In dozens of communities nationally where local laws require developers to support construction of affordable housing, there have been no reports of housing markets grinding to a screeching halt.
In fact, more than 300 cities and municipalities have such laws. Philadelphia was one of the few major cities without one until the inclusionary housing program devised by Councilman Darrell L. Clarke was approved by City Council on Dec. 13.
It's understandable that local developers might adopt a wait-and-see attitude about the new requirement for them to either include affordable units in every major residential project or contribute to a housing fund. But what developers shouldn't do is pretend that a more targeted effort to add affordable housing will force them to abandon the city.
Modeled on other cities' initiatives, Philadelphia's program would require that a share of the units built be affordable across a range of incomes, from low-income to middle-class families. If developers decide they're unable to include such units - say, in a project with million-dollar condos - then, instead, they will have to make payments to the city's Housing Trust Fund, which promotes affordable housing.
This program comes along at a time when the demand for high-end residential units - mostly condos in and around Center City - remains strong. Despite the general slowdown in the regional housing market, the city's prospects appear to be good for many years. And the biggest incentive to build in the city remains in place: the 10-year tax abatement on new construction.
So it's not unreasonable to seek developers' cooperation now in the worthy cause of adding affordable housing. The city is short an estimated 60,000 housing units affordable for working-class families (four family members earning a total of $36,000 annually).
What's more, developers are not being asked to shoulder the entire burden. Council is working on a companion measure that spells out incentives for developers.
What might those incentives be? Clarke's bill notes that they could include streamlining building-code requirements, providing city help with land acquisition costs, or tax credits - all of which could reduce builders' expenses. Incentives that don't come with significant costs to taxpayers are preferable, of course.
Until those incentives are spelled out, Council has created some degree of uncertainty for home builders. But it should be short-lived, since affordable-housing advocates are pushing for Council to craft the incentives over the next few months. That's the window during which developers can provide their input on how to best shape the program.
The passage of the inclusionary ordinance represents a victory for a broad range of community and labor groups organized as the Philadelphia Campaign for Housing Justice. They were wise to join forces with Clarke.
Key to their mutual support was agreement to a key focus of Clarke's original plan: to provide housing attractive to middle-class homeowners, who are critical to bolstering the city's tax base. For his part, Clarke improved his bill by adding provisions that benefit working-class families. The result is a victory for Philadelphia.