Advocates for an increase in homes that Philadelphians can afford have been able to count on two truths: The city doesn’t have nearly enough affordable housing, and securing city funding to create more will be a battle.
But under a bill City Council is considering, about $25 million automatically would pass through the budget into the Housing Trust Fund, which would at least address the latter issue. The fund is meant to help create housing for people with low wages and accessible homes for people with disabilities, and to provide rent subsidies and mortgage assistance. In a city of old housing stock, the fund also helps Philadelphians preserve and repair their homes, which prevents homelessness and neighborhood blight.
If City Council passes the legislation, Philadelphians will need to vote on the budget allocation in November’s election, since it requires a change to the Home Rule Charter.
Mayor Jim Kenney’s administration had promised to provide the fund about $20 million per year as part of a five-year plan to allocate $100 million. But the administration did not include the funds in last year’s budget proposal, which took into account a $749 million budget gap caused by the pandemic. City Council added the funding that advocates said was urgently needed as the pandemic left residents struggling to stay in their homes.
“We want dedicated dollars. We’re tired of fighting this fight,” said Staci Moore, chair of the board at the Women’s Community Revitalization Project, a nonprofit that develops affordable housing and helped write the legislation. “It’s obvious more funding for affordable housing is needed.”
Moore, who was part of the effort to create the Housing Trust Fund more than 16 years ago and was homeless more than 25 years ago, now rents a home in Northern Liberties. She said the “rents are astronomical” and “all around me are houses that are like $500,000 and more.”
In addition to money from the city’s general fund, the Housing Trust Fund receives mortgage and deed recording fees and deposits from developers in exchange for zoning bonuses, such as the ability to construct a building that is taller than local zoning allows. Kenney’s vow to allocate money from the general fund to the Housing Trust Fund was the result of a compromise a couple of years ago to stop a construction tax that would have generated money for the fund. (Council passed a 1% tax on residential construction last year to fund efforts to fight poverty and expand access to affordable housing outside of the Housing Trust Fund.)
Rob Dubow, the city’s finance director, testified against the legislation at a City Council hearing Tuesday, saying that although the Kenney administration “agree[s] that housing funding is crucially important,” the city also needs to fund other crucial budget items, such as education and violence prevention, and must have flexibility in its budget to respond to future needs.
“We oppose this and any similar amendment that attempts to bind the hands of future mayors and Councils by requiring certain budgetary appropriations as opposed to proceeding through the normal budgetary process,” he said.
He suggested Council could increase the deed recording fees that help feed the fund.
But advocates for more affordable housing said the gap in supply is vast. Between 2008 and 2016, Philadelphia lost roughly 13,000 apartments renting at $800 or less, while adding about 6,000 apartments renting at $2,000 or more, according to Moore’s testimony at the Council hearing Tuesday. Each year, the city creates up to 300 affordable rental homes, which can’t keep pace with the need, she said.
The Women’s Community Revitalization Project, which also provides services for women working for low wages and their families, is a member of the Philadelphia Coalition for Affordable Communities, which supports the legislation that would mandate that at least half of 1% of the city’s general fund budget — roughly $25 million — go to the Housing Trust Fund. The coalition includes Habitat for Humanity Philadelphia, the Housing Alliance of Pennsylvania, and Liberty Resources, which advocates for people with disabilities. The Women’s Community Revitalization Project had begun working with City Council to secure dedicated funding for the housing fund when the pandemic hit.
Anticipating future budget challenges like the one the pandemic caused, Council members included a provision in the bill that would pause funding if the city needs the money for emergency programs or to prevent a disruption of city services.
Councilmember Derek Green, who introduced the bill, said the time was right for the legislation, given funds from the federal American Rescue Plan, the city’s continued economic recovery from the pandemic, and the growing call for more affordable housing punctuated by last year’s demonstrations on the Benjamin Franklin Parkway and outside the Philadelphia Housing Authority headquarters in North Philadelphia.
“I felt there was a need to have this commitment going forward considering this commitment had been broken,” Green said. “Fundamentally, budgets are about choices and decisions.”
Nine Council members cosponsored the bill. If City Council passes the legislation this month, Philadelphia voters will decide in the Nov. 2 election whether to amend the Home Rule Charter to allow for the mandatory allocation of funds to the Housing Trust Fund starting in fiscal year 2023.