PHILADELPHIA (KYW Newsradio) — Center City Philadelphia continues to attract new residents and has successfully rebounded from the pandemic-driven slowdown in residential development, according to a report released Monday by the Center City District.
The report says that Greater Center City, about 6% of Philadelphia’s land mass, accounted for 2,805 new housing units — 48% of all new housing in the city in 2022.
Center City District President and CEO Paul Levy said demand in the form of population growth is keeping up with supply.
“The growth of market rate housing in the downtown is a sign of health and vitality, and it’s a job driver,” said Levy.
Levy said people are moving into town, even though office workers have not returned in the numbers he would like to see. Office occupancy is at about 44%.
But he sees signs of hope there, too.
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“One of the points we keep making is that there has not been a plateauing of the return to the office,” said Levy. “It’s very gradual, more gradual than I would like, but clearly that’s where it’s going at this point.”
Levy says city government could be doing more by example to restore office occupancy to pre-pandemic levels, by getting more of its own workers back into city offices. But he says there are lots of signs the downtown is recovering, and there is no need for pessimism.
Center City’s recovery has been so robust, that Levy said they saw concern about whether there was too much building going on. There were more than 13,000 building permits issued citywide by the end of 2022, but he says data shows only about 5,000 are actively under construction, and population growth in Center City can absorb the new units.
“I think these folks are sizing for the market,” said Levy.
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In what may be a particularly Philly quirk, most of the new units are apartments and townhouses as opposed to condos, but again Levy sees a big rental market as a positive.
“It’s people who haven’t made their long-term commitment, people we can keep or who choose to be here,” he said.
Levy says one concern about the housing market, citywide, is affordability. He estimates only about 18% of rental units are affordable for people with low incomes.
The report proposes potential solutions, such as preserving the complete 10-year tax abatement for projects in which more than 20% of the units are affordable.