Philly’s inclusionary zoning bill: Who’s for and against it, and why

It’s the most contentious bill to come through City Council since the soda tax.

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The inclusionary zoning bill making its way through City Council will either stimulate affordable housing in Philadelphia or stifle development so much nothing new will get built, let alone affordable housing.

At least, that’s how it sounded at a hearing Monday, where proponents and opponents presented views on both extremes for four hours before Council’s Rules Committee delayed its decision on the bill until at least its next meeting on Dec. 5.

Proponents believe the way to lessen Philadelphia’s affordable housing crisis — about 23,000 affordable units have been lost in the last 10 years — is by mandating developers to pay for these homes, especially around Center City. Opponents worry the bill will lead to almost no new affordable housing and possibly even less. They note how Philadelphia has construction costs similar to New York and other coastal cities, but not the real estate prices or high incomes to match, leaving developers more vulnerable to additional costs, possibly pushing them out of the market entirely.

The bill, amended last week by Councilwoman Maria Quiñones-Sánchez, aims to promote affordable housing by mandating developers to set aside about 10 percent of units for affordable housing in properties featuring nine or more units. In lieu of affordable housing, developers could pay between $11,000 and $30,000 per unit into the Philadelphia Housing Trust Fund, depending on specifications of the project. Originally, the bill was set to encompass all of Philly. But the amendment changed the mandate from the entire city to areas with high-density zoning, essentially Center City and University City.

It’s the most contentious bill the city has seen since the soda tax. Where do the most prominent stakeholders stand and why?

City Council: TBD

We won’t know for sure whether City Council truly supports the bill until the Rules Committee votes to bring it in front of Council as a whole. But many Council members have implied the measure has their support, in addition to prime sponsor Quiñones-Sánchez.

Council President Darrell Clarke, for instance, joined the hearing as the committee questioned developer Carl Dranoff and representatives for the Building Industry Association. Clarke, who along with Quiñones-Sánchez, Kenyatta Johnson and Jannie Blackwell is a sponsor, became at least the third person of the day to use the phrase “tale of two cities” when describing Philadelphia’s poverty problem. He pointed out the success of the 10-year tax abatement, a boon for developers, and noted Council should legislate something “on the other side of the equation.”

“It’s our responsibility to craft something to stimulate affordable housing,” he said. “That’s why you see proposals like this.”

Rules Committee chair Bill Greenlee said, “When this bill comes out, I can guarantee you everyone’s going to have a little concern about it, but that’s how legislation works.”

Allan Domb, known as the Condo King in his pre-City Hall career, was the only member of Council to exhibit significant skepticism of the bill (like Clarke he appeared at the hearing despite not being on the Rules Committee). He brought up the need for a fiscal impact study and said he’d spoken to banks concerned the bill could lead to fewer loans and credit risks.

Developers: Against it

The Building Industry Association and several developers have been meeting with City Council and other influential parties the last several months to discuss specifics of the bill. When the amended version came out last week, they were almost unanimously displeased.

They think the fees in lieu of providing affordable housing on projects are too high and the density bonuses too low, and would lead to stalled development in Center City and University City. BIA President Brian Emmons called it “a very steep tax” that has almost no incentives for developers and would lead to overpricing and gentrification farther outside Center City, rather than increased affordable housing. Parts of Philly outside of Center City and University would essentially not be covered by this latest version of the bill.

“The developers will go to other areas and develop land there,” he said, “and that raises prices in other areas.”

Quiñones-Sánchez asked Dranoff, who said he would consider supporting a bill with non-mandatory or lower fees for developers, whether he was asserting nothing would get built in Center City. That was pretty much his belief.

“We want to create buildings and create revenues for the city. This legislation would discourage that very building,” he said. “Especially if times turn bad, which inevitably they will, it could completely stifle development downtown for housing.”

Neighborhood organizations: Against it

Almost every neighborhood organization supports affordable housing. The details of the bill and the late amendments, however, have many opposed.

Jeff Hornstein, president of the Crosstown Coalition — a group of nearly three dozen civic associations — said the Coalition asked Quiñones-Sánchez to table the bill even before releasing her new amendments. Those amendments came out late in the afternoon last Monday. That gave people two business days over the holiday to process the new changes before yesterday’s hearing.

“Civic organizations operate in weeks and months, not days and hours,” Hornstein said. “It really wasn’t enough time.”

Fellow Crosstown Coalition leader Steven Huntington echoed that sentiment at Monday’s hearing. Representatives from Society Hill and East Falls also voiced opposition, citing concerns about whether enough affordable housing would be the end result.

“We’re just glad it didn’t get rushed through today,” Hornstein said.

Added Jeff Braff of the Center City Residents Association: “We’re not the U.S. Congress here dealing with Obamacare or taxes. What’s the rush to push this out of committee today? We ask that the bill be held, that it be given further consideration. And that the civic associations have an opportunity to consider the bill as amended.”

Nonprofits: For it

A bevy of supporters testified Monday, mostly representing nonprofit development corporations, such as Habitat for Humanity and the Women’s Community Revitalization Project. WCRP president Nora Lichtash read a statement from one of the organization’s members not only approving of the bill but requesting the payments/mandated affordable housing stay mandatory forever.

Kimberly Washington, executive director of the Frankford Community Development Corporation, said Frankford residents worry about “looking at gentrification in the eye” in five to seven years.

“We are thrilled our Councilwoman Maria Quiñones-Sánchez and Kenyatta Johnson have not only bore attention to this matter but taken steps to pass this legislation,” she said. “We will work with you to expand this legislation.”