The Philadelphia Association of Community Development Corporations (PACDC) supports bills 200556 and 200558 as a legislative package to invest in affordable homes, community economic development, and job creation activities. Bill No. 200556 will create a 1% Construction Impact Tax, which PACDC advocated strongly for in 2018 to generate funds for the Philadelphia Housing Trust Fund. Bill No. 200558 will delay implementation of real estate tax abatement reform for three years in order to lessen the impact on development that would be subject to the Construction Impact Tax.
Leadership in City Council has proposed to use the revenue from the Construction Impact Tax—projected to generate $20 million – $26 million per year—to pay off the debt service on a $400 million bond for affordable homes and commercial corridors. While legislation has not yet been introduced to approve a bond issue, PACDC strongly supports this idea to super-charge investment in our neighborhoods. We recommend that 25% of the funds be dedicated to supporting commercial corridors, and the other 75% for affordable homes.
Philadelphia desperately needs action to stimulate economic activity to recover from the devastating impact of COVID-19 on our local economy. That action must also be equitable, and center recovery strategies on attacking the inequality that has led to people of color in Philadelphia being hardest hit by shut downs, job losses, and the health crisis of COVID-19.
CDCs in Philadelphia are well positioned to invest these resources quickly and equitably. In the last 28 years, they’ve had a $5.4 billion economic impact in Philadelphia undertaking the very activities this package of bills will support:
- Building new affordable homes for rent or home ownership for very low, low, and moderate income Philadelphians;
- Repairing and preserving existing affordable rental and home ownership homes;
- Providing rental assistance which can prevent homelessness and reduce housing cost burdens on low-income households, and down payment assistance for first-time home buyers;
- Making significant new investments in our neighborhood commercial corridors so that very small businesses can survive through the economic crisis, new businesses can start, and boosting ownership of businesses, property, and wealth for people of color;
- Ensuring equitable access to jobs, resources, and wealth building for neighborhood residents and people of color that have been too long denied access to these critical opportunities.
To ensure the spending supports the activities that community residents need and will benefit from, PACDC calls on City Council to include language in any legislation that authorizes spending of these new funds the creation of an Advisory Committee with significant community representation to guide decision-making on how the funds will be spent, as well as regular reporting to the public on investments, job creation, and equity goals.
We also encourage City Council, the Kenney Administration, and the building trades unions to work with community developers to explore ways to bring down the cost of construction for projects funded with these and other public subsidies so we can stretch the dollars further and serve more Philadelphians in need, as well as significantly boost participation of workers of color on construction and rehabilitation projects.
While this proposal represents a significant investment in programs that attack poverty and inequality, we know it’s not enough. A $400 million bond could be largely spent down even before the next Mayor and Council are sworn-in in. So, we must continue planning for how Philadelphia will have annual, dedicated revenue for meaningful investments in affordable homes and community economic development after the bond funds have been expended.
There must also be action by our representatives in Washington D.C. and Harrisburg to make even bigger investments in economic stimulus. Philadelphia can’t end poverty, solve our housing affordability needs, or end wealth and income inequality for people of color on our own. But by leading and putting our resources on the table, Philadelphia will be well positioned to quickly leverage and deploy additional state, federal, and philanthropic investments.
PACDC applauds Council President Clarke, and Councilmembers Parker, Sanchez, Squilla, Johnson, Henon, and Jones, for co-sponsoring the legislation, and Mayor Kenney for his support. We look forward to working with them and all members of Council to discuss how CDCs will lead the way in putting these resources to work to create an equitable Philadelphia.