Philadelphia Real Estate Development and Affordable Housing
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Klehr Harrison has been working with numerous developers to obtain approvals for affordable housing in Philadelphia.
03.01.21
The prospects of providing affordable housing in Philadelphia, and the incentives to do so, have come to the forefront. The Philadelphia Zoning Code offers incentives in the form of bonuses for floor area ratio (FAR), housing unit densities and maximum building heights. These incentives enable the developer to economically and viably provide affordable housing, while at the same time actually create affordable housing for Philadelphia residents.
Starting in 2013, and as amended and enhanced seven times afterwards, Philadelphia City Council passed zoning-related legislation that established an incentive to provide affordable housing in Philadelphia. Yet, developers have only recently embraced the concept and utilized the available zoning development bonuses.
By providing affordable moderate- or low-income units in a development project, or by paying into a city trust fund in connection with the project, a developer can obtain zoning development bonuses of floor area, height or housing unit density bonuses.[1]
In the certain Zoning Districts of RM-1, RM-2, RM-3, RM-4, RMX-1, RMX-2, RMX-3, IRMX, CMX-1, CMX-2, CMX-2.5 CMX-3, CMX-4 or CMX-5, all or certain of the affordable housing bonuses apply based upon either moderate-income or low-income housing as defined in the Zoning Code as set forth in the attached chart.
In addition to actually providing the Mixed Income Housing units to obtain the bonuses, an applicant can enter into a binding agreement with the Department of Planning and Development to pay fees into a fund for the bonuses in lieu of providing the units.
For example, where an applicant seeks a bonus to increase housing unit density numbers, the payment is $25,000 for each moderate-income housing unit sought and $30,000 for each low-income housing unit sought.In addition to actually providing the Mixed Income Housing units to obtain the bonuses, an applicant can enter into a binding agreement with the Department of Planning and Development to pay fees into a fund for the bonuses in lieu of providing the units.
Where an applicant seeks a bonus for increased FAR in certain enumerated zoning districts, the payment is $25 for each additional square foot of floor area for moderate-income house units and $30 for each additional square foot of floor area for low-income house units.
Author Ron Patterson is a partner in the real estate and finance department at Klehr Harrison.
[1] A household consists of every person who lives or intends to live in the unit, regardless of age, dependency status, or relationship.