COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE Room 400, City Hall Philadelphia, Pennsylvania Wednesday, April 23, 2025 10:20 a.m. PRESENT: COUNCIL PRESIDENT KENYATTA JOHNSON COUNCILWOMAN NINA AHMAD COUNCILWOMAN CINDY BASS COUNCILWOMAN KENDRA BROOKS COUNCILMAN MICHAEL DRISCOLL COUNCILWOMAN JAMIE GAUTHIER COUNCILWOMAN KATHERINE GILMORE RICHARDSON COUNCILMAN JIM HARRITY COUNCILMAN CURTIS JONES, JR. COUNCILWOMAN RUE LANDAU COUNCILWOMAN QUETCY M. LOZADA COUNCILMAN NICOLAS O'ROURKE COUNCILMAN ANTHONY PHILLIPS COUNCILMAN MARK SQUILLA COUNCILMAN ISAIAH THOMAS COUNCILMAN JEFFREY YOUNG, JR. BILLS: 250195, 250196, 250197, 250198, 250199, 250200, 250201, 250202, 250210, 250211, 250212 RESOLUTION: 250214 - - -
This is the public hearing in the public meeting of the Committee of the Whole regarding Bills No. 250195, 250196, 250197, 250198, 250199, 250200, 250201, 250202, 250210, 250211, 250212 and Resolution No. 250214. Ms. Loughead, will you please call the attendance.
Present. Thank you. A quorum of the Committee is present and this hearing is now called to order. Ms. Loughead, will you please read the titles of the resolutions. Bill No. 250195, an Ordinance amending Chapter 19-1500 of the Philadelphia Code, entitled "Wage and Net Profits Tax," by revising certain tax rates, under certain terms and conditions. Bill No. 250196, an Ordinance adopting the Operating Budget for Fiscal Year 2026. Bill No. 250197, an Ordinance to adopt a Fiscal 2026 Capital Budget. Bill No. 250198, an Ordinance to adopt a Capital Program for the six Fiscal Years 2026-2031 inclusive. Bill No. 250199, an Ordinance amending Chapter 19-2600, of The Philadelphia Code, entitled "Business Income and Receipts Taxes," to revise certain tax rates and end certain exclusions from the tax on receipts, all under certain terms and conditions. Bill No. 250200, an Ordinance amending Chapter 12-1000, The Philadelphia Code, entitled "Traffic Code," to revise the fee for the use of parking meters; all under certain terms and conditions. Bill No. 250201, an Ordinance amending Chapter 19-1800 of The Philadelphia Code, entitled "School Tax Authorization," to provide for an increase in the tax of the Board of Education of the School District of Philadelphia is authorized to impose on real estate; and amending Chapter 10 19-1300, entitled "Real Estate Taxes," to establish an equivalent reduction the tax rate for the City real estate tax; all under certain terms and conditions. Bill No. 250202, an Ordinance amending Section 19-1806 of The Philadelphia Code, entitled "Authorization of Realty Use and Occupancy Tax," to eliminate certain exemptions, all under certain terms and conditions. Bill No. 250210, an Ordinance amending Section 10-1001, of the Philadelphia Code, entitled "Fees of Commissioner of Records" to increase the portion of fees for the recording of deeds and mortgages and related documents to be used for Housing Trust Fund purposes, under certain terms and conditions. Bill No. 250211, an Ordinance amending Chapter 19-1400 of The Philadelphia Code, entitled "Realty Transfer Tax," by revising the rate of the tax, all under certain terms and conditions. Bill No. 250212, an Ordinance to amend Chapter 19-4400 of The Philadelphia Code, entitled "Development Impact Tax," to end the imposition of a tax, under certain terms and conditions. Resolution No. 250214, Resolution providing for the approval by the Council of the City of Philadelphia of a Revised Five Year Financial Plan for the City of Philadelphia covering Fiscal Years 2026 through 2030, and incorporating revisions with respect to Fiscal Year 2025, which is to be submitted by the Mayor to the Pennsylvania Intergovernmental Cooperation Authority pursuant to an Intergovernmental Cooperation Agreement by and between the City and the Authority.
Thank you very much. Today we continue the public hearing of the Committee of the Whole to consider the bills read by the Clerk that constitute proposed operating and capital spending measures for Fiscal Year 2026, a Capital Program and a Forward- looking Capital Plan for Fiscal Year 2026 through Fiscal Year 2031. Today we have scheduled testimony regarding the Housing Opportunities Made Easy Home Initiative. Ms. Loughead, will you please call the first witness to testify.
The first person to testify is Tiffany Thurman, Chief of Staff, Office of the Mayor. (Witnesses approached Witness table.)
Good morning. Good morning, Council President Johnson and members of City Council. My name is Tiffany Thurman, Chief of Staff to Mayor Parker. And I'm honored to testify in support of the Housing Opportunities Made Easy Initiative. Joining me today are Chief Housing and Urban Development Officer Angela Brooks, Department of Planning and Development Director Jesse Lawrence and our Consultant Greg Heller, along with our entire team of senior leaders working around the clock on this very important initiative. Council President, we all know the vision to make Philadelphia the safest, cleanest and greenest big city in the nation with access to economic opportunity for all. Advancing each pillar of this vision is essential to improving the quality of life for every Philadelphian. But as the Mayor has said, there is no single issue other than public safety that is more important in our city than access to housing. This is why we are truly grateful for your leadership, Council President, and also for City Council's partnership in pursuing our shared vision. Without this, getting big things done just isn't possible. The special attention this body is devoting to housing is again showing your continued dedication to the City of Philadelphia and all of our residents. Some have suggested we don't have a housing crisis. Council President, I am confident you believe us when I say we have a housing crisis now in Philadelphia and we need to address it together. We need more housing and we need it now. Grounded in data, leading national practices, hearing residents as voices and what has been known to work in Philadelphia, the Home Initiative centers access to affordable, quality, safe housing as our top city priority. But why now? Why this big, why this scale? Is this the right time giving all the uncertainty in our country? Council President, Mayor Parker and this Administration respectfully submit to you we cannot afford to wait. We cannot hedge our bets against going small. We cannot and must not be paralyzed by what is happening in Washington. Philadelphians of many social economic brackets need access to housing and they need it now. We also know we cannot do this alone. Intergovernmental collaboration is a hallmark of this Administration. If we work together side-by-side, as we have done consistently since day 1, there is nothing that we cannot accomplish together, including a $2 billion historic and unprecedented housing plan to build, preserve and restore 3000 units of housing in Philadelphia. E. plan, scope and scale is too large and not focused enough on those citizens who are the mos income-challenged. Council President, we cannot and will not create boxes for access to housing in Philadelphia. We will not pit the have-nots against those that have just a little bit. The need is too broad, the demand is too strong and our plan must be that comprehensive. Today we are proposing the creation of a new housing ecosystem for Philadelphia. It is desperately needed. We are establishing a track record of results. And in collaboration with this Council, we can and we will do that for Philadelphia. Fortunately, we still have some considerable advantages that Chief Housing and Urban Development Officer Brooks and Director Lawrence will speak to shortly. But these are just several of the critical factors driving the urgency around this issue I know that we all feel. First, most of our housing stock is old and built before 1960 with nearly 40% of the current supply built in 1939 or earlier and a quarter built between 1940 and 1959. In the region, roughly of homeowners and renters face critical repair needs. E. Initiative. Our inventory is also shrinking the number of vacant housing units in Philadelphia, both for sale and for rent, have declined over the past two decades. The simple economics of this declining supply has pushed prices up, squeezing out both renters and aspiring homeowners.
At approximately 52%, our rate of homeownership is relatively high compared to other cities, and that's been validated. And owner- occupancy rates, including for Black and Brown residents, have remained relatively stable over the span of a decade. Despite this baseline, significant racial and ethnic home ownership gaps remain and must be closed in our lifetime under our leadership. Considering our more vulnerable residents, Councilmembers Lozada, Driscoll, Harrity and Squilla have been laser-focused on the complex and intertwined challenges facing the Kensington community. One of these is addressing housing stability, especially for renters, and ensuring that our homeless residents can access not only wraparound services but shelter and permanent housing. Many Philadelphians are cost-burdened, paying more than 30% of income towards housing. Some are severely cost-burdened paying a staggering 50% or more. What does this leave for groceries, eggs, travel, school supplies or many other basic necessities? Councilmembers Gauthier, Brooks and O'Rourke have been raising these points repeatedly. For that, I say thank you. This is putting tremendous -- that's right, it deserves an applause. )
This is putting tremendous pressure on families to make ends meet, and those who have the least are at risk of housing instability and homelessness. Finally, seniors. Seniors need more access to housing, so do our veterans who serve their country and so do our tremendous municipal workers, our teachers, our firefighters, police officers, sanitation and street workers, our entire municipal workforce. We're going to build housing for the people who make the city work. The massive scale of the need is why our goal is to build, preserve and restore 30,000 units of housing over the next four years. E. Initiative, as we'll discuss today, is not just a housing plan, but a bold and ambitious and attainable strategy with a comprehensive array of action steps that will deliver results. To meet this moment, the Administration is proposing a $2 billion financing strategy, a historic investment unlike any seen in generations. This includes nearly $1 billion in funding from the public sector, a sum of the $800 million in borrowing in Fiscal Years '26 through '35 year plan and approximately $20 million in other local, state and federal funds. Another 1 billion will come from the value of the City's land and assets that will contribute to housing production. That methodology we're prepared to speak to. Councilmembers Thomas and Landau have smartly been inquiring about whether we can actually afford this. And we can, we must. So let's be clear together, Council President. This $800 million borrowing is a drop in the bucket of what we need to build, preserve and restore more housing right now in Philadelphia. Critically, our public total investment will be leveraged further by philanthropic community, private capital and our union partners that will add millions more. And while the construction and preservation of housing is our goal, we cannot overlook the powerful opportunity this offers for family-sustaining jobs and workforce development, issues that Councilmembers Gilmore Richardson and Ahmad have raised. This is a huge part of the initiative and we've planned for months, over a year in close coordination with the Building Trades, GBCA and BIA. We'll be investing in workforce development for apprenticeship programs with the trades and through the Sam Staten Sr. Pre-Apprenticeship Program and have an accounting of the people coming through these programs into those good-paying jobs. And why are we doing all of this? E. plan is pro-growth, pro-jobs and pro-economic opportunity for every Philadelphian. Our City College for Municipal Employment is both integrated into this plan for exactly that reason. I cannot emphasize this enough, the focus, the urgency, our commitment the Mayor and our Administration is bringing to bear on these very critical issues for Philadelphians. When the Mayor says she wants shovels in the ground, she means it, and we intend to deliver that as early as this fall. This includes swift efforts to cut red tape and streamline internal processes, a roadmap for which is already drawn up. These recommendations and report pursuant to Executive Order 3-25 now live on our website for every resident to see how we plan to make real changes. Councilmembers Bass and Young, this means that the Land Bank too which will need to move hundreds of properties back into productive use, mitigating blight and revitalizing communities. We'll expand programs like Turn the Key and Basic Systems Home Repair Plus to meet the demand while creating new programs to fill gaps, reaching not only lower-income residents but those middle income bands who also urgently need help throughout the city. These programs work, Council President. And you and Mayor Parker helped launch Turn the Key together under our friend and ally, the previous Council President Darrell Clarke. E. Initiative. And the Mayor wants to put Turn the Key on steroids.
And we'll take a hard look in collaboration with this body at policy changes that are needed now, from zoning to tax initiatives -- or tax incentives to stimulate construction. We'll be transmitting legislation in the coming weeks with some of these policy changes which we hope will be passed by this legislative body by the end of the session that will allow us to begin to implement this plan. Thank you again for your commitment to all of these issues and for today's discussion and how we address them together. And now, I'd like to turn it over to my colleague Chief Housing and Urban Development Officer Brooks to offer an overview of the initiative and how this unique opportunity for us to become a national leader. Brooks.
Thank you, Chief Thurman. And thank you, Council President and Councilmembers, for the warm welcome since I joined the Administration last month. One of the questions I've been asked most often is what made me leave a city that I love to come work in Philadelphia. And that answer really directly leads to why we're here today. As the immediate past President of the American Planning Association, the largest urban planning organization in the world, I had the privilege of co-chairing the Housing Supply Accelerator. This was a national campaign that's working to improve local capacity, identify critical solutions and accelerate reforms to enable communities and developers to collaborate on producing, preserving and providing diverse, quality, attainable housing options for all. In partnership with the National League of Cities, we produced the Housing Supply Accelerator Playbook for local elected officials and community planners working to boost attainable and equitable housing options nationwide. Throughout my travels speaking about increasing housing supply, I Heard from planners and elected leaders like you about meeting housing needs in vastly changing communities. The consistent challenge everywhere, lack of housing supply. This isn't just a Philadelphia issue. S. is underproducing by approximately 4 million units per year, with suburban and rural areas seeing increasing shortages each year as well. While Philadelphia has experienced a surge in housing production over the past five years, this growth hasn't addressed the full housing need, leaving a shortage of approximately 17,000 new units. When I saw this opportunity and learned about the plans for the largest housing investment in the city's history with Mayor and Council collaboratively working together to meet the needs of a legacy city, I knew I had to be a part of it. E. Initiative is so vital at this time. The initiative includes a comprehensive set of targeted recommendations and city investments allocated across the following areas: Preserving homes so they remain livable, healthy, safe and high quality, ensuring all Philadelphians can afford quality homes in amenity-rich communities with access to jobs, building more housing in all income levels, in all neighborhoods by unlocking the potential of our land, making the city work better for people by improving city processes and enhancing customer service, reducing housing instability and preventing homelessness through interventions like rental assistance and investing in permanent supportive housing because we know the wraparound services are important, making our homes and communities resilient by investing in infrastructure and housing to withstand natural disasters, reducing blight and improving our communities by redeveloping vacant lots and buildings while greening and beautifying our blocks. With Philadelphia's aging housing stock, we need to preserve approximately 16,500 units evenly split between homeownership and rental properties. E. Initiative provides a comprehensive housing needs assessment that outlines tenure type, rental or owner, target income levels and preservation or creation requirements. At the same time, we're thrilled to lift up striking a complementary strategy put forward by the Philadelphia Housing Authority to meet the City's total housing needs. Again, as a Housing Authority alum I am super excited about the work PHA is doing. I've seen how this is playing out in other cities. The Opening Doors planned by Kelvin Jeremiah's leadership to redevelop, build or acquire roughly 2000 units over eight years will put Philadelphia on the map and is complementary to the work that we're proposing here. No city in the country has a single major initiative with the ambition and possibilities that we're talking about today, let alone two that have been developed and rolled out together. E. Initiative.
Director Jesse Lawrence and his team have been working relentlessly and in close collaboration with other city departments to stand this initiative up. He'll conclude our opening remarks by briefly discussing DPD's role and how investments in continuing, expanding and launching effective housing programs will propel us toward achieving this initiative's goals. Thank you for your time and consideration.
Thank you, Angela. And thank you, Council President, and thank you, Councilmembers, for providing this particular opportunity for us to take this deeper dive into the H.O.M.E. Initiative and the plan. The Department of Planning and Development stands ready to take on its central role in the H.O.M.E. Initiative. We have the benefit of an experienced team and subject matter experts in development, project financing, affordable housing, land management, zoning and land use, city planning, evaluation and monitoring and funding streams that have been established at the federal, state and local levels. Many of these experts are joined with me here today, including John Mondlak, First Deputy and Chief of Staff; Mark Dodds, Interim Director of the Division of Housing and Community Development; Octavia Howell, Deputy Director for the Division of Planning and Zoning; Emily Persico, Deputy Director for Development Services; and Kathleen Grady, our Deputy Director for Finance and Administration. We're also joined here today by leaders of our quasi public partner, the Philadelphia Housing Development Corporation, PHDC, including Dave Thomas, our President and CEO of that; and Angel Rodriguez, who is the Senior Vice-president of Land Services. We work hand-in-hand with PHDC, the quasi governmental agency that's been created by City Council for the very purpose of administering programs to implement city housing objectives, sharing key staff in office management, IT, communications roles as well and even working side-by-side and colocated office space as well. We support the Philadelphia Land Bank in similar ways. We are fully aligned with the core H.O.M.E. tenet of cross- departmental, cross-governmental and cross-sector collaboration, as we're working on a daily basis with elected officials, numerous city departments, developers, foundations, financial institutions, nonprofits and organizations of that nature, neighborhood groups, state and federal agencies and business and civic and community leaders as well. This uniquely suits us for our role under the H.O.M.E. Initiative for convening stakeholders and using their feedback to improve our proposed policies, plans and programs. The H.O.M.E. plan calls for continuing and expanding our existing successful housing programs, many of which our research has shown are considered some of the best in the country, national models even. Our research has also shown however that there are gaps in our housing coverage of issues and our H.O.M.E. plan proposes new programs specifically designed to fill these gaps. One such program is a new One Philly Mortgage program that will help Philadelphian households at or under 120% of AMI to become first- time homebuyers. We expect at least 3000 households to benefit from One Philly Mortgages with 30% -- excuse me, 30-year fixed rates, low down payments, very low interest rates and perhaps most impactfully, no private mortgage insurance. Meanwhile, H.O.M.E. will drastically expand the popular Basic Systems Repair Program, a program that is already helping households a day, but that can certainly do much more if we get what we propose. Eligibility at 100% of AMI and more is where we're looking to expand those eligibility levels and income levels, along with a more comprehensive portfolio of repair services as well. But those are just two of the several dozen programs that have been outlined in the H.O.M.E. Initiative, and we look forward to discussing those goals that they meet and all of this ambitious initiative efforts that we can achieve with our residents. So as I conclude I thank you again, Council President, for the opportunity as we stand ready for questions and feedback at the moment.
Thank you very much for your testimony. And before I turn it over to my colleagues, I just have a couple of questions that I want to ask. Tiffany, I like how you talked about that we're pushing back on this notion that there isn't a housing crisis in the city of Philadelphia. And you said, in fact, it is indeed a housing crisis. And I remember when we did the press conference for the executive order, I ultimately believe that we are in a housing crisis simply for the fact that as a District Councilmember, day-in and day-out we have individuals coming to our office seeking some type of housing assistance. And so, can you and your team give us the overview on the data that was used specifically for the city of Philadelphia that shows that we have an actual housing crisis? And then also, I know we talked about the issue of affordability that was mentioned by Ms. Brooks, particularly around those who are renting. People spend more than 50% of their income just actually renting a rental unit. And so, let's talk about the affordability and the housing crisis, but give me the data that shows that in the city of Philadelphia we are indeed facing a housing crisis.
Absolutely, Council President. I'll start with the data and Angela Brooks will talk about that based on her national experience and even international experience and then compared to what we're seeing here locally in the city of Philadelphia, then I'll turn it over to Greg. And to the point that you raised, you're absolutely right. I'm getting those calls from your Chief of Staff, your District Chief of Staff Tiffany White, right, from sun up to sun down. The waiting list for Turn the Key, Basic Systems Home Repair, it's long, it's growing. People need rental assistance. That list is long and growing. We're working with OHS with Cheryl Hill making sure that we're able to meet the needs there and through the Planning Department. And it's just not enough. It's not enough. So absolutely we know it. But when I look at you, I think about the calls that I receive myself regarding the long list that are in your District alone. And it's not just unique to your District. It's throughout the entire city. But in terms of the data, I'll kick it over to Angela now to answer that.
I'm pulling up so I can quote specific Philadelphia data. And actually, I'm going to tag in Ira because he's going to have a lot of the local Philadelphia data since you asked specific to Philadelphia. So we're calling up now Ira Goldstein, another one of our consultants from the Reinvestment Fund. (Witness approached Witness table.)
Mr. Goldstein, just state your name for the record.
Yes sir. My name is Ira Goldstein. And to answer to your question first of all, I think that it is a little bit sort of a false choice to talk about there being a housing crisis or an income crisis. I think the fact is that we really have both. And if you look at the best thinking about what's going on in the housing market right now, people point to issues that take us to where we are right this moment based on structural issues in the housing market, like, for example, over the last several decades, home prices have risen and rents have risen faster than people's incomes. Those are the structural things. You have dynamic things like issues that attach to the pandemic that created supply chain crises, thereby driving up those prices, and those will go up and down as the things resolve. But then you also have self-imposed things. And every community around the country has self-imposed things. Do we do things quickly enough, do we do things efficiently enough. All of those things add to cost. So do you have a housing crisis? I think the answer is yes. Some of the Philadelphia specific data points to things like, for example, our typical home price over the last several years has gone up from 175,000 right before the pandemic to over 240,000 now. That's a 37% increase. But if you look at the first quartile, the 25% of housing units that sold at sort of the lowest range, those jumped up from 93,000 to 145,000, which represents a much larger proportionate rise. So what that means is Philadelphia's portion of the housing mark where more modest income people were able to get in has become much more difficult. Our interest rates have gone up. When you pair those rises of interest rates with the rising amounts of the home prices, it makes it doubly difficult for people to --
And I think Jesse might also answer this as well. So just give me an overview, Jesse, on -- and maybe I know we have folks who are here from PHDC.
So how many people are on a waiting list for Basic Systems Repair?
So I think that waiting list spans a series of months. But I'd like to call up David Thomas to talk about how exactly those numbers populate.
Because what I want to do, right, I want to frame that here's the foundation of why we have a crisis, this is the methodology as to why we came up with this particular initiative, right --
-- and the data that shows that we have this many people in the waiting line for BSRP --
-- this many people apply for our first-time homebuyers program just to show the level of need. I want to see it crystallized for the body.
So I'd like to kick it over to Dave that can give you the specific numbers I think you're talking about.
Good morning, Council President. Morning, Council. To be clear, I'm not too certain what you asked me so I want to be specific --
So I want to get an idea of all the programs that operate under your purview that deals with housing, right, tell me the numbers. How many people in the Basic Systems Repair? I know we're talking about keeping NPI moving forward, right. How many people are on the waiting list as it relates to utilizing those particular programs that's showing that there's an actual crisis that we're dealing with. And I'm sure we have the data that shows here's why I need to ramp up and borrow $1 billion to address the issue.
So for BSRP, currently I have a waiting list of about 7000. I can't tell you all -
And clarify for the record what is BSRP for those who do not know, to the listening public.
BSRP is the Basic Systems Repair Program. It provides emergency repair to homeowners, for homeowners --
Roofing, plumbing, electric, structural as well as some cosmetics but very few. But most of it is major.
7000 on the waiting list. We do about $1 million a week in repairs. I have about 100 contractors, so we certainly have the capacity. But obviously, we have some challenges because the need is great. I get about 200 expressions a week looking for services or support. And those numbers ramp up when we have bad weather, torrential rain, things of that nature.
So that's just to address the aging infrastructure that we have in the city of Philadelphia?
Let me go into first-time homebuyers. Just talk about that particular program as well.
Turn the Key, we have a great -- we have a large demand for that as well. The challenge that most people have obviously is the affordability, the cost of purchasing a new home or just purchasing a home at all.
-- that was created to help with first-time homebuyers down payment. And the name of that program is what?
No. What's the name of program that gives in -- that the person can sign up for --
Philly First. Elaborate on it. Is that program in high demand or I want you to crystallize it to us. So you should be laying out and saying, here's all of our key programs, here's the demand for the programs. Hence, why we need $1 billion to continue this initiative. But a point of information with Councilmember Nicolas O'Rourke.
I just wanted to get what the actual number is. He said there's roughly 7000 on the list. What is the actual number that is on the waiting list as it relates to BSRP?
That number moves daily, so I'll give you what I have in front of me. And that number was 7054.
Thank you very much. Talk about Philly First program.
And the level of demand for it when we talk about affordability.
Philly First Program, that too has a huge demand. Philly First is a program for first-time buyers. It provides settlement assistance up to 10,000 or 6% of the sale price. That program too, I think we started that program quite some time ago. And truth be told -- I'll just say this, we thought, I certainly thought that after the pandemic that that program would diminish or something because we thought it was a big challenge. But that program has remained relatively steady throughout this time. So we're getting I want to say -- I haven't looked at that number too much, but we are looking at several million dollars in first-time grants. So I have to say several thousand people who have tried to become first-time homebuyers through that program.
Does that exemplify you a need for continued investment?
The need is great. The need is continuing to be there. I don't see that need coming down any time soon, especially given the rising prices of housing and the interest rates that people are being faced with.
And out of the 7000 that's on the waitlist, how many have we actually served -- I mean, we have 7000 on the waitlist. How many have we actually served just in total?
No, the waitlist is the amount that haven't been addressed, right?
And I'll come back to you later on. But I just want to -- again, we're crystallizing this whole conversation around affordability and crisis, right?
That's a part of the H.O.M.E. Initiative. We say we don't want to pit the haves versus the have-nots, right. We had a town hall last night. And again, the debate is that the area median income for the federal level doesn't respect our District Council constituencies that we represent, right. And so, how do we strategize to make sure that we're not amplifying gentrification based upon the NPI -- based upon the AMI method that we're using, right. Because obviously when you build more houses, value goes up, taxes goes up, right. And again, want to be clear it's not one group versus the other, but really being sensitive to that population of individuals who may be at an economic price point that they can only purchase a home at a certain level. So talk about the strategy of -- and that's not for you, Mr. Dave Thomas. It's for Jesse. How are we going to address that conversation in terms of this strategy? And I did see the breakdown so I have an idea, but let's all talk about it for the public so the greater public can know how we're addressing the AMI conversation. And again, we want to support everybody. But I also believe as a representative of government, my first priority is to represent those who don't have a voice. That's usually individuals who are impoverished, coming out of poverty and maybe on the threshold to be middle income as well comprehensively.
Right. Well, we recognize that the federal AMI is much far out of sync with what Philadelphians are, right. And that number is quantified on a metro area basis. Simply put, that average is offset by the collar counties that have some affluence. So what we do here is we look at -- for Turn the Key, for instance, right, that number is quantified or the sale prices are backed into a way where we look at the ability to sell properties at a certain price point, understanding where folks would be able to qualify on purchasing those properties, understanding what the debt-to-income ratio would be on actual Philadelphians. So we know what Philadelphians are at in terms of an average. So there's 100% of AMI that's quantified on a metro area level, but that number, your average Philadelphian is about high 50s, low 60s, right. So we make sure that we're providing these opportunities on the homebuyer side through Turn the Key, that price point to be able to sell the property, sell to those who can actually qualify, be able to increase their household income into the maximum AMIs that we've set it 80% of AMI or 100% of AMI for Turn the Key price points for sale properties. But at the same time, we've --
-- done this in a way where we've made sure that that mortgage comes in a way in response to what actual AMIs are. So it's the 50%, the 60%. Most Turn to Key applicants are qualifying and purchasing those homes, they're at a high 50%, low 60% of AMI.
Now, strategically how would you work with District Councilmembers where one District may say I'm comfortable with 80, another District may say I'm comfortable with 40 and another District may say I'm okay at 100, right? How did your strategy play into that in the event that we pre approved properties and working in partnership with the Administration?
Well, the strategy would be based on conversations, like you said, on a District-by-District basis, right. And it would look into what the markets can sustain in certain areas without completely needing a ton of subsidy. Because with what we do, there's always a kind of ranging or fluctuation in how much the City needs to subsidize to get those price points lower than they would be on a market rate basis, right. So we would have those conversations with City Council to understand where the market could sustain purchase prices at certain levels, understanding that sales might imply where we might want to take some initiative in investing in sparking up the market, where we don't want to necessarily create the market, but where we might want to stabilize the market, where folks are being priced out in a way where, you know, we talk about gentrification, we talk about displacement risk, that's the attention that we're paying toward and that's part of the strategy.
When you talk about this is a $2 billion investment, the other billion dollar deals with the land value. Do we do property assessments of all the land that's being put forth and come up with that billion dollar number? Where does the billion dollar of land investment come from? How do we arrive at that number?
So before I turn it over to Greg to talk about the formula that we derived that number from, that number is -- again, the formula involves a certain citywide. It looks at vacant property sales citywide as well. It also looks at the value that has been assessed at a low, medium and high rate. And that average is taken on a zip code-by- zip code basis. But I'll turn it over to Greg to talk much more intimately about it.
Good morning, everybody. Greg Heller. I'm a consultant for the City. So the first thing I just want to make clear is that that billion dollars, the purpose of it is to estimate the value of the city's land that's going into the H.O.M.E. plan to create housing. That --
I'm clear on that. I just want to know how you came up with that number.
So that price is not based on how the land will actually be sold. Each parcel will be sold according to the City's land dispositions policy, which requires different types of valuation and/or appraisal --
I'm clear. I just want to know, Greg, how did you get to the number.
Yep. Understood. All right. So the methodology we used was we identified vacant parcels using city property data and city- reported vacant lots. Then we calculated a per square foot value for every zip code in the city by two methods. One is assessed value and the other is sales data, sales post-2021. Then we cleaned and normalized the data by removing outliers via interquartile range filtering. We removed the top and bottom 25%. Then we estimated the total land value by applying a zip code-level average to each parcel in the city's vacant land inventory. Based on those two valuation methods, we feel comfortable that using the sales- based approach which is likely more accurate, that the City's inventory is worth approximately $1 billion, especially for future development and disposition planning purposes. And I also just want to emphasize that we have experienced housing finance professionals who did this work and validated it with the City.
Okay. All right. Thank you very much. I have one last question and then I'm going to turn it over to my members. I know we're doing a lot of work with Basic Systems Repair. Can you give me a reasoning why we didn't include the Built to Last program, which is the cousin of Basic Systems Repair? If we're talking about addressing housing infrastructure in the city of Philadelphia, why wouldn't we not include another successful program that works in partnership with BSRP?
Council President, I think in doing this we tried to make sure that we addressed as many programs as we could possibly address here. And I think we saw some similarities in the operations of Built to Last and Basic Systems Repair. So as we talk about the ability to expand Basic Systems Repair, we'd like to see it go beyond some of the emergency services repairs that we've typically seen historically. And we'd like to see about or think about how we can bring some of that scope into the Basic Systems Repair, where we might be short- changing --
Okay. So are we going to -- Basic Systems Repair, I guess essentially you're saying y'all moving in the realm of weatherization in the future as opposed to the dealing with PEA?
As we think about the opportunities to expand some of these programs, we do see some opportunities in actually centralizing some of that stuff.
Yeah, point of clarity too. Weatherization is now being carried out by PHDC going forward. Energy Authority is not handling weatherization any longer.
I don't know about a phase-out. All I know the state approached PHDC asking that we take over the weatherization program a month ago.
Okay. No, when I say a phase-out, it just sounds like if Basic Systems Repair is a successful program and you're saying we didn't put Built to Last as a part of this because we're looking at expanding the scope of work that Basis Systems Repair is doing, then that means the only thing that Basic Systems Repair -- the only thing that Built to Last is doing that Basic Systems Repair isn't doing is primarily the weatherizing of the homes, the solar panels, coming inside the property and making sure that it's weatherized, right, heating efficient, cooling efficient, right. And from my understanding, that's why Built to Last, PEA, Philadelphia Energy Authority works in partnership with Basic Systems Repair to kind of supplement one another, particularly when it comes to weatherizing of homes and fixing up the roofs and so forth. But if we're going in that direction with Basic Systems Repair and PHDC has done weatherization, I would think because the need is so great, and I heard this before, why can't we just expand and do both? That was for Mr. Jesse --
We remain open to talking about how Built to Last can play a role into this because we certainly have identified that we support it and continue -- we support the continuance of the program.
I just want to go on the record and say that I think it would be a great part of the proposal. I know Council could fight and advocate for it, but I just think it just naturally should be a part of the proposal if we're talking about the preservation of homes and we're addressing particularly the aging infrastructure and we already have a robust, successful program that's here, that we would marry the two in terms of I would bring it under this umbrella as opposed to being a Council-advocated initiative, but something I think as we work in partnership with that The Administration could take the ball and run with. (Applause.)
We would -- I can confirm we would be happy to continue that conversation about including them in this proposal.
Okay. Mr. Rob Dubow, just want to get an idea around just real quick the $800 million in borrowing, just for the record the cost of the debt service and the total amount of the debt service?
Good morning. Rob Dubow. So the debt service will be after both bonds are issued between 66 and 69 million a year depending on where rates are when we go to market.
And what's the total amount, the total amount?
The total amount, give me one second. I have it here. I think it will be about 1.3, a little over 1.3 billion.
And how long will the City be paying on the debt service?
20 years. And for every 9 $100 million borrowed, what's the 10 debt service on that cost? 11
So for every 12 100 million, it's about $8 million 13 or $9 million little. 14
Yeah. A 17 little over 8 actually. I'm doing 18 the math in my head. 19
And out of the additional 200 million that's projected for us to get from outside sources, how much has already been secured? I know we talked about the unions, like the unions want to be a part of this particular project and I guess they're using union funds to participate. How much commitment has been made thus far? Are any project labor agreements a part of that process in terms of commitment with the unions? And since they're going to be at the table, I just want to see their commitment on diversity, equity and inclusion regarding making sure that they're going to partner with the City of Philadelphia, right, and they get a returning investment which is the jobs that they're going to get for generations to come and that we're also building generations of wealth for Black and Brown children as well if they're going to be at the table as a part of this project. So one is how much have they committed thus far? Is there any actual real commitments? And then, two, their commitments in making sure that they're providing a diverse and inclusive workforce? I know we talk about apprenticeship programs a lot of times. I'm waiting to see what they're actually doing in terms of hiring the children from the city of Philadelphia.
So we're still in discussions. So there are no formal commitments, but there is definitely a lot of interest there and those discussions are serious and happening right now. We talked to them almost -- well, very regular I would say. And obviously, that kind of opportunity you're talking about will be part of those discussions.
And, Rob, I know you're on point in terms of oversight and doubling down and making sure we're doing things right. What would that arrangement look like? I know on the private side I've seen unions step up and say, XYZ developer wants to build a tower, and then that union will provide the funding from their union fund to help finance the project. And I guess return on investment, obviously they'll get the work and they'll get paid back after the project gets done. What does that look like for the City of Philadelphia to engage in that type of partnership and have we done anything like this before in the past?
So for them it likely would be investment from their pension funds, which would mean they'd want to understand what kind of return they got and also what kind of jobs were created for their members. And they would want reporting on that to understand what that looked like for them.
Any risk analysis that in the event that they do this type of investment of their workers' pension funds --
-- the market in terms of housing still continues to flourish and go forward. But is there any liability on the City side in the event that the housing market tanks and they've already invested so many millions of dollars from their union pension funds?
So those are the kinds of things that we're talking about, and obviously things that they want to understand and we want to understand as we get to the point where we have a solid commitment.
Okay. We would like to be briefed as a body. We want to make sure we fiscally responsible, the process is transparent and we know that we're being good fiduciary stewards for the taxpayers' dollars. So that's all I have. Point of information, Ms. Rue Landau.
Thank you so much for the help on the debt service. Can you explain one part to me? Do we always pay a fixed amount on our debt service? Does it ever decrease? How do we forecast that --
So for these borrowings, they'll be what are called fixed rate costs. You can do fixed rate or variable. Variable rate will go up and down so you have interest rate risk. For these bonds, they'll just be fixed rate. So we have fixed debt service for each year.
Yeah. So if interest rates move in the right way and it would save us money to refinance and we do that -- we do that all the time.
Thank you. And one last thing. Mr. Thomas, you talked about the waiting list. Is that a waiting list or expressions of interest? Just want to get clarification. Like individuals you actually said, hey, we're going to work on --
I'm going to say it's a waiting list at its present state. So for us, we consider it a waiting list because we're still waiting on documentation to determine eligibility in some cases. So I'm going to say we've engaged the constituent. We've had preliminary discussions. We understand what the need is. We just haven't been able to put them in the bucket of eligibility just yet.
All right. Thank you very much. And for the record, I always give you flowers. Thank you for your hard work that you're doing. I give my shout-out to Janae Mumford over there and Ashley Gilmore to make sure particularly when those bread-and-butter issues about Turn the Key and making sure that we're addressing Basic Systems Repair that spends $1 million a week, which again shows that there is a crisis, but I wanted y'all to crystallize it coming from you as opposed to me. It just shows that level of need. At this time, I want to turn it over to the Chair of Housing Councilmember Jamie Gauthier.
Thank you, Council President. Good morning to all of you. This is a very exciting day. I want to start by saying that I support this robust level of spending to combat the affordable housing crisis. I agree with Chief Thurman that this crisis is real. And frankly, it just gets more expensive the longer we don't properly address it. While I am excited that housing is at the top of the Mayor's priority list, I also think this body has a responsibility to be asking probing questions on this plan, especially given that Council's NPI Initiative is in its final year. And so, that means that H.O.M.E. will be our main source of funding related to affordable housing for at least the next four years. And so, I hope that you will take my questions in that spirit and not as criticism of the vision. This $800 million must be transformational in its impact. But based on the information that we currently have, I don't feel like we're currently all the way there. Right now it feels diffuse with dozens of different programs listed and without a clear throughline or sense of spending priority. We're sprinkling a lot of money in many different directions, and I'm hopeful that you can give us some clarity on the rationale for that. I'm also concerned that the H.O.M.E. plan's goals are actually lower than the goals of the Kenney Administration's Housing Action Plan, which sought to create or preserve a minimum of 10,000 units per year, including 4000 units per year for households at or below 30% of AMI. Can you speak to that as well? (Applause.)
I believe that we're in different times. I do think that we have the ability to address what we can given the path that we spelled out here. I would say that the Kenney plan was much more people-based compared to this which is much more unit-based right now. We think about the approach in the sense that we're trying to make sure that we have the ability for people to maintain what they have in the best ability that we see fit when it comes to the bond issuance here. So I mean, I think that 30,000 units is an ambitious goal. I think that the split that we've identified is based on the data that provides that there is a supply and demand issue, more so a demand and the need and a shortage. So our goals are predicated off of the data that reveals where exactly that shortage lives.
From a data perspective, can you speak to the rationale for actually decreasing the amount of units for people at or below 30% of AMI? What is that data and how does it factor into this plan? And then, can you speak to the rationale of taking the 800 million and kind of sprinkling it over dozens and dozens of programs?
Well, the rationale in spreading it across different income levels aligns with the Administration's effort and initiative to really provide some sort of economic opportunity at all levels and all income levels throughout the city. So we totally abide by the fact that there is no need to exacerbate the ability to concentrate poverty, which is why we're trying to provide some sort of upward mobility for not just those at the lower incomes but also at the moderate incomes as well. So that's our approach. That's the Administration's approach. You know, growing the pie, making sure that opportunities are provided for everybody, to spread economic opportunity for everybody. And your second question?
Are you suggesting that supporting people at 30% or below is concentrating poverty as opposed to helping people to move up the economic ladder?
I'm suggesting that not addressing other income levels is not what the Administration would like to do.
So it's the -- essentially, Councilmember, the approach is more comprehensive. In comparing the 2018 report, I believe it was produced in 2018, as Jesse said it's a very different time than it is now. And so, based on our current state market trends, what the need is now across the entire city, we took a comprehensive approach. Now, tag lines like sprinkling programs I won't address that. What I will say is that this is comprehensive. And we're looking at not just housing but systemic issues across the city, what's driving those systemic issues, and how do we address that. So it's ensuring that whether regardless of where you live, regardless of what challenges that you have, that everyone could see this plan and see what we mean when we say economic opportunity for all. So it's not a sprinkling. It's a comprehensive approach.
Okay. A couple more questions, if that's okay, CP?
Okay. I also think that the information we've been provided so far doesn't show us what the full story is behind the spending decisions in the H.O.M.E. plan. For example, we need more information to actually understand the full intent behind H.O.M.E. First, I see that we just received updated FY26 budget numbers this morning so that will be very important for us to review. Second, I do think we need the FY25 budget detail for each program so that we're understanding whether we're increasing, decreasing or staying the same as it relates to the programs in the plan. And third, it looks like we're leaving off a few sources and other sources of funding, particularly leftover proceeds from previous bonds that we haven't spent yet and money the City has gotten back from our various loan programs. How many millions of dollars like these haven't been spent yet or do we plan to get replenished to put back into the programs listed under H.O.M.E.? I just think without all of this data we can't see a full picture and have a full sense of how we're investing our resources. And lastly, we've heard a lot about a large legislative package that will accompany the H.O.M.E. plan. I'd like for you to outline what legislation the Parker Administration is hoping to get passed by Council this June? So first, if you could speak to some of the other information that's kind of missing from the plan that might help us to better understand the spending. And then if you could further outline the legislative package.
Absolutely, and we've been very transparent in our process with the Council briefings. We made a few corrections this morning and was transparent about that as well. And also, in that forecast that you're looking at it does explicitly say what programs are -- where the expansion is taking place, what programs are being and what new dollars will be invested in that. But I have Rob Dubow here, our Finance Director, to talk more specifically about that. Then I'll come back and talk about the legislative package.
So the billion dollars includes $800 million from the two borrowings. And then there's another $200 million that is a combination of money that we put to the Housing Trust Fund, both from the General Fund and recording fees. And then there's federal money from things like CDBG and HOPWA and ESG. So all that money will be going into the program. And as you pointed out, there's still $50 million left from NPI that Council is really helping direct where that will be spent.
Would it be possible to update the documents that we have with these other sources of funding so that we can have a full picture?
And while we have not introduced the legislation yet, I know that we spoke with you and Council President yesterday around several bills that we're looking to introduce, including proposed zoning text amendments, Tier legislative projects around CMX, CM4, parking revisions that we're looking to introduce as well and talk through with members, and then zoning districts, looking at updating our base zoning districts around R2a-2. And so, we are prepared to talk about that at a later date. But that's the overview of the legislation that we're looking to introduce.
Are there fiscal notes signed to every piece of legislation you're sending over, analysis of all of them for Mr. Dubow?
We will get that package as early as -- I need to look at my legislative team, Thursday.
Thank you. The Chair recognizes Councilmember Rue Landau.
Thank you so much. Thank you, Council President. Thank you all for being here today. As you know you've heard me say many times, I've been a lifelong housing advocate. I believe that housing is a human right and I've served years representing low-income tenants in Housing court, ran the Fair Housing Commission, so I've been doing this for a very long time. I want to be really clear about where I stand here. I am absolutely excited that the City is going to do an investment of funds to what I hope will transform the way we are handling housing here in the city of Philadelphia. I am all in for it. I think where I might disagree with you all would be where we place this money. And to be clear, I believe I could say for myself and clearly many of my colleagues we are not trying to pit the have-nots versus the have-a-littles. We are just not. In fact, that's where I want the largest investment of funding to go, the have-nots and the haves-a-littles. It's the higher levels that are a little more concerned to me. I too know that our previous housing plan, I'm so proud of our city. We've been outperforming those numbers and know that if we stay on track with that plan, we are reaching significant goals that I fear we will backtrack from if we implement this particular plan. As stated, 1/3 of Philly's households earn $30,000 or less, which is more than 200,000 households here in Philadelphia. But only 9000 of the total 30,000 units in this plan will be created or preserved for people earning 30% of AMI. That's $31,000 or less. So just to be clear, 30% of AMI the household earns $31,000 or less. This is proportionately lower than the target under the previous plan. We've only seen a list of initiatives that will be continued, expanded or introduced under this plan and how much of the total funding will be dedicated to each program but not the targets for each? How much of the H.O.M.E. budget will be dedicated to support the housing needs of families and individuals that earn 30% of AMI or less? And can you detail which programs funded under this plan will be targeted for those households?
Well, first I want to -- I'd like for Jesse to address the 2018 plan which is very different than this plan, to ensure that we're not spending an ordinate amount of time comparing the two plans or saying one plan is better than the other. So I think that I'd like for Jesse to answer that. And then we could answer the question around AMI. Thank you, Councilmember.
Yeah. I mean, I just -- simply put, the 2018 plan was a 10-year plan and that number laid out the 100,000-unit target. Ours is a snapshot for a smaller term, four to five years. Four years, to be honest with you, for 30,000 units. And again, it's much more produced. It's much more about making sure that we're preserving the actual production and preservation efforts. That 2018 plan speaks a lot to some of the plans that we have here today or earlier versions of the plans that we have here today. It does not abandon them. We're not abandoning that plan, because a lot of the same initiatives that were coming out of that plan rise into this plan as well. So I mean, we are looking to make sure that whatever we did here when it came to this current plan we didn't completely abandon the 2018 plan.
I do want to suggest that under DHCD's dashboard, the number of households that you will affect under your current plan will decrease for our lowest income Philadelphians I believe under this plan.
Again, I think we are responding to the snapshot in time right now 2025, understanding that we have done an updated research effort on where that need is production-wise and preservation-wise. And this plan is again pivoting toward the production and preservation of the existing housing stock in addition to supporting a good amount of what resonated through the 2018 plan through the programming and wraparound services that are in the stabilization and incentive efforts that we're presenting in that category in the 2025 plan.
Okay. So can we get back to how much of the H.O.M.E. budget will be dedicated to support the housing needs of families and individuals that earn 30% of AMI or less? And can you detail which programs funded under this plan will be targeted for those households? I'm looking for the total amount dedicated in each program, not the targets for each. Thank you.
Councilmember Landau and Council President, we can get back to you on that even today during the hearing.
We'll be here all day. And so, you want to give them a chance --
But I also want to clarify that the materials that we've provided in Appendix B, we do have target -- not the target. We have the affected AMIs, the affordability levels and the income bands laid out --