Safe and affordable housing is a right that everyone deserves. It can build generational wealth for both renters and homeowners, allowing renters to save money and giving homeowners the opportunity to profit or pass their home onto family. Throughout the country, cities have two fundamental barriers to homeownership: high prices and low income. Philadelphians struggle the most with low incomes. By comparison to other large cities, Philadelphia is affordable but its people live in such poverty that homeownership is not a reality.

A 2018 Pew study found that at least 40% of Philadelphia households were cost-burdened. What does it mean to be cost-burdened? It means that people spend 30% or more of their income on housing costs, including rent, mortgage payments, utilities, insurance, and property taxes. For renters, the numbers tell an even bleaker story. Philadelphia has twice as many low-income renter households than there are housing units in their price range. 

How can we change this pervasive issue? 

There needs to be a mix of policy, taxation, and strategies for city-funded projects to bring more affordable housing. For example, national policies like universal healthcare and raising the minimum wage would have an immense, positive impact on those who are most cost-burdened. Within Philadelphia, policies requiring new buildings to have a high percentage of affordable units are key. Another option would be rent control to keep people in their homes, especially in rapidly gentrifying neighborhoods. 

Leveraging taxes on top earners, home sales, or through other methods could create enough funds to keep people in their homes. This money could be used for the preservation of existing affordable housing, home repair grants, and fund mixed-use development in commercial areas. 

Strategies for city-funded projects could increase Philadelphia’s affordable housing stock. This is where PAF plays a role. Developers that receive loan funds from PAF must have at least 51% affordable housing units in their properties. By making inclusionary housing a requirement for properties sold by the city, both owners and renters alike could benefit. 

Solving the affordable housing crisis will not happen overnight but by enacting a mix of policy changes, taxation, and strategies for city-funded projects, the most cost-burdened Philadelphias could reap massive benefits. If you are a developer planning on building affordable housing but do not have the funding you need, join the PAF portal to see what loan options are available.