This essay is part of a series that accompanies NCRC’s 2019 study on gentrification and cultural displacement. The opinions expressed in this article are the author’s own and do not necessarily reflect the views of NCRC.
Like other cities, Philadelphia’s past is marred by decisions that pushed low-income people out of their neighborhoods, fostered residential segregation and stripped wealth and opportunity from low- and moderate-income neighborhoods. These were deeply racialized decisions that had an outsize negative impact on people of color, and which resonate in the persistent poverty and inequality of today’s Philadelphia.
As wealth and opportunity flow back into the city after decades of decline, it is the responsibility of policymakers to embrace ideas that not only prevent the deepening of inequality, but also begin to compensate for the errors of the past. Anti-displacement strategies are one part of that effort. Philadelphia has taken a few steps forward, but as our development boom continues, we need to move quicker.
Shifting neighborhoods: Gentrification and cultural displacement in American cities
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So far, Philadelphian policy makers have prioritized helping homeowners facing unaffordable property taxes that threaten their ability to stay in their homes. Two programs allow property owners to freeze their real estate taxes to prevent future increases: the Senior Freeze program for low-income homeowners over 65 years of age and the Longtime Owner Occupant Program (LOOP) for households that have owned and lived in their home for 10 years or more (subject to income eligibility) and who saw increases of 300 percent or more in tax assessments from one year to the next. More than 29,000 Philadelphia property owners have enrolled in these programs, earning them $21 million in property tax relief.
Another 13,161 Philadelphian homeowners have enrolled in the Owner Occupied Payment Agreement (OOPA) program, with $86 million in delinquent taxes under agreement. Property owners who face losing their home to tax foreclosure can enter into monthly payment agreements with the amount due between 0 to 10 percent of their monthly earnings, depending on income.
Unfortunately, Philadelphia has few programs to help renters who are facing displacement due to rising costs. While advocates secured a victory in 2018 that will boost funding by more than $70 million over the next five years to expand affordable units and preserve existing affordable homes, resources are still inadequate to ensure housing stability for all low-income Philadelphians. The city is also piloting a new eviction prevention program in 2019, which gives an expanded number of tenants access to legal services and representation, as well as financial counseling. Discussions are ongoing to scale that up to provide a right to legal counsel for all low-income renters facing eviction, and provide a local source of rental assistance to serve more tenants facing the loss of housing.
A new Mixed Income Housing program took effect in Philadelphia in the fall of 2018 that offers developers zoning “density bonuses” if they either pay a fee to a Housing Trust Fund or set aside affordable units for rent or sale on-site of their development. By making more affordable units available on-site, lower-income households could choose developments in higher quality or improving neighborhoods with great amenities, nearer to transit, jobs, good schools and green spaces. Payments to the Housing Trust Fund could help provide or preserve quality, safe housing for families that want to stay in the neighborhoods they’ve called home for years.
Philadelphia is also starting to look at ways to help small businesses that face displacement when property taxes and rents rise or when their revenue drops as their local client base changes. A new pilot program will launch in 2019 that will offer a low-cost revolving loan fund to help small businesses or community development corporations (CDCs) purchase property in commercial corridors. Businesses that buy their buildings can stave off rent increases from owners who see gentrification as an opportunity to hike rents. They can also earn income by renting out upper stories. CDCs could purchase and preserve commercial spaces for reduced-cost rents to ensure that legacy businesses and the local retail mix continue to serve long-time residents.
While these programs are a good start, they have not solved the problems of gentrification-driven displacement in Philadelphia. In fact, local policy exacerbates displacement through Philadelphia’s inequitable 10-Year Property Tax Abatement offered for all new construction. This drives up home sale prices as developers can charge a premium for newly built homes in exchange for the guarantee of low taxes for a decade. Neighbors in older homes surrounding the new construction see their property taxes rise due to the improvements, while the new owners get a 10-year subsidy. The policy also zaps the local treasury of revenue for critical public services at a time when the city is desperate for more resources to help those facing homelessness and housing instability.
Concerns about displacement led a coalition of Philadelphia advocates and government officials to join together in 2018 to participate in PolicyLink’s Anti-Displacement Network, a collaboration that has brought together leaders from 10 cities in transition to learn from each other. Through this collaborative work, we’ve reaffirmed our commitment to protect homeowners facing displacement, and we are digging deeper to consider new policies to help renters and small businesses. The only way to grow Philadelphia is to grow it equitably, and attacking displacement in all of its forms is critical to that work.
Beth McConnell, policy director, Philadelphia Association of Community Development Corporations, @BAMinPhilly, @PhillyCDCs