Philly’s increasing lack of affordability is highlighted in a new report, which finds that the city lost 20 percent of low-cost rental units between 2000 and 2014.
That’s according the Federal Reserve Bank of Philadelphia’s latest analysis, which highlights the impact of gentrification on low-cost rental housing.
Specifically, the city lost 23,628 units with rents that fell below the $750 threshold between 2000 and 2014. The researchers found that gentrifying neighborhoods were hit hardest by this loss. These areas—think Center City and University City—have lost low-cost rental units at five times the rate as non-gentrifying neighborhoods.
The researchers used $750 as the low-cost price point because in Philly that number is considered affordable to someone who makes about $30,000 a year, which is just above the city’s median income.
As the chart dictates, while Philly lost a significant chunk of apartments with rents below $750, housing stock in every other price range increased between 2000 and 2014. The three census tracts that lost the most low-cost units were University City, Holmesburg, and Center City near Jefferson.
“The shrinking stock of affordable housing in Philadelphia leaves lower-income renters saddled with higher rent burdens, greater financial distress, and insecure housing arrangements,” the researchers write.
Dwindling supply of affordable rental housing is a serious issue in metros nationwide, but it’s particularly prevalent in Philadelphia, given that it has the highest poverty rate of all major metros in the nation. In addition, even more recent Census data shows that more than half of Philly renters are cost-burdened, meaning they spend more than 50 percent of their income on rent.
So, where is all the affordable housing stock going? There are a few factors. In gentrifying neighborhoods, they’ve been replaced by amenity-driven, market-rate apartments—Philly was number one in new walkable construction this year. With these new luxury apartments, rents continue to rise, making the neighborhood increasingly less affordable. Nearly 70 percent of new construction in Philly since 2014 has been on the high-end, with these apartments averaging about $1,795 per month.
Rising rent is also a contributing factor in non-gentrifying neighborhoods, but less so than conversions to owner-occupancy, abandonment, or demolition, the researchers write.
Further complicating things is that the affordable housing restrictions that are left in Philly are set to expire within the next five years. That’s a big problem, since research shows that subsidized units are often well-maintained even compared to market-rate units because they under routine inspections in order to receive funding—not to mention they cap rising rents.
That’s why, the researchers write, maintaining these subsidized units is just one crucial component to mitigating the city’s loss of affordable housing.
- Gentrification and Changes in the Stock of Low-Cost Rental Housing in Philadelphia, 2000 to 2014 [Federal Reserve Bank of Philadelphia]
- More than half of Philly renters are cost-burdened, report says [Curbed Philly]
- High-end construction in Philly makes up nearly 70 percent of rental market [Curbed Philly]