In order to meet its growing demand, Philly will need to add 38,407 new apartments by 2030. Problem is, Philadelphia is one of the toughest cities to add necessary households for renters.
The Philadelphia metro ranks sixth out of 50 metros in terms of hardest cities to add new apartments, according to a new report by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA). Honolulu took the number one spot in the ranking.
In general, the U.S. must add 4.6 million new apartments by 2030 to meet its rising demand.
But the Philly metro has a number of barriers that could prevent enough apartment growth, according to the report. It ranked 5th out of 50 as one of the more restrictive metro areas, with No. 1 being the most restrictive. The following areas played into Philly’s high ranking:
[L]engthy and sometimes multiple approval processes even when proper zoning is in place; use of control density with some type of minimum lot size restraint; use of affordable housing requirements and/or open space and infrastructure cost requirements in some areas; long-term lot development cost increases in excess of general inflation; and lengthy review times.
Despite all that, Philadelphia itself has seen a boom in apartment building renovations and construction in recent years, although much of it has occurred in the Greater Center City neighborhoods. In Center City alone, about 30 residential projects are currently under construction or have been proposed. Just a handful of those 30 are condominium developments.
But the NMHC/NAA report suggests that Philly needs even more apartments than it’s already shelling out. More importantly, they need to be at all price points—not just those at the high end of the market, said Miles Orth, president of the Pennsylvania Apartment Association and Pennsylvania Apartment Association East.
Research conducted by Hoyt Advisory Services for the report found that due to a projected rise in apartment household growth, growth in renters, and population growth, Philly is expected to need about 38,000 new apartments by 2030. But at the current average annual construction rate in Philly, it’s projected to build only 32,930 apartments by that point.
Apartments were defined as a rental in a building that has five or more units.
More Philly metro data from the study can be found here.