Linda K. Harris
New Housing Report Shows Record Levels of New Production
PHILADELPHIA (February 16, 2017) – In 2016, a record number of new residential units were brought to market for a growing downtown population, with 2,506 new units delivered in Greater Center City, a 15.5% increase over the previous high of 2,168; 73% (1,833 units) were rental apartments; 27% (673 units were for-sale housing), according to a new report researched and produced by the Center City District/Central Philadelphia Development Corporation and released today.
Six large projects of 100 units or more account for 73% of all new apartments (1,331 units) completed in 2016. Five of these six are located in the downtown, activating the sidewalks by adding more residents and retail customers to an area that was primarily a daytime business district just two decades ago.
At the same time, 528 single-family homes and smaller multi-family developments spread across the neighborhoods that extend beyond the downtown core, north to Girard Avenue and south to Tasker Street.
In addition to this new supply of rental and for-sale housing, there are 4,167 rental and 1,212 for-sale units under construction in Greater Center City, whose population has grown 19% since 2000 and now numbers almost 190,000.
Can this volume of new housing be absorbed? Like nearly all North American downtowns, Greater Center City has capitalized on the growing preference for diverse and walkable, live-work settings. More than 60% of Greater Center City workers are able to commute to work without a car, and 40% forgo the costs of car-ownership entirely.
Center City is benefitting from a national trend of shifting away from home ownership toward rentals, while shrinking household size also fuels demand for apartments. In Greater Center City, 40% of the population is in the millennial cohort, which has shown a clear preference for renting over owning. And though the millennial generation may be peaking, Philadelphia has a vast array of colleges and universities that draw a new class of 18 year olds each year into the city.
Density, walkability and convenient access to restaurants, retail, culture, and medical care are appealing to all ages and, particularly, to young adults and empty nesters. But Philadelphia’s slow job growth and the uncertainties surrounding public school funding tend to limit our ability to maximize these competitive strengths. The fundamentals of the homeownership market likely will remain very strong, but some excess supply of new rental units coming in 2017 could cause rents to moderate and vacancy rates to rise in some existing apartment buildings.
To read the 20-page report, accompanied by informative maps, photos and charts, please click here.
The Center City District, a private-sector organization dedicated to making Center City Philadelphia clean, safe and attractive, is committed to maintaining Center City’s competitive edge as a regional employment center, a quality place to live, and a premier regional destination for dining, shopping and cultural attractions. Find us at www.centercityphila.org and on Facebook and Twitter.