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2016 Builders Conference Recap: “Building a World Heritage City''
More than 175 builders, developers, Realtors and other real estate professionals attended the half-day conference September 21 at the National Museum of American Jewish History. (Visit the BIA Flickr page to view photos of the conference.)
Keynote speaker Harris Steinberg, director of Drexel University’s Lindy Institute for Urban Innovation, called for a citywide historic preservation plan, comprised of a comprehensive inventory of historic resources and a “forensic audit” of the current regulatory system, in order to create a transparent and predictable development climate.
Change is constant in a centuries-old city, he noted, yet without a consensus vision derived from a widespread public conversation, every development proposal is decided on a case-by-case basis.
“What if we did a citywide preservation plan together?” asked Steinberg. “Given that we are at a standstill … we need a truce. We need a way forward.” (Click here to view a PDF of Harris Steinberg's presentation.)
Economist Kevin Gillen, also of the Lindy Institute and a BIA board member, reported that, unlike most other large cities and Philadelphia’s own suburbs, housing prices in Philadelphia have fully recovered from their recession lows. The city’s housing prices are now at an all-time high, and Salem County in New Jersey, not Philadelphia, now records the lowest housing prices in the region.
Philadelphia’s real estate tax abatements for renovations and new construction are key to the recovery, Gillen said. Based on new research, he refuted several common misunderstandings about the abatement:
- 61% of abated residences are valued at under $400,000. Only 2.6% of abated residences are new construction costing more than $1 million.
- Abated properties have increased the City’s taxable base of real estate by 9%. Formerly-abated properties now yield $48.1 million every year in new tax revenues. When all currently abated properties see their abatements expire, this will rise to $161.3 million in annual tax revenues.
- Abated properties, both new construction and renovations, are most heavily concentrated in and around Center City, but are situated across Philadelphia.
- Since the abatement program was implemented, homebuilding activity in Philadelphia has increased 376% while falling an average of 11.25% in the suburbs.
Anne Fadullon, director of Philadelphia’s Office of Planning & Development and immediate past president of the BIA, and David Perri, commissioner of the Department of Licenses & Inspections, considered “What it Takes: Building in Today’s Philadelphia” in a panel moderated by Francis Vargas, vice president of Elon Development Company.
Fadullon said her biggest challenge so far is the pivot to managing growth after decades of decline. The city lacks sufficient processes and programs to guide sustained growth, she added.
“How do we adjust?” she asked. “We are a city that is moving more forward than back, and we are going to continue to grow and expand while recognizing that we still have some deep problems.”
Perri emphasized procedural changes at L&I to keep up with growing demand, including hiring and training of more field inspectors and faster reviews and permits. One challenge, he added, is Philadelphia’s obsolete uniform building code. L&I is at work to enable the city to adopt its own code to meet the city’s specific needs, he reported.
Leo Addimando, managing partner of Alterra Property Group and BIA’s board treasurer; Jonathan Broh, principal at JKRP Architects and of the Washington Square West Civic Association, a registered community organization (RCO); Jonathan Farnham, executive director of the Philadelphia Historical Commission and Lauren Vidas, president of Hazzouri and Associates and of the South of South Neighborhood Association, also an RCO, discussed “Embracing Change: From ‘NIMBY’ to ‘YIMBY’” in a panel discussion moderated by Jon Adler of Naked Philly.
Adler opened the panel by remarking: “I don’t need to tell this room that we need more development. But it’s not just quantity, we need quality too. We need density in our urban core. We need to address the ever-present parking issue in a well-reasoned fashion. We have to have frank conversations about architecture and historic preservation. And we’d be remiss if we aren’t finding ways to align the goals of the development community with the (reasonable) wants, needs and desires of community groups around town. Most of all though, we need smart development, with projects that fit into the context of the past and present, and give us a future that we can all be proud of.”
The representatives from the two RCOs emphasized the need for early and thorough communication with residents on development proposals. Addimando discussed the cooperation between Alterra and SOSNA, which included a survey of neighbors, in order to obtain a zoning ordinance enabling Alterra’s pending block-size development at Broad and Washington.
Farnham addressed the notion that historic designation is sometimes used to block development, noting that what he called an “alt-preservation movement,” independent from existing organizations, is making “11th hour nominations” of properties where a sale or demolition permit application appear imminent. The Historical Commission’s goal, he emphasized, is preservation of valued resources, but without a preservation plan and sufficient resources, these nominations can slow or stop development. He called for a “return to a predictable, transparent process where property owners don’t have to fear the 11th hour nomination … and perform due diligence with a reasonable assurance of proceeding.”