In middle-income neighborhoods where property prices are often below the city median, renters looking to buy their first home are competing — and often losing — with buyers who can afford to pay more for those homes. properties, often in cash.

These buyers, some of which are national investment firms, typically turn single-family townhouses into rentals, taking away housing stock that was once a reliable source for moderate-income homeownership, said Emily Dowdall, Director of Policy at the Reinvestment Fund.

The trend predates the pandemic, but has accelerated in the past two years as prices in these neighborhoods, including West Oak Lane, Olney and parts of Southwest Philadelphia, have continued to rise.

Home prices in the city’s mid-markets have risen significantly over the past five years or so. According to an analysis by the Reinvestment Fund, the median from 2016 to 2018 was around $127,000. From 2021 to 2022, it had risen to $213,000.

“The data certainly indicates that there are unmet needs for these moderate-income households who, although not in poverty, still have difficulty making a down payment, building a strong credit and finding available housing stock to own,” Dowdall said.

Close the gap

There’s also a racial equity element to the city’s plan to build as many workforce housing units.

By giving city workers like Buttler buying preference for upcoming homes, Philadelphia is poised to increase its number of black homeowners, a figure that continues to lag behind the number of white homeowners in the city.

The majority of the city’s municipal workforce is black, and AFSCME District Council 33, whose members stand to gain the most preference, is majority black.

“If you look at the racial and socio-economic mix of city employees who meet the Turn the Key requirements, we are confident that we will have a diverse pool of candidates who will positively impact the communities in the city where these homes will be. built,” Jamila Davis, spokeswoman for the Philadelphia Housing Development Corporation, said in an emailed statement.

“We are confident that we will help many people realize the American dream of home ownership where it might have been impossible,” she said.

In 2019, 47% of black Philadelphians owned homes, compared to 59% of white residents, according to researchers at the Federal Reserve Bank of Philadelphia. This gap is slightly larger today than it was 30 years ago.

According to data from the Reinvestment Fund, nearly 25,000 black renter households would need to become homeowners to make up the difference. This disparity partly explains why the Building Industry Association of Philadelphia, which often opposes affordable housing proposals from the city council, overwhelmingly supports the Turn the Key program.

But Mohamed Rushdy, the group’s vice president, said the initiative could have a much bigger impact if additional public land could be ceded without the approval of city lawmakers.

As it stands, District Council members must submit a resolution authorizing transfers of individual plots to the Land Bank, the source of all plots currently in the scheme. Rushdy argues that removing this step, an example of a long-standing practice known as the councillor’s prerogative, would significantly speed up the project approval process for new owners.

“The Land Bank needs this autonomy,” Rushdy said. “There is no other solution.”

Released in 2018, Philadelphia’s Housing Action Plan calls for the construction of 10,000 new affordable housing units by 2028, including 4,000 workforce units.

Clarke said there are plans to add “well over” 1,000 homes to the city’s workforce housing inventory through Turn the Key.