What explains the housing boomlet in the city of Philadelphia?

Abstract

Since 2003 a sizeable shift has occurred in the location of new housing units in the Pennsylvania portion of the Philadelphia metropolitan area, which consists of four suburban counties and Philadelphia County (the central city). The percentage of units located in the city of Philadelphia increased from an average of 4.6 per cent per year in the 1990s, to over 20 per cent during 2004–11, and to over 40 per cent starting in 2012. This paper stipulates that demand for new housing in the central city appears to be driven by the large increase in employment in the education and health services and, to a lesser extent, employment in business services. On the supply side, the city of Philadelphia facilitated housing supply in the central city by providing a ten-year abatement of property taxes for new housing and initiated the Neighborhood Transformation Initiative (NTI). NTI involved the sale of bonds to finance the demolition of abandoned structures and the assembly of land for development.