1,000 single-family homes on city land
City Council Speaker Darrell Clarke speaking at the groundbreaking ceremony for The Hamilton.
The City of Philadelphia has finally put in place its own financing to begin using its portfolio of vacant land for affordable housing production.
Several city officials and members of the Philadelphia City Council gathered on an empty lot in West Philadelphia on Thursday to announce the launch of Turn The Key, the city’s new program to develop affordable single-family homes for first-timers. buyers, Board Chairman Darrell Clarke’s office announced. By giving away land virtually for free to private developers who respond to tenders, Turn The Key is expected to create 1,000 new single-family homes for households earning no more than 80% of the region’s median income.
Homes built under the program will have three bedrooms and 1.5 bathrooms, be energy efficient and cost no more than $250,000, according to the announcement. Mortgage payments should not exceed $1,200 per month, which is where city funding will come in — $7-8 million initially, to come out of the preservation initiative’s $400 million plan of the neighborhood adopted by the council in 2020, reports the Philadelphia Inquirer.
The city’s funding will be used to provide what it calls concessional loans of up to $75,000, depending on household income, to offset down payments and closing costs, according to the announcement. Homeowners taking out such loans would add a second mortgage to their home, although this is designed to be phased out – at the end of a standard 30-year mortgage, the low-rate loan would be completely forgiven.
The plot identification and disposal process will be the shared responsibility of the Department of Planning and Development and the Philadelphia Housing Development Corp., which absorbed the Philadelphia Land Bank and the Philadelphia Redevelopment Authority in 2019. of this year, Tenders for dozens of lots have already been published on the PHDC website.
Turn The Key is one of the many ways PHDC and the city have attempted to leverage vacant city-owned land for the benefit of the city. A law passed in early 2020 opened up the possibility of such lots being given away for a nominal fee to developers who promise to keep at least 51% of on-site residences affordable. A scheme launched last year promised to make empty land available to participants in its minority developer scheme.
If Turn The Key works as planned, it will end a years-long series of council policies that largely encouraged affordable housing through regulation rather than economic support, which private developers have described as misguided to actively hostile.