This post is part of a larger series.
So far, I’ve written about reforms to governance and to fiscal policies. The first establishes a strong foundation of government that is efficient, and that people can put their trust in. The second reforms create a tax and income framework that discourages inequality and generates increased revenue. Now we can begin discussing the third set of reforms: programmatic reforms. These include all of the areas of basic needs: housing, health, education, transportation, food, and public infrastructure. The City already has programs for much of this, but I want to push these proposals further.
Here is where I can finally get to my core argument. The whole point of Block to Block is to establish that 1) there is an immense level of poverty and inequality in Philadelphia and its greater region, 2) this poverty and inequality is not a necessary state of affairs due to resource constraints, and 3) we can and should provide for basic needs for all in the region, and government is the only way to effectively achieve this.
In the first and second sections of Block to Block I established numbers one and two. The first two sections of my proposals for change have fallen in the third point, and now we can finally begin discussing concrete policies and programs to provide for basic needs.
Programmatic Reform Part 1: Housing
The City recently published its first comprehensive housing plan. This alone is an incredible breakthrough. However, the housing plan doesn’t go far enough, relying heavily on the private market. It should aim to achieve the following:
- Produce affordable housing
- Preserve existing affordable housing
- Prevent displacement
- Make first-time homeownership more accessible
- Make home repairs more accessible
The ultimate goal should be a Philadelphia where everybody can afford a safe, quality home. The City already has several programs in place that help reach towards this goal, but their funding and scope is entirely insufficient. With significant, sustained investments in existing programs, we can meet the level of need.
First, here’s an overview of the City’s existing housing programs and related departments.
The Department of Planning and Development
The Department of Planning and Development implements almost all of the City’s housing programs. This department acts as the umbrella under which all other City-controlled housing agencies operate. It includes or plays a major role in the following:
- Art Commission
- Philadelphia City Planning Commission
- Development Services
- Division of Housing and Community Development
- Historical Commission
- Zoning Board of Adjustment
- Philadelphia Housing Development Corporation
- Philadelphia Land Bank
- Philadelphia Redevelopment Authority
The Division of Housing and Community Development is the primary agency that directly implements housing programs. Through this agency and its peer subdivision, the Philadelphia Housing Development Corporation, it implements the following programs:
- Adaptive Modifications Program
- Basic Systems Repair Program
- Weatherization Assistance Program
- Senior Housing Assistance Repair Program
- Neighborhood Home Preservation Loan Program
- Heater Hotline
The Housing Trust Fund
City Council created the Housing Trust Fund in 2005 through legislation. It is a dedicated fund within the City’s budget with the sole purpose of supporting housing needs. Its focus areas include creating affordable housing, preserving existing affordable housing, and preventing homelessness. Philadelphia’s Housing Trust Fund is just one among more than 50 in Pennsylvania and hundreds in the country.
Basically, the Housing Trust Fund is a method of collecting and redirecting money for affordable housing. Most of the money goes to the City’s programs for affordable housing, to nonprofits that build or maintain affordable housing, and to assist those who are at risk of foreclosure.
Unfortunately, the Housing Trust Fund’s budget is meager compared to the level of need. Since its creation, it has spent just over $100 million, and it has an annual budget of about $10 million.
Home repair programs
There are several home repair programs through the City of Philadelphia.
BSRP: The Basic Systems Repair Program (BSRP) provides free repairs for eligible households, including emergency repairs. The program works on structural, heating, plumbing, electrical, and roofing needs. In order to be eligible, the applicant must own and live in the house, not own any other residential properties, be current on all taxes, and meet income guidelines.
WAP: The Weatherization Assistance Program operates similarly to the BSRP, but focuses on weatherization improvements. These include upgrades like adding insulation, caulking, sealing air leaks, and hot water heater replacements. This program is also free, but the household has to meet income guidelines and other conditions. Unlike BSRP, participants in WAP can be tenants or the owner, as long as they live in the property.
AMP: The Adaptive Modifications Program assists eligible households with installing features that allow those with permanent physical disabilities to have increased mobility. This includes features such as automatic lifts on stairs, widening doorways, installing railings, installing lower sinks and other wheelchair-accessible equipment, and improving bathrooms for easier access. Like other programs, participants must meet income guidelines, be current on their taxes, and live in the property.
RRR: Restore, Repair, Renew offers Philadelphia homeowners 10-year, 3%-interest loans to repair their home. Loans range from $2,500 to $24,999. Homeowners must meet income and credit guidelines, among other requirements.
SHARP: The Senior Housing Assistance Repair Program is a partnership with the Philadelphia Corporation for Aging that provides low-cost repairs for seniors. These are minor repairs for homeowners aged 60 or older. Homeowners with a household income below 200% of the federal poverty guidelines are eligible for reduced costs.
PFHP: The Philly First Home Program assists Philadelphians with purchasing their first home. The program provides $10,000 or 6% of the home value to assist with closing costs or the down payment. The homes must be single-family or duplex. Participants must meet income guidelines, be a first-time homebuyer, and attend a homeownership counseling session.
Other forms of assistance
Other forms of assistance are offered by each level of government.
TTF: A tangled title is special term that means the people living in a home do not have their names on the deed. There is no paper trail tying that person to the house, even if they functionally own the home. This typically happens for homes that are passed through the generations informally, and because it can be quite costly to pass on a home through official means. Once a household is in tangled title status, it can get even more expensive and difficult to resolve, since back-taxes may be owed and other legal fees may be required. This is an issue because there is almost no program (none that I know of) that a household with a tangled title is eligible for. This means that thousands who need assistance have no way of applying for it.
The Tangled Title Fund (TTF) helps households pay for the costs of resolving a tangled title. Typically the limit is $2,500, and there is a hard limit of $4,000. The applicant must reside in the property and meet income and assets guidelines.
Heater Hotline: Through a partnership with the Energy Coordinating Agency, Philadelphia households can receive assistance with paying utilities bills and providing weatherization upgrades. Not much more information is publicly available.
Utilities Assistance: Through a partnership with UESF, Philadelphia households can receive assistance with paying utilities bills or receiving oil directly.
Heat Assistance through LIHEAP: The Low Income Home Energy Assistance Program is a State program that helps households pay heating bills through cash grants. This is available to any household that meets income guidelines, whether they are renting or own the home. LIHEAP also offers crisis assistance, including with repairing heating systems.
Philadelphia Housing Authority rentals: The Philadelphia Housing Authority (PHA) is not actually controlled by the City, and is instead considered to be part of the Federal department of Housing and Urban Development (HUD). PHA primarily offers rental vouchers (see below), but it also owns 12,800 rental units that eligible households can apply to live in (see this report). To qualify, a household must meet income guidelines. Rent for participating households is subsidized to make it more affordable.
Federal vouchers: PHA also offers Housing Choice Vouchers, which were formerly called Section 8 vouchers. This is direct, monthly cash assistance to pay rent on the private market. PHA’s latest report to the State says that there are currently 18,000 households in the program.
Fully fund existing programs
There is already a robust network of programs in place to offer housing support. However, all of these programs are chronically underfunded. The City’s resources for its own programs are limited, due to the City’s meager budget resources, and PHA has been underfunded for decades. Take a look at the budgets and services provided for each, below.
First, here are the expenditures and revenues for the City’s housing programs. Note that the City’s Comprehensive Annual Financial Reports break this down by function, not program, so everything is organized as “housing and neighborhood development.” This may not be exactly the budget of the Division of Housing and Community Development, since it might include small legal and administrative costs as well. It might also exclude workforce development.
Expenditures fluctuated between $120 and $140 million for several years, until the recession hit. Only recently have expenditures been growing again. Although not reflected on this chart, the City recently budgeted an additional $19 million through the Housing Trust Fund.
The Division of Housing and Community Development’s report for 2018 says that it accomplished the following:
- 1,907 home repairs through the Basic Systems Repair Program
- 187 adaptive modification improvements
- 1,088 homes saved from foreclosure
- 1,187 received rental assistance
- 68 affordable rental units created
- 88 homeless and special needs units created
The diverse types of services offered make it difficult to estimate the cost for each household, especially since no breakdown of the total cost for each category is currently offered. The 2018 CAFR reports expenses of $94.215 million. Therefore, we are stuck with the very broad estimate of $20,821 per household.
Next, is the State. The latest State report on LIHEAP says that the program served 80,010 households in Philadelphia. They do not offer a cost breakdown by county, but expenditures for the whole State averaged $330 a household.
Finally, there is PHA. I used PHA’s recent annual audits to build this graph. The City’s financial report also lists PHA, but only as of 2017, and mixed with the Redevelopment Authority. So, this data is a bit more limited.
PHA’s most recent Act 130 report says that: “…since the year 2000, capital funds have fallen by 35%, and they have been trending downwards for decades. PHA’s backlog of unfunded capital needs within the public housing portfolio is estimated to exceed $1 billion, compared to the most recent annual Capital Fund allocation of approximately $40 million.” Below, I have shown this capital need compared with annual revenues and expenditures, as found in the annual audits:
Every year, expenses exceed revenues, and the budget has remained very steady. Accumulated depreciation continues to grow, with no end in sight due to meager Federal appropriations.
According to PHA’s website, they serve 80,000 households. So, that’s an average of $5,243 per household every year. Basically, this amounts to rental assistance of $437 per month per household.
Due to these lasting budget shortfalls, these programs are wholly incapable of meeting the level of need. PHA has a waitlist of 42,900 households, and sign-ups were closed in 2013 due to overflow. The waitlist had more than 84,600 households several years ago, and currently does not reflect the level of need because of the number of people who have simply given up. Similarly, the City’s programs all have immense waitlists. The Basic Systems Repair Program, the City’s signature home repair program, has a waitlist of more than four years, with 8,000 households on the waitlist.
We know these programs work. We don’t need creative approaches or a silver bullet—we need to invest in basic programming for housing. The first order of business is to fund any existing back-logs, such as PHA’s more than $1 billion in repairs and maintenance that has accumulated. Then, we need to expand the services of these programs to appropriately meet the need.
Exactly how much they should be expanded by is difficult to say, but we can at least make some basic estimates based on waitlists and the level of need. If we assume that there are 80,000 additional households seeking PHA’s services—which is likely conservative—then PHA’s budget would have to be doubled. This is in addition to fully funding PHA’s needed repairs of $1 billion.
With regards to LIHEAP, we can use census estimates to understand the level of need. The American Housing Survey reports that, in 2017, 57,900 households in Philadelphia and Camden were uncomfortably cold for 24 hours or more, and 17,500 of those cases were not due to equipment breakdowns or inadequate insulation. That is, 17,500 households simply did not have heating. Philadelphia Gas Works reports that 7,777 of its customers have no heat due to lack of payment. The American FactFinder reports that 3,523 had no heating type at all. If we assume slightly less than the 17,500 figure, to exclude Camden, then LIHEAP needs to increase its reach by about 20% to meet the need in Philadelphia.
As for the City’s services, we can use the Division of Housing and Community Development’s latest estimates on the level of need, which is 63,500 “preservations” and 32,500 new units. However, this also includes 15,000 new market-rate units, so we can exclude those, for a total of 17,500. If “preservations” goes beyond repairs to also include adaptive modifications, foreclosure prevention, and rental assistance, then DHCD preserved 4,369 units in 2018. They would have to increase activities by 45% to reach a 10-year goal of preserving all 63,500 units. New unit construction would have to increase by a whopping 11.21 times.
In sum, there are a series of great programs in place, but they do not offer enough services. And, the City’s recent housing plan, published in 2018, does not go far enough. It only calls for an increase in government resources of about $50 million annually over 10 years. As it stands, this report calls for a status quo with PHA, the City’s program’s, the State’s programs, and private luxury development.
In sum, then, here are the increases in budgeting that would have to happen to meet the level of need in Philadelphia:
- $419 million in PHA rental subsidies or supported rentals per year
- $1 billion in PHA repairs and maintenance
- $5.3 million in LIHEAP heat assistance grants per year
- $16,356,600 in City preservations per year
- $590,822,070 in new affordable units per year
In total, we need $11.315 billion in additional funds over the next ten years to meet these goals. Almost half of this would be coming through the federal government, since it would be via PHA. The other large chunk—for new homeownership units—could have significant amounts of revenue flowing back into the City’s coffers through offering a program like Habitat for Humanity’s and other housing nonprofits, where families who meet income guidelines purchase their homes through low or zero-interest loans. This is a lot like the BSRP model for home repairs that already exists, but for homeownership instead.
My major point is that our existing programs are drastically underfunded, and what we need is robust and consistent funding for programs that work. However, there are many other changes that can help increase access to quality, affordable housing. Broadly speaking, here are the most significant recommendations I have seen:
- Strengthen protections for renters
- Implement rent control policies
- Strengthen protections against discrimination
- Provide attorneys through the City for eviction prevention
- Introduce a requirement for landlords to accept rental vouchers
- Offer City resources for annual inspections, instead of only when a dispute is lodged
- Introduce methods to provide City assistance for landlords to repair their properties, much like the owner-occupied repair programs
- Strengthen protections for homeowners
- Provide attorneys through the City for foreclosure prevention
- Strengthen protections against discrimination
- Create a legal framework for housing co-ops and community land trusts to operate
- Introduce inclusionary zoning requirements that do not allow developers to opt out through payments, and that has a more intentional strategy to focus on the types of development in different regions
In sum, we need more pubic funding in programs, and more legal protections for safe, affordable housing. This is in addition to changes in property tax policy, as described in my prior post on tax reform. Only with a massively increased level of public investment can we hope to solve Philadelphia’s housing crisis. Anything less is either apathy, or a disingenuous attempt to profit from gentrification.