A reform aimed at making it faster and less costly to build in Philadelphia is gaining momentum at City Hall.
The fix responds to an age-old problem for developers and, especially, affordable-housing providers: It takes too long to get projects approved by the city government.
The unpredictability of permitting can throw complex development deals into chaos, especially when multiple streams of financing and subsidy are involved, which is often the case with affordable housing.
There’s a workaround at the Department of Licenses and Inspections, where an applicant can pay to expedite review of a building permit for a $540 fee. The accelerated review reduces the wait time to five days, from up to 30 days.
Originally intended for small projects, the option proved so popular that L&I became overwhelmed by the demand and considered ending the program, upsetting developers of all stripes.
But Councilmember Maria Quiñones-Sánchez on Thursday introduced legislation that she and others hope can help developers, especially those building affordable housing, keep their projects moving.
The bill would quadruple the cost of expedited permit reviews for market-rate developers and allow affordable-housing providers to expedite their permits without paying. If the legislation goes into effect, L&I would bring on six additional plans examiners to confront the expected workload.
“This allows developers to have more predictability,” said Quiñones-Sánchez, “especially when they are financing deals that need to be closed on with a particular construction deadline. It streamlines, allows for predictability, and builds capacity in the Department of Licenses and Inspections.”
A boost for affordable-housing developers
To the North Philadelphia councilwoman, the boost for affordable-housing developers is essential at a time when demand for units is growing.
“We want to make sure that anyone who is building an affordable-housing project gets access to a review and does not jeopardize any funding mechanisms that come into those very complicated projects,” said Quiñones-Sánchez.
Philadelphia isn’t the first city to experiment with expedited or free permitting for affordable-housing projects in recent years, especially after the Trump administration’s tax cuts reduced the value of the federal government’s popular Low Income Housing Tax Credit.
Developers represented by the Building Industry Association support the bill despite the upfront costs to members because they argue it will save money in the long term.
“It’s certainly going to save money and a great amount of time,” said Jim Maransky, president of the Building Industry Association. “In this business, and for anyone that has been involved in any type of building process, you know time is money. So it’s definitely going to speed up the process and It’s going to make things cheaper.”
But what about smaller developers, or homeowners who say the fees will be too high?
To deal with this concern, the bill allows smaller developers of one or two homes to access a free review within 15 days. Three or more units would be defined as “commercial development” and subject to the fee for expedited review.