Demand for Center City Housing Booming in Philly

Dana DiFilippo:

Lured by jobs, city amenities and the ability to get around without a car, more people are living in Center City, resulting in the rebound of a housing market severely damaged in the 2008-09 recession, according to a report released Tuesday by the Center City District and Central Philadelphia Development Corp.

The population of “greater” Center City – 180,000 residents, living from river to river and from Tasker Street to Girard Avenue – soared 10.2 percent from 2000 to 2010, so that Philadelphia now has the third-largest downtown population among American cities (behind New York and Chicago), the report notes.

That trend boosted both the volume and price of residential sales and rentals, and spurred more construction and renovation, the report shows.

Paul Levy, the Center City District’s president and CEO, attributed the population growth to empty nesters returning to the city, more families deciding to raise their children here and more adults in their 20s, 30s and 40s settling here.

Multi-family housing is very popular right now. Smaller core cities who want to be competitive for residents need to let developers build that kind of housing when they want to.


  1. President Obama needs to stop preventing a recovery by getting bank regulators to back off so that the projects you envision can get financing.

  2. Federal Reserve and FDIC statistics say otherwise.

    Banks aren’t lending Jon. They’re taking deposits and buying treasuries. This is doing more to hold back a recovery than anything else. Only Obama can do something about it, and he’s not.

    • Jon Geeting says:

      How are so many condos and multi-family buildings getting built in Philly then? There are dozens of them in various stages of planning and construction.

  3. Vs. the size of the market that’s peanuts.

    Here there’s almost nothing on except where the taxpayer is providing the financing (the NIZ).

  4. I think the first sentence of the post is key “lured by jobs.” People don’t just move places because they like the coffee shops, but because there’s a way to pay for the coffee.

    Hopefully Allentown looks more like a city like Philadelphia and not like its peer post-industrial small cities in the years ahead.

    • Jon Geeting says:

      There’s a chicken and egg problem. You don’t typically see job growth without population growth, or vice versa. Is Texas’ population growing because they’re adding jobs, or are they adding jobs because the population’s growing due to other factors like low housing costs? Is job growth in Philly happening because companies just all of a sudden started opening there, or is it growing because of the inflow of people from NYC fleeing high housing costs? I would argue that the latter is the bigger factor in both cases. The lesson is that if Philly or Allentown can keep their office rents and housing costs down, that will increase the size and skill diversity of their labor market and more jobs will follow. Philly’s also got to reduce its really high wage and business taxes and replace them with land taxes.

  5. There are reasons that business relocate. Cost is no doubt one of them. Proximity to customers is rather important too. The Lehigh Valley has some great businesses, but less business diversity than it had some years ago. I’d like to see less talk about lower rents and more talk about how businesses can be near potential customers by locating in Allentown.

    • Jon Geeting says:

      Through denser construction, cities can create more proximity to both other businesses and customers. If you want more business diversity, you need a larger market that allows for more specialization.

      • I would amend your sentence to state: through denser construction, cities can create more proximity to both other businesses and customers…if someone moves in.

        There’s not as much of a chicken and egg argument as you state. While quality of life and rental cost questions are important, they are not as important as actually selling things. It is a tough question, but since our civic leaders seem to think significant businesses are going to relocate to a city based on slightly lower rents, a minor league hockey arena, and some decent restaurants–I don’t expect many thoughtful answers to emerge soon.

        Put it this way–draw a line as far away from Chicago and Boston as far as Allentown is from New York–or even Philadelphia–and tell me how many success stories are out there.

        • Jon Geeting says:

          “While quality of life and rental cost questions are important, they are not as important as actually selling things.”

          The fact is that people and businesses continue to move to the Lehigh Valley, and are projected to keep moving. Something would have to go seriously wrong to disrupt the long-run trend of population growth in Southeast Pennsylvania. The issue is: given continued growth, where within SEPA will people and businesses choose to locate? I think sufficiently large cities like Allentown and Bethlehem can have a big effect on location decisions if their policymakers keep the focus on making them great places to live, keeping rents and housing prices comparably low, and shifting their tax burdens onto land and off of income and property improvements. Shrinking the time it takes to get between NYC and Philly will also help increase the appeal of the LV’s cities relative to other areas of SEPA and western NJ.

  6. I think, in general, there comes a point where all this Lehigh Valley boosterism reaches a point of “crap, let’s do it and hope it works out.”

    Allentown is barely within SE PA, so who cares what the population growth trends are if they look to Philadelphia (or even King of Prussia) as their natural commercial center. What’s the evidence that anyone is looking to Allentown as a serious shopping or commercial option from, say, Lower Merion township?

    Lots of folks are talking about agglomeration, but agglomerating on what? What is it that Allentown is offering businesses? To be near a sports medicine clinic? A hockey arena? A tobacco shop? When you do have an example of an industry promoting economic growth–like a Brookings study tying Pittsburgh’s recent growth to the shale industry–you turn to Paul Krugman blah blah about how apparently having a nice looking city makes businesses move there.

    What’s the measurement of success? better civic finances? gross tax receipts? average per capita income in the city center? business occupancy rates?

    I’m not clear how travel times to New York or Philly are going to shorten, other than maybe by bus lanes. The train isn’t going to happen. Again, there is NO commuter rail system–serving people traveling every day–even comparable to what people propose doing.

    Lay off the rents. What are the average commercial rents in Akron, Buffalo, Springfield MA, Rochester, and Worcester MA? All cities that have a similar industrial profile–all with low commercial rents, good housing stock and access to top quality higher education –in many cases near major cities. Why aren’t their trends reversing?

    Allentown’s leaders need a serious idea and vision of what Allentown is going to represent for tomorrow’s businesses. Everyone wants to be Portland, but no one can decide what their Tectronics equivalent is going to be.

    • Jon Geeting says:

      Again though, we don’t have to speculate. We know that people and businesses are moving to the LV. They were moving in the 2000s, and now that the recession is ending the same migration patterns are picking back up again. We don’t have to worry about how to get the growth, so much as which areas of the LV will absorb the growth. The choice is between land use and tax policy that directs growth inward toward the cities, or policies that allow development to sprawl outward.

      I’d be for dedicated bus lanes to NYC and Philly, but I’m also for rail. I think that if you connected the Doylestown SEPTA station to Allentown – just 30 more miles of track – that more professional service businesses currently located in the SEPA suburbs might opt for an Allentown location. You don’t necessarily need to be moving people all the way between Allentown and Philly, but people do commute now by car. You could argue that the daily fares would be too expensive, but I’m for moving away from the fare system entirely. I’d rather see SEPTA funded entirely by land taxes on land within a 1 mile radius of rail stations.

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