This year will be a telling one for Center City’s housing
market as 3,127 apartment units will be completed and put to a test the demand
or lack of it for living in Philadelphia.
There are 4,167 apartments under construction in the city
and the units that will be finished and available for rent this year represents
a 71 percent increase over the total number that were completed last year,
according to Center City District’s newest housing report.
Can the city's housing market survive if millennials head
to the suburbs?
In 2016, 2,506 residential units, of which 1,833 were
apartments and the remainder condominiums and townhouses, were put on the
market and set a new record for the number of housing units delivered in a
single year. The highest had been set in 2013 when 2,168 units were completed.
Since 2000, when CCD began tracking new housing that was
added to the market, 20,705 new units have been constructed. They have mostly
been absorbed by a 19 percent rise in the population of greater Center City to
190,000, the report said.
The report, as have other observers of Center City’s real
estate market, questions whether Philadelphia will be able to rent out the new
apartments or sell the new condos that are in the works or will it face a glut.
At this point, a definitive answer remains elusive though
the report believes some softness is expected. However, if two primary issues –
creating more jobs and improving public education – are addressed, that
softness could be a temporary situation rather than worsen over time.
Center City has a lot going for it that helps promote a
healthy housing market by attracting new residents who want to live in
Philadelphia. It has a variety of housing that appeals to people at different
stages of their lives, strengthening its ability to retain residents long-term
as their needs change, the report said. It is also walkable, with a range of
restaurants, arts and cultural institutions and other amenities people seek out
in an urban environment. The city is also benefitting from a shift in a desire
to rent rather than own a home.
While those factors help attract and retain new residents
to fill apartments, they won't sustain the housing market. The city's heavy
millennial population is a good thing until it's not. Millennials, which
account for 20 percent of the region’s population, represent 40 percent of
Center City’s population, according to CCD.
“...In order to sustain growth, Philadelphia needs first
to retain millennials as they age and form families and, second, attract a
steady stream of replacements to fill the apartments of those who choose to
become homeowners,” the report said.
That might become difficult. A poll on Philadelphia
conducted by Pew in 2014 found half of millennials did not expect to be living
in Philadelphia in five or 10 years with jobs and schools for children as the
top reasons for leaving. To that end, addressing how Philadelphia can grow jobs
and improve its public education system and financial support for it are key to
Philadelphia's future housing market.
“Center City enjoys significant competitive advantages
that align well with changing national lifestyle and employment preferences,”
the report said. “But Philadelphia’s slow job growth and the uncertainties
surrounding public school funding tend to limit our ability to maximize these
competitive strengths."
Editor's Note: An earlier version of this story
misstated the population growth of Greater Center City and has been corrected
to indicate that it has grown since 2000 by 19 percent to 190,000 people.
Source: Philadelphia
Business Journal
No comments:
Post a Comment