Developers could build a record number of rental units in Philadelphia in 2022.
Based on the volume of building permits approved by the city’s Department of Licenses and Inspections in 2021, the final figure for the year could balloon to 10,000 — more than triple the average annual total of 3,000 to 4,000 new apartments.
“This is a massive wave of new construction. Much bigger than we’ve even seen before,” said Kevin Gillen, a senior research fellow with the Lindy Institute for Urban Innovation at Drexel University and the analyst behind the data.
It’s unclear if all 10,000 units will be built in 2022, or even in the years ahead. Gillen said it’s likely that some developers filed permits preemptively, so they can take advantage of the city’s existing 10-year tax abatement for new construction before changes to the controversial program take effect.
Starting in 2022, the value of the abatement will shrink by 10% each year after the first year. But property owners with building permits in hand as of Dec. 31, 2021, can still avoid paying 100% of the building’s real estate taxes for the full 10 years.
Either way, Gillen said, the surge is indicative of developers being “very bullish” on Philadelphia’s rental market.