Proposed new construction tax fails, but city agrees on alternate affordable housing funding

Developers dodged a bullet, but they could lose the 10-year tax abatement.

Pat Loeb
September 13, 2018 - 7:12 pm

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PHILADELPHIA (KYW Newsradio) — Philadelphia will not impose a tax on new construction

City Council has withdrawn a bill it passed in June imposing the tax. But developers can't rest easy yet.

The tax was intended to fund affordable housing. Mayor Jim Kenney opposed it but supported its aim so, in a deal to get council to withdraw the tax bill, he promised to put $20 million toward affordable housing from the general fund immediately and contribute $32 million more over the subsequent four years. 

Councilwoman Maria Quiñones-Sanchez said she's satisfied with the outcome.

"Both the administration and council not only recognize that affordable housing is an absolute need but is willing to dedicate significant resources to this process," she said.

While developers dodged a bullet on the construction tax, they could lose the 10-year tax abatement on new construction. Councilwoman Cindy Bass has introduced a bill to repeal the abatement, and one apparent ally is City Council President Darrell Clarke.

"There needs to be some changes in the 10-year tax abatement," he said. "This is money that would have been going to the school district or the city of Philadelphia to provide programs, so I think it's time to change."