To combat the threat posed to Philadelphia residents by a public crisis regarding rising housing costs, the city's elected officials have been searching for revenue streams to restore federal housing funds. After a stalled affordable housing bill last year, the city council reportedly now is considering implementing a construction tax, according to www.philadelphiaweekly.com.
Council sources confirmed some legislators were briefed April 10 about a proposal to impose an "impact fee" based on 1 percent of estimated construction costs submitted by builders to the city's Department of Licenses & Inspections for permitting. The fee would apply to properties eligible for the city's 10-year property tax abatement, which covers nearly all new construction.
A spokesperson for the Building Industry Association of Philadelphia said the group had learned about the proposal but it was not clear what the tax rate would be or whether it was meant to be paid by the developer, the contractor or split between involved parties. The group declined to comment until the legislation had been introduced.
It also is unclear whether the proceeds of the tax would add to the city's existing Housing Trust Fund, which supports various low-income housing programs, or a different initiative.
The legislation is expected to be introduced by council member María Quiñones-Sánchez at the council's April 12 session.