Philly City Council Advances Tax on New Construction

PHILADELPHIA, Pa.—A City Council committee approved a bill June 6 to levy a 1% tax on new construction in order to fund affordable housing, sending the measure to the full Council. The bill advanced despite criticism from the city’s building-trades unions and affordable-housing advocates. John “Johnny Doc” Dougherty, business manager of International Brotherhood of Electrical Workers Local 98, sent the Council an open letter calling the measure “antibusiness” and “dumb,” saying it “would have the net effect of ending the recent prosperous run of new construction that is transforming neglected sections of the city.” Supporters say the tax, which would exempt nonprofits such as museums and universities—but not housing built with federal low-income housing tax credits—could raise up to $19 million a year. Developers could use those funds to build housing for people making up to $105,000 per year for a family of four. “There’s no guarantee it will go toward affordable housing,” said Nora Lichtash, executive director of the Women’s Community Revitalization Project, one of several witnesses who argued that at least half the revenue raised should be used for housing people who make less than $26,000. Philadelphia’s median household income is $37,000. Read more