Press release

Downtown Rebounds: Greater Center City Housing Trends 2023

Published February 27, 2023

Contact:
JoAnn Loviglio
T 215.440.5546
jloviglio@centercityphila.org

FOR IMMEDIATE RELEASE

CCD/CPDC Annual Housing Report Examines City’s Residential Sector Momentum

PHILADELPHIA (February 27, 2023) — For two decades, the fastest growing residential section of Philadelphia has been Greater Center City (Girard Avenue to Tasker Street, river to river) and 2022 proved no different: At just 5.8% of the city’s land area, it accounted for 48% of the city’s total supply of new housing units, a new Center City District/Central Philadelphia Development Corp. (CCD/CPDC) report has found.

Moreover, the four ZIP codes immediately adjacent to Greater Center City accounted for another 27% of new units in 2022. Combined, Greater Center City and the adjacent ZIP codes represent 16.2% of the city’s geography but accounted for 75% of the 5,853 new units completed in Philadelphia last year.

While the pandemic, stay-at-home directives that shuttered offices and storefront businesses, and the civil unrest of 2020 were highly disruptive to both the economy and the public perception of downtown, the market quickly rebounded in 2021 and gained momentum in 2022.

“Today, many traditional work patterns are re-emerging and new ones are evolving, as Center City continues to adapt as a thriving, live-work setting with more than 300,000 jobs, 200,000 residents and a broad array of cultural institutions, visitor attractions and retail opportunities,” CCD President Paul R. Levy said. “The presence of high-skilled jobs and residents at the center of the region’s transit system generates the greatest demand for moderate-skilled and entry-level jobs.

After a temporary population dip in 2020, when many college students returned home and some owners of second homes relocated, the number of downtown residents on sidewalks in Center City surpassed 2019 levels by the end of 2022. Rents and home sale prices largely recovered from the declines of 2020, and 5,000 additional residential units were under construction at the start of 2023 in Greater Center City.

“Any citywide economic development strategy advanced by mayoral candidates should avoid false choices between downtown and neighborhoods, recognizing instead that inclusive growth for Philadelphia requires complementary strategies for both neighborhoods and the high density job areas of Center City, University City, the Navy Yard and other anchor institution districts,” Levy added. “With well-designed public incentives, Philadelphia can also add more affordable opportunities within mixed income developments in Greater Center City, so residents and workers at all education levels can enjoy the amenities and ease of access to the largest concentration of jobs in the region.”

For a narrative of trends, along with explanatory charts and maps, download the new 20-page housing report, Downtown Rebounds: Greater Center City Housing Trends 2023.

Downtown Rebounds examines the cumulative effects of three decades of growth, the rebound from 2020 and its impact on housing markets, new and upcoming residential developments and homeownership trends, and the status of the rental market.

Among the report’s key findings:

Greater Center City and its four adjacent ZIP codes represent 16.2% of the city’s geography but accounted for 75% of the 5,853 new residential units completed in 2022. Greater Center City itself is 5.8% of the city’s land area and accounted for 48% of new housing units last year.
The population in the core of Center City rose from 45,000 in 2000 to 69,100 in 2020, a 54% increase. Within extended Center City, the population rose from 101,400 in 2000 to 134,400 in 2020, a 32% increase.
Of the 110,500 housing units in Greater Center City in 2021, 41% were owner-occupied, with a higher proportion of homeownership in extended Center City than in the downtown core.
As of December 31, 2022, there were 13,544 units with active permits in Greater Center City, 48% of the city total. About 5,000 of these are under construction.
Data from CoStar, which tracks larger and newer multi-family buildings, shows that average asking rents for Greater Center City apartments declined 4.3% in 2020, before increasing 8.4% in 2021 and 1.0% in 2022.
The number of occupied units tracked by Costar declined by 902 in 2020 and surged to 3,700 in 2022, the largest net absorption of any year during the past two decades. This occurred even as rents were increasing, suggesting sustained demand.
Center City residents benefit from the most energy-efficient densities in the region: 37 persons per acre in Greater Center City and 49 persons per acre in the core — 2.6 times the citywide average and more than 17 times the density of nearby Montgomery County. Additionally, Philadelphia has been a national leader for 25 years in converting vacant office and industrial buildings to residential use.

The report also provides a number of recommendations for the next mayor to foster citywide growth by breaking down silos between public and private sectors, pursuing more collaborative approaches to co-producing clean and safe neighborhoods and commercial corridors, and increasing the supply of affordable housing.

“The City of Philadelphia must address lingering quality of life challenges and improve its performance on ‘clean and safe’ in areas outside those already served by business improvement districts. Then, if return to work patterns continue to improve as employers successfully adapt to new modes of work, there is no reason why the trajectory of growth in the last two decades, which included the severe disruptions of 9/11 and the Great Recession, cannot accelerate in the coming decade,” Levy said. “Well-managed cities are highly resilient cities.”

In The News

February 27, 2023 | With 13,500 new housing units planned, Center City District report says there's 'no reason for pessimism', Philadelphia Business Journal
February 27, 2023 | Nearly half of Philly's new homes were in and around Center City last year, The Philadelphia Inquirer
February 27, 2023 | New Philly housing report shows downtown is heading in a ‘very positive’ direction, WHYY
February 27, 2023 | Center City Philadelphia shows more signs of recovery with thousands more new housing units, KYW Newsradio
February 27, 2023 | Center City Rebounding From Pandemic Loss, Report Says, NBC Philadelphia