Housing Crisis Study: Philly Homeowners Sell
Higher sales that could translate into fewer affordable units
Lichtman is not the only owner to have put his property on the market during the pandemic.
Nearly 21% of Philadelphia homeowners put a property up for sale in 2020 compared to 3.5% in 2019, according to a recent poll by researchers at the University of Pennsylvania and Harvard University. Property sale announcements have increased in all 10 cities included in the August report, but Philadelphia has seen a larger year-over-year jump than the overall – 3% to 13% in 2020.
While a greater proportion of large homeowners with 20 or more units in Philadelphia put their properties up for sale, smaller owners with one to five units were also looking to move out. About 20% of them, a figure by co-author Elijah de La Campa called “quite sobering”. In Philadelphia, homeowners with fewer units provide most of the city’s affordable rental stock.
The report found that landlords who received less rent in 2020, most likely due to the pandemic, were much more likely to list their properties for sale. This was not the case before COVID-19 hit the country.
And yet, it’s unclear what all of this says about Philadelphia’s affordable rental market going forward, a market housing advocates considered far too small long before the pandemic. The survey did not ask the owners why they had decided to list their properties.
Longtime owner Carolyn Boxmeyer is another Philadelphia owner who recently listed her building, one of four she owns. She said she was selling the Fishtown property because she was fed up with dealing with the city. “They kept raising taxes and raising taxes and creating more and more hurdles to jump over to even have rental property,” Boxmeyer said.
Even without understanding exactly why the sales trend took hold, the report’s co-authors agree that the shift in the market could ultimately result in fewer affordable rental units in Philadelphia.
They say the share of Philadelphia homeowners offering properties for sale is an important stand-alone statistic, in part because people don’t typically put properties on the market out of curiosity.
“Putting your property up for sale is not a free transaction. You need to find a real estate agent. In some cases, you need to list it and advertise it. And there is money involved in this stuff. So I think that indicates a real intention to move these types of units, ”said de la Campa.
This means that the city’s already limited stock of affordable rental units could potentially decrease as buyers might not want to keep those properties as affordable housing, he said. Depending on where the building is located, it could be much more lucrative to turn them into market-priced apartments, for example.
Vincent Reina, professor at the University of Pennsylvania and director of the faculty of The Housing Initiative at Penn, agrees that a major implication of the investigation is that Philadelphia could lose affordable rental housing in the long term. A bigger red flag, however, has been the increase in the number of homeowners who have reported postponing maintenance on their properties last year, he said.