The Philadelphia real estate market and Philadelphians themselves are feeling something in the air. A revival of Philly’s Downtown is having rippling effects throughout the city. Businesses are thriving, serving a new population of city-dwellers that have been immigrating into the city from the suburbs and exurbs year after year. This wave of new Philadelphians is partly due to investments that the city has made in the past and partly due to the rising cost of gas making many question their commutes. Whatever reason brings them to the City, this population is reviving neighborhoods, starting new local businesses, and supporting the businesses that make Philly great.
Demographic Shift Fueling Philadelphia’s Downtown Revival
A Pew Poll from 2011 (PDF) shows that the demographics of the city are shifting toward young adults and families with those aged 20-44 representing 37% of the city population. Further, it shows that only 69% of Philadelphia’s population was born in the city, meaning that 31% of that year’s population had moved into Philly at some point in their lives.
This demographic is great for Philadelphia, as it is generally composed of young professionals and their families. They are predominantly moving to Fishtown and University City neighborhoods to enjoy these areas’ thriving restaurant and cafe culture. This group’s spending is supporting Philadelphia businesses, leading to a further revival of Philadelphia’s Downtown businesses.
Philadelphia Downtown Revival: “If You Build It…”
Philadelphia businesses have been the key to Philadelphia’s Downtown revival. Their successes, some say, are a result of investments that the city of Philadelphia made in the 1990s. By passing the 10-year real estate tax abatement, Philadelphia courted business. One of the results was a New Convention Center and the many hotels that sprung up around it. Another was an increase in commercial shopping space, the same space that has made it possible for many Philadelphia small businesses to appear in the decades since.
Philadelphia is now feeling the effects of its long-term investment. More businesses means more jobs, so courting business has provided the jobs needed for the population influx of the last decade. The abatement of real estate taxes accomplished its goal of promoting business development in Philadelphia, but it also resulted in tax shortages that Philadelphians have felt through funding cuts to schools, fire departments, and police departments throughout the city.
Course Correction a Part of Philadelphia’s Downtown Revival
The Downtown Revival will need to be funded. Those young families need schools for their children and safe neighborhoods. The businesses need well-maintained roads for shipping and receiving of goods. The successful abatement left Philadelphian public servants clamoring for funding, but the City’s Actual Value Initiative (AVI) promises to be just the course correction that the city needs.
While it is likely to raise taxes on many commercial properties and increase the share of the tax burden shouldered by Philadelphia businesses, the funds that it will draw into city coffers will have a direct impact on the lives of Philadelphians. With shifting demographics moving toward those populations that economies are built upon, the Downtown Revival is likely to continue, and that can only be good for anyone who wants to buy a home in Philadelphia.