Philadelphia Home Buy Now Impact Report

Posted by Urban Affairs Coalition on November 10, 2014

Philadelphia Home Buy Now Program Releases Impact Report: 160% ROI in First Year to City of Philadelphia

On Thursday, October 2, 2014 at Wells Fargo Bank, the Community and Economic Development (CED) Committee of the Urban Affairs Coalition released a report identifying the impacts of the Philadelphia Home Buy Now Program. This white paper was completed by Social Impact Consulting, an affiliate of the Wharton School of the University of Pennsylvania.

Among the findings in the report, the researchers found that:

A majority of the program participants are Millennials. Attracting Millennials to your City is often credited as a leading indicator of economic and cultural revitalization. Millennials have become an elusive cohort for the real estate market, with many preferring renting over for homeownership. Incentivizing Millennials to become homeowners provides an advantage to both the locale and the employer. By putting roots down in the City, workers receiving housing benefits tend to stay at their positions 50% longer, show increased performance and remain close by when needed.

Philadelphia Home Buy Now is a smart investment for the City. Since 2004, each dollar invested in matching grant funds is returned to the City upon sale with an immediate 160% gain. In addition, the City gets additional property tax revenue on an annual basis. Grant participants typically receive between $2000 and $7,500 from their employer and a match of up to $4,000 from the City of Philadelphia.
Additionally the report finds that:

• For a $3,765 investment, the city of Philadelphia received an average of $6,044 in revenue from realty transfer taxes collected.
• In addition to the tax benefits provided by homeownership, a typical Philadelphia Home Buy Now purchaser saves $2400 annually in commuting costs.
• Nearly one out of three program participants would not have become homeowners without the Philadelphia Home Buy Now incentive.[1]
• Philadelphia Home Buy Now reaches those workers least likely to buy as well as those workers critically needed to keep the engine of our urban economy moving: medical technicians, nurses, utility workers, educators, etc.
• 44 Area Employers have provided funds to employees to purchase homes with Philadelphia Home Buy Now to assist 384 homebuyers. Area universities and healthcare related employers are the most active. The flexibility and customizability of the program allow for many small employers such as Weaver’s Way Co-op in Mt. Airy to participate as well.

“The Philadelphia Home Buy Now program is a large part of the success of the Drexel Employee Home Purchase Assistance program. Through our continued partnership; we will continue in creating affordable and attractive housing with expanded opportunities for home ownership for Drexel faculty and professional staff members.” Althea Wallace, Director of Human Resources, Drexel University

UAC projects that the Philadelphia Home Buy Now program can generate more than $42 million in home sales[2] and reinvest more than $10,000,000 back to the City by 2020.

A copy of the completed report can be found at: http://uac.org/sites/uac.org/files/Home%20Buy%20Now%20Report.pdf.

[1] According to a National Association of Realtors model
[2] Using 2014 dollars