College Grads Need to Double Their Income to Afford Philly

Recently released data from national housing experts paints a troubling picture of housing affordability in Philadelphia. Our report Development without Displacement contains substantial evidence of the real impact a rapidly rising cost of living has exacted on long-term low-income families and individuals, forcing too many to leave and putting countless others at-risk of being driven out. The findings from one of these experts reinforces our report, but another study sheds new light on another at risk population,  which is often credited with helping the city rebound after decades of declining population numbers: millennials and recent college grads.

The first data set comes from the annual Out of Reach report, produced by the National Low Income Housing Coalition in partnership with the Housing Alliance of Pennsylvania. It shows that in order to afford a modest two-bedroom apartment at fair market rate in the Philadelphia metro area, a worker needs to earn $22.23/hour. Put another way, that means an individual would need to hold 3.1 full-time jobs at the current $7.25/hour minimum wage just to afford a place to live. Even recent proposals to raise the minimum wage to $15/hour would be insufficient! (The full version of that report can be found here)

Trulia also released an analysis of affordability for recent college grads in large metro areas. It says that the income they need to afford median rent in Philadelphia rings in at $56,870. What makes that so troubling is that median income for new grads here is only $27,840 – less than half of what they are said to need. (The full version of that report can be found here)

Taken together, these groups make up a large majority of the population in our city, heightening the need for our leaders to take actions that ensure those who are committed and invested in their communities can afford to stay. This includes a large population of long-term residents – children, disabled individuals, seniors, and working families living below the poverty line – and new residents like recent college graduates and millennials. Everyone who lives and works here should be particularly concerned about these findings because they call our future into serious question. If people can’t afford to live here, they will simply leave for somewhere affordable and those who can’t escape will suffer as a result.

That’s why we released our Anti-Speculation Tax proposal, which would apply a 1.5% increase to the Realty Transfer Tax on ‘flipped’ properties (those that are bought and resold within 24 months). It would draw revenue from a lucrative business practice and allow those in need to get the support they need from the added funding made available in the Philadelphia Housing Trust Fund. The Fund has proven itself as a critical tool in preserving affordability in our neighborhoods but it needs additional resources.

Our proposal represents a real opportunity to ensure that as Philadelphia continues to grow, it builds communities that include a place for everyone – low-income long-term families and individuals, recent college graduates, and the wealthy alike.