TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, June 15, 2018

WSJ: Philadelphia’s Affordable-Housing Plan — A Tax On New Buildings

Wall Street Journal, Philadelphia’s Affordable-Housing Plan: a Tax on New Buildings:

Philadelphia’s City Council is weighing a proposed 1% tax on construction to raise millions of dollars for affordable-housing programs, marking the latest push by a U.S. city to address rising residential costs.

The council could pass the new tax this week, setting up a possible showdown with Democratic Mayor Jim Kenney, whose administration warns the levy would hurt the city’s competitiveness as it vies to land Inc.’s second headquarters.

The debate has made odd bedfellows. The Building Industry Association of Philadelphia, which mainly represents residential developers, backs the tax, as do many affordable-housing advocates. Opponents include other business groups, such as the local Chamber of Commerce, and the building trades union, whose business manager calls the proposed tax “dumb.”

The measure cleared a council committee and has the support of Council President Darrell Clarke. The plan is aimed at “putting Philadelphians first and ensuring that Philly retains its character as a diverse, affordable and welcoming city,” Mr. Clarke said.

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To make housing more affordable Philadelphia taxes new construction. Really? ... Maybe the city could find some money if it reconciled its bank accounts.

"...missing $33 million, the discrepancy between what the city’s records say it has and what is in the bank — the result of a failure to reconcile the city’s cash account over several years"

Posted by: Woody | Jun 15, 2018 7:32:38 PM

Adding taxes to house-building isn't going to drive down the cost of housing.

Posted by: David D | Jun 16, 2018 10:12:14 AM