Philadelphia Market Studies

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Client

Pennsylvania Multifamily Asset Managers (PMAM)

Skills

Appraisal, Market Study – Affordable Housing

Project Description

Clarendon was awarded a contract with Pennsylvania Multifamily Asset Managers (PMAM) to provide Reviews of HUD Section 8 Rent Comparability Studies (RCS) for the State of Pennsylvania.

Section 8 laws and administrative procedures require HUD to obtain and review Rent Comparability Studies (RCS) when initially renewing most Section 8 contracts and when processing some rent increase using the Annual Adjustment Factors. The market rents resulting from these studies determine the rents owners can receive and, hence greatly influence whether an owner will renew and continue providing assisted housing or opt-out of the Section 8 contract and convert to unassisted, market rent housing. The market rents set in these studies also drive HUD’s outlays for Section 8 project-based subsidy..

Market Overview

Economic conditions in the Philadelphia market have been improving since mid-2010 after a decline beginning in 2008, with the metro recording an increase of 17,600 jobs. The education and health services sectors are the largest employers and account for approximately 25% of all jobs, added 12,100 positions.

Philadelphia is experiencing the current national trend of downtown population growth, with approximately 183,000 people residing in the Center City , up 16% from 2000. Like most large urban markets, much of the growth is driven by millennials, who have a preference for renting in urban locations. The city is also attracting residents from the New York City market.

Apartments represent 15% of Philadelphia’s housing stock, compared to 30% in Chicago, 35% in Boston and 51% in New York City. This has caused dramatic rent growth, given demand and limited supply. The market has seen record new construction permits issued to meet the demand.