Philadelphia, one of the biggest states in America, is home to more than 1.6 million people. Philadelphia has a significant problem with the lack of affordable workforce homes. Maxwell Drever of drever capital management notes that since the COVID-19 pandemic started, the problem has gotten worse. The market anticipates a collapse as a result of supply chain problems that have exacerbated the segment’s demand and supply imbalance.
130,000 households in Philadelphia currently make less than $20,000 annually, according to a recent survey. As a result, people end up spending more than they can afford for housing. As a result, they find it extremely difficult to live honorable lives in the future. The current housing stock in Philadelphia is also steadily disappearing. Maxwell Drever asserts that the population is also decreasing at the same time.
These problems together present a considerable barrier for the various parties engaged in the affordable workforce housing market. The most important problems that Philadelphia’s affordable workforce housing sector is currently facing are listed below, along with remedies.
Maxwell Drever Explains the Philadelphia Housing Crisis
Philadelphians are in a terrible predicament. Currently, more than 31,000 people are squeezed into a limited area. In addition, 60,000 more units are required to meet the housing issue in the state. If the residences are too expensive, the residents won’t be able to buy them. The fact that 17% of Philadelphia residents spend more than 50% of their income on rent is another problem.
Population Decline and Aging Properties
Half of the city’s housing stock was constructed before 1956. Philadelphian homes need more upkeep as they age. The city’s aging population makes the situation worse. People 65 and older, many of whom have poor incomes, own 30% of all homes. Older inhabitants are less able to keep their homes updated, and a backlog of unfinished maintenance typically leads to abandonment, states Maxwell Drever.
The resources Available Are Insufficient
Philadelphia frequently faces financial difficulties when trying to handle the workforce housing challenges. The state’s federal entitlement has significantly dropped over time. As a result, investments in the construction of homes have fallen. Due to the decreasing availability, it has become harder for consumers to find additional projects that are within their price range. As a result, the problem has gotten worse.
According to Maxwell Drever, a Housing Trust Fund Is a Practical Solution
A Housing Trust Fund is one of the most workable solutions to Philadelphia’s affordable housing dilemma, according to Maxwell Drever and the vast majority of citizens. The funding for low-cost housing is running out, so this sector has to be revived more than before. For future monies required to address the affordable housing crisis, the trust fund will offer suitable investment options and leverage.
The development of America depends on the state of Philadelphia. However, the shortage of workforce housing there has deteriorated quickly. According to Maxwell Drever, some of the major problems the industry is facing are a declining population, aging homes, abandonment, and underdeveloped areas.