Two Approaches to Mixed-Income Housing
Philadelphia has two programs that aim to produce affordable housing through private development. One incentivizes construction. The other has deterred it.
The Mixed Income Housing Bonus vs. the MIN Overlay
| MIHB (Voluntary Bonus) | MIN (Mandatory Overlay) | |
|---|---|---|
| Type | Voluntary incentive | Mandatory requirement |
| How it works | Density bonus in exchange for affordable units or payment to Housing Trust Fund | 20% affordability mandate on 10+ unit projects, no public subsidy |
| Geography | Citywide | Parts of Council Districts 3 and 7 |
| Set-aside requirement | 10% at 50% or 60% AMI (developer chooses) | 20% at 40% AMI (no choice) |
| Fee-in-lieu option | Yes — developer can pay into Housing Trust Fund instead of building units | No — on-site units required (5% waiver available but never used) |
| Effect on construction | Incentivizes additional density — developers build MORE because of the program | Deters construction — developers build LESS or not at all |
| Affordable units created | 141 (CO issued) | 18 (CO issued) |
| Under construction | 159 | 15 |
| Revenue to city | $36.3M | $0 |
MIHB: The Voluntary Bonus
Citywide, since 2019. Source: 2024 Mixed Income Housing Programs Report.
MIN: The Mandatory Overlay
CD3 + CD7 only, since July 2022. Source: Planning Dept list + L&I permit data.
Year-by-Year Housing Production
A side-by-side comparison of affordable and market-rate housing production under both programs. MIHB numbers reflect building permits issued and certificates of occupancy; MIN numbers reflect the Planning Department’s project tracking list verified against L&I permit records.
| Year | MIHB (Voluntary Bonus) | MIN (Mandatory Overlay) | ||||||
|---|---|---|---|---|---|---|---|---|
| Affordable (BP) | Affordable (CO) | Market-Rate Bonus | Revenue | Affordable (BP) | Affordable (CO) | Market-Rate | Note | |
| 2019 | 4 | 0 | 66 | $2.3M | — | — | — | Not yet enacted |
| 2020 | 17 | 4 | 160 | $3.6M | — | — | — | Not yet enacted |
| 2021 | 82 | 7 | 794 | $20.3M | — | — | — | Passed Dec 16, 2021 |
| 2022 | 32 | 7 | 145 | $1.3M | — | — | — | Takes effect Jul 18. 1 ZP issued Oct. |
| 2023 | 48 | 20 | — | $7.3M | 5 | — | 18 | 1615 Foulkrod BP issued (23u total, 5 aff) |
| 2024 | 136 | 61 | 1,060 | $1.5M | 11 | 5 | 41 | 2 more reach BP. First CO: 1615 Foulkrod (5 aff units leased) |
| Cumulative | 300 | 141 | 1,000+ | $36.3M | 33 | 18 | 90 | +112 on paper (ZP only) |
Sources: Annual Mixed Income Housing Programs Reports (City of Philadelphia DPD, 2019–2024). MIHB revenue includes fee-in-lieu payments only. The 2021 spike reflects the tax abatement deadline rush.
What Zoning Categories Produced Results?
Matching project addresses to OPA parcel records reveals where each program actually produced housing — and where MIN’s mandate created a dead zone.
MIHB Projects (53 matched)
| Zone | Projects | Affordable Units |
|---|---|---|
| CMX-2 | 35 (66%) | 127 |
| RM-1 | 10 (19%) | 54 |
| CMX-2.5 | 2 | 11 |
| CMX-4 | 1 | 9 |
| IRMX | 1 | 15 |
| CMX-1 | 1 | 1 |
| Other (RSA) | 3 | 10 |
MIN Projects (16 matched)
| Zone | Projects | Affordable Units |
|---|---|---|
| RM-1 | 7 (44%) | 38 |
| CMX-2 | 5 (31%) | 28 |
| CMX-2.5 | 3 (19%) | 49 |
| CMX-3/4/5 | 0 (0%) | 0 |
| Other (RSA) | 1 | 18 |
Zero projects in FAR-bonus zones. MIN blocked the bonuses that make these categories viable.
The bonus as a safety valve
91% of MIHB projects are in density-bonus zones — predominantly CMX-2 neighborhood commercial corridors. These are not mega-developments getting a windfall. They are 10–30 unit projects where the bonus adds a handful of units that help the project pencil. A developer building 12 units can build 14 with the bonus, or pay $60,000 into the Housing Trust Fund. Either way, the project gets built and the city benefits.
The fee-in-lieu option is a safety valve. If Council sets the on-site requirements at levels the market can’t absorb, developers can still contribute to affordable housing through the fee. MIN eliminated this flexibility. The result was not developers building exactly to the Council member’s specifications — it was a reduction in overall projects. The city got neither the affordable units nor the revenue.
How MIN Blocks the Bonus System
The zero-FAR-zone finding above is not a coincidence. MIN does not simply impose an affordability mandate — it also blocks access to the floor area bonuses that are the primary mechanism through which MIHB generates both affordable units and fee-in-lieu revenue.
In CMX-3, CMX-4, CMX-5, RMX-3 zones inside MIN:
- ×30% FAR bonus from TOC — blocked per §14-513(5)(a)(.2). This alone costs an estimated 1,364 housing units in the TOC zone.
- ×Public Space (§14-702(6)) — Only available if Mixed Income Housing bonus is also earned
- ×Transit Improvements (§14-702(8)) — Only available if Mixed Income Housing bonus is also earned
- ×Underground Parking (§14-702(9)) — Only available if Mixed Income Housing bonus is also earned
- ×Green Building (§14-702(10)) — Only available if Mixed Income Housing bonus is also earned
Why zero MIN projects in FAR-bonus zones?
CMX-3, CMX-4, and CMX-5 are the zoning categories where the city intends the most housing density — mapped along commercial corridors and near transit. MIN blocks the floor area bonuses that make large projects viable in these zones. The historical permit data confirms the result: FAR-bonus zones collapsed 68% in large permits after MIN, and not a single MIN-compliant project has been built in any FAR-bonus zone.
By contrast, MIHB has produced projects in CMX-4 and IRMX — because the voluntary program lets developers access bonuses while choosing how to contribute to affordability (on-site units or fee). MIN removes that choice and removes those projects from the pipeline.
What MIN Cost in Housing Trust Fund Revenue
MIHB’s fee-in-lieu option created a revenue stream for the Housing Trust Fund — money the city receives for free from developers who choose to pay rather than build affordable units on-site. Citywide, this has generated $36.3M since 2019 for home repairs, adaptive modifications, rental assistance, and new affordable housing. MIN banned this option in Districts 3 and 7.
| Year | Payments | Projects | Affordable Started | Note |
|---|---|---|---|---|
| 2019 | $2.3M | 7 | 4 | First year of expanded program. 25 total developers. |
| 2020 | $3.6M | 33 | 17 | COVID year. 78 total developers. 86% chose fee-in-lieu. |
| 2021 | $20.3M | 90 | 82 | Tax abatement rush. 77% chose payment. Formula increased mid-year. |
| 2022 | $1.3M | 7 | 32 | Post-abatement crash. MIN takes effect Jul 18. Avg payment $182K. |
| 2023 | $7.3M | 3 | 48 | Fewer but larger payments ($2.44M avg). Nearly 90% chose low-income. |
| 2024 | $1.5M | — | 136 | 20 projects got CO. 61 aff units created. First MIN CO (1615 Foulkrod). |
The 2021 spike reflects the tax abatement deadline rush. The post-2022 decline is citywide, driven by the abatement phaseout and higher interest rates — not MIN. But within CD3+CD7, MIN banned the fee-in-lieu option entirely, eliminating revenue that would have flowed to the HTF from those neighborhoods.
Estimated Lost Revenue from Districts 3 & 7
Of the ~3,000 units deterred by MIN, approximately 77% would have chosen the fee-in-lieu option (the citywide MIHB average), generating revenue instead of on-site units.
| Scenario | Fee Rate | Fee-Paying Units | Lost Revenue | BSRP Grants |
|---|---|---|---|---|
| At MIN rate (conservative) | $10,900/DU | 2,310 | ~$25M | 1,679 households |
| At MIHB Low Income rate | $17,700/DU | 2,310 | ~$41M | 2,726 households |
Free money vs. borrowed money
MIHB revenue comes to the city at zero cost — developers pay it voluntarily in exchange for density bonuses. By contrast, the city’s 2023 Neighborhood Preservation Initiative (HOME) bond borrowed over $400M for housing programs at municipal bond interest rates. Every dollar of MIHB revenue MIN suppressed in CD3+CD7 is a dollar the city either had to borrow or didn’t spend on housing programs. The estimated ~$25M–~$41M in lost free revenue could have funded 1,679–2,726 Basic Systems Repair grants for low-income homeowners — without borrowing a cent.
What the Housing Trust Fund pays for
The Basic Systems Repair Program provides grants of up to $20,000 for low-income homeowners to repair electrical, plumbing, heating, and roofing systems. The Adaptive Modifications Program provides free home adaptations for people with disabilities. The Housing Trust Fund also supports rental assistance, homelessness prevention, and new affordable housing construction. In fiscal year 2022–23 alone, the BSRP served 2,362 households citywide.
MIN’s Pipeline: Paper vs. Reality
The city’s Planning Department reports 18 projects in MIN’s pipeline. A closer look at permit status reveals most exist only on paper.
| Status | Projects | Total Units | Affordable Units | Assessment |
|---|---|---|---|---|
| Delivered (CO issued) | 3 | 67 | 18 | People living there |
| Under construction (BP) | 3 | 56 | 15 | Active construction |
| Expired zoning permits | 3 | 35 | 11 | Zoning permits expired (no building permit within 3 years per §14-303(6)(d)) |
| Stalled (18+ months, no BP) | 3 | 327 | 66 | 18+ months since zoning permit, no building permit filed |
| Recent ZP (<18 months) | 6 | 125 | 35 | Too early to assess |
None of the 18 projects match the city’s subsidized affordable housing inventory. All are private market developers. Average time since zoning permit for paper-only projects: 20.9 months.
The bottom line on affordable housing production
MIHB has created 141 affordable units (with certificates of occupancy) and generated $36.3M in revenue for housing programs — all while incentivizing more construction. MIN has delivered 18 affordable units and $0 in revenue, while deterring an estimated ~3,000 housing units that would have included ~~600 affordable units under MIN’s own 20% requirement.