Build Philly NowExecutive Summary
Philadelphia’s Mixed-Income Neighborhoods (MIN) overlay imposed a 20% affordable housing requirement at 40% of Area Median Income (AMI), with no public subsidy, on residential developments of 10 or more units in portions of Council Districts 3 and 7. It took effect July 18, 2022.
This analysis examines 11,431 building permits (January 2019 – December 2025) using a difference-in-differences design that compares development inside the MIN overlay to development outside MIN but within the same council districts. Every methodological choice is deliberately conservative.
The existing TOD overlay shows no evidence of counteracting MIN’s chilling effect. The Mayor’s Transit-Oriented Communities bill faces an estimated 20.9% yield reduction from MIN. Meanwhile, the city’s voluntary Mixed Income Housing Bonus (MIHB) has produced 300 affordable units and $36.3M in Housing Trust Fund revenue using the incentive-based approach MIN rejected. Portland, Oregon faced the same problems, reformed its program with full public funding, and saw construction restart. Oregon has since made unfunded inclusionary zoning illegal.
1. The Core Finding: A 37-Point Collapse
| Pre-MIN | Post-MIN | Change | |
|---|---|---|---|
| Inside MIN | 27.7/yr | 8.7/yr | −68.6% |
| Outside MIN (control) | 6.8/yr | 4.6/yr | −31.6% |
| MIN effect (DiD) | −37 percentage points |
The 31.6% decline outside MIN captures market-wide headwinds. The additional 37 points inside MIN is the policy’s measured impact.
2. Estimated Housing Units Lost
64 fewer large permits were filed inside MIN than expected under a flat (0% growth) pre-MIN rate. Three estimators for the resulting unit loss:
| Estimator | Avg Units/Permit | Lost Units | Lost Affordable (20%) |
|---|---|---|---|
| Mean | 60.4 | 3,866 | 773 |
| Trimmed mean (5th–95th percentile) | 46.6 | 2,983 | 597 |
| Median | 30.0 | 1,920 | 384 |
We use the trimmed mean (~3,000) as the headline estimate, excluding outlier mega-projects.
3. Transit-Oriented Zoning Categories Hit Hardest
52% of all lost housing units inside MIN were in Floor Area Ratio (FAR) bonus zones (CMX-3/4/5, RMX-3, IRMX, ICMX) — the commercial and mixed-use categories deliberately mapped along transit corridors. These zones declined 68% in permits. RM-1 (small multi-family) was flat (+1%) because most projects stay under MIN’s 10-unit trigger.
| Zone | Pre | Post | Change | Pre Units | Post Units |
|---|---|---|---|---|---|
| CMX-5 | 3 | 0 | −100% | 886 | 0 |
| CMX-2.5 | 19 | 3 | −82% | 853 | 68 |
| CMX-3 | 8 | 2 | −72% | 539 | 70 |
| IRMX | 15 | 5 | −63% | 1,026 | 346 |
| CMX-4 | 10 | 4 | −55% | 1,303 | 1,059 |
| CMX-2 | 22 | 7 | −65% | 538 | 154 |
| RM-1 | 22 | 20 | +1% | 660 | 599 |
4. The Voluntary Bonus Outperformed the Mandate
| Metric | MIHB (Voluntary) | MIN (Mandatory) |
|---|---|---|
| Affordable units delivered | 141 | 18 |
| Under construction | 159 | 15 |
| Revenue to city | $36.3M | $0 |
| Effect on production | Incentivizes density | Deters construction |
| Geography | Citywide | CD3 + CD7 only |
MIN also banned the fee-in-lieu option that generates MIHB revenue. If the ~3,000 lost units had been built under MIHB, the city would have collected an estimated ~$32.7M for the Housing Trust Fund — enough for ~2,180 Basic Systems Repair grants for low-income homeowners.
5. MIN’s Pipeline: Mostly Paper
| Status | Projects | Total Units | Affordable |
|---|---|---|---|
| Delivered (CO) | 3 | 67 | 18 |
| Under construction | 3 | 56 | 15 |
| Expired ZP | 3 | 35 | 11 |
| Stalled (18+ mo) | 3 | 327 | 66 |
| Recent ZP | 6 | 125 | 35 |
3 zoning permits have expired. Average time since ZP for paper-only projects: 20.9 months. None of the 18 projects are subsidized/LIHTC — all private market.
6. Threat to the Transit-Oriented Communities Bill
Mayor Parker’s TOC bill expands the TOD overlay from 500 feet to a quarter mile. But §14-513(5)(a)(.2) explicitly blocks the 30% FAR bonus for CMX-3/4/5/RMX-3 parcels inside MIN. Combined with behavioral deterrence, MIN is estimated to cost 3,032 of the 14,527 housing units TOC would otherwise produce — a 20.9% reduction.
| District | TOC Yield (no MIN) | MIN Loss | Net Yield |
|---|---|---|---|
| D3 (Gauthier) | 5,880 | −1,779 (30%) | 4,101 |
| D7 (Lozada) | 6,076 | −1,253 (21%) | 4,823 |
| D1 (Squilla) | 2,571 | 0 | 2,571 |
| Total | 14,527 | −3,032 (20.9%) | 11,495 |
7. Other Cities Found a Better Way
Portland enacted an unfunded IZ mandate in 2017. Permits fell 40%. Threshold gaming doubled. In 2024, Portland and Multnomah County fully funded the program (~$220K/unit subsidy). Gaming returned to normal. Construction restarted. On March 4, 2026, Oregon passed SB 1521 making unfunded IZ illegal statewide. Philadelphia’s MIN — 20% at 40% AMI with no subsidy — would not survive that standard.
8. Recommendations
The goal of mixed-income neighborhoods is sound. The mechanism needs to change. Portland found a better way. Oregon made it the law. Philadelphia can do the same.