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 would lose at least 1,364 units where MIN blocks its FAR bonus by statute. Meanwhile, the city’s voluntary Mixed Income Housing Bonus (MIHB) has built 194 affordable units and $36.9M 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: New Construction Fell 68.6% Inside MIN
| Pre-MIN | Post-MIN | Change | |
|---|---|---|---|
| Inside MIN | 27.7/yr | 8.7/yr | −68.6% |
| Outside MIN (within-district) | 6.8/yr | 4.6/yr | −31.6% |
| Within-district gap (upper bound) | −37 percentage points |
That within-district gap compares MIN’s strong-market submarkets to the weaker-market parcels left outside it, so it overstates MIN’s effect. Against a control matched on market strength, MIN’s isolated effect is +16 to +23 pp — about ~450 deterred new-construction units, and roughly ~1,200 once conversions are counted.
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. Multiplying that by average project size gives a within-district estimate — shown below for transparency, but superseded: it compares MIN to the weaker-market parcels left outside it, so it runs high.
| Estimator | Avg Units/Permit | Lost Units | Lost Affordable (20%) |
|---|---|---|---|
| Mean (within-district, superseded) | 60.4 | 3,866 | 773 |
| Trimmed mean (within-district, superseded) | 46.6 | 2,983 | 597 |
| Median (within-district, superseded) | 30.0 | 1,920 | 384 |
Headline instead: against a market-matched control, MIN deterred an estimated ~1,200 housing units (1,000–1,400, counting conversions; the stable new-construction core is ~450) — below the within-district figures above.
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 built | 194 | 19 |
| In pipeline (approved) | 102 | 21 |
| Revenue to city | $36.9M | $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 ~450 lost units had been built under MIHB, the city would have collected an estimated ~$3.8M for the Housing Trust Fund — enough for ~252 Basic Systems Repair grants for low-income homeowners.
5. MIN’s Pipeline: Mostly Paper
| Status | Projects | Total Units | Affordable |
|---|---|---|---|
| Delivered (CO) | 4 | 85 | 19 |
| 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 — a 1,364-unit loss that follows directly from the statute, about 9% of the 14,527 units TOC would otherwise produce. A behavioral deterrent likely adds more; the figures below include that component, which is being revised against the market-matched control and should be read as provisional.
| 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 |
*Includes the 1,364-unit statutory FAR-bonus block (a hard floor) plus a provisional behavioral-deterrent estimate under revision against the matched control.
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.