Density and Dimensional Bonuses Allowed for Mixed-Used Properties Under the Philadelphia Zoning Code

—Clementa Amazan, an associate at Nochumson P.C., assisted with preparing this article.

PART ONE IN A SERIES:

The Philadelphia Zoning Code restricts the amount of housing units and the size of mixed-use buildings situated in the City of Philadelphia. Over the years, the city government has amended the Philadelphia Zoning Code to include incentives to increase the amount of housing units as well as the size of such building structures. Over the course of several articles, we will be discussing the “zoning” bonuses a property owner can take advantage of when developing property within city limits.

This part delves into the Mixed-Income Housing Bonus, Green Roof Bonus, and the Fresh Food Market Bonus which are applicable, in whole or in part, to properties with a zoning classification of CMX-1, CMX-2, and CMX-2.5.

CMX-1, CMX-2, and CMX-2.5 zoning districts are primarily intended to accommodate low-impact, small-scale retail and service use in storefront buildings, as well as the type of residential use allowed in the surrounding zoning district.

Mixed-Income Housing Bonus

Sections 14-702(2) through 14-702(4) of the Philadelphia Zoning Code establish a Mixed-Income Housing Bonus that provides “bonuses” for gross floor area, building height, and housing unit density if the property owner either agrees to designate a certain portion of dwelling units as affordable under the Philadelphia Zoning Code or makes an in-lieu-of payment to the Philadelphia Housing Trust Fund.

CMX-1, CMX-2, and CMX-2.5 zoning districts are eligible for height and housing unit density bonuses through the Mixed-Income Housing Bonus. In these zoning districts, the base height limit is 38 feet. Property owners can gain an additional seven feet if they include either Moderate Income or Low-Income housing.

Properties in these districts which include Moderate Income can receive up to 25% increase in units and properties which include Low Income can receive up to a 50% increase in units.

Alternatively, property owners can make a payment to the City of Philadelphia to receive the Mixed-Income Bonus instead of including affordable housing units. To do so, the property owner must sign an agreement with the City’s Department of Planning and Development (DPD) and make a payment to the City before the building permit may be issued.

Payment is calculated based upon the zoning district, category of bonus, and level of affordable housing being offered.

In the CMX-1, CMX-2, or CMX-2.5 zoning district, the payment amount is the greater of: 1) the lot area (in square feet) multiplied by $20 for the Moderate Income bonus or by $24 for the Low-Income bonus; and 2) the number of additional dwelling units earned through the bonus multiplied by $25,000 for the Moderate Income bonus and by $30,000 for the Low-Income bonus.

To apply for the Mixed-Income Housing Bonus, the property owner must first obtain a zoning permit from the City’s Department of Licenses and Inspection (L&I).

Before applying for the zoning permit, the property owner must submit a completed Mixed-Income Housing Zoning Bonus Applicant Acknowledgement Form to the City’s Department of Planning and Development (DPD).

In the completed form, the property owner acknowledges the requirements which must be met by the property owner in connection with the Mixed-Income Housing Bonus.

After the completed form is signed by a representative from DPD, the property owner will submit the completed form along with the zoning permit application to L&I.

If the property owner intends on building affordable units when the property owner submits the building permit application to L&I, the property owner must also provide: 1) an affordable building plan; 2) a draft of the recordable instrument in the form of a restrictive covenant in favor of the City committing to the requirements of the Mixed-Income Housing Bonus, and 3) a statement of compliance issued by DPD for any requirements DPD imposes to secure and monitor the property owner’s satisfaction of these governmental requirements.

If the property owner intends on making a payment in lieu of building affordable units when the property owner submits the building permit application to L&I, the property owner must also include with the building permit application: 1) a copy of the fully executed written agreement entered into between DPD and the property owner committing the property owner to make payment in consideration for obtaining the Mixed-Income Housing Bonus, and 2) a copy of the deposited check tendered by the property owner to the Philadelphia Housing Trust Fund in the amount set forth in the written agreement.

Green Roof Bonus

Properties in the CMX-2 and CMX-2.5 zoning districts are eligible to use the Green Roof Bonus as provided in Section 14-602(7) of the Philadelphia Zoning Code.

The Green Roof Bonus allows property owners to increase the amount of allowable residential units by 25%. To illustrate, if the Philadelphia Zoning Code allowed for 20 residential units as a matter of right, under the Green Roof Bonus, the property owner could include another five (or a total of 25) residential units with the inclusion of such a green roof.

To be eligible for the bonus, the dwelling units must be located in a building with a green roof, which covers at least 60% of the rooftop.

For new buildings, the building structure’s construction requires a minimum of 5,000 square feet of earth disturbance as determined by the Philadelphia Water Department (PWD).

Earth disturbance is defined in the stormwater regulations as any construction or other activity that disturbs the surface of land. This includes but is not limited to landscaping, demolition activity surrounding the structure, and new sidewalk installation.

In the alternative, existing buildings or expansions of existing building structures, the building structure requires a minimum building footprint of 5,000 square feet.

Projects applying for the Green Roof Bonus must obtain pre-requisite approval from PWD.

Applicants should email pwd.planreview@phila.gov to notify PWD that they intend to apply for the Green Roof Bonus.

It is also recommended that the applicants notify DPD regarding its review of the zoning permit application.

Any project that is pursuing the Green Roof Bonus must submit an application for Existing Resources and Site Analysis (ERSA) at www.pwdplanreview.org.

When submitting the ERSA application, the property owner must also provide the following documentation:

• A green roof plan that is signed and sealed by a registered professional with green roof details, that includes the following: 1) General plan sheet requirements as specified in Table E-1 of the Philadelphia Stormwater Guidance Manual (Manual) 3.0; 2) compliance with design guidance specified in Section 4.3 and Appendix F.9 of the Manual; and 3) calculations to demonstrate that the green roof covers at least 60% of the rooftop in accordance with §14-602.7 of the Philadelphia Zoning Code; and
• PDW Storm Water Plan Review Worksheet 4, which will be used to prepare the Operations and Maintenance (O&M) Agreement for all proposed stormwater management practices;
• Operation and Maintenance Schedule for the Green roof as specified in Table E-7 of the Manual; and
• A Construction Certification Package for the Green Roof to ensure that acceptable documentation is maintained during the construction of stormwater management practices.

The property owner must also execute and record a deed restriction in favor of the City, approved as to form by the City’s Law Department, which requires the green roof to be constructed and maintained, at a minimum, in accordance with the manufacturer’s guidelines, where applicable, and with PWD standards, for the life of the building structure and which allows the City to inspect the green roof for, or demand proof of, continued compliance with those requirements.

Fresh Food Market Bonus

Recently, property owners have been taking advantage of the Fresh Food Market Bonus which is outlined in § 14-603(7) of the Philadelphia Zoning Code.

For CMX-1, CMX-2, and CMX-2.5 zoning districts, property owners can gain up to a 25% increase in the amount of residential units allowed in the building and an additional 15 feet in the height of the building.

The Philadelphia Zoning Code defines a fresh food market as an establishment primarily engaged in the sale of grocery products and provides:

• At least 5,000 square feet of customer-accessible floor area used for display and sales of a general line of food and nonfood grocery products such as dairy, canned and frozen foods, fresh fruits and vegetables, and fresh and prepared meats, fish, and poultry, intended for home preparation, consumption, and use;
• At least 25% of retail inventory by volume is in the form of perishable goods, which must include dairy, fresh fruits and vegetables, and frozen foods and that may include fresh meats, poultry, and fish; and
• At least 750 square feet of such customer-accessible sales and display area is used for the sale of fresh fruits and vegetables.

In order to receive the Fresh Food Market Bonus, the fresh food market must be located on the ground floor of the building and accessible through a separate entrance located along the main street.

In addition, another fresh food market may not be in operation within 1,000 feet of the building. To satisfy this requirement, L&I may rely on an affidavit from the property owner as presumptive evidence, absent evidence to the contrary.

Whether property owners elect to use the Mixed-Income Housing Bonus, Green Roof Bonus, or the Fresh Food Market Bonus, it is clear these governmental incentives are a great tool for property owners because it gives them the opportunity to expand projects while also contributing positively to the neighborhood.

Reprinted with permission from the October 2020 edition of Commercial Leasing Law Strategy © 2020 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com, or visit www.almreprints.com.