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This past year, the city of Philadelphia approved and implemented a number of impactful pieces of legislation affecting land use and zoning law. These changes impacted the process of developing real estate, managing rental properties, dining outdoors, and even the makeup of the city of Philadelphia’s Zoning Board of Adjustment itself.

In this article, we highlight some of the most important changes to land use and zoning law in Philadelphia in the year 2022.

Bill No. 210669—Change in Composition of Zoning Board of Adjustment

At the end of 2021, the city government submitted a ballot measure under Bill No. 210669 to amend the Philadelphia Home Rule Charter in order to change the amount of members on the city’s Zoning Board of Adjustment from 5 to 7 and to require Philadelphia City Council to confirm any members appointed by the mayor to the Zoning Board of Adjustment.

As for the composition of the Zoning Board of Adjustment, it would be required to include an urban planner, architect, zoning attorney, a real estate finance expert, and two members from community organizations.

Furthermore, member of the Zoning Board of Adjustment would also have to show “sensitivity to community concerns regarding development and protection of the character of Philadelphia’s neighborhoods.”

Voters in Philadelphia approved the ballot measure in May 2022, and, while the approved changes have not yet gone into effect, we expect to see a change in the composition of the Zoning Board of Adjustment, etc. sometime in 2023.

Bill No. 210633-A—Mixed Income Neighborhoods Overlay

This past summer, the Mixed Income Neighborhoods Overlay went into effect, mandating certain affordable housing requirements for real estate development projects in select tracts of the 3rd and 7th Councilmanic Districts.

Bill No. 210633-A requires 20% of residential dwelling units in any new housing development of 10 or more residential dwelling units in these certain areas of Philadelphia to be made available at restricted pricing for a 50-year period by way of a deed restriction.

Under this new law, at least 15% of these affordable residential dwelling units must be on-site. However, this new law does offer real estate developers and investors the chance to apply for a waiver from the city Planning Commission to fulfill up to 5% of the requirement via offsite units or a contribution to the city of Philadelphia’s Housing Trust Fund.

These residential dwelling units must be affordable for rental households earning up to area median income (AMI) of 40%, and for owner-occupied households earning up to 60% of AMI. These residential dwelling units must be offered at a total monthly cost that does not exceed 30% of the gross monthly income for households earning up to 40% of the AMI, including utilities, and adjusted for household size.

The zoning overlay created by this new law does offers significant incentives for providing affordable housing, including bonuses under the Philadelphia Zoning Code for the amount of allowable residential dwelling units, the maximum occupied area, the maximum building height, the maximum floor area ratio, and the minimum required parking spaces.

In December 2022, city council president Darrell Clarke introduced similar legislation that would apply to a sliver of the 5th Councilmanic District along the North Broad Street corridor. Stay tuned in 2023 to see how that legislation progresses through Philadelphia City Council.

Bill No. 210776—Revamped Outdoor Dining Program

This past fall, the once-temporary outdoor dining program has been made permanent with the passage of Bill No. 210776.

This governmental program, which incorporated feedback from restaurant owners and residents alike, allows restaurant establishments to provide outdoor seating on designated city sidewalks and streets.

The new outdoor dining program offers licenses for sidewalk cafés and streeteries.

A sidewalk café license allows eligible restaurant establishments to occupy sections of the sidewalk in front of their storefront for outdoor dining. This license grants restaurant establishments the privilege of additional seating while maintaining adequate sidewalk access for pedestrians and those with disabilities, while also regulating for issues like noise and cleanliness standards.

A streetery license allows eligible restaurant establishments to occupy a designated portion of the parking lane on authorized city streets in front of the restaurant establishment. This license includes provisions for furniture, shelters, enclosures, and crash-worthy protective barriers. Streeteries are only permitted “by-right” in designated commercial areas throughout the city to ensure that residential areas are less effected by the noise and other impacts of streeteries.

Applications for the streetery and sidewalk café licenses are now available through the city of Philadelphia’s Department of Licenses and Inspection’s eCLIPSE system and must be renewed annually.

To be eligible for these governmental licenses, the applicant must have a commercial activity license, a business income and receipts tax identification number, a valid food preparation and serving license, and be either tax compliant with the city of Philadelphia or on an approved tax repayment plan with the city of Philadelphia.

Bill No. 210081—New Rules and Regulations for Airbnb and Short-Term Rental Properties

Bill No. 210081, effective as of Jan. 1, created new governmental rules and regulations for operators of Airbnb’s and other short-term rental properties across the city.

This new law was enacted in 2021 to tighten the reins on bad actors who were operating rental properties illegally or doing so as a nuisance to the surrounding community.

This new law requires limited lodging operator’s licenses for rentals hosts who live in the unit.

Additionally, hosts will be required to list the rental through a booking agent with a limited lodging and hotels booking agent license, such as Airbnb.

While the monetary costs of obtaining a limited lodging operator’s license is relatively low, hosts will be asked to comply with new governmental requirements that previously only applied to long-term rental properties, and in many cases, hosts will be required to obtain a variance from the Zoning Board of Adjustment because of the restrictive nature of the Philadelphia Zoning Code.

Because the wait for a hearing before the Zoning Board of Adjustment can take upwards of six months, many hosts of short-term rental properties across Philadelphia are outraged about the potential impact this new law will have on their ability to rent their properties until they receive special governmental approval to allow them to use their properties legally.

According to a recent article in the Philadelphia Inquirer, “so far only 247 people have received a limited lodging operator’s license, and 164 have received the hotel permit, out of an Airbnb host count in the thousands.”

For those renting their properties on a short-term” basis and do not reside at the property being rented, they must obtain a zoning permit to use the property as a “visitor accommodation,” a zoning classification for hotels or motels and a rental license that specifies space is rented as a hotel.

Bill No. 210389—Additional Restrictions on Construction and Excavation Activities

Lastly, Bill No. 210389, which was enacted late in 2021, but did not go into effect until Jan. 1, created new governmental rules and regulations to protect residents from construction and excavation in adjoining properties.

During the recent rise in construction and real estate development in the city, many Philadelphians have seen their properties damaged, and, in some cases, destroyed by construction and excavations activities occurring next door to them.

Proceeding forward, the city government will require excavation licenses and a separate excavation permit for contractors to dig more than five feet into the earth.

Contractors will also be required to submit their excavation plans and preconstruction surveys documenting the condition of adjacent properties, as well as obtain site safety managers and a general liability insurance policy with a minimum of $2 million in protection.

Additionally, the new governmental rules and regulations will enhance protections for historically designated properties.

Alan Nochumson is the sole shareholder of Nochumson P.C., a legal services firm with a focus on real estate, land use & zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Nochumson is a frequent author and lecturer on issues commonly confronting businesses, individuals and professionals. You can reach him at 215-399-1346 or alan.nochumson@nochumson.com.

Alex Goldberg is an associate attorney at the firm. You can reach him at 215-399-1346 or alex.goldberg@nochumson.com.

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