As Philadelphia City Council enjoys its summer recess, this is a good opportunity as any for us to review recently enacted or pending laws that will affect the personal and business lives of individuals and corporate entities situated within the city of Philadelphia.

Bill No. 210081—Limited Lodging

The new law regarding Airbnbs and other short-term rental accommodations within city limits went into effect recently. The city government now only allows “limited lodging,” or short-term rental accommodations, of a unit that is the owner’s primary residence. Property owners considering limited lodging must first obtain a limited lodging operator license from the city government, then list the rental through a booking agent with a limited lodging and hotels booking agent license. For a property owner hoping to lease a property that is not their primary residence, the property owner will have to obtain a zoning permit either as of right under a zoning classification that allows for “visitor accommodation” or seek and obtain a variance under the Philadelphia Zoning Code to allow for such a use of the property. A number of other requirements were created under the new law, regulating tenant behavior, advertising and licensing.

Bill No. 210633-A—The Mix Income Neighborhoods Overlay Bill

This new law, which goes into effect on July 18, will require 20% of residential units in any new housing development with 10 or more residential units in select tracts of the 3rd and 7th Councilmanic Districts be made available at restricted pricing for a 50-year period. At least 15% of these affordable units must be on-site. The new law offers 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 Housing Trust Fund contribution. These 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.

Bill No. 210917-A—Leasing of Commercial Property

As of March, commercial tenants must be afforded the opportunity to determine the zoning and approved uses for a commercial property before entering a lease arrangement. The landlord must give the tenant written notice on how to determine the zoning and approved uses of the leased premises and an acknowledgement form signed by both parties, indicating that the tenant received the requisite written notice. The new law provides tenant with a private right of action against any landlord which fails to comply with it.

Bill No. 220337—Commuter Transit Benefit Program

Beginning in 2023, a commuter benefits program will empower thousands of Philadelphia workers to use pre-tax income to cover commuting costs. The law, introduced by Councilmember Helen Gym, and enacted in early June, will require employers with more than 50 full-time employees in Philadelphia to offer a commuter benefits program, which can be used for public transit passes and fares, van-pooling and potentially bicycle expenses. Cities such as New York City, Seattle and Washington, D.C. have already implemented similar governmental programs.

Bill No. 220186—Affordable Workforce Housing

A new governmental program providing a homebuying preference for qualified employees working for the city government will commence in late July. The new law directs the city’s Office of Housing and Community Development to draft and set regulations governing the manner in which governmental employees and other preferences will be applied within its workforce housing programs.

Bill No. 220413—Real Estate Taxes (in Council)

This bill was introduced by Councilmember Mark Squilla on May 12. The bill proposes that, for real estate taxes due for the 2023 tax year, no interest, penalties, or additional charges will accrue while an appeal of a property’s assessed value is pending before the city’s Board of Revision of Taxes (BRT), provided that the tax assessment appeal was timely filed and the taxpayer has paid by March 31, 2023, an amount equal to the real estate taxes due on the property for the 2022 tax year.

Bill No. 220414—Philly Tree Fund Bill (in Council)

This bill, introduced by Councilmember Katherine Gilmore Richardson, seeks to increase the tree canopy across the city of Philadelphia, preserve existing trees, and impose fees for real estate developers and investors who cut down trees with no plan to replace them.

The bill provides for a payment to the Philly Tree Fund in lieu of planting trees, which Gilmore Richardson hopes will allow the city to reach its goal of tree canopy of 30% across all of its neighborhoods by 2030.

According to the Philadelphia City Council’s website, the bill comes after the city’s tree cover has declined by 6% since 2008 due to rapid development in residential areas. Improving the city’s tree canopy will enhance property values, reduce summer peak temperatures and air pollution, improve social ties among community members and provide obvious aesthetic benefits.

Bill No. 220110—Demolition of Religious Structures (in Council)

On Feb. 10, Councilmembers Curtis Jones, Jamie Gauthier and Allan Domb introduced this bill that amends the Philadelphia Code to include additional requirements for demolitions permits for building structures currently or previously used as religious facilities.

The bill would require the city’s Department of Licenses and Inspections (L&I) to verify if a building structure is or was used as a religious facility. If the building structure is a religious facility and is at least 50 years in age, L&I must notify the applicable district councilmember and the applicable registered community organizations (RCOs) of the demolition permit application, and, after that occurs, the applicable RCOs must hold a meeting with the community and confirm with L&I that they discussed demolition within 30 days of receiving notice of the demolition permit application, with L&I then considering the position of the RCOs in making the decision whether to issue the demolition permit. If passed, the bill will take effect immediately.

Bill No. 220008—Protection for Properties Adjacent to Construction (for Mayoral Review)

This bill, introduced on Jan. 20 and effective on Jan. 1, 2023, would increase the protections afforded to adjacent property owners during construction. Specifically, under the bill, property owners would be responsible for preparing and submitting plans to protect those adjacent properties including details on adjoining or adjacent buildings structures and any element that may be impacted by the construction; documentation of the existing conditions of adjoining or adjacent building structures; photographs of the existing conditions of adjoining or adjacent building structures; and a signed statement by the representative of the entity performing structural observations confirming the conditions in preconstruction surveys.

According to the bill, the initial notice of construction given to adjacent or adjoining property owners must include the pre-construction survey and details describing work that may affect the adjoining or adjacent property and a copy of an insurance certificate. If the property owner cannot obtain a signature from the adjacent or adjoining property owner for the building permit, evidence of delivery is sufficient to receive the building permit, but that property owner must wait 60 days prior to commencing construction activities.

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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.

Reprinted with permission from The Legal Intelligencer © 2022 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.

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In any real estate purchase, title insurance should be obtained. When land transfers owners, the new property owner can be responsible for pre-existing mortgages, unpaid property taxes, personal judgments against former property owners and even unpaid utility bills. By purchasing title insurance, the new property owner can ensure that they own the property free and clear from these potential liens and encumbrances. Simply stated,  title insurance protects buyers from any issues with the title of the property, making the transaction less risky.

The Benefits of Title Insurance

 

1. Circumvent Mortgage Responsibilities

Obtaining title insurance can help you protect your investment in cases where the previous property owner took out a mortgage to buy the property. 

Take this as an illustrative example. In a real estate transaction, the current property owner probably took out a mortgage to purchase the property in the first place. Assume the current property owner’s mortgage is $200,000 and agrees to sell the property for $300,000. If the mortgage is not paid in full when the property is transferred, that mortgage will remain as a lien against the property and does affect how much the new property owner will receive after they sell the property in the future.

Why is this the case? Assume the new property owner sells the property for $300,000, the same amount they purchased the property for. After paying the $200,000 mortgage lien from the sale proceeds, the new property owner will only be left with $100,000 of their $300,000 initial investment. This could be a rather costly mistake.

2. Protect Yourself from Unpaid Property Taxes

Title insurance can also help protect you from a previous property owner’s unpaid property taxes. Take the previous example and apply it to a case with unpaid property taxes. Say, for instance, the current property owner does not pay the property taxes during all of his years of ownership. The unpaid amount serves as a lien against the property, and that property tax lien will only be removed when that amount is paid in full.

3. Avoid Complications with Personal Judgments

Personal judgments against former property owners also may have a negative effect on the state of title to the property. In Pennsylvania, a personal judgment attaches to all real estate that an individual owns at the time the judgment is entered, meaning you could be buying a property with a judgment lien. In a future sale of the property, the sale proceeds will first be applied to satisfy that judgment.

4. Steer Clear of Utility Responsibility

Depending upon the jurisdiction, unpaid utility bills also attach to a property. At closing, these bills must be paid in full. As an initial step, the new property owner must first find out which utilities may attach as a lien, which can be tricky as each county is different. Then, the new property owner must determine if any such bills remain unpaid, otherwise the new property owner will be literally and figuratively footing the bill in the future.

5. Protect Your Purchase

As a new property owner, you should also purchase title insurance to make sure that your transaction is valid. In this day and age, identity theft is prevalent. As a new property owner, you must make sure that the current property owner is the actual person on the deed to the property. If the current property owner is not that person, the new property owner will be purchasing that person’s interest in the property, which is nothing.

However, there are some cases that are less fraudulent but rather a result of neglect. A lot of times, the person selling the property does not even remember how they came to own the property. They may own the property through a corporate entity or a married couple thinks they are both the owners of the property when they are not. This is a common occurrence when one spouse purchases the property before marriage and the other spouse moves into the property after marriage. The couple equally pays for all the property expenses during the marriage, so naturally they assume they equally own the property, which they do not.

When it comes to making smart real estate decisions, obtaining title insurance makes plain sense. While many of these situations may not come to pass, it is more advantageous to have this type of insurance so you are prepared for the worst case scenarios. 

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For the first time in several years, the city government in Philadelphia has begun to issue property reassessments by way of its tax assessment department, the Office of Property Assessment.

According to the Office of Property Assessment, a strong real estate market has caused the aggregate value of all properties in Philadelphia to rise approximately 21% since the last property reassessment.

In this article, we outline the various governmental programs that will reduce the impact of the increased proposed property assessments in order to ensure that real estate taxes remain affordable to the some of the most vulnerable property owners in Philadelphia.

Homestead Exemption

The Homestead Exemption currently reduces the taxable portion of a primarily residential property by $45,000.

Currently, the Homestead Exemption of $45,000 equates a savings to of approximately $630 on a property owner’s real estate tax bill. However, Mayor James Kenney has stated his desire for Philadelphia City Council to introduce and enact legislation increasing the Homestead Exemption to $65,000, equating to additional real estate tax savings. If the proposed increase in the Homestead Extension passes, property owners need not reapply to the program—the change will be automatically applied.

In order to be eligible for the Homestead Exemption, the individual must typically own and reside at the property and the property must not be subject to a real estate tax abatement,

An individual who resides at a property may be eligible to receive a conditional Homestead Exemption even if that individual’s name is not on the deed to the property, if the individual inherited the property from a deceased relative, if a fraudulent deed was recorded against the property, or if the individual entered into a rent-to-own agreement and has paid all or some of the monetary consideration for the property. Under these circumstances, the Homestead Exemption would be granted three years from the date of application.

The deadline to apply for the Homestead Exemption is Dec. 1 of previous tax year. However, property owners should file the application by Sept. 13, 2022, to ensure that the Homestead Exemption is reflected on their real estate tax bill for the 2023 tax year.

An individual may apply for the Homestead Exemption at //rev.phila.gov/homestead/, by calling 215-686-9200, or by mailing the following application at city of Philadelphia, Department of Revenue, P.O. Box 52817, Philadelphia, Pennsylvania 19115: https://www.phila.gov/media/20220223090043/Homestead-Exemption-application-Philadelphia-2023-form.pdf

Longtime Owner Occupants Program (LOOP)

LOOP is a real estate tax relief program for eligible property owners whose property assessments have increased by 50% or more from the previous tax year.

This governmental program is advantageous for property owners in rapidly gentrifying neighborhoods, as it locks in a property reassessment at 150% of the previous tax year’s property assessment for as long as the property owner remains eligible under this governmental program.

In order to be eligible for this governmental program, the individual must: reside at the property for a minimum of the previous 10 years; be current with their real estate taxes for the property or be a participant in an owner-occupied payment agreement or installment plan; and have income that falls below this governmental program’s limits.

To apply for this governmental program, the individual must complete the following application and mail it to Philadelphia Department of Revenue, P.O. Box 53250, Philadelphia, Pennsylvania 19105: //www.phila.gov/media/20220513080323/Longtime-Owner-Occupants-Program-LOOP-application-2023.pdf

In the alternative, the application can be hand-delivered to the following locations:

Municipal Services Building

Department of Revenue

1401 John F. Kennedy Boulevard

Philadelphia, PA 19102

Northeast Municipal Services Center

7522 Castor Ave.

Philadelphia, PA 19152

Hope Plaza

North 22nd St. and West Somerset St.

Philadelphia, PA 19132

Low-Income Senior Citizen Real Estate Tax Freeze

The city of Philadelphia’s Department of Revenue offers to prevent a real estate tax bill from increasing if the affected individual meets certain age and income requirements.

This real estate tax freeze applies even if the property assessment or tax rate changes. If the real estate tax liability decreases due to a lower property assessment or tax rate decrease, the amount of real estate taxes the affected individual owes in real estate taxes will also be lowered to a new amount.

Last, Councilmember Brian O’Neill introduced legislation that would extend the deadline to apply for the tax freeze.

An individual is eligible under this governmental program if the individual is aged 65 years or older; resides in the same household with a spouse who is aged 65 years or older, or is aged 50 years or older who is a widow of a spouse who reached the age of 65 before passing away.

An applicant under this governmental program must have a total income of $33,500 or less for a single individual or $41,500 or less for a married couple.

To apply for this governmental program, the individual must complete the following application and mail it to Philadelphia Department of Revenue, P.O. Box 53190, Philadelphia, Pennsylvania 19105.

In the alternative, the application can be hand-delivered to the same above locations.

Real Estate Tax Installment Plan

Senior citizen and low-income individuals who own and reside in the property may be eligible to pay their property’s real estate tax obligations in monthly installments to the city government in Philadelphia.

If first-time participants in this governmental program make all required monthly payments, they will be automatically enrolled in the installment plan for the following tax year. However, if the individual fails to make the monthly payment due under this governmental program, that individual will be considered in default, removed from this governmental program, and all real estate taxes will be due at that time.

Individuals who are at least 65 years of age or have a spouse who resides in the same household who is at least 65 years old may be eligible.

In addition, low-income individuals may be eligible based on family size and monthly maximum household income.

To apply, an individual must complete the following application and mail it to Philadelphia Department of Revenue, P.O. Box 53250, Philadelphia, Pennsylvania 19105: https://www.phila.gov/documents/real-estate-tax-installment-plan-application/.

In the alternative, the application can be hand-delivered to the same above locations.

The application window for the 2022 tax year closed in March, so interested property owners will have to look ahead to apply for this governmental program for the 2023 tax year.

Owner-Occupied Real Estate Tax Payment Agreement (OOPA)

Under OOPA, property owners may make monthly payments on real estate taxes which are past due.

To be eligible under this governmental program, the individual must reside in the property that the individual owns or, if the name of that individual is not on the deed to the property, the individual must have a legal interest in the property.

In order to maintain eligibility under this governmental program, the individual must pay all new real estate taxes as they become due.

To determine the minimum monthly payment amounts, participants under OOPA are arranged into one of five tiers, with tiers based upon monthly household income and family size, as follows:

A property owner who finds that the monthly payment due under this governmental program is not affordable may request that the monthly payment is based upon their net monthly income after taking into account their monthly expenses.

To apply, an individual must complete the following application and mail it to Philadelphia Department of Revenue, P.O. Box 53250, Philadelphia, Pennsylvania 19105: https://www.phila.gov/documents/owner-occupied-real-estate-tax-payment-agreement-forms/.

In the alternative, the application can be hand-delivered to the same locations above.

Active-Duty Tax Credit

The Active-Duty Tax Credit is designed for members of the United States Armed Forces Reserve or National Guard called into active duty.

This governmental program relieves such military service members from paying real estate taxes in Philadelphia while they are called to active duty outside of Pennsylvania.

To be eligible under this governmental program, the individual must own the property as their primary residence.

The real estate tax credit amount under this governmental program is calculated by taking the portion of real estate tax you which would otherwise be due for a full tax year and dividing that number by the number of days in a calendar year. This number is called the “daily property tax rate.” The daily property tax rate is then multiplied by the days the individual spends on active duty. The resulting number is the amount of real estate tax credit the applicant will be eligible to receive.

To apply for this governmental program, an individual must complete the following application and mail it to Philadelphia Department of Revenue, P.O. Box 53190, Philadelphia, Pennsylvania 19105: //www.phila.gov/media/20220228090124/Active-Duty-Real-Estate-Tax-Credit-application-2022.pdf

In the alternative, the application can be hand-delivered to the same locations above.

Real Estate Tax Deferral Program

The city government in Philadelphia offers a deferral program for property owners who see their real estate taxes increase by more than 15% from the previous tax year.

Considering the dramatic rise in property assessments proposed for the 2023 tax year, the property owner should determine if they meet the eligibility criteria for this governmental program.

In order to be eligible, the individual must use the property as their primary residence and all real estate taxes on the property must be up-to-date or under a payment agreement or installment plan.

If eligible, the property can defer payment of the real estate taxes which otherwise would be due until the property is sold or transferred, but they must pay a minimum annual interest rate of at least 2% until that occurs.

Eligibility is determined by annual household income and size, as follows:

Applications under this governmental program for the 2022 tax year have yet to be released online, but, as a guide, the applications for the 2021 tax year may be reviewed online at https://www.phila.gov/documents/real-estate-tax-deferral-application/

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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.

Reprinted with permission from The Legal Intelligencer © 2022 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.

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We are proud to share that our attorneys, Alan Nochumson and Natalie Klyashtorny have been once again recognized as the 2022 Pennsylvania “Super Lawyers”! This honor is reserved for those who excel in their legal practice areas and is only awarded to 5% of attorneys in Pennsylvania each year! 

This year Alan Nochumson was recognized for his work in the Real Estate category while Natalie Klyashatory was recognized for her success in Business Litigation. 

Pennsylvania’s Super Lawyers are selected by the team at Super Lawyers, a service from Thompson Reuters, Legal. The team oversees the selection process to include a survey of lawyers, an independent evaluation of candidates, a peer review of candidates, and an evaluation of discipline and good-standing. 

About Nochumson P.C. 

At Nochumson P.C., we are more than legal counsel. We are people serving our neighbors and community in Pennsylvania and New Jersey. Knowing that real communication between real people can help lead to real positive results, our team of attorneys is available 24/7 to help answer your legal questions and to fight for you with skill and fortitude, whatever the case may be. When you hire us, you can expect a sensible and cost-effective approach to legal counsel. We think fast, think ahead, and get things done. Contact us today or call us at (215) 399-1346 to see how we can represent you.

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On June 3rd, Natalie Klyashtorny will join the Building Industry Association of Philadelphia to give a seminar, Overview of Recent Significant Property and Construction Laws Enacted In Philadelphia.  

Natalie will discuss, amongst other things, how the city government has expanded the rights of neighboring property owners when it comes to real estate construction and development, increased protections afforded to adjacent property owners during construction by requiring property access agreements, imposed further obligations on the building permit and excavation permitting process, and restricted the ability of short-term rental investors and operators from doing business within city limits. In addition to the legislation that has already been enacted into law, Natalie will discuss some of the legislation that is on the horizon. 

Join her on June 3rd at 12:30 PM at Mindspace Philadelphia, The Wanamaker Building, 100 East Penn Square, 4th Floor and learn more about the impacts of the recent legislation.

Register Here

 

About Natalie Klyashtorny

Natalie Klyashtorny is a Shareholder of Nochumson P.C., where her practice focuses on business and commercial counseling and litigation and employment law. In addition to litigating in both state and federal courts, Natalie counsels and represents individuals and small and medium-sized businesses in commercial transactions, real estate disputes, business disputes, and with regards to their employment and workforce issues.

She is admitted to practice in the Commonwealth of Pennsylvania, the State of New Jersey, the District Court for the Eastern District of Pennsylvania, and the District Court for the District of New Jersey.

Natalie received her undergraduate degree from American University and graduated from Temple University School of Law.

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As interest rates are rising, real estate developers and investors must become more resourceful with regards to obtaining funding for their real estate acquisitions as well as their real estate development projects.

In this article, we will discuss some of the programs offered by the Philadelphia Industrial Development Corp. (PIDC), a nonprofit organization founded by the city of Philadelphia and the Chamber of Commerce for Greater Philadelphia in 1958, which can greatly assist these real estate developers and investors.

PIDC offers two grant programs for property owners in Philadelphia—the redevelopment assistance capital program and stormwater grants program.

Redevelopment Assistance Capital Program (RACP)

A grant under RACP provides reimbursement to property owners related to physical maintenance and operation of a property, administrative costs, legal fees and costs, financing and accounting costs, and architectural and engineering fees.

Awards are made twice a year, in April and October.

Past projects awarded grants under RACP include new construction and renovations of hotels, nursing homes, and universities, multipurpose centers and shopping centers.

In order for a project to be eligible for a grant under RACP, it must first be listed in an enacted Capital Budget Act, which itemizes projects that are available for state funding. When the project is “shovel ready,” the project sponsor may submit a business plan to the commonwealth of Pennsylvania’s Office of Budget.

The business plan must detail the “scope of work, project costs, documentation of other financing sufficient to complete the project, anticipated construction schedule and other relevant project and organizational information.”

To qualify, the project must cost at least $1 million and the property owner must match the funding equal to the grant amount.

Under RACP, the project must significantly impact the region’s economy, create, or maintain jobs, impact the community, be financially sustainable, and be shovel ready.

The grant offered under RACP requires financial sustainability because it operates on a reimbursement basis as expenses are incurred.

Furthermore, the project may not receive a majority of funding through any other state programs like PENNDOT or PENNVEST.

Finally, the project may not be located in a city revitalization and improvement zone (CRIZ) nor have eligibility for benefits under CRIZ.

You can learn more about RACP on the Pennsylvania Office of the Budget’s program page.

Stormwater Grants Program

The stormwater grants program, which operates through the Philadelphia Water Department (PWD), offers grant funding for the development of stormwater retrofit projects on commercial, industrial, multi-residential properties with more than 4 units and places of worship, amongst others.

The purpose of this program is to reduce pollution entering the city’s rivers and creeks and assists the PWD meet regulatory obligations and enhance the region’s water quality.

This grant is only eligible for property owners that are planning to add a stormwater retrofit to finished properties situated in the city. Funding under this program can be used for the design and construction of a stormwater retrofit projects on one or multiple eligible properties.

The application under this program must include the goals for the project, the broader mission of the property owner, additional work proposed with the stormwater retrofit, and the environmental, social, and economic impact on the local community.

The application must also include findings from environmental due diligence, a concept plan, any contracts related to the project, the proposed schedule, and additional financial documents which can be found in this document from the city of Philadelphia.

PIDC also offers further financing assistance to property owners in Philadelphia through the neighborhood development loan, subordinate term loan and a bridge loan.

Neighborhood Development Loan

The neighborhood development loan provides financing for property owners of mixed-use, commercial, and industrial projects located throughout Philadelphia.

Applicable uses for this loan include tenant improvements, property acquisition as part of a construction or rehabilitation project, building renovation or construction, machinery and equipment, as well as costs associated with fees, permits and appraisals.

The term of the loan is typically five to seven years and the amount of the loan ranges from $50,000 to $500,000. Under this program, the property owner is required to provide equity of 10%-20% into the loan.

Furthermore, there is no prepayment penalty under the loan program.

There is a fee to apply for the loan as well as a fee of 1.5% of the loan amount due upon the issuance and acceptable of the commitment letter.

To learn more about this loan program, you should visit PIDC’s Neighborhood Development Loan product page.

Subordinate Term Loan

A subordinate term loans, or flexible real estate debt, provides financing to property owners for commercial and industrial projects.

This loan typically funds projects that will create and maintain jobs for low-and-moderate-income residents, increase investment in underserved areas, or improve energy efficiency.

Under this program, one full-time equivalent job must be created for every $35,000 lent.

Eligible uses include property acquisition, construction or renovation, machinery and equipment, and soft costs, such as fees and costs associated with legal, accounting, engineering, permitting, appraisals and other related expenditures.

Typically, the term for this loan program typically ranges between 15 and 20 years and the loan amounts range from $500,000 to $5 million.

PIDC can fund between 10% to 40% of total project costs with a 10% minimum equity contribution by the property owner.

There is a fee to apply for the loan as well as a fee of 1.5% of the loan amount due upon the issuance and acceptable of the commitment letter.

You can visit PIDC’s product page to learn more about this loan program.

Bridge Loan

A bridge loan is available for projects that have been awarded public grants which are in need of short-term financing.

The only eligible use for this program is for interim financing to bridge timing gaps between contracts receivables.

This program offers up to $3 million in such short-term financing, depending upon contract-related cash flow and loan terms typically last one year.

There is a fee to apply for the loan as well as a fee of 1% of the loan amount due upon the issuance and acceptable of the commitment letter.

To learn more about this loan program, you should visit PIDC’s Bridge Loan product page.

PIDC also offers three tax incentive programs for property owners in Philadelphia—tax-exempt bond program, new markets tax credits and tax increment financing.

Tax-Exempt Bond Program

The tax-exempt bond program offers tax-exempt bond financing certain manufacturing facilities and nonprofit 501(c)(3) facilities.

The fee to apply for this program is $2,000 and the origination fee ranges from .0625 to .375%, depending upon the amount so bonded.

You can learn more about this program on PIDC’s Tax Exempt Bond Program page.

New Markets Tax Credits (NMTC)

NMTC is designed to generate private-sector improvements in low-income areas for projects that create jobs and stimulate economic growth.

Individuals and corporate entities can receive credit against their federal income taxes for making qualified investments in projects that finance community development.

Eligible uses include property acquisition associated with substantial renovation or new construction, new building construction, machinery or equipment and working capital.

Financing under this program consists of an equity investment from an investor and a loan from a third-party lender on a non-recourse basis funded into an investment fund. The investment fund is used to make qualified low-income community investment, in the form of a loan, to a qualified active low-income community business.

When applying, the applicant must submit a plan detailing how the project will benefit low- income communities.

The fee for applying for this program of $2,500 for a nonprofit entity and $5,000 for a for-profit entity.

To learn more about this program, you should visit PIDC’s page on New Markets Tax Credits.

Tax Increment Financing (TIF)

TIF is an alternative financing tool which authorizes the taxing bodies of the city of Philadelphia (the city and the School District of Philadelphia) to establish geographic areas (TIF districts) where tax revenue may be used to finance improvements in blighted areas of the city.

PIDC can propose any area of the city to Philadelphia City Council and the school district of Philadelphia for approval to establish such an area as a TIF district.

The eligible uses allowed for financing under this program include new construction, building rehabilitation, site improvements, machinery and equipment acquisition, and limited settlement and processing fees.

The amount of financing under this program is determined by the present value of the incremental tax revenue discounted according to the lender’s underwriting criteria.

The term of the TIF District and, therefore, the financing cannot exceed 20 years.

The interest rate of the loan under this program will depend upon the lender’s criteria.

—Kelsey Keane, a third-year law student at the Benjamin N. Cardozo School of Law, who is interning at the firm, assisted in the writing of this article.

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.

Reprinted with permission from The Legal Intelligencer © 2022 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.

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Over the past year, Philadelphia City Council has introduced and, in some cases, passed laws that will dramatically affect the way property owners, real estate developers and investors, and other real estate professionals conduct themselves within city limits.

In this article, we summarize the following relevant pieces of legislation:

Passed Bills

• Ordinance amending Title 4 of the Philadelphia Code to add provisions relating to the abatement of rats and other vermin in the city of Philadelphia.

Bill No. 210902, introduced on Nov. 4, 2021, and enacted on Feb. 24, 2022, places extra requirements on property owners to abate rats and other pests prior to any new constructions with excavation.

Prior to demolition, full rehabilitation, or new construction with excavation, the property owner must prepare a rodent control management plan including provisions for abatement by a licensed structural pest control company as well as maintain a written record of any pest control measures performed on the site.

In addition, property owners of vacant lots must perform and certify annual inspections (and remediation, if necessary) by a duly licensed pest control company for the city of Philadelphia’s Department of Licenses and Inspections (L&I) and the city of Philadelphia’s Department of Public Health. These governmental authorities will enforce the rules and reporting structure.

In doing so, property owners will now be required to remain vigilant in controlling pests in both construction sites and vacant lots.

• Ordinance amending Title 4 of the Philadelphia Code to revise provisions relating to excavation work and historical structures.

Bill No. 210389, introduced on April 28, 2021, and taking effect on Jan. 1, 2023, adds responsibilities to the building permit and excavation permitting process to better protect right of ways and adjacent building structures.

Changes include adding monitoring plans prepared by duly licensed engineers and filing additional information about the developed properties including property lines, location and widths of adjacent streets walkways and easements, all existing building dimensions surrounding the developed property, any foundation or retaining wall within 10 feet of the proposed excavation, and location of utilities within close proximity of the developed property.

The new law further requires the city of Philadelphia’s Streets Department to approve any encroachments into the right of way and city of Philadelphia’s Water Revenue Bureau to approve stormwater management where the area of disturbance exceeds 5,000 square feet.

When excavating next to a historic structure, the preconstruction survey must include documentation of the existing building structures, identification of any visible cracks in the building structures, photographs showing the elevation and any deformations, and a statement by the entity performing the observations confirmed the condition in the survey.

Property owners must notify adjacent property owners of the excavation, modifications to an adjoining firewall, and describe the nature of the work, estimated duration, monitoring and protection plans, and contact information for the real estate development project.

This new law places additional obligations on property owners and increases their responsibility to adjacent property owners. These requirements protect adjacent property owners by enforcing a reporting and documentation scheme to avoid liability.

• Ordinance adding protections for commercial tenants by adding a new chapter to Title 9 of the Philadelphia Code.

Bill No. 210917-A, signed on Jan.18, 2022, and effective on March 18, 2022, mandates that tenants have an opportunity to determine the zoning and approved uses for a commercial property before entering a commercial lease.

The landlord must give the tenant written notice on how to determine the zoning and approved uses of the leased premises and an acknowledgement form signed by both parties, indicating that the tenant received the requisite written notice.

The new law provides tenant with a private right of action against any landlord which fails to comply with it.

• Ordinance requiring the disclosure of the names and addresses of some individuals behind real estate development projects by adding Section A-301 to the Philadelphia Code.

Bill No. 200417, which took effect on Jan. 1, 2022, creates more stringent requirements for property owners regarding the posting of permits, licenses and work site signage.

Specifically, applications for permits, issued permits, site signs and other governmental applications related to construction must list: the name and address of the property owner if the property owner is a natural person; the names and addresses of the property owner’s responsible officers if the property owner is not a natural person; or the names and addresses of any individual who owns more than 49% of the value of the property or that of the property owner, if the property owner is not a natural person or a publicly-traded company.

By way of passage of this new law, the public at large will now ultimately know the identity of many individuals behind a real estate development project.

• Ordinance amending Title 4 of Philadelphia Code “The Philadelphia Building Construction and Occupancy Code” in order to require property access agreements.

Bill No. 220008, introduced on Jan. 20, 2022, and effective on Jan. 1, 2023, increases the protections afforded to adjacent property owners during construction.

Specifically, property owners responsible for the construction activities must prepare and submit plans to protect those adjacent properties including details on (1) adjoining or adjacent buildings structures and any element that may be impacted by the construction; (2) documentation of the existing conditions of adjoining or adjacent building structures; (3) photographs of the existing conditions of adjoining or adjacent building structures; and (4) a signed statement by the representative of the entity performing structural observations confirming the conditions in preconstruction surveys.

The initial notice of construction given to adjacent or adjoining property owners must include the pre-construction survey and details describing work that may affect the adjoining or adjacent property and a copy of an insurance certificate. If the property owner cannot obtain a signature from the adjacent or adjoining property owner for the building permit, evidence of delivery is sufficient to receive the building permit, but that property owner must wait 60 days prior to commencing construction activities.

This new law will place the onus on property owners to notify their adjoining or adjacent property owners about the proposed construction activities. By doing so, however, in many cases, will delay construction activities during this 60-day cooling off period.

• Amending the Philadelphia Code to provide a credit against taxes or city fees to cover the cost of installing fire-escape rope ladders.

Bill No. 220004, which will take effect with respect to the 2022 tax year and thereafter, affords property owners the option to apply for a tax credit, or a credit against the monies they owe to the city government, equal to the cost of installing a fire-escape rope ladder.

The property owner must agree to maintain the ladder and will be obligated to reimburse the city government if the property owner fails to maintain the ladder appropriately.

The purpose of this new law is to ensure a safe means of escape in the event of a fire or other emergency to the occupants of multistory building structures.

Bills in Committee

• City of Philadelphia’s Streets Department may collect governmental fees for costs incurred in reviewing plans for and constructing ADA-compliant sidewalks.

Bill No. 220189, which is currently in committee, authorizes the city of Philadelphia’s Streets Department to charge a fee for reviewing ADA ramp plans or installing ADA-compliant curb ramps in lieu of installation by the property owners.

• Resolution creating the School District of Philadelphia Building Authority Work Group.

Pursuant to Resolution No. 211028, the University of Pennsylvania has donated $100 million to the Philadelphia to improve school facilities through environmental remediation.

The School District of Philadelphia plans to prioritize environmental concerns but also proceed forward to develop a plan for the development of schools for the 21st century, including new building structures.

Philadelphia City Council created a School District of Philadelphia Building Authority Work Group, comprised of experts and stakeholders, to consider, analyze, and make recommendations regarding new educational facilities, co-locations with other governmental agencies, and health centers.

• Introduced ordinances placing a six-month ban on all total demolition in the Eighth Councilmanic District.

On Feb. 3, 2022, District Councilmember Cindy Bass introduced Bill No. 220081, which would place a six-month prohibition on all “total demolition” in the Eighth Councilmanic District.

Total demolition is defined as “removal or partial removal of structural elements for the purpose of removing the entire structure.”

There are two exceptions to the proposed moratorium: if the demolition is necessary to abate an imminently dangerous condition as determined by L&I; or if a governmental permit allowing for such demolition is obtained in accordance with provision of Section 14-1005 of the Philadelphia Code which regulates historical districts and requires approval from both L&I and the Philadelphia Historical Commission.

The moratorium does not apply to any real estate development projects valued at $150,000 or less.

• Introduced ordinance adding requirement to the issuance of demolition permits for building structures currently or previously used as religious facilities.

On Feb. 10, 2022, Councilmembers Curtis Jones, Jamie Gauthier and Allan Domb introduced Bill No. 220110, which amends the Philadelphia Code to include additional requirements for demolitions permits for building structures currently or previously used as religious facilities.

This proposed ordinance would require L&I to verify if a building structure is or was used as a religious facility. If the building structure is a religious facility and is at least 50 years in age, L&I must notify the applicable district councilmember and the applicable registered community organizations (RCOs) of the demolition permit application.

After that occurs, the applicable RCOs must hold a meeting with the community and confirm with L&I that they discussed demolition within 30 days of receiving notice of the demolition permit application. L&I will then consider the position of the RCOs in making the decision whether to issue the demolition permit. If passed, the ordinance will take effect immediately.

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.

—Kelsey Keane, a third-year law student at the Benjamin N. Cardozo School of Law, who is interning at the firm, assisted in the writing of this article.

Reprinted with permission from The Legal Intelligencer © 2022 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.

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In Pennsylvania, if a contractor is not paid for repairs or improvements made to real estate, the contractor can either take the traditional path of litigation and sue the property owner by filing a complaint under contractual or equitable theories or file for a mechanics’ lien that clouds title to the real estate.

If the contractor files for a mechanics’ lien, practically speaking, the property cannot be sold and there cannot be any change in financing of the property by way of a mortgage loan without the mechanics’ lien being paid or discharged.

In other words, obtaining a mechanics’ lien is a very powerful tool for any contractor if there is a payment dispute with the property owner.

In Baker v. Amin, 2022 Pa. Super. Unpub. LEXIS 336 (Feb. 4, 2022), the Pennsylvania Superior Court analyzed a contractor’s compliance with the Mechanics’ Lien Law of 1963 (MLL), 49 P.S. Sections 1101-1902, which was established to protect contractors, subcontractors, and even suppliers against property owners who may refuse to pay for labor and materials as it relates to repairs and improvements made to real estate.

In Baker, the property owners purchased a vandalized and seriously damaged skating rink in Dunbar Township, the opinion said.

They subsequently entered into oral agreement with a contractor to renovate the skating rink, the opinion said.

The contractor was expected to provide labor and materials for the renovation project, using a diagram provided by the property owner, the opinion said.

According to the opinion, the contractor worked on the renovation project for almost a year but ceased work when the property owner allegedly failed to make payments due to the contractor.

The contractor then filed a mechanics’ lien claim against the property owners in the Fayette County Common Pleas Court.

In doing so, the contractor alleged that, while the property owner paid $100,000 to the contractor, the contractor believed that it was owed an additional amount of $68,304 for labor and materials it expended during the renovation project.

In response, the property owners claimed that the contractor “failed to provide a detailed statement of the kind and character of the labor and materials furnished and prices charged for each” as required by Section 1503(6) of the MLL that governs the contents of a claim made by a contractor under the MLL.

The trial court ultimately ordered the contractor to file an amended complaint in compliance with Section 1503(6) of the MLL.

The contractor’s amended complaint included exhibits with invoices, receipts and cost breakdowns.

However, the property owners maintained their argument that the contractor failed to provide detailed statements regarding the cost breakdown for labor and materials, as mandated by the MLL.

The property owners argued that the contractor “only gave a broad description of the alleged money owed and a broad description of what the money was used for.”

The property owners filed a motion for summary judgment, asserting an identical argument under Section 1503(6).

The trial court granted summary judgment in part, noting that the invoices that did not comply with the MLL would be excluded from consideration.

At trial, it was ordered for the parties to submit briefs about the application of the MLL under the circumstances of the case.

The trial court found that, even with the amendments to the complaint, the contractor did not comply with the MLL.

After the trial court denied the contractor’s post-trial motion, the contractor filed an appeal to the Superior Court.

On appeal, the contractor argued that the case law interpreting the MLL utilize a “rule of ‘substantial compliance’ when determining if a claim filing has complied with law,” such that “wherever enough appears in the statement to point the way to successful inquiry.”

The contractor contended that the exhibits attached to the amended complaint substantially complied with the requirements of Section 1503(6) by providing: the employees who worked on the renovation project and their hourly wage; the dates and hours worked for these employees; the land involved and the character of the renovation project; a description of a previously unbilled kitchen equipment; and the date when the last work occurred.

The contractor further claimed that it could not detail exactly what labor or materials were completed, but not paid for, because the property owners always paid the contractor in round numbers.

The Superior Court in Baker highlighted that the issuance of a mechanics’ lien is an extraordinary remedy and anyone seeking to obtain it must “judiciously adhere to the requirements” of the law to secure a valid and enforceable lien.

Keeping that in mind, the Superior Court in Baker noted that anyone filing a claim for a mechanics’ lien must provide a “detailed statement of the kind and character of the labor or materials furnished or both, and the prices charged for each thereof.”

While acknowledging that courts in Pennsylvania have held that substantial compliance with the MLL is sufficient to claim a mechanics’ lien, the Superior Court in Baker concluded that the contractor did not comply with the statutory requirements.

The Superior Court in Baker emphasized that the contractor’s exhibits describing the work performed were prepared after the filing of the claim for a mechanics’ lien, some even by the contractor’s own attorney, and were not previously presented to the property owners.

Moreover, the Superior Court in Baker stated that, although the contractor’s invoices were thorough, listing the employees utilized on different workdays and receipts from purchases, the contractor still failed to accurately describe the work performed by the employees and the receipts did not describe what the materials were used for.

By relying on the exhibits, not an actual detailed statement as required under the MLL, the Superior Court in Baker determined that the contractor did not substantially comply with the law.

Lessons Learned

The Superior Court’s ruling in Baker emphasizes the importance of strict adherence to the requirements set forth in the MLL. Contractors must keep detailed contemporaneous records of the kind and character of the labor or materials furnished, the prices charged, and all communication with owners regarding payment and the scope of work. By failing to do so, they lose the right to obtain a mechanics’ lien and the leverage to immediately collect the amount in controversy, forcing themselves to instead undertake litigation against the property owner under traditional means which, in many cases, may take years to complete.

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.

Clementa Amazan is an associate attorney at the firm, a legal services law firm with a focus on real estate, land use and zoning, litigation, and business counseling for the people of Pennsylvania and New Jersey. Her experience as a judicial law clerk has enhanced her ability to identify, analyze and solve a diverse array of legal issues confronting her clients. 

—Kelsey Keane, a third-year law student at the Benjamin N. Cardozo School of Law, who is interning at the firm, assisted in the writing of this article.

Reprinted with permission from The Legal Intelligencer © 2022 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.

Post Excerpt In Pennsylvania, if a contractor is not paid for repairs or improvements, they can either take the traditional path of litigation or file for a mechanics’ lien.

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We’re proud to announce that in January 2022, Natalie Klyashtorny was elected to a three-year term as a member of the Executive Committee of the Real Property Section of the Philadelphia Bar Association.

The Real Property Section assists members in the practice of real property law by serving as an ongoing resource in a variety of areas. The Section plans and sponsors programs and workshops and produces materials on substantive and procedural aspects of the law. The Section also suggests improvements in applicable law practices and procedures and interfaces with judicial, legislative and administrative bodies toward that end.

About Natalie Klyashtorny

Natalie Klyashtorny is a Shareholder of Nochumson P.C., where her practice focuses on business and commercial counseling and litigation and employment law. In addition to litigating in both state and federal courts, Natalie counsels and represents individuals and small and medium-sized businesses in commercial transactions, real estate disputes, business disputes, and with regards to their employment and workforce issues.

She is admitted to practice in the Commonwealth of Pennsylvania, the State of New Jersey, the District Court for the Eastern District of Pennsylvania, and the District Court for the District of New Jersey.

Natalie received her undergraduate degree from American University and graduated from Temple University School of Law.

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On Dec. 16, 2021, Philadelphia City Council unanimously passed Bill No. 210669 and Resolution No. 210692.

In a nutshell, by way of this legislation, the number of members on the city of Philadelphia’s Zoning Board Adjustment (ZBA) would increase from five to seven, the ZBA’s board appointees would be subject to confirmation from Philadelphia City Council, and board appointees would be obligated to possess specified areas of expertise and a demonstrated sensitivity to community concerns regarding real estate development and the protection of the character of Philadelphia’s neighborhoods.

Voters in Philadelphia will have the opportunity to decide, during the May municipal election, whether this attempted amendment to the Philadelphia Home Rule Charter will become law. If so, the changes to the Philadelphia Home Rule Charter will take effect in October.

The resolution comes after a decades-long battle between the executive branch and Philadelphia City Council for control over the oversight of land use and zoning, which was originally a strictly executive power under the Philadelphia Home Rule Charter.

When Philadelphia City Council created the Zoning Code Commission (ZCC), in 2007, it amended the Philadelphia Home Rule Charter, creating the ZCC as an independent administrative agency, but embedded control and influence by the Philadelphia City Council into the duties and powers of the ZCC.

The ZCC was made up of 31 members, consisting of members from multiple zoning-related agencies, members of Philadelphia City Council, members from the community, mayoral appointees, and appointees of the city council president as well members of Philadelphia City Council.

The ZCC was charged with reforming the Philadelphia Zoning Code and investigating potential reforms. However, the powers and duties so outlined in the amendment created a reporting structure that gave power to the Philadelphia City Council, in an area of the law originally designated to the executive branch.

The ZCC implemented an updated Philadelphia Zoning Code, which took effect in 2012.

In December 2017, the city of Philadelphia’s Planning Commission published the Philadelphia Zoning Code Five-Year Report (the report), a five-year review of the new Philadelphia Zoning Code.

The report found that the new Philadelphia Zoning Code was overwhelmingly successful, citing a decrease in variances, increase to at-right permits, and transit-oriented development. Further, the report found that the new Philadelphia Zoning Code was easier to use and comprehend.

The report outlined five recommendations for zoning reform moving forward: reducing use variances requests through collaboration between the ZBA and community, increasing dimensional conformance, reforming community groups which are known as registered community organizations (RCOs), continuing and expanding remapping efforts, and reducing approval rate of variance requests.

The last recommendation is the primary influence for City Council President Darrell L. Clarke’s and Councilmember Cherrelle Parker’s resolution to reform the ZBA. The report states that, from 2008 to 2012, the ZBA granted 92% of variances requests. After the new Philadelphia Zoning Code took effect, the ZBA granted 87%. The report stated that the high level of variance requests “reflects a particular and significant disconnect between planning law, policies, and enforcement.”

Clarke specifically cited the high number of variance requests as the impetus for the changes to the ZBA.

To ensure that the ZBA arrives at consistent, well-reasoned decisions when considering requests for variances; the resolution requires that the members of the ZBA include an urban planner, an architect, an attorney with experience in land use and zoning, an individual with experience in the construction industry, and at least two recognized leaders from community organizations.

Furthermore, there are recommendations for administrative measures to further support the ZBA’s capacity, including, for example, mandatory training, physical improvements to the facilities of the ZBA, and additional administrative support from the staff of the City Planning Commission.

Mayor James F. Kenney opposed the resolution, citing many of the same concerns as advocates for real estate development. Specifically, it is the belief of Kenney that the resolution will slow real estate development in Philadelphia and make potential real estate developers and investors weary to build when they cannot evaluate risks or predict outcomes of hearings before the ZBA.

However, Kenney recently appointed William Bergman as chairman of the ZBA. While the rest of the members of the ZBA come from a background of labor unions, architecture, and civic organizations, Bergman has a different slightly different background. Bergman was an administrator and executive at Temple University, most recently serving as vice president for the public, government and community affairs. Bergman has worked closely with the City Planning Commission, the ZBA, and the city of Philadelphia’s Department of Licenses and Inspections (L&I). Bergman has a history of involvement in community groups. Namely, Bergman established two community groups within the neighborhood adjacent to Temple University that led to the development of the Special Service District, which provides street cleaning and additional safety measures from North Broad Street to North 18th Street.

Bergman’s appointment seems to align with the expressed concerns of the Philadelphia City Council. However, it is unclear whether Bergman’s appointment will lead to an overall decrease in granted variance requests.

Some experts believe that the high volume of variance requests stems from outdated zoning maps that do not match the conditions on the ground. Real estate developers and investors in Philadelphia maintain that the high number of overlay districts are the main source of Philadelphia’s uniquely high number of variance requests.

The report that inspired the Philadelphia City Council’s search for ways to decrease approved variance requests illustrated an increase in zoning overlay districts correlated with the introduction of the new Philadelphia Zoning Code. For example, in 2016, Philadelphia City Council passed amendments to the Philadelphia Zoning Code that created 12 overlay districts (in addition to the 11 other amendments to the Philadelphia Zoning Code that year alone). The previous year, Philadelphia City Council passed 15 amendments to the Philadelphia Zoning Code in total. “While some overlays are proposed by PCPC to address specific planning goals, most overlays are the result of other interests. PCPC generally discourages the creation of overlays because they can reduce the clarity of the code, provide additional issues with enforcement, or do not represent appropriate planning objectives. PCPC prefers to initiate comprehensive remappings to address discrepancies in base zoning.”

The growing number of overlay districts concerns potential real estate developers and investors in Philadelphia and they believe just targeting the ZBA is counterproductive to the Philadelphia City Council’s goal of increasing affordable housing.

In addition, some real estate development professionals are concerned that the increase in the members sitting on the ZBA and the heightened standards for the two additional board members will effectively halt development in Philadelphia. Specifically, some worry that an increase in the number of board members reduces the likelihood of meeting the necessary quorum to hear zoning variance requests and they expect an increase in recusal from board members due to a conflict of interest.

The proposed changes to the ZBA and the appointment of Bergman have left many real estate developers and investors wondering what the future of real estate development will look like in Philadelphia. City officials and real estate developers and investors expect that the resolution overhauling the ZBA will become law by way of voter referendum, however, most disagree on whether the resolution will benefit the city and its citizens.

Clementa Amazan, an associate at Nochumson P.C., is the co-author of this article.

— Kelsey Keane, a third-year law student at the Benjamin N. Cardozo School of Law, who is interning at the firm, assisted in the writing of this article.

Reprinted with permission from The Legal Intelligencer © 2022 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.

Post Excerpt The proposed changes to the ZBA and the appointment of William Bergman as chairman have left many real estate developers and investors wondering what the future of real estate development will look like in Philadelphia.

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