Philadelphia City Council Advances Key Real Estate Legislation for 2026
As 2025 draws to a close, Philadelphia City Council has advanced a slate of real estate-related measures that will shape real estate development, housing policy, and property oversight in the year ahead. From accelerating affordable housing approvals to tightening accountability for landlords and adding new layers of community review to certain commercial uses, Philadelphia City Council’s end-of-year legislative activity reflects a growing focus on neighborhood stability, public safety and the city’s housing affordability challenges.
This month’s update highlights the key bills that moved forward and what they signal for real estate developers, property owners and practitioners navigating Philadelphia’s evolving regulatory landscape.
Philadelphia City Council has enacted new legislation introduced by Councilmember Brian O’Neill to crack down on illegal rental conversions in residential neighborhoods. The law, co-sponsored by Councilmember Mike Driscoll, restricts property owners from installing more than one public utility meter or creating multiple utility service accounts at any residential property with three or fewer dwelling units unless they hold a valid rental license or have secured a building permit authorizing multi-family use.
These councilmembers emphasized that this measure closes a longstanding loophole that allowed owners to convert single-family homes into multi-unit rentals without proper zoning approvals, permits, or safety inspections. Such illegal conversions have been a persistent issue across Philadelphia, contributing to unsafe living conditions, fire hazards, strained infrastructure, and neighborhood parking problems. O’Neill and Driscoll stressed that the new law will help protect tenants, maintain neighborhood stability, and uphold the residential character of communities, particularly in the far northeast.
Under the ordinance, any property owner seeking separate utility service for additional units must first demonstrate compliance with city licensing and zoning requirements. The law takes effect immediately.
Two major affordable housing bills championed by Councilmember Jamie Gauthier became law this fall, aiming to accelerate the development of affordable units and increase accountability in the zoning variance process. Gauthier, chair of the housing committee, emphasized that the new laws streamline municipal approvals, lower development costs, and strengthen trust between communities and real estate developers.
Bill No. 250043 requires the Department of Licenses and Inspections (L&I) to expedite its review of affordable housing projects—five business days for zoning permits and 10 business days for building permits—removing prior qualifiers that allowed delays due to staffing or leadership changes. The bill also accelerates the hearing date for affordable housing matters which are decided by the Zoning Board of Adjustment (ZBA) at no additional cost and broadens the definition of “Affordable Housing Project” to include more forms of deed-restricted housing.
Supporters from the Philadelphia Association of Community Development Corporations and the American Institute of Architects testified that predictable, fast permitting is essential to reducing pre-development costs, especially as rising borrowing costs and material prices strain nonprofit real estate developers.
The new law addresses a long-standing bottleneck: zoning variances for affordable housing often take more than six months to receive a hearing, and previously required fees of up to $2,250. By moving these projects to the front of the line for free, the city intends to help affordable housing developments projects move forward more quickly and at lower cost.
Bill No. 250041 restores confidence in the zoning variance process by empowering the ZBA to enforce affordable housing commitments through binding conditions known as provisos. Historically, real estate developers often promised to include affordable units to gain community support, but the ZBA lacked authority to require follow-through, leading to broken promises and mistrust from neighborhood groups. Now, when either the applicant or the coordinating registered community organization initiates the request and documents the discussion at the required community meeting, the ZBA can formally condition approvals on delivering the agreed-upon affordable housing units.
Community leaders and advocacy groups testified that enforceable commitments will make residents more willing to support developments seeking extra density, which many real estate development projects rely on to make affordable housing financially viable. With these two laws, the city aims to speed up construction, reduce costs, and ensure that affordability promises are honored, helping more Philadelphia families access safe, affordable homes sooner.
Introduced by Young, this bill would exempt residential water and sewer customers from all penalties and interest on late payments starting July 1, 2026. Currently, overdue accounts incur a 5% penalty after 30 days plus additional fees tied to billing frequency. These penalties would remain for commercial and nonresidential properties. The measure is intended to ease financial pressure on households and prevent mounting fees from worsening residential water debt.
Bill No. 250834 (In Council): Zoning Overlay for Convenience Stores
Councilmember Quetcy Lozada’s Bill 250834 would create a zoning overlay for the 7th District requiring a special exception for certain convenience-store uses. At a hearing on Oct. 16, 2025 administered by the rules committee, supporters argued the measure would curb the rapid growth of nuisance convenience stores that residents associate with drug paraphernalia sales, illicit activity and public-safety concerns. Community leaders from Frankford and Kensington described clusters of such shops as impediments to neighborhood stability, citing disruptions to businesses, school safety issues and repeated incidents of violence. Members of the staff of the Philadelphia Planning Commission testified that the bill would apply across the entire district and align zoning requirements with updated code formatting, while adding a structured community-review step. Lozada and several witnesses emphasized the proposal as a preventive tool designed to give residents meaningful input and strengthen oversight. The committee amended related measures and advanced the bill with a favorable recommendation.
Councilmember Anthony Phillips introduced legislation requiring all rental properties to provide verifiable contact information and mandating a local Philadelphia-based agent for landlords who live outside the city. Phillips said absentee owners often contribute to blight and code violations, citing over 62,000 violations reported in five years.
The bill is intended to improve landlord responsiveness, streamline enforcement, and ensure tenants and city agencies have a reliable local point of contact. The bill has been introduced and referred to committee for further review and a future hearing. Implementation would involve creating a process to collect and verify local agent information for nonresident landlords.
Compliance is critical: New laws tighten enforcement and accountability.
Affordable housing projects benefit: Faster permitting and enforceable commitments.
Community input matters: Expect more structured review processes.
Prepare for 2026 changes: Water penalty relief and landlord requirements are on the horizon.
This article was prepared by a licensed Pennsylvania attorney at Nochumson P.C., a Philadelphia-based law firm with extensive experience in all thing's real estate, litigation, land use and zoning, and business counseling.
Reprinted with permission from The Legal Intelligencer © 2025 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.