Center City Philadelphia is demonstrating a stark defiance of urban development trends with a booming residential population and a flood of new apartments to match, indicating that the developers' gamble on downtown revival wasn't misguided. According to recent data released by the Philadelphia Business Journal, the population of the Greater Center City region skyrocketed by 26% to 188,741 from 2011 to 2022, enjoying a similar increase in housing units which rose by 24%.
Despite the shift towards remote and hybrid work models that diminished the number of office workers, Greater Center City's residential population saw an uptick of 3% over the past four years, with 7,429 new housing units built since 2021, there's no sign of growth slowing down as the area absorbs new residents and wrestles with the impacts of these demographic shifts, all the while Greater Center City's attraction continues with positive net migration as research from Placer.ai suggests over 11,000 migrated there between 2021 and 2023, as reported by the Center City District.
Philadelphia is setting a strong example nationally with its proactive approach to office-to-residential conversions, capitalizing on tax incentives and solidifying its position as a beacon for development amongst its counterparts. "Despite challenging macroeconomic conditions, a significant change to the 10-year tax abatement, and a nationwide discourse on the pandemic’s dismantling of urban life, Greater Center City and adjacent ZIP codes are continuing to see residential investment at unprecedented levels," revealed a new report from the Center City District/Central Philadelphia Development Corp, as reported by the Philadelphia Business Journal. These factors lead to thousands of new units to come within the next 12 to 24 months, possibly leading to saturation – yet the current trends predict a healthy balance.
According to a WHYY report, the completion of 2,844 units in the last year, coupled with some buildings transitioning from office to residential spaces, marks a five-year high for Greater Center City. With rents averaging $1,996 in November 2023, Greater Center City boasts relative affordability and walkability compared to other major cities like Manhattan, where the median rent more than doubles that of Philadelphia's downtown district however nearly half of the city's renters still grapple with cost burdens, spending more than 30% of their income on housing.
