Philadelphia’s poverty could be solved with better tax policy and jobs, business leaders say
Downtown Philadelphia has almost returned to pre-pandemic downtown levels of jobs and foot traffic, and may be on the verge of another “Rendell moment,” reminiscent of the city’s revival in the early 1990s, according to business leaders and a new report from the downtown district.
But the recovery could be short-lived unless the City Council tackles the high payroll taxes and bureaucracy of doing business here, said Center City District Chief Paul Levy introducing the new report. State of Center City,” available on the nonprofit’s website. centercityphila.org.
Among the bright spots driving Philadelphia’s post-pandemic growth: 80% of retail and restaurant storefronts within the downtown limits are open or have found tenants through the first quarter of 2022. Performing arts and cultural institutions have fully reopened.
Tourism and conventions also rebounded, with the average daily room rate in downtown hotels dropping to $182 in 2021 from $156 in 2020. 2021 rates are about 10% lower than 2019 levels , according to the report.
The combination of shoppers and visitors reached 87% of pre-pandemic levels in April. But only half, or 49%, of non-resident workers have physically returned to work downtown. It still helped Philly overtake New York in job resumption rates, Levy noted.
Philly’s poverty can be solved with more jobs, Levy said during a two-hour presentation and panel discussion Thursday morning at the Union League in front of about 100 people.
“We have the highest poverty rate because we have the slowest job growth and the lowest business density,” he said. “When we created jobs over the last decade, poverty went down.”
Tax policy must change, he said. “We need to rely more on property assessments and reduce payroll taxes. It’s more financially stable for the city and it will help our black and brown small business owners more.
Rija Beares, Greater Philadelphia market leader with real estate firm CBRE, said tech employers and other potential leasing customers compare Philadelphia to “world-class capital cities in Europe.” But the stopping point is the tax on wages and professions. That’s when they decide not to move here,” she said.
Still, venture capital deals soared between 2020 and 2021, from $3 billion to $7.7 billion, and making Philadelphia the sixth-largest metropolitan area in the nation.
“I’m usually a complainer, but right now I’m very optimistic,” said Robert Zuritsky, president and CEO of Parkway Corp., a parking lot developer and company. “Philly is having another ‘Rendell moment’ and we just need leaders to push for better payroll tax policy and jobs,” Zuritsky said, quoting the city’s 1992-2000 mayor, Ed Rendell, which balanced Philadelphia’s budget, lowered taxes on businesses and wages, and improved services to neighborhoods.
John McNichol, president of the Pennsylvania Convention Center, didn’t mince words when he addressed the Union League panel.
“Our customers’ top priority is safety,” he said. ‘We made national news, folks’ with a record 2021 murder rate and protest violence.
“Visitors want the comfort of security if they come to stay with us. But the crisis breeds competition, so we are fighting against Boston, Chicago and DC,” he added.
McNichol recalls a visiting doctor who asked, “Why is toothpaste locked up in pharmacies? I had to explain that retail theft is not prosecuted here. We are on a good trajectory, but if we don’t pay attention to the details, we fall into disuse.
Approximately 80% of city jobs lost March-December 2020 in performing arts, spectator sports, museums and historic sites recovered by September 2021, the last available.
The Convention Center’s McNichol said hotel nights were on track to hit 500,000 this year and 700,000 in 2023, from 380,000 in 2019.
Taxable sales of downtown retailers and restaurants increased throughout 2021, reaching 83% of the pre-pandemic 2019 level in the fourth quarter, while bars and restaurants have seen a steady increase since last year .
At the end of 2021, there were over 17,000 residential units under construction or authorized in Greater Downtown, representing 50% of the city’s total in 6% of the city’s territory.
Much of this construction has taken place in the Market East section of the city, where Thomas Jefferson University and its hospital staff are the largest employer.
Safety, however, has been a huge concern for doctors and nurses, according to Clayton Mitchell, senior vice president of real estate and facilities at Jefferson University.
As a result, “We recently hired the former Deputy Director of the Secret Service and are expanding the visibility of our force,” he said, even moving Jefferson’s own security service to street-level offices. .
Inspector Ray Evers told the panel that increased visibility will contribute to the “feel index” of safety which he says is key to keeping visitors, workers and other pedestrians downtown.
“We want people to see the police on their beats, on bikes, where the most pedestrians are,” he said. “We need more contact with visitors.”
He acknowledged a staff shortage, but said ‘we are doing the best we can with the hand that has been dealt to us’.
Philadelphians’ educational attainment has also increased, with 31% of residents age 16 or older in 2020 earning a bachelor’s degree or higher, according to the report. This is up from 23% 10 years earlier and 18% in 2000.
Meanwhile, the share of the city’s population 16 and older with less than a high school diploma has fallen to 14%, from 29% 20 years ago. The report also found that 105,000 students were enrolled at 14 colleges in and around Center City in fall 2020, and said that of the 30,000 degrees awarded by those schools the previous year, the major part was in STEM (28%), health fields (23%) and business (20%).
In February 2022, Philadelphia still needed 38,500 jobs to return to pre-pandemic levels. This lags behind the region, which restored 84% of the jobs lost before the pandemic, and the country, which regained 87% of the jobs lost.
Philadelphia’s labored recovery mirrors the city’s slow growth from 2010 to 2019 when employers added private sector jobs at the rate of 1.5% per year, 26th among counties spanning 30 bigger cities.
In 2019, Boston had 31% more salaried jobs than in 1970, New York 20% more and Washington 18% more; Philadelphia was 21% below 1970 employment levels.
Writer Maddie Hanna contributed to this article.