Philadelphia is Affordable!

Owning in Phila. more affordableCensus: But for renters, it’s costly.<br />By Thomas Ginsberg, Rita Giordano, Dylan Purcell and Alletta Emeno<br />Inquirer Staff Writers<br /><br />More photos<br />Data charts <br />New census data confirm what Philadelphia homeowners long have believed about their rank among big cities: Owning is more affordable here.<br /><br />But among the 10 biggest cities, Philadelphia is also one of the costliest for renters relative to their income. A rising proportion spend a big chunk of their pay on rent, according to the data.<br /><br />The trends are detailed in a new Census Bureau survey for 2005 being made public today. It measures, among other things, the proportion of income spent by renters or homeowners on mortgage, property taxes, utilities, fees, maintenance and other costs.<br /><br />Across the Philadelphia region, the numbers indicate that home values rose more modestly than elsewhere, in part because of the area’s slower-growing economy and job market, experts said.<br /><br />As a result, a housing bust probably would be less-damaging overall, they said.<br /><br />”It’s good to be stable,” said Celia Chen, director of housing economics at Moody’s, a West Chester-based research firm.<br /><br />In Philadelphia, homeowners spent a median of 22 percent of their income on housing. That is a smaller share than homeowners in New York, Boston, Los Angeles and Chicago, but bigger than those in Baltimore and Houston, the data show.<br /><br />According to lenders and real estate experts, most residents – renters or homeowners – should limit housing costs to 30 percent or less of income, although people with good credit can go much higher.<br /><br />”Not that 30 percent is a barrier, but once you cross it, you start borrowing from Peter to pay Paul,” said Kevin Gillen, a real estate expert at the Wharton School.<br /><br />Mindy Karp, 32, a TV producer who was moving Friday into her newly purchased rowhouse in South Philadelphia, said the decision to quit renting in Society Hill was easy.<br /><br />”The rent for a shoebox was exorbitant. I wanted to own something,” Karp said, noting her new mortgage cost is roughly the same as her rent was. “I knew I wanted a house in South Philadelphia, where I can still walk to everything.”<br /><br />On the other hand, Gillen, the Wharton teacher, decided to wait out high mortgage rates and rent rather than buy, after getting a good deal in Rittenhouse Square.<br /><br />”Ownership costs are so high in the burbs, and now it’s landing back in the city,” he said.<br /><br />Among Philadelphia renters, almost 52 percent spent at least 30 percent of their income on rent. Overall, the median share of income spent on rent and utilities in Philadelphia was 34 percent, second only to Los Angeles among the top 10.<br /><br />In high-income Chester County, the median percentage that renters spent on housing was 28 percent. But homeowners there got socked by rising home values and other costs, which pushed up their monthly housing bills 12 percent between 2004 and 2005, from $1,370 to $1,537 – more than any other in the region.<br /><br />For renters in Bucks, Camden and Burlington Counties the median share of income spent on housing was more than 30 percent. For homeowners there, the median was about 23 percent.<br /><br />For homeowners in Camden, Gloucester and Burlington Counties, the median share of income spent on housing was about 23 percent. That is slightly higher than each of the Pennsylvania counties except Bucks.<br /><br />Blame property taxes, which were higher on the Jersey side of the river, according to census data and many observers.<br /><br />”The taxes are atrocious,” said Vincent Lobascio, 81, a retired state worker from Audubon, Camden County. “It’s getting completely out of hand. I have a small bungalow in Audubon, and I pay over $4,000.”<br /><br />The burden is particularly clear among homeowners who have paid off their mortgages, typically older people.<br /><br />”There is a realization at every level of government that New Jersey’s economy is suffering from its high-tax, high cost-of-living environment,” said Dan Emmer, a spokesman for the New Jersey Association of Counties, “and everyone is looking for ways to lower those costs.”

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