Wall Street Journal: Glass Mostly Full in Center City This Season (Philadelphia: real estate market, lease)

[MarketStEl]

A feature that ran in The Wall Street Journal this past Thursday paints a mostly positive picture of how things are going in Center City Philadelphia this post-shutdown season:

Philadelphia's Center City Sees Resurgence in Housing, Economic Activity | The Wall Street Journal (free link)

The reporter notes that the rise in foot traffic, business activity and house values is taking place despite worries about crime.

Seems that a lot of people who decided to get outta town when the lockdowns hit are coming back, according to the article.

I spent some time at the Christmas Village Saturday, and it was very busy; I had to make my way through the crowds.

So: think we can sustain this going into 2023?

[cpomp]

Generally a good article.

Funny that a New York paper showcases Philadelphia in a positive light, yet the local Inquirer is largely a negative woke warrior publication... Thankfully there is some good journalism still there, but the publication is a mess.


Per your question, Philadelphia is finally almost out of the (Covid) woods. Foot traffic increasing, retailers and employers trickling back, real estate market is strong, so much development everywhere, positive changes to business and corporate taxes this year, and more...

The biggest hurdles (high level talk)...

1. CRIME. Whatever it takes, we need to alleviate the issue. A good writeup with Michael Nutter's comments...

'There’s a sense of lawlessness': Michael Nutter on why Philadelphia's 2023 elections are all about crime
https://www.bizjournals.com/philadel...tys-death.html

2. Improving the QOL for all Philadelphians... Street sweeping, cleaning trash, fixing sidewalks and roadways, investing in parks, community centers, etc.

3. Maintain and grow economic and leisure relevance. Philadelphia has a lot of institutional, cultural and corporate resources and is easily positioned to be a standout in the 2020s and 2030s, but the city need a change in the political status quo. And perfect timing... A huge Mayor race, several open council seats. The upcoming election will set the tone for the next decade.

In summary, I'm hopeful.

[Duderino]

Originally Posted by cpomp

In summary, I'm hopeful.

Yes, I continue to believe that Philadelphia has unbelievable resilience and tenacity in the face of adversity.

To me, its biggest "ace" will continue to be its status as the last large metro area in the high-demand Northeast Corridor with any semblance of economic balance--that will definitely continue to be attractive to would-be urbanites in cities like Boston, NYC, and DC who want to maintain a good standard-of-living without sacrificing urban vitality. As someone currently living in the Boston area, housing prices are nothing short of absurd around these parts. It's not sustainable, and from what I understand, the NYC and DC areas are pretty much in the same boat.

But you're right: in the end, it has to come down to crime, quality-of-life issues (like fixing broken sidewalks and the constant battle against litter), and blight.

If Philadelphia continues to do reasonably well with all of its challenges, imagine how well if it would do if they were even half as notable.

[JamesJay64]

It would be great if the city got to a point where people didn't have to mention crime in relation to EVERYTHING. I can only speak for myself but it doesn't define life here, yet it dominates every conversation pertaining to the city.

[cpomp]

Originally Posted by JamesJay64

It would be great if the city got to a point where people didn't have to mention crime in relation to EVERYTHING. I can only speak for myself but it doesn't define life here, yet it dominates every conversation pertaining to the city.

It got to that point or very close in before the end of the world started (Covid)...

Present day, ongoing discussions about crime are generally warranted because the city has a major crime problem that reaches many neighborhoods and until recently showed no signs of a slowdown and was met with a lax attitude from some city leaders.

However, the over the top sensational media headlines can lead to a skewed reality and incessant trolling.
I am tired of reading nice articles about the city (new restaurant openings, the Christmas market, etc.) and the comments are overwhelmed with trolls saying you will get shot... But unfortunately until shooting, homicide, carjacking, armed robbery rates drop, an image problem will persist (even if it is dramatized). And yes, I know every city has crime issues (cough *Washington DC*), but Philadelphia is often unfairly picked on.

But I agree with your general sentiment.

[MarketStEl]

Originally Posted by cpomp

It got to that point or very close in before the end of the world started (Covid)...

Present day, ongoing discussions about crime are generally warranted because the city has a major crime problem that reaches many neighborhoods and until recently showed no signs of a slowdown and was met with a lax attitude from some city leaders.

However, the over the top sensational media headlines can lead to a skewed reality and incessant trolling.
I am tired of reading nice articles about the city (new restaurant openings, the Christmas market, etc.) and the comments are overwhelmed with trolls saying you will get shot... But unfortunately until shooting, homicide, carjacking, armed robbery rates drop, an image problem will persist (even if it is dramatized). And yes, I know every city has crime issues (cough *Washington DC*), but Philadelphia is often unfairly picked on.

But I agree with your general sentiment.

I tell people all the time, "Philadelphia is underrated, and no one underrates it more than the locals."

The flip side of that coin is that, if and when something negative happens in the city, many locals blow it out of proportion or act as if it is somehow unique to Philadelphia or worse here than elsewhere.

And so it is with crime here right now.

And that's also one reason why I shared the WSJ item.

[thedirtypirate]

Thanks for sharing, MSE.


I think it's a fair article that highlights on some positives. No doubt, there were some weeks there in 2020, when I thought the city was done for. Or at least took such a blow that it would take a very long time to recover again. But places reopened, new things have been built, more grocery stores, and cultural events started to take place again.

Generally though, Center City is not what I worry about. It's the other parts of the city. However, one thing that I don't think has recovered and has progressively got worse is the subway system. Smoking, cleanliness, and other factors just make it a generally bad experience. If you want to take public transit it right now in Philly, the bus is the way to go.

[JamesJay64]

This article is of a similar note but provides some unique data: https://billypenn.com/2022/12/12/phi...s-center-city/

Some key points:

Philadelphia’s population did shrink from 2020 to 2021, but perhaps not as much as previously thought. Census Bureau estimates released earlier this year showed a 1.5% decline, with 25k fewer Philly residents. A just-released update based on a more reliable data collection process (the 5-year American Community Survey), shows a much smaller decline of less than 0.3%, about 4k people. Meanwhile, Center City neighborhoods grew their population in 2021, continuing an upward trend.

Cell phone data from Placer.AI showed the city’s population may even have grown slightly from April 2021 to April 2022, with a not-insignificant portion of the newcomers moving from Manhattan and Brooklyn.

Close to half of lease applicants at Alterra Property Group’s Philly properties were from out of state this year. VP of asset management Jeff Schaffer put the number at 48%, compared to 32% in 2020 and prior. The most popular locations they move from are New York and Washington DC, Shaeffer said.

All of this is generally good news for Philadelphia. More people moving into Center City means more people paying wage taxes — regardless of where they work and who they work for — and more customers to patronize local businesses. But is it sustainable? It could be, observers say, if the city is able to make improvements in two significant areas: reducing gun violence and improving the public school system.

[Duderino]

Billy Penn published a very similar article but also included some great info. on the topic of remote work trends in Philadelphia. It definitely corroborates the theory about newcomers from other Northeast metros being attracted by the livability of core Philadelphia neighborhoods. The city would be very smart to really capitalize on this trend.

Some of the people living in Philadelphia are coming from New York and other locations — more than before.

Close to half of lease applicants at Alterra Property Group’s Philly properties were from out of state this year. VP of asset management Jeff Schaffer put the number at 48%, compared to 32% in 2020 and prior. The most popular locations they move from are New York and Washington DC, Shaeffer said.

Cell phone data from Placer.AI showed the city’s population may even have grown slightly from April 2021 to April 2022, with a not-insignificant portion of the newcomers moving from Manhattan and Brooklyn.

“They’re not moving to upstate New York, they’re moving to other cities, because they’re city people,” Klinvex said.

This was happening to some extent before COVID-19, with people who committed to being so-called super commuters. With a savvy Amtrak strategy, they found ways to keep their NYC jobs without sacrificing their Philadelphia comforts (and much lower cost of living).

https://billypenn.com/2022/12/12/phi...s-center-city/

[MarketStEl]

Originally Posted by thedirtypirate

Generally though, Center City is not what I worry about. It's the other parts of the city. However, one thing that I don't think has recovered and has progressively got worse is the subway system. Smoking, cleanliness, and other factors just make it a generally bad experience. If you want to take public transit it right now in Philly, the bus is the way to go.

I still ride the Broad Street Line every day, and I have to agree with you. I regularly ride cars where people are smoking or vaping, and the smell of weed pervades the car.

People also jump or worm their way through the turnstiles with abandon.

There's a funk song by Brooklyn Funk Essentials that I'm very fond of whose spoken bridge begins

"Quality of life police
Sniffing like a hound
Say we disturb the peace
Want to shut us down..."

This 2008 song introduced the phrase to my vocabulary, but apparently, "quality of life policing" was a key component of the famed "broken window theory" that New York cops applied with great success in the 1990s.

Radicals, natch, beat up on it as a means of regulating or suppressing the marginalized, but it sure seems to me now that clamping down on those little violations of social order can make a big difference, even if those doing the violating are doing nothing worse than lighting up spliffs on trains.