Preserving Philly's charm by converting old buildings into housing units

Philly's historic charm is one of its most alluring aspects, which is partially why it's leading the nation in converting old hotels, factories, schools and warehouses into residential spaces.

Why it matters: Philadelphia has long struggled to address deteriorating and abandoned properties, which can harm neighborhoods and residents' quality of life.

• Repurposing old buildings into housing is one way to tackle blight, while having less of an environmental impact compared to new construction.

The big picture: The number of old buildings being converted into apartments is on the rise across the country. Converted units have nearly quadrupled since 2010, from 5,271 to 20,122 by the end of 2021.

• Philadelphia converted a total of 1,863 units in 2020 and 2021 combined, the most of any U.S. city over that two-year period, according to a report from Rent Cafe.

Between the lines: The main hurdle for developers is the cost, David Wilk, a Temple University professor who oversees the real estate program, tells Axios.

• It's often cheaper to demolish and create new construction rather than converting, Wilk says.
• The overwhelming majority of redevelopment in the city is still new construction, according to Drexel University economist Kevin Gillen.

Yes, but: Philadelphia provides some incentives to off-set that.

• A bill that took effect this year is starting to phase out the city's 10-year property tax abatement for new residential construction. But, there’s a caveat for converted properties, which get to keep the entire 10-year tax incentive.
• As of 2019, Rehab projects that are historically designated don't have to provide parking, and some get zoning perks.

What they're saying: Ken Weinstein, president of Philly Office Retail, has been repurposing buildings for the past 25 years. Weinstein tells Axios "there's a lot of work to be done" in the city.

• "If your passion is blight removal, we have a lot of factories and a lot of unused office buildings. We have a lot of blight in the neighborhoods."

Paul Steinke, executive director of the Preservation Alliance of Greater Philadelphia, said adaptive reuse projects can help attract tourists to Philly. He hopes it can also make headway in addressing the city’s housing crisis.

• "It'd be great to see more adaptive reuse for affordable housing since there’s quite a bit for market-rate housing," Steinke says. "It'd be nice to see them play a bigger role.”

Of note: Project HOME opened residential housing units for those struggling with addiction and on the brink of homelessness in a former elementary school in October.