Subsidy of Downtown Apartment Projects

TFP this morning ran a commentary piece discussing the tax breaks provided to five of the largest downtown apartment projects.

Passenger Flats

Market City Center

Heritage – Maclellan on Broad

1400 Chestnut

Walnut Commons

All five were provided substantial property tax breaks via the PILOT (property in lieu of tax) program. While the focus on the piece is on questioning the decision to extend the tax breaks as opposed to letting the market determine demand it is a substantial piece of the puzzle to help understand where the market is.

With more than 1,000 units in these five projects gaining this kind of incentive it has created a situation that from the outside looks like a stronger market than it in fact is. Again echoing my earlier retail observations the developer has led the charge here and it is going to take a number of years for the market to catch up.

Once I can track down a link to the commentary I will post it.