FX168 Financial News (Asia Pacific) News Well-known financial blogger ZeroEdge quoted BiSnow's new report as saying that due to a surplus of housing projects and problems with the demand behind them, jobs in the construction industry in Philadelphia may soon drop drastically. In fact, some developers are calling for a serious collapse after rushing to take advantage of the city's 10-year tax cut plan to temporarily peak economic activity.
Construction work is busy on the main road in the city of Philadelphia, and teams are dealing with a large backlog of projects approved before the key tax relief plan expires in January 2022. More than 26,000 units were approved in 2021, a significant increase from 2020, and the work is expected to be completed within the next 18 months.
(Source: Twitter)
Construction volume began to surge in 2022, driven by low interest rates and a rush to meet tax relief deadlines. More than 10,000 apartments will be put on the market in 2023, and another 16,000 high-end apartments are expected to be completed within the next 18 months.
However, according to Census data, there has been a sharp drop in new housing permits in the Philadelphia-Camden-Wilmington area, with only 949 issued in January and 986 in February.
Vince Jolly (Vince Jolly), founder and president of CVA Commercial Group, said, “We didn't even anticipate a recession; the economic downturn is already here.”
He went on to tell BiSnow, “I think construction workers are clearly going to be hit hard because once these jobs run out, I mean, what else can they do?”
According to Census data, the number of people employed in the city's construction industry increased by 1.5% from 2021 to 2023, and the industry had 121,000 local workers by the end of 2023.
However, according to CoStar data, the number of new condominiums started has dropped by more than 30% from the peak at the end of 2022, and 99 projects, including 17,000 units, have been suspended during the proposal phase.
Riverwards Group Managing Partner Mo Rushdy (Mo Rushdy) commented: “For example, by May 2025, the problem of surplus apartments will be solved by itself. The real problem is, first, employment.”
“We've heard from union friends and others that the housing sector and new job opportunities projects in the 2026-27 pipeline will dry up.”
“I'll tell you from experience that we're not even seeking financing,” Rushdie added.
Calvin Snowden (Calvin Snowden), founder and managing partner of BDFS Group, a Philly construction management company, said, “I'm seeing larger players starting to be affected. Companies that were profitable in the past few years are now struggling to survive.”
“I'm an engineer, not an economist, but I know there's a problem.”
“I know interest rates have to go down because these projects don't make sense anymore, these numbers don't work at all.”
Although nearly 100 multi-family housing projects have been put on hold, such as Alterra Property Group's 352 apartment complex in the University City, some large-scale projects are continuing. Notably, Tower Investments is advancing its 1,111 unit project in Central City. The project accounts for 6.5% of the total number of units currently under construction in the metropolitan area, making it the 11th largest condominium project under construction in the country.
However, large-scale projects are becoming less common.
Alterra Group's Mark Cartella said the industry is likely to see large-scale projects decline ahead of smaller ones. Meanwhile, redevelopment projects are driving Benchmark Construction Group's activities. Projects are being carried out in Fishtown (Fishtown) and other high-demand areas such as southern and northern Philadelphia, focusing on new homes and existing housing.