Yet another item for the mayor-elect’s to-do list: addressing Philadelphia’s sluggish economy | Editorial

Voters elected Cherelle Parker as mayor last month in an apparent response to her detailed vision for addressing public safety issues in the city. And with a month still to go before the new mayor’s inauguration, Parker’s plans, an unexpected financial windfall, and changing crime trends have already started reshaping police work in Philadelphia.

The mayor-elect has named a well-regarded police commissioner in Kevin Bethel. Financial assistance from the state has allowed officers to use new digital technology to collect evidence and pursue other forensic advances. Detectives are solving more murders at the same time that the annual number of homicides in the city is on pace to decline by nearly 20% when compared with 2022.

While Parker’s focus on reducing crime has clearly been embraced by voting Philadelphians, the mayor-elect would be wise to keep her eye on another persistent challenge for our city: sluggish economic growth.

During the Kenney administration, the economy grew, but just barely. New jobs were concentrated at the lower end of the wage scale. It was mostly a continuation of the same trends that have plagued the city since the 1970s, a time when much of the region’s large employers, middle-class residents, and best-paying jobs left the city in response to Mayor Frank Rizzo’s large tax increases.

This phenomenon has been devastating. Not only does a suburban exodus mean less revenue for city coffers, it also calcifies poverty in Philadelphia’s neighborhoods. Job sprawl has long been known to have particularly negative effects on low-wage workers and people of color, removing the ladder of opportunity and extending commute times. Philadelphia — unlike many other large cities — has not truly recovered from the loss of a quarter million jobs between 1970 and 2000.

Now the city faces another potential emptying out with the post-pandemic trend toward hybrid and remote work. While Center City’s foot traffic has recovered somewhat, the uptick in activity downtown has been driven by new residents and visitors, not workers returning to the office. Per the Center City District, just over 100,000 commuters a day arrive in Center City, an area built to handle several times that number. A failure to arrest and reverse this trend would hurt the city.

For one, the lack of commuters has crushed SEPTA, leaving the agency struggling to recover its pre-COVID-19 ridership levels and pay competitive wages. One of the best ways to help the transit agency could be to drive more economic activity to Center City, as a way to increase ridership in its busiest hubs. (While the agency stands to benefit from the Sixers’ arena proposal, it wouldn’t open until the end of the decade, toward the tail end of a potential second term for Parker.)

Without quickly recovering ridership or securing additional public subsidies, SEPTA will be forced to pare down its schedule and postpone desperately needed maintenance projects. Those steps would likely lead to further erosion of ridership and more cuts. Transit advocates call this outcome the “transit death spiral.” For a city with Philadelphia’s narrow streets, scarce residential parking, and a large portion of residents who don’t own cars, that would be a disaster.

Another facet of the commuter crisis concerns the growing vacancy rates in city office buildings. Brandywine Realty Trust has canceled an 800,000-square-foot office tower along the Schuylkill, with president and CEO Jerry Sweeney pointing to the “economic tea leaves” as the rationale for his decision.

Because most of the city’s remaining office buildings are poorly suited for residential conversion, there’s the potential that many of these structures will become sources of blight. Some building owners may seek a reprieve on their real estate valuations, presenting a revenue challenge for the city, the School District, and the business improvement zones that rely on them.

There are parts of the mayor-elect’s agenda that could help alleviate this crisis. Parker supports shifting the burden from business and wage taxes to commercial property taxes, a move that requires significant buy-in from Harrisburg. She’ll need to wring every drop of value from her connections there if she wants to make that happen. She’s also talked at length about the need for all of the city’s commercial corridors to provide the cleanliness and safety residents and visitors deserve. Her Taking Care of Business initiative represents an important first step toward achieving that goal.

One Parker idea that is unlikely to move the needle is cutting the city’s parking tax. While parking costs are high in Center City, reducing rates by a dollar or two is unlikely to alter behaviors. Especially when parking in suburban areas is typically free and unlimited.

Parker has long discussed her strategies to solve the city’s public safety crisis, but Philadelphia also needs her help — and vision — to tackle its stagnant economy.