Is Philadelphia the Perfect Millennial City?
Millennials represent a growing group of home buyers ranging from about the age of 18 to 34 today. While many are buying their first home, some millennials found on the higher end of the age scale may be buying the last home they will own until retirement. Regardless, the home itself may not be nearly as important as the city it's located in, at least for millennials.
The millennial generation has a unique set of qualities they find important within the city they live in and the house they choose. According to a report from Abodo.com, millennials are likely to value the following qualities when scoping out a new city to call home:
A Thriving Job Market
Hiking Trails and Parks
Local Restaurants and Good Pizza
Highly-Rated Public Schools
Farmers Markets or Green Shopping Options
Plenty of Ethnic Food Options
A thriving job market is the number one thing millennials look for with affordable housing coming in second. However, this list becomes interesting once millennials cover jobs and housing. Next on their list of importance are parks, hiking trails, local restaurants and quality pizza. Some may even choose the neighborhood they live in due to the number of local restaurants, parks and how good the pizza is nearby.
The only group of millennials not putting a thriving job market as the most important factor is those from age 18 to 22. However, a thriving job market still comes in second for this group. All ages groups and both men and women put affordable housing close to the top of the list, as well.
Without rehashing the entire report from Adobo.com, it's easy to see what millennials want in a city. Philadelphia may be the perfect city for millennials and many have already decided this is where they want to live. A growing millennial population in Philadelphia, along with a high percentage of homeowners in the country (53%), are just two stats backing up the claim that Philadelphia is the perfect city for millennials.
What Makes Philadelphia so Great for Millennials?
The study from Abodo.com shows one glaring stat that puts Philadelphia as the top of the stack for millennials. After surveying 2,000 millennials born between 1982 and 1998, the study found 20 qualities millennials look for in a city. Based on these qualities and which cities in the United States offer the largest number of these qualities, Philadelphia ranks at the top of the list offering 95% of the qualities millennials seek in a city to call home.
The City of Brotherly Love beat out Boston, Washington D.C., New York City, Portland, Seattle, Chicago and a number of other big cities in the United States. It's the only city to offer 95% of the qualities on the list with five others coming in at 90% and three more at 85%. The only quality on the list Philadelphia doesn't offer is highly rated public schools. However, the only city named in the report offering highly rated public schools was Seattle, WA.
Tax Abatement Bringing More Millennials to Philadelphia
One of the major reasons millennials are flocking to Philadelphia is the 10-year tax abatement offered to homeowners. Many think tax abatements are only for the rich, but only about 6% of the number of abatements are given to millionaires. Currently, about 15,000 of the 530 properties in Philadelphia have abatements and 96% are residential properties.
Most tax abatements are on properties with an assessment of less than $400,000. Many of these properties are affordable and considered workforce properties.
Tax abatements in Philadelphia help to make homeownership more affordable. Basically, if you buy or own a home in Philadelphia and you make improvements, you won't pay any taxes on the value of those improvements for ten years. This may include things, such as remodeling a kitchen, redoing the bathrooms, adding on an addition or anything else causing the property to go up in value.
Abatements really come into play with new construction properties. With a newly constructed property, as much as 90% of the value is found within the actual structure. Since the entire structure is considered an improvement to the property, a millennial purchasing a new construction home only pays property taxes on the value of the land for the first decade. This represents a significant tax break considering the land is usually only 10-20% of the value of the property.
Philadelphia is Nearly the Perfect City for Millennials
A perfect city for millennials may not exist. However, Philadelphia comes very close. With 19 of 20 important factors for millennials found within the city and the current 10-year tax abatement, it's as close to perfect as you can get.
Tax abatements help to encourage new construction and rehabilitation of Philadelphia properties. This makes neighborhoods more attractive, helps with community revitalization and creates many good construction jobs. Millennials find all of the benefits of tax abatements attractive and the one factor not listed as found in Philadelphia (highly rated public schools) may change with the abatement.
Tax abatements have created an additional $48 million in tax revenues per year in Philadelphia. If that number rises to $161 million, the city can eliminate about $1 million in school deficit in just one year. This could allow more funding for public schools to improve and become highly rated.
In addition, the tax abatements make new construction homes more affordable for millennials looking for something brand new. With many new construction projects going on throughout the city, the growing population of millennials has the opportunity to find a home they truly love, in a city fitting their specific needs and wants. As more millennials approach a time in their lives when they are ready to settle down as their children go through school, Philadelphia provides a nearly perfect city to call home.