TCB November 2025

On November 4, 2025 from New Jersey to Virginia voters delivered a reasonably clear message: life has become unaffordable. As Pennsylvania State Rep. Malcolm Kenyatta observed, winning candidates shared a through line: "they talked about making people’s lives more affordable."

For those of us in the weeds studying Philadelphia’s economy, this is neither surprising nor new. The presidential election of 2024 hinged, in part, on Donald Trump’s ability to pin blame for the high (but falling) inflation on President Biden and on the Democrats more generally; polling leading up to the 2024 election suggested that voters trusted Trump and the GOP to be better stewards of the economy. A year later, the GOP seems to have lost that edge, with policies like cuts to social insurance and a huge tax on consumers in the form of tariffs keeping affordability at the top of voters’ minds. With news of Elon Musk’s staggering trillion-dollar compensation package sharing headlines with rising prices and layoffs in the public and private sector, it really still is “the economy, stupid,” in James Carville’s felicitous phrase. While Trump brags about the growth of stock prices, ordinary Americans know that their bills continue to outstrip their incomes; as I write, 42 million SNAP recipients – more than 10% of all Americans – have no idea whether their benefits will survive the federal government’s unprecedented 40-plus day shutdown, not to mention the tens of millions at risk for massive health insurance premium increases if/when the subsidies for the Affordable Care Act are allowed to expire.

While DC and Harrisburg face intractable political paralysis, Philadelphia is celebrating its moment of greatest fiscal health since the 1950s, with a billion-dollar budget surplus. It is time for concerted local action to address the manifest economic inequities in our own city and region. That’s why we are proposing the 50-50-50 Challenge – can we work together so that by the end of Mayor Parker’s presumptive 8 years in office we will have created 50,000 jobs, attracted 50,000 net new residents, and reduced the absolute number of Philadelphians in poverty by 50,000?

The Crisis in Context

Far too many Philadelphia families know about income and wealth inequities from lived experience. While the City’s poverty rate has dropped below 20% for the first time in decades, we are not quite sure why, and in any case, 20% is still well above the national average. Opportunity Insights ranked Philadelphia last among 50 large metros for economic mobility. Philadelphia’s housing, childcare, healthcare, transportation, food, and energy costs have all outpaced income growth for working families. For far too many local families, income instability is a fact of life – as is social immobility.

This crisis hits unequally. The same structural inequalities producing concentrated poverty in Black and Latino neighborhoods – where 40.2 percent of Latino residents live below the poverty line and Black poverty rates are several points higher than white poverty rates – make these communities disproportionately vulnerable to rising costs.

But the current moment is particularly urgent because affordability no longer only affects those in poverty. Teachers and nurses, construction workers and small business owners – people with jobs and credentials – find their futures increasingly precarious as living costs relentlessly climb.

And in the longer run, the MAGA attacks on affirmative action and DEI policies, as well as the radical cuts to the federal workforce and the blistering assault on public employee unions will hit Black and Latinos the hardest, since government contracting and employment have been among the most reliable on-ramp into the middle class for Americans of color.

Beyond Poverty Reduction

For decades, Philadelphia’s challenges were framed through poverty reduction. This framework, while important, no longer captures what residents are experiencing. The affordability crisis affects families earning $40,000, $60,000, even $80,000 annually who cannot build savings, absorb unexpected expenses, or achieve the stability that should come with steady employment.

Consider housing, historically Philadelphia’s greatest affordability advantage. The arithmetic has become punishing: property taxes rising faster than incomes, spiking insurance costs, climbing utility bills. For renters, rent increases outpace wage growth in virtually every neighborhood. Homeownership, long the main vehicle for intergenerational wealth accrual, becomes another source of financial stress, while aspiring buyers find down payments impossible when every dollar goes to current expenses.

The Hidden Tax

Philadelphia’s affordability crisis compounds with longstanding racial and geographic inequality. Economy League research revealed that homes in predominantly Black and Latino neighborhoods are systematically undervalued, denying families billions in home equity yet these homeowners face property tax burdens consuming higher percentages of household income than in wealthier neighborhoods. Programs designed as a bulwark against rising property taxes, like LOOP and the Homestead Exemption, are under-subscribed by precisely those who need them most.

Residents in disinvested neighborhoods often pay more for basics than those in affluent areas via the well-documented "poverty premium." Fewer full-service grocery stores means higher food costs. Fewer banks means check cashing fees. Older housing stock means higher utilities. Limited transit means higher transportation costs. This hidden tax means residents in these neighborhoods earn less, own less wealth, and must pay more for daily necessities.

Solutions Require Innovation

Addressing this crisis requires the same comprehensive, community-driven innovation we revealed during our Fair City Challenge. Solutions will not come from any single policy but will emerge from coordinated interventions across housing, transportation, energy, food systems, childcare, healthcare, and workforce development.

Some solutions are already emerging from neighborhoods: community land trusts stabilizing housing costs, cooperative ownership models, energy efficiency programs reducing utility bills, workforce training connecting residents to family sustaining careers. These community driven approaches deserve support because the people most affected understand both causes and solutions.

But community innovation alone cannot solve structural crisis. Philadelphia needs a comprehensive policy framework treating affordability as the through line connecting economic development, housing policy, transportation planning, workforce development, and municipal finance.

This means controlling the costs making existing housing unaffordable like property taxes, insurance, and utilities. It means helping low-income Philadelphians invest in home improvements that bring down energy costs, like weatherization, and enroll in all of the programs that can help mitigate property tax pressure. It means investing in public transit as an affordable alternative to car ownership. It means ensuring that job growth produces family sustaining careers with wages covering the actual cost of city living.

Striking while the proverbial iron is hot (and the City treasury is flush): The 50-50-50 Challenge

Fortunately, sound leadership and smart policy in the past 40 years have created the most fiscally sound City of Philadelphia government in decades, with a record budget surplus topping a billion dollars and investment-grade bond ratings that put the city in the enviable position of being able to borrow at good rates. In short, the time is now to invest in the future for those who have been marginalized by the economic changes of the past few decades.

The Economy League supports current policies to responsibly lower business and wage taxes at the same time as the city prepares to make major investments in affordable and workforce housing through the public-private MOVE initiative. Investment in quality, affordable housing – especially in neighborhoods that have been hit the hardest by depopulation and disinvestment – as well as in business development along commercial corridors, is a critical path toward ensuring that our declining poverty numbers lead to more equitable outcomes.

And this brings me to an idea that Economy League Board Vice Chair and former City Commerce Director Harold T. Epps and I have been bouncing around, which we are calling the 50-50-50 Challenge. By the end of the Parker Administration’s presumptive 8-year term, we ought to aim for 50,000 more residents, 50,000 more jobs, and 50,000 fewer people in poverty. This will require a concerted public-private effort to attract and retain residents; attract, retain, and grow local businesses; and upskill large numbers of our fellow Philadelphians so they can compete for the middle- and high-skilled jobs of the future.

The good news is that many of the components are already in place. Last summer’s Brookings/Pew report laying out the region’s ‘opportunity’ sectors provides a reasonable roadmap for the job-growth and business attraction components of the plan, driven in part by the Chamber of Commerce under the leadership of Chellie Cameron; the PAGE and Supply PHL initiatives under the auspices of the Economy League, the Urban League, and The Enterprise Center/Innovate Capital are making strides in the business-growth area; University City District’s Skills Initiative, Philadelphia Works’ Good Jobs Challenge, and numerous programs at Community College of Philadelphia among others in the workforce development space are beginning to address the upskilling challenge; and the newly created Live Work Philadelphia along with established organizations like The Welcoming Center and Campus Philly are focused, respectively, on continuing to make immigrants feel welcome here and retaining a growing proportion of the hundred thousand-plus college students who study here.

While the pieces are in place, we have been lacking coordination, resources, and urgency. It is my hope that the newly emerging economic mobility initiative spearheaded by the Chamber will play a similar role in aligning workforce development and the needs of the market to that played by PAGE and Supply PHL in the business development space; that the Philadelphia Equity Alliance, chaired so ably by Ryan Boyer and Michael Forman, continue to provide a broad table for coordinating efforts, and that local philanthropic organizations like the William Penn Foundation and The Philadelphia Foundation, along with others, bring the requisite resources to the table.

The Urgency of Now

Voters have spoken: life has become unaffordable. Philadelphia faces decisions about property tax reform, affordable housing investments, economic development strategies, and workforce development that will shape affordability for decades.

The question is whether we will treat affordability and upward mobility as the organizing principles they must be in evaluating every policy and investment or continue addressing it piecemeal among competing priorities.

The conditions exist for transformative change. It is time to seize the moment.

Jeff Hornstein, PhD
Executive Director
Economy League of Greater Philadelphia

The Economy League of Greater Philadelphia, is a nonpartisan, nonprofit organization that conducts research and facilitates collaborative action on the region's most pressing economic challenges.