TCB October 2025

The statistics are stark and unforgiving. Philadelphia remains among America's poorest large cities, with nearly one in four residents living in poverty. While measurable progress has been made over the past decade, dropping from our longstanding designation as the absolute poorest big city to second place, this modest improvement masks a deeper crisis that threatens not just individual families but the structural integrity of our entire metropolitan region.

The persistence of concentrated poverty, particularly among Black and Latino residents, is not merely a social justice issue or a humanitarian concern, though it is certainly both. It represents perhaps the greatest threat to Philadelphia's economic competitiveness and civic stability in the twenty first century. Understanding this crisis and mobilizing comprehensive responses to it is not optional—it is an existential imperative for our city's future.

The Anatomy of Persistent Inequality

Our research at the Economy League consistently reveals the multidimensional nature of Philadelphia's poverty challenge. While 23.3 percent of all residents live below the federal poverty line, the burden falls disproportionately on communities of color. Among Latino residents, a staggering 40.2 percent live in poverty, a rate 1.7 times higher than the city's overall poverty rate and more than five times higher than the rate for non Hispanic white residents.

These numbers represent families struggling to afford basic necessities, children growing up without adequate resources, and entire neighborhoods trapped in cycles of disinvestment that have persisted for generations. The concentration of poverty in specific geographic areas creates what economists call negative spillover effects—reduced property values, diminished local business activity, strained public services, and limited social capital that make individual escape from poverty exponentially more difficult.

What makes Philadelphia's situation particularly challenging is that poverty here is structural, embedded in decades of policy decisions, discriminatory practices, and investment patterns that have systematically excluded Black and Latino communities from wealth building opportunities long available to white families.

The Hidden Costs of Inequality

The economic costs of persistent poverty extend far beyond the individuals and families directly affected. When nearly a quarter of your population lacks adequate purchasing power, local businesses suffer. When children grow up in poverty, educational outcomes decline, reducing the quality of the future workforce. When families cannot afford to maintain their homes or neighborhoods, property values stagnate or decline, eroding the tax base that funds essential city services.

Perhaps most critically, Philadelphia's poverty crisis undermines one of the most important mechanisms for building generational wealth in American society: homeownership. While Philadelphia has historically been a city of homeowners, 52 percent of residents own their homes, including 48 percent of Black residents and 42 percent of Latino residents. Economy League research reveals that properties in nonwhite majority neighborhoods are dramatically undervalued, denying families billions of dollars in home equity.

This systematic undervaluation is not an accident or a mere market phenomenon. It reflects decades of discriminatory practices, including redlining, predatory lending, municipal underinvestment, and ongoing bias in property assessments. The result is that homeownership, which should serve as a pathway out of poverty and a foundation for family wealth building, instead becomes another mechanism for perpetuating racial and economic inequality.

The Innovation Imperative

Addressing challenges of this magnitude and complexity requires more than traditional policy responses. It demands innovation, creativity, and the kind of community driven solutions that can only emerge when we tap into the knowledge, experience, and entrepreneurial spirit of residents most directly affected by these issues.

This is why the Economy League created and just completed our latest Impact Labs social innovation competition, the Fair City Challenge, premised on the idea that the most promising solutions to thorny civic challenges like disinvestment often come from within those neighborhoods themselves. Community based social entrepreneurs with lived experience understand their neighborhoods' challenges and assets in ways that outside experts never can. They know which corner needs better lighting, which vacant lot could become a community garden, which local business deserves support, and which homeowner needs help weatherproofing their property.

The Fair City Challenge identified and supported more than a dozen community driven solutions across three interconnected areas: helping homeowners maintain and upgrade their properties, supporting neighborhoods in becoming cleaner, greener, and safer without displacement, and advocating for policy changes that build community wealth while protecting current residents from gentrification pressures.

Beyond Individual Solutions

“Wealth, like health, is socially determined.”

What makes the Fair City Challenge different from traditional anti poverty programs is its recognition that individual successes, while important, are not sufficient to address structural inequality. We need approaches that work at multiple levels simultaneously—supporting individual homeowners while also strengthening neighborhood institutions, improving local services, and advocating for policy changes that address root causes rather than just symptoms.

This comprehensive approach reflects what economists and urban planners increasingly understand about neighborhood change: property values and neighborhood conditions are interconnected in complex ways that require coordinated interventions. A homeowner who weatherizes their house creates value not just for their own family but for their neighbors. A community garden on a vacant lot improves property values for the entire block. A new business corridor increases foot traffic and informal social control that benefits everyone in the area. In sum, wealth, like health, is socially determined.

The four Fair City finalists—North Roots x Bossed Up, which is transforming North Philadelphia’s Logan Triangle into a thriving urban farm, food forest, and cultural hub; Raíces Capital Fund, which addresses the capital gap needed for people of color, specifically Latinos, to become real estate investors; Climate Equity Home Fund (CEHF), a climate fintech platform that helps low and moderate income homeowners in Philadelphia finance energy efficient home upgrades to boost home equity while reducing energy costs; and the Grand Prize winning WEALTH Collective, a team of Black women in real estate, banking, and finance with a tech enabled mission to eliminate racial appraisal bias of Black and Brown people and communities in the city of Philadelphia and across the nation—each represent a promising and scalable approach to reinvesting in some of Philadelphia’s most challenged neighborhoods.

The Fair City Challenge's substantial cash prizes, combined with business development support, represent seed investment in solutions that could eventually attract much larger public and private investment. As important, they represent a commitment to building local capacity for ongoing innovation and problem solving.

The Broader Urban Context

Philadelphia's poverty challenge is not unique, but our response to it could be. Cities across the country are grappling with similar issues of concentrated poverty, racial inequality, and neighborhood disinvestment. Some have pursued market driven approaches that prioritize economic development over equity concerns. Others have focused primarily on social services without addressing underlying structural issues.

Philadelphia has an opportunity to chart a different course—one that combines rigorous data analysis with community driven innovation, that addresses both immediate needs and long term structural change, and that recognizes community wealth building as both a means and an end in the fight against poverty.

The Urgency of Now

The COVID19 pandemic made clear to all what many of us already knew: poverty is not just an individual hardship but a community vulnerability that affects everyone. Neighborhoods with high poverty rates experienced higher infection rates, more severe economic disruption, and greater difficulties accessing healthcare and other essential services. As we continue to navigate the pandemic's aftermath and prepare for future challenges, the imperative to address structural inequality has only grown more urgent.

At the same time, we are seeing unprecedented federal investment in infrastructure, unprecedented attention to racial equity, and unprecedented innovation in community development finance. The conditions exist for transformative change if we have the vision and commitment to seize this moment.

A Call to Action

The Fair City Challenge represents one tool in what must be a comprehensive toolkit for addressing Philadelphia's poverty crisis. But it reflects a broader philosophy that the Economy League brings to all our work: that sustainable solutions must be rooted in rigorous analysis, community knowledge, and collaborative action across sectors.

We cannot solve Philadelphia's poverty crisis through policy alone, or market forces alone, or community organizing alone. We need all of these approaches working in coordination, informed by the best available data and guided by the voices and experiences of residents most affected by these challenges.

The families living in poverty today did not create this crisis, but they hold many of the keys to solving it. Our job as researchers, policymakers, funders, and fellow citizens is to provide the resources, platforms, and support they need to implement those solutions at scale.

Philadelphia's designation as America's second poorest big city is not just a statistic—it is a call to action. The question is not whether we can afford to make the investments necessary to address this crisis. The question is whether we can afford not to.

The Economy League stands ready to continue providing the data, analysis, and facilitation necessary to support evidence based solutions to our city's greatest challenges. But ultimately, the work of building a more equitable Philadelphia belongs to all of us. The Fair City Challenge is just one way to get started.

Jeff Hornstein, PhD
Executive Director
Economy League of Greater Philadelphia