Are You Maximizing Your Land Use?
A Overview of Philadelphia Zoning Bonuses
Overview
When you’re looking to maximize your land value, you’ll want to know what you can do to get the most allowable building area, heights, and/or unit counts. Most cities provide bonuses for complying with certain regulations, and Philadelphia is no different. Here we’ll discuss the zoning bonuses for Philly to see how you can maximize the value of your land.
The zoning and density bonuses are spelled out in the Philadelphia code, specifically in Chapter 14. These bonuses come in two forms:
Density (Square Footage or Units)
Height
Density bonuses provide either a unit bonus, i.e. 50% more units, or a floor area bonus. Whether you receive a unit or density bonus is dependent on your zoning designation. Unit bonuses are always rounded down to the lowest whole number. So if you have a building with 5 units, and receive a 50% bonus, you will only be able to build 7 units. i.e.:
5 x 50% = 2.5. Round this down to 2 units
Thus 2+5 = 7 units
There are several bonuses offered by the city to increase both the height and density of your building. Some bonuses can be stacked on top of each other to provide higher value. Now before it sounds like this is all too good to be true, each bonus comes with a requirement for you to do something at the property in order to earn that bonus.
There are also levels for some bonuses, and they are often related to the property’s specific zoning designation. So unfortunately it’s not as straightforward as combining the ‘transit bonus’ with the ‘parking bonus’ and getting an extra 400% building area.
This post is just an overview to help shine some light on the bonuses and incentives which are available. Ultimately you should work with your architect and/or zoning attorney when pursuing any one or combination of these bonuses.
Overlays & Maximums
CDO Overlay District
Image Credit: Amlegal’s publishing of the Philadelphia Code
ECO Overlay District
Image Credit: Amlegal’s publishing of the Philadelphia Code
The first thing to note is that many building height bonuses are only applicable when your property is located within one of two zoning overlays. These are the CDO: Central Delaware River Overlay District and the ECO: East Callowhill Overlay District. However there are also zoning designations (i.e. RM-1, etc.) which provide height bonuses even if the property is not located in these overlay districts. The CDO definitively deals with the area along the Delaware River. However, the purpose behind the ECO is not 100% clear, there are a number of ideas which make sense. One is to try to build a closer connection between Old City & Northern Liberties, another says its about updating the area from its institutional and warehousing background. Finally there is a theory that it is about breaking down the mega blocks to make a more pedestrian friendly space. Whatever the primary driver is, the ECO serves a useful purpose.
Even with all of the bonuses, however, there are still limits. You cannot build 2,000% of a lot area for example. Each zoning designation has a different limit which is suited to its location. CMX-3 for example can earn a max of 250% of the lot area while a CMX-5 site located in Center City can build up to 1,200% of the lot area.
Disclaimer
We are not zoning attorneys and while we are architects, we are not acting as your architect. This article is meant to provide a overview understanding of the types of zoning bonuses applicable at the time of writing. We do not guarantee anything or make any inferences about the quality or ease of obtaining any of these bonuses. We are also not encouraging or discouraging you to apply for any of the items enumerated below. Additional criteria or interpretations may apply for each bonus. When in doubt, or if you would like to pursue one of these zoning bonuses, consult the Philadelphia Code directly and work with a professional.
Zoning Bonus Types
Public Art
A number of criteria must be met in order to qualify for the public art bonus. First off, the art must equal at least 1% of the hard construction costs and you must provide a financial security that binds you to commissioning and installing the artwork. The art must be installed in a public space as defined by the code. With proper permissions from the City, art located within the public sidewalk can qualify, but it must not impair pedestrian movement. Pursuing this may also require you to secure approval from the Art Commission. If you have a building zoned CMX-4 or 5, you stand to gain 50% & 100% area bonuses respectively, as well as an additional 12 ft of height.
Public Space
This bonus can provide a great public amenity for the surrounding neighborhood your building in. There are two methods to earning this bonus: you can provide either a public outdoor space such as a park or plaza, or you can provide a public 'room.’
The outdoor space must be at least 5,000 SF and shall be open to the sky, save for any decorative canopies and trellises you may want to install. These spaces must all be accessible and half of the space must be no more than three feet above the level of the adjacent sidewalk. And no, you cannot use this space for parking, instead it must include a minimum of 30% of landscaped surface. The city mandates open hour requirements, 8:00 AM to 9:00 PM daily, and requires the space to be lit artificially.
If you’d rather go the public room route, you must provide a 5,000 SF conditioned & accessible space with a ceiling height of 24 ft minimum. Think conference center height. This space must include access to a public amenity such as retail sales, libraries, cultural exhibits, etc and must provide seating. Similar to the open plaza option, you must maintain access and availability between 8:00 AM to 9:00 PM daily.
This option is only really feasible for specific sites, but when employed, it’s a win-win situation. The community gains access to a great new indoor or outdoor space, and the developer can gain up to 48ft of height 400% of floor area bonus, depending on location and lot area.
Mixed Income Housing
Philadelphia has a shortage of affordable housing. Seeking this zoning bonus helps mitigate that situation while also providing a benefit for the developer for their efforts. There are two levels of this bonus, Moderate Income & Low Income. Both of these can apply as both rental units & owner occupied units. For our purposes, we’ll discuss the impact of this zoning bonus on rental units.
Both moderate and low income units must not exceed 30% of the gross monthly income of households earning 50% of less of the Area Median Income (AMI). That’s a long way of saying that the rent & utility costs can’t be expensive. The AMI is reported by HUD, the department of Housing and Urban Development for the region. As a ballpark figure to understand the amounts we’re talking about here, 50% of the AMI for Philadelphia as of April 1, 2020 is $48,300 for a household of four people. There are some additional income caps related to the AMI which must also be enforced.
The building you’re constructing must be a residential use for at least 50% of the gross floor area and at least 10% of the residential dwelling units must be maintained as affordable for at least 50 years.
Alternatively, if you are unable to provide the affordable housing or elect not to do so, you can pay into the Philadelphia Housing Trust Fund. For the moderate income bonus, the rate is the greater of $20/SF of lot area or $25,000 per additional unit. For the low income bonus, the rate is the greater of $24/SF of lot area or $30,000 per additional unit.
If you’re seeking this bonus, it’s advisable to contact a zoning attorney to ensure you are meeting all of the detailed requirements.
Transit Improvements
A transit bonus is granted if you connect to or improve a rail, subway, or trolley station. In order to receive this bonus you must submit a letter from the appropriate transit authority confirming their approval of your connection and that it will be constructed as a part of their property. Alternatively you can provide streetscape improvements which exceed the minimum code requirements as long as they are connecting to an existing rail, subway, trolley, or water taxi stop. These are intended to promote safe pedestrian and bicycle connections to mass transit.
Similar to other bonuses, the transit improvement bonus requires you to put down financial security up front to ensure the work will proceed without anyone getting cold feet. Plan to spend at least 1% of your construction costs on the transit improvement, with a maximum of 4% for the optimal benefit. Depending on your zoning designation and amount of construction costs spent on the transit improvement, you may receive between 25% - 400% of lot area. If you’re in the CDO overlay, you also stand to gain an additional to 12 - 72 ft height increase.
Underground Accessory Parking & Loading
Who likes street parking anyway? This bonus is designed to encourage you to provide parking, whether required or not, underground in lieu of at grade. Providing parking below grade allows for better used street frontage and potentially higher densities in the areas where this bonus is permitted. Only the RMX-3, CMX-3, CMX-4, & CMX-5 zoning designations may take advantage of this bonus, all others are out of luck.
The fine print requires that your underground parking structure provides at least 75% of its spaces for users and occupants of the building, whether residential or commercial. No more than 25% of the spaces may be rented out to users other than building occupants. That said, the building owner is still allowed to bill those occupants for those 75% of spaces they are using. Additionally the size of the underground garage must be at least 50% of the gross floor area of the ground floor. You also cannot use the bonus space gained to just construct more parking — that would defeat the point.
Finally, there are some very specific location requirements for an area downtown where, contrary to the rest of the bonus, you can provide public parking and still receive the bonus. I recommend looking into it and mapping that specific area if you believe this is applicable to your project, however. Just to give you a sense of what I’m talking about, here is how it’s worded in the Philadelphia code:
“… a line parallel to 20th Street that extends north 32 ft. from a point located on Cuthbert Street 282.5 ft. from the northwest corner of 20th Street and Cuthbert Street …”
Nobody said it would be easy. But if you think the bonus will work for your property, you stand to gain between 50% & 200% additional gross floor area depending on your zoning designation.
Green Building
The temperature of the Earth is rising, and we’re burning through fossil fuels like beer at a tailgate party. If you want to help do something about that, and get rewarded for doing so, you can (and should) plan to apply for the green building bonus. In addition to doing something good for the environment, you also get rewarded with between 50% & 400% increased floor area. If your property is located in the CDO or ECO overlays, you stand to gain between 24 & 36 additional feet of height depending on what level of sustainability you employ.
Now you can’t just put up a basic code minimum building with a few energy star appliances in it if you want this bonus. You must design your building to a third party standard. That standard is called LEED, which is short for Leadership in Energy and Environmental Design. LEED is managed by the U.S. Green Building Council (not a government organization) and certifies buildings based on a point system. USGBC also accredits professionals to administer this process, you’ll see a “LEED AP” after their name, sometimes followed by a series of letters further indicating their specific building type.
You must comply with either LEED Gold or Platinum in order to achieve this zoning bonus. Both of which require documentation to be sealed by a LEED Accredited Professional (AP). As an added benefit, your building will also use less energy and be more water efficient, costing less to run and thus paying you back for your good work.
Trails
If you are in the CDO Overlay and construct and/or dedicate a trail on your site, you’re entitled to a zoning height bonus. If you are applying for the Public Space bonus above, you cannot apply for the trails as well — unless they are two separate areas. The trails must be along the Delaware River and the must extend from the downstream to upstream boundary of your site, basically from the south side of your site to the north side of it.
The trail must be 12’ wide, not including planting zones and it must be within the boundaries of the CDO distrcit overlay. Similar to the Public Space bonus, you must light the trail, it cannot be used for parking, and it must connect to an existing trail in accordance with the Comprehensive Plan. You must put forth a financial security in order to secure this bonus. If you want to dedicate the trail, you need to work with the City’s Law Department to do so.
Additional height is tied to the amount of trail you construct or improve. For constructing only, you receive 12 ft of height for the first trail segment, and an additional 12' ft for every 200 lineal feet thereafter. It’s capped at 48 ft. If you’re also dedicating, then the numbers go from 12ft to 24f, with a max of 72 ft.
Street Extensions
To achieve this bonus, you must dedicate a street. If you opt to extend and improve the street, you can achieve a greater bonus. In order to dedicate the street, it must be located in the CDO overlay be between the river and the eastern or southeastern end of a river access street. If you’d prefer to extend and improve a street, it must be up to the standards of the Streets Department and you must post a bond for financial security.
Bonuses for this option are similar to the trails, with a 12 ft height bonus for each land dedication of 200 lineal feet, with a maximum of 36’. For dedication & improvement, these numbers change to 24 ft and 72 ft respectively.
Retail Space
If you’re located in the CDO or ECO overlays, you can gain additional building height by providing ground floor retail space. This bonus provides an incentive to activate the street through retail. All portions of the ground floor that face a sidewalk and are not used for entrances, exits, and waiting areas must be constructed with a 10’-6” minimum ceiling height in order to allow retail trades to occupy the space. In addition, you must record a covenant with the Deed which indicates the space shall be used as retail for 15 years minimum.
The bonus for this is 12 ft of height for each 5,000 SF of retail. The CDO overlay caps it a 36 ft of height and the ECO overlay caps it at 48 ft.
Stormwater Management
Depending on the size of your lot, you may be able to qualify for the stormwater bonus. First off your lost must be 15,000 SF or bigger and located in the CDO or ECO overlays. This bonus comes with a number of restrictions and requirements, so I would once again encourage you to double check the Philadelphia Code itself to get the exact wording.
The gist of it is that you can provide either open space for stormwater to drain, manage the street drainage, or provide a mix of both of these methods. Each option provides a different bonus and must be implemented differently depending on if you are in the ECO or CDO overlay district. The maximum height in the CDO district is 12 ft, while you can achieve a maximum of 48 ft in the ECO district with the proper street drainage management.
Trough-Block Connection
While this zoning bonus sounds simple enough, its actually highly restricted. This must be within 15’ of the former Noble Street, and between 2nd and 6th. This is for properties in the ECO district and only a handful of sites would qualify. Part of the reason for this bonus may have been the City’s desire to break down the larger mega blocks in part of the neighborhood, but we’re just guessing.
Whatever the purpose though, the connection has some stringent requirements. While I won’t get into all of them, the connection must be 24 ft wide and completely unobstructed, i.e. open to the sky. It must be accessible and If you plan on driving through this connection, it must be compliant with all vehicular regulations adopted by the City.
Depending on the length of your connection, you stand to gain between 24 and 48 ft of additional height. If you believe your property is within these boundaries, take a look at all of the detailed requirements in the code and see if you can help break down these lots into something more pedestrian friendly.
Green Roofs
This is one of my favorite bonuses. In a city with mostly paved surfaces, green roofs provide the much needed ability to capture and absorb rainwater in the even of a storm. This helps to prevent the overflow of Philadelphia’s combined sewer system and doesn’t require the installation of large infrastructure to do so.
The property in question must be zoned as either RM-1, CMX-2, or CMX-2.5. Additionally, the project must involve at least 5,000 SF of earth disturbance. If your property is just under, fear not, because this calculation also includes things like trenching for utilities and excavation for foundations.
The roof must be 60% covered with a green roof that meets the standards of the Water Department. In order to verify this, the roof must be made accessible and safe for inspections, from either the City or a third party inspector. Additionally the City will require you to record a deed restriction that mandates the green roof shall continue as long as the structure is alive. If they suspect you are not staying on top of the upkeep, they will mandate you provide reasonable proof that you are doing so.
For your efforts, you can get an addition 25% of the units permitted prior to the addition of other bonuses. This bonus could be a game changer for a developer looking to maximize their next multifamily property.
Fresh Food Market
Looking to include some retail or grocery uses in your project? Consider putting a fresh food market in place. While not a ‘zoning bonus’ per se, this incentive provides an additional two SF per every one SF of fresh food market square footage. Additionally, in districts where floor area is limited for retail uses, a fresh food market allows you to exceed these limits by up to 50%. There are also height bonuses (15 ft) and reduced parking requirements that come with this incentive.
Conclusion
So when you’re looking into figuring out what you can do with your next piece of land, take a look at the development constraints based on your property’s zoning, but also consider some of these added zoning bonuses and incentives. They are structured to be a win-win for the city and the developer.
Need some help navigating the zoning code? Just give us a call and we can help you work through it with you.