Philadelphia Zoning, Land Use, and Construction COVID-19 Update - November 25, 2020
Philadelphia Legislative Update
Three bills are scheduled for discussion during a meeting of City Council’s Committee of the Whole on December 1, 2020—Bill No. 200366, Bill No. 200556, and Bill No. 200653.
Bill No. 200366 would delay the start of the residential tax abatement phase-out (applicable to the Ordinance 1456-A abatement). Currently, the phase-out is set to begin on January 1, 2021; so, unless the law is changed, abatements applicable to applications filed after December 31, 2020, would apply to 100% of the improvements during the first year but phase out by 10% per year thereafter.
With December 31, 2020, quickly approaching, developers across the City have been trying to obtain building permits to complete their tax abatement applications before the start of the phase-out. However, developers have had difficulty obtaining building permits due to the COVID-19 pandemic, which shut down Philadelphia for months. Accordingly, Bill No. 200366 would postpone the start of the phase-out to January 1, 2022, giving developers an additional year to apply for the full 10-year residential tax abatement. Note that Bill No. 200558, which was introduced last month and which would postpone the start of the phase-out to January 1, 2024, is not scheduled to be discussed at the hearing; but the phase-out start date could be adjusted if either Bill No. 200366 or 200558 moves forward.
Bill No. 200653 would reduce the benefits of the commercial/industrial tax abatement (the Ordinance 1130 abatement). If passed, Bill No. 200653 would provide that the Ordinance 1130 abatement applies to 90% (instead of 100%, as currently is the case) of the value of the improvements over 10 years. This bill would apply to all Ordinance 1130 abatement applications filed after December 31, 2020, and therefore, if passed, would create a similar year-end scramble to obtain permits and file abatement applications.
Bill No. 200556 seeks to impose a tax on future construction in Philadelphia. If this bill passes, beginning July 1, 2021, a tax will be imposed on the construction of any structure for human occupancy or the construction of any improvements to a structure for which a building permit is required. The tax would be imposed on the owner of the real property upon which the improvements are constructed unless the property owner is a government entity, in which case the tax would be imposed on the non-governmental owner of the taxable improvements. The rate of tax would be 1% of the total construction cost; this would be based on best estimates when the building permit is issued but must be corrected if additional amounts are due based on actual costs. Half of the tax must be paid at issuance of the building permit, and the other half must be paid upon issuance of a certificate of final inspection. If no certificate of final inspection is required, the tax must be paid in full at the issuance of the building permit.
There would be some exceptions to the construction tax. No tax will be required in the following instances: if the improvements are not eligible for the 10-year tax abatement under the Philadelphia Code—i.e., they are upkeep or maintenance that does not rise to the level of “improvements” under the abatement law; if the improvements are exempt from real estate taxes under State law or located in a Keystone Opportunity Zone; or if the improvements are associated with preparing an existing residential rental unit for a new tenant.
Finally, another bill—Bill No. 200573—is scheduled to be discussed at a Finance Committee hearing on November 30, 2020. Under current law, taxpayers must be in full compliance with all tax filing and payment obligations in order to be eligible for any of the real estate tax abatements. This includes compliance with all City Wage Tax obligations. Bill No. 200573 would provide additional enforcement power regarding the Wage Tax by requiring applicants for abatements to prove that they have no tax delinquencies, including demonstrating that they “paid over to the City any Wage Taxes that were collected, or that should have been collected but for misclassification of workers.” It is unclear exactly what documentation would be required if this bill were to pass, but the intention would be to allow the Revenue Department to use an abatement application as a mechanism for policing Wage Tax collection and, specifically, worker classification issues.
We will monitor these hearings and the progress of these bills.
Construction work of all types is authorized in the City of Philadelphia. Construction sites must comply with all applicable State and City guidance. All work must conform to the requirements of the Secretary of the Pennsylvania Department of Health issued on April 15, 2020 (regarding business safety measures for in-person operations) and April 5, 2020, regarding building safety measures; all applicable guidance of the Centers for Disease Control (including the April 8, 2020, guidance regarding critical infrastructure workers who may have been exposed to COVID-19); the Governor’sApril 28,, guidance regarding real estate industry operations; the Governor’s April 23, 2020, guidance regarding construction businesses; and the City’s Safer-At-Home guidance. Also, the Philadelphia’s Water Department must be notified of the project at firstname.lastname@example.org. More detailed information is available here.
L&I’s Audits and Investigations Unit is conducting patrols in order to ensure compliance with COVID-19 requirements. L&I is also tracking all stop-work orders issued for non-compliant work sites and will pursue action against non-compliant license holders. Failure to comply with the City’s order will result in the issuance of violations and corresponding fines of up to $2,000 per day of violation, the suspension or revocation of the contractor’s license, a referral to Commonwealth authorities, and any other remedies available under law.
Licenses and Inspections
L&I employees are actively working on zoning and building permits through eCLIPSE, L&I’s online permitting and licensing system. All physical copies of issued permits will be held at the Municipal Services Building at 1401 JFK Boulevard, but electronic copies will be made available, along with electronic billing statements. Individuals can pick up their permits and plans from the Municipal Services Building by appointment. Individuals can also file permit applications and drop off additional materials by appointment. L&I also increased all fees, excluding inspection and administrative fees, on July 1. The new fee schedule can be found here.
L&I has also developed a new master approval process for residential developments. If a project consists of multiple buildings of the same design and construction, an applicant may elect for the master approval process which is intended to reduce overall permit processing times. More information about this process can be found here.
Further, as of November 12, any application, permit, or notice required under the Zoning Code must contain the full name and address of the owner of the affected property. If the owner is not a natural person, the full names and addresses of the owner’s responsible officers must be provided. If the owner is not a natural person or a publicly traded company, the full name and address of each natural person who has an equity interest in the owner must be provided, subject to certain equity requirements.
L&I maintains a crew of inspectors. All inspections must be scheduled through L&I’s Interactive Voice Recognition system (IVR). Instructions for IVR are available here. If a contractor needs to meet a critical deadline, he/she should submit an inquiry to L&I via 311 using an online form available here. Notably, contractors will not be able to schedule inspections if their licenses are not up to date in eCLIPSE. Also, starting on January 1, 2021, Philadelphia contractors and trade licensees will be required to submit the names of each subcontractor that works under their permits to L&I using eCLIPSE, within three days of that subcontractor starting work.
To obtain a “make safe” permit for a dangerous building, an appointment must be scheduled with L&I. Instructions for requesting a “make safe” permit are available here.
L&I has also suspended the expiration of previously issued permits. The expiration dates on all construction permits and zoning permits, including conditional zoning permits, active on or after March 16, 2020, have been extended by six months. An additional six-month extension may be requested upon the expiration of the extended period. These extensions do not apply to fire code, make safe, or rough-in permits. Also, this extension is not in addition to any extension issued by the Zoning Board of Adjustment; all permits granted by variance or special exception are still subject to ZBA regulation. Lastly, all permit applications active on or after March 16, 2020, have been extended for six months from the date that the permit would be deemed abandoned. This extension, however, does not apply if there have been subsequent submissions.
Furthermore, all individuals who received variances and special exceptions between September 16, 2019, and March 16, 2020, may file for an administrative review any time within 360 days of issuance of the special exception or variance.
Currently, the Board of License and Inspection Review, the Board of Building Standards, and the Plumbing Advisory Board are conducting regular hearings. All previously stayed hearings have been rescheduled.
Permit denials and the ability to appeal are currently available through eCLIPSE if the denial was issued on eCLIPSE after March 15, 2020. Individuals can make amendments via eCLIPSE if the application was filed on eCLIPSE; amendments to pre-eCLIPSE documents must be submitted by mail or by contacting L&I.
Zoning Board of Adjustment
The Zoning Board of Adjustment began holding bi-weekly virtual hearings on July 14, 2020. All hearings will be conducted via Zoom. Agendas for the upcoming hearings can be found here. For appeals filed on or after March 13, 2020, and appeals filed prior to March 13, 2020, but not yet scheduled for a hearing, the ZBA will schedule the matter for an original hearing and notify the appellant at least 21 days in advance. For appeals scheduled to be heard after March 13, 2020, the ZBA will reschedule any hearing that was cancelled or otherwise continued and notify the appellant at least 14 days prior. For appeals not involving a request for a variance or special exception, the ZBA will schedule the matter for a hearing and notify the appellant at least seven days in advance.
All appellants who had a hearing scheduled after March 13, 2020, that was subsequently cancelled and rescheduled are not required to resend individual notifications, but the ZBA recommends re-notifying all parties. Furthermore, at least five days prior to the scheduled hearing, appellants must email to the ZBA an exhibit packet that includes all information required by the Zoning Code. Failure to submit an exhibit packet may cause the ZBA to continue or dismiss the matter.
Posting and Notice Requirements
Notification signs for hearings must be posted at least 21 days prior to the hearing date, and notification signs for continued hearings must be posted at least 14 days prior to the hearing date. The content for these signs will be provided by the ZBA. If the content provided is missing pertinent information or if the content is inaccurate, it is the responsibility of the applicant to correct the information. All Zoning Code requirements relating to reposting, sign removal, and the posting of refusals and referrals remain in effect. The ZBA may require an applicant to provide proof that the posting requirements have been met.
If a ZBA hearing has been scheduled, but a coordinating Registered Community Organization (RCO) is unable to organize a community meeting, the ZBA shall defer to the recommendation of the Planning Commission regarding the treatment of the ZBA hearing unless the District Councilperson objects or the ZBA finds that the recommendation imposes an undue burden upon the applicant or other persons or entities, including the RCO(s). If an RCO is unable to hold a meeting within the 45-day meeting period, the Planning Commission
The ZBA has also extended the expiration dates on all approvals issued by the Board if the approval would have expired during the window of March 15, 2020, through December 31, 2020. All such approvals have been extended by 180 days from the date that the approval would have expired.
Pennsylvania Department of Environmental Protection/U.S. Environmental Protection Agency/U.S. Army Corps of Engineers
By order of Gov. Tom Wolf, PADEP offices throughout the Commonwealth remain closed. However, much of the regional staff is telecommuting and reachable in connection with inquiries on the status of pending environmental approvals/applications. The U.S. Environmental Protection Agency remains open via telecommuting options, and the U.S. Army Corps of Engineers also is reachable.
Developers may have some flexibility in their efforts to comply with environmental laws, at least as far as the EPA is concerned. Here is a link to our Environmental Group’s alert on that topic. Here is a link to the previous Ballard Spahr alert discussing the EPA policy.
Furthermore, PADEP has expanded its menu of online permitting functions, enabling the business community to take advantage of what PADEP believes is a more streamlined permit application and review experience. PADEP is also promoting use of the tool because it increases the efficiency of its permit reviewers now working from home as a result of the COVID-19 crisis. PADEP notes that previous online permitting options will remain in place, and for those taking advantage of the earlier programs, the existing portals should continue to be used. For the new slug of permits online, here is a helpful link to application materials with instructions and guidance. For questions, email Harry Weiss, leader of Ballard Spahr’s Environment and Natural Resources Group, at email@example.com.
The EPA’s Temporary Enforcement Policy
The EPA announced that as of August 31, 2020, its temporary enforcement policy, which loosened as a result of COVID-19, ended. A link to the notice terminating the EPA’s COVID-19 temporary enforcement policy can be found here.
For the development and property management industry, in particular, typical permits that should be re-reviewed for compliance duties include stormwater discharge permits issued under the federal Clean Water Act (generally known as NPDES permits) that regulate pre- and post-construction stormwater control discharges.
It’s also important to review state requirements, as some states continue to have in place an enforcement waiver process for environmental compliance impacted by COVID-19.
Linear Infrastructure Permitting
A Federal District Court in Montana has invalidated U.S. Army Corps of Engineers Nationwide Permit 12 because the court found that the Corps did not, while reauthorizing the general permit in 2017, take into proper account the impact of use of the permit on certain endangered species. The decision in can be reviewed here, and has left developers of such projects scrambling to identify other Nationwide Permits that may be utilized to keep projects moving forward and avoid the need to seek individual wetland fill permits for work along the entire route.
Zoning and building permits should still be posted on properties in the normal course, to the extent possible. Please contact our Zoning and Land Use Team for any assistance.
The Philadelphia Streets Department has staff members working remotely, however, delays should be expected. Plan Review Counter Submissions (Checklist no. 1) may be submitted online only through the L&I eCLIPSE system. All Plan Review Intake Submissions (Checklists nos. 2, 3, and 4) must be submitted electronically to StreetsROW.PlanReview@phila.gov. Developer Services Meetings deemed necessary by staff may be held remotely.
If a permit has expired or is approaching expiration as a result of work stoppage due to COVID-19, the Department advises individuals to email the permit number and their contact information to firstname.lastname@example.org to request a permit extension.
The Water Department’s offices are closed to the public; however, Private Development Services’ staff members are working remotely. Staff members are conducting storm water plan reviews, utility plan reviews, water and sewer sign-offs, along with other reviews. Delays should be expected for all reviews, especially utility plan reviews. All general questions and meeting requests should be sent to email@example.com. Additional information about submitting materials and payments can be found here.
Any zoning, demolition, site, or building permit that requires PWD sign-off must be applied for via eCLIPSE. At this time, due to the volume of requests and the pressing tax abatement deadline, PWD is offering applicants the ability to defer utility plan review for residential construction projects. The deferral request form can be found here; once completed, it must be submitted to Louis.Taxman@phila.gov by 5 p.m. on December 18, 2020. Additionally, PWD has created a new Electronic Pre-Application Form. This form is recommended for projects that have yet to make an ERSA Application, but wish to meet with PWD virtually in advance of submission to discuss the project.
The Water Department is also processing plumbing permits. For all new connection requests, applicants must have a pre-permit, which can be requested by contacting firstname.lastname@example.org. More information about plumbing permits and payment methods can be found here.
The Water Department is also granting time extensions to expiration dates for project permits and approvals impacted by the pandemic. Time extensions only apply to PWD-issued permits and approvals.
Regular billing will continue, but PWD has waived late payment fees and penalties for all customers until further notice. At this time, PWD will not terminate service for residential customers through April 1, 2021.
Department of Records
The Philadelphia Department of Records has a small staff is now in-office to help process mail, email, and phone requests. In-person services are still unavailable. E-recording via third-party vendors, however, is still operating. Delays should be expected.
Department of Planning and Development
The Department of Planning and Development issued emergency regulations governing “deemed approvals” by the Philadelphia City Planning Commission, the Philadelphia Historical Commission, the Philadelphia Art Commission, and their various committees, including the Civic Design Review Committee and the Sign Committee of the Art Commission. From March 18 through 60 days after the termination of the Mayor’s Emergency Order, the non-performance of review by these agencies, their respective committees or staff, in connection with any applications, plans, materials, or other documents will not constitute a deemed approval or a deemed denial of any such applications, plans, materials or documents subject to review.
Philadelphia Historical Commission
While the offices of the Philadelphia Historical Commission are closed, staff members are working remotely. General inquiries, approvals, complaints, and nominations can be emailed to email@example.com. The staff can also review and approve most applications without referral to the Commission itself. Additional information can be found here.
The Historical Commission is also meeting remotely. Members of the public can watch or listen to the Commission’s meetings. More information about upcoming meetings can be found here.
Philadelphia Art Commission
Art Commission staff members are working remotely. Details about upcoming meetings can be found here.
Philadelphia City Planning Commission (PCPC)
Staff members at the Planning Commission are working remotely, although delays should be expected. Staff members are reviewing plans submitted on eCLIPSE and amendments to master plans. PCPC staff will provide comments on any proposed legislation—a draft of should be sent to staff members. Requesting parties should keep in mind that all legislation is subject to the discretion of City Council. Reviews of applications related to steep slopes, frontages, and landscapes are being completed in a timely manner. Reviews of applications related to watersheds or lot lines are delayed due to the inaccessibility of maps located in PCPC’s offices. Staff members are also conducting Urban Design reviews through eCLIPSE and processing loading waivers through email.
The Civic Design Review Committee is holding virtual meetings. More information about upcoming meetings can be found here. Staff members are available to provide preliminary Civic Design Review comments by email at CDR@phila.gov.
PCPC is required to send out notices as soon as practicable for any appeal or referral to the Civic Design Review (CDR) Committee. The date on which the notice is received shall constitute the date of receipt under the Zoning Code.
With respect to Registered Community Organizations (RCOs), all coordinating RCOs will be deemed to have met the public meeting requirements if they hold their meeting within 45 days of receiving notice. Virtual meetings hosted through telecommunications technology satisfy the public meeting requirements. If a coordinating RCO cannot host a public meeting, they must contact PCPC, the Zoning Board of Adjustment (ZBA), the CDR Committee, and the applicable District Councilperson prior to the date of the scheduled ZBA hearing and/or CDR meeting.
Philadelphia Parks and Recreation
Tree Management staff members are conducting plan reviews on a limited schedule. Plans can be dropped off between 9 a.m. and 3 p.m. on Mondays through Fridays via a phone call to Robin Klink at 215.683.0213, or by email at Robin.Klink@phila.gov. Once the plan has been reviewed, a notification will be sent by email. Plans may be picked up based on the above schedule.
Tax Abatement Applications
Tax abatement applications can be mailed to the Office of Property Assessment or emailed to Drew.Aldinger@phila.gov. The application will be deemed received on the postmark date.
Copyright © 2020 by Ballard Spahr LLP.
(No claim to original U.S. government material.)
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.
This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.