Multi Unit investing in Philadelphia

5 Replies

Hi! It heavily depends on the zip code/neighborhood as some communities are more vocal than others. The process itself is pretty straightforward and instructions can be found on the city’s website.

Originally posted by @Anthony Zayas :

@John B. When looking at a property, check to see if it is basically anything RM1 - CMX etc. Those properties can be converted by right without having to go through the use variance process!

Hi Anthony, just so you know, CMX1 zoning use is based on neighboring properties so if you have a CMX1 corner property and the rest of the row is RSA5, you in effect have an RSA5 property. 

CMX2 and 2.5 require ground floor commercial for the full frontage of the property and for the first 30' of depth. On many houses this is nearly the entire first floor that you would be required to use for commercial purposes. Also, the number of units you're allowed on these smaller CMX2 and 2.5 parcels is pretty low. Often you might only get 2 units plus commercial out of a building and the commercial, in many parts of Philadelphia, would be a detriment to the project. Commercial rental rates are very low in many areas and with Covid, you could potentially have a very hard time leasing up the space even at competitive rates. 

RM1 unit count is based on lot size and I see many lots and buildings listed as being able to support multifamily but in reality they're too small and wouldn't even allow 2 units by right. You need a minimum of 720 sq ft lot size to make 2 units by right. There are other caveats as well like making sure a lot is wide enough (you could have a very tough time fitting a multi on a 13' wide lot) or there's an egress alley in the rear (without it you're limited to bedrooms in the front portion of the building only) but now we're really getting in the weeds here. The zoning laws in Philadelphia are pretty intricate so I'd advise asking a zoning attorney before purchasing anything besides existing single families.