Why Cherelle Parker’s Choice For Police Commissioner Is Great for Public Safety — and the Economy

Kevin Bethel, Cherelle Parker’s pick for Philadelphia Police Commissioner./ Photograph courtesy of 6ABC

For six and a half years, I was privileged to serve on Philadelphia’s City Council. It was a great vantage point from which to get involved in the many issues facing the city and try to improve the lives of all Philadelphians.

As a Councilmember, I saw how our economy is dramatically impacted by what happens in the city. The best example is the connection between the health of the city and real estate. What happens in the city impacts the real estate market, and what happens in the real estate market can dramatically impact the city

In this column, I want to talk about that connection — and, in light of it, congratulate incoming mayor Cherelle Parker on her first major decision, the selection of Kevin Bethel as Philadelphia’s next police commissioner. As I’ll explain, he not only has the opportunity to make Philadelphia safer — an essential thing for all Philadelphians — but to help out the real estate market and the economy, too.

The Real Estate Slowdown

Today, we are in the beginning of a real estate downturn that probably kicked off over six months ago, with a dramatic slowing of the rental and sales markets in Philadelphia.

Why? On the rental side, tremendous new inventory has flooded the market, which is causing supply to far outpace demand. I believe this will correct itself. Because of that oversupply — and the dramatic increase in interest rates, which I’ll talk more about in a moment — most new large-scale residential rental projects have been put on hold. Over the next 12 to 24 months, this should help the rental market absorb the current oversupply of rentals.

With respect to the sales market, activity is down in part because of those aforementioned interest rates. The tripling of rates over the last two years has caused borrowing costs to go up 300 percent, which is making the market pause.

Those rates are higher than they’ve been in a while, but we should keep things in context. I have seen many interest rate swings in my career. In fact, when I started in real estate in 1980, inflation was at 15 percent, interest rates hit a high of 21 percent, and you had to be a depositor with the bank to obtain a mortgage loan.

Today, inflation is about three percent and mortgage interest rates are approximately eight percent. In retrospect, interest rates probably dropped too low during COVID, and then the Federal Reserve raised them way too fast, not allowing the market to adjust.

The Role of Public Safety

Interest rates are no question a major issue, but in my opinion, the number one issue in Philadelphia — both in the city overall and the real estate market — is public safety. While Philadelphia’s crime rate has gone down over the last year, we still have too many violent offenses and too many of our citizens are victims.

What’s more, the city still faces a perception of not being safe. And most buyers will not live in an area where they feel at risk. For instance, we are no longer seeing the volume of Baby Boomers from the suburbs moving into town.

If you’re not one of those Boomers, why should that matter? Well, as I learned when I served on City Council: those people are essential to the city’s finances. Baby Boomers were a huge part of the luxury market — people over 50 with double incomes, no children in the schools, not using any city services, at the peak earning of their careers, paying high taxes, and spending money in the local economy. From a budget standpoint, this sector of the market has been a boon to the city’s finances and overall economy.

And so is real estate overall, since it makes up a large portion of individual and businesses wealth across our city. When real estate prices rise, wealth increases and individuals and businesses are more likely to borrow and spend. It also has a tremendous effect on all the business related to the housing market — architects, builders, furniture suppliers, plumbers, electricians, carpenters, etc.

The New Police Commissioner

All of this is why the selection of a new police commissioner was so important, and why I applaud Mayor-elect Cherelle Parker’s appointment of Kevin Bethel. He is a protégé of former police commissioner Charles Ramsey, who in my opinion is one of the best in the United States.

I believe that, with Commissioner Bethel in place, we will see public safety improve dramatically. While it may not happen overnight, it will happen over the next 12 to 18 months. And it will have a ripple effect.

Next up to keep the city on the right path: We need to create good-paying jobs, help the homeless and those with mental illness get off the streets, and improve the education we provide our children. But public safety is crucial, and Mayor-elect Parker has taken a great first step.