PHILADELPHIA — The Parker Administration announced today a proposed agreement with representatives of Philadelphia’s hotel industry on a revised tax proposal that is currently under consideration by City Council as part of the Mayor’s FY27 “One Philly, One Future” Budget. Under the tentative agreement, the city’s originally proposed 2 percent hotel tax increase would be reduced to 0.6 percent, while also proposing a 6 percent increase on existing taxes applied to short-term rentals in Philadelphia. Any final proposal remains subject to adoption by City Council and authorization by the Commonwealth of Pennsylvania.

If adopted, the revised hotel tax and short-term rental tax proposals are projected to generate approximately $15 million annually, or roughly $75 million over five years, to help support Philadelphia’s proposed investments aimed at ending street homelessness, including additional shelter capacity, wraparound services, behavioral health support, substance use recovery services, and other housing and continuity-of-care initiatives. The proposal would sunset in five years.

“Addressing street homelessness in Philadelphia will require partnership, thoughtful policy, and sustainable investment,” said Mayor Cherelle L. Parker. “I want to thank representatives from the hotel industry, Council President Kenyatta Johnson, members of City Council, State Legislators, and leaders from our administration for continuing to work together toward a balanced proposal that supports both our hospitality sector and our goal of helping more Philadelphians access safety, stability, and support with dignity. This is an extraordinary, proposed agreement and it furthers our mission of a safer, cleaner, and greener city with access to economic opportunity for all.”