High union wage rates are far from the only problem, but they compound the city's other drawbacks - the wage tax, the troubled schools, crime, spotty municipal services and so on.
Those other factors force sellers in the city to offer discounts from suburban prices for comparable housing - but high labor costs compared to the suburbs make it very hard to offer such discounts on construction.
It costs 30 percent to 50 percent more to build housing units in Philadelphia than in the suburbs, according to a story by staff writer Nathan Gorenstein in last Sunday's Inquirer.
Union leaders confirmed the statistics, explaining that they give contractors in the suburbs better deals on wages and benefits to win work against competition from nonunion labor.
That competition is almost nonexistent in the city, in part because the unions do whatever they have to do to keep nonunion labor out - with backing from the judges and city officials whom they helped elect.
No doubt, the unions have the situation set up to their advantage. But the net effect is they discount wages in suburbs where more people have the income to manage high housing prices, while adding a surcharge in the city where household incomes are lower. Something is wrong with this picture.
What can be done about it?
An obvious first move would be for Mayor Street to use some of his political capital with these unions - the same ones who will enjoy top-dollar wages to build the mayor's new stadiums in South Philadelphia - to get them to offer a wage discount at least for construction related to the antiblight campaign.
The bond issue to finance the mayor's plan is a modest $250 million, but the hope is that it will leverage much more private and nonprofit investment. But the scarce capital won't go very far if work has to be done using the unions' prevailing city rate.
