In the News
Builders Turn to the Middle
Earni Young
Philadelphia Daily News, October 9, 2006
TIMES, THEY ARE a-changin'. A recent conference by the Building Industry Association of Greater Philadelphia focused on the importance of building "workforce housing" that would be affordable to middle-of-the-market households earning $50,000 to $90,000 a year.
Until now, these households had been ignored while developers focused on luxury townhouses and condos for higher-income professionals and well-to-do empty-nesters.
That has meant that middle-income families have benefited the least from public subsidies, including tax abatements on new construction or to elderly low-income homeowners. And, of course, middle-income families are unable to buy low-income public housing.
"The families that have been buying housing in the city during the past decade - some of them moving in, others moving up - appear to be either higher-income or lower-income families," John Kromer, former head of the Office of Housing and Community Development under Mayor Rendell, told Building Industry Association (BIA) members at their 5th Annual Housing Conference. The session was aptly themed: "The Big Squeeze: Housing Philadelphia's Middle Class."
Workforce housing is for job holders with some capability to move up in the housing market. These are our teachers, police officers, midlevel office and retail workers, nurses and reporters.
These homes would sell in the $150,000 to $300,000 range, so they could not be built in Center City, where land values and labor costs would make it impossible for a developer to recoup costs, let alone make a profit. So the search for inexpensive land has builders and investors eyeing North Philadelphia, Germantown, Frankford and West Philadelphia.
But the heady days of wherever-we-build-it-they-will-come are over. With almost daily shootings in certain areas of the city, there is no guarantee that buyers will follow builders into neighborhoods struggling to recover from decades of disinvestment and neglect.
Bill Reddish, BIA president and head of Gensis Group, said he's seen no signs that developers are pulling back to safer streets. But buyers may be less adventurous.
"I haven't heard anyone on my board say they are not going to invest or build because of crime," Reddish said. But, he added, "I do think that the increase in violence... might cause some potential buyers to hold off or withdraw completely."
John Westrum, who is building more than 600 townhouses and condos near 31st and Girard Avenue, said violence is all over, not just in the neighborhoods.
"I think that violence is prevalent throughout our society, and when you take areas that were neglected and vacant and start to revitalize them that you make them better," Westrum said. "When you clean them up, the underlying causes of the violence will go away."
That sentiment is echoed by state Sen. Dwight Evans, a likely Democratic candidate for mayor of Philadelphia. His belief - that changing the environment for the better has a like effect on the behavior of the inhabitants - is at the core of Evans' Blueprint for a Safer Philadelphia.
"I don't think the political process has been focused enough on making that kind of connection," Evans said. "We talk about tax policy, but we don't talk about safety within the context of economic development."
Evans isn't just talking about housing, but about commercial development.
Commercial areas in neighborhoods including Germantown and West Philadelphia "look like fortresses" behind metal riot gates and bulletproof glass service windows, Evans said. "You don't get the quality of retail because you will not draw customers if people feel intimidated by the environment."
And the same is true for housing - especially now that the market has cooled and buyers have become more risk-averse.
Jeremy Nowak, president of the Reinvestment Fund, said public safety will and should be the No. 1 issue for next year's race for mayor. TRF is a nonprofit financial institution that invests in residential and commercial real estate in low-income communities.
"There can be no long-term economic growth, no matter how good of a real-estate market
we've had in the absence of tackling the basics," Nowak said.
But as Nowak sees it, there is no reason Philadelphia can't duplicate the success of New York, which continues "to defy the odds and depress serious crime numbers down, even in the poorest sections of the city."