Answering lingering neighborhood questions about the proposed Pennrose apartment building on Ridge Avenue
Ever since it was announced in January 2015 that Pennrose Management Company would be developing the vacant plot of land at Ridge Ave. and Merrick Street (across from East River Bank), there’s been some buzz about who’s building it, who’ll live there, and the size of the development.
There’s also been discussion about promises made as a result of the litigation around the redevelopment of Schuylkill Falls that was demolished about 20 years ago.
I am sharing information (mostly stuff that I have shared as answers to questions on social media) in order to better inform the community and correct any misconceptions that some of our neighbors may have.
The property is owned by the Philadelphia Housing Authority (PHA). Over two years ago, they held an open competitive process inviting developers to propose a development for this vacant land (that has been blighting our commercial corridor). PHA selected Pennrose Development in 2015, out of three proposals.
Pennrose specializes in residential development and has developed more than 1,200 units of housing throughout Philadelphia, and more than 12,000 units nationally. Pennrose’s design firm, WRT recently won a national Housing Award for the John C. Anderson apartments in Center City (near 13th and Spruce).
Why an apartment building? Couldn’t we have houses built with subsidies and sold to new owners at reduced rates?
Anything could have been proposed for the site. However, all three private developers who responded to the open bid request proposed apartment buildings. The two that did not get the bid were going to build even larger buildings than Pennrose; PHA selected the smallest development.
Will the Pennrose building be Section 8 or PHA housing?
No. Pennrose is building apartments with rents that are typical of East Falls.
By way of background, here is information about subsidized rentals (that I know from years of representing tenants as a legal aid lawyer). PHA or subsidized housing sets a tenant’s “rent” based on the person’s income. The housing is geared for people at the lowest incomes. “Rent” for such a tenant is calculated as 30% of income. For example, if the income is $100/month, ‘rent’ is $30. If the person loses a job, “rent” goes down accordingly. This is NOT the Pennrose proposal.
Pennrose plans to use financing called tax credits to lower their cost of borrowing money to build. They then plan to commit to keeping a portion of the apartments – about half – affordable to people at 60% of the median income for the region. Right now, that’s about $40,000 a year, with rents ranging from $800 – $1,000/ month. If the tenant loses a job or doesn’t/can’t pay rent, the tenant can be evicted. Rent does not change based on the tenant and is not based on the person’s income.
These apartments are for those with jobs such as people in food service, office workers or other branches of the service industry. Right now, this rent range of $800 – $1,000 is typical for lots of apartments in East Falls (like the building the EFDC owns and rents to residential tenants). A monthly rent of $800 – $1,000 is an amount that many people in East Falls pay for their mortgage.
The other half of the Pennrose units will have no income limits and will be for people with higher incomes and higher rents.
As a result of the lawsuit between PHA and East Falls organizations and individuals, wasn’t an agreement reached that 30 market rate apartments would be built on this site?
No. There is no such agreement.
Background. People in the neighborhood sued to have what was promised to them by PHA 20 years ago when the old public housing was demolished. They wanted to have a mixed income community with both rental and homeownership. Ultimately, the lawsuit was settled in a Settlement Agreement that was signed and filed in federal court. As a result, you now see Falls Ridge and the Hill Top at Falls Ridge.
In the Definitions section of the Agreement, the development was laid out as Phase I, Phase II and Phase III and referenced a development plan map. Phase III was defined as a 30 units apartment building. Then, in the Agreement section where PHA made its enforceable promises for the development, only Phase I and Phase II were promised. These phases have been built: the senior citizen midrise (50 units), family subsidized rentals (85 units), affordable homeownership (34 homes), and the market rate Hill Top at Falls Ridge (123 homes). The Settlement Agreement has been fully complied with.
Yes, Phase III was discussed and was on a plan 20 years ago but at that time it was an idea and placeholder on the plan. This happens a lot in the development process. What would happen in Phase III was not agreed to in the signed Settlement Agreement in court. Subsequent to the Agreement, in fact, HUD struck the 30 units from the development plan so that the plan now reflects the Agreement. This allowed PHA to open the site up for market development as it has done.
The majority of the plaintiff Agreement signers support the Pennrose development.
A Better Business District
The site is a blight the Riverfront Business District. We have been asking PHA for ten years to put the site out for development and, thank goodness, they finally did. We now have an opportunity to see this developed.
Community support of more housing like that proposed by Pennrose is evidenced by recent planning. In cooperation with the Planning Commission, the East Falls Community Council and East Falls Forward (our two community groups) supported rezoning this parcel of land to CMX 3, which would allow for a five story apartment building to be built there. They want more people there to create vibrancy. Along with the EFDC, we all support some commercial development on the first floor.
As proponents of a vibrant Riverfront Business District (RBD), we think an 80 or 90 unit apartment building will add new residents to the area, along with the other new apartments. These residents will entice businesses to come to our area and help improve the RBD for everyone who wants better goods and services in East Falls.
Its probably too late in the game, but I still would prefer that construction subsidies and tax breaks go toward reduced-cost ownership rather than reduced rents.
Reduced rents are like giving a person a fish to eat. Reduced cost ownership is like teaching somebody to fish. One creates wealth, while the other provides only a temporary benefit.
Morgan, it is too late since the developer was selected already. I beg to differ on the fish analogy. Rents of $800 – $1,000 can be ‘teaching to fish’ since these amounts are the same as mortgage payment amounts. Why is someone renting instead of buying? Need to build credit? Down payment? Just aren’t ready yet? People who pay rent regularly, build up credit, and save for a down payment. Then, they can buy a house when the time is right. I used to run a housing counseling agency – getting first time homebuyers into homeownership when they cannot afford the emergency repairs or unexpected expenses doesn’t always make sense in the long run. Or, they may need to build credit (because they have none or have bad credit) to get a loan. Each decision is personal.
Thanks, Gina — and Morgan! The fishing analogy really helps frame the renters/homeowners issue for me here.