December 25, 1997–January 1, 1998

city beat

King's Village in Gray's Ferry: The community worked hard for new rental housing in the 2700 block of Titan Street.

Philadelphia last year received more than 50 percent of the state funds available for rental housing, while it was only entitled to 13 percent. "We're not really liked by other cities, like Pittsburgh," said a city housing official.

The Rent Is Right

Despite a dedication to home ownership, tax credits encourage the city to offer more affordable apartments.

By John McCalla

"In the economy of many Philadelphia neighborhoods, the most important physical assets are single-family, owner-occupied houses," wrote John Kromer, director of the Office of Housing and Community Development (OHCD), in his "Neighborhood Transformations" report.

The same report, released in February, called developments in Philadelphia's neighborhoods over the past 30 years a catastrophe. And even though the exodus of homeowners has contributed greatly to that catastrophe, neighborhood development is focusing less on the construction of "single-family, owner-occupied houses" than on building homes for rent. When the price is right and the tax credit is obtained, affordable rental housing (singled out in Kromer's report as "critically important" in neighborhoods) seems a more viable option, according to city housing officials.

Two recently completed phases of projects that establish new rental housing in North Philadelphia's construction-heavy area of Cecil B. Moore Avenue and the King's Village neighborhood in Grays Ferry show what can happen when community groups, the OHCD and the Redevelopment Authority come together in aggressively going after grant money.

Once low-income housing tax credits, OHCD funding and other grants are figured, 70 percent of total development costs are covered in building rental housing, Kromer said. And so far, he said, Philadelphia has figured how best to take advantage of the available funds.

"We've done a really good job of choosing which projects will be successful," Kromer said, pointing out that Philadelphia last year received more than 50 percent of the $15 million available from annual state funds, while it was only entitled to 13 percent. That figure spreads out over 10 years and adds up to $70 million, Kromer said.

"We're not really liked by other cities, like Pittsburgh," Kromer said. "However, state funding levels probably will not continue to be that high in the future as other cities copy our formula."

Still, with more than $100 million under his control at the OHCD, Kromer said the city agency spends about 50-50 for rental and ownership housing.

"We're creating a balance between rental housing and ownership," Kromer said. "We still have a big commitment toward sales, but it has to be a mix of rental and ownership."

Mayor Ed Rendell echoed the precept at the Dec. 19 dedication of Cecil B. Moore Village, a development of 34 affordable apartments adjacent to the Cecil B. Moore Homeownership Zone in North Central Philadelphia, a $46 million development that will enrich the area with nearly 300 homes in the next five years.

The 34 apartments dedicated in December will offer one-to-four-bedroom apartments at rents from $323 to $488. Phase two of the Cecil B. Moore Village will be completed next spring and will include duplex homeownership units for sale.

"This is only phase one," Rendell said. "Phase two will offer homeownership opportunities. We still have a focus on homeownership, though rentals are perfect for some people who aren't ready for home ownership … Still, the goal is homeownership."

Community involvement is essential for rental housing projects to get their funding, Kromer said. The recently completed new construction of the $3 million King's Village got much of its momentum from the Martin Luther King's Village Community Association, which was made a limited partner in ownership of the properties in the 2700 block of Titan Street.

The association was also a key player in selecting the subcontractors and tenants for the 21 three-bedroom townhomes, which came complete with garages, said Redevelopment Authority Director of Housing Projects Herb Wetzel.

The same concepts apply to homeownership, Kromer pointed out. In April, HUD awarded $23.5 million for the Cecil B. Moore Homeownership Zone. Other funding sources included the federal Community Development Block Grant, helped along by the Cecil B. Moore Service Corporation, a partnership of the Cecil B. Moore Avenue CDC and the Philadelphia Housing Development Corporation.

"During its [40] years of service to the community, the service corporation has learned a great deal in the process," said board chairperson Geneva B. Hill. "One of the most important things we have learned is that there is not just one single or right way to help solve the problems of individuals or the neighborhood."

"These projects will succeed and last as long as the community is involved," Kromer said.