In Point Breeze, Rising Land Values Revive a Plan to Seize Lots

Point Breeze’s ZIP code saw the biggest jump in median housing values in the city. Credit: PWBaker on Flickr

Last week, the international news media was atwitter over a dispute between Philadelphia’s Redevelopment Authority (PRA), and OCF Realty, a real estate developer widely known in Philadelphia for a high-profile branding effort that has spawned a popular real estate blog and brought trendy cafes named for the company into neighborhoods where it has invested in property. A trash-strewn parcel of vacant land, owned by the PRA and adjacent to an OCF cafe at 20th and Federal, became a flashpoint after developer and cafe owner Ori Feibush spent $20,000 cleaning and landscaping the land. The developer said the blighted lot was costing him business, the city said he was trespassing.

While eyebrow-raising headlines like, “Philadelphia Cracks Down On Business Owner For Cleaning Up Trash”, attracted a great deal of attention to the conflict, the populist outrage over the city’s reaction to Feibush’s cleanup efforts has overshadowed a larger intervention in Point Breeze by the state agency, which handles eminent domain and land assembly for the municipal government.

With no public dialogue, the PRA in April resurrected a seemingly dormant plan to build affordable housing in the Point Breeze Urban Renewal Area, a redevelopment zone created by the agency in 1971. Officials introduced an ordinance that would give them the power to condemn and acquire 51 lots scattered around the area, a majority of which are tax delinquent and owned by private individuals. Others are the legacy of prior revitalization efforts, owned by other government agencies or defunct nonprofits. The planned affordable housing development that the newly acquired lot would be taken for lacks definition and a sure source of funding, though it has been on the authority’s radar for some time.

Point Breeze is to many advocates a last vestige of black, working-class South Philadelphia. But while there has been little significant investment for a generation, Point Breeze’s proximity to Center City Philadelphia — downtown’s jagged skyline is visible from the neighborhood’s brick stoops — has helped it become one of the city’s most rapidly transforming neighborhoods in recent years. Hip gastropubs, like the American Sardine Bar which opened last year, have sprung up alongside dive bars and dollar stores. Average home sale prices have jumped from $30,000 in 2000, to an average of around $150,000 today, although certain sections of the neighborhood have seen units fetch over $250,000.

Walking through the area now, the transition is evident in its mix of older two- to three-story rowhomes, sleeker modern construction and corner stores, punctuated by an ever-diminishing supply of vacant land, as infill construction continues to flood the neighborhood. In recent months, the area has become symbolic of city-wide tensions over changes that many longtime residents see as gentrification and others see as needed development. But while Mayor Michael Nutter has remained silent on the issue, the state redevelopment authority has now quietly stepped in with a plan that the authority says will, through seizing private property using its power of eminent domain, create affordable housing and ostensibly, lessen pressures on homeowners and renters who fear being priced out.

The attempt to seize large amounts of privately held land is a peculiar reversal for an agency that has nominally made strides towards offloading the backlog of properties it has accumulated over 67 years of urban renewal activities. Over the past decade, PRA and the city have faced broad criticism for creating blight by holding on to land for decades without development and not maintaining their properties. In recent years, the Nutter administration has pushed the PRA and other city agencies to start selling off some of the nearly 12,000 vacant, city-owned properties to stimulate development. Over the summer, the administration launched a website that is designed to increase transparency related to land use and ownership while making it easier for citizens to know if land is publicly owned or available for sale.

Feibush said he was surprised to learn in April that several lots he owned, including several he had ironically just acquired from the PRA itself, were on a list of those threatened by eminent domain. While his lots have since been taken off the condemnation list, Feibush says he is representing other owners whose land is threatened with PRA seizure.

John Kromer is a former head of the Philadelphia Office of Housing and Community Development who is now a senior consultant to the Fels Institute at the University of Pennsylvania. He said he was surprised to hear that the PRA had attempted to take property from active owner-developers. “The history of backlash against the use of eminent domain in Philadelphia and other cities has pushed their use of that ability in the opposite direction,” Kromer said. “Sure, in those instances where the private market isn’t working its magic the government steps in, but I haven’t heard of anything like this.”

The developer claims the land grab is a result of the PRA being politically pressured by affordable housing developers who have the ear of the local councilman, Kenyatta Johnson, to increase the pool of land they could develop. Feibush says this move could squeeze out future private development opportunities in a section of the neighborhood that has seen a building boom. “They’re strictly condemning parcels in the most desirable part of Point Breeze,” Feibush said. Other owners did not return calls for comment.

The South Philly Taproom is another example of new, more upscale businesses that have started emerging in the neighborhood. Credit: KissA from Flickr

Councilman Johnson’s office acknowledged that the plan was aimed at acquiring land for affordable housing development. “Point Breeze is a rapidly gentrifying neighborhood,” said Johnson in an email statement issued by his staff. “To ensure a mixed income and culturally diverse community, we want to ensure that there is balanced development by protecting longstanding residents and promoting a mix of market rate and affordable housing,” the email said.

Johnson’s Chief of Staff, Chris Sample, acknowledged this, describing Point Breeze as “re-gentrifying.”

“We have a number of neighbors, older neighbors, who say ‘Oh my god, they’re moving me out. They’re building a $300,000 house down the street from me, and and I can’t afford the taxes with AVI’ and things of this nature,” said Sample, referring to the city’s not-yet-implemented Actual Value Initiative, a property reevaluation program that is expected to increase taxes in developing neighborhoods. Sample said he envisions the “renewal zone” including 40/60 split between affordable and market-rate housing with the affordable units selling in $150,000 range and the other 60 percent selling at higher price points.

“We’d like to keep it lower, but there’s just no money to offset the cost of this,” Sample said. “And we’re in a union town and, man, they wear us out with those rates.” Sample said they were seeking aid from the city’s Neighborhood Transformation Initiative funds to get the project moving, saying, “the mayor’s helping us with this.” Money from a previous federal grant from the Department of Housing and Urban Development’s Neighborhood Stabilization Program will also be put towards the project, PRA documents show. The Nutter administration did not respond to a request for comment on their role in the project.

Sample said he was sympathetic to private owners whose land would be taken, but felt that pushing the condemnations forward was needed to avoid delays. He said that at this point the agency could not remove lots from the condemnation list because it would set back the process another “six months.”

He suggested that developers like Feibush, who he described as “aggressive,” enter into agreement with the city for rights to develop the seized parcels — possibly with the affordable housing units and only if they agree to develop the land in a timely fashion.

“[They] gotta give us some timeframe. [They] can’t leave them, you know, vacant for long periods of time, because we’re just not interested in that,” said Sample, who said that final plans for the project would not be released until February, with groundbreaking possible by 2014.

But Feibush says its insulting to be told to accept the seizures and enter into contract with the city while a detailed“Renewal Zone” is not in place. “To condemn properties at whim, some that have been owned for just a couple of months, without a plan, is a dramatic overuse of power,” said Feibush.

Feibush says that while he and other private developers are painted as greedy, their affordable housing counterparts ultimately have the same goal, just different methods. He said that under the current plan they will receive land for close to nothing and receive government funds for construction, but still sell the majority of their units on the open market. “Their profit margin is five, six, seven times what ours is. It’s a dollars and cents game here, and the land is just the political piece,” he said.

Feibush and other private property owners in the area are currently lobbying the full City Council to halt the condemnation process, although he says there has been no progress since the April board meeting.

“We will stop this condemnation,” he said.

The PRA could not be reached for additional comments by press time.

Ryan Briggs is a journalist who lives in West Philadelphia. A veteran of several economic development agencies in Philadelphia, Ryan is a regular contributor to Next City, the Philadelphia City Paper, Hidden City and more.

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Tags: philadelphiaeconomic developmentaffordable housinggentrificationmichael nutter