And Now: A Word About Gentrification…

Let’s Hold Hands And Keep Our Neighborhood Blighted

Some of you may wonder why I’ve obsessed over Point Breeze lately, and for good reason.  Councilman Johnson doesn’t particularly care for me, and well… who can blame him?   He took the City of Philadelphia to Federal Court over campaign bandit signs he was putting up all over South Philadelphia back when he was running for State Representative, then his friend Councilman Jones authored a City Council bill to legalize them in the City–which really did not make me happy, and that’s putting it mildly [I threatened to erect bandit signs saying some very not-nice things all around both Coucilmanic districts had that bill actually passed].

But that’s neither here nor there.   I’ve watched Kenyatta and waited since he took his Council seat to see what kind of performance he’ll bring to the 2nd District.

So far, I’m not impressed at all.

What the hell is going on down there?

It seems obvious to me that Councilman Johnson, when he arrived to the 2nd District, is not really in tune with the friction over development in Point Breeze.   This started about 5 years ago, so for Johnson’s sake and for readers not intimately familiar with it, here’s the condensed version:

There’s a small core group of activists who call themselves Concerned Citizens of Point Breeze.  Some of the “Concerned” citizens do not actually live in Point Breeze.   And a few of these “Concerned” citizens were around back when the Graduate Hospital neighborhood was gentrifying and were fighting that.   The neighborhood redeveloped anyway.  Knowledge of CCPB’s existence came when a flyer attacking Sidecar, a gastropub on Christian Street, with scary headlines appeared telling Point Breeze residents about the menace that was to come:  “$300,000” houses and al-fresco dining.

At first, CCPB attacked ALL private market development within the neighborhood.  When OCF became the dominant development force in the neighborhood, and the most visible to the public, Concerned Citizens of Point Breeze is now changing its message and it’s saying the only issue they have is with OCF Realty and Ori Feibush.   But that’s disingenuous, because they treated John Longacre (owner of American Sardine Bar) just as badly as they’ve treated Ori.

And it’s not like OCF isn’t present at every South Philly H.O.M.E.S. meeting (or the NAC that controls zoning in Point Breeze).   Before Councilman Johnson took office, the previous fight was CCPB’s insistance that the Philadelphia Zoning Code be amended to create a special overlay district that bans 3-story homes and roofdecks from any new construction in Point Breeze.   Former Councilwoman Ana Verna’s office actually drafted legislation for it until her office was met with swift backlash.

CCPB made the argument that the homes were ‘dangerous to the health of residents in the neighborhood’, and other less-specious arguments.   The idea was simple:  ban this style of housing, and perhaps that will keep out the newcomers.   It didn’t work.

Yesterday, CCPB sent out this chain email [Phillyspeaks] which runs along the same non-sensical ranting as the flyers they furiously photocopy and leaflet over the neighborhood every time South Philly H.O.M.E.S. holds a zoning meeting.

Let’s not forget how racial this is.    I sat in a packed church in Janurary listening to one racial epithet after another.   While I sat there, in silence, my jaw dropped wide open at some of the things I heard.

I even still remember when I heard a loud soliloquy about Mexicans [jump to 5:00], during one Point Breeze zoning meeting in a frozen church last winter.   And that was a zoning meeting that was called for the third time, after two previous attempts to hold it failed, including one where the police had to be called.

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The legendary Kenny Gamble (credit: Inquirer)

Is the antagonism against development universal?    Of course it isn’t.

Universal Companies, owned by famed Philadelphia record producer Kenny Gamble, another housing developer who operates in Point Breeze, receives practically zero criticism in comparison to OCF or Longacre. Universal is a politically-connected non-profit and Mr. Gamble has his roots in this section of South Philadelphia.   Kenny is also considering moving back to this area of the City, although he’s had trouble citing and then finishing the plans for the construction of his home in South Philly.

The City has also been generous to Universal.   It’s handed more land over to Universal than Universal has resources to build; and original time limits on development plans for some lots Universal owned in Southwest Center City even expired and ownership transferred back to the City.    Universal also operates charter schools since 2002.   It was given a second chance to operate the Vare middle school after it failed previously under Universal’s stewardship.   Universal has plenty of friends with City administration, legislature, the school district and in Harrisburg.

Because of its relationship and work it is obviously pro-charter, which is a topic that splits Democrats in half.   But let’s face it: Universal gets breaks in Point Breeze that nobody else really gets.    Even South Philly H.O.M.E.S. doesn’t get the same generosity.  H.O.M.E.S. hasn’t ever been given multimillion allotments to construct housing developments the size of city blocks, ever.    Maybe that will change with Councilman Johnson; if money ever materializes to make that happen.

Currently, Universal is busy with its development project in the Nicetown section of Philly and it hasn’t put Point Breeze back into top-contender for expansion.   It’s not like that even matters.   When Universal was building gangbuster-style in Southwest Center City, it failed to transform the neighborhood into a lower-to-mixed income neighborhood.    It also failed to stop the dilution of racial composition in the neighborhood.   And I really shouldn’t even use the word failure, because that wasn’t the goal of Universal’s expansion during the housing boom.

Universal never had a modus operandi to stop gentrification.   Its expansion was driven by the urgency to spend grants and tax credit funding as quickly as possible so that it would not have the opportunity to be reallocated.   If it were ever the case that Gamble had any idea of being the neighborhood dictator ala Emanuel Freeman; that was quickly put to bed when SOSNA, the civic over SWCC, got very active.

The Philadelphia Housing Authority (PHA), also the largest landlord in the Commonwealth, has a significant presence in Southwest Center City and it also grew in the neighborhood when former director Carl Greene embarked on PHA’s largest expansion and upgrades in the agency’s history.   Newer residents who never had to live next to PHA property soon took notice of how PHA property is managed on a day-to-day basis.   They were not enthusiastic and it led to calls for reform.   Residents even skipped over local pols and wrote to U.S. Senator Chuck Grassly calling for HUD reform of the agency, and even dared asking the Congressman to consider striking funds from HUD if it could not get a grip on major issues like drug running out of PHA apartments and illegal boarders.  [The U.S. Department of Housing and Urban Development supplies almost all of PHA’s funding]

This worked.   Carl Greene’s antics making the press for months was enough for HUD to dial up the pressure and force the board of PHA out.   Former Mayor John Street and current Councilwoman Jannie Blackwell used to serve on that board before it was put out of commission.   Control over PHA’s board will now align itself more closely with the Mayor’s office.

PHA reform kind of started on it’s own.   I passed a tip to the Inquirer back in 2010 that Carl Greene was losing his home to a Wachovia foreclosure action.  Within weeks, employees who used to work under the threat of fear of Greene started to speak out and openly expose PHA’s dirty laundry and the stories started to grow legs, once it became clear to them that Greene’s days at the agency were numbered.   The agency is now slowly starting to turn around.   Hopefully that will have a positive impact in the neighborhoods where PHA maintains a heavy presence after all these decades of looking at PHA as a leviathan monolith resistant to change.

But for SWCC, the neighborhood just to the north of Point Breeze… did a large, expanding, and badly-run housing authority thwart gentrification?   Of course not.   New Philadelphians simply ignored PHA and continued to roost in Southwest Center City.   You can see them jogging in the morning on blocks that used to be drug corners.

Now back to Councilman Johnson…

It’s pretty clear to me that the freshman Councilman doesn’t really understand all the dynamics that have been going on in Point Breeze for the last half-decade.   He obviously doesn’t want to visibly side which is an understandable reaction he would have since he stepped into the centerpiece of a fight that has been boiling for years.

But what about the other developers in Point Breeze?   OCF isn’t the only one in there.    For starters, a few have quit work in Point Breeze and others try to remain as quiet as possible, trying to stay within the bounds of by-right development within the new Philadelphia Zoning Code so they can skip having to deal with zoning.  There’s also work going on there illegally, without permits, like in nearly every neighborhood in Philadelphia.

Why is gentrification so… evil?

The issue boils down to one simple reason:   renters.    A pattern that repeats itself over and over in the story is what happens to rents when they transition away from a neighborhood that has more crack dealers than legitimate businesses.   Rents rise.

The majority of all landlords renting to Point Breeze residents are absentee.   They don’t live in Point Breeze.   They rarely have to ever see their tenants and many could care less about the condition of the properties their tenants live in.   When gentrification arrives, landlords can smell the money from a mile away and immediately consider what to do with their investment property.   Do they fix it up and raise the rent higher, or do they find someone to buy the property and cash out?    Cashing out is the most tempting option because it offers immediate gratification and reward for all the time of putting up with tenant hassles, like repairs, and missed rent, and damaged units, and evictions.

You won’t see Concerned Citizens ever holding a march down Point Breeze Avenue against the nuisances that slumlords cause, because they could really care less about that.   A tax delinquent landlord is just something that isn’t on the radar.   Neither is a vacant lot full of rotting garbage next to a family of 5 who’s kids are getting sick with stomach flu.   It’s just not a problem.   Because the fight is not about that.

Homeowner-occupied residents don’t have much to worry about either given that the political climate favors them over the newcomers entering Point Breeze.   These Philadelphians vote regularly, and cannot stomach large property tax hikes.   Raising property taxes on this population will simply result in mass defaults, and the rate of tax delinquency in this neighborhood is already high to begin with.   It’s not a genuine problem to be worried about.   And Council President Clarke has ideas to protect these homeowners from whatever might happen in the real estate market that influences their taxes.

But for renters, they are scared.   Right now, there’s not much demand for original-condition 2 story Point Breeze rowhomes.   The allure of Point Breeze is with new construction that is mostly going up in vacant lots.   That’s almost all of the development activity that’s going on.

But someday, if all the vacant lots get filled in with amenities and houses, that might change.   Developers might start putting up tempting offers to buy those two story homes, and landlords would be tempted to sell.   When a landlord sells a property, the buyer has the option to discontinue leasing the property once the lease expires.   No more tenant.

That’s what the fight is all about.

But why gentrification?

We can get into a long discussion about organic vs. inorganic development (and that author believes any real estate transaction that involves a real estate agent is inorganic, but whatevs).   But what’s in it for all Philadelphians when depressed and torn-apart neighborhoods gentrify?

  • Violent crime always, always, always goes down.    It’s been proven repeatedly in every neighborhood that went from a loser to a winner in this town.  While property crime goes up or down with gentrification, it’s the plague of violent drug-turf related warfare that goes away when gentrification reaches a blighted area.   Same goes for neighborhood beefs.    You don’t often get two homeowners racking the slide on their Glocks and pointing them at each other over painting one’s front door the wrong color, or shoveling snow the wrong way.   (Sure, that happens over parking spaces when it snows, but not all the time.)
  • Private investment for redevelopment encourages more homeownership and at higher tax value.    That’s good for Philadelphia because the City has little money to spend on services and it needs more.  When a streak of violence hits any neighborhood, the first thing you hear is “We need more cops!!!”.   True, we do need more cops; but how do we pay for it?  The City isn’t getting more from Harrisburg and the political makeup of Harrisburg is not likely to change soon.   So the City needs to use assets that it has… like its land, which it has a lot of, to turn into uses that generate revenue to the City so it can maintain the services we expect the City to deliver.
  • Tax abatements can and do expire.   The tax abatements that lit a fire in neighborhoods like Fairmount and Northern Liberties are slowly coming off.   The City of Philadelphia stands to bring in tons of new money it wouldn’t have gotten otherwise if the incentives were not around to improve the land.   The City dumped public money for 40+ years into Point Breeze and nothing happened, and now part of this neighborhood is poised to turn revenue productive if it maintains its rate of growth.
  • The more people want to move into Philadelphia, it will drag employers into the City who follow them in.   For the first time in 50 years, the City’s declining population is FINALLY turning around.   And that is due to two demographics:   low-income immigrants who see opportunity in moving here, and affluent folk who prefer Philadelphia because they feel their future is better-off here.    That’s highly unusual given what the City went through from 1955-2000.    The fight over the Unisys sign should have clued in people by now that something is going on with the business climate.   The investment group Blackrock entertaining Philadelphia as a place to relocate its operations was another major clue.    These “clues” shouldn’t be ignored.   We need more employers in the City so more people can have jobs.   People with jobs tend to spend more than people with fixed income, so they generate more taxes, which the City can then plow into services to attract more people into the City who will contribute more revenue, and that goes to pay for services for those who don’t have any money.    This is basic economic math–which is something I hope the School District of Philadelphia teaches to some degree.
  • And the most important thing: In order to provide services, like low-income housing, you need a captive audience to pay for it.   When I say “captive audience” I mean that you’re asking people to pay for services, but not in such a way that they get upset, angry and call a realtor to leave.    We can just look at Detroit to figure that out.   Most of its population has left and businesses are conveniently set up all around Detroit just outside of the reach of the taxing authority.  Detroit doesn’t have funds to sustain the larger low-income population it had in the 1970s, and with Michigan’s economic collapse in 2008, much of that population has also left for greener pastures.   There’s no one left to tax to pay for much of anything that the City used to support in the past.    Philadelphia has been inching towards that state for decades but the recent redevelopment in the city has reversed that.
In Detroit, urban prairie is more common than people

So, what now?

The simple answer is that urban renewal, and yes… gentrification, that scary word, is a necessity in Philadelphia.   Even Councilwoman Blackwell, who used to fight gentrification with the best of them, especially UPenn’s various expansions, understands that now [she finally approved the Apple Lofts project over the objections of a political hack].

And it’s not like you can’t take advantage of the fact that developers want to buy land in order to extract returns, either.    The City can certainly appraise its own land to true market value rather than its buffeted value, pocket the proceeds and then pour some of that into low-income development on other parcels that it owns.   It has plenty of land that it could sell and start a cycle of mixed-income development all over the city that builds in lock-step with private development.

But, to date, the City isn’t really very interested in that.   Only PHA is and Universal, and a few CDCs.   And that’s where the anti-gentrification arguments get frustrating.    The loud voices aimed at developers should be directed at City leaders to do something with the vacant land—return some of it to the community.   Divert sale proceeds to community groups when developers gobble up lots.

The City has given away land for a buck before to the elation of neighborhood groups and organizations that seem to time themselves well to Council elections.   If it was smart, it would look at its vacant land as a funding source for bolder projects that quiet the concern of low-income residents and improve their quality of life, while encouraging medium and higher income growth at the same time so that way the City’s balance sheet grows and we become a less-blighted City.

That takes strategic thinking and fast movement.   Strategy is to identify where the City can pull profit from lot sales and get them into the market, and the thinking goes into “who is competent and who can build sustainable low-income units that mesh well in a Philadelphia where different incomes are sharing party walls?”

It’s not a dream-scenario either.   East Kensington has naturally-occurring mixed-income sections where blocks are not 100% poor or 100% affluent.   It’s truly mixed.  And racially mixed.   And here’s the kicker; it happened organically and with a lot less fuss.   I know, because I live in Kensington and see it with my own eyeballs every morning when I step foot outside my house.


That’s what this is really all about.    It’s something all Philadelphians should be concerned about;  not what “Concerned Citizens” is concerned about—who are worrying what decisions their current slumlords will make in the future.


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