Zillow listing in Kensington for a half million

The Only Cure to Kensington’s Heroin Problem is Gentrification

There are half-million dollar homes in Kensington

Directly next to Huntingdon Station on the Market-Frankford Line sits a sign that one small corner of Kensington, a section of the city that’s seen nothing but economic depression since the late 1970s is about to turn.  Houses are being built there.  They are directly next to the EL.

Only one stop further down the line is Somerset Station, the notorious home of the East Coast’s largest opioid supermarket.

Greeting you when you exit the station at the foot of the staircase is a dealer or a hustler, trying to make some coin so he can walk the two blocks from there to the front of Episcopal Hospital where he can score the next bag.   Off in the distance you’ll hear fire sirens as another rescue unit makes its way to yet another call for an overdose.  Just a few blocks away on York Street a junkie OD’d at the foot of yet another new construction site for a brand new home.

Travel around Huntingdon Station and you’ll encounter one of the busier areas for prostitution in the city.  All the girls who work Kensington and Sergeant and at Jasper and Sergeant Street are working to buy drugs.  The dealers they buy from are not far away. Only a few of those dealers actually live nearby.  Most of them can’t afford to live there.   Violent crime in East Kensington, while always low to begin with, has dropped further.  So has vice crime other than prostitution.  The same is true with an even stronger effect in Point Breeze where violent crime began a steady march downward after 2004.

We’ve now come to an irony and a harshly politically-incorrect thing to say: Kensington’s way out of the heroin crisis looks to only have one path: gentrification.

You’re thinking is ‘that’s not a cure, that’s just pushing the problem somewhere else.’   And you’re right.   Still, it’s the only way out–for Kensington.

No resources

The opioid crisis has deepened to such a point there likely won’t ever be resources that can tackle the large population that’s been affected by it.  The current rough estimate for the number of opioid abusers in Philadelphia alone is around 70,000 people.  The existing provider network in the City has had no effect chipping away at a problem that amplifies in severity each passing month.   Local community groups are now training ordinary residents on how to get their hands on Narcan to curb the asymptotic rate of overdose deaths.

The local economics that surrounds a drug addict’s decisions on where to spend most of their time are a bit different than you and me.   Since a drug is ruling that person’s life, high on the order of needs is living close to the drug market.   Kensington has always been the prime real estate for the illicit drug industry for a few reasons.   The EL that is now considered a jewel of an asset to real estate developers as homebuyers look for proximity to transit as a key selling point was once a key selling point of trading drugs around Somerset.   Besides the local drug users who live in Kensington, a large amount of people from around the region find their way to the heroin supermarket by way of SEPTA.   For non-resident overdose fatalities, nearly all of them happen in Kensington and Fairhill.

The death of Kensington’s original economy–manufacturing–opened the door to drugs.  It is still the neighborhood’s most active economic trade.   As manufacturing was gutted the nearby worker homes that were built to cater to those who worked in Kensington crashed in price.   You could buy a whole house in Kensington for what it costs you to rent for a few months in Center City.   As the area garnered a bad reputation, slumlords flourished and City Hall paid homage to the poor that live there but did little in the way of getting any real economic replacement going for what was originally there.   The EL itself was seen as a gash in the neighborhood and the crime under its shadows a scary place, forever keeping the broader legitimate economy away.

The Megalots are Disappearing

The Kensington Megalots are rapidly disappearing as homes are now going up on them

New people, new politics

A thing that’s struck me since the Great Recession is the newer trend by City Hall to now treat the outer neighborhoods of Philadelphia much the same way as Kensington was treated for the last 35 years–mostly ignored.  Irrational gentrification phobias dominate discourse within the city, meanwhile City Hall as a whole is more tightly bound to real estate developers than any member of City Council will ever admit, save for real estate developer Alan Domb who’s a Councilman-at-Large.

Many of the new homebuyers who are buying the new construction product that is now going up in Kensington are far more adept at compartmentalizing the malaise that lies feet from their front doors.   They’re also willing to reverse commute to the suburbs.   Higher property tax levels in the suburbs and non-urban housing styles have lent way for urban homebuilders to provide a product that’s fairly unique in the region.   Add in speculation, density limits and the City’s broken vacant land dispensation policies and you sometimes see rapid price increases on land.

Kensington is also the only gentrifying area of Philly were local sentiment about new construction is generally positive than lamentive.   There’s never been this level of investment before in this place by the private market and so close to some of the city’s worst social problems.  The new residents generally do not accept the level of non-involvement from City Hall as lifetime Kensington residents have grown accustomed.  While they may be able to squeeze some resources out of City Hall with enough activism, their sheer presence alone is what’s turned Kensington around.

Junkienomics

For opioid addicts who rent the magic number for what I call their push/pull rent number is $900.   Once rental prices push north of $900/mo for a 1-bedroom unit a heroin addict who does less than one bundle a day will start to scour rental listings looking to move.  Non-functioning addicts, those who are abusing heavily are usually not in a stable living situation.   They may split rent with someone in a house, head to a group home or take up some other alternative living situation.   Square footage prices in areas where 1-bedroom rents have gone past $900 are unattractive for those who provide those beds as a business.   For those who own the property who is housing an addict, they may turn the deed loose after the market price goes high enough that cashing out is too enticing.   For 2-story brick that number is around $150,000.   There are 16-foot vacant lots in Kensington that now cost more than $60,000 to purchase.

Besides the drug abusers, drug dealers themselves are also sensitive to real estate prices.   Once a mass of drug addicts shifts, it opens the drug market wherever they’re going to.   Lower Bucks County has been one of those areas exhibiting a new influx of Philadelphia residents, some of them following their clients and selling pills and heroin to them out in the suburbs.   As heroin availability has been increasing in Philadelphia’s suburbs it eats into part of the drug market that Kensington has–which further puts pressure on dealers.

Rental prices pushing from the other direction forces some dealers to decamp.   Even drug cartels must work within the confines of the real estate market.

And that is exactly what’s happened to South and East Kensington as real estate values have gone up.   Visible open-air drug markets in roughly half of Kensington have all but disappeared and gone indoors whereas the part of Kensington that has not seen any new home construction at all remains unchanged.

Fairness

New construction and rehabs create a virtuous cycle where residential investment re-animates dead commercial space in the neighborhood.  This dampens the social ills in the neighborhood by statistical function and on the ground where the neighborhood looks as changed as it does on paper.  But this is also the root of one of the biggest complaints about gentrification.   Those who are poor and living in a neighborhood are not re-made into the wealthy people who are the ones buying these new housing units and local government is the same as before–failing to provide economic opportunity for those same poor who now feel the crush of tax appraisals on their heads.

Government could certainly eliminate this latter problem by using a process of appraisal pegging; which is a different form of a Homestead Exemption that’s implemented in some states and in Pennsylvania for low income seniors.   By holding off on re-appraising a house until the next time the property is sold, existing lifetime resident-homeowners don’t feel the heat of gentrification pressure.   That also encourages a large part of the owner-population to stay rooted in Philadelphia.  We’re the only city that has a large low-income homeownership rate so this type of policy would be an easy win for the very people that City Hall says it wants to protect.   But neither anti-gentrification activists nor anyone else are calling for sticky assessments.  It seems strange too since the first person who would ever propose it in City Council would become an instant populist hero.

skyline

Kensington’s path out of the drug crisis is to transform itself into a desirable community that’s considered a nice place to live, which is where it’s headed.  It makes perfect sense that path should be supported as it is right now since it’s working.   The communities that are on the receiving end of the drug migration are now dealing with a very visible opioid crisis which isn’t just a problem for the Philly burbs, but all the rural counties of the state.  There’s nowhere to move to escape the opioid crisis since it’s everywhere.   It’s also a crisis that has leapt over the rural/urban split in Pennsylvania, making a political settlement on what resources to commit to the problem easier to manage.

The current drug wave centered around Kensington which is also home to a hot construction market is certainly a peculiar oddity.   If Kensington’s redevelopment transformation keeps up the drug market will also continue to lose real estate from which to transact business.  As long as people continue to hold the view that Kensington holds untapped potential and look upon the neighborhood positively then people will see value in living in new construction and rehabs built here.  That helps to lower the pressure of all the problems Kensington has; perhaps even to bring some of that malaise down from a constant string of unsolvable crisis to “maybe that’s fixable”.