Philly CRE Leaders Worry 'Affordable Housing' Is Losing Meaning Amid 'Civil Rights Issue Of Our Time'

Several for-sale affordable housing projects have gone up over the last three decades in Point Breeze.

OCF Realty President Ori Feibush, who lives in the rapidly gentrifying section of South Philadelphia, hasn't been happy with the demographic he has seen moving into those homes.

“Every single affordable housing for-sale development has gone to young, white professionals who just graduated from school,” Feibush said during Bisnow's Philadelphia Affordable Housing Summit held Wednesday at The Tower at Henry Avenue. “Their parents co-signed on the loan.”

There’s a lot of variation in how industry leaders define affordable housing.

That is worrying developers like Feibush. The tax dollars allocated for the Point Breeze projects should have been spent on Philadelphians who would be homeless without government assistance, he said.

“We need to prioritize the greatest population need with the limited resources that we have,” he said.

The Michaels Organization, which operates more than a dozen complexes for low-income renters across metro Philadelphia, is focused on people who make 60% or less of the area median income, Regional Vice President of Development Kristina Vagen said.

But projects for people making up to 120% of AMI can also be considered affordable housing by some definitions, according to John Mondlak, deputy director for development services at Philadelphia’s Department of Planning and Development.

Mondlak agreed that affordable housing developers should mainly be focused on housing for households making 60% or less of AMI. Yet up to 95% of households could be eligible for housing subsidies in some cases, said Anne Fadullon, a founding principal at Make Advisory Services. 

The affordable housing shortage in the city is a crisis, Philadelphia Housing Authority CEO Kelvin Jeremiah said during opening remarks at the event.

“I would argue it’s the civil rights issue of our time,” he said.

The city has struggled with its affordable housing goals. Mayor Cherelle Parker campaigned on building 30,000 units of affordable housing, but she has tempered that language, dropping the word “affordable” from her public comments since taking office.

“Mayor Cherelle L. Parker has always seen the goal of 30,000 housing units in a broad, comprehensive way, encompassing market rate and affordable housing, the restoration and rehabilitation of existing homes, and private and public housing development,” Mondlak told The Philadelphia Inquirer in a statement earlier this year.

Jeremiah said his agency can‘t fix the city's affordability problem alone. Its budget is spread thin across a roughly 4,000-unit portfolio. Half of the residences are more than 70 years old, and 30% are functionally obsolete, he said.

He called on private market leaders to finance PHA’s projects, utilize the agency’s voucher program when leasing properties and find other avenues to create units for low-income Philadelphians.

The number of apartments on the market in Philadelphia rose significantly after developers rushed projects out to meet the 2022 deadline for a city tax abatement initiative. The high supply and lower rents that came with it have been a boon for PHA’s housing voucher program, according to some panelists.

Landlords can now bring in market-rate rental income by renting new units to voucher recipients, Riverwards Group Managing Partner Mo Rushdy said. But he added that there’s still a stigma around these low-income renters.

Wednesday’s summit took place at NewCourtland’s Apartments at Henry Avenue in Northwest Philadelphia, which is being expanded. The community already has 85 affordable senior living units in place. NewCourtland is building out 175 more apartments on the property, most of which will be available at market rate.

That kind of housing is welcome, considering seniors who stay in the large homes where they raised their families are contributing to the affordable housing shortage, New Courtland CEO Joe Duffey said.

That is particularly true in Pennsylvania, which is aging rapidly. In 10 years, a third of the state’s population will be 65 or older, Inglis Housing Corp. CEO Dyann Roth said.

“Every senior that moves into this building is going to open up a house for a 30- or 40-year-old with a couple of young kids,” Duffey said of the Henry Avenue complex.