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Mon
Jun 13
2011

The Boondoggle of New Affordable Housing in Point Breeze

Community Ventures, in association with the Redevelopment Authority of Philadelphia (RDA), the Office of Housing and Community Development (OHCD), and South Philly H.O.M.E.S., recently broke ground on a fairly significant project in Point Breeze. In two developments that will produce eleven housing units over lots covering 1626-36 Federal St., and 1218-28 S. 17th St., Community Ventures will turn two currently vacant, long-blighted lots, into some of the most attractive housing in the neighborhood.

View of the 17th St. site, looking south toward Latona St.

Shmancy rendering of the 17th St. site, looking north toward Manton St.

Not bad, eh?

The prices on these homes will range between $125K and $250K, with an average sales price of about $173K. Eight of the units will target buyers earning $50K or less per year, while three will target buyers earning up to $75K. We here at Naked Philly support affordable housing, and think this project is a wonderful display that affordable housing doesn’t have to look boring, ugly, or cookie-cutter. On its face, this project is a tremendous step forward for the Point Breeze neighborhood, and affordable housing in general in Philadelphia.

BUT… we have a couple of questions/complaints/red flags that we have to bring up here, or we wouldn’t be doing our jobs.

At the groundbreaking, Anna Verna said, “I have a special love for Point Breeze; I was born and raised in this community.” If only, Mrs. Verna, you were somehow in a position of power and influence these past few decades as Point Breeze has sunk into poverty and blight. If only you could have somehow shown your love by investing time, energy, and public dollars into making Point Breeze a desirable place to live. If only… wait- Verna’s the City Council President? She’s been on City Council since the mid-seventies? Well, then. If Anna Verna ever tells you she has a special love for you, do yourself a favor and turn around and start running. Fast.

Shortly after a photo-op, we heard Mayor Nutter say, ”Let the people who are actually going to do something get on the site now.” We’re not mind-readers (yet), so we don’t know what the Mayor was thinking, but if the Mayor is looking for “people who are actually going to do something,” we would politely ask him to TAKE A LOOK AROUND. New construction and renovation is everywhere in Point Breeze, particularly on the northern and eastern edges. Want more “do something” people operating in PB, Mr. Mayor? Howzabout you make a stronger effort to sell the hundreds of lots owned by the City in Point Breeze? Or perhaps you could persuade some churches in the neighborhood to sell off their vacant land instead of sitting on it without paying taxes? Plenty of developers really want to contribute to the development of the countless vacant, blighted lots in Point Breeze if they could only get their hands on those lots. We turn it back to you, Mr. Mayor. Please do something!

These homes are being funded with Federal Neighborhood Stabilization Program dollars, with the final tab coming to nearly $3.8M. While about $1.9M of that number is expected to be repaid through the sale of the homes, these houses are still costing taxpayers nearly $2M, with construction costs at approximately $345K per house! We understand that with public money comes a absurdly high building standards, but $345K per house?!? Looking at the cost estimates, we have some questions about how this public money is being used. For example, the cost estimates cite a Site Improvements expense of $364K. Hm, sounds kind of high. By our calculations, that number should be more like, say, $0. How about $146K for Architecture? Or $70K for Engineering? We’re not builders, but these numbers don’t seem to make intuitive sense, and that’s without considering the built-in line item of $201K for Builder Profit & Overhead.

Our hope is that these beautiful buildings going up right next to Baynard’s Bar will hasten its demise, as it is one of the biggest nuisance bars in the neighborhood. We’re confident that the overwhelming majority of neighbors would welcome that addition by subtraction.

Make no mistake, we’re pleased as punch to see these lots developed. What we can’t stand is for our tax dollars to be wasted and our City’s leaders not doing enough to ensure that greater development occurs in a neighborhood that desperately needs it. Think we have a point? Make yourself heard and email Council President Verna or Mayor Nutter. We’re sure they will be thrilled to hear from you.

15
COMMENTS
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Posted in Point Breeze, Uncategorized | 15 Comments
  • http://atmediadesign.com Tyler Westnedge

    Something is really fishy going on here. Affordable housing should be built affordably,

    Maybe they are, and some allocated funds are being put into pockets instead of the houses.   Not sure why they would be creating 350K houses and selling them for half the price. 

  • Phillycarpenter47

    The total cost to taxpayers is actually more because the RDA is basically donating these parcels, 11 large building lots, which could easily fetch $500,000 if sold to market rate developers. 

  • Luca

    Actual construction cost should not be more than $200K per house at the highest.  The fact that the politicians can stand there and make their speeches is laughable.  Or maybe the fact that no one questions them is more so.

  • Sickofitall

    There should be no such thing as affordable housing period. This is a large city and there are plenty of places for people who make up to 75k a year to live. If you can’t afford to live somewhere, you should move somewhere that you can afford. All new construction should be market rate.

  • Kater Resident

    There are a couple drivers that are most likely causing these homes to cost $345,000 price tag.

    1.  Union labor rates:  Publicly funded projects over 10 units must almost always be built with union labor; not by law but by pressure from the unions.
    2.  Publicly funded projects have high soft costs mandated by the funding source; market study, appraisals, impact studies, etc.  These cost are even higher because professional services are rarely bid.  Special interests have crafted affordable housing regulations to benefit them.
    3.  Lowest bidder isn’t always used because developer is mandated to hire a % of minority and women owned business.  When I developed affordable housing their was a female owned roofing company that got 90% of jobs. 

    As for $201,000 for profit and overhead, or $18,272 per unit isn’t that much profit.  90% of builders wouldn’t touch this project with a ten foot pole.  It probably took a non profit developer 18-24 months to put the project together. 

    The biggest winners in the affordable housing market are the professional service providers; Architects, appraisers, project managers, etc. 

    The losers are the tax payers!!!!

  • http://twitter.com/brianbrews Brian Marsh

    Good points.  Although I disagree with this one: “As for $201,000 for profit and overhead…isn’t that much profit.  90% of builders wouldn’t touch this project with a ten foot pole”.   ~7%+ fee with ~5% construction contingency is a project that almost any qualified builder would go after aggressively in this economy. 

  • PB and NB

    An average price of 173K is far from affordable for people earning 50 to 75K.  They will probably only ask for a 3% downpayment or roughly $5,000.  Do the math and they will have a $1000 – $1200 monthly mortgage.  That is a manageable mortgage, but not for a family making $50k.   Low Income families would be better off buying a rehab or fixer upper than getting sucked into a mortgage they can’t afford.  I just bought a rehab in Point Breeze/Newbold last year and my mortgage is $600 a month.

  • http://www.philadelphiaheights.wordpress.com phl

    Well at least they don’t cut corners at every turn and exploit illegal aliens the way that private suburban developers do. The winners are the children who don’t have to grow up in a home with leaking rooves, mould in the walls, or toxic chemicals leaching into the air. The winners are also the construction workers who don’t have to go to bed hungry after a ten hour workday. The winners are also the neighbors who don’t have to live next to an abandoned building because it was built so bad that no one could live there.

  • http://nakedphilly.com/point-breeze/spinc-stonewalls-developer-and-the-community-loses-out/ SPINC Stonewalls Developer and the Community Loses Out | NakedPhilly

    [...] affordable housing and improving the quality of life for residents” in Point Breeze. As we reported last month, SPINC is currently partnering with Community Ventures Inc. to develop 11 units of affordable [...]

  • http://nakedphilly.com/graduate-hospital/itty-bitty-building-being-built-on-itty-bitty-block/ Itty Bitty Building Being Built on Itty Bitty Block | NakedPhilly

    [...] Affordable housing currently being built in Point Breeze at an average cost of $345K per house! [...]

  • Newcomer

    Personally I think the city is in contract with Asian business owners.  Nearly all of the houses around there are inhabited by hardworking Asians who sell amongst eachother.  They appear to only live there for 2 to 3 years and than they switch families.  There is nothing wrong with affordable housing as long as people OWN them.

  • http://nakedphilly.com/point-breeze/update-affordable-houses-in-point-breeze-look-as-nice-as-expected/ Update: Affordable Houses in Point Breeze Look Nice, as Expected | NakedPhilly

    [...] in June, we wrote about an eleven-unit affordable housing project from Community Ventures in cooperation with South Philadel…. In case you don’t feel like (re)reading 800 words from six months ago, the key takeaways [...]

  • http://nakedphilly.com/point-breeze/three-foundations-next-to-three-homes-in-point-breeze/ Three Foundations Next to Three Homes in Point Breeze | NakedPhilly

    [...] are government subsidized, affordable housing projects. For a case study on one such project, click here. On the other hand, there are about a dozen privately developed, market rate projects are currently [...]

  • http://nakedphilly.com/point-breeze/point-breeze-land-grab-lies-damned-lies-and-the-big-unanswered-question/ Point Breeze Land Grab: Lies, Damned Lies, And The Big Unanswered Question | NakedPhilly

    [...] how many affordable housing units two-million dollars gets you? By our calculations, looking at the Community Ventures project at 17th & Federal, the answer is six. Maybe seven. So we’re looking at guaranteed funding on less than twenty [...]

  • http://nakedphilly.com/point-breeze/two-homes-under-construction-on-17th-street-in-point-breeze/ Two Homes Under Construction on 17th Street in Point Breeze | NakedPhilly

    [...] between Federal and Wharton. This block has seen quite a bit of construction in the past year, with affordable housing units going up on 17th Street near Manton, on the end of the 1600 block of Federal, and the end of the [...]

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