Proposal in Point Breeze Shows the Challenges of Affordable Housing Today

Affordable housing is on everyone’s mind at the moment, with City Council currently debating a bill that will require developers to provide affordable units in certain medium and large sized projects. The thing is, affordable housing is a really difficult nut to crack, and as the fight continues over the aforementioned inclusionary zoning bill, it’s clear that different people and groups have different needs, wants, and desires in this arena. A Point Breeze community meeting earlier this week drove this point home in illuminating fashion.

Lot at 2002-04 Annin St.

A representative from Innova made a presentation to develop 2002-2004 Annin St., a property that’s been sitting vacant for as long as we can remember. If you live nearby, you already know that it wasn’t long ago that this was consistent with the rest of the block. But as we’ve detailed before, this block has experienced a nearly complete rebirth and now 2002-2004 Annin St. is one of the few vacant lots that remain.

Looking west on the 2000 block of Annin

You might think that it would make sense to build a couple of townhomes on this property, which would fit in pretty well with the rest of the block. Instead, Innova is proposing a double-wide triplex, and the units will be listed for sale as condos. The reason for this move isn’t out of a desire for a higher rate of return, but instead because the developer bought the property from the City, along with several others, in response to an RFP to build workforce housing. The goal of the RFP was to create as many units as possible that could be affordable for purchase for residents earning 80-120% AMI. While Innova could feasibly build homes here, the resulting additional construction cost combined with the reduced unit count would create an economically unfeasible outcome.

The project had refusals for use, since the parcel is zoned for a single family home, and also for open space and rear yard size. But the variances weren’t really the subject of discussion at the meeting. Instead, members of the community were interested in learning the expected sale price of the units. The moderator of the meeting tried to dismiss these questions, as they don’t pertain to zoning, until eventually a representative from Councilman Johnson’s office stood up to talk about affordability. He didn’t, however, state the sale price for these units, which we believe will be somewhere in the neighborhood of $250K per unit. On its face, that’s a fine price for a 3 bedroom, 1.5 bathroom condo units at 20th & Annin. But we heard several people in the crowd stating that truly affordable units would sell for a price around $150K.

And they have a point! A $250K property, even with a 5% down payment, would require about $25K up front, and would result in a monthly mortgage payment of roughly $1,300, at current interest rates. That’s almost $16K/year in housing costs, which doesn’t account for repairs and maintenance. For that to be 30% of someone’s annual income, they would need to earn roughly $70K/year. We admit, we don’t know the exact sale prices for these units, but assuming we’re in range, should the City be giving away land to subsidize construction of units at this price point?

Persistent dumping site on the NW corner

Innova also presented plans for two duplexes, a little to the north on 20th Street. As was the case with the triplex, several members of the community were not thrilled with the desired variance, because they weren’t convinced that the units were truly affordable.

Duplex proposed up the street
Another duplex proposed at 20th & Ellsworth

We have a feeling that the ZBA will approve the proposals whether or not they get support from the community, as they’re ostensibly being built with the goal of creating affordability in the neighborhood. That being said, the need for affordable housing persists in Point Breeze and in just about every other neighborhood in town. We don’t believe that the inclusionary zoning bill will get the job done either, unfortunately. Do you have any ideas about how to increase affordable housing options in Philadelphia?