City Council Advances Bill Blocking Redevelopment Of University City Affordable Housing Complex

A zoning bill that Philadelphia’s real estate industry warns could set a dangerous precedent for development in the city is on the precipice of passage.

Bill Number 210778, introduced by Philadelphia City Councilmember Jamie Gauthier on Sept. 30 and passed out of the council’s Rules Committee on Tuesday, would rezone an area encompassing the University City Townhomes affordable housing complex at 3900 Market St. as residential, codify its affordable status and ban demolition at the site for a year. The property and its residents now sit at the center of a conflict between the life sciences development wave and concerns about displacement and racial equity.

Gauthier proposed the bill in reaction to the news that the complex’s owner, an affiliate of the Altman Group, is looking to sell University City Townhomes at the close of its 40-year contract with the U.S. Department of Housing and Urban Development to provide subsidized housing. Residents of the 70 units have been notified that they must vacate the premises by July 2022 to make way for the next ownership’s plans, which are widely assumed to include life sciences given its location on the hottest corridor for the asset class in the region.

The 2.8-acre site is zoned for CMX-4, a designation that allows for some of the densest construction in the city. Nearly 2M SF of development would be allowed by-right, which combined with the parcel’s location, had some estimates pegging its value as high as $100M. The bill, which Gauthier introduced as the representative of the lot’s district, would create an overlay zoned RMX-3, allowing for a floor-to-area ratio of 750% and commercial usage on the ground floor only. 

The bill would also mandate that whichever is greater between 40% of the property’s residential units or 77 units overall must be affordable housing for residents making up to 20% of the area median income. It would set the minimum parking requirement as two spaces for every 10 units and impose a one-year demolition moratorium within the overlay.

Representatives from the Pennsylvania Apartment Association, the Building Industry Association, NAIOP and the Laborers District Council all gave public testimony at the Rules Committee hearing to denounce the bill. 

“Developers need just one thing from City Hall, and that is certainty,” BIA Treasurer and Riverwards Group principal Mo Rushdy said at the virtual hearing. “We can figure out what type of project to build and where and when to build it as long as we can control a sufficient number of variables to make projections work, but Bill Number 210778 would make it possible for council to rezone any parcel whenever it wants and halt demolition before a new project is announced.

"Suddenly, [development has] a whole lot more uncertainty than anywhere else in the country because this would not happen anywhere else.”

Altman Group founder Brett Altman said his company has been meeting individually with residents of the property to help arrange their next residence, including covering moving costs and providing assistance in preserving their housing choice vouchers. Altman also offered to seek buyers for the property that would include affordable housing in their plans in exchange for the bill being delayed.

“I, along with my partners, have received a number of offers in the past 30 days,” Altman said at the hearing. “These are not final offers. We are committed to working with these interested parties, Councilmember Gauthier and the Kenney administration to develop a plan for the future of this property that will include affordable housing at the current site.”

Central to the protests of Gauthier’s bill was the fact it amounts to spot zoning of a parcel without the consent of the parcel’s owner. Though spot zoning is technically illegal, small overlays are common practice by members of the council to change a property’s zoning, often at the behest of developers seeking to avoid having to apply for a variance with the Zoning Board of Adjustments. Such overlays are virtually always passed unanimously by the council under the tradition of councilmanic prerogative, making it unsurprising Bill 210778 passed out of committee without any votes against it.

Testifying in support of the bill were residents of University City Townhomes and of the former Black Bottom, the primarily Black residential neighborhood that was demolished in the 1960s and '70s to make way for the University City Science Center. University City Townhomes was developed, in part, to offset the displacement that made way for the complex that just now topped off its latest development, the speculative life sciences project One uCity Square, mere blocks away, Gauthier said at the hearing.

Both uCity Square and Schuylkill Yards, Brandywine Realty Trust’s megaproject in collaboration with Drexel University, are massive developments going up on the northern edge of University City, raising property values of the primarily Black neighborhoods north of Market Street and increasingly making its longtime residents feel unwelcome, University City Townhomes resident Aida Smith said at the hearing.

For its part, Drexel University has acknowledged the gentrification risks that come with its development ambitions, with one of their initiatives to ensure local communities benefit being the inclusion of middle schools at one of uCity Square’s finished buildings. Timothy Boyle, the founding president of one of those schools — the Science Leadership Academy Middle School — testified that 22 students at SLAMS were members of families served notices to vacate by next July.

“Most of the students who attend this school and live in the neighborhood are residents of [University City Townhomes],” Boyle said. “There are very few places in this city where so many affordable homes are next to so much economic opportunity, cultural opportunity and educational opportunity.”

The bill will have its first reading for the full city council on Thursday, and it can be brought to a vote as early as Nov. 4.