Philadelphia CRE Executive Ken Weinstein Develops Developers
Philadelphia developer Ken Weinstein isn't looking to make a buck off the people who have sought his help in getting started in the commercial real estate business. Instead, he's hoping to instill community-oriented best practices in the next generation of developers that limits the ill effects of gentrification.
"[Developers should] share resources with other novice developers so they can 'grow the pie' rather than fighting over a piece of the pie," Weinstein said. "By doing so, they can help grow wealth locally and keep investment dollars inside the community."
Over the past three decades, Weinstein has gained a reputation for finding value in neighborhoods that had fallen on hard times, such as Mount Airy, Germantown, and suburban locations like Norristown and Upper Darby.
As his fame grew, so did the requests for mentorship from aspiring developers. Eventually, Weinstein decided he could be a more effective mentor by forming a nonprofit organization called Jumpstart Germantown five years ago. There are six other Jumpstarts in other Philadelphia neighborhoods.
Participants, whom Weinstein said are mostly people of color, are instructed on how to develop properties while minimizing any potential gentrification. For $100, which covers the cost of course materials, participants get weekly Monday night seminars covering the process of developing a property. Weinstein also coaches them on how to minimize the negative impact of their development on existing residents. Graduates are eligible for loans from Jumpstart to help them fund their projects.
"We are purposely not making any money on the program," Weinstein told Bisnow. "We are mission-oriented. We aren't just telling people how to get rich quickly or how to renovate a house."
Demand for the program is surging amid the coronavirus pandemic. Jumpstart Germantown trained about 130 students in January and February. Weinstein said the program expects to graduate 250 people in September and October as it catches up in its waitlist of applicants. Since the program's start, Jumpstart Germantown has trained about 850 people. Hundreds more have graduated from Jumpstarts in other Philadelphia neighborhoods.
According to Weinstein, developers should take a deliberate approach and create a mix of affordable and market-rate housing rather than trying to focus on luring only wealthy people to their properties.
He also argues that it's better to renovate "scatter site" housing instead of knocking down a large number of properties under the guise of "urban renewal." Developers should also look for "middle neighborhoods" where there is slow, steady growth rather than "hot" communities where property values are exploding. And they shouldn't just parachute into a neighborhood, build and exit.
"[A developer should be] a good neighbor and take the time to connect with others in the community you are investing in," Weinstein said.
Germantown was the site of a Revolutionary War battle and had many historic homes and industrial properties that have fallen into disrepair. Weinstein began purchasing commercial properties more than a decade ago near SEPTA's Wayne Avenue train station. The area is known as Wayne Junction. He expects to spend more than $20M to implement his Phase 1 and Phase 2, which include the renovation of historic buildings. Phase 3 would be new construction, requiring another investment of $20M.
"Wayne Junction in its heyday, starting in the late 1800s and running probably through the 1950s, was a major industrial hub," Weinstein said. "We have bought up mostly former factory buildings, and we are making them into restaurants, pubs, light manufacturing, apartments and offices."
Jumpstart graduates are also tackling the neighborhood's blighted housing, which complements Weinstein's developments. Two years ago, Germantown resident and Jumpstart alum Rhakeim Miller formed Ross Street with his neighbor Kwame Gray. The two met clearing up trash in their neighborhood and now are renovating and redeveloping in the neighborhood.
"Every block is not perfect, and there are some challenges," Miller said in an interview. "There's a lot of beautiful homes in Germantown, and there are a lot of homes that need work."
University of Pennsylvania professor Dominic Vitiello notes the ability of private developers like Weinstein to control gentrification is limited, especially in Philadelphia, where city officials have dragged their feet for decades in developing policies to provide affordable housing.
"The scale of poverty and need for affordable housing in Philadelphia is just massive compared to the resources, tools, and political commitment we have marshaled to address these problems," Vitiello wrote in an email. "Of course, this isn't all Philadelphia leaders' fault, as much more importantly, in recent decades, the federal government has cut funding for affordable housing. People demolished and replaced a fraction of many thousands of public housing units, and shifted affordable housing priorities and funding from very poor people to middle income increasingly starved cities of community development funding to work against these trends."