COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE COUNCIL COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, May 16, 2000 10:25 a.m. - - - BILL 000150 - Held at request of sponsor BILL 000216 - Approving the redevelopment proposal of the Redevelopment Authority of the City of Philadelphia for the redevelopment of a portion of the Germantown Redevelopment Area Wister III Urban Renewal Area. . . PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILMAN JAMES F. KENNEY, Vice Chair COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DICICCO COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN MICHAEL A. NUTTER - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 5/16/00 - RULES - BILL 000216 I N D E X * Herbert Wetzel, Executive Director. . . . . 5 Philadelphia Redevelopment Authority * Stephen Kazanjian, Executive Director . . . Greater Germantown Housing Development Corp. 7 (*Also submitted attached written testimony.) Other Attached Written Testimony By: - State Senator Allyson Schwartz - State Representative John Myers - Geneva Lankford-Blanks, President Wister Neighborhood Council - Patrician M. LeGrand, Director Lower Germantown Community Rebuilding Project/RCI 3 /00 - RULES - BILL 2 P R O C E E D I N G S
Good morning. This is the public hearing of the Committee on Rules. I would ask the clerk to please read the title of Bill No. 150.
An ordinance amending Chapter 9-601 of the Philadelphia Code, entitled "Garages, Parking Lots, Sales Lots and Sales Showrooms," be adding a definition for "automated parking garages" and restricting the operation and maintenance of said automated parking garage to within 300 feet of any residentially zoned property, all under certain terms and conditions.
This bill 16 will be held until the call of the Chair, at the request of the sponsor. Would you read the title of Bill No. 19 216, please.
An ordinance approving the redevelopment proposal of the Redevelopment Authority of the City of Philadelphia for the redevelopment of a portion of the Germantown Redevelopment Area Wister III Urban Renewal Area, being the area generally bounded by Wakefield 4 /00 - RULES - BILL 2 Street and Baynton Street, between Wister Street and Shedaker Street on the north, Shedaker Street and Logan Street on the east, Green Street on the south, and Queen Lane and Bringhurst Street, between Germantown Avenue and Wakefield Street on the west; approving the urban renewal plan and determining that such plan and redevelopment proposal conform to the general locality plan and made adequate provisions for individuals, business concerns, and families who are displaced; determining the necessity for change in and for zoning, streets, alleys, public ways, streets patterns, location and relocation of public utilities; determining that the urban renewal plan and redevelopment proposal prohibits discrimination because of race, color, creed, sex, sexual orientation, national origin, ancestry, or handicap; declaring that the condemnation is not imminent with respect to the Project, except as otherwise expressly provided for in the proposal; and declaring the redevelopment undertakings in the Project to be an important part of the City's program to remove and prevent the spread of urban blight. 5 /00 - RULES - BILL 2
Good morning. Kindly identify yourself for the record and proceed with your testimony.
Good morning. My name is Herbert Wetzel, and I'm the Executive Director of the Philadelphia Redevelopment Authority. Madam Chairperson and members of the Committee on Rules, I'm Herbert Wetzel, Executive Director of the Redevelopment Authority of the City of Philadelphia. I am here today to speak in support of Bill No. 216, which is the third amendment to the Germantown redevelopment proposal urban renewal plan. This bill would authorize the Redevelopment Authority to acquire a total of 13 properties, 7 vacant and vandalized structures, and 6 abandoned lots. The purpose is to eliminate blight in the area as part of the Greater Germantown Housing Development Corporation's second phase of Living in Neighborhood Kinship Project, or otherwise known as "Link II." The properties to be acquired will be developed 6 /00 - RULES - BILL 2 through a combination of new construction and rehabilitation into affordable housing for low- and moderate-income families. The Link II Project is a development undertaken by Greater Germantown Housing Development Corporation (GGHDC), which will build 7 new homes and substantially rehabilitate 6 properties for sale, again, to low- and moderate- income families. These will be first-time homeowners. The acquisition of the thirteen properties will require one demolition, and since all of the properties are vacant, this development will require no relocation. Madam Chairperson and members on the Committee on Rules, on behalf of the Redevelopment Authority, I respectfully urge your favorable consideration of Bill No. 216. I would also like to formally request a suspension of Council rules, which would allow the first reading of this bill 21 at your next session, on May 23, 2000.
Mr. Wetzel, I am sure that there have been community meetings regarding this matter?
Yes. And the Greater 7 /00 - RULES - BILL 2 Germantown Housing Development Corporation is here represented today, and I think they can speck to that matter as well as their work with the Wister Neighborhood Council, which is the local civic association that would cover this area.
All right. Are there questions from members of committee? (No questions.)
Mr. Wetzel, would you call the witnesses, please. (Witness comes forward.)
Good morning, sir. Kindly identify yourself for the record.
Good morning. My name is Stephen Kazanjian. I'm the Executive Director of Greater Germantown Housing Development Corporation. Madam Chair, I brought copies of my testimony as well as some attachments for members of the committee.
Thank you, Madam Chair. 8 /00 - RULES - BILL 2 I am here today to testify on behalf of GGHDC, Greater Germantown Housing Development Corporation, with regard to the proposed Wister III urban renewal taking. The properties included in the proposed urban renewal taking have long been vacant, blighting influences on the surrounding community. Our research has indicated that all the owners are nowhere to be found and do not care about the physical condition of the properties. In addition, the real-estate taxes on these properties have not been paid to the City for several years. For GGHDC and the residents who live in our target neighborhood, however, these properties are instrumental in furthering a comprehensive approach to the revitalization of the community. In the areas surrounding these properties, GGHDC has already invested over $10 million in federal, state, City, and private dollars to begin redeveloping the community. Since the late 1970s, GGHDC has developed a 20,000-square-foot shopping center, known as "Freedom Square," 47 units of elderly housing, 9 /00 - RULES - BILL 2 over 50 units of affordable family-style housing, and 30 units of home ownership housing, all within a 4-block radius of the proposed properties. Our strategy for the development of the properties included in the Wister III urban renewal taking is to renovate the vacant houses into affordable housing for new home ownership in the community. All of the renovations will be according to RDA specifications, and the houses will be sold to low- to moderate-income individuals and families. The vacant lots will be developed with new construction home ownership twin housing, and a copy of the proposed design of the new houses is attached to the testimony included in the packet, as you can see. These new houses will also be sold to low- to moderate-income households. Our goal is to encourage the existing residents to become invested in the community by purchasing homes in the area as well as to entice new homeowners to the neighborhood. By removing this blight and improving the community, GGHDC is confident that we will see an increase in property values and an increase in the amount of private investment in 10 /00 - RULES - BILL 2 the community. The benefits to the City will be found in increased real-estate tax revenue, as well as a stabilized resident base. In addition, the construction of the project will create jobs and increase wage and sales tax revenue to the City. In the immediate area surrounding the Wister III urban renewal taking, GGHDC has been funded by the Pew Charitable Trusts/Target Neighborhood Initiative to implement a comprehensive revitalization strategy. GGHDC is currently developing 10 new construction twin houses and 12 rehabilitated homes for first-time home buyers. These houses are being funded by the Office of Housing through various programs, including subsidy funds raised in conjunction with YouthBuild Philadelphia Charter School. GGHDC has also secured $4 million to convert a vacant factory building in this area into 40 units of new rental housing for elderly individuals. In addition, GGHDC is working to strengthen the commercial corridor along Germantown Avenue with new business development, renovation of new storefronts, new apartments, and facade 11 /00 - RULES - BILL 2 improvements. Attached to this testimony is also a color-coded map that indicates all of the development activity that GGHDC is proposing in the immediate area. This map shows the level of activity and the importance of the Wister III urban renewal taken as a next step to creating a critical mass of stability. All of these developments are part of GGHDC's comprehensive strategy to stabilize the community in Lower Germantown. GGHDC is well-positioned to take on the work involved in redevelopment of these sites.
Since our inception in 1977, GGHDC has successfully developed over 400 units of rental housing and over 130 units of home ownership housing in the entire Germantown community. We now have over 60 units of home ownership housing and 48 units of rental housing that are under development in Germantown. In addition, we have completed the development of over 60,000 square feet of commercial space, and we are under development with an additional 40,000 square feet of commercial space. 12 /00 - RULES - BILL 2 GGHDC has, over the years, developed the capacity to take on large-scale development as well as multiple small projects and initiatives. We are one of the City's largest producers of affordable home ownership housing, and recently we were named in the Philadelphia Inquirer surrounding the success of our home ownership program. Our houses range in price from as low as $30,000 to as high as $108,000, creating a diverse portfolio of products available to people of various income brackets. GGHDC has the support of the Wister Neighborhood Council, a very active community voice in the neighborhood in favor of the proposed Wister III urban renewal taking. The Wister Neighborhood Council has worked with GGHDC to identify many of the vacant properties that are on the list. In addition, State Representative Myers and State Senator Allyson Schwartz have provided GGHDC with their support, as have the members of the Germantown Community Collaborative Board, a government structure that is working with GGHDC to stimulate community revitalization in the 13 /00 - RULES - BILL 2 Germantown neighborhood. We have also worked closely with the office of Councilwoman Miller to solicit her involvement with this project, and we have valued her guidance throughout this process. There are letters of support in the package from State Senator Allyson Schwartz, State Representative John Myers, the Wister Neighborhood Council, and the Germantown Community Collaborative Board. As practitioner of community development for the past five years, I am thrilled to see the new administration's emphasis on blight elimination and revitalization of our urban neighborhoods. Working in Germantown, I have realized how important and strategic this neighborhood is to the overall health and vitality of the northwest section of the City. Located at the vortex of northwest Philadelphia, Germantown is surrounded by various stable, desirable neighborhoods such as East Falls, Roxborough, Manayunk, Mt. Airy, and Chestnut Hill. If we allow blight and deterioration to continue in Germantown, one can only ask the question, how long before that blight seeps into 14 /00 - RULES - BILL 2 other stable neighborhoods? If we are able to stabilize Germantown, however, we are able to solidify an entire base of the City, which can effectively compete with the outlying suburbs for residences and businesses. Given the historic character of the Germantown neighborhood, there is a treasured resource here that is a natural draw for residents and visitors. We need to get properties like the ones included in the Wister III urban renewal taking out of the hands of absentee owners and back into the productive hands of taxpaying home owners. I hope that the members of the Committee on Rules and City Council will approve the Wister III urban renewal taking and allow GGHDC to take ownership of these properties so that they can be redeveloped and put back into productive use. Thank you for your time and consideration.
Thank you for your testimony. Despite the fact that Councilwoman Miller was unable to be in attendance this 15 /00 - RULES - BILL 2 morning, she did say that she was very supportive of this particular ordinance. Are there any questions from members of the committee? The Chair recognizes Councilman Clarke.
Thank you, Madam Chair. Good morning. I had a question about the wide scale of housing costs that you're selling, 30,000 to 108,000. What's the median income for the upper end of the scale?
We have different programs that target different populations. Most of our houses are sold to households whose incomes are below 80 percent of median income, but we do have one program that is being targeted to households whose income is below 120 percent of median income. And for the first time in GGHDC's history, we sold a home without subsidy: that was a house for $108,000, and that was sold to somebody whose income was around $60,000. So we are diversifying the income base of the population, as well.
What type of 16 /00 - RULES - BILL 2 financing did you use for the upper income?
Oh, okay. Mr. Wetzel, do you know of any programs that will allow above the traditional 80 percent of median income home purchasers?
The only program was one funded by the previous administration with Economic Stimulus Funds that provided a $25,000 subsidy, similar to the program that the Redevelopment Authority runs, called the "HRP Program." But the 25,000 per unit did not have the same income that capped 80 percent of median. But, again, that was essentially local funding that allowed for the income criteria to be established by the City. But right now, all the federal programs are capped at 80 percent of median.
In the home ownership zone, were we able to get a waiver? 17 /00 - RULES - BILL 2
Yes. There's a percentage of the households -- I don't know the exact percent, but a percent of the units that are sold in the home ownership zone can be sold to persons, I believe, up to 120 percent of median. And that was only because it was a home ownership zone and that the City asked for the waiver from the federal government.
In my understanding, that was a relatively successful program as it relates to attracting 120 percent --
Yeah. I think one of the problems is, some of our home ownership programs right now attract a number of individuals who are above 80 percent of median, and which we have to turn them down. I mean, I think Ludlow is an example where a number of the applicants for the new-construction homes in Ludlow were over 80 percent of median income and were denied essentially the opportunity to purchase a house. And I just noticed that in -- the House 18 /00 - RULES - BILL 2 in Washington just passed legislation recently, and I don't know where it in the Senate, that allows for the CDBG in home dollars to go up to 115 percent of median income. However, it appears that it's restricted to uniformed employees of a municipality or school teachers. And it would be nice if they just simply lifted that cap to 115 percent of median for anyone who's willing to buy a home that's subsidized with these funds. And maybe we ought to take a look at how we might talk to our congressional delegation about amending that. So for the first time, the CDBG and home rates will change if this bill passes the Senate and is signed by the President, which allows up to 115, but it appears that it's for a categorical group of individuals rather than across the board. But the door is open for the first time; it's the first time any consideration has been given above 80 percent, and maybe it can be expanded.
I don't know. I mean, I 19 /00 - RULES - BILL 2 just saw it yesterday in a newsletter I got from a national organization that indicated that. And what's interesting is -- and I'll get a copy of that and share it with whomever on Council would like. It also indicates that in certain cases, that the municipality could, in high-cost areas -- and I don't know what they mean by "high-cost," either high cost of the house or high cost to produce the house, it's unclear -- that the local municipality could up to 150 percent or median. But, again, I'm not sure. It appears that it's categorically restricted to municipal employees who are either uniformed or school teachers, and I think it would be very interesting to broaden that. And if you would like, I'll get a copy faxed to you.
Yeah. I'm very interested in that, as I think other members of Council are. In any event, if we were able to do that, could we also increase the sales price, thus decreasing the level of the subsidy that will be required by the City?
No. The sales price is 20 /00 - RULES - BILL 2 more determined by the appraised value than the subsidy amount. I mean, in some cities, the subsidy is used to lower the price of the property in order for -- to make it affordable. In the case here, most of the time, the subsidy is used to make up the difference between what it costs to build it and what we can sell it for. But I think West Poplar is an example where the first phase started out at a $45,000 sale price, and by the third phase, they're now at $65,000, so that there is clear evidence that as you keep building, the value of every property in that neighborhood continues to go up.
And by the way, that's HR Bill 1776, and I would be glad to provide you and anyone else on Council a copy of the newsletter that I got about it.
I think we're all interested in that, so if you would send it to the members of Council, I'd appreciate that.
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madam Chair. Good morning. What is the median income now for Philadelphia under these programs?
I can't tell you what the median is, but 80 percent of median for a family of 4 is about 46,000.
And it varies, based on the number of people in the household?
So the average person that you're attracting in this particular program, or this particular project, would be a family of 4 making 40,000 or less?
In this particular 22 /00 - RULES - BILL 2 development, it looks as if there are nine properties that are being taken?
Well, yeah, but some of them are adjacent -- like you see and 23. 6
And are there any 13 other properties involved in the development in 14 addition to the taken properties? 15
Yes, there are. If you 16 look in your packet on the color-coded map, you'll 17 see that the Wister III urban renewal taking is in 18 green. However, there are properties that are in 19 red, some of which GGHDC already owns, especially 20 on the upper half of the map, some of which are 21 also owned by the City of Philadelphia, which we are going to combine with these properties to include in the proposed redevelopment.
What is the total number of properties. 23 /00 - RULES - BILL 2
In these properties, the proposal is to have them rehabilitated or new construction?
Well, there's -- it's both, rehabilitation and new construction.
Okay. The houses to be rehabilitated, what is the average cost of the rehabilitation; do you have any idea at this point?
It actually ranges. Unfortunately, it's hard to determine because some of the properties which aren't terribly deteriorated we'll rehabilitate with the City's HRP Program. And those properties typically costs us about 75 to $85,000 to rehabilitate.
To rehabilitate. How about the properties that are -- what condition is a property determined that it would be better to tear it down and build new than it would be to rehabilitate?
Typically, it's determined to tear it down if there's no historic 24 /00 - RULES - BILL 2 significance to it, if it's not attached to other properties, and if the development costs of it are more than $70,000 in excess of the value.
How many properties are being developed of construction?
Right now, there's about -- in the proposed urban renewal taking, there's 7 of them that are going to be new construction. However, we're combining that with some vacant lands that we already own, and so there will be about 12 new-construction houses.
And what's the average cost of the newly constructed homes?
And I would say it's probably 75 or $80,000 per unit for the rehabs, generally, or --
Probably a little bit more than that in some of these cases. In some of these cases, the rehabs will be about $100,000 per unit because of the extent of the deterioration. 25 /00 - RULES - BILL 2
I just want to ask this question generally, not directed specifically at this project, 'cause I have this question for most of the projects that come through here in this regard. And that is, the average, I guess, working family in Philadelphia's house isn't worth $120,000, and I'm just wondering how we justify the new construction of a $125,000 house if the average working Philadelphian couldn't afford it anyway.
Well, this is why we need subsidy funding to do most of the development work. However, one of the things that we're trying to do in Germantown is push the values of the houses up so that we are relying less on subsidy funding. And I gave you the example of the $108,000 house to Councilman Clarke; that house was originally appraised at $80,000 before we went to construction. We used a City program called the "HIP Program," which allowed us to sell it to a family who's up to 120 percent of median income. Someone came along and wanted to buy one of the houses and they didn't qualify, and they actually /00 - RULES - BILL 2 paid $108,000 for that house, and the house appraised post-construction at $108,000, so the bank was able to finance that.
Okay. Mr. Wetzel, are you aware of any programs in either the RDA or OHCD that is making some attempt to retain some of the people who are fleeing the City into neighborhoods like Washington Township, New Jersey, and Delaware County that are buying single-family tract houses for 120 to $140,000 that do not meet the median-income requirements and, therefore, are frozen out in many ways for these subsidies, find both tax relief and educational-expense relief in surrounding communities outside of Philadelphia. Is there any -- and I've asked this question of John Kromer and it doesn't seem to get an answer that's satisfactory, and if you don't know of any programs, then that's fine too. But there seems to be great effort to deal with low- and moderate-income housing development, which is admirable and, I think, is needed in the City, but there is very little, if any, efforts to retain the families who can afford to buy outright a 120, 27 /00 - RULES - BILL 2 140, $150,000 home that are looking for those properties outside the City of Philadelphia.
I think your question is the fundamental question that all of us are asking, and that is -- you know, there's two issues that cause people to leave: one is the housing the type and the other is that people leave to educate their children, and they believe that the suburban schools either in Pennsylvania or New Jersey are better, and they make that conscious decision. I think where we're sort of hamstrung is with the issue I was talking previously about, which is that the subsidy is limited to a targeted group of 80 percent of median or less. And yet, at the same time, HUD and the federal government have encouraged the concept of creating mixed- income communities. Well, if you take a neighborhood and you have to use subsidies to bring the housing back, you're not creating a mixed-income community, you're essentially creating a community of persons who are 80 percent of median or less. And I think that we need to find some 28 /00 - RULES - BILL 2 way to get legislative relief to that particular cap. Yes, a portion of that money, and maybe a significant portion, should still go for affordable housing for low and moderate income, but we can't even use one dime of it, under the current regulations, to help anyone who makes over 80 percent of median. And it's sort of sad. Some of the people that are being turned away, you know, are making a lot more, they're making 50,000 a year or $55,000 a year as a family of 4. We cannot help them, under the current regulations. And I'm going to share that newsletter on HR 1776 with you. I think we ought to find a way to allow that a portion of the funding to that comes up from the federal government to do just that.
Yeah, and I don't mean in any way to denigrate this project -- I think it's a terrific project. And I agree with you that Germantown needs to be stabilized in an effort to maintain the stability that exists around Germantown, and it's a great neighborhood. And we have a responsibility, I think, as a city and as a government to house as many people as 29 /00 - RULES - BILL 2 possible in a decent way. I guess part of my concern is the balance when we have young families who could -- you know, would not qualify for these programs that are looking to move up in housing stock and then wind up being pushed into communities outside of the City, even though they didn't want to be in the first place. So I guess your comments are germane to this in that we've got to find a way to house all of our people and maintain our taxpaying middle class.
And we have to an incentive system that offsets the issues of why people are leaving, and to the extent that they could buy a house in the City -- let's -- I don't know what they're paying -- 150 in South Jersey and get an equivalent house in the City for 100, and cost us 120 to build but we wrote it down to 100 as an incentive program for people to stay.
So they may make that decision to stay, in other words, and to save that $50,000 in terms of their housing cost.
Councilman Kenney, in the past administration, Mr. Wetzel referred to program that was funded, called the "HIP Program," where the City took $3 million of Economic Stimulus money turned it -- put it into housing, and that money was targeted to families whose incomes are below 120 percent of median income. And it's been a very successful program for various different neighborhoods, of which Germantown is one of them. And my suggestion would actually be to try and find some more Economic Stimulus money for programs similar to the HIP Program.
Is the point that the diversion of dollars into economic stimulus gets us around the HUD requirements and federal housing requirements on income limitations?
But we can't ignore the fact that $69 million in block grant comes in, and 31 /00 - RULES - BILL 2 that is capped. That is a lot of resource. And, again, I think that we got to make sure that we're using it properly for low and moderate income, but it would be very nice to be able to use a portion of that in any development that we're doing to create mixed-income communities.
Thank you. Are there any other questions from members of the committee? (No further questions.)
Thank you, sir. Do we have no one else to testify on this bill? (No response.)
Seeing none, this will conclude the public hearing. - - -
We will now go into our public meeting, and the Chair recognizes Councilman Kenney.
Madam Chair, I move that Bill No. 216 be reported out of this 32 5/16/00 - RULES COMMITTEE - PUBLIC MEETING committee with a favorable recommendation and a request be made for a rules suspension to allow for first reading at our next Council session. (Duly seconded.)
It has been moved and seconded that Bill No. 216 be reported out of committee with a favorable recommendation and also a recommendation that rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion is carried. This concludes the public meeting of the Committee on Rules. Thank you all very much. (Adjourned at 10:49 a.m.) - - - 33 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, May 2000, were 8 reported fully and accurately by me, and that this 9 is a correct transcript of same. 10 11 12 13 RE: COUNCIL COMMITTEE ON RULES 14 BILL NO. 000216 15 16 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter