Philly Housing Authority to rehab and rent neglected properties tied to Germantown Settlement

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In the coming months, the Philadelphia Housing Authority will start renovating a package of blighted properties once part of Germantown Settlement’s vast real estate portfolio.

City Council on Thursday passed a resolution authorizing the transfer of 28 properties from the Philadelphia Land Bank to PHA. The move comes more than four years after the city took the extraordinary step of seizing the buildings from a group of companies controlled by Emanuel Freeman, who led Settlement for more than two decades before the politically connected nonprofit became defunct in 2010.

“Germantown, because it is increasingly becoming gentrified, because we are not seeing the level of affordability that once existed there, this is an opportunity for us to do exactly what our mission calls us to do, which is to provide affordable rental opportunities for families who are in desperate need in the city,” said PHA president Kelvin Jeremiah.

The neglected properties — a mix of townhomes, rowhouses and apartment buildings — are largely vacant. There are a total of 116 units. Only 17 of those are occupied, the housing authority said.

Jeremiah said it will take about 18 months to renovate the properties. Before work can start, PHA must receive regulatory approval and complete an environmental review, steps required by the U.S. Department of Housing and Urban Development.

The housing authority plans to manage the properties as rentals, at least to start.

“I am thrilled that they are now slated for affordable housing. PHA has experience developing quality affordable housing in Germantown and across the city,” said Councilmember Cindy Bass, who introduced the resolution.

Some neighbors are frustrated by the deal with PHA.

Longtime activist Yvonne Haskins said some of the properties are better suited for first-time homebuyers. She had hoped Habitat for Humanity or another organization would get the opportunity to do that work.

Haskins is also outraged the city gave the green light to PHA, an agency “with a reputation of being one of the worst landlords” in Philadelphia.

“It is the height of disrespect to the community that this was done rapidly behind closed doors. We had no notice it was even being contemplated. And this is on top of the disrespect given to the community after we uncovered this fraud,” said Haskins.

A spokesperson with the Philadelphia Redevelopment Authority did not immediately respond to a request for comment.

The PRA repossessed 45 properties in January 2020 after fighting Freeman in bankruptcy court for two years — an unprecedented showdown rooted in $3.55 million in federal loans awarded to Settlement to develop low-income housing in Germantown.

The legal battle unfolded after neighbors derailed a deal with the city that would have saved Freeman nearly $6 million in interest and penalties. Under the proposal, Freeman would retain control of the properties if he agreed to fix them up and pay back the principal on the loans.

The offer disappeared after the deplorable condition of the properties came to light. Haskins and two neighbors spent weeks photographing and documenting Freeman’s negligence. Tenants were living with unstable heat and water. Common areas were strewn with trash and debris.

Between 2010, when Settlement declared bankruptcy, and 2018, Freeman was collecting rent.

“They were absolute crooks,” said Haskins.

Neighbors also handed the PRA copies of mortgage documents that showed Freeman did not legally own the properties.

After the city seized the properties — and walked away from the $9 million Freeman owed  — the housing authority was brought in to temporarily manage some of the properties. PRA later launched a community engagement process before soliciting bids from potential developers. The authority didn’t select any of the applicants.

As Germantown experiences a wave of private residential development, Jeremiah is asking the community to give PHA a chance to show they can restore these affordable units after all these years. And the authority may acquire the remaining properties the city seized, according to Bass’ office.

“If they look critically at the work that we have done, we have brought back in some real ways communities where we are. And have revitalized far beyond our footprint a lot of housing across the city — high-quality housing where anyone regardless of their income would choose to live,” said Jeremiah.