RDA stimulus program: One house at a time

David Feldman is a 52-year-old Harvard-trained architect with a long history of working in the affordable housing arena. Selina Kedziora is a 39-year-old mother of six-year-old twins who has recently gone back to school to become certified as a real estate broker. What they have in common is that they are among the 35 or so individuals and small businesses (including some nonprofits) that have signed up to participate in the Redevelopment Authority’s (RDA) Neighborhood Stabilization Program.

“With the economy the way it is these days, this program works for me right now,” says Kedziora. “I really enjoy being a part of what I feel is a team. I have a support network at the RDA that helps me in everything I do.”

The program (http://planphilly.com/rda-putting-66-million-federal-funds-work-neighborhoods), the first phase of which winds down in mid-September, uses federal stimulus money to match qualified small developers with foreclosed properties in stable neighborhoods outside of the usual reach of such programs.

Kedizora has worked on three houses, all in the Mayfair area of the Northeast, and is ready to settle on a fourth in October. Feldman has worked at a similar pace since winning qualified contractor status. With each new house, the process gets a little easier, they say — although, of course, no two situations are exactly the same.

“I now have a better feel for the ‘spread’ between what a house is purchased for in ‘as-is’ condition, and what a fully rehabilitated house will sell for in any one neighborhood,” Feldman observes. As the program enters maturity, he adds, realtors are beginning to recognize the marketability of these homes, too. “So these houses are actually selling very quickly, even in this market.”

Developers like Kedziora and Feldman receive a flat fee of $20,000 per house they’ve rehabbed, after the property is sold, and are responsible for assembling contractors and listing the homes. “It’s essential that you can float the construction as the project gets underway,” says Kedziora, “because as with any government agency, it can take awhile for you to start receiving checks for construction costs. I allow myself $15,000-$20,000 to start.”

Along the way, the RDA approves the proposed rehab budget, and checks in periodically to review the work’s progress. Developers must also meeting Equal Opportunity Employment requirements in hiring women and minority workers, and must pay attention to paperwork. “All of these requirements can be a little intense,” says Kedziora. “You really have to work for this money.”

According to Dana Hanchin, the program’s director, the RDA has considered more than 600 properties — which come to the agency via the National Community Stabilization Trust — and financed 64. As part of the arrangement, qualified developers receive instant notification of new foreclosed properties and can check them out on their own, even if the RDA decides not to finance them.

For the RDA, the program achieves a range of disparate goals. “We’re obligated to commit the $20 million in federal funds by Sept. 20, 2010 and to implement activities that address the mortgage crisis,” says Hanchin. “These developers are invaluable in helping us do that.

“But we’re also moving to stop deterioration on a block by block basis,” Hanchin continues, “and we’re providing job creation in a struggling economy, and outreach to a number of minority and women-owned businesses and subs.”

Kedziora, who is currently in the process of getting evaluated herself as a WBE contractor for the federal government, likes to concentrate on properties in the Northeast, she says, to keep projects near to each other. “For me, it’s an efficiency issue,” she says. So far, she’s spending about 10 weeks on each house.

As they gain experience, the developers have tried experimenting. For Kedziora that’s meant listing some homes for more than her typical $130,000 range. “I’ve become comfortable with, say, putting in granite countertops or double-sided refrigerators with ice and water dispensers, if I feel the neighborhood merits it,” she says.

Feldman agrees that the program’s higher income limits — buyers so far have had household incomes of between $34,000 and $72,000, says Hanchin — “allow for both higher sales prices, and more flexibility in the construction budget.” For him, that’s meant that he can focus on a particular interest of his: sustainable building practices.

In his most recent project, in Gray’s Ferry, for instance, Feldman upgraded from contractor finishes in some cases, using bamboo flooring, installing motion sensor lighting, and adding a skylight. (As required by the City for all such projects, kitchen appliances are EnergyStar-rated.) On the outside, the roof uses reflective surfacing, and even the numbers used to mark the house’s address are solar-powered.

And although Feldman says he always tries to incorporate his design hand when rehabbing housing, in this building he spent more time (and money) moving windows and closets, and reorienting rooms for a better flow and a more economical use of the 800-square-foot space. After the project was underway, he acquired the empty adjoining lot and turned it into an urban produce garden. He’s packaged the two as a pair, offering the super-sized parcel at $137,000.

As they think bigger about their work, these two developers, at least, are also considering the ways in which they can contribute to improving the urban fabric. “There are many built-up, urbanized communities in southeast, northeast and central Pennsylvania which could take advantage of their existing building stock to attract more development, and expand their markets,” Feldman says. “I’d enjoy helping to identify opportunities in those communities.”

Kedziora, who had, with her contractor husband, invested in and sold some 30 houses — about $3 million worth of construction projects — by the time she received qualification from the RDA, now looks upon “flipping” with distaste. “I hate that word,” she says. “Whatever you call it, you’re basically just speculating. Now, I’m more interested in getting paid to use the skills I’ve developed.

“The developers involved with this program aren’t just ‘flipping,'” she continues. “We’re creating value and helping to stabilize neighborhoods. I’m promoting home ownership — I believe in it very deeply.”

Contact JoAnn Greco at  www.joanngreco.com
Check out her new online magazine, The City Traveler, at 

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

Together we can reach 100% of WHYY’s fiscal year goal