One Water Street pays $3.75 million to housing fund instead of opening affordable units

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(John Suvannavejh for PlanPhilly)

(John Suvannavejh for PlanPhilly)

Philadelphia’s Housing Trust Fund is getting an influx of $3.75 million, thanks to a deal struck between a developer and Mayor Kenney’s administration over the weekend.

Earlier this month, PMC Property Group tried to go back on a commitment it made to add 25 affordable units to the building in exchange for a significant “zoning bonus” for its One Water Street project.  With the bonus, the luxury 16-story apartment building on the Delaware River waterfront was allowed to be five stories taller.  

Then, after those five stories had already been built, the Philadelphia Inquirer reported the company was talking to city officials about earning that zoning bonus another way by swapping the affordable housing for other amenities, such as public art and retail shops on the ground floor. 

Housing advocates cried foul and the city’s Department of Licenses and Inspection withheld One Water Street’s certificate of occupancy until the matter was resolved. 

On Saturday morning, Mayor Jim Kenney’s office announced PMC had accepted his request to pay $3.75 million into Philadelphia’s housing trust fund. The payment satisfies PMC’s affordable housing obligation and allows tenants at One Water Street to start moving in. 

The Philadelphia Association of Community Development Corporations (PACDC), which has been pushing city officials to double the annual revenue to the fund, praised the decision and the Kenney administration for holding the developer accountable.

But is the deal delaying new affordable units? 

The PACDC’s policy director, Beth McConnell contends it’s actually a better outcome for low-income Philadelphians in the long-run. If PMC had set aside those 25 affordable units as it originally committed to doing, it would have offered a single person making around $45,000 a year the chance to live in a luxury waterfront apartment for $1,000 a month, McConnell said. 

“So that would have given moderate income people an opportunity to live in a really nice apartment building,” she said. By contrast, “the payment to the housing trust fund allows us more flexibility to serve people who are in deeper poverty.”

The housing trust fund takes in about $11 million per year and goes toward home repair and preservation programs, as well as gap financing for new affordable housing projects. Waiting lists for those programs stretch as long as five years, while others are closed.

“Affordable housing developers have projects ready to go and they’re searching for funding desperately to make them pencil out and make them work,” McConnell said. “It will take a while for them to be built, but that’s what it takes to get new units produced.”

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