Philly reaches deal with property owner over the future of UC Townhomes

Philadelphia has agreed to build 70 units of affordable housing on a portion of the site containing the soon-to-be-shuttered University City Townhomes, the city announced Wednesday.

The forthcoming project is a piece of a settlement agreement stemming from a federal lawsuit  the complex’s owners filed against the city last year in response to legislation passed by City Council. The measure was introduced as part of a broader effort to maintain affordability in a swiftly gentrifying section of the city, as well specifically at the site of the townhomes. The owners argued the bill violated their constitutional right to sell the blocklong complex at 39th and Market streets, calling it an abuse of power.

“This is a major victory for the tenants and for affordable housing more broadly,” said City Councilmember Jamie Gauthier, who participated in the negotiations. “The normal way this goes is that the subsidy expires, the tenants are displaced, and then that’s it, end of story.”

The lawsuit followed nearly two years of private negotiations between IBID Associates and Gauthier, who introduced the legislation in September 2021. The discussions started after IBID decided not to renew its affordable housing contract with the U.S. Department of Housing and Urban Development after 40 years, slating the townhomes for demolition and sale.

Under the agreement, the owners will donate roughly a half-acre of the site to the city. The development will be permanently affordable, and the intention is to offer the units to households with very low income.

The rest of the nearly 3-acre site will be owned by IBID Associates and can be used for a separate development, according to the settlement. The valuable land sits amid a growing life science market, within walking distance from the University of Pennsylvania and Drexel University. The agreement also accounts for the possibility of the site being used for a market-rate residential project.

The settlement requires the owners to pay the city $3.5 million. That money will be used to create a “tenant fund” that will support the 70 households that were displaced to make way for the new development.

Under the agreement, each household will receive up to $50,000. Most of the complex’s tenants have used housing choice vouchers issued by the Philadelphia Housing Authority to rent elsewhere on the private market. Since announcing the complex’s closure in 2021, IBID has worked with HUD to push the move-out deadline back multiple times in order to give tenants more time to find a new home.

The overwhelming majority of tenants have moved or are preparing to move.

“We’re a city that is growing. The life sciences industry and other economic forces are putting pressure on the housing market. But you cannot have corporate interests come here and just throw people away or act like people don’t matter. People who have been living in communities for decades and decades and decades deserve consideration,” said Gauthier.

With backing from the government, IBID built the University City Townhomes with the explicit goal of providing affordable housing in a section of West Philadelphia some still refer to as the Black Bottom. This was after the city demolished hundreds of neighborhood homes in the late 1960s and early 1970s to make way for a science and technology campus — what today is known as the University City Science Center.

Like today, the area targeted for redevelopment housed a community of Black families.

Under HUD contracts, tenants only have to pay 30% of their adjusted household monthly income in rent. Through its housing choice voucher program (formerly known as Section 8), HUD made up the difference between those payments and the full contract rent.

In Philadelphia, 1,700 units are tied to affordability restrictions that could expire over the next few years, and 3,400 over the next decade.

“As our city continues to grow and attract new amenities, collaboration between residents, stakeholders, and property owners is necessary to ensure that all Philadelphians have access to affordable and quality housing. I am grateful that this settlement will facilitate equitable development through the preservation of affordable housing in West Philadelphia,” said Mayor Jim Kenney in a statement.

Kevin Feeley, spokesperson for IBID Associates, said, “we are pleased to reach an agreement that at last provides the chance to achieve what we have sought from the beginning: to successfully redevelop 3900 Market Street while also respecting the residents of University City Townhomes and accommodating the legitimate need for affordable housing at the site.”

Townhome residents were not part of the negotiations that led to Wednesday’s announcement, but they helped shine a spotlight on the impact of the complex’s closure by organizing a series of rallies and other demonstrations.

Last summer, housing activists set up a protest encampment on the grounds of the complex to bring further attention to the sale and displacement of tenants, a decision the owners called “unfortunate and ill-advised.” Law enforcement dismantled the camp about a month later following a court order.

Rasheda Alexander is one of the few residents remaining at University City Townhomes. She said the settlement agreement comes with too much red tape and leaves too many open questions about the new housing development planned for the site.

She’s concerned the units will not be deeply affordable or available to housing vouchers holders. She also worries the development won’t be able to accommodate households that need three or four bedrooms.

“People are looking at it like it’s a victory, but I think it’s safe to say that we are not satisfied. The funds and the parcel that was donated are not significant,” said Alexander, 35, who shares a two-bedroom apartment with her teenage daughter and has been one of the lead tenant organizers.

The settlement agreement is set to take effect after two pieces of legislation become law. The first would revert the site’s zoning back to CMX-4, a designation that often yields mixed-use developments. The other measure would exempt IBID’s property from zoning restrictions the owners filed suit over.

Gauthier said she plans to introduce both measures next week with the hopes of having the full Council pass them before summer recess in June. Kenney would have to sign them for them to become law.