Philadelphia’s housing market today is completely different from what it used to be decades ago. Today, neighborhoods that were considered undesirable 50 years ago by real estate investors see increased market values. Accordingly, developers try to take advantage of these rising prices and acquire property to build market rate housing complexes at a handsome profit. These developments normally do not keep with the architecture of the existing buildings and are above the average price of housing in the community: Think the boxy, colorful paneled row homes that are popping up all over Philadelphia. Often, new developments are inaccessible to low–and middle–income buyers and eventually result in raised property taxes that price out current residents. The potential housing development at 4601 Market Street is currently grappling with this narrative, with developers attempting to build market rate housing units. However, community members are fighting back, urging the developers to include affordable housing in the housing complex.
In 2019, Iron Stone Real Estate Partners won the bid for 4601 Market Street and the 100 year old stately Provident Mutual Insurance Company headquarters on the property for $10 million. Before Iron Stone purchased this property, the City of Philadelphia had poured about $52 million into renovating it for the new police headquarters. Iron Stone turned the property into a health and education campus. Currently, locations of Public Health Management Corporation, the Children’s Hospital of Philadelphia, and a KIPP charter school are on the property. The 13 acre property spans across multiple blocks, an unusually large piece of land considering its location within city limits.
Last summer, Iron Stone revealed its plans to build 1240 market rate housing units on the property. Their proposal has sparked backlash from the community, and 3rd District Councilmember Jamie Gauthier has been an active opponent for this development, arguing that at least 20% of the units should be earmarked for affordable housing units.
Jamie Gauthier, who represents portions of west and southwest Philadelphia on the Philadelphia City Council, has been outspoken about her desire for Iron Stone to include affordable housing in its plans for the 4061 Market Street property. “I don't disagree that this would be a good area for housing, given that we need more housing units. This is a transit rich area that's close to jobs and opportunity. However, given that taxpayers in the city have invested millions into this site, it is imperative that Iron Stone includes affordability at the site,” says Gauthier. She explains that the community surrounding the Iron Stone site is predominantly low–income and working class and has seen increasing real estate prices over the past decades from University and other institutional developers and the expansion of the life sciences industry in that area. “And so for all these reasons, is unconscionable that Iron Stone would take this site that belonged to taxpayers, that was invested in by taxpayers, and use it to further gentrify our community and to harm the people who lived here if they're going to build housing at this site,” she says.
John Kromer, professor of Urban Studies at Penn, echoes these sentiments. Given the surface parking lots and sprawling lawns on the property, “there would seem to be an opportunity to develop mixed income housing, in which affordable units would be side by side with every unit. There's certainly a history of that kind of mixed–use development. And I'm sure that some of the staff at Children's Hospital would appreciate the opportunity to have on site [housing],” he says.
Technically, Iron Stone has its zoning and is legally allowed to build the housing project. Iron Stone conveniently submitted their permits before the City began implementing the Mixed–Income Neighborhood Overlay, which is a law Councilmember Gauthier passed that requires at least 20% affordability in the district. In addition to community organizing, Councilmember Gauthier is currently exploring possible legal remedies. However, pursuing the possibility of legal recourse or any other binding community input is limited. Philadelphia is one of a few major U.S. cities that has only an advisory design review process. Developers are not required to adhere to recommendations.
In Philadelphia, when a development project is more than 100 residential units, more than 100,000 square feet, or if it is next to a residential zoning district and over 50,000 square feet it must be assessed by the Civic Design Review. During a CDR review, the developer has a meeting in the neighborhood of the proposed project, and community members and the CDR committee weigh in with suggestions. However, the committee’s recommendations are non–binding, and a City Planning Commission report found that developers usually ignore these recommendations. Further, only the design of the developments is able to be commented on.
Despite the advisory nature of the CDR, Iron Stone repeatedly attempted to get out of the meeting and deny the public this one area of input they get. According to Councilmember Gauthier, the original CDR meeting was supposed to be in early March. Iron Stone then canceled, but said they would sit down with the City to talk about affordability. After ignoring all attempts by the City to have the conversation Iron Stone promised, the next CDR meeting was scheduled for late March. However, Iron Stone did not attend in person: “They express this ridiculous claim that they couldn't come in person because they're scared for their safety in a neighborhood where they own a huge asset. And to expect to develop it is completely disrespectful. It really cheated the community out of the one of the only opportunities that we have, or that you know, community members have, to really speak up,” says Gauthier.
During the virtual CDR, fifteen community residents testified, along with Gauthier. “Iron Stone’s proposal is equally insulting and harmful to the community in this regard. Building clusters feel like fortresses of exclusivity. UFOs of development dropped down on the site, completely dissimilar from other structures around them, and intentionally walled off from rest of neighborhood,” Councilmember Gauthier testifies at the CDR meeting. She also mentions how Iron Stone’s plan only includes efficiencies or single bedrooms, when this is a family neighborhood. On top of unanimously voting to have Iron Stone take time to engage the community in a thoughtful manner and to come back to the committee after several months, the CDR committee bluntly called Iron Stone’s proposal “offensive.”
The fight for affordable housing at 4601 Market Street illuminates the role the city should play in ensuring equity in housing. Looking forward, Councilmember Gauthier believes that we have to rethink what the City does with public land to prevent another developer from behaving similarly to Iron Stone. Indeed, she believes that the City should scrutinize more who gets the land, what the land will be used for, and how much the land is sold for. If Councilmember Gauthier was in office at the time Iron Stone acquired 4601 Market Street, she would have been more clear about what the property could and couldn’t be used for without the explicit approval of the City and surrounding community. “I think we have to be much more careful about the public land that we have because it's one of the most powerful ways for us to influence what actually gets built in the community.”
However, affordable housing should not only be the concern of the public sector. “Everybody in this city who is benefiting from the city has a responsibility to ensure that there's equity in what happens, whether that's the public sector, Penn, Drexel, private developers; you name it,” says Gauthier. The tradeoff between profit and equity is important to the sustainability of neighborhoods that are being plagued by gentrification. Yes, these luxury housing units are more profitable than affordable ones, but these housing complexes exist within a larger community that developers cannot ignore.
In light of limited mechanisms for community input in Iron Stone’s development plans for luxury housing units, the future of 4601 Market Street may seem bleak. But as Kromer says, “The groundbreaking hasn’t happened yet.” It will take strong community organizing, an audacious city government, and a respectful developer to create housing that will benefit the entire West Philly neighborhood.