One Water Street, the first project built under
Philadelphia's Delaware waterfront master plan, isn't quite finished, but the luxury
apartment house already towers over Columbus Boulevard. At 16 stories, it
promises residents spectacular views of the river, from the Ben Franklin Bridge
to the sailboats bobbing in the marina next to Morgan's Pier. One-bedroom
apartments are listing for an impressive $1,875 a month.
One Water owes its statuesque proportions and fabulous panorama to a
new provision in Philadelphia's zoning code that was intended to boost the
supply of affordable housing in fast-gentrifying neighborhoods. In exchange for making 25 units available at subsidized
rents, the developer, PMC Property Group, was allowed to add 48 feet
- roughly five stories - to the height of the building.
But as One Water prepares to welcome its first tenants,
it seems unlikely any low-income renters will ever get to enjoy the stunning
river views. The developer wants out of the deal.
The problem, of course, is that One Water Street can't
exactly return the five extra floors it's already built.
PMC's executive vice president, Jonathan Stavin, declined
to discuss the company's decision to renege on its affordable-housing
obligation, but two city officials confirmed the builder was in talks to
substitute another public amenity in place of the subsidized units. Among the
proposals: public art.
Talk about a bait and switch.
This wasn't how things were supposed to work when
Philadelphia introduced an affordable-housing bonus into the zoning code in
2012. At the time, the provision, officially known as inclusionary zoning, was
hailed by city officials as a progressive, market-based strategy to help
booming neighborhoods retain a degree of income diversity. One Water Street was
the first to sign up for the bonus.
The approach may be new to Philadelphia, but the nation's
reviving cities have been turning to inclusionary zoning
as a way to cushion the impact of skyrocketing rents. Cities like San Francisco
and Boston, with stratospheric housing costs, have even moved to make
inclusionary zoning mandatory for all large apartment projects. New York just approved set-asides of 20 percent to 30 percent.
At a time when the federal government has virtually cut funding to city housing
authorities, inclusionary zoning is one of the few means left to pay for
affordable housing.
Philadelphia's rents aren't nearly as high as they are in
those cities, so officials here decided to make the inclusionary housing
voluntary, and to offer compensation. Developers who offer subsidized units can
qualify for a substantial height bonus.
On paper, the One Water Street bonus looked like a
perfect test case. PMC agreed to rent 25 apartments at below-market rates. The
city, in turn, let PMC construct a taller building - with space for 30 more
full-priced units. That way, the developer came out ahead in the bargain, with
a total of 250 units.
Though 25 subsidized units aren't going to solve
Philadelphia's housing problems, they did promise to inject a bit of economic diversity
into a hot real estate market. Instead of paying $1,875 a month for a
one-bedroom unit at One Water, a qualified renter - say, a single person
earning less than $32,000 a year - could lease the apartment for $940.
But that didn't count on having the developer build and
balk.
So what happens now?
PMC is scrambling to come up with another bonus option to
justify One Water's extra 48 feet. According to Karen Guss, a spokeswoman for
the Department of Licenses and Inspections, PMC will have to start the zoning
process from scratch. That means the changes will have to be vetted by the
Planning Commission and Civic Design Review.
"I'm a bit concerned about doing the swap after the
fact, after the building is essentially built," said Gary Jastrzab, head
of the city planning department.
That's a nice way of saying zoning One Water retroactively won't be easy. In
addition to the 48-foot bonus for affordable housing, PMC received a 24-foot
height bonus for providing public open space, bringing One Water's total height
to 190 feet.
Of course, if you visit the site, you might be
hard-pressed to identify the "public open space" that PMC created to
satisfy the bonus requirement. Is it the planted berm in front of the building?
The generous driveway? Or maybe the row of concrete benches along Columbus
Boulevard? Whichever it is, it's a pretty stingy contribution to the public
realm.
Jastrzab suggested one way PMC could make up for the 25
affordable units is by retrofitting One Water to include ground-floor retail.
The irony is that PMC was excused the first time around from that obligation, a
key requirement of the Delaware waterfront master plan, because the city felt
the market was still too weak to support retail uses on the river.
Whatever happens, the city needs to keep a sharp eye on
PMC's next project, a massive overbuild for the former Marketplace Design Center
on the Schuylkill. Through the use of various zoning bonuses, PMC claims it can
legally increase the project's size by 20 percent, to 860,000 square feet.
Let's hope someone checks the math.
Gaming the zoning system, unfortunately, is a
time-honored practice in Philadelphia. Dockside, an apartment building a few
blocks south of Penn's Landing, also attempted to wriggle out of its obligations under
the Percent for Art program. It got away with building a reduced-scale version
of the art installation, and the piece has never looked quite right.
The excuse we always hear is that Philadelphia's
construction costs far exceed the rents developers can charge. But with the median rent now topping $1,250 for a one-bedroom apartment -
up 3.1 percent over last year - how much longer can the city's developers cry
that they are the ones too poor to follow the rules?
Source: Philly.com
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