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Affordable-housing developers struggle to stay one step ahead of gentrification in Philadelphia | Inga Saffron

Two high-end developers create a sideline to provide islands of affordability in Philadelphia's fast-changing neighborhoods.

The former Frankford Carpet Mill on Huntington Street and Trenton Avenue in South Kensington will be converted into 39 affordable apartments.
The former Frankford Carpet Mill on Huntington Street and Trenton Avenue in South Kensington will be converted into 39 affordable apartments.Read moreISA

A mere four years ago, the Oxford Mills apartments felt like the edge of the gentrified world. The sprawling 19th-century dye works at Philadelphia's Front and Oxford Streets was bordered by empty lots, shuttered factories, and a sprinkling of auto mechanics. There was no Honeygrow, no Suraya, no Evil Genius Beer Co., no City Fitness, and definitely no suit-wearing brigades striding down Front Street.

That made the brick buildings perfect for subsidized housing in the view of Greg Hill and Gabe Canuso, two Philadelphia developers with a do-good streak. By cobbling together a variety of federal tax credits, they were able to turn a historic industrial relic into a mixed-used development and offer 90 loft apartments at a serious discount. Today, Oxford Mills is an island of affordability in a sea of $500,000 homes. The neighborhood now goes by the name "Olde Kensington."

Hill and Canuso immediately decided they wanted to repeat the model, so they went hunting for a similar industrial building farther up the Market-Frankford El corridor. They found the Frankford Carpet Mill in 2015 at Huntingdon Street and Trenton Avenue, a block south of Lehigh Avenue and Kensington's notorious heroin encampments.

The pair plan to start construction on their next batch of affordable apartments this fall, but this time the conditions are very different. Gentrification arrived before they could even get started.

From the upper windows of the old carpet factory, you can see the distinctive plywood framing of new rowhouse construction dotting the landscape. Five new houses across the street are selling for north of $400,000. A coffee-and-comics shop has planted its flag down the block. "If I hadn't bought this building three years ago, I could never afford to do this project," Hill told me.

Gentrification used to creep up on Philadelphia neighborhoods imperceptibly over the span of a decade or two. These days, it's moving at warp speed, especially through the river wards served by the El. It took just four years to spread two stops, from Berks to Huntingdon Station, and now the march of development is poised to make the leap across Lehigh Avenue into Kensington proper.

While those neighborhoods need affordable units more than ever, good development sites are getting harder to come by, says Felix Torres-Colon, who runs the nonprofit New Kensington Community Development Corp. His group opened the 51-unit Orinoka Civic House across from Somerset Station last year and plans a companion building on its remaining land.

After that? "We have about 10 rowhouse-size sites in Fishtown," where the group could build discounted, for-sale houses. They would probably end up selling for $250,000 to $325,000 — a relative bargain, but beyond the reach of many low-income families.

Anyway, it's affordable rentals that are in short supply. In 2000, 45 percent of the apartments in New Kensington's service area, which stretches from Girard Avenue to the Frankford Creek, rented for less than $500. Today, just 7 percent are in that price range, according to a market study by the development corporation.

Hill and Canuso are an unlikely duo to come to the rescue. Their resumé is dominated by blue-chip projects like the Ayer condos on Washington Square, The Bridge in Old City, and million-dollar-plus Mode7 houses in Logan Square. But after the 2007 recession, which their company barely survived, they vowed to devote more of their time to socially conscious projects, what the industry calls "impact development."

Hill and Canuso still do the high-end work, but mainly to pay the bills so they can concentrate on developing affordable housing and office space for nonprofits. "I wanted to do something meaningful with my skills," Hill said. It's a labor of love, he added, noting that if he simply sold the carpet factory to another developer, he would make more than he will turning it into affordable housing.

The old carpet factory is a perfect place to replicate the Oxford Mills project. The high-ceilinged, brick buildings also were erected in the late 19th century, during the "loom boom" when Kensington was the epicenter of American carpet manufacturing. Designed by William Steele & Sons, the engineer-architects responsible for many of Philadelphia's great loft buildings, the buildings have big open floor plans that make conversion to apartments easy. ISA is doing the architecture and has added a new stair tower to make access easier.

Hill and Canuso aren't just interested in building cut-price apartments. They also use their projects to create communities. With Oxford Mills, they built a social network around education. Teach for America rents the lion's share of the office space, and their recruits get priority on the apartments, which are priced 25 percent below market rate. Both buildings are designed around generously landscaped courtyards with outdoor seating and fire pits to encourage socializing.

The new project, which is being called Huntingdon Mills, will bring together people involved in health care and social services. Low-income social workers, therapists, and nurses will get first crack at the 39 subsidized apartments. Given the proximity to Kensington, Hill believes  many of his future tenants will be serving the local population.

The developers already have lined up an early learning center for the ground floor. But given all the development in the neighborhood, they're also making space for a cafe and gym.

When I asked Hill and Canuso how long they can stay one step ahead of gentrification, they sighed. They haven't found their next building yet. Maybe something in Port Richmond. They had better hurry.