Clarke plans affordable housing in gentrifying areas

COUNCIL President Darrell Clarke's mysterious "bold vision" is starting to come into focus.

Joined by labor and development leaders and Council colleagues, Clarke unveiled a plan yesterday to build 1,500 affordable-housing units in gentrifying neighborhoods by redeveloping city-owned vacant land or tax-delinquent properties.

"We thought it was very important to move very aggressively in those neighborhoods because if we don't, there would be no opportunity to continue to have affordability," Clarke said. "It's just a simple reality."

Asked whether the plan is his "Bold Vision for Philadelphia" - the language used in Clarke's campaign material that has fueled rumors that he will run for mayor next year - Clarke said, "Yes, this is part of the bold vision."

John "Johnny Doc" Dougherty, leader of the politically powerful electricians union who has been supportive of a Clarke mayoral run, didn't need a prompt.

"We keep trying to talk about growing the pie instead of trying to cut the pie up. This is how you grow the pie," Dougherty said at a news conference. "That's why this is a bold vision."

Dougherty's electricians and the other building-trade unions could benefit from the proposal because city-managed construction always uses union workers, whereas private developers who otherwise would have acquired these properties may not.

Under Clarke's plan, the city would build 1,000 affordable rental units by issuing a $100 million bond and by using two financing tools of which Clarke says the city isn't taking advantage: a federal tax-credit program managed by the Pennsylvania Housing Finance Agency and operational subsidies from the Philadelphia Housing Authority.

The bond would be floated through a quasi-governmental agency, such as the Redevelopment Authority or the Philadelphia Authority for Industrial Development. Its debt service would be paid for out of the Housing Trust Fund, which is funded primarily through mortgage and deed recording fees. The fund's $12 million-per-year budget supports existing affordable-housing programs that presumably would have to be cut or funded through other sources if Clarke's plan becomes reality.

For the other 500 units, which are targeted for homeownership, the city would sell parcels to developers under the terms of a 10-year covenant. The properties would have to be sold to middle-income owners who make them their primary residences and couldn't be resold for more than a specified below-market amount during that period.

In characteristic Clarke fashion, the proposal was developed in near total secrecy. Even some Council members whose districts are in the proposal didn't know what was coming until yesterday morning.

Clarke said he did not consult with the Nutter administration in developing the plan. He let the mayor know that the announcement was coming last week.

Mayor Nutter's spokesman, Mark McDonald, said the administration looks forward to being briefed on the proposal and how it will mesh with PHA's ongoing effort to build or retain 6,000 affordable units during five years.

A spokeswoman for PHA, which manages 14,000 affordable-housing units, didn't respond to requests for comment. Clarke spokeswoman Jane Roh said the 1,500 units would be in addition to PHA's planned expansion.

The issue of affordable housing is close to home for Clarke, whose 5th Councilmanic District includes posh Center City squares, impoverished North Philly neighborhoods and areas in between.

Clarke uses the unwritten power of "councilmanic prerogative" to hold up potential developments on city-owned land more than any of his colleagues, saying that he does so primarily to slow the pace of gentrification, especially around Temple University, where student housing is pushing farther into low-income areas.

Clarke said the new Philadelphia Land Bank, which was passed into law in December in an effort to streamline the process of redeveloping city-owned vacant land, will play a "key role" in the initiative. The agency is being organized now.

Councilwoman Maria Quinones-Sanchez, who championed that legislation, said she supports Clarke's plan.

"This was a good idea, to put out a challenge, to put out some potential partnerships and leveraging and resources" to add affordable housing, she said.

Her Kensington-centered district includes three of the "Opportunity Zones" identified in a booklet on the program. Others include parts of Mantua, Point Breeze and Germantown.

Roh said those zones are guidelines, not boundaries. More zones may be added, and nothing in the plan prevents transactions outside those zones, she said.