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Philly Housing Authority took their homes two years ago. They are still waiting to get paid

It's been two years since hundreds of residents were displaced and more than 1,300 properties were condemned through eminent domain to make way for a massive redevelopment of the Sharswood neighborhood and notorious Blumberg housing projects. Yet, only 10 percent of the 800 privately-owned properties seized have been paid for.

Arthur and Betsy Deleaver in front of their Sharswood house. The city housing authority has taken it by eminent domain for a massive revitalization project. DAVID SWANSON / Staff Photographer
Arthur and Betsy Deleaver in front of their Sharswood house. The city housing authority has taken it by eminent domain for a massive revitalization project. DAVID SWANSON / Staff PhotographerRead moreDavid Swanson

When Arthur Deleaver's parents bought his childhood home in the city's Sharswood neighborhood in the late 1930s, the family went from just renting the first floor to owning the two-story, 900-square-foot rowhouse.

"I had a tricycle and rode around in the front room, in all the space," Deleaver, 84, said, his eyes widening to express how big the house seemed then to five-year-old Arthur.

Those are the memories Deleaver was hoping to pass on to his children by giving them the house when he dies, just like his mom did with him. "That way they could look back and say 'My dad's house. He was born here.'"

The Philadelphia Housing Authority now owns those memories — or at least the home where they were made.

PHA’s Big Plans in Sharswood

Deleaver's house was one of 1,300 properties taken through eminent domain by the Housing Authority in 2015 to make way for a massive redevelopment of the Sharswood neighborhood and Blumberg housing projects, located just north of Fairmount and Francisville — and an area surrounded by rapid gentrification. The land grab was pitched as an effort to preserve an island of affordability for low-income people in a sea of rising housing prices.

Fewer than 150 houses were occupied at the time of the seizure; those residents were relocated throughout the city.

But two years on, only 10 percent of the 800 privately-owned properties seized have been paid for. Many of the owners, like the Deleavers, are tied up in a slow appeals process trying to get a better price. The housing authority has offered wildly varying amounts for similar properties, and has valued them below the city's tax assessments. (The other 500 condemned properties were publicly owned.)

In all, the Sharswood redevelopment project involves 245 acres of land, which stretches from 19th Street to 27th Street and from West Girard Avenue to Cecil B. Moore Avenue. Authority plans say it will cost $675 million to remake the area.

The condemnation and ensuing payouts offer a window into the complicated process that unfolds when a city attempts to rebuild a struggling neighborhood while staving off gentrification.

Owners of many now-vacant Sharswood properties bought from the housing authority in a 2011 auction with plans to refurbish them, rent them and hold them as investments. They paid their taxes and say they want a fair price from the city.

Others were like the Deleavers. Initially, the redevelopment authority, which was the housing authority's agent in the condemnation, offered Arthur Deleaver $22,000 for his family home, which he had been renting to tenants. Deleaver asked the city for a second review. Officials increased the offer to $25,000 in February 2016.

"I wasn't going to take peanuts for it because they are going to make money off it so let me make some too," Deleaver said in an interview outside his home. He no longer has access since the city took possession.

Deleaver hired a private assessor in March 2016 who said the house was worth $53,000 in 2015, the year of the condemnation, the year the price must be based on. But the housing authority didn't budge.

For comparison, the city valued the Deleavers' home at $34,400 for tax purposes in 2015. And for tax year 2016, it was assessed at $52,700.

Asked about the discrepancies, Ryan Harmon, the redevelopment authority's general counsel, said state law on eminent domain prohibits the use of tax assessments in fixing a property's value. Instead, they are required to hire independent appraisers who weigh the use of the property and the size and condition of the home. It is much the same procedure the city uses for tax assessments, which, since 2014, must be based on 100 percent of market value.

Deleaver and his Community Legal Services attorney, Michael Froehlich, requested an appeals hearing before the Board of View, a three-person panel that decides eminent domain value appeals. A Common Pleas Court judge ordered the panel in September 2016 to hear Deleaver's case.

But more than a year later, he and his wife, Betsy, are still waiting. After the Inquirer and Daily News asked about the case, the Board of View scheduled a hearing for April 11.

The board only meets weekly. It has so far decided 29 Sharswood appeals and has about a dozen more scheduled.

A review of the more than 80 properties whose owners have settled with the city so far showed several examples in which the city assessments and housing authority offers diverged.

For example,  two vacant properties on the same block — 2426 and 2422 Bolton Street — were assessed by city assessors at $29,300 each in 2015. Both are vacant, three-story, 1,200-square foot homes. Yet, the housing authority paid $4,500 for 2422 Bolton and  $25,000 for 2426 Bolton.

For 1331 N. 23rd Street, the authority initially offered $18,000 to owner Angel Pinkett. He contested it with the Board of View and was awarded $38,000. The house's assessed value is even higher — $43,600.

The owners of hundreds of other properties haven't even come forward to either take or negotiate a housing authority payout. In June, the agency deposited $3.8 million in an escrow account held by Common Pleas Court for 208 condemned properties whose owners haven't responded. Authority officials plan to deposit more money soon for another set of unclaimed condemned properties.

The money will "always" be there in case the owner of a condemned property decides to eventually come forward, Harmon said. Property owners have six years to appeal the compensation. After that, they are stuck with the amount the housing authority determined, with independent appraisers, as the market value of the property in 2015. Inflation is not taken into account and all liens and debts that were owed would need to be paid at any future settlement.

Funding is unpredictable since the authority relies on the federal government. Tax credits and grants for affordable housing are competitive and hard to get.

The funding uncertainty has added to the anger of some owners.

"They have no control over who gets the tax credits… it's all very theoretical with what they are doing," said Adam Lang, who is disputing his payment from the authority. "They could keep neighborhood full of vacant lots for the next 20- 30 years."

But housing authority officials say they are confident that by partnering with nonprofits and developers, they will get the money to finish the project within a decade.

"Each phase hopefully is a little easier financially because we are rebuilding a neighborhood," said Nick Dema, executive vice president of development and design for the housing authority. "That's why we want to do this over time — so we can take advantage of the improvements that we're doing in the neighborhood."

In June, 57 new housing units opened on the 2300 block of Jefferson Street, where the imploded high rises once stood. That was Phase 1 of the 10-phase project, funded through a tax credit for low-income housing.

But another phase of the project, which called for 42 new rental units on the 2100 blocks of Sharswood and Master streets, was shut out of the 2016 round of tax-credit awards, so it is stalled.

Meanwhile, vandals have been breaking in to now-abandoned homes and stripping them of fixtures. At this point, the Deleavers can't do anything about it but fight for a little bit more money.

Beyond the memories, they were hoping to leave their children and grandchildren a home with steady rental income.

"We would like to leave the kids a little better off than we are. Leave them something to fall back on," Betsy Deleaver said.