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What a $755,000 teardown in Graduate Hospital tells us about affordability and tax policy in Philadelphia | Inga Saffron

A patchwork of city zoning and tax incentives is fueling a frenzy of demolitions around the neighborhood.

Completed in 2008, this single-family house at 1507 Christian St. is being demolished to make way for a five-unit condo building by Zatos Investments. The developer acquired the building shortly after its property tax abatement had expired. The city will now forego property taxes on the new building for another decade.
Completed in 2008, this single-family house at 1507 Christian St. is being demolished to make way for a five-unit condo building by Zatos Investments. The developer acquired the building shortly after its property tax abatement had expired. The city will now forego property taxes on the new building for another decade.Read moreInga Saffron

If you’ve visited this column space before, you know that one recurring theme is the loss of Philadelphia’s fine old buildings to indiscriminate development. In December, I highlighted a developer’s plan to replace an elegant, 140-year-old townhouse on Christian Street with a garish, five-unit condo building. Stamm Development Group isn’t merely demolishing a perfectly good house and breaking up a handsome row of Victorians in the process; it’s also messing with history: In the early 20th century, the 1500 block was home to some of Philadelphia’s most successful Black professionals, including architect Julian Abele, and was known as “Doctors’ Row.” That heritage is now being erased.

Only two months have passed since then, but I’m back with news of another teardown on the block, this one at 1507 Christian, just three doors east of that Victorian. In this case, however, the house is a mere 13 years old — so recent, its 10-year property tax abatement expired only in 2018. The house was built during what I think of as Philadelphia’s Mud Epoch, when globs of brown stucco protruded from facades and blank garage doors marked the ground floors. The developer, who paid $755,000 for the house, plans to erect a five-unit condo building in its place. Once again, the property will qualify for the city’s decade-long tax holiday.

In contrast to what’s happening to its Victorian neighbor, the demolition of this stucco monster would seem to be good news for the street. From the renderings provided by Zatos Investments, the design by Gnome Architects promises to be a respectable work of architecture. Christian has always been one of the grander streets in the Graduate Hospital neighborhood, with wide sidewalks and stately townhouses. The condo building’s two parking spaces will be tucked discreetly in the back, making for a more gracious streetscape.

Yet, while the outcome here will likely be much better, there is still reason to be concerned about the forces that made these two projects possible. Both condo developments reveal how a patchwork of city zoning and tax incentives is fueling a frenzy of teardowns in Graduate Hospital.

You can hardly walk down any of the larger streets in the neighborhood without your path being blocked by a construction fence or improvised arrangement of orange barriers. Century-old Victorians are being yanked out on virtually every block of Christian Street, and on select blocks of Fitzwater and Bainbridge. Most of these demolition targets were in livable condition when they were marked for removal. The teardown at 1513 Christian (sale price: $678,000) was actually a boardinghouse that offered an affordable option in a neighborhood where the median house price is now $500,000.

For Richard Gliniak, a local activist and preservationist, the pace of demolition has reached alarming proportions. “When you see relatively new houses” in the cross hairs, he told me, it suggests that “every house on a large lot is going to be torn down eventually.”

Because these incentives are likely to produce similar results in Philadelphia’s other high-demand neighborhoods, they are worth unpacking in detail. The biggest driver, of course, is the 10-year property tax abatement, which was recently modified to include a small surtax to fund antipoverty programs.

» READ MORE: Developer’s condos would destroy South Philly’s famed Black ‘Doctors’ Row’ | Inga Saffron

Since its introduction in 2000, the abatement has remade and invigorated neighborhoods around the city, but few have been transformed as radically as Graduate Hospital. The area was once a middle-class Black enclave, home to luminaries such as concert singer Marian Anderson and Dr. Cornelius Wooding, Philadelphia’s first Black medical examiner. Over time, redlining and the threat of a crosstown highway sent the neighborhood into decline. In the two decades since the abatement was introduced, Graduate Hospital has gone from being a predominantly Black neighborhood to one that is overwhelmingly white.

In the early years of the abatement, much of the new construction was infill development on empty lots and renovations of derelict houses. That began to change after the city adopted a new zoning code in 2012, which allowed taller homes to accommodate the modern taste for high ceilings. Suddenly, there was a reason to replace tiny trinities with modern, four-story homes.

What has really turbocharged the teardowns, ironically, was the introduction of a new zoning incentive in 2018 designed to mitigate the gentrifying effect of the tax abatement. Known as the mixed-income housing bonus, it allowed developers to construct even taller structures if they included affordable units in the project. The idea was to ensure that there would always be housing for low-income residents salted into the neighborhood.

That provision has only accelerated the construction of high-cost housing.

When City Council came up with the mixed-income bonus, many expected that it would appeal mainly to developers of large apartment buildings, who would be able to add a few extra stories. But it has also become popular with boutique developers who realize they can now legally squeeze a small condo building onto an 18-foot-wide townhouse lot. Because Christian Street has so many grand homes in that size range, those builders are lining up to buy development sites.

» READ MORE: Philadelphia urged to use vacant land to curb shortages of affordable housing and food

Yet it’s unlikely that any of those projects will include affordable units. A clause in the mixed-income bonus law allows developers to get out of the obligation by making a contribution to the city’s Housing Trust Fund.

In the case of the Zatos and Stamm developments, that contribution is roughly $35,000. That’s not much of a deal for the city. The height bonus effectively allowed them to add one extra unit to their condo projects. If that unit sells for $350,000, the city would probably forgo closer to $50,000 in taxes during the term of the abatement.

So, to recap: No meaningful increase in affordable housing. No new tax revenue for 10 years. Meanwhile, Graduate Hospital’s distinctive architecture is being ripped to shreds.

I have no doubt that Philadelphia’s density advocates, who often call themselves YIMBYs (for “Yes in my backyard”), would counter by arguing that these five-unit condo buildings ultimately increase the city’s housing supply, leading to lower rents and greater affordability.

This may be true in an Econ 101 sort of way, but we don’t measure our cities strictly on efficiency — how many units produced. We value them for the beauty of their architecture, the stories they tell about the people who lived there before us, and the contributions they made to our collective history. We need to balance those priceless qualities with our obligation to ensure there is enough housing for everyone.

» READ MORE: Kensington faces a new challenge: Luxury development. Can a woke developer mitigate gentrification? | Inga Saffron

One way to protect Graduate Hospital’s heritage would be to create a historic district that would trigger the review of every demolition. Since there are so many large houses, you could still encourage the creation of affordable housing by converting some to apartments. Go ahead, add an extra floor or two to those buildings. And, by all means, let developers build dense, multifamily buildings on the many empty parcels that still exist in Graduate Hospital. (Singer/songwriter Kenny Gamble has owned five vacant lots on the 1500 block of Christian for more than 20 years, according to city records.)

One of the arguments in favor of high-density development is that it’s better for the planet. But so is preservation and reuse, since land-filling debris from demolished houses is a huge waste of resources. It’s time to find an incentive that helps Philadelphia keep its fine architecture and great history intact.