It was like a scene out of a Dickens novel. After a Christmas tree fire sent smoke swirling through a converted Fairmount townhouse, killing a dozen members of the same family, the city discovers that 19 people were living in the once-grand building. But instead of a greedy slumlord, it turns out the owner is the Philadelphia Housing Authority, the agency that the poorest of Philadelphia’s poor depend on for shelter.

That a fire could spread with such deadly speed through a typical Philadelphia rowhouse is almost beyond imagining. But the reason why so many people would jam into the PHA property is no mystery: The city doesn’t have enough public housing available for people with very low incomes, especially those subsisting on less than $15,000 a year.

We hear a lot about the “affordable housing crisis” in Philadelphia, but that term is so all-encompassing that it has become practically meaningless. Housing has certainly gotten more expensive here over the last decade. Even people earning comfortable, middle-class salaries must now devote more of their budget to rent than they once did, and that can make it harder to save the down payment for a house. But as my colleague Michaelle Bond has written, Philadelphia housing remains an incredible bargain compared with cities like San Francisco and New York.

The real crisis in Philadelphia is poverty. Even as the city’s economy has rebounded over the last two decades, launching a building boom that has shined up blighted neighborhoods, its poverty rate has grown steadily worse. Almost a quarter of city residents struggle to pay for food and housing — 65,000 more than in 2000. No matter how many houses Philadelphia’s private developers build, those low-income residents will never be able to afford the rent.

That leaves PHA as the housing provider of last resort.

Why doesn’t PHA just build more apartments? The short answer is that the federal government has drastically reduced funding to the nation’s housing authorities over the last three decades and imposed strict limits on new construction through the Faircloth Amendment. Things got so bad here that PHA closed its waiting list to new applications (except for seniors and the disabled) in 2013. The situation isn’t unique to Philadelphia: Today, there are 200,000 fewer public housing units available nationally than during the Clinton era.

When those federal cuts were imposed in the ’90s, Congress promised that market-driven programs — like Section 8 vouchers and tax credits — would compensate for the loss of traditional public housing. But those programs never kept pace. President Joe Biden has a terrific plan to increase the supply of housing vouchers for the very poor, but getting it through Congress is another matter.

That’s what makes the upcoming redevelopment of a PHA property in West Philadelphia so important. PHA has a rare chance to add hundreds of new subsidized units to its portfolio at West Park, a 1960s-era public housing project at 44th and Market. Just months before the pandemic started, PHA announced that it was seeking a partner to purchase two of West Park’s three towers and help reimagine the 12-acre site. A deal could be announced as soon as PHA’s meeting on Thursday.

With the tide of gentrification rolling in from University City, West Park is a perfect place to lay in a stock of low-income housing. The sprawling campus — once occupied by the Pennsylvania Hospital for the Insane — sits atop a small hill just two blocks from a Market-Frankford El station. It’s an easy walk to jobs at Penn, Drexel, and the Science Center. There’s a rec center next door and a public school around the corner.

Because the site was grossly underdeveloped — in typical ’60s fashion — the three standalone towers contain just 357 subsidized apartments. Outfitted with a true urban street grid, West Park could easily support three times that number, assuming PHA makes the right deal with a developer.

PHA has been through this kind of redevelopment many times before, but the results have always yielded fewer — not more — subsidized units. In the ’90s, federal policymakers came to see high-density, high-rise public housing projects like West Park as incubators for crime and dysfunction. PHA had already assumed ownership of hundreds of formerly private houses around the city, like the house in Fairmount, which allowed people to live in mixed-income neighborhoods. With the encouragement of the Clinton administration, PHA began systematically demolishing its towers. It has razed nearly two dozen so far, leaving just a handful of old towers in place.

In each of the new developments, the inward-facing housing towers were replaced with rowhouses and midrise apartments — buildings that looked as if they belonged in Philadelphia. Because the goal during the Clinton era was to de-densify poverty, many PHA developments — such as Hawthorne at 12th and Catharine — also included a hefty amount of market-rate houses, which were sold at discounted prices to encourage home ownership. Almost immediately, the surrounding neighborhoods sprung back to life, setting the stage for the revival we’re seeing today.

But there was one big downside: PHA ended up with much less low-income housing in its portfolio at the exact moment when poverty in the city was spiking.

PHA has clearly learned some lessons since then. When its president and CEO, Kelvin Jeremiah, announced plans to demolish two of West Park’s towers for new housing, he made it clear that the agency now favored density. He also promised that every existing public housing unit would be replaced or renovated. But, in an interview with WHYY in 2020, he said that he still envisioned plenty of market-rate housing, retail space, and other amenities. “We’re looking for the highest and best use,” he said.

It’s easy to understand why PHA would want to repeat that mixed-income strategy at West Park. Hawthorne was a huge success story, and the agency still believes that bringing middle-class residents to West Park will help attract investment to the adjacent neighborhood, variously known as Haverford North and Mill Creek.

The problem is, Philadelphia is a very different place than when Hawthorne was built. The neighborhood around West Park can hardly be called blighted, as Hawthorne was in the ’90s. When West Park residents look out their windows, they can already see a miniature skyline of gray-and-white apartment buildings forming on nearby Chestnut Street. Does it really make sense to build market-rate housing at West Park when the need for subsidized units is so great?

PHA is getting pulled in both directions. Many West Park residents want to see market-rate homes as part of the redevelopment, Andrea Foster, the project’s tenant representative, told me. State Rep. Amen Brown, a first-term legislator who grew up in poverty and has several family members living in West Park, said he believes economic diversity is crucial to West Park’s success. Without market-rate housing salted into the mix, he fears that West Park 2.0 will end up once again as an enclave of extreme poverty.

“Mixed income means you’re living with doctors, professors, professionals. You’re all getting into the elevator together. They provide role models,” Brown explained as we walked around West Park, threading our way amid the scaffolds that had been erected to catch the bricks and concrete falling from the old towers. “My mom was on welfare. That was a learned behavior.”

Although PHA has not released details about the proposals for West Park, several have leaked. Brown and Foster are big fans of a plan submitted by Post Brothers, the luxury housing developer now transforming Northern Liberties into a mini downtown with high-rises and retail. Rather than merely replacing West Park’s 357 subsidized units, Post would build an equal number of condos and turn them over to the current residents, giving them full ownership.

But to offset the costs of this unusual plan, Post wants the rights to use the remainder of the site for market-rate housing, as many as a thousand units. Once the current residents became owners, West Park would no longer have any subsidized units.

Other plans that have surfaced also call for large amounts of market-rate housing, although few are as extreme as the Post Brothers plan. A New York development team, led by L+M and MSquared, envisions opening up the 12-acre site to the surrounding neighborhood with new streets, parks, and, someday maybe, a pedestrian bridge over the El. To pay for those amenities, 30% of the units would be market rate.

Even that amount of market-rate housing might be too much for local Councilmember Jamie Gauthier, who represents West Philadelphia. Just days after PHA announced plans to seek a redevelopment partner, she condemned the plan in a speech to City Council, complaining that it expressed “no preference for equitable development.” Gauthier has said repeatedly that West Philadelphia can’t afford to lose a single affordably priced home.

That doesn’t mean West Park can’t be an economically diverse place. The term affordable housing can cover a range of incomes, from people on subsistence incomes, to the working poor. As the Fairmount fire has made clear, PHA needs to focus on building the most housing for the people who need it most.