Developer Todd Potter, of Southampton, Bucks County, started University Realty in the recession year 2009, when banks had stopped funding suburban housing developments. In the four years since, he's been working on steadily larger private student-housing projects, both in University City, and North Philly near Temple U.
"We started at 34th and Spring Garden," in the old Powelton Village section that adjoins Drexel University, Potter told me. "People had been saying to me there was a shortage of undergrad student housing at Drexel. My vice president for operations, Ray Young, is a real estate agent. He said to me, 'There's this one lot you can get.' 3337 Spring Garden. It was only big enough to handle one triplex -- three apartments.
"We did a little research. We saw there was a big shortage of undergrad housing. So we built a brand new, three bedrooms, three baths apartment house. We outfitted it with front-door monitors, alarm systems, granite kitchen counters. So we appealed to the parents with security concerns, and to the students." They listed the units at $700/month/student, with students paying utilities. "We rented all three apartments in one weekend. Students were saying, 'Wow, you can take your shoes off here,'" as opposed to older UCity rentals converted from rowhomes. "There hadn't been competition for quality product.
"From there, we started purchasing lots and building larger projects. We bought three lots at 3339-41-43 Spring Garden, all the way to the corner at 34th St. We built nine apartments in 2010 -- same amenities -- and rented them all out. Then we went to Temple and built two buildings at 15th and Jefferson and 15th and Carlisle, and rented those out, 20 apartments in mostly three-unit buildings.
"Then we came back to Drexel. We started building a 21-unit building at 31st and Hamilton, with a parking garage underneath. Then up the street to 38th and Hamilton, 12 three-bedroom-three-bath units, with 12 cars parking underneath.
"And this fall we're starting a 28-unit, 3-bedroom, 3-bath at 38th and Spring Garden. And another 9 units at 35th and Spring Garden."
Why now, and not, say, five years ago? "Powelton Village has beautiful homes, a few big landlords who own most of the (rentals), and maybe 10 percent of residents who own their own homes." Their Powelton Village Civic Association has resisted increasing the number of student rentals, Potter says. So he and his fellow builders started their own group, the Drexel Area Property Association, to "represent all the responsible landlords and say, 'We have a code of ethics and student behavior and we're going to keep the neighborhood safe and uniform and clean and not have rowdy parties and a lot of problems.'"
Plus - and maybe most important -- Philadelphia's "Zoning Board of Adustment is very developer-friendly right now."
Isn't it getting tougher to rent, with all the new, high-rise, privately-run student housing closer to the center of Drexel's campus? "You go over four stories, you have to put steel in the building, and the rent escalates. I don't want to go above four stories. Our rents right now are between $700-750. We've been trying to keep it at a certain level. The high rises people like David Adelman are building, and the university dorms, they're probably charging $1,000 a month, or more." Live further, pay less? "We have a shuttle service. Picks people up at all our buildings and drops them off on campus every 45 minutes."
How long can the building continue? "There's no saturation. When you develop a good product, students come. Even with everything in the pipeline."