For neighborhood stabilization and revitalization, scattered-site development the way to go

A highlight of a recent week was being able to talk with Karen Black and Ira Goldstein in the same afternoon.

Black, who is CEO of May 8 Consulting, has been an interview go-to since she was with Community Legal Services in the early 1990s.

Goldstein is the president of policy solutions at the Reinvestment Fund.

He and I first met on the playing fields of Chestnut Hill, helping to coach soccer for kids who are now in their mid-30s. Goldstein knows his numbers, which is critical to understanding real estate.

The topic of my latest discussions with Black and Goldstein was low-income housing credits, and whether the scattered-site approach to neighborhood stabilization and revitalization was more efficient than the single-site strategy of one multiunit building on a vacant lot.

The answer: scattered-site, hands down. Here's the link to the story I wrote: http://www.philly.com/philly/business/real_estate/20161113_Revitalizing_in_a_different_way.html.

Conducting the study to determine which approach worked better gave Black an appreciation for the Philadelphia rowhouse.

"What an amazing housing stock we have," she said. "Some of these rowhouses have been vacant 30 to 40 years, and yet they are still viable."

The scattered-site approach "tightens up blocks" and has more of an economic benefit than single-site, Goldstein said. Typically, 10 percent to 52 percent of single-site development is financed through public funds.

The value of tax-credit allocations used for scattered-site units was 41 percent lower than those used for single-site new construction, and 32 percent lower than rehabbed single-site projects, Goldstein said.

He readily understood why the Pennsylvania Housing Finance Agency, which administers the federal low-income tax credit program, might have posed the cost-efficiency question.

Yet, the scattered-site model that has been used since 1989 by Neighborhood Restorations/West Philadelphia Real Estate to return more than 1,100 housing units to the rental market is a vehicle that has proven its value, Goldstein said.

"It is a way to rebuild neighborhoods that is helpful in other areas," such as jobs, retail, transit and schools, he said.

To say Philadelphia is on the rise is probably understating the case, but I've lived in the region for nearly four decades and I have been disappointed in the past, so I'll stop there.

"Why does it take so long for anything to happen in Philadelphia?" someone asked at the September meeting of the Building Industry Association of Philadelphia. I was surprised that the answer was not a resounding "Duh!"

Yet things are happening in the most unexpected places, which, if you understand the dynamics, isn't all that surprising.

Too expensive in Center City? Still too pricey in Northern Liberties? Head to Fishtown, Port Richmond and Kensington.

Jim Levin, a partner in WPRE with George Bantel and Scott Mazo, has a better perspective on those changes.

"I spend more to buy houses now than I used to," he said.

"It is a cost-competitive environment and much tougher," Levin said.

The value of housing in West Philadelphia and other parts of the city is much greater, which, of course, is a good thing.

But "you pay the price for that," he said.

In West Philadelphia, the universities have been the chief catalyst for change and growth.

In the 1990s, "Penn and Drexel made the decision to invest in the neighborhoods and look what happened," Levin said.

Now, Penn's home ownership program "goes all the way to 52d Street," he said.

aheavens@phillynews.com

215-854-2472@alheavens

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