Neon lights flash purple, green, red, and an array of other colors most nights at Broad and Chestnut Streets. They illuminate the 18-story building once regarded as one of the city’s premier office locations, the former home of the Art Institute of Philadelphia and other enterprises that enjoyed its proximity to bustling Broad Street.
These days, it’s one of Philadelphia’s newest upscale apartment buildings: the Griffin, at 1338 Chestnut St. And if the exterior is any indication, the interiors are extravagant and impressive.
Like many of the city’s luxury addresses, the Griffin offers a list of high-end features so long and robust that it rivals those at posh resorts and hotels. There’s a half-indoor, half-outdoor rooftop deck equipped with fire pits, outdoor kitchens, views of City Hall, and billiards and shuffleboard tables. There’s a sprawling gym. A golf simulator. A conference room. And a 24-hour doorman stationed in a sleek lobby.
It’s an expansive package for those craving that “live here, work here, play here” energy that luxury developers are banking on their prospective tenants desiring. But for those looking to rent at a price that won’t break the bank, the ultra-amenity lifestyle can sometimes result in ultra-tiny personal space.
At the Griffin, a typical 438-square-foot studio apartment rents for at least $1,500 a month. Upgrade to one of the largest two-bedroom/den units? That can cost as much as $4,000 a month.
Higher rents are part of a larger trend across the Philadelphia market, as an influx of millennials and the nationwide dip in home ownership have dramatically increased tenant numbers. According to a January study released by the Federal Reserve Bank of Philadelphia, the number of apartments citywide renting for more than $2,000 a month nearly doubled, to almost 11,000 units, from 2000 to 2014. At the same time, the study found, Philadelphia lost nearly 20 percent of its low-cost rental units (those available at less than $750 a month), dropping from 117,000 in 2000 to 93,000 in 2014.
The median rent per month, the study found, was $936 citywide (half rented for more, half for less).
Rapid increases in rents have been concentrated in Center City, where both local developers and some from the New York-Washington corridor have been rushing to build. This year and next, about 4,100 new apartments are expected to be delivered — and that’s in addition to the nearly 6,000 units that have opened up since 2013.
But today, developers also are searching far beyond Center City’s expanding borders, venturing into historically lower-income neighborhoods. The result has been gentrification, a term the Fed defines as both an increase in home values or rents and an increase in the number of college-educated students in an area where household incomes were once below the citywide median.
To establish which areas of the city have experienced gentrification, the Inquirer relied on reports from the Fed and other experts, as well as conversations with developers, Realtors, and residents. The goal was to see how rentals in these gentrifying areas have been transformed as the neighborhoods around them have been altered.
Using home-listing websites, the Inquirer searched to find what kind of apartments were available to renters with a budget of $1,500 to $1,600 a month in five of Philadelphia’s most rapidly gentrifying neighborhoods. That cost represents almost half the city’s median monthly pretax income of about $3,190 (annual is about $38,000), but the rental range was chosen with the assumption that many of these listings include multiple bedrooms that would house multiple tenants. The median income listed for each zip code is yearly.
Here are some of the units that were available between June 19 and 24.
Brewerytown: Philadelphia 19121
The Fairmount @ Brewerytown, 1363 N. 31st St.
Monthly rent: $1,500-$1,550 Type of unit: Largest one-bedroom/one-bathroom Size: 900-950 square feet On-site parking: Yes, indoors, for a $175 monthly fee
Amenities: Rooftop pool; 3,500-square-foot gym; billiards room; business center; in-unit washer/dryer; on-site retail and dining Median income for zip code in 2015: $17,969
The Fairmount @ Brewerytown complex opened in March 2016 as a redevelopment of the old Acme warehouse near 31st and Master Streets. The $50 million project yielded 161 lofts, ranging from 550-square-foot studios that start at $1,200 a month to 1,500-square-foot two-bedrooms priced at $2,400. Occupancy is at 93 percent, said Sean McGovern, a partner at McSpain Properties, the project’s developer.
Brewerytown has seen rapid change. New developments both large and small have sprouted, with many projects, such as McSpain’s, rising in old factory buildings. Located about two miles from Center City, near major highways and SEPTA bus routes, Brewerytown is an ideal candidate for gentrification, situated just beyond Fairmount, now one of the city’s most expensive neighborhoods. And Brewerytown has started to see the spillover of investors and others hungry for cheaper properties.
“Quite frankly, you look at the prices people are spending in Center City, and it is egregious,” McGovern said. “People are spending $3 to $4 per square foot for rent, and the demographics don’t support it. When you’re paying $1.75 to $2, that is affordable, in my mind. I want to do developments where people can actually afford their rent.”
Fishtown: Philadelphia 19125
Old World Warehouse, 1100 Shackamaxon St., Apt. 2C
Monthly rent: $1,595 Type of unit: One bedroom/one-bathroom loft Size: 800 square feet On-site parking: No
Amenities: In-unit washer/dryer Median income for zip code in 2015: $45,720
When Jackie Dabrowski purchased her condo in Fishtown nearly 10 years ago, the neighborhood was almost entirely different. Back then, she said, much of it was filled with working-class residents, and home prices were affordable. When she heard about the conversion of the old Morse Elevator Works factory into lofts, she jumped at the chance to own one, attracted by the space’s large, nearly 9-foot-tall windows and 13-foot ceilings, its original pine floors, and a working freight elevator restored from the old factory.
Now, however, Fishtown is changed: There are trendy coffee shops and bars, salons, and more affluent residents. “A lot of the reason that I bought this was that it was this really cool, old factory that you couldn’t find anywhere else,” Dabrowski said. “Fast-forward to where we are now, and Fishtown is its own neighborhood … you don’t have to go to Center City. You could move to Fishtown just because it’s Fishtown now.”
According to information from the Federal Reserve Bank of Philadelphia, the average median home value in the “river wards,” defined as Fishtown and Port Richmond, increased 155 percent, from $56,048 in 2000 to $143,398 in 2013. Rental prices and median household income saw sizable increases, too.
“The growth here is not done yet,” Dabrowski said. “It’s been a nice transition from what it was to what it’s becoming. And I think it’s been very peaceful.”
West Philadelphia: Philadelphia 19139
West Lofts, 220 S. 47th St.
Monthly rent: $1,560 Type of unit: Two bedroom/one-bathroom loft Size: 735 square feet On-site parking: No, street parking, for now. Construction continues.
Amenities: Restored 1911 high school gym with running track; 24-hour concierge; landscaped gardens with bocce Median income for zip code in 2015: $24,606
Andrew Bank, based in New York with Strong Place Partners, was looking to develop a site in the city when the School District of Philadelphia was trying to sell off some of its public school buildings to raise cash to fill a budget deficit.
One school, in particular, caught his eye: West Philadelphia High School, which his grandmother had attended.
He purchased the property for $5.1 million, with the hope of turning it into housing. Opening in July will be 139 apartments. In receiving federal tax credits, Bank said, he made every effort to preserve the school’s facade and other key features, while turning the building into what he hopes are highly sought-after lofts.
For years, West Philadelphia has been changing, largely because of Drexel University and the University of Pennsylvania. But developers have begun to take interest beyond the universities’ perimeters.
“We’ve had a very positive response,” Bank said. “We’ve seen a lot of people from the neighborhood who are just attracted to the type of apartment that we have available.”
Grays Ferry/Point Breeze: Philadelphia 19146
2632 Federal St.
Monthly rent: $1,500 Type of unit: 3-bedroom/1-bathroom rowhouse Size: 1,070 square feet On-site parking: No
Amenities: In-unit washer/dryer; fenced back patio Median income for zip code in 2015: $48,015
The way many observers see it, Grays Ferry is simply next in line. The redevelopment of the Graduate Hospital area fueled the redevelopment of Point Breeze, they say. And when Point Breeze redevelopment is near completion, more investors will turn their eyes to Grays Ferry.
That’s certainly what RE/MAX Realtor Maria Quattrone is thinking. Last month, she listed this three-bedroom rowhouse on 26th Street, just one block away from Point Breeze — and saw plenty of interest, most of it from young professionals and students.
The house has been completely restored from what Quattrone described as “a shell.”
“You are seeing a lot of new [residential] construction popping up in Grays Ferry,” Quattrone said. “So soon, there will be commercial businesses popping up here, as well.”
Cecil B. Moore/Lower North: Philadelphia 19121
1908 Ingersoll St., Unit B
Monthly rent: $1,500 Type of unit: 2-bedroom/2-bathroom Size: 900 square feet On-site parking: No, street parking
Amenities: In-unit washer/dryer, back patio Median income for zip code in 2015: $17,969
Raza Properties finished construction along the 1900 block of Ingersoll Street earlier this year, delivering nine units that it hopes will target typical working-class renters.
The $1,500-a-month rent “gives us the ability to develop properties at a reasonable price, attracting middle-income clientele,” said Rahil Raza, CEO of the development group. “We’ve been successful in doing that so far. … Some of these units will be rented out to young professionals who just graduated.”
Located south of Temple University, the Cecil B. Moore/Lower North neighborhood has experienced growing pains in the past, as developers increasingly have constructed new, pricier units to house students and young professionals off-campus. Earlier this year, City Council passed a measure that would decrease the density in some areas, with a goal of preserving more single-family housing.