Blighted Properties to Be Sold

Blighted Properties to Be Sold PHILADELPHIA, PA - At 19th Street and Montgomery Avenue in North Philadelphia, the promise and the plight of urban neighborhoods face off across the intersection. To the south on 19th, nothing but new homes, financed with federal funds, rise from once-blighted blocks. To the north, two boarded-up eyesores loom over a vacant lot. The owner of the derelict buildings is the city's largest landlord: the Philadelphia Housing Authority. Of the agency's 6,900 scattered-site houses - separate from its big developments - about a third are boarded up and considered unfit for tenants.

Now, after decades accumulating buildings and land, PHA is set to reduce its inventory. The agency announced 18 months ago that it would sell 1,000 vacant houses and 800 lots to raise money. The move drew plaudits from developers and neighborhood activists who saw the potential for removing blight.

The U.S. Department of Housing and Urban Development, which funds most of PHA's budget, had to approve the sale. But the request got so bogged down in a bureaucratic quagmire that, in February, HUD shelved it. This month, HUD officials met with PHA executive director Carl Greene in an attempt to move the sale forward. Edward Warwick, a PHA spokesman, said the two agencies had reached "an understanding" on how to dispose of the properties. No start date has been set, but the sales would be "staggered" over three to five years, he said, adding, "It's really a function of where the marketplace is."

The authority does not know how much the sales would generate, Warwick said. But when the plan was announced in October 2007, Greene said the agency could use proceeds to bridge the funding gap created by federal cutbacks. From 2003 to 2007, the agency's operating budget dropped 14 percent to $89 million.

Donna White, a HUD spokeswoman, said the department had never received a request from a housing agency to dispose of so many properties at once. She said PHA's original application had multiple "deficiencies" that the authority had not addressed in a timely way. The process became snagged in the details, such as discrepancies over whether 200 houses were vacant or occupied, or missing information on the total acreage of homes and lots.

Although the 1,800 properties that PHA wants to sell are all over the city, most are in North and Southwest Philadelphia. The agency still would be left with 1,500 empty scattered houses that it hopes to repair and rent. Stimulus aid from the federal government is to be used to upgrade 300 of them. PHA also has 4,400 occupied scattered sites, plus 7,200 homes and apartments in its developments.

Although the authority will seek market value for most buildings and lots, Warwick said the agreement with HUD allowed some properties to be transferred to developers of affordable housing for nominal sums "on a case-by-case basis."

The initiative "presents an opportunity for community-based development corporations to rehab scattered-site properties and put them back into productive use for affordable housing," said Jeremey Newberg, president of Capital Access Inc., a developer in South and Southwest Philadelphia.

In some pockets of the city, the interest in PHA properties is strong - starting at 19th and Montgomery. Dozens of homes are going up on the south side of the intersection as part of a federal homeownership program, which does not involve the housing authority.

There is much activity to the north, too. That's where Habitat for Humanity has its main office - next to deteriorating PHA homes in the 1800 block of North 19th. One PHA property has been empty since 2000, another for more than a decade.

Habitat has its eye on about a dozen PHA properties in the neighborhood that would be prime candidates for renovation, said Jon Musselman, director of project planning. Volunteers who come to work on Habitat projects, he added, often ask why he can't do something about the blight.

Private developers, too, are interested. "I can't tell you how many times a developer has walked in here and said, 'How can I get this property? Can you help?' " Musselman said.

The real estate market in that part of North Philadelphia remains strong, he said. Just west of Temple University, the neighborhood is still seeing home construction and rehabs, thanks to the demand for student rentals.

Habitat is renovating the rowhouse at 1805 N. Gratz St., which it acquired from PHA. The process took four years, but the property, which will be sold as low-income housing, was conveyed for a token $1.

Rick Sauer, executive director of the Philadelphia Association of Community Development Corporations, said the PHA initiative to recycle its blighted property could be "a very positive move" - especially if the housing authority conveyed some of it to nonprofit developers of affordable housing. "It is critically important," Sauer said, "that we have better access to vacant land."

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