Luxury real estate developer PMC Property Group has agreed to pay $3.75 million to the Philadelphia Housing Trust Fund after it backed out of a commitment to provide affordable housing units at its brand new One Water Street tower on Columbus Boulevard.
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In 2014, PMC obtained an inclusionary zoning bonus allowing it to build the 16-story tower 48-feet taller in exchange for providing 25 apartment units at subsidized rates. Construction next to the Benjamin Franklin Bridge proceeded according to plan, per the agreement, until the developer stated in June of this year that it would not be offering affordable housing.
Upon learning of PMC's withdrawal from the zoning requirements, Philadelphia's Department of Licenses and Inspections temporarily withheld the certificate of occupancy necessary for tenants to move in, pending a deal or alternative arrangement.
According to Philadelphia Inquirer architecture critic Inga Saffron, PMC decided to pay up in lieu of affordable housing at the request of Mayor Jim Kenney. L&I spokeswoman Karen Guss said the deal was brokered by "senior administration officials" who have ensured the $3.75 million will be used to build affordable housing elsewhere in the city.
PMC owns more than 40 rental communities in Philadelphia. Prior to the deal, the developer retained the option to meet its zoning requirements by adding 5,000 square feet of retail space, a public art installation and an energy-saving system. As Saffron points out, that was an unsatisfactory resolution both for city leaders and urban planners who advocate for affordable housing.
"PMC's actions particularly disheartened housing advocates because it was the first developer to take advantage of the new inclusionary housing provision in the zoning code," Saffron writes. "Developers are allowed extra density in exchange for setting aside a fixed number of subsidized units - or contributing a sum of equal value to the housing trust fund."
Rents at One Water Street's 250 apartments range in price from $1,725 per month for a one-bedroom apartment to $2,250 for a two-bedroom and $5,525 for a three-bedroom. Even with a subsidy, the one-bedroom apartments would have come to approximately $942 per month. The $3.75 million settlement allotted to the Philadelphia Housing Trust Fund is based on the estimated value of One Water Street's 25 subsidized units and the cost to construct them at another location in Philadelphia.