University City rents rise through the roof

Three years ago, local resident Kerneisha Boyd returned to her native Philadelphia after attending college in Washington, D.C. She was excited to come back to her hometown, eager to settle down and earn a living for herself in the city she remembered so fondly.

However, in stark contrast to the idyllic Philadelphia that she had envisioned, Boyd was confronted upon her return with a very different reality. The cost of living had skyrocketed since she had left for school, making housing virtually unaffordable.

She found that the exorbitant cost of living in West Philadelphia was rapidly consuming residents' paychecks, leaving locals with little disposable income and nearly causing her to head back to Washington.

"The rent around here is too high compared to the same kind of houses in other parts of the city," Boyd says. "I really had to think hard about moving, because the cost of living is a lot less in D.C. It's just so hard to afford living in West Philadelphia."

And while she ultimately decided to stay, the price of housing has nevertheless forced Boyd into a less than ideal living situation, in which she must share her $430 per month studio apartment at 58th Street and Baltimore Avenue in order to make it affordable.

"If you don't have a roommate or two jobs, it's hard to be able to live here by yourself anymore," Boyd says. "It's almost impossible to make ends meet on your own."

Although local resident Kerneisha Boyd has been able to find a way to stay in West Philadelphia, many have not been so lucky and have been forced to settle elsewhere. Boyd's problem is unfortunately an all too typical example of the housing phenomenon which is sweeping across Philadelphia --particularly West Philadelphia -- sending rents soaring and many local tenants packing.

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Once considered one of the city's most crime-ridden and unsafe neighborhoods, University City -- the area bordered by the Schuylkill River and 50th Street on the east and west, and Woodland Avenue and Spring Garden Street to the south and north --was among the city's least desirable places to live prior to the late 1990s. This trend was reflected in and reinforced by declining rent prices, which filled the area with many low-income residents. Because of the reputation of the neighborhood, many University staff members, faculty and students lived in on-campus residences, Center City or the few blocks immediately adjacent to Penn's campus.

"Due to the suburbanization of the American white middle class and their flight out of the city following World War II, by the 1970s, West Philadelphia was almost exclusively African American," says Director of the University Archives Mark Frazier Lloyd, an expert on Penn and the surrounding community. "It became a concentration of poverty, and people affiliated with Penn tried to avoid going any further west than they had to."

The area's housing prices largely reflected the lower-income reality of the neighborhood, and the late 1980s and early 1990s were characterized by a continued downward trend in housing prices and rents. The decline culminated in 1996, with the near-campus murder of University science researcher Vladimir Sled, which, along with a major increase in crime, caused rents to plummet.

"Before 1996, the area was pretty depressed. People were moving away, there were some major crimes, there was a lot of bad publicity from the media," says Miki Farcas, director of the Office of Off-Campus Living. "Rents hit rock-bottom in 1996, and then the murder was like a wake-up call. Community groups realized that things had to change and started uniting to revitalize the area."

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Following this realization, a host of both University-affiliated and privately funded groups, such as Penn Faculty and Staff for Neighborhood Issues and the University City District emerged to improve the quality of life in West Philadelphia. To accompany these new initiatives, a number of other developments began to transform the neighborhood into a more desirable area, leading to an almost immediate increase in housing prices and rents.

"We saw a strengthening of the market for quite some time," says Dan Bernstein, chief operating officer of Campus Apartments. "The increase in goods and services in University City, the work of Penn and the University City District in making the area safer and the construction of the Penn-Alexander School as a quality school for local residents have all played a large role in that and help to explain why the market is now stronger."

Indeed, as a result of this combination of factors, rents have skyrocketed over the past seven years. Though, in many cases the quality of the buildings has not improved, the average monthly rent for a two-bedroom apartment has rapidly risen from $720 in 1996 to $1,102 in 2003, according to a report by the University City District. Home ownership has exhibited a similar pattern, with the median home price more than doubling, increasing from $72,700 to $160,000 between 1995 and 2003.

Rent increases have followed neighborhood revitalization, and they are now reinforced and further raised by the revamped image of the West Philadelphia area as more than a viable, but actually a desirable, place to live.

"We've seen rents increasing between 50 and 300 percent as far west as 52nd Street since 1996," says Blane Stoddart, executive director of the Partnership Community Development Corporation, which develops University City properties for purchase by low- and moderate-income families.

"Houses that were selling for $80,000 on the 4500 block of Spruce are now going for $500,000. It's great to see prices going up, in a sense, after 25 years of little or no new investment. It shows that the area has now become attractive and trendy, which helps to draw more people to the area and keep it attractive."

And it is not just members of the Penn community who are now drawn to West Philadelphia. A number of the would-be tenants of the ritzy Rittenhouse Square area are now opting to rent in West Philadelphia rather than Center City, driven west by what many call the unreasonably high prices of the downtown area partially resulting from low supply and high demand.

The average cost per month for a one-bedroom apartment in Center City in 2004, for example, was $1,310, according to the Office of Off-Campus Living. These steep Center City rents help make University City -- despite its dramatic rent increases -- an appealing residential area for young professionals and post-graduates who are being financially squeezed out of the coveted downtown area.

And while they help to reinforce the "trendy" image that local investors have tried so desperately to create in recent years, these individuals have also contributed to a housing jam. In combination with the area's development, this rising demand continues to push West Philadelphia rents even higher.

"A few years ago, Center City just started becoming too expensive," Bernstein says. "People were being priced out and being pushed into University City at the same time that the University City area was improving, which drew a lot of young professionals who are willing to pay a little bit more."

Residential rent increases have most dramatically affected the areas immediately surrounding campus, and particularly housing adjacent to 40th Street between Pine and Walnut streets.

These locations have traditionally been strictly dominated by Penn undergraduates.

"You can now find a two-bedroom apartment on 40th and Pine for $1,875 per month," Farcas says. "That's Center City pricing."

As a result, many undergraduates have been forced to move to less expensive apartments located further south and west of the center of campus.

"Undergrads traditionally tended to live pretty close to 40th Street," Farcas says. "But now, because of higher prices around 40th Street and a better neighborhood further west, we are seeing undergraduates move as far as 43rd Street and beyond. They no longer see 40th Street as a barrier."

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The West Philadelphia rent increases, which young professionals new to the neighborhood are able to absorb, have done more than push Penn undergraduates farther away from the heart of campus. Rising rents have caused a trickle-down effect, which has a significant adverse effect on lower-income local residents. While students are generally willing to share a room or make the financial sacrifices required by higher rents, many local residents -- particularly those with families -- simply cannot afford these sacrifices, and therefore must move well beyond 43rd Street or even out of West Philadelphia.

"The rent trends are definitely not working-class friendly," Stoddart says. "It is becoming increasingly difficult for working families to be able to afford to live here, and a lot of people are getting displaced to areas further south and west."

"A lot of people are moving away from around here," says Rosalyn Hoakes, a local resident who has worked at Freshgrocer for two years. "I really only see students coming in here, because they're the only ones who can afford to live around 40th Street. When the students go away, it's really slow until they come back."

According to many area residents, loss of diversity in the community is one of the most significant negative effects of the neighborhood's development. In their eyes, the development has produced a degree of gentrification that has destroyed the mix of races, ethnicities and socioeconomic classes that once vibrantly coexisted in the neighborhood.

"What made University City so great was its diversity and integration," Stoddart says. "You used to be able to find professors living next to working-class families, but you just can't find that anymore. Because of the high prices, we have lost a great opportunity."

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Despite the prospect of continued area development and the accompanying influx of young professionals, there has recently been some indication that the housing costs are leveling off. With this plateau comes hope for both students and local residents that the displacement away from 40th Street will finally come to a halt.

"After 2002, the rate of rent increase was much slower," Farcas says. "Rates increased so dramatically between 1998 and 2002 that they had to adjust based on demand. People were asking for more money, because they knew they could and tenants would still pay it. But now that the neighborhood has moved westward, there are other choices. People have the option to move further west rather than pay more, which restricts landlords from continuing to drastically increase rents."

In conjunction with groups like the Neighborhood Preservation and Development Fund, the Fannie Mae Foundation, the Partnership CDC and other local private groups, Penn is working assiduously in an effort to further stabilize rents in order to preserve the socioeconomic and ethnic diversity for which University City was once so renowned.

These community-oriented groups seek to buy and develop several apartment units in West Philadelphia and then convert them into affordable housing, largely by subsidizing rents and offering low-interest loans.

In at least a limited way, this effort could help to reverse some of the negative effects that resulted from Penn's neighborhood revitalization efforts.

"There have certainly been people who have fallen through the cracks, but that is inevitable in such a large-scale renovation and revitalization project which changes the area so dramatically," Farcas says. "The University and the community certainly have a long history of resentment, anger, pain and bitterness, and housing is certainly at the core of that."

She adds, "But since the late 1990s, there has been a recognition of the effect of development on local residents by the University and other interest groups, and through things like the NPDF, housing is becoming less of an issue and things are improving."

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