In East Falls, a courageous experiment in mixed-income housing

You would never guess, turning off School House Lane and into the Falls Ridge neighborhood, that you had stumbled upon one of Philadelphia Housing Authority's developments. Two dilapidated buildings - so uninhabitable they were demolished in 1996 - once towered atop a hill overlooking Kelly Drive. On that site today, PHA has nestled a 163-unit complex composed of 135 rental units and 28 affordable homes. It stands next to another 16-acre site on which Westrum Development Co. will build 128 market-rate units, revolutionizing the concept of public housing.

"Carl Greene and I have worked hand in hand on this site to make it a model for both the city and the nation," said John Westrum, CEO of Westrum Development Co.

The project has been a long time coming. Carl Greene, Executive Director of PHA, came to Philadelphia from Detroit in 1998, two years after PHA had been awarded a Hope VI grant from the U.S. Department of Housing and Urban Development and imploded the Schuylkill Towers, which had been vacant at least 10 years before they were destroyed. Two years later, the low-rise homes built around the towers were also demolished.

In 2001 the East Falls community, which had been promised a mixed-income development in the towers' place by PHA and the U.S. Department of Housing and Urban Development, took the agencies to federal court. The two sides finally settled in 2003, with an agreement that PHA would divide the site in half, selling the remaining 16 acres to a private developer who would build market-rate housing right next to the public housing.

It took until 2006 for Greene and Westrum to come to an agreement, having previously been in dispute over the density of Westrum's site. Westrum bought 16.7 acres from PHA for just over $3 million.

Greene said there was considerable political pressure to get the Falls Ridge project off the ground, particularly because both Senator Arlen Spector and Governor Ed Rendell live in East Falls.

"Spector said 'Carl, if this doesn't work out you're going to be living up here,' " Greene said, referring to the public housing he was building.

"Everyone is happy how [Falls Ridge] ended up," Greene said.

Much of Hilltop at Falls Ridge has not been built yet; Westrum said he would build as he sells, at an anticipated pace of 40 units per year.

Westrum is offering three different products ranging in price from the low $300,000's to the high $700,000's: stacked townhouses, and front-loaded and rear-loaded luxury townhomes. So far, 12 units have been sold, according to Westrum, and deposits have been made on three others, including two of the luxury townhouses.

"The key to this is that we would not have put the private investment in if we did not have the confidence in what we call the new PHA. The new PHA is really a very diligent, well-managed organization," Westrum said.

Hilltop and Falls Ridge, as separate sites standing next to each other, make what Westrum described as a "segregated" mixed-income.

"[Greene and I are] working on other areas to do a more integrated mixed income," Westrum said, adding: "If we had designed the site from the beginning we might have integrated it . . . In the future, that's what we're going to try to do," Westrum said.

Greene described Westrum and his work as "overwhelmingly impressive," saying, "He has the corporate courage that you don't see in a lot of homebuilders. He's changed the paradigm where builders stay outside of city lines. His business has contributed so much to this city."

PHA has 13 planned developments to be completed through 2011. The authority has a successful track record in revitalizing the areas in which it builds.

According to a study done by Econsult last year, the investments PHA has made in four of its sites have generated over $200 million in residential market value in adjacent neighborhoods.

"East Falls is an up-and-coming area that is very desirable and that has close proximity to Center City," Westrum said. "It was really brought down in its real estate value by having those towers."

"Folks come in here who wouldn't normally live so close to public housing," Greene said, nodding in part to the new look of the development, with low-rise buildings and houses on clean streets lined with trees that would be at home in any suburb.

Leslie Balzer, executive director of marketing for Westrum, said that the proximity of public housing to the townhouses has not proven to be a hindrance in selling them.

"We had thought it would be a challenge . . . but really, the only problem right now is the market," Balzer said. The housing market all over the region is soft.

The 135 units at Falls Ridge are rented at 30 percent of a family's income to families with a maximum income of $36,000. The 28 affordable homes that PHA is offering to families with a maximum income of $43,000 have already been sold. Nine of the buyers are previous PHA tenants. *