Philly officials celebrated the first house sold in a city initiative to build up to 1,000 price-restricted homes

In April 2022, city officials gathered in West Philadelphia to announce a plan to build 1,000 homes for first-time buyers by giving away city-owned land to private developers and subsidizing mortgages.

On Thursday in South Philadelphia, officials celebrated the first person to move into a home built through the city’s Turn the Key program, a $7 million initiative that represents Philadelphia’s largest investment in building income-restricted housing in decades.

Turn the Key is part of City Council’s $400 million Neighborhood Preservation Initiative, a plan that includes building and preserving affordable housing and helping first-time home buyers in a city that has a tradition of home ownership but where rising costs are pushing the milestone out of reach for more Philadelphians.

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Owning property is how most households build wealth that can be passed down through generations.

Turn the Key is open to Philadelphia buyers who have never purchased a home or have not owned one in the last three years. Anyone who meets income limits can apply, but the program gives preference to city employees, “who we often require to live in the city of Philadelphia but often aren’t given the opportunity to live in an affordable home,” said David Thomas, president and chief executive officer of the Philadelphia Housing Development Corp., which is administering the program.

At a ceremonial ribbon cutting Thursday of Turn the Key’s first home, City Council President Darrell Clarke said the city’s largest labor union for municipal workers told him how members struggle to find housing they can afford.

“They talked about individuals working for Streets or working for Water who literally were living in rooming homes. That makes no sense,” Clarke said. “We have to take care of our municipal workers.”

Turn the Key works with mortgage lenders to get lower interest rates for buyers and offers up to $75,000 in 20-year, forgivable loans to lower the price that a buyer has to pay.

So far, the city has committed more than $47 million in subsidies to buyers for the 631 homes across the city that private developers have been approved to build. Of those, 277 are under construction. Brewerytown, Grays Ferry, Port Richmond, Sharswood, and West Poplar are among the neighborhoods where developers are building on land they got from the city. More home closings are scheduled for the coming months.

The new homes can’t cost more than $280,000. That’s an increase from the $250,000 maximum announced last year. The median sales price of a home in Philadelphia in July was $280,000, according to the most recent report from the multiple listing service Bright MLS.

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Matthew Rozanski, who works for the Philadelphia Water Department, had been discouraged in his home search a few years ago, because he kept seeing properties that were both expensive and needed a lot of work. So he continued renting. Then, about a year ago, he got an email at lunch encouraging city employees to apply for Turn the Key.

Early this year, he learned he was preapproved and could submit an application and go through housing counseling, which all participants have to complete.

Last week, the 30-year-old became the first homeowner to move into a Turn the Key property. His new three-bedroom, two-bathroom South Philadelphia home was built on an empty lot by the Bala Cynwyd-based BVG Property Group. It’s one of five new homes on his street that will be owned by Turn the Key participants.

Rozanski said he feels lucky.

Home ownership “is something that’s definitely hard to come by for my age bracket,” he said. “I don’t think I would be in a home [I own] if it wasn’t for this program.”

Income limits to qualify for the Turn the Key program vary by household size. In this latest iteration of the program, single households can make up to $80,100 per year and households of three can make up to $103,000. In Philadelphia, the median household income was about $52,900 in 2021, according to the most recently published results of the Census Bureau’s American Community Survey.

To help cover purchase costs, buyers can use grants from the city’s Philly First Home and other programs.

Turn the Key homes are energy efficient, and most will have three bedrooms and two bathrooms.

“I think that what we’re doing is transformative. And I hope that we can show others how to do it,” Thomas at PHDC said. “This is a great opportunity for folks to be home buyers, stabilize their life, and build community. That’s what Philadelphia is supposed to be about.”