Reinvestment Fund financing is supporting Frankel Enterprises with the development of 30 units of workforce housing.
The neighborhood of North Central Philadelphia is a vibrant, racially and ethnically diverse community of residents. It shares a border with Temple University and a bustling commercial corridor along North Broad Street. It is also home to many vacant properties.
The median household income in the area is approximately $23,000, the homeownership rate is about 21%. It is an area ripe for investment, but the related risk of gentrification in the neighborhood could price long-time residents out. What these families need in the changing market are affordable housing options to help keep them near the workplaces and schools they love–as well as a chance to earn equity as homeowners, versus paying out rent from month to month.
Fortunately, North Central Philadelphia has seen an uptick in interest from both the City of Philadelphia and developers like Frankel Enterprises. Max Frankel, along with his brother Zach, have adopted a particular focus on affordable homeownership as principals of the fourth-generation development company.
Recently, through a partnership with the Philadelphia Housing Authority (PHA), Frankel Enterprises has turned its sights on workforce housing in North Central Philadelphia.
This project targets moderate-income buyers making between 80 and 120 percent of the area’s median income (AMI). The goal is to help moderate-income families that otherwise might face barriers achieve homeownership.
“A big part of homeownership is the responsibility and pride that comes with owning a home. There’s a certain dignity when you walk into your own home,” said Max Frankel. “And that’s why we do what we do.”
Frankel Enterprises is in the midst of developing the Residences at Diamond Village, 30 new rowhomes–one rehabbed and 29 new construction–right on the cusp of Temple’s campus. Reinvestment Fund provided a revolving construction loan of $3.5 million to support the $6.7 million development. The project is part of a larger $120 million project to redevelop the former Norris Homes public housing site into new, affordable rental units for families with a mix of incomes.
The single-family homes, each 1,700 square feet, include three bedrooms, two full bathrooms, and backyard space. They will be available for sale at a price of $249,999 to families at 120% of the area median income.
“The majority of our buyers are first-time homeowners. In a city where real estate prices are on the rise, these families are given the chance to obtain a home for around $1,000 per month,” said Frankel. “That price point is likely less than they have been spending in rent. Simply put, this is an opportunity to own a home that they might not otherwise have.”
Each new construction home will have one finished basement level with a bedroom, bathroom, laundry room, and storage space, a first floor with living room, kitchen, and dining area, and a second floor with two bedrooms and a bathroom. The one existing unit is a two-story rowhome that will be rehabbed to similar standards.
Interested buyers are required to submit an application for the first-come, first-served process. Philadelphia Housing Authority performed income certification for applicants. Once the application is approved, families will undergo housing counseling at community organizations prior to assuming ownership. It is anticipated that at least five homes will be sold to former PHA residents.
“Moving from renting to owning is a big step, and we want to set the buyers up for success,” said Frankel. “Part of the housing counselor’s job is to help buyers understand the equity they’re building for their families for generations to come.”
This project will not only change the trajectory for the new owners, but it will also help to boost economic development in North Central Philadelphia. Replacing vacant lots with new homes contributes to neighborhood stabilization, increases in property values, and new vibrancy.
The Residences at Diamond Village represent Frankel Enterprises’ second affordable homeownership project in Philadelphia. In October 2018, with support from Reinvestment Fund, the brothers developed 23 rowhomes in the West Poplar neighborhood as part of the City of Philadelphia’s Workforce Housing Program. Like at Diamond Village, the homes were sold to families with incomes up to 120% AMI–this time for $230,000 each.
“Reinvestment Fund has been there to support us from start to finish,” said Frankel. “They understand the affordable housing model in a way that traditional banks don’t. We could not serve families as meaningfully as we do without Reinvestment Fund.”