Philly enclave sees resurgence with 1,600 housing units

An overlooked enclave in Philadelphia is experiencing a revival thanks to a new boom in housing planning and construction.

More than 1,600 housing units have either been proposed, under construction, or completed north of East Lehigh Avenue, adjacent to a historic railway embankment that has long stood as a physical and social divide between neighboring communities, the Philadelphia Inquirer reported.  The once-neglected railbed was characterized by junkyards, tire shops, and homeless encampments. 

However, the space between Emerald Street and Aramingo Avenue, Lehigh and Somerset Street, has undergone a striking transformation with the the emergence of at least seven residential projects at varying stages of development.

“These projects are taking what was formerly pretty heavily industrial areas, and in some cases land that had been vacant for many, many decades, and bringing it back into active use,” said Andrew Ortega, president of the East Kensington Neighbors Association.

Despite challenges like proximity to drug markets and a history of tire fires, the area boasts convenient access to amenities. It lies near the I-95 highway and SEPTA’s Market-Frankford Line, while also being within walking or biking distance of trendy bars and restaurants.

Leading the development thrust around the rail lines is the Riverwards Group, with projects like Kensington Courts at 2037 E. Lehigh Ave, Somerset Station at 2200 E. Somerset Street, and the disputed 2750R Aramingo Ave. Together, these initiatives contribute to “naturally occurring affordable housing” due to their ability to offer large-scale projects at a lower price point compared to those around Center City. However, critics argue that the resulting units remain unaffordable for many existing residents in the low-income neighborhoods north and west of the rail hub.

The development boom in this area has been catalyzed by the availability of sizable tracts of land at affordable prices, making large-scale projects economically viable. Despite challenges posed by rising interest rates and material costs, developers like Mohamed “Mo” Rushdy, managing partner of the Riverwards Group, have reshaped this industrial wasteland into a burgeoning residential zone. Still, discussions continue around the need for more inclusive affordable housing solutions, particularly in communities with lower average incomes.

“What drew us to the area is that we are able to get land in a large quantity and density,” Rushdy told the outlet. “[That allows us] to target the middle person who is making $50,000 to $80,000 a year in terms of household income.”

Apart from its residential impact, this revival is expected to influence the Lehigh Avenue corridor by enhancing safety measures and potentially redirecting traffic to public transit options. 

The surge in residential demand comes at a time when office vacancies in the city have spiked.

Office occupancy in Greater Philadelphia has contracted by nearly 10 million square feet since 2019, the Philadelphia Inquirer reported, citing data from CBRE. Hybrid work models and remote work have cut significantly into the market.

“The downtown market is beat up right now pretty good,” Nick Gersbach, senior vice president in CBRE’s Philadelphia office, told the Inquirer. “I’ve been here 23 years in this market, and I haven’t seen it contract at this pace before … We’re a three- to five-year window from stabilizing and experiencing a slow recovery. … People are not going back into offices.”

— Ted Glanzer

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