Neighborhood Transformation Initiative

Many Philadelphia neighborhoods are in some state of decline. The age and deterioration of large portions of the housing stock in low-income communities and increasing housing abandonment and vacancy have contributed to a net decline in the quality and quantity of housing accessible to low- and moderate-income populations. These trends are symptomatic of underlying demographic and economic changes over the past 50 years, as suburban growth and the demise of industrialization resulted in a flight of population and jobs from Philadelphia. Housing policies and programs alone cannot solve these problems. It requires a dramatic change in government structure, policies and priorities.

In April 2001, the City of Philadelphia unveiled its Neighborhood Transformation Initiative (NTI). NTI is a strategy to rebuild Philadelphia’s neighborhoods as thriving communities with clean and secure streets, recreational and cultural outlets and quality housing. NTI takes a multifaceted, comprehensive approach that stresses interagency cooperation and coordination in addressing every aspect of neighborhood development. The initiative also creates opportunities for government and citizens to work together, restoring civic pride and building community spirit. NTI strives to build the capacity of community-based organizations to identify needs and develop new housing and employment strategies within their communities while garnering the support of the private sector through innovative partnerships and by leveraging resources. Through its various components, NTI will help Philadelphia’s neighborhoods meet their potential as clean, safe and thriving places in which to live, work and play.

n  NTI Goals and Principles

NTI establishes a framework for action with six goals to revitalize Philadelphia’s neighborhoods and to change the way the City operates:

Goal 1: Planning

Facilitate and support community-based planning and the development of area plans that reflect citywide and neighborhood visions.

Goal 2: Blight elimination

Eradicate blight caused by dangerous buildings, debris-filled lots, abandoned cars, litter and graffiti to improve the appearance of Philadelphia streetscapes.

Goal 3: Blight prevention

Advance the quality of life in Philadelphia neighbor-hoods with a targeted and coordinated blight prevention program that enforces city codes and abates public nuisances.

Goal 4: Assembling land for redevelopment

Improve the City’s ability to assemble and dispose of land for redevelopment and establish a Land Bank that will oversee the continual maintenance of such land over time.

Goal 5: Neighborhood investments

Stimulate and attract investment in Philadelphia neighborhoods.

Goal 6: Leveraging resources

Leverage resources to the fullest extent possible and invest them in neighborhoods strategically.

Effectively promoting new investment in Philadelphia’s neighborhoods requires transparent strategies, predictable administrative policies and a coordinated, comprehensive approach that mandates cooperation among public agencies, community residents and private and non-profit sector interests.

Anchored by standards for quality neighborhoods, the City will employ a set of principles to guide the allocation of federal, state, and local resources that are available for investment in neighborhoods. These principles seek to:

•    use planning as an investment tool;

•    balance affordable and market-rate housing;

•    invest to stimulate market activity;

•    foster competition to get the best product;

•    maximize private capital and minimize public subsidies; and

•    link housing with other public and private investments.

Affordable Housing

n Basis for Assigning Relative Priority Needs

High Priorities

The City is assigning a high priority to the following household types:

•    Extremely Low- and Low-Income Renter Households, including Elderly households, Small Households and Large Households with cost burdens, severe cost burdens and substandard conditions.

•    Extremely Low- and Low-Income Owner Households, including Elderly and Non-Elderly, with substandard housing and cost burdens.

•    Moderate-Income Renter Households and Owner Households with cost burdens, and other housing problems, including Elderly, Small and Large Renters, and Elderly and Non-Elderly Owners.

Extremely Low- and Low-Income Renter Households and Extremely Low-Income Owner Households in Philadelphia have the most urgent housing needs. Between 70 and 75 percent of these families face either housing costs in excess of 30 percent of income or housing that is deteriorated. Because these are among the most impoverished households in the city, cost burdens and severe cost burdens are particularly intolerable. The City proposes to continue funding affordable housing activities that will target all household types in these income categories.

Support for homeownership for low-income and moderate-income families is a high priority for the City, due both to the positive neighborhood benefits generated by increased homeownership and the high cost of maintaining aging housing units. Assistance for Elderly and Non-Elderly current and first-time homeowners will continue as a funding priority. Homeownership rehabilitation and sales housing production in moderate-income neighborhoods will also receive support as an effort to promote stable communities and encourage middle-income homeowners to remain within the city.

The housing needs of Moderate-Income Renter Households are assigned a high priority by the City, although the relatively greater needs of extremely low- and low-income families suggest that the bulk of funding go to the lower income groups. The City will continue to fund activities for moderate-income renters as funding permits, particularly programs targeting Elderly and Large Households.

Medium Priorities

The City is assigning a medium priority to the following household types:

•    Extremely Low-, Low- and Moderate-Income Owner Households with overcrowding only;

•    Extremely Low-, Low- and Moderate Income Large Renter Households with overcrowding only.

Some owner households do face high rates of overcrowding, and that overcrowding may be a particular problem in the Latino community. Large Renter House-holds were found to have the highest overall incidence of overcrowding. Because these families (both Owners and Large Renters) are also likely to have other problems identified as “high priorities” (such as cost burdens or substandard conditions), most households experiencing overcrowding will fall into other categories of need that will receive funding. As Low- and Moderate-Income Owner Households and Large Renter Households facing overcrowding alone become evident and as funding permits, the City may allocate resources for their assistance.

Low Priorities

The City is assigning a low priority to the following household types:

•    Extremely Low-, Low- and Moderate-Income Elderly Renter Households with overcrowding;

•    Extremely Low-, Low- and Moderate-Income Small Renter Households with overcrowding.

Overcrowding presents a housing emergency almost exclusively for Large Renter families in Philadelphia. Affordability and substandard conditions are the most immediate problems for Lower-Income Elderly and Small Renter Households. Elderly Renter Households, by census definition, are limited to one or two persons and are less likely to be found in overcrowded settings. Elderly heads of households with five or more family members would receive a priority for assistance as a Large Renter Household.

n  Strategy and Objectives for Meeting Priority Housing Needs

The City’s affordable housing strategy responds to the unique features of the Philadelphia housing market. Both rents and home prices in Philadelphia remain lower than in many cities of comparable size across the country. However, affordability remains a problem for households at the lower end of the income distribution. Also, the age and deteriorated condition of the housing stock forces many low- and moderate-income families to live in substandard conditions. Elderly homeowners on fixed incomes have a difficult time keeping up with repairs and thus, vacancy and housing abandonment are at crisis levels in many low-income neighborhoods.

The City’s affordable housing strategy addresses these factors, emphasizing housing production to rebuild the deteriorated housing stock; housing preservation, to arrest the process of abandonment and vacancy; homeownership, to enable low- and moderate-income renter households to experience the benefits of homeownership and to encourage private investment in Philadelphia neighborhoods; and resource leveraging to ensure that scarce housing dollars support as much activity as possible, in response to the overwhelming levels of need in the city. Each aspect is described below.

n Housing Production

Rental and Homeownership Production

Rental and homeownership production are key components of Philadelphia’s affordable housing strategy. In addition to increasing the net supply of housing units available to lower-income families, new construction is necessary to redevelop the hundreds of vacant lots that blight many Philadelphia neighbor-hoods. Vacant lots result from the process of housing decay, abandonment and ultimately demolition. Without attention, these areas can quickly become trash-strewn dumping grounds. At the same time, vacant lots present an opportunity for the development of more spacious dwelling units with private yards or off-street parking. Given the persistent downward trend in population, new construction can provide a means of redeveloping large portions of the low-income housing stock in a manner that incorporates advances in urban design and that provides enhanced accessibility for persons with disabilities.

New construction at a large scale can also rebuild a housing market, leading to the reduction in subsidy required to produce additional housing units.

Rental and Homeownership Rehabilitation

Housing rehabilitation is a particularly important strategy for Philadelphia, given the large numbers of long-term vacant properties (some of which are suitable for rehabilitation) found in low-income communities. Through rehabilitation, rental units that are vacant and uninhabitable can be reoccupied and units occupied by extremely-low and low-income homeowners can receive critically necessary repairs and basic maintenance. Both the declining incomes of Philadelphia’s homeowners and the deteriorated condition of the housing stock call for an aggressive policy of housing rehabilitation.

Housing rehabilitation should reinforce existing strong blocks or communities, consistent with NTI principles.

Public Housing Production

The Philadelphia Housing Authority (PHA) serves the lowest-income persons who are often the neediest. For this reason, supporting the production and management of public housing is perhaps the single most important strategy for meeting the needs of extremely low-income renter households. PHA’s large-scale redevelopment activities, notably redevelopment funded through the HOPE VI Program, can transform blighted neighborhoods while producing mixed-income rental and homeownership units that serve persons of very low to moderate income. The NTI program will support acquisition at large scale in areas such as Mill Creek where HOPE VI activities are taking place. In the past, CDBG or HOME funding supported the redevelopment or replacement of obsolete PHA units at Southwark Plaza (now called Courtyard Apartments at Riverview), Martin Luther King Plaza and Schuylkill Falls.

Housing Production Program Objectives

In advancing this housing production strategy, the City reaffirms its commitment to preserve and revitalize neighborhoods by continuing the targeted development of rental and homeownership units in North Philadelphia and in low-income sections of West Philadelphia, South Philadelphia, Northwest Philadelphia, Frankford and Kensington. Specific programmatic objectives are:

•    New construction for sales housing;

•    New construction for rental housing;

•    Vacant unit rehabilitation for sales housing;

•    Vacant unit rehabilitation for rental housing;

•    Large-scale homeownership development in targeted neighborhoods.

 

n  Promoting Homeownership and Housing Preservation

To more effectively support economic development and reinvestment in Philadelphia, the City will continue to emphasize homeownership and preservation of the existing occupied housing stock. Homeownership and housing preservation are top priorities in the neighbor-hood strategic plans developed in coordination with OHCD. The City proposes to sustain housing counseling programs for first‑time homebuyers and maintain support for major systems repair programs for current homeowners. These activities encourage first‑time homebuyers and also support current homeowners through preservation programs.

Homeownership and Housing Preservation Program Objectives

By strengthening housing preservation and home-ownership programs, the City will help to prevent further housing abandonment, maintain neighborhood quality of life and assist low- and moderate-income residents in attaining the goal of homeownership. These goals will be accomplished by supporting the following objectives:

•    Housing counseling;

•    Emergency repairs, housing preservation and weatherization; and

•    Home equity financing and rehabilitation assistance.

n        Leveraging Private Sector
Resources

The City’s Consolidated Plan can be an effective component of the City’s overall economic development strategy if available resources are organized to leverage substantial commitments of private sector funding and long‑term investment in Philadelphia. Such activities can include attracting commitments of private debt and equity financing, making full use of the City-State Bridge Loan Program and sustaining private‑sector support for Community Development Corporation (CDC) operations through targeted funding commitments made in coordination with private funding sources.

In continuing to develop rental and homeownership units, the City proposes to pursue strategies that will attract private capital into Philadelphia neighborhoods. These strategies maximize the impact of federal housing dollars by increasing the net amount of resources flowing into communities. Over the past several years, OHCD has supported the development of rental housing by providing financing to projects which leverage significant amounts of private funding. OHCD financing to rental projects has generated equity investment through the utilization of the Low‑Income Housing Tax Credits (LIHTC) by corporations and equity funds such as the National Equity Fund (NEF). Additional private funds have been leveraged through use of the Pennsylvania Housing Finance Agency (PHFA) PennHOMES Program which provides permanent financing for the development of rental projects.

Objectives for Leveraging Private Sector Resources

In order to maximize private-sector investment in low-income subsidized housing, OHCD proposes the continuation of policies that generate or sustain the following private sector funding commitments:

•    Equity investment in Low-Income Tax Credit Ventures;

•    Private sector support for CDC operations and working capital;

•    Mortgages for first-time homebuyers;

•    Bank financing for rental rehabilitation; and

•    Anti-predatory lending products.

Strategy for Removing Barriers to Affordable Housing

Two main local issues can be identified as barriers to affordable housing development: the public property acquisition/disposition process, and the high cash requirement for first-time homeownership.

Since 1993, the administration of public acquisition and disposition activities has been centralized at the Redevelopment Authority. While the process still remains cumbersome, clear lines of responsibility have been established and there is now one point of contact for the public and for developers wishing to obtain city-owned property. More importantly, eminent domain through the state’s Act 94 and Urban Renewal processes has replaced the Sheriff Sale as the primary means of acquiring privately owned, tax-delinquent or blighted properties. Condemnation is a less risky, faster means of acquiring privately owned, tax-delinquent or blighted properties than the Sheriff Sale process.

As part of NTI, the property acquisition and disposition process will be streamlined and selected vacant land will be landbanked for future development.

Philadelphia’s high transfer tax and down-payment requirements for obtaining a mortgage have hindered many low- and moderate-income families from becoming homeowners. In 1994, the effect of the transfer tax was partially mitigated by an exemption of properties conveyed to low- or moderate-income buyers by non-profit housing development corporations. In addition, transfers to non-profit housing development corporations which intended to re-convey to low- or moderate-income buyers were also exempted.

Lead-Based Paint Hazard Reduction Strategy

Lead-Based Paint Hazards in
Philadelphia Housing

Lead is the leading cause of non-congenital mental retardation. Elevated blood lead levels in young children can lead to a range of problems from relatively subtle developmental disabilities to severe impairment or even death. Common effects include impaired cognition and functioning, slowed learning abilities and behavioral disorders. Often these manifestations are subtle during early childhood but become more pronounced as children progress through school. In the past three years Philadelphia has had at least one lead-related death. Lead poisoning is most likely to occur in old, poorly maintained dwellings with deteriorated paint. Philadelphia’s housing stock is largely pre-war; an unusually high proportion of low-income residents own their houses but lack the means to prevent water damage and decay while those who must rent face an extreme shortage of safe, affordable rental housing.

Though it has declined markedly in the past few years, there is still an alarming incidence of childhood lead poisoning in Philadelphia. More than 2,000 young children currently have blood lead levels above the Environmental Intervention Blood Lead (EIBL) level—20 micrograms per deciliter (ug/dL), or two consecutive readings between 15 and 19 ug/dL—and almost 5,000 are above the 10 ug/dL “level of concern.”

Response to Lead Poisoning

Until recently, public lead-hazard reduction activities have been primarily reactive: they are targeted to properties where a child has been identified with an EIBL level. The Health Department’s Childhood Lead Poisoning Prevention Program (CLPPP) offers remedies based on the blood lead level found in children 6 months to 6 years old. Children are screened through a citywide network of hospitals, public health clinics, private doctors and schools. EIBL levels are confirmed by laboratory reports. In addition to providing direct medical intervention as appropriate, the City seeks to minimize further lead exposure in the lead-poisoned child’s home environment.

For children with blood lead levels of 70 ug/dL or higher, CLPPP attempts an environmental investigation at the home (or other suspected lead source) within 24 hours after EIBL is confirmed. Based on recent experience, no such cases are expected in FY 2005. For children with blood lead levels between 45 and 69 ug/dL, an environmental investigation is attempted within five working days after test results are received in the district health office. The investigation rate for this intermediate level of lead poisoning is approximately 90 percent. In less extreme, asymptomatic cases (where there may have been no physician follow-up), parents often have little sense of urgency. Despite follow-up contact attempts by Health Department staff, the expected investigation rate is only 70 percent.

Following its hazard investigation, the Health Department orders the property owner to take corrective steps. When necessary it is empowered to declare properties unfit for human habitation. The objective of enforcement is not abatement (the permanent elimination of lead hazards), which is often prohibitively expensive, but hazard reduction. Hazard reduction uses a combination of measures to make the property currently lead-safe. As such measures are not necessarily permanent, this approach requires ongoing monitoring and control. Even the desired level of hazard reduction, however, is likely to cost several thousand dollars. When properties are deteriorated from lack of maintenance, extensive repair may be a necessary precondition. Thus hazard reduction can be prohibitively expensive for a low-income owner-occupant or for the owner of a low-income rental property whose cash flow barely covers current costs.

The Health Department’s own crews are able to do emergency hazard control in a few properties per month. Under its “order and bill” authority, the department can have an abatement contractor do hazard control work (for which it then attempts to reclaim the cost from the owner); until 2002 this authority was seldom used. For several years very limited financial assistance, primarily through HUD grants, was available for hazard reduction. Most of it was targeted to low-income owner-occupants.

As of February 2002, there were 1,405 properties with outstanding lead violations—636 rental units and 769 owner-occupied houses. About 2,100 children under age 6 were believed to be living in these properties, which are highly concentrated in the poorest neighborhoods of North Central and West Philadelphia. On average, violations are found in almost 50 new addresses each month.

Renewed Commitment

Recently the lead-poisoning danger to Philadelphia children has engendered an unprecedented level of public concern and political pressure. In the FY 2003 budget hearings, the Health Commissioner was questioned about the adequacy of CLPPP’s lead hazard control services. Program capacity had been far less than would be needed to correct new violations found each month and ultimately eliminate the backlog of outstanding violations. The administration agreed to reallocate funds to make possible a large increase in the number of abatement crews. It directed city departments to work together in addressing the various facets of the problem. In close consultation with the Health Department, the Managing Director’s Office/Adult Services (AS), Office of Emergency Shelter and Services (OESS), Department of Licenses and Inspections (L&I), Department of Human Services (DHS), and City Solicitor’s office—as well as OHCD, PHDC and PHA—framed a concerted strategy for bringing properties with lead violations into compliance. The Health Commissioner convened two inter-departmental teams, including representatives of all these agencies, which meet regularly to develop plans and monitor progress. With greater speed than normal procurement procedures allow, six experienced private lead abatement contractors were hired. Thanks to the cooperation of Municipal Court, a special Lead Court was established to deal with rental-property owners who ignore Health Department orders. For owner-occupied houses that need system repairs (such as structural repairs or a new roof) before abatement, the repair work is done either by PHA (which the Health Department reimburses) or through PHDC’s Basic Systems Repair Program. Arrangements were made to relocate families temporarily in furnished, lead-safe apartments or in motels while hazard control work was done in their homes. Facing serious legal sanctions, many previously uncooperative landlords took steps to bring their properties into compliance. By March 2004 the backlog of more than 1,400 outstanding violations had already been reduced to less than 600; no new cases were added to the backlog.

Primary Prevention

The Residential Lead-Based Paint Reduction Act of 1992, known as “Title X, “ established a policy of primary prevention—eliminating lead hazards in the country’s housing stock rather than responding when children have already been harmed. Consistent with federal policy, the City has attempted to develop strategies and incentives which reduce children’s exposure to lead before they become lead-poisoned. An early step in this direction was a “disclosure” ordinance passed by City Council in 1995 in anticipation of the federal disclosure regulations later mandated by Title X. This ordinance gave consumers the right to obtain information about the lead safety of a residential property before buying or leasing it. The Health Department’s “Lead Safe Babies” Program provides outreach and education to new mothers and pregnant women. CLPPP workers identify potential hazards in homes and attempt to correct them. Under a new Title X regulation which finally took effect in FY 2001, steps must be taken to reduce lead hazards in almost all housing that receives HUD federal assistance—regardless of the status of current residents. Significant attention must now be given to lead hazard control in virtually all the City’s housing repair, rehabilitation, acquisition and rental assistance activities. The required level of intervention varies depending on the type of program and the amount of federal rehabilitation funding or rental assistance per unit.

In addition, under a local consent decree, lead hazard control work is required in all vacant properties to be sold by HUD as a result of FHA mortgage default. The Health Department is under contract with the local HUD office to inspect and clear this work.

Anti-Poverty Strategy

Philadelphia’s housing problems will remain intractable as long as a high proportion of its population is economically dependent and lacks access to the skills and resources needed to succeed in today’s economy. According to 2000 Census data, approximately 23 percent of Philadelphia’s population have incomes at or below the poverty standard. The continued departure of jobs from the city as well as the higher educational requirements for occupations in the growing sectors of the economy have made it increasingly difficult for city residents from low-income communities to obtain stable, well-paying jobs. Measures which connect people to the labor force, support the creation of small businesses and encourage entrepreneurship among low-income residents are necessary to improve the economic prospects of city’s residents and alleviate poverty. The following initiatives help low-income residents gain access to jobs, skills and capital, and form the core of the City’s Anti-Poverty Strategy:

•    The Neighborhood Benefit Strategy was inaugurated through Mayor’s Executive Order 2-95 and requires developers receiving CDBG funding to set a goal of returning 50 percent or more of the economic benefit of the CDBG-funded venture to the immediate and surrounding neighborhood; and

•    The Empowerment Zone Strategy being implemented in the designated neighborhoods will generate new job opportunities, support local enterprises and help revitalize local neighborhood economies.

In addition to these core initiatives, job-training activities are undertaken by a number of local agencies including OHCD, PHA, OESS, the Department of Human Services and PWDC. Representatives from these agencies and other service providers meet regularly to coordinate resources and promote economic self-sufficiency programs.

Several programs serving homeless persons include a self-sufficiency component. For example, Dignity Housing, Project Rainbow and People’s Emergency Center provide life-skills training and other services designed to increase economic and social self-sufficiency.

PHA’s Family Self-Sufficiency Program provides Housing Choice Voucher rental assistance to program participants who also receive remedial education, counseling, job-training referral and placement.

Education is another primary strategy that can aid in the reduction of poverty. Volunteers from the Mayor’s Commission on Literacy help Philadelphians improve their reading skills, and link education with neighborhood-based organizations.

Effects of Welfare Reform

Federal and state welfare reform will continue to have an effect on the city as more residents lose benefits by exceeding their lifetime limit or failing to meet work requirements imposed by the state. Homelessness and the demand on city social services are likely to increase as this happens. For example, the rising number of Philadelphia residents without Medical Assistance/Medicaid has resulted in more visits to city health care centers by uninsured individuals: in FY 1996, 49 percent of the visits to health care centers were by uninsured visitors while in FY 2001 that number reached 64 percent.

Full enforcement of welfare reform and further policy changes produced by the federal and state governments may also have revenue impacts to the city. Philadelphia’s Department of Human Services depends heavily on federal support through the Temporary Assistance for Needy Families (TANF) program. Currently, increased City spending on health centers and human services continues in an effort to address the needs of TANF households as their resources are depleted.

The City continues to maintain CDBG and HOME funding for critical housing and community development needs, and does not divert housing or community development funds to specific welfare reform activities. However, beneficiaries of these programs and funding sources do include families currently receiving or transitioning off TANF benefits.

 

Strategy for Improving the Institutional Structure

n Planned Reorganization

As part of the Neighborhood Transformation Initiative, the City will reorganize and streamline the public agencies which carry out affordable housing activities. Currently, much of the City’s housing development and preservation activities are carried out principally by three agencies—the Office of Housing and Community Development (OHCD), the Redevelopment Authority (RDA), and the Philadelphia Housing Development Corp. (PHDC). The City will reorganize and integrate many of the City’s housing and community development functions within the Office of Housing and Neighborhood Preservation (OHNP), under the leadership of a cabinet-level secretary reporting directly to the Mayor. The first Secretary of Housing and Neighborhood Preservation was appointed by the Mayor in December 2002.

OHNP will focus on the following critical activities:

•    speeding up the acquisition and disposition of vacant property;

•    emphasizing and creating incentives for private housing development;

•    instituting performance measures for the achievement of specific housing-related goals, including the development of 16,000 new housing units in the first five years;

•    monitoring and evaluating existing programs to determine their success and continued viability;

•    financing the preservation and stabilization of existing housing; and

•    facilitating access to the City’s housing programs by the public, including private developers.

An integrated approach will generate other benefits as well. Each of the three agencies currently has personnel, MIS, purchasing and legal operations. Reducing administrative costs will provide more funding for housing and other program activities.

Because of its unique role and the extensive federal requirements under which it operates, the Philadelphia Housing Authority (PHA) will not be part of the actual reorganization effort. Instead, PHA and the RDA, a Commonwealth instrumentality that will continue to carry out its special statutory powers, will be guided by the strategic direction established by OHNP.

n City of Philadelphia Departments

OHCD

OHCD is responsible for all policy making and planning related to housing and community development activities. The Secretary represents the Mayor in the management and execution of City housing policy and is the administration’s chief representative on housing and community development issues. OHCD is responsible for the organization and administration of the Consolidated Plan and the housing budget, including HOME funds, state Department of Com­munity and Economic Development funds, and HOPWA funds. OHCD administers contracts with public agencies such as RDA and PHDC as well as with subrecipient non-profit organizations which conduct planning activities and perform services in support of the CDBG and related programs.

Adult Services

Reporting directly to the Managing Director, the Deputy Managing Director for Special-Needs Housing leads Adult Services (AS). AS was created in FY ’02 and is a reorganization of City agencies who work to prevent homelessness and provide emergency and transitional services to assist households in obtaining and maintaining permanent homes for themselves and their families. The primary responsibility of the AS Director is to set City policy on issues that impact homelessness and access to permanent housing, including eliminating chronic homelessness and increasing permanent supportive housing. This is accomplished through working within government as well as with the private and non-profit sectors. The AS Director has line authority over the Office of Emergency Shelter and Services which provides services to prevent homelessness and assists those who are homeless with shelter and support services. The Director also oversees Riverview Home, a personal care boarding home that provides housing and support services to vulnerable adults. In FY ‘03, AS created the Housing Support Center as a joint venture with DHS to assist households with worst-case housing need in their efforts to secure or maintain affordable housing.

n Other City Departments

Other City de­partments play lesser roles in providing affordable housing opportu­nities. The Office of Behavioral Health and Mental Retardation Services (OBH/MRS) has primary responsibility for placing MH/MR clients. DPH’s AIDS Activity Coordinating Office (AACO) contracts with social service agen­cies for case management services. The Department of Licenses and Inspections enforces local building codes. The Commission on Human Relations enforces local non-discrimination laws. In Year 19, the responsibilities of the Fair Housing Commission, which resolves disputes between landlords and tenants over rent increases and practices, were transferred to the Commission on Human Relations. The Mayor’s Office of Community Services (MOCS) administers the Community Servic­es Block Grant and operates a network of neighborhood offices which aid in the distribu­tion of food to the poor, help low-income persons apply for the Low-Income Home Energy Assistance Program, and act as advocate with utility companies and government agencies. The May­or’s Commis­sion on People With Disabilities assists disabled persons needing housing by acting as advocate and by referring to the appropriate resource. The City Planning Commission and Philadelphia Historical Commission provide the requisite environmental and histori­cal reviews for federally funded projects.

n        Commonwealth of Pennsylvania and Related Agencies

DCED

The Department of Community and Economic Development (DCED) of the Commonwealth of Pennsylvania administers housing and redevelopment funds which are annually appropriated by the state legislature. Philadelphia has used DCED funds for its home-repair programs and to help finance homeownership and rental rehabilitation and new construction developments. DCED administers Pennsylvania’s federally funded weatherization program which is designed to reduce home-energy costs for low-income persons. Under contract to DCED, PHDC administers the weatherization program in Philadelphia.

PHFA

The Pennsylvania Housing Finance Agency (PHFA) is a state-chartered authority which issues bonds and funds affordable housing programs. PHFA funds are one component of many development financing schemes. In addition, PHFA provides low-interest mort­gage loans for first-time homebuyers and provides mortgage counseling and restructuring aimed at preventing mortgage default.

n Non-Profit Organizations

Community Development Corporations

Philadelphia has a large number of community development corporations (CDCs), many of which meet HUD’s definition of a Commu­nity Housing Development Organization (CHDO). CDCs are neighborhood-based corporations which are able to evaluate a commu­nity’s perceived development needs and desires. Housing develop­ment and economic development efforts are then designed to meet these needs. CDCs may rehabili­tate vacant and deteriorated buildings for resale to low- or moderate-income buyers or for rental purposes. Some CDCs also sponsor job banks or training programs, provide housing counseling, operate home-repair programs, or undertake commercial development. Recently, CDCs have built new-construction houses as a cost-efficient way to provide affordable housing.

OHCD’s policy is to provide a substantial portion of its resources to housing activities sponsored by CDCs. In fact, whenever an eligible neighborhood is served by a CDC the City is commit­ted to carrying out housing production through that organization. OHCD also works closely with the Philadelphia Association of Community Development Corporations (PACDC), a non-profit organization that serves to support CDC activity by providing technical assistance and by advocating for the interests of CDCs in the public arena.

In addition to CDCs, there are several citywide private non-profit corporations which undertake housing rehabilitation and development. These organizations carry out a variety of activities including rental property management, permanent housing for the homeless, home-repair loans, community improvements and “sweat equity” homeownership development projects.

Neighborhood Planning Organizations
and Neighborhood Advisory Committees

OHCD funds Neighborhood Advisory Committees (NACs) throughout the CDBG-eligible service area. NACs are governed by boards elected by their communities and are funded to provide neighborhood input on housing and community development and to provide information and outreach about affordable housing pro­grams and related services.

Non-Profit Housing Counseling Agencies

Philadelphia supports a wide range of agencies which provide housing counseling services aimed at combating predatory lending, preventing homelessness, increasing homeownership and assisting individuals with landlord/tenant disputes. Some agencies provide services to specific at-risk populations, such as the elderly, the disabled or abused women, while other agencies provide services to the general population.

The Homeownership Counseling Association of Delaware Valley was created to better coordinate the resources and activities of the strong network of housing counseling agencies that serve the Philadelphia region. OHCD will continue to work closely with both the association and individual counseling agencies to ensure that high-quality housing counseling services continue to be made available to area residents.

Housing counseling aimed specifically at the homeless or at preventing homelessness is provided by several agencies which offer services ranging from rental assistance to life-skills development.

Housing-related legal services are provided by at least three entities in the Philadelphia area. Community Legal Services represents low-income clients who have housing-related legal problems, including landlord-tenant cases, mortgages and deeds, and disputes with home-repair companies. Regional Housing Legal Services offers legal assistance to non-profit housing agencies and CDCs. The Public Interest Law Center of Philadelphia is dedicated to protecting the right of housing consumers to live where they choose by enforcing fair housing laws.

n Private Sector

Several private entities that are active in Philadelphia provide financing for affordable housing developments. The Reinvestment Fund pools investments from individuals and institutional investors including religious organizations, educational institutions, corporations and foundations to provide a loan fund for housing development. The Local Initiatives Support Corp. (LISC) is a national non-profit corporation which is instrumental in providing project development funding for affordable housing projects. The Philadelphia Urban Finance Corp. provides short-term financing for projects using funds loaned by local churches and religious congregations.

In 1991, the Pew Charitable Trust announced a series of grants to support community develop­ment and neighbor­hood organizations, many of which also do housing development. Other local founda­tions may provide specific funding on occasion.

During 1994, new state legislation was enacted which made it possible for businesses to obtain state tax credits for contributions to non-profit organizations, including CDCs. In Philadelphia, an initiative known as the Philadelphia Plan was organized in order to link local businesses with non-profit and community-based organizations and to support these organizations through use of the tax-credit benefit.

Private Developers and Providers

Many private developers, landlords and others provide affordable housing in Philadel­phia. Through the Housing Choice Voucher program (formerly known as Section 8), private owners are able to rent to low-income families who could not otherwise afford the rent necessary to carry the expenses of the building. The extreme shortage of new Housing Choice Vouchers, however, has led to vacancies in some buildings while families remain on waiting lists. The high cost of rehabilitation and the low rents which poor Philadelphians can pay has meant that private developers are able to rehabilitate vacant buildings for affordable units on a large scale only with public subsidies. OHCD, PHFA, low-income and historic tax credits have all been used successfully for financing. The end of the federal Rental Rehabilitation program (called MEND in Philadelphia) has cut off one source of subsidy, especially for smaller developers.

Philadelphia’s homeless population is cared for through a network of boarding homes and shelters largely run by private providers who contract with OESS.

n Philadelphia Housing Authority

The Philadelphia Housing Authority (PHA) is a state-chartered agency which administers low-rent public housing and the Housing Choice Voucher program. PHA is governed by a five-member Board of Commissioners, two of whom are appointed by the Mayor, two by the City Controller and the fifth member by the other four. Traditionally, the fifth member is a PHA tenant who has been recommended by the tenant organizations. Having representatives of the Mayor’s Office involved on the PHA Board helps provide effective oversight and ensures that PHA, City and HUD activities are well-coordinated.

n Overcoming Gaps

The housing agency reorganization will integrate housing and community development functions within OHNP. The office will be responsible for setting housing and community development policy and implementing the programs to carry out those policies. In coordination with NTI goals and funding, incentives will be created for private-market development, along with a continued emphasis on affordable housing funded with CDBG resources. OHNP will continue the coordination with the Deputy Managing Director for Special Needs Housing in planning and developing low-income housing, especially for persons with special needs, including the homeless. The Mayor’s Community Development Group, composed of the leadership of OHCD, PHDC, RDA, NTI, the Empowerment Zone (EZ), Philadelphia City Planning Commission, OESS and PHA meets monthly with the Mayor to share information and coordinate responses to issues of common concern.

Summary of Public Comments

OHCD received public comments at three separate stages in the development of the Year 30 Consolidated Plan. A Needs Hearing was held early in the planning stage to give citizens an opportunity to participate in the process of needs identification and the establishment of funding priorities. A second hearing was held after the release of the Year 30 Preliminary Consolidated Plan, a draft version of the Plan released for public comment and input. Revisions were incorporated into the Year 30 Proposed Consolidated Plan, which was distributed for public comment and presented to City Council for consideration and adoption. The hearing for the Year 30 Preliminary Consolidated Plan met the public hearing requirements specified in HUD regulations. The issues raised by the public at these three hearings are summarized below.

n  Needs Hearing

At the Needs Hearing on Dec. 11, 2003, 27 neighborhood representatives, housing professionals and private citizens offered testimony regarding the housing and community development needs within the city. Nine additional individuals or organizations presented written testimony that was incorporated into the record of the hearing. Individuals representing the interests of persons with physical disabilities, the elderly, community development corporations (CDCs) and very low- income persons characterized the specific needs facing their constituencies and offered recommendations for local spending priorities.

Needs mentioned at the hearing centered around the following areas: housing for special-needs and very-low income families, concerns about the relocation process, homelessness prevention, housing counseling, anti-predatory lending, commercial development by CDCs, preservation of green space and blight removal. Suggestions were made to establish a Housing Trust Fund, to modify relocation as part of the Neighborhood Transformation Initiative (NTI) and to dedicate more funding to housing for very low-income persons and the physically disabled. Funding was requested for emergency rental repairs, housing counseling services, housing preservation and specific projects, populations and neighborhoods.

n  Hearings on the Preliminary Consolidated Plan

On April 1, 2004, OHCD held a public hearing to receive comments on the Year 30 Preliminary Consolidated Plan. Community representatives and individuals expressed support for the Consolidated Plan and specific programs currently funded by OHCD. OHCD received comments regarding the appropriateness of certain funding decisions and current policy directions and general remarks on ongoing programs and funding needs in specific neighborhoods. A summary follows:

Funding decisions: Support was expressed for various programs including housing counseling,
anti-predatory lending activities, using HOME funds for rental assistance for persons with AIDS and community gardening and greening. Concerns were raised about the impact of the loss of NTI funding for the Adaptive Modifications and Basic Systems Repair Programs and about reduced funding for several other programs, including community economic development activities.

Other issues:

q  Many persons and groups advocated for the establishment of a local Housing Trust Fund in the amount of $20 million, funded with non-federal funds, including document recording fee increases, local real estate transfer tax funds, state funds and NTI funds.

q  Increased funding for acquisition.

q  Advocates for the disabled testified in support of increased funding for more affordable, accessible housing, for increasing funding for the Adaptive Modifications program and for requiring new houses to be visitable.

q  Further comments or requests for housing and community development assistance were made by representatives from: Liberty Resources, Jewish Employment and Vocational Services, Greater Philadelphia Urban Affairs Coalition, ActionAIDS, Independent Community Assistance Network, Inglis Housing Corp., People's Emergency Center CDC, Community Design Collaborative, Tenants’ Action Group, Women's Community Revitalization Project, South Philadelphia H.O.M.E.S., Project H.O.M.E., Impact Services Corp., Homeownership Counseling Association of Delaware Valley, Philadelphia Corporation for Aging, Ceiba, Neighborhood Gardens Association, Philadelphia Association of CDCs. Written comments were received from Let's Love Logan Community Association, Nicetown CDC, Energy Coordinating Agency, Community Choice Housing Committee, New Kensington CDC, Community Land Trust Corp. and Asociación de Puertorriqueños en Marcha.

n  Hearings on Proposed
Consolidated Plan

On June 1, June 3 and June 10, 2004, public hearings were held before City Council's Committees of the Whole and Finance to receive comments on the Proposed Year 30 Consolidated Plan and to obtain approval of the Council bill authorizing the application for federal and state funds. At the same time, testimony was heard on the City's proposal for spending under the locally funded Neighborhood Transformation Initiative for FY 2005. Heard on June 2 was testimony on an ordinance creating a local Affordable Housing Trust Fund. Testimony received at the hearings covered a diverse set of issues and concerns.

Currently funded programs receiving support included neighborhood greening, senior housing repair and adaptive modifications programs, employer-assisted housing and anti-predatory lending programs, technical assistance programs, homeless and special-needs housing development, community economic development funding and housing counseling. The increase in the required number of accessible units in new construction housing from 5 percent to 10 percent in the Proposed Consolidated Plan received support. Following is a summary of suggestions and comments received at the hearing:

Neighborhood Transformation Initiative: Citizens expressed support for NTI but suggested that acquisition funding be increased for FY 2005. In addition, several comments were made concerning relocation as part of site acquisition and assembly. One speaker suggested that additional funding be made available to continue the Targeted Basic Systems Repair Program for a second year. One speaker advocated for an increase from NTI funds for the Basic Systems Repair Program.

CDCs and other concerns: Many speakers called for the creation of a local Affordable Housing Trust Fund of $20 million, supported with NTI funds, increased document recording fees, a portion of the real estate transfer tax, and state funds. Supporters of the Trust Fund included disabled advocates from Liberty Resources and Disabled in Action, CDCs represented by the Philadelphia Association of CDCs and others. Several CDCs advocated for increased funding for community economic development activities. One speaker advocated for increased settlement assistance grants using American Dream Downpayment Initiative (ADDI) funds and the re-institution of required home inspections as part of the Settlement Grant program. Several speakers supported specific development projects or development in specific neighborhoods. Two speakers raised concerns about minority participation in NTI and other contracts. CDCs represented included People's Emergency Center CDC, Friends Rehabilitation Program, United Communities Southeast Philadelphia, Frankford CDC, Point Breeze CDC, Women's Community Revitalization Project, Raise of Hope, Project H.O.M.E. and The Partnership CDC.

As a result of the City Council hearings, funding was increased for acquisition activities and funding sources were realigned for programs including Acquisition, Basic Systems Repairs, SHARP and Homeownership Rehabilitation Program. These budgetary changes are reflected in the final Year 30 Consolidated Plan.