Final approval granted for mixed-income apartment project in Center City after an 11-year process.
A lengthy delay in the development of a new mixed-income apartment complex at 2012 Chestnut Street in Philadelphia has raised concerns among stakeholders. The project, a collaboration between the Philadelphia Housing Authority (PHA) and Alterra Property Group, is designed to provide affordable housing options in the city center, where such units are increasingly scarce.
Initially slated to commence construction in 2025, the project has faced significant setbacks attributed to complications at the federal level. In a recent meeting of PHA’s board, officials reiterated their commitment to moving forward, with promises that construction will begin shortly. According to Kelvin Jeremiah, PHA’s president and CEO, recent developments indicate that all necessary regulatory approvals are now in place, and construction mobilization is expected to take place before October 6.
The planned 14-story structure will comprise 121 residential units, featuring 30 two-bedroom apartments, 63 one-bedroom apartments, and 28 studio units. Additionally, the project includes approximately 2,000 square feet of commercial space and off-site parking, making it noteworthy as the PHA’s first foray into Center City apartments since the agency vacated its former headquarters 18 years ago.
Market dynamics dictate that 40% of the residential units will be offered at market rates, while the remaining will be set aside for tenants earning 80% of the area median income, pegged at ,500 for a two-person household. This bifurcation aims to support a range of income levels, addressing the pressing need for affordable housing options within the city.
The design is being executed by JKRP Architects, and the construction will be managed by Hunter Roberts Construction Group. Unfortunately, bureaucratic hiccups from the U.S. Department of Housing and Urban Development (HUD) have plagued the project, which has been in the pipeline for nearly a decade since PHA and Alterra first collaborated in 2016. These difficulties stemmed from staffing cuts and resource constraints at HUD during the previous presidential administration.
As these delays have accumulated, the overall project cost has surged to million, representing an increase of million primarily due to rising prices for construction materials and ongoing supply chain issues. The financial complexities of housing development within urban environments continue to challenge stakeholders as they work toward alleviating housing shortages and improving prospects for low- and middle-income residents in Philadelphia.
Moving forward, PHA will maintain ownership of the land through a 99-year ground lease, while Alterra will handle the project’s development and management. These arrangements underscore the importance of collaboration in tackling the intricate challenges posed by housing development, particularly in vibrant urban centers. The push toward breaking ground marks a critical step in addressing the city’s housing needs, as stakeholders insist on actualizing the long-anticipated project.
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