As Population Decreases, Philly Seeks to Fill Space

Philadelphia is to weeds as Kansas is to corn. In large sections of North Philadelphia, the weeds appear intent on reclaiming land the Colonists settled hundreds of years ago. Weeds poke through the sidewalk, twirl through the charred hulks of abandoned homes and factories and ascend, in creepy majesty, to towering heights as weed trees (that's what the city maintenance workers call them) in the vacant lots that pockmark seemingly every other street.

The weeds memorialize the city's retreat from better days. Like Detroit, St. Louis, Baltimore and a dozen mid-sized Rust Belt cities that might turn up in a Bruce Springsteen song, Philadelphia is haunted--plagued, even--by the remnants of its earlier success. All these cities now have much more space than people to fill it.

Philadelphia's population swelled to 2 million in the manufacturing boom that immediately followed World War II. As the industrial jobs dried up, it's been losing people ever since, hitting a new low of 1.5 million in the 2000 census. Like a retreating army, that exodus of moms and dads and kids and dogs has left ruins in its wake--abandoned cars, derelict homes, vacant lots. Patricia Smith, a city planning official, calculates that between the abandoned homes and empty lots, about 10% of the city's real estate parcels are vacant. Downtown Philadelphia and upscale enclaves are vibrant. But the vacant parcels, like so many sinkholes, have pulled down too many neighborhoods in a cycle of decay and abandonment.

Enter new Philadelphia Mayor John Street, a man whose prodigious energy can be only partially explained by his fondness for bottled water and health foods. This spring, Street launched a Neighborhood Transformation Initiative (directed by Smith) that qualifies as the most ambitious urban renewal offensive in the country. His goal is to first clear away the ruins and then encourage new building that will reverse the half-century of population loss.

Street started last year by towing cars abandoned on the streets; the city has now removed 70,000 of them and is collecting more at the rate of up to 1,000 per week. Earlier this month, in a driving rainstorm, the mayor launched a campaign to clean up 31,000 vacant lots; city workers are now charged with clearing 600 a week for the next year. He's also pushing a bond issue that would allow the city to tear down 14,000 abandoned buildings over the next five years, about three times as many as it demolishes today. "I don't know where that has happened, outside of an earthquake or a war," says Jeremy Nowak, president of the Reinvestment Fund in Philadelphia and a consultant to the plan.

Daunting as all these tasks might be, they still pale beside the challenge of attracting developers to construct new homes once Philadelphia's struggling neighborhoods are swept clean. As Smith notes, pockets of residential development are thriving in the city, with warehouses being converted to luxury lofts near downtown and a handful of upper-end homes sprouting in the best neighborhoods. But these are exceptions. The obstacles to building inside the city outnumber the incentives: Byzantine zoning and permit processes and exorbitant union labor costs (60% to 80% higher than in the surrounding suburbs) swell the cost of construction, even as a weak market holds down the price builders can charge. The result: From 1995 through 1999, the city granted fewer than 3,000 permits for new residential construction--25 times fewer than the number granted in the city's suburbs, according to Harvard University's Joint Center for Housing Studies.

Philadelphia's problems attracting new housing might be especially severe, but they are hardly unique. Cities have been largely overlooked in the housing boom of the 1990s: Though the nation added an eye-popping 16 million new houses from 1990 through 1998, the number grew three times faster in the most distant suburban counties than in central cities. Even a majority of African Americans who purchased homes in the 1990s bought in the suburbs.

This trend imposes huge costs on cities like Philadelphia. New homes could add to their revenue base through property taxes; they can even increase the values of existing homes. More important, new homeowners fill up the little platoons--school board members, crime watch volunteers--that make communities work. "You need homeowners to provide stability and commitment to these neighborhoods," Street insists.

To inspire more home construction, though, Philadelphia, like many cities, needs more incentives for builders. With little attention, President Bush has developed a proposal that could help: a tax credit for builders that would subsidize up to 50% of the construction cost for new homes in low-income neighborhoods. The credit is modeled on the hugely successful low-income housing tax credit that helps fund the construction of more than 90% of all low-income rental housing built in America. "It makes a lot of sense to build on that successful formula," says Buzz Roberts, vice president for policy at the Local Initiatives Support Corp., a national group that funds grass-roots development.

Even with greater tax incentives, builders won't come unless cities trim the weeds in their own permitting and zoning systems. Street is already trying to reform and consolidate the city's overlapping housing agencies. But the old dysfunctional habits of urban politics die hard. Some City Council members--publicly demanding more specificity about the plan and privately angling to secure a greater share of the proceeds for their own districts--have delayed approval of the $250-million bond issue Street needs to move forward.

Street is confident the bond will be approved, and the plan advanced, this fall. But even if the city meets all the goals he has set, it's unlikely to ever again house as many people as it did half a century ago. The same is true for Detroit and St. Louis and other burly cities hollowed out by a changing economy. As Street understands, that means these cities will have to think creatively about how to relocate people into a more concentrated core--and how to then use the vast open spaces they'll never fill again. The other day someone proposed to Street that the city build a golf course just a long tee shot from downtown. It seemed like an odd idea, but then he thought: Maybe, why not? After all, greens beat weeds any day.

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