Published: September 30, 2008
The odds are against the little guy in this market.
Last Thursday at City Hall, just across from the new Ritz Carlton development, a rally was held by the Campaign for Housing Justice to convince City Council to pass part two of a housing bill introduced back in December.
It was fitting that the rally was taking place in the shadow of the Ritz-Carlton.
It was in 1991 that One Meridian Plaza, today the site of the Ritz-Carlton, caught fire and burned to the ground. The building, on 15th between Market and Chestnut, sat vacant for years until a developer agreed to a deal to build a 54-story luxury condominium on the property. To close the deal, the city agreed that anyone buying a condo in the high-rise would receive a 10-year abatement—or free pass—on property and other taxes. It’s a strategy that helps developers get projects finished and serves as a major selling point for those looking to buy, including those at the Residences at the Ritz-Carlton.
Right now, the average monthly rental for a two-bedroom apartment in the city is $923. Homelessness is on the rise and tax abatements, like the one the Ritz offers, get paid out of Philadelphia taxpayer dollars.
The protestors want the city to commit to a 10 percent affordable housing set-aside in any new development of more than 20 units. They also want a trust fund for basic home-repair grants, rehab for vacant properties and home upgrades for the disabled.
Nora Lichtash, executive director of the Women’s Community Revitalization Project, and Wayne MacManiman, chairman of union SEIU’s Mid-Atlantic District 32BJ, say they are determined to narrow the disconnect between those able to buy at the Ritz and those who aren’t but may be helping to foot the bill.
“There are a lot of people who have taken out loans they can’t afford—and a lot more who can’t afford to stay in their neighborhoods,” says Lichtash. “Rents and taxes are going up and people are being priced out of their neighborhoods. One in five households—that’s 130,000 households in Philly—is paying too much for their home and can’t afford it.”
MacManiman says he attended the rally to support housing for regular Philadelphians who can’t afford one of the luxury condos that are going up all over the city—“some subsidized by taxpayer dollars.”
“We feel that if the everyday working people are to a degree footing the bill and the developers are getting incentives,” he says, “then there needs to be some benefit for the average, normal working family.”
With housing and mortgage corruption on the rise, experts say homeowners are falling prey to get-rich-quick schemers who promise to save a home vulnerable to foreclosure. Often they swoop in with a stack of paperwork and then disappear with huge amounts of equity from a homeowner’s mortgage in their back pockets.
Foreclosure specialist Darrell Fitzgerald, head of a Philadelphia company called Clientele Management & Investments, has seen a sharp increase in dirty foreclosure tactics.
“We reach out to susceptible homeowners who may not know their options,” he says. “There are so many TV ads for phony companies. People are desperate for a solution and these companies can sound like one. But their strategy isn’t in the best interest of the consumer or the homeowner. They want to get in and out very quickly.”
Saying he too is trying to save homeowners from this type of scam, City Councilman Curtis Jones of the 4th District sent a letter to Barack Obama urging him to consider Philadelphia’s Mortgage Deferment Program, which he helped create, as a model for the country.
Jones says his program began as a response to a “tsunami” of events that hit Philadelphia hard during the past few years, including adjustable-rate-mortgages reset—a “bump up” of a rate when a mortgage underwriter qualifies someone for a marginal loan—those exceeding 30 percent of gross income. He says, “The economy died and people were downsized out of their jobs, then energy prices went through the roof at the exact same time.”
Jones says he saw the spikes in foreclosures. “With this program, property owners and the mortgager can get together and work out a deal cheaper than what it would cost to foreclose. This interests the mortgager because they can’t move many properties, so it’s worth it to them to sit down with borrowers and through a judge and pro bono legal counsel work these issues out.”
Jones predicts things will get worse before they get better.
“What happens on Wall Street always has ripple effects. When America catches cold, the inner city gets pneumonia. Bush and Congress are about to write the biggest welfare check in American history, and there’d better be provisions for affordable housing. If we can do a national program for this issue, and also bail out Main Street—or our Market Street—that’s better for the entire nation.”
For more information on the Philadelphia Mortgage Deferment Program, contact ACORN Housing Corporation. 215.765.1221. www.acornhousing.org
To find out more about the Philadelphia Campaign for Housing Justice, go to www.projecthome.org/advocacy
