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April 19, 2023

Settlement allows UC Townhomes to be demolished and sold, but preserves some space for affordable housing

Displaced households will receive up to $50,000 as part of the $3.5 million agreement between the city and IBID Associates

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UC Townhomes settlement Maggie Mancini/PhillyVoice

A settlement allows IBID Associates to demolish and sell the University City Townhomes in West Philadelphia, but a portion of the land will be given to the city to build 70 affordable housing units.

The owner of the University City Townhomes has agreed to transfer nearly a half-acre of the property to Philadelphia so the city can build 70 new affordable housing units there.

The deal is part of a settlement reached between the city and IBID Associates, which had sued the city over its efforts to block the demolition and sale of the UC Townhomes. The property, at 39th and Market streets, had offered affording housing since built with city support in the early 1980s.

As part of the agreement, IBID Associates also will pay $3.5 million the city. Those funds will be distributed to the 70 households that were displaced by its decision to end its affordable housing contract with the U.S. Department of Housing and Urban Development. Each household will receive up to $50,000. 

The United Way of Greater Philadelphia and New Jersey has been tasked with distributing the money. The nonprofit also is providing support services to the displaced tenants. Those services will be funded by the University of Pennsylvania, Drexel University, Penn Medicine, University City Science Center and the Children's Hospital of Philadelphia.  

Many of the UC Townhomes residents have used housing vouchers to find new places to live, IBID Associates said. 

"Even though true equity means no one gets displaced from their home, this settlement is a historic win," Councilmember Jamie Gauthier said. "No one has ever fought this hard, or won as much, for the residents of an expired affordable housing site."

Under the settlement agreement, the rest of the 2.6-acre property again will be zoned for high density commercial and mixed-use units, allowing IBID Associates to move forward with its plans for the land. The property also will be exempt from zoning restrictions the city created last year to preserve affordable housing units in gentrifying neighborhoods. IBID Associates filed its lawsuit in response to those zoning restrictions, claiming the city and Gauthier had violated the company's right to sell the property. 

"We are pleased to reach an agreement that at last provides the chance to achieve what we have sought from the beginning: to successfully redevelop 3900 Market Street while also respecting the residents of University City Townhomes and accommodating the legitimate need for affordable housing at the site," said Kevin Feely, a spokesperson for IBID Associates.

Some residents were not satisfied with the settlement, saying it falls short of addressing their needs. They said they have a "right to return" and want direct involvement in the future development of the property. They also want the site to prioritize housing for families making 30% or less of the area median income – not the 60-80% dictated in the settlement. 

The residents said they were not involved in the settlement negotiations. 

"We said last year that we're not going anywhere and we'll continue to fight to make sure any future site includes deeply affordable housing for very low-income seniors and families," said Darlene Foreman, a U.C. Townhomes resident and Resident Council member. 

The dispute between IBID Associates, the city and the residents of the U.C. Townhomes dates back several years. 

In July 2021, IBID Associates said it was not going to renew its HUD contract, ending four decades of affordable housing at the site. Under HUD contracts, tenants only have to pay 30% of their rent, with housing choice vouchers covering the difference. 

The UC Townhomes sit in an emerging life sciences sector in West Philadelphia. Over the decades, real estate developers have bought up properties in the area near Drexel University and the University of Pennsylvania, pushing out long-time residents who can no longer afford to live in the neighborhood. 

In response to IBID Associates' decision, Gauthier introduced a bill to protect residents from displacement by rezoning the area to require any redevelopment offer at least 20% of its units at below-market rates. The bill, passed in March 2022, also prevented the townhomes from being demolished for a year. IBID Associates quickly sued. 

Last summer, UC Townhomes residents and activists set up an encampment to protest the planned sale and the eviction of the property's residents. Many of them had lived there for decades. The residents initially were expected to vacate the property by July 8, but that deadline was extended several times. In February, 13 units still had residents