News analysis: U. policies contribute to boom in local real estate values

Over the last five years, the real estate values in the neighborhoods that surround the University have skyrocketed, and residents have been affected both positively and adversely by the change.

The rise can be attributed to several factors: University initiatives, programs of local nonprofit organizations and a nationwide real estate boom, likely caused by the lowest mortgage interest rates in several decades.

While the low national mortgage rates have aided the rising real estate values by creating a favorable housing market, University and local initiatives intensified the national trend and caused the value of the surrounding neighborhoods to boom.

The result of the boom is frequently discussed as a trade-off -- stability of the neighborhood on one hand, and displacement and the demise of socioeconomic disparity on the other.

Over the last decade during the administration of University President Judith Rodin, Penn has pursued policies to improve the conditions of University City neighborhoods.

Penn's West Philadelphia Initiatives -- which collaboratively promote economic, commercial and educational development -- include such projects as a Penn-assisted school and the Penn Enhanced Mortgage Program.

Other community organizations, like the University City District, have undoubtedly contributed to the stabilization of the neighborhood. Through economic revitalization, crime reduction and neighborhood cleanup programs, UCD has worked to improve the quality of life in University City.

These projects have, to some extent, brought about a renaissance of the neighborhood. While the population in Philadelphia as a whole decreased by 4 percent, University City actually gained 2 percent in the 1990s.

The rise in real estate value is abundantly clear. Prices in University City have close to tripled since 1998 -- a house in Spruce Hill that was worth $125,000 six years ago is worth nearly $375,000 today.

But the numbers fail to address the possible adverse effect on the residential makeup of the neighborhood.

Residents "receive rent increase notices, or the property they were renting sells. The owner is attracted by the high sale price, and the new owner will occupy a portion of the property, displacing the long-term renter," said Chris O'Donnell, the vice president of O'Donnell Real Estate. "The long-term renter then seeks other lodging opportunities in the immediate area and finds the rents have doubled, and then the long-term renter moves to another area."

Those who have lived in the community for many years distinctly remember a culturally vibrant neighborhood made possible by a diversity of socioeconomic residential options. Many see the so-called "stabilizing effects" as just a smoke screen that hides the gentrification of the neighborhood that has displaced residents in the lower-income brackets.

But reasons for urban migrations are difficult, if not impossible, to empirically track. What results is a set of anecdotal examples of residents being forced out of the neighborhood.

Indeed, some realtors in the area have seen lower-income families, artists and even educated, lower-middle-class residents moving out into the periphery of the neighborhood. They attribute the movement to the rising cost of the real estate market.

This gentrification, the displacement of longtime indigenous residents, is cause for concern -- not only because individuals are losing their homes, but because over time, such an exodus imperils the cultural diversity of the community.

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