Neighborhoods

Is red hot Fishtown really the third-toughest place to build in the entire country?

A new study says yes because the neighborhood has far fewer new homes than expected, but some of those closest to development aren’t buying it.

New construction homes on Norris Street in Fishtown.

New construction homes on Norris Street in Fishtown.

Mark Dent/Billy Penn
mark

Don’t let the modern condos and apartments squeezed in the middle of Fishtown’s row houses fool you. The neighborhood’s housing growth is not nearly as strong as people might expect.

According to a new study from economist Issi Romem of BuildZoom that was originally completed for The Wall Street Journal, the 19125 ZIP code ranked as the third-most difficult market for building in the entire country. The two zip codes ranked higher were in Venice Beach, Calif., and Prospect-Lefferts Gardens in Brooklyn.

The basis for the ranking comes down to expectation. Given how much prices have increased in the neighborhood in the last 15 years, the housing stock would be expected to rise significantly.

Instead, the housing price index went up 283 percent between 2000 and 2015, and the housing stock just 7.5 percent. In 2015, Fishtown’s 19125 zip code had 10,736 housing units, about 750 more than it had in 2000. Its population was slightly smaller than in 2000, having dropped from about 23,600 to 23,000.

“The toughest place to build isn’t a place that doesn’t build anything,” Romem said. “It’s a place that doesn’t build as much as what one might expect.”

Outside of pricey Center City condos, Philadelphia hasn’t seen a ton of growth in new construction, particularly for multi-unit housing, pushing prices in some neighborhoods out of control. Developers say it’s difficult to build here in part because of expenses — our city has “New York consumption costs” without New York sales prices — and zoning regulations.

Regulations are particularly strict in Fishtown, said Jordan Rushie, an attorney who specializes in zoning and real estate and a former president of the Fishtown Neighbors Association (disclosure: Rushie is currently suing the Association). A few years ago, as Fishtown was becoming one of Philly’s hottest neighborhoods, neighborhood organizations and the City Planning Commission made several changes to the zoning code. It had previously been a mess, particularly in areas like Fishtown, with many industrial pockets zoned residentially and many residential pockets zoned industrially. The new code led to much of the neighborhood being zoned RSA-5, for single family housing.

“And then the [Fishtown Neighbors Association] said, ‘why would we allow variances if we changed this,’” Rushie said. “That made it difficult to deviate from the zoning code.”

If developers want to build a structure with multiple housing units on something zoned for single family, they must seek a variance and get permission from the FNA, the Registered Community Organization in that neighborhood. Vocal residents have often packed FNA meetings to speak against multi-unit projects, such as for redevelopment of St. Laurentius Church (the Zoning Board of Adjustment later went against the FNA’s request and approved the redevelopment).

Rushie said earlier this year he had a client who wanted to build a three-unit structure on a vacant property that originally had three units but was rezoned for one. The client’s attempt was unsuccessful.

Matt Karp, executive chair of the FNA’s zoning committee, isn’t buying the study. He said development in the neighborhood is not tricky and more areas of the neighborhood are zoned for by-right construction than in previous years. By-right construction negates the need for a variance, and therefore, a vote by a community organization and the ZBA. Karp said said he was interviewed but not quoted in the Wall Street Journal story.

Fishtown was the only Philadelphia ZIP code featured among the top 100 most difficult to build in Romem’s study. Most every other zip code was in the New York, Los Angeles or Washington DC metro areas.

What might Fishtown look like if housing supply came closer to meeting expectations based on the soaring prices? Some hot neighborhoods in other U.S. cities, like Dallas and Atlanta, are seeing growth rates surpassing 100 percent.

In Houston, a city where it’s much easier to build than Philadelphia, the toughest neighborhood for building is The Villages. Yet from 2000 to 2015, its housing stock still increased by about 11 percent. With even that much of a gain above its 7.5 percent growth, Fishtown would have added about 400 to 500 more housing units.

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