Off-Campus, Close By

 

“Take a good look at this block now,” President Amy Gutmann instructed a crowd gathered at 39th and Walnut streets for a groundbreaking ceremony for the Radian apartment complex in July, “and come back just a little more than a year from now and see its transformation. It will be a great block for Penn and a great block for Philadelphia.”

When it opens its doors next August, the $50 million building will be the third in a recent trio of University-driven housing projects that aim to transform off-campus living for over 1,000 graduate and undergraduate students. The construction of The Radian, The Hub
(at 40th and Chestnut streets), and Domus (at 34th and Chestnut streets) represents the biggest housing surge in the area since the erection of Superblock and graduate student dorms in the early 1970s. Over 500 new rooms will accommodate students seeking, in executive vice president Craig Carnaroli W’85’s words, “flexible residential options that will be off-campus living in the heart of it all,” thus opening residences in West Philadelphia to a new generation of owners and renters.

The Hub, the first to be completed, has already filled its rooms, primarily with undergraduates. Apartments in the $23 million building, designed by Piatt Associates, range from studios to large two-bedrooms. The Jean Madeline/Aveda Institute, a beauty school, occupies the ground-floor level, and the building will also play host to esteemed restaurateur Jose Garces’ next endeavor, a bi-level haute Mexican eatery called Chilango slated to open in the summer of 2008. With studio apartments starting at $670, The Hub is the most moderately priced of the three new complexes.

Five blocks east on Chestnut Street, the entrance to Domus is dominated by “Wave Forms” [“Window,” May/June], an outsized public-art fixture designed by sculptor Dennis Oppenheim. The site was previously occupied by a parking lot, but now the illuminated installation hints at the luxury within. The architecture firm behind the $71 million complex is Baltimore’s Design Collective, for whom student housing is a specialty. For prices starting at $1,799, tenants enjoy a state-of-the-art gym, a year-round heated pool surrounded by grills and fireplaces, and a 24-hour concierge who can book conference rooms, a private movie theater, or a shared kitchen for private functions.

The Radian, designed by Philadelphia’s Erdy McHenry Architecture, will target the mid-range market, with apartment rents starting at $975. However, its 44,000 square feet of retail space and open plaza design will give it a strong claim as the new darling of University City. The availability of group-living quarters emulates Penn’s dorms, but The Radian hopes to attract students who wish to live with two or three peers while retaining the independence that off-campus housing offers.

All three projects share two important traits. First, each was financed through a third-party developer. The firms behind The Radian, Domus (The Hanover Company) and The Hub (Teres Holdings LLC) signed long-term land-lease deals with Penn, relieving the University from the financial burdens of construction and development. The developers receive the majority of leasing income for the life of the deals, after which the properties are turned back over to the University. This strategy began with the Left Bank apartment complex [“Gazetteer,” Sept|Oct 2001], and has been adopted by other universities, including Temple in Philadelphia and Franklin & Marshall College in Lancaster. Carnaroli sees it as a way to reinvigorate underused areas quickly while expanding the choices available to students.

“At The Hub you had basically a closed bank branch that wasn’t serving anyone, and now it’s been brought to life with student apartments, a restaurant, and the hairstyle studio,” he says. “Radian was a run-down strip mall that should have been demolished when I was a student here 20 years ago. So quite frankly, in my mind, we control the land but we get a much better use for our students in a model that they desire as part of their living experience.”

The second similarity is that each is a mixed-use development in which retail space is prominently featured. Shops and services at street level are aimed at stimulating economic growth and creating jobs. In recent years, commercial activity has been a development priority along Walnut Street, from the Left Bank near the Schuylkill to The Fresh Grocer at 40th Street, and the success of these businesses has done much to improve the image of University City.

If the primary impetus for these housing projects is to enable students to stick close to a campus that doesn’t have enough room to shelter everyone, there is also another goal—to make more housing stock available for purchase in the area. In 1998, Penn launched its Enhanced Mortgage Program to make West Philadelphia a more attractive place for Penn staff and faculty to settle. From guaranteeing mortgages to forgiving certain home-improvement loans after seven years of residency, Penn has offered a variety of incentives for long-term homeownership. The Penn Alexander School opened in 2001, providing encouragement for families who’d fled to the suburbs for quality education to return. As a result of these endeavors, homeownership rates have risen from 6.3 percent in 1990 to 17.7 percent in 2006. Meanwhile, median housing prices in University City have surged from $78,472 in 1995 to $292,222 in 2005, slightly outpacing Center City’s increases. Yet a large percentage of the houses in University City are still occupied by students.

That can diminish the neighborhood’s appeal for families. While there are many porches dedicated to beer pong and examining the previous night’s hookups, there are other areas where children play hopscotch on the sidewalks as neighbors discuss gardening tips. Though there is no direct pressure to keep students away, the tension can be
evident in such scenes, and in calls to police about noisy parties.

Yet even if the three new off-campus apartment complexes fill every one of their 1,000 beds, the broad contours of the local housing market seem unlikely to change that much. At present, Penn’s on-campus housing comprises slightly fewer than 7,000 beds. With a student body totaling approximately 20,000, split more or less evenly between undergraduates and graduate students, that leaves some 13,000 people to seek housing elsewhere.

Carnaroli says it is inevitable that University City will have a big rental market. “Our plan is to offer more residential choice to students, which may change the market dynamics. If students respond, landlords and property owners may see value in creating home-ownership opportunities by converting the properties back to their original use as single-family homes,” he says.

“The thing about Penn students,” he adds, “is that they like to have options.”

—Carter Johns C’07


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