The stats behind University City's booming economy - Technical.ly Philly

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Nov. 13, 2015 10:38 am

The stats behind University City’s booming economy

A forthcoming report from University City District paints a picture of rapid job growth — and the potential pitfalls of increased housing prices.
A rendering of uCity Square, a forthcoming project of the University City Science Center.

A rendering of uCity Square, a forthcoming project of the University City Science Center.

(Courtesy image)

A snapshot of a rapidly changing University City is captured in a new report being released next week by nonprofit economic development group University City District (UCD).

The top-level highlights, according to a copy made available to Technical.ly ahead of publication, are these:

  • A population increase of 11 percent in University City alone since 2013 bringing the total number of residents to just shy of 51,000;
  • New commercial and residential developments in the works, including the 3.0 University Place office building and the apartments planned at 3601 Market St.;
  • And a milestone of 75,000 jobs in the University City area alone, a figure aided in no small part by the presence of Drexel University, the University of Pennsylvania and the University of the Sciences.

But looming over the details is a question of how new development will affect, and possibly reshape in several ways, a diverse set of neighborhoods — which, in UCD’s view, is one of the reasons this section of Philadelphia bounded by the Schuylkill River on the east and 50th Street on the west has grown, and will continue to grow, at a swift clip.

“We’re very fortunate to have this extremely desirable set of neighborhoods that are directly adjacent to this institutional cluster,” said Seth Budick, senior manager of policy and research for UCD and largely responsible for assembling the organization’s new report. “We have a lot of capacity to continue to grow for years.”

(Map courtesy of University City District)

(Map courtesy of University City District)

Of course, University City has already been growing. Over the last year, by the report’s count, 29 different real estate projects were completed or remained in the works in University City, representing six million square feet of building space for a combined worth of $2.2 billion. And that doesn’t even include uCity Square, the 14-acre, $1 billion expansion that the University City Science Center is planning.

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While certainly not as dense as Center City, University City is coming close. Its 2 percent office vacancy rate is the lowest in the Philadelphia region, and Class A commercial real estate is currently going for $41.73 per square foot. So long as commercial real estate growth continues, Budick expects more developers will see University City as an attractive option for new construction.

“What you’ve seen in Center City has been a lot of residential conversion,” Budick said. “That’s not what we’re seeing over here.”

But with greater development comes a greater risk of displacement, as property values and rents climb. In the last 15 years, the median home price in the neighborhoods that make up University City has risen from just below $100,000 to a record high of $316,000. Rental prices have risen as well.

“Prices are going up. The social consequences of that I don’t think we’re going to comment on too much,” Budick said. “For the most part, though, if you look at that rent figure … you’ll see a huge diversification.”

Indeed, rents in most University City neighborhoods have stayed between $1,000 and $1,500, while rents in the Central University City area — 38th Street to the Schuylkill — have spiked to above $2,500. The question of gentrification has been one that some University City power players, like Science Center CEO Steve Tang, have begun to consider more closely. But UCD, for its part, knows that University City has always had a diverse mix of housing stock, and believes that new development, commercial and residential — 2,500 multifamily housing units will be completed by 2016 — can commingle well with current residents.

“We think the neighborhood for a long time to come will be able to accommodate a variety of budgets,” Budick said.

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