After 25 years, Margot McConnel left the suburbs behind.
Her children were grown and gone. A lot of her friends had already moved.
Even her garden she can live without.
“I’m glad somebody else is taking care of it,” McConnel said.
She and her husband, Bruce, a partner in a Philadelphia law firm, have gone downtown.
In April they rented a $2,000-a-month, two-bedroom apartment in a slick, converted factory building with exposed brick and wraparound views of the city lights.
“I love going out and discovering the city,” she said.
A strong apartment market and city tax incentives have combined to turn some of downtown Philadelphia’s aging, abandoned office buildings into apartments filled with students, musicians, accountants and suburban refugees.
Now there are lights, and mini-blinds and hanging plants in the windows of buildings that were once vacant, gaping holes in the fabric of the downtown area known as Center City.
McConnel lives in a former Bible printing plant along the Schuylkill River that was converted to apartments last year. The waiting list at the building is 20 deep.
So far, 840 units–home to an estimated 1,635 residents–have been completed in Center City. Another 935 units are planned, which would bring the total of new Center City residents to 3,270, according to statistics compiled by the city.
The department has identified 54 buildings with potential for conversion. Of those, 11 have received approval for the city’s new tax-abatement program, and 10 others have applied.
“Everything is starting to pop now,” said Paul Levy, executive director of the Center City District, which oversees development and maintenance of properties in the central business district.
While 3,000 people is not a population explosion, developers and city officials say they will have a big impact because they are concentrated in what were dead zones.
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Levy said two camps of renters were migrating to Center City: Waiters, students and beginning professionals paying rents of $800 to $1,000 a month; and higher-income professionals and suburban empty-nesters relocating to the city, some paying $2,000 a month and up.
At the 152-unit Locust on the Park complex, a marketing survey found that 30 percent of its residents relocated from the Philadelphia suburbs and 42 percent from out of state. Only 28 percent of the residents came from elsewhere in the city.
The former Avenue of the Arts Building, one of the first and most prominent buildings to be mothballed in the early 1990s, became home to 600 students this fall.
Developers are planning to convert a vacant Bell Atlantic building into 193 apartments, to construct lofts in 11 vacant Old City warehouses, and to remake a warren of alleys into a tiny urban village.
Others are circling large, vacant buildings in Center City that remain unspoken for.
Pent-up demand is driving the conversion wave in a city where no new housing has been built for more than a decade. Developers say high construction costs and sluggish growth have discouraged new apartment construction in Center City.
Vacancy rates in Center City are near zero.
As a result, monthly rental rates have increased from 75 to 85 cents a square foot five years ago, to $1.50 a square foot today, said John P. McDermott, Philadelphia regional manager of Marcus & Millichap, a national brokerage company.
That’s still not enough to kick off a major housing construction boom, McDermott said.
Construction costs in Philadelphia are about the same as in other major cities, but rental rates are still 50 to 100 percent below other markets with stronger employment and population growth, he said.
But, McDermott said, there are opportunities for developers converting older Center City buildings into apartments.
The city has helped the market along with a two-year-old program that forgives real estate taxes on the added value to a building when it is converted from vacant offices to housing.
Old office buildings in the area began to go dark in the early 1990s as a new generation of office towers elsewhere downtown lured top-name tenants.
“We needed to put people back on the sidewalks,” said Center City Councilman Frank DiCicco, who sponsored the legislation.
“To build anything in the city, there must be incentives,” said Ron Caplan, president of Philadelphia Management Corp., who with his financial backer, Lubert-Adler Partners, has converted hundreds of units.
“Some would have happened anyway,” Caplan said, “but some would not have. A lot would not have.”