BREAKING: 85 Units Receive Zoning Approval in Proposed Residential Development Ban Overlay

The blocks near Hahnemann Hospital's old campus could see a residential freeze if Councilmember Young's bill passes

What fun are the holidays if there’s not some major, unavoidable drama? Well, we’ve got all sorts of fun for you if drama is your thing! You may have heard about a recent zoning overlay proposed by Councilmember Jeffery Young, Jr. of the Fifth Council District. This is one of the most gerrymandered districts in the entire city, somehow reaching all the way up to Roosevelt Blvd. and all the way down to Rittenhouse Square. And thanks to councilmanic prerogative, the city’s long running “tradition“ of giving absolute control over land use decisions to a district’s sitting member, these areas operate as something of a fiefdom of power, with all other councilmembers voting in lockstep with the district’s leader.

A map of Philadelphia’s 5th Council District, currently led by Councilmember Jeffery Young, Jr., stretches from Hunting Park to Fishtown to Strawberry Mansion to Rittenhouse Square

This area encompasses the former campus of Hahnemann University Hospital, which had been an important staple of the Philadelphia medical ecosystem since 1848. Hahnemann closed back in 2019 when owner Philadelphia Academic Health System, an affiliate of American Academic Health System (in turn, an affiliate of private equity firm Paladin Healthcare Capital), filed for Chapter 11 bankruptcy. This was both chaotic and awful, with around 2,000 folks losing their jobs and the closure causing the “most significant graduate medical education displacement in history,” with over 550 residents scrambling to find new institutions.

This left the buildings - which had been spun off into another subsidiary owned by Paladin - empty and awaiting their fate. Iron Stone Real Estate Partners purchased the Drexel-affiliated New College Building at 15th & Vine back in 2021 along with what is now Race Street Labs, which we covered last December. At that time, we had ideas of a potential residential shift for the rest of the campus, before our thoughts were confirmed when Dwight City Group proposed a 288-unit conversion of two of Hahnemann’s main towers over the summer. The HOW Group then jumped in to bid on the park at the NW corner of Broad & Vine.

A look at part of the Hahnemann campus back in December of last year

All of which leads us to today, where the buildings - and the park - are still empty and awaiting their fates. But after we figured that we’d see a residential conversion move forward, that overlay we mentioned earlier has suddenly made things much more complicated. The proposed bill from Councilmember Young would ban housing from a four-block area smack in the middle of Logan Square in a place with the most permissive zoning in Philly, CMX-5. The move is supposedly to keep jobs in the district, though, per the Inquirer, the councilmember also noted contradictorily that:

“Next year, we’re going to be facing, potentially, a bill that will allow abatements for underutilized commercial properties,” Young said. “We want to make sure that those benefits that the property owners can reap, that Philadelphians see those benefits with the creation of jobs in those locations.”

Let’s take a look at the area to be impacted, along with another property that very much caught our interest just yesterday evening.

The area of the proposed zoning overlay is highlighted in yellow - with a very interesting property within these borders highlighted in orange

Here’s where things get extra spicy: that orange-highlighted property above is 201-19 N. 15th St., which is owned by Broad Street Healthcare Properties LLC - the same entity that owns/owned all of those Hahnemann buildings we mentioned earlier. They have been the owners since January 2018, having purchased the property for $9.12 million - the same time that Paladin originally purchased the hospital and the associated real estate. This eight-story building was originally built in 1963 and served as the Nurses’ Residence, before serving as an office affiliated with Drexel University.

What brings us here today is something that surprised us greatly: a brand-new zoning permit to change this vacant building to 85 residential units over commercial spaces. This permit is so new, in fact, that it isn’t yet up on the property’s publicly available information page, so we have no details beyond this brief description and the architect: Woodcock Design. However, it sure seems interesting that this under-the-radar property would suddenly see a change so soon after the proposed overlay was announced. Spicy, indeed!

An aerial view of 201-19 N. 15th St., formerly a Drexel building

A street-level view of the building from N. 15th St., perhaps destined for a mixed-use future

Another view of the Mid-Century property from N. 15th & Race St.

A view of the back of the building from Race St., in front of the parking lot of Race Street Labs

Now, we aren’t sure if this property is owned by Dwight City Group, the HOW Group, Iron Stone, Paladin, or another mystery owner given the September auctions that took place around this tangle of buildings. In fact, we aren’t even sure if this is a legitimate proposal where the owner plans to proceed with development, or if it’s simply an exercise in getting the proper entitlements in order to make the property either valid as a residential opportunity down the road or to make it more enticing to sell. For our money, we’d love to see this interesting building activated as residences ASAP, as it would be great to see this stretch of Center City get some foot traffic in an area that sees very little most of the time.

But to be perfectly honest, every aspect of this situation leaves us with a terrible taste in our mouth: a California-based PE firm buying up and closing an important medical entity that did so much good; thousands of medical professionals and students who were unceremoniously dumped in the name of extreme capitalism; the positioning of giant development firms looking to jump on an unfortunate opportunity; a misguided councilmember looking to take control over a situation that is almost assured to not happen. Bad looks all around.

But as much as we’d like to snap our fingers and make these blocks into our utopian ideal for a mixed-use, transit-oriented complex that helps people, houses people, and employs people, we are just a humble real estate blogger, providing a (wonderfully thorough!) perspective on what’s happening. These are the realities of the world of real estate and big business, and getting angry about what’s happened isn’t going to help anyone get a new job, better healthcare, or lead to any sort of a productive future. Understanding what’s transpired, learning about the ins and outs, and advocating for what we believe is the best outcome is all we can do. Unless, that is, someone wants to drop a few hundred mil into our bank account - then we can really have some fun. Until that day, it’s important to learn, understand, and do what we can to help the greatest number of our fellow neighbors.

UPDATE (12/23/2025): We originally used an out-of-date map of the 5th Council District, which has since been updated.