In Philadelphia neighborhoods where the clank-clank-beep-beeps of construction noise permeate the air, longtime residents often read the white Tyvek siding of new construction like a billboard: “Greedy developer at work here.”

But does it have to be that way?

Rhakeim Miller hopes not. Just a few years ago, Miller was getting an up-close look at housing pressures in Germantown, a real estate market quickly gaining steam, as Neighborhood Advisory Committee manager for the nonprofit Germantown United Community Development Corporation. As a former grassroots organizer and public servant in New York City, Miller’s task was to use his experience to help Germantown residents navigate difficult situations.

“Most of what I did was housing work, focused on helping folks who were facing foreclosure getting different resources to save their homes,” Miller said. 

Just a few years later, Miller has left the CDC and now views housing through a very different lens  - as a full-time developer and real estate agent. The nexus of his transition was Jumpstart Germantown, a professional training program and loan provider created in 2015 by northwest Philadelphia developer Ken Weinstein. Anyone can apply to the program, and accepted participants take a five-week crash course on how to get started in real estate.

But rather than an offer to join the dark side, Miller and Weinstein say the program helps provide access to individuals who are typically cut off from the real estate industry and also keeps value generated by redevelopment in the neighborhood. 

Weinstein says the idea came to him after being approached repeatedly by everyday Philadelphians who wanted to get into real estate but had no idea where to start.

“I would sit down with people for about an hour, and I’d encourage them to get into real estate, but I wasn’t really helping them,” Weinstein said. “I was more like a cheerleader and less like an instructor.”

He also saw another problem. Over his nearly three decades in the industry, Weinstein realized it was dominated by white males such as himself. 

Although Jumpstart does not specifically recruit women or people of color, Weinstein says those demographics have so far made up more than 90% of the program’s graduates.

“I’m not surprised,” Weinstein said. “Those folks have historically been overlooked in the real estate industry… It used to be, you had to have an uncle in the business in order to get started. But it shouldn’t be that way.”

Eight years in, it appears Weinstein is onto something. He says Jumpstart is a success. The program has graduated more than 2,500 Philadelphians to date and provided $48 million in loans. After launching in Germantown, and later expanding to Tioga, Kensington, and West Philly, the program announced this summer it would now provide loans to development anywhere in the city.

But just how far can it go in helping to solve Philadelphia’s complex housing problems?

Empowering residents

Miller first got the notion to go into real estate via a situation any experienced homeowner can understand. He and his wife, then pregnant with their second child, had just purchased a house in Germantown. They searched for contractors to fix it up and wound up with bad ones.

“We really had a nightmare situation with contractors. So I was forced to navigate some of that stuff,” Miller said. “I was like, ‘You know what, there has to be a better way.’ Because it was so stressful.”

Forced into learning home repairs himself, Miller signed up for Jumpstart training. Over several weeks, he joined a small cohort in a space above the Philadelphia Federal Credit Union at Germantown Avenue and Phil Ellena Street. The group learned about how to find and value a real estate deal, navigate city bureaucracies, locate reliable contractors, and pitch a proposal to a lender.

The community that Jumpstart has created offers useful networking and support for the first three sections of the program’s curriculum. But it’s that last hurdle, pitching a proposal, that can often present the greatest challenge to new or small developers.

David Wilk, director of the Real Estate Program at Temple University’s Fox School of Business, says that traditional lenders like banks typically want to see an applicant have at least two of three things: capital, land, or a track record. Many Philadelphians have zero. 

Compounding the problem, Wilk adds, is that banks are typically only going to lend to safe or lucrative deals. One-off flips or small-scale new construction in unproven neighborhoods just don’t fit the calculus.

“It’s really hard to make money in a transitional area,” Wilk said. “[Projects] don’t get the return that would be able to be underwritten by a bank.”

Jumpstart helps to solve those problems by offering a gateway to both experience and capital, Wilk says.

Where’s the ceiling?

To what extent Jumpstart can really flip the script on the real estate industry remains to be seen. 

Weinstein says the numbers are trending in the right direction. The loan program, started in 2019, was originally backed by Weinstein himself, via his real estate company, Philly Office Retail. Since then, it’s received outside investment from TriState Capital Bank ($7 million), the Reinvestment Fund ($3 million), and Local Initiatives Support Corps (LISC) Philadelphia ($2 million). 

He adds that Jumpstart has yet to have a single investment result in foreclosure, with proceeds from successful deals cycling back into the pot, fueling a total of $46 million in loans over 384 deals. Originally confined to just a few Philadelphia neighborhoods where Jumpstart training programs exist, the success has allowed Jumpstart to now loan citywide.

Similar lenders in the city, such as Spring Garden Capital, also claim success in issuing small, nonconventional loans to historically disenfranchised Philadelphians. 

But Weinstein says this still doesn’t add up to a sea change among major lenders. Zillow, a major real estate technology company, briefly tried to get into the small-scale property flipping game but exited in 2021 due to a lack of profitability. In the end, the margins on these types of developments just aren’t fat enough.

“The Jumpstart program is a labor of love,” Weinstein said. “I’d welcome it if other people want to take it on and get involved or put us out of business. [But] there’s a reason why traditional banks are not providing these loans.”

Miller knows that there’s also a ceiling on how much the program can ease neighborhood tensions over issues like gentrification. Even as a Black man doing deals in his own neighborhood, he encounters pushback.

“In Germantown, they don’t play around,” Miller said, laughing. “They’ll hold your feet to the fire.”

Even still, both he and Weinstein believe the program can help launch new developers who can build value in their own neighborhoods, and counter a pattern of profits going to outside developers in places like New York City. 

They say local developers also often have a better sense of their community and know what kind of development is appropriate for specific streets or neighborhoods.

“If any developer tells you they can improve a neighborhood without some gentrification, they’re lying to you,” Weinstein said. “But we believe that we can improve neighborhoods with less gentrification. Because we are recruiting local residents to improve their own communities.”