"It raises more questions than answers, and to think people want [the PHA] to revert back to local control," State Rep. Michael McGeehan (D., Phila.) said of Kelly's departure.
HUD took control of the PHA following revelations of sexual-harassment claims under Greene's leadership.
Contributing to the mystery surrounding Kelly's abrupt resignation, Estelle Richman, a senior adviser to the HUD secretary, said after the board meeting that Kelly had "re-thought his life." She would not elaborate.
Richman will replace Newton-Cole, returning to her previous role as the lone Housing Authority board commissioner and receiver. Richman served for seven months as the PHA board when HUD placed the authority in receivership last year. After leaving PHA, she served briefly as an acting deputy HUD secretary, but HUD said she could now return to Philadelphia.
Kelly will be replaced by Kelvin Jeremiah, PHA's current director of audit and compliance.
Kelly said that he had notified Mayor Nutter and HUD officials two weeks ago that he would resign.
"This gave us time to re-organize our thinking," Richman said.
Asked what he would do next, Kelly said simply, "I'm going back to Washington."
Kelly, who left his job as head of New York City's housing authority to direct the PHA after Greene was fired in September 2010, had led housing agencies in Washington, New Orleans, and San Francisco.
A father of three, Kelly, 58, is married to Kimla McDonald, a midwife in Washington. An architect and urban planner, he earned degrees from Princeton University; the University of California, Berkeley; and San Francisco State University.
Assessing his brief tenure at the top of the beleaguered PHA, Kelly said he had built "in a short time an incredible foundation to engender public trust to move to a more accountable, transparent policy system."
He said he was "incredibly thankful" for the opportunity to have worked in Philadelphia.
In a slight variation on Kelly's account, Nutter said he did not know definitely that Kelly would leave Friday.
"He did let me know that he may be stepping down just a little while ago, but it was not clear as to when that might occur," Nutter said, adding that Kelly gave him no reason for his departure.
The mayor praised Kelly's leadership, saying he brought "a level of stability" to PHA. He added, "I have appreciated his hard work and wish him the best."
At the conclusion of Friday's board meeting, members of the audience of more than 100 people crowded Kelly, who shook hands and hugged well-wishers.
Standing to the side, Richman said, "Mike has done a good job to help us move from the past, but clearly there are more things to be done."
Virginia Wilks, a resident of the Richard Allen Homes and a longtime tenant activist, said Friday that Kelly had made important improvements in the agency, winning tenant approval by significantly upgrading apartment maintenance operations in the public housing projects.
But she said Kelly's departure would bring instability to the PHA, still feeling the effects of the Greene years.
"We still haven't gotten ourselves back to together," she said.
Wilks said she previously had seen HUD's Richman at board meetings, when Richman served as PHA's one-person board.
"She seemed pretty cool," Wilks said, though quickly adding that she had limited contact with Richman.
In a news release, Newton-Cole said: "Mr. Kelly's leadership over the past year has turned the agency around."
With an annual budget of $375 million, the PHA serves 80,000 households, many with annual incomes between $12,000 and $18,000. The fourth-largest public housing agency in the United States, PHA has a waiting list of more than 100,000 households.
Stepping into Kelly's role, Jeremiah had previously served as the New York City Housing Authority's inspector general.
In his 10 months with PHA, he has been responsible for audits and anti-corruption efforts.
He was in contact with federal investigators on a case that already has resulted in two guilty pleas in a $2 million PHA insurance fraud prosecution.
Kobie T. West, president of Philadelphia's now-defunct West Insurance Group, and former PHA insurance manager Edgar Bridges are awaiting sentencing in that ongoing investigation.
In New York, Jeremiah also increased prosecutions in cases involving that agency.
Kelly arrived at PHA in December 2010 after Greene's tenure unraveled with sordid stories of sexual harassment of his staff that had led to huge secret cash settlements.
Greene was fired after the housing agency's board of directors learned that he had secretly settled three sexual-harassment complaints without informing them, and had a fourth case pending. Settlements in the four cases totaled $1.1 million.
Accounts of over-the-top parties with belly dancers also dogged Greene.
HUD took over the housing authority after the resignation of its five-member board, which had been criticized for lax oversight of Greene.
Contact Alfred Lubrano at 215-854-4969 or email@example.com.
Inquirer staff writers Miriam Hill and Amy Worden contributed to this article.