The contractor, identified by police as 20-year-old Salis Hanrahan, was fatally shot Wednesday afternoon.
A 75-year-old male was taken into custody for questioning following the shooting. Police said they recovered a firearm at the scene.
So far, no charges have been filed.
Members of the construction team provided a few details and spoke with police at the scene along the 400 block of Ripka Street in Philadelphia's Roxborough section.
Police said the contractors told officers they were out back putting siding on the house at around 2:15 p.m. before at least one shot was fired inside the home.
"They heard argument or some kind of commotion inside and then they found the boss outside," said Philadelphia police Captain James Kimrey.
Police said Hanrahan collapsed on the sidewalk after he walked outside, suffering from a gunshot wound to the chest.
He was pronounced dead a short time later.
Neighbors were surprised to see so much activity.
"This is shocking, surprising. Doesn't really happen here," said Colleen Daily.
"It's crazy, it's crazy especially at this house. That was the last house I would think, you know," said neighbor Jim Mulligan.
Anyone with information should contact the Homicide Unit at 215-686-3334 or submit an anonymous tip by calling or texting 215-686-TIPS (8477).