Helloooo Detroiters, PPPers, and those of you who'd love to see Donald Trump on American Ninja Warrior!
Blog Summary for my Busy PPPers:
The revitalization of our urban neighborhoods brings with it the threat of gentrification-based displacement. But we don't have to sit idly back and let displacement happen. In addition to clearing up the many myths and half-truths about gentrification, and making sure we consider gentrification's effects on local businesses, here are two strategies we can employ against gentrification-based displacement:
- Play offense against displacement, not defense against gentrification; and
- Control the land, and put our "money where our mouth is."
Full Blog Post:
Discussions about gentrification and displacement in urban neighborhoods are everywhere. Not only is gentrification a topic of discussion worldwide, the battlefields applicable to gentrification have expanded. Gentrification fights are not just about who lives in the houses anymore. For example, gentrification reared its head when a black church in DC argued against a new bike lane. Not even our animals are spared -- dogs have become soldiers on the gentrification battlefield as dog parks have become another gentrification flashpoint.
What I think is missing from the usual discussions is a succinct summary of what we can DO about the problem. Here are two strategies we can use to fight displacement in revitalizing urban neighborhoods:
- Play offense against displacement, not defense against gentrification;
- Control the land, and put our "money where our mouth is."
Strategy #1: Play displacement offense, not gentrification defense
Let's stop focusing on the people moving into challenged neighborhoods, and start focusing on the people who want to stay. Let's teach lower and middle-income home-owning residents how to save for an increase in property taxes before those increases start to occur due to rising property values. Maybe we can create some sort of sponsored savings vehicle to make that happen. Could the equity in their homes be leveraged to pay their property taxes on an ongoing basis? We could also teach neighborhood homeowners how to choose appropriate financing so that they don't lose their homes during downturns or be forced to sell before the good times roll around.
We all knew those property increases were coming and certain financial tools were shoddy! These are just a couple of homeowner displacement-fighting ideas, can you think of more? Let's play offense against displacement, not defense against gentrification.
What about seniors with fixed incomes and no ability to save? You could, as DC did, pass a law that protects long-term resident seniors from property tax increases. I have some quibbles with the law, but it's definitely offense instead of defense. DC was trying to get in front of the issue. We can't limit our offensive game plan to homeowners however -- our renters and business owners also need a game plan against displacement. The next strategy discusses that game plan.
Strategy #2: Control the land, and put our "money where our mouth is."
We might not need to keep all of the land we purchase, but we definitely need to control it at some point to mitigate displacement risk. Government agencies, non-profits and increasingly, philanthropic organizations, often control land in historically dis-invested neighborhoods. During the toughest times, these organizations also often have the opportunity to purchase neighborhood land and properties at low prices. Non-profits, city agencies and philanthropic organizations should purchase land and properties in areas they believe will be subject to gentrification-based displacement risk in the future. Once you control the land you can control the outcomes.
Use the Land to Preserve Affordability. In other cases, the land could be sold to the market place with covenants that help create new affordable housing or preserve the affordability of some of the existing housing. To be clear, government agencies need to carefully understand the financial ramifications of their affordable housing rules-- both in terms of the percentage of housing that must be affordable and the level of affordability that is mandated. Governments must provide some funding in certain cases to support their policy goals.
There are a number of vehicles to help preserve the affordability of housing using land covenants and mandates. Examples of land control tactics include community land trusts, inclusionary zoning requirements, and affordability mandates on dispositions of government-owned land. If you're interested in a little more detail about these strategies click through to the associated links and read my more detailed descriptions of these tactics at the bottom of this post.* There's a business displacement strategy in here as well -- government agencies and non-profits should also start buying commercial buildings and retail storefronts. Buy industrially-zoned land. Buy those warehouses now! Those are the maker spaces of your future. As the owner the government or non-profit could help those longstanding businesses stay in the neighborhood by capping their rent increases. Exchange those rents caps for better facades, local hiring and improved placemaking. Let's me coin a term a new term right now -- let's start creating "commercial community land trusts" that allow us to prevent local retail and small-scale manufacturing business displacement.
To be fair, I do need to add one more point: Yes, we need to focus on fighting displacement. And yes we should look at how to control the land to control the outcomes. Those two tactics are not enough, however. If we are going to control the land, and mandate non market-based mandates, we also need to put our money where our mouth is. Government agencies, non-profits and philanthropic agencies must also provide funding to help make urban redevelopment and preservation make sense.
"Put Our Money Where Our Mouth Is..."
I have to say it...I'm not who you think I am. I'm both a developer and consultant to cities and non-profits around the country. I worked as a government redevelopment official and as a private developer trying to make market-rate and affordable housing deals work. So you're not going to read from me a one-sided, black and white recommendation on whether (and how) governments and non-profits should support their social policy mandates. Accordingly, I know that sometimes social policies come with a price-tag that can't be supported by the project. The cost of the policy mandates are not commensurate with the risk/reward proposition of the redevelopment. Frankly, sometimes social polices come with a price-tag that needs to also come with an instant 25% off coupon.
In a nutshell, governments, non-profits and philanthropic organizations need to: 1) Educate themselves on the true costs of their mandates (and understand the difference between a greedy developer or local entrepreneur and one who is telling the truth); 2) Do an analysis of the market to understand the ramifications of their requirements; and 3) Provide subsidies, grants or low-interest loan products to close the gaps which are not subsidizable by the profits made by the developer or entrepreneur. Let me be clear -- sometimes deals can get done without government subsidy or incentives. But let me also be clear that the viability of land-related social mandates really depend on the local market, current debt and equity marketplace and the capacity of your development and entrepreneurial community. Elected officials, I'm looking at you: Don't make the mistake of including land-based mandates that haven't been reconciled with the market.
That's it for now. Two strategies for dealing with resident and business displacement caused by the revitalization of our urban neighborhoods. We all have an important part to play in advancing the discussion on gentrification and displacement. Let's stop getting caught up in never-ending discussions on the problems and let's get started on implementing realistic solutions.
*I said earlier that I'd give you a little more detail on ways to "control the land to control the outcomes." There are a number of vehicles to help preserve the affordability of housing using land covenants and mandates, and I'll just briefly discuss a few of them here:
Community Land Trusts. Shout-out to my fellow presenter at the Lincoln Institute of Land Policy Journalist's Forum -- Emily Thaden at the National Community Land Trust Network. They are doing great work to help CLTs around the country to permanently preserve affordable housing! See also this recent Next City article on the most successful community land trust in the country, Boston's Dudley Street Neighborhood Initiative, and other land trusts that have been less successful. The key is to set up the community land trust BEFORE land prices get too high, and the competition of land acquisition is to strong.
Inclusionary Zoning Ordinances. Montgomery County, Maryland was the vanguard of these policies. Montgomery County and Fairfax County in Virginia have shown some promising results on rental properties. Outcomes have not been so good with affordable for-sale housing requirements, however. The "skimpy sales" of DC's for-sale inclusionary program is one example.
Affordable Housing Requirements on Dispositions of Government-Owned Property. These policies mandate that government-owned property sold for private residential development contain mandatory affordable housing requirements. One recent example is DC's Disposition of District Land for Affordable Housing Amendment Act (DDLAH). The DDLAH requires 30% of the units built on land sold by the District government to be affordable housing units. The proverbial jury is still out on the DDLAH, but here's an article that discusses the pluses and minuses of the legislation.
Let us know in the comments of other tools of which you're aware. The key point is that if we control the land, we can help ensure that some housing in revitalizing neighborhoods remains affordable to moderate and lower-income residents.