Revitalization without Gentrification:

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1 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org Jason Reece, Kirwan Institute Technical Memorandum on Gentrification Issues July 28, 2004 Revitalization without Gentrification: Gentrification is a controversial and divisive issue that has been extensively debated. From our research and the work of others, we feel two critical issues must be addressed in the gentrification debate. 1. Defining gent rification 2. Achieving revitalization without gentrification Defining gentrification - Without defining gentrification, it becomes impossible to determine if gentrification is occurring within a neighborhood. Viewpoints on what gentrification is may vary significantly, and based on these misconstrued definitions identifying the impacts of gentrification becomes difficult. The term is often mistakenly intermixed with urban borhood. any physical investment within a neigh revitalization or is used to describe These definitions are flawed and miss an important distinction. Gentrification is not simply reinvestment into the neighborhood, gentrification is a process that extensively and extensively dislocates traditional low income residents (usually residents of color) changes the social fabric of the neighborhood. Research by the Brookings Institute provides the best working definition of i gentrification: Gentrification: the process by which higher income households displace significant numbers of lowe r income residents of a neighborhood, thus changing the essential character and flavor of the neighborhood. Based on this definition, three specific isplacement of original residents, physical upgrading of most of conditions must be met: d the housing stock and change in neighborhood character. This working definition produced by the Brookings Institute continues to address what gentrification does not entail. Gentrification is not occurring if higher income residents move into a neighborhood at a scale tha t is too small to displace existing residents, or redevelopment is targeted toward abandoned or vacant structures or lots. Also, the existence of economic development activity (revitalization) does not automatically ii Gentrifica provide for gentrification. tion is the process of permanently changing a distressed community into an exclusive upper income community and does not simply equate with community reinvestment . By using this narrow definition it is easier to understand the negative impacts of Gentrification gentrifi cation and easier to distinguish revitalization from gentrification. (by this definition) is not a healthy phenomenon for a community. The displacement caused by gentrification falls most heavily on disenfranchised low income resident. 1

2 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org Gent rification also does little to deconcentrate poverty, instead shifting the low income iii in nearby areas . population into neighboring communities, further concentrating poverty Revitalization: Gentrification: Mixed income housing development, displacement avoided. me residents by Widespread displacement of traditional low inco affluent households. Residents unable to accrue wealth, remain highly susceptible to Wealth building strategies for existing residents implemented, displacement. residents stabiliz ed from displacement pressure. Existing social networks, neighborhood services and local Social networks, neighborhood services and businesses businesses disrupted in the community. reinforced in the community. Additional new business and d options for all residents. services expan Community transitions to an exclusive community, inaccessible Community transit ions to a mixed income , mixed wealth and diverse community. to low income households. Table 1: Contrasting gentrification with revitalization R evitalization instead of gentrification - Neighborhood improvement (or revitalization) is not synonymous with gentrification . Neighborhood reinvestment can occur and improve the quality of life for existing Several ciated with gentrification. residents without the widespread displacement asso urban/social research institutions have been pushing for a new model of policy development that does not gentrify the community. These new development models have iv “ equitable development ” been labeled as or “ community re vitalization ” . All of these new models of development share certain characteristics. The distressed community transitions into a mixed income, mixed wealth and diverse community. The social networks and services utilized by traditional residents are maint ained and improved. Existing neighborhood businesses are supported while additional viable businesses are created in the community. Neighborhood improvement not only focuses on improving the physical environment but focuses on creating wealth and opening opportunities (such as to existing residents. employment) PolicyLink has further refined its model of equitable development. Detailed information Appendix A . of the policies to promote equitable development can be found in Monitoring/Diagnostic Tools: One of the recommendations widely supported for add ressing gentrification pressure is neighborhood monitoring and assessment. Establishing a diagnostic system for monitoring investment and property ownership enables intervention before gentrification to analyze if reinvestment in the s. Conversely, this system enables a community occur community poses little threat of gentrification, thus resources can be targeted toward 2

3 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org other neighborhood concerns. The critical aspect of monitoring neighborhood change is address potential problems before they occur, case studies have shown too many to communities have organized to mitigate gentrification after significant displacement has altered the neighborhood. As addressed by the Brookings Institute: “Perhaps the most i mportant task for neighborhood residents, local and regional government officials and other stakeholders is to identify gentrification pressures early, and to understand how gentrification dynamics are to unfold.” Brookings Institute. Dealing with Neighbor hood Change. Page 30. Understand Context of the /Region - Neighborhood Before establishing a monitoring system for a neighborhood, it is also important to assess the neighborhood in the context of the surrounding city and region. Research by director powell (and supported by research from the Brookings Institute) has found that gentrification pressure is directly tied to the regional housing market. The degree of gentrification stress is higher for “rich” or high market cities (San Francisco, New York, Port land) and much less a phenomenon in weak market cities (Cleveland, Detroit). Also, the strategies to mitigate gentrification will vary within these cities. For example, inclusionary zoning may be a better strategy in a hot market city, while strategies to avoid displacement and build assets (for existing residents) may be more appropriate for a weak market city. (Many of these issues are addressed in the Network that I presentation prepared for the Community Development Partnership submitted to you earlier) . Another consideration is assessment of what attributes may lead to gentrification in a neighborhood. Research by PolicyLink of California has identified several characteristics that gentrifying neighborhoods share. The neighborhood contains a high prop ortion of renters (population most sensitive to displacement pressure). Easy access to job centers and regional amenities. Comparatively low housing values in the context of the regional and local market, particularly for housing stock with architectural merit. Methods of Monitoring - The tools to monitor for gentrification depend on the housing market and size of the area of concern. Diagnostic systems may be city wide (measuring all neighborhoods) such a s systems found in Philadelphia and Providence RI . The Providence, RI monitoring system analyzes the property sales and abandonment to identify areas of potential land speculation. At the neighborhood level, diagnostic sy stems can be more proactive, specific and accurate . Neighborhood organizations can track change in the community to understand i f gentrification is occurring. Indicators to consider monitoring include: Property appreciation rates, how fast are they growing, compare rates with the 1. region, the city or other urban neighborhoods. 3

4 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org Analyze th e rental market in the community. Determine if rents are changing and 2. how they compare the change in rents in the region, the city or other urban neighborhoods 3. Are critical neighborhood social services under pressure to relocate? 4. Determine if any displace ment is occurring in the neighborhood. Are other local (neighborhood) housing opportunities available to displaced residents? 5. Are traditional residents able to maintain properties, monitor if code violations are threatening to cause displacement. Mitiga tion Strategies in Place - Neighborhood monitoring also requires planning for mitigating gentrification if it disrupts the neighborhood. Researching and identifying mitigation strategies beforehand can speed up any response to gentrification in the neighbor hood . A wide range of mitigation policies exist to address gentrification. These vary from extensive inclusionary housing ordinances to localized programs to provide financing for local businesses or provides a brief ndix B funding for code compli ance for existing residents. Appe summary of a selected number of potential mitigation strategies. More information can be provided for specific strategies at a later date, if this would be helpful to your efforts. Addressing Land Speculation: Land speculation is a problem in inner city neighborhoods across the nation. We are organization in Detroit address vacancy and currently assisting a community advocacy speculation problems by advocating for a city wide land bank program. Options for eculat ion are somewhat limited, but two primary recommendations dealing with land sp would be helpful in dealing with speculative property owners. addressing land speculation. Second , First, strict code enforcement is the best policy for bandoned properties can also prove effective. aligning other redevelopment tools against a Land bank programs can be used to acquire properties for community use. Community groups can work proactively with the city to enforce codes and utilize eminent domain to incentive programs to revitalize the neighborhood address vacant properties. Finally, any should attach requirements to assure properties will be redeveloped in a timely manner. Also, incentives should not be given to potential property owners that have a history of or city a t speculation in the community large. Potential Housing Policies: Based on the concerns you addressed in our conversation several policies may be useful to pursue in the neighborhood planning process for Weinland Park. Code Enforcement/Building Rehabilitation Policies – strategies to improve quality of housing for existing residents Examples: Local code enforcement monitoring, aligning community ess blight and code violations, maintain loc organizations with the city to addr al database of code violations. 4

5 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University institute.org http://www.kirwan the neighborhood revitalization strategy that improves Asset Building S trategies – a quality of life for existing residents and buffers residents from future gentrification pressure. Examples: Limited equity housing cooperatives, strategies to promote homeownership for e xisting residents (financing availability, down payment assistance), also could include business assistance for existing businesses and service providers in community. – encourage income diversity in the neighborhood Investment Strategies and public tment inves Examples: Align public subsidies with neighborhood planning goals, use of incentives to increase homeownership and introduc tion of market rate housing Other (Addressing Gentrification Concerns) monitor for Gentrificat Establish Early Warning System – ion and identify appropriate tools to mitigate gentrification if problems occur 5

6 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University institute.org http://www.kirwan Appendix A: Principles identified to promote a model of equitable development Source: PolicyLink, Equitable Development tool kit. htt p://www.policylink.com To create a context for equitable development while preventing displacement of residents: Understand the economic, political, and social forces at work Assess, map, and analyze the potential for displacement Support resident par ticipation in land use planning that envisions community - wide economic improvement Stabilize current residents Build public awareness of the issues and proposed solutions among key players - income development at every turn and across juris dictions Advocate mixed Expand the range of housing not susceptible to the commercial market through permanent affordability mechanisms Promote diverse homeownership opportunities for current residents Target income and asset strategies to stabilize current residents Utilize equity criteria to guide new investment - rooted commercial, nonprofit and arts organizations Anchor culturally Tie housing production to commercial growth Plan for newcomers to promote a diverse community mix and ensure affordability Strengthen regional cooperation in community and economic development planning Craft policies to engage local, regional, state and federal governments in addressing gentrification pressures 6

7 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org Appendix B : Equitable Development Strategies to promote revitalization wh ile avoiding gentrification. Source: PolicyLink, Equitable Development tool kit. http://www.policylink.com Brownfields This tool covers strategies used to encourage redevelopment of brownfields (abandoned, idled, or underutilized commercial or industrial sites). Brownfield redevelopment is complicated by the real and perceived dangers of environmental contamination. Infill development is the use t land within built urban areas. Reclaiming brownfields and the use of infill of vacan development offers new land use options in gentrifying areas. Minority Contracting Ensures that healthy lo cal businesses owned by people of color are a basic component of strong, sustainable communities. These businesses generate job opportunities for residents, and keep money circulating within the neighborhood. This tool reviews major approaches for - achievin g parity for minority owned businesses. Real Estate Transfer Taxes This innovative tool reviews techniques through which tax regulations can limit two destabilizing practices in low and moderate - inc ome communities: delinquency, when property - taxes are not paid on blighted property; and speculation, when land is acquired with the intent of 'flipping' its ownership strictly for profitability as the housing market inflates. Local Hiring Strategies An array of strategies that connect economically marginalized communities to regional job opportunities. For example, linkage programs can require that a percentage of jobs created by a commercial d evelopment go to local residents. Other programs link urban core and inner - ring suburban residents to employment opportunities around the region. Building such economic opportunity helps residents remain in their communities. Affordable Housing Development 101 Increasing and preserving affordable housing stock is critical to community stability. There are a range of practices that are aimed at both existing housing and new development. The focus is ty pically protecting low - income residents most at risk of displacement from gentrification. Often strategies expand to include a spectrum of housing choices from rental to ownership in a range of income classes. Expiring Use: Retention of Subsidized Housing Protects "expiring use" subsidized housing from losing its affordability - designation and reverting to the private market. This tool clarifies ways to protect affordable housing originally suppo rted by HUD, with a special focus on regions with extreme housing shortages, and not coincidentally, considerable amounts of gentrification. 7

8 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org Commercial Linkage Strategies A range of programs and fe es that tie economic development to the construction of affordable housing. Most require developers of new commercial properties to pay fees to support affordable housing construction. Linkage programs support smart growth, mitigate rising used by economic development, and provide a dedicated source of revenue housing costs ca for affordable housing. Commercial Stabilization This tool reviews effective techniques employed by community - based org anizations to preserve cultural organizations and longstanding commercial enterprises that define the historic character of communities. These institutions are frequently the most vulnerable to displacement in gentrifying neighborhoods. Community Mapping This tool identifies key information needed to assess the considerable public and private forces driving gentrification. The tool reviews effective community mapping and indicator projects; es key data sources to guide community interventions; and shows the role of mapping identifi in community education and organizing. Community Development Financial Institutions Existing and emerging residen t - owned financial institutions serve to build assets for low - income/low - wealth residents and provide them with a stronger voice in running an institution dedicated to neighborhood development and revitalization. Cooperative Ownership Models Businesses, based on democratic principles, owned and run by various stakeholders such as op models targeted to low employees, producers, consumers, or others. Co - - - income/low wealth residents can offer potential financial benefits, business skills, and experience in running a democratically controlled enterprise. Just Cause Eviction Controls These laws give special protections to the elderly, disabled an d catastrophically ill, and ensure that landlords can only evict with proper cause, such as failure to pay rent or property destruction. They protect renters against being unfairly evicted by landlords who want to capitalize on the explosive rental and hou sing markets. Code Enforcement Prevents and abates violations on private property such as vacant, poorly maintained, and tor vehicles and more. dangerous buildings, illegal dumping, weeded lots, graffiti, junk mo 8

9 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org Code enforcement can be an important way to protect existing residents or to accelerate gentrification. This tool will provide strategies to ensure resident protection. Infill I ncentives Density bonuses allow developers to create higher density projects, increasing affordability measures. Infill incentives reward innovative housing efforts to expand homeownership through unused or abandoned lots in urban core neighborhoods. Use d properly, these programs can produce new housing units, reduce blight, preserve open space, reduce traffic, and encourage retail development that serves the needs of existing residents. Developer Exactions Requires new commercial developments to contribute fees to the development of affordable housing, community services and infrastructure. Creative nonprofit organizations are utilizing exactions as an anti - gentrification tool to finance service s such as day care, cultural centers, job training, below market rate housing, and ride sharing. Living Wage Provisions Ordinances that ensure the employees of public contractors, private contra ctors receiving public sector funding, and public employees are paid wages at pace with regional cost of living income residents - measures. Higher wages achieved through living wage ordinances assist low in remaining in their communities, lead to greater st ability in the workforce and increase the municipal tax base. Rent Controls A review of legal and programmatic protections for renters to slow the pace in markets with rapidly escalating rental prices. The effectiveness and implications of rent control has been heavily debated for as long as such ordinances have existed. This tool reviews their potential application in gentrifying contexts, as well as the compeimentary techniques necessary to ma ke this a useful strategy. CDC's with Resident Shareholders - An emerging tool that offers low income/low - wealth residents the opportunity to own equity in real estate projects spearheaded by communit y development corporations (CDCs). Owning CDC project stock provides residents with financial benefits and voice in the neighborhood development process. This tool directs profits from development back into the community, ensuring benefit for existing resi dents. Community Reinvestment Act Congressional mandate that financial and depository institutions, such as commercial banks, help meet credit needs of the communities in which they operate, including low - and income neighborhoods. To utilize the Act as an anti displacement tool requires - moderate - 9

10 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University http://www.kirwan institute.org diligent monitoring to ensure investment occurs, as well as strategic planning to direct investment to benefit residents. Inclusionary Zoning - 20%) of the housing units in any Land use regulation mandating a percentage (usually 15 project above a given size be affordable to people of low and moderate incomes. The developer can build the housing or contribute t o a fund to develop it elsewhere. This tool has particular relevance in gentrifying communities, where high - income and luxury apartment developments can quickly overrun the existing low and moderate - income housing stock. - Housing Trust Funds Public funds, established by legislation, ordinance or resolution, to receive specific revenues dedicated to affordable housing development. The key characteristic of a housing trust fund is that it receives on - goin g revenues from dedicated sources such as commercial development taxes, fees on loan repayments, and transfer taxes. These funds can stabilize communities facing gentrification pressures. Housing Cooperatives Limited Equity A partnership wherein residents collectively own and control their housing. The limited equity component limits the return on resale, insuring that housing remains affordable to future - ops promote democr atic participation through resident control and residents. Limited equity co ownership. Community Land Trusts A model where nonprofit organizations acquire and hold land for community benefit, making the land available to individu - term land leases. Residents own the homes als through long located on the land. This alternative property ownership model insures long term community benefits such as permanent affordability, while creating homeownership and equity opportunities for indivi dual residents. i Excerpted from “Dealing with Neighborhood Change: A Primer on Gentrification and Policy Choices” by Maureen Kennedy and Paul Leonard (April 2001). A Discussion paper prepared by the written Brookings Institution Center on Urban and Metropolitan Policy and Policy Link. ii Excerpted from “Dealing with Neighborhood Change: A Primer on Gentrification and Policy Choices” written by Maureen Kennedy and Paul Leonard (April 2001). A Discussion paper prepared by the Brookings Institution Center on Urban and Metropolitan Policy and Policy Link. iii - For more information about the impacts of gentrification please review “G iving Them the Old “One Two”: Gentrification and the K.O. of Impoverished Urban Dwellers of Color”. By john a. powell and Marguerite L. Spencer. Forthcoming journal article. (2004) 10

11 Kirwan Institute for the Study of Race & Ethnicity The Ohio State University institute.org http://www.kirwan iv For extensive information on equitable development tools and gentrificati on mitigation tools visit the http://www.policylink.org/EDTK/ equitable development toolbox website provided by PolicyLink at: 11

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