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Different choices for thriving communities

By Melody C. Barnes

Mar 7, 2018

Photo: Jamie Street/Unsplash

“They’re coming for us, next,” some long-time residents of north-side Richmond, Virginia, observed after witnessing development in other parts of the city. It’s a common narrative about the gentrification that residents fear will consume the places, customs, and people that define their neighborhood. Us versus them. Low-income versus middle class. And frequently, people of color versus new white residents.

The concerns are real — fueled by public- and private-sector policies and practices — but displacement is not inevitable. Displacement is the result of the choices we make at every level of government and in the private sector. We can do better. Different decisions will lead to better outcomes and the possibility that existing and new residents can benefit from an influx of economic activity.

Low-income communities are candidates for gentrification, and history tells us why many urban communities have stagnated economically. A 2015 studyfrom the Federal Reserve Bank of San Francisco states that “drivers of decline are anything but natural and stem from a confluence of factors including: federal policy and investments, changes in the economy, demographic and migration shifts, and discriminatory actions.” Policies and practices including “the Federal Urban Renewal program, local redevelopment efforts, and interstate highway construction of the 1950s and 60s forcibly displaced communities of color and low income communities in urban neighborhoods en masse.” Today, those neighborhoods are attractive to new resources and capital, as well as individuals seeking the benefits of urban life. Jackson Ward in Richmond is a prime example.

Jackson Ward was the black Wall Street of the south in the early 20th century; home to a vibrant community ultimately under siege. The federal Homeowners Loan Corporation denied or charged more for banking and insurance services in minority neighborhoods like Jackson Ward — a process later known as redlining. It also deemed minority neighborhoods unfit for investment, triggering disinvestment in 239 cities across America. Private real estate covenants, white flight, the concentration of poverty in federal housing projects and highway construction that bisected the neighborhood contributed to the inevitable economic collapse of Jackson Ward and hundreds of other communities.

Today, development is underway in Jackson Ward and neighborhoods like it across the country. New apartment buildings, restaurants and other businesses bring new neighbors, and their refurbished homes, near those who have lived in the community for decades. The new investment creates jobs and amenities where they’re needed most: an opportunity — not a curse — if managed thoughtfully.

Low-income and middle class families can benefit from access to mass transportation, and fresh and affordable food, as well as safe streets, good schools, and green spaces — if we choose to break the cycle of winners and losers. Equitable development requires a new approach to power, policy and private-sector partnerships.

Integral to smart development are the long-time residents and business owners of the community and a rebalancing of power that allows their voices, values and needs to be heard and addressed. Residents know what they need to thrive in their neighborhoods, and in collaboration with aligned nonprofit, philanthropic and private sector leaders, they are positioned to help build vibrant neighborhoods that reflect the best of their history.

Residents know what they need to thrive in their neighborhoods, and in collaboration with aligned nonprofit, philanthropic and private sector leaders, they are positioned to help build vibrant neighborhoods that reflect the best of their history.

Nonprofits can help shepherd this community engagement by providing tools and resources that make it feasible for residents to advocate on their terms. In Philadelphia, a local nonprofit — Philadelphia Association of Community Development Corporations — created a policy platform for local elections so low- and moderate-income residents can provide proactive steps for equitable economic development in the city, and national nonprofit PolicyLink has created a toolkit to support the work of residents across the country.

Policymakers are critical to equitable development. After all, government often crafts incentives and makes — or doesn’t make — investments that create or exacerbate displacement. Every community is different, but some that face significant displacement challenges have recently implemented noteworthy new policies. Government can preserve affordable housing by providing tax and permitting incentives and abatements to developers, partnering with private finance institutions to provide funding to developers who cannot afford market rates, making public land available for development, and creating tenant-friendly housing policies. A law in Washington, D.C. gives renters the first right of refusal to purchase their properties if owners decide to put them up for sale, and some renters have worked with non-profit housing trusts to take advantage of this policy.

Localities have incentivized developers to preserve affordable housing and neighborhood diversity by offering to lower or freeze property tax rates for a period of time after new construction or property rehabilitation. In Chicago, owners who perform substantial renovations of their market rate properties get a tax abatement if they keep a percentage of the property affordable.

Policymakers can also enforce — and normalize — the terms of community benefits agreements to ensure that private developers provide the services communities want in exchange for tax incentives that maximize the profitability of development in gentrifying neighborhoods.

There are opportunities for private-sector partnership. In New York City, the local government partnered with private banks and community development financial institutions to help nonprofit developers acquire desirable property in the city’s highly competitive housing market. At a low interest rate, these nonprofit developers can access up to $190 million dollars in loans from the New York City Acquisition Fund for property acquisition and predevelopment financing. A similar fund exists in the Bay Area, which also sets aside a percentage of the loans for amenities that can be enjoyed by low and middle income residents alike, such as health clinics, grocery stores, and retail.

The middle class isn’t static; it is a status people aspire to reach, and even exceed. Our communities can catalyze that dynamic transition by providing access to housing, services and amenities, while respecting the best of what already exists. With empowered communities, and smarter policies and partnerships, we can make better choices that grow and strengthen the middle class.

About the author:

Melody Barnes is a Co-Founder and Principal of MB2 Solutions LLC, and a Senior Fellow and Compton Visiting Professor in World Politics at the University of Virginia’s Miller Center; she is also a Distinguished Fellow in the School of Law. Melody was Assistant to the President and Director of the White House Domestic Policy Council from 2009–2012.