Steps to Take in Fighting Gentrification

New Orleans     Talking to Randy Shaw, tenant organizer and lawyer with the Tenderloin Housing Clinic in San Francisco, on Wade’s World about his new book, Generation Priced Out, he mentioned several steps that are worth research and action in cities everywhere facing gentrification.  In fact, he emphasized several times that one of the things that he had learned from his travels around the country in assembling this volume, is that anyone out there who is still singing the song, “it can’t happen here,” is simply smoking their own grow and not looking out the door.

One place where he was more than willing to point the finger was at road blocking of affordable housing that was creating more displacement by neighborhood organizations and the politicians and cities that kowtow to them in blocking multi-unit and higher density construction.  California is a leader in this fight, and Shaw argued that even Los Angeles, long a worshipper of single-family lots, is moving to deal with this issue.  In fact, the State of California sued the 200,000-person coastal city of Huntington Beach, some forty mile south of Los Angeles for trying to restrict zoning laws to prevent density.  He said that Minneapolis also finally moved to change its restricts on higher density.

Shaw argues that every city needs to inventory its unused public lands and make them available for construction of affordable housing as well.  He was especially critical of New York City Mayor DeBlasio’s administration allowing the armory in Crown Heights to be developed for condos in Brooklyn, rather than affordable housing.  In our annual Year End ACORN meeting, it was difficult to suddenly hear that the City of Toronto was making public land available and then claiming that affordable housing built there would be limited on a big project with nonprofit management because the for-profit developer needed to make a killing.  Nonetheless, this is worth a fight.

Giving preference for any housing built in lower income or minority areas undergoing gentrification for a big percentage of the housing to be offered preferentially to local residents so that they would be displaced, also seemed exactly right.  In the meantime, while construction is underway in Toronto, the city assures that every unit lost has to be replaced, and that housing is provided and subsidized to the families while they are out of house and home for the new project.   That rocks!

Inclusionary zoning continues to be key.  Shaw takes an ecumenical view on this issue, which was both interesting and pragmatic.  Essentially his argument was, any level, even a low one, whether a 10, 20 or 30% set aside is still a win, because it makes more affordable housing available than existed before.

Bottom line:  gentrification has to be stopped.  We can’t allow policy makers to join developers in saying it’s inevitable.  There are weapons in this fight, if we organize effectively to force their adoption.

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The Problem of Scale for Housing Development Projects

Milwaukee       Talking to the housing and economic development people, whether from the government or nonprofits, I kept hitting my head against a ceiling when it came to the thinking about the housing problems.  Looking and thinking about the issues in the Amani neighborhood made this headache unavoidable.

Work with me on this.

In Amani you have a community that within the boundaries drawn by the city and many of the residents has a population of about 8500.  The population is actually increasing there in recent years, which is a question worth contemplating at another time.  There are roughly 1400 properties, and more than 300 are rated by the city as vacant, which is more than one in five properties.  More than 20% of the properties are also tax delinquent.  It goes on and on like this.

Various programs available from the city allow small grants for repairs.  Some other programs fund nonprofits to help finance and rehab houses but often limit them to no more than four per year.  Some are catch-22 situations where to get money to fix a roof, the owner has to have insurance, but insurance companies cancel the owner when they have roof problems.

The math isn’t simple, but it is unforgiving.  If the only problem was rehabbing the vacant homes, and money was available to rehab only fifteen per year, it would take twenty years to bring the existing vacant properties up to snuff.  With more than 70% of the housing stock built before 1939, at a minimum all of those houses would be over 100 years old, so time will not stop, there will be more houses that need rehabilitation, whether occupied or vacant.

Working block by block would be hard as well.  Even doing five houses per block to try to turn a block around, there are 130 blocks in Amani.  One block a year would take twenty-six years, so that would never work.  Even three blocks per year doing fifteen houses would take ten years, and of course time will not stop there either, making housing rehab at this level a Sisyphean project.

Meanwhile the housing valuation is going down, not up, in Amani.  The last evaluation of the assessed value of Amani properties showed a drop of over 4% from $29786 to $28533 or $1253, even going the wrong way compared to inflation.  A low-to-moderate income homeowner looking to borrow $20,000 to rehab their own home from a bank is going to face the problem of putting $20K into a $30K house and finding the valuation for collateral purposes in the Amani market might only move the property to being worth $35,000, not $50,000 making most banks skittish to say the least.

To turn the community around and create a real tipping point, it would seem that organizations and government should be looking at doing 100 houses a year for four or five years.  If the price tag was $20,000 per house that would be $2 million per year or eight to ten million to get it done.  If $30,000, then then $3 million per year, if $40,000 then $4 million per year.  Those are not unmanageable numbers.  That’s a mid-range condo in New York City.  A project that size would raise all boats and the whole neighborhood, because it makes sense.  If such a project only raised the average valuation of the houses from $30,000 to $40,000, that would mean a $14,000,000 bump in the neighborhood and over five years a minimum of $70,000,000 for the housing stock.

If we were downtown or commercial developers, the city and local banks would be standing in line to finance the deal, because the numbers make a difference.  When we’re talking about housing, we are being nickeled-and-dimed, when we need to push to get to scale to stop playing catch up and start getting ahead and making real change.

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