[Book Excerpt] Mitigating the Great Inversion: The Problems of Affordability and Displacement

By Stephanie Meeks posted 12-19-2016 16:44

  

Earlier this fall the National Trust for Historic Preservation (in collaboration with Island Press) published The Past and Future City: How Historic Preservation is Reviving America's Communities, a book by National Trust President and CEO Stephanie K. Meeks and Kevin C. Murphy about the role historic preservation plays in urban spaces. In this book Meeks uses unique empirical research to describe the many ways in which saving and restoring a city’s historic fabric can help create thriving neighborhoods, good jobs, and a vibrant economy. She explains the critical importance of preservation for all communities, the evolution of the preservation field to embrace the challenges of the 21st century, and the innovative work being done in preservation today.

This is an excerpt from chapter 6 of the book. For more information on the title, visit Island Press and read this Q&A here on the Forum Blog.

pandfuturecity.jpg

I woke up this morning, I looked next door.
There was one family living where there once were four.
I got the gentrifi-gentrification blues.
I wonder where my neighbors went, ’cause I know I’ll soon be moving there too.
Gentrification Blues,” Judith Levine and Laura Liben1

As we have seen, preservation can save important places, enhance neighborhoods, and turn historic resources into community anchors that accommodate the ever-changing needs of society—from food markets to clothing stores to cultural centers. A central argument of this book is that cities and neighborhoods that want to see more residents, jobs, and investment would do well to take a page from the National Trust’s research and work to reemploy the older building fabric that is proven to jump-start urban revitalization. We are seeing it happen over and over again—in Baltimore, Philadelphia, Detroit, and all across the country.

At the same time, although there are neighborhoods in every city in the United States that are looking for more investment, some places—and increasingly more places—are facing a somewhat different problem. In these cases, rapid revitalization is helping produce neighborhoods that are in danger of being completely hollowed out and drained of character. Chain stores and luxury lofts are quickly crowding out small businesses and affordable housing. Young, white, and comparatively wealthy new arrivals are moving in, and communities of color, who have lived and worked there for decades, feel they are suddenly being pushed out.

Preservation shouldn’t be something that happens to communities. We have to make sure we’re doing it right and that the quality of life for existing urban residents isn’t being diminished by the associated impacts that come when a street, block, or neighborhood begins to improve its fortunes. Affordability, displacement, the rising cost of living, and loss of neighborhood identity are all issues that preservation and urban revitalization efforts must contend with and, if possible, work to mitigate. …

Preventing Displacement

The job of historic preservation is not to try to prevent change—communities are always in the process of change—but we can leverage the tools, techniques, and habits of our field to help neighborhoods move forward in a positive direction, in a way that minimizes community disruption and helps facilitate equity, affordability, and harmony among old residents and new arrivals. Most important, in all the work we do, we can try to mitigate the displacement of existing residents in as much as possible.

There are many ways we can achieve these goals. We can make sure that beloved old buildings are still fulfilling needed uses in their communities, including the need for affordable housing. … We can use tools like property tax freezes, down-payment assistance, and energy-efficiency loans to help low-income homeowners stay in a reviving neighborhood. We can also use the traditional tools of rent control, homeownership assistance, rehabilitation grant programs, zoning, historic districting, and others to help stabilize communities without contributing to unwanted displacement.

We can also work harder to listen to communities’ concerns about a particular preservation project and see that those concerns have a voice at the table where decisions are being made. As the National Trust has advocated with the Main Street program for decades, building and supporting organizations that are composed of community leaders will help ensure the brightest future for threatened neighborhoods. Main Street organizations, like neighborhood associations, watch out for the needs of their residents and provide an important forum for discussion and community decision making. In many neighborhoods, community development corporations—such as the Seattle Chinatown International District Preservation and Development Authority—fulfill a similar role.

At the National Trust, we have been meeting with these and other local leaders and community advocates across the country to get a better sense of how preservation can help encourage equity and affordability and mitigate displacement in transitioning neighborhoods. In these discussions, other tools have come up that could well prove fruitful.

Community Benefits Agreements

Many major construction projects in recent years have been accompanied with a community benefits agreement, or CBA. This agreement stipulates, before ground is broken, how and in what ways the finished project will improve the existing neighborhood. The first major CBA came into being in Los Angeles in 2001 when the Figueroa Corridor Coalition, a network of local and labor organizations, struck a deal with developers on the building of a multipurpose sports, entertainment, and retail complex adjacent to the Staples Center. That CBA included a hiring program and additional affordable housing for low-income residents, a promise that at least 70 percent of the jobs at the complex would pay a living wage, and money set aside for parks, parking, and other community needs.2 …

Commercial Protections and Heritage Business Laws

Often, when it comes to significant displacement in a neighborhood, the canaries in the coal mine are local small businesses. Bodegas, hair salons, or quirky record shops that have been around for decades suddenly disappear, replaced by banks, fast-food restaurants, or chain stores. When these new commercial tenants don’t hire the old workers, those local residents no longer have jobs and soon cannot make the rent themselves.

This same sad story plays out every single day in our largest cities, and mainly for one key reason: although residential renters usually have at least a few protections against unreasonable rent hikes, commercial renters often do not. So landlords—eager to make more money from higher-paying tenants—start increasing the rent to absurd proportions. As Tim Wu explained it in the New Yorker: “If you’re a landlord, why would you keep renting to a local café  or restaurant at five thousand or ten thousand dollars a month when you might get twenty thousand or even forty thousand dollars a month from Chase [Bank]?”3

So local businesses suffer. … In our biggest cities, this dismal cycle of rent hikes and closings has reached epidemic proportions. New York City sees nearly five hundred store closings a month. (Not coincidentally, it has also seen seven consecutive years of chain store growth.) … San Francisco is experiencing the same trends. Between 1992 and 2011, business closures and relocations increased 884 percent there. Since 1999, commercial rents have gone up by 250 percent, and 2014 saw an estimated thirteen thousand businesses close, including four thousand that had been open for more than five years. According to San Francisco’s Office of Small Business, businesses involved in lease renewals regularly see rent hikes of 30 to 50 percent. When these stores close, they are often replaced by chains or businesses serving an upscale or luxury market. “Rents are no longer affordable for the average neighborhood-serving businesses,” said San Francisco Small Business Commissioner Kathleen Dooley. “The basic needs have to be replaced by more and more restaurants, bars, and expensive boutiques. You kind of have to be expensive because the rents are so high.”4

To help mitigate these losses, Mike Buhler, executive director of San Francisco Heritage, worked with the city’s board of supervisors to create a Legacy Business Preservation Fund, an idea that’s also been used in other white-hot markets like London and Barcelona. … Unanimously endorsed by the board of supervisors, the Preservation Fund passed a citywide vote in November 2015. Now, other cities such as Los Angeles, Houston, and New York City are contemplating similar legislation.5 …

Of course, businesses will come and go based on how well they serve the needs of their community. In our biggest cities, however, these mass closures clearly have more to do with speculative rent hikes than the desires of local customers. When all the quirky, independent mom-and-pop stores on a block are eventually replaced with high-end chains, its inherent character and cultural fabric are lost. The neighborhood becomes just like every other place and, thus, no place at all.

Community Land Trusts

... Put another way, CLTs break the usual connection between land and the houses on it: residents can buy or rent the homes, but the land remains owned by the community. …

Community land trusts began being used as an affordable housing tool in the 1980s and have been growing in popularity over the years. As of 2012, there were 258 community land trusts in the United States, in cities like Boston, New York, Irvine, Austin, Chicago, and Las Vegas. They collectively oversee roughly 13,000 housing units and 25,000 rental units. (As it happens, the largest and to-date most successful urban CLT, in Burlington, Vermont, was in part established by Mayor Bernie Sanders.)6

Although it is still only a drop in the bucket in terms of the total housing market, the results so far have been very promising. A 2010 study by the Lincoln Institute of Land Policy found that homeowners in a CLT were one-tenth as likely to default on their homes as owners in the private market. “One of the things that we think is great about community land trusts,” said Armando Carbonell of the Lincoln Institute, “is that they are pretty stable even in the face of tough economic conditions.” That holds true, he noted, “even though CLT property tends to be owned by lower-income people, who might be under more stress than the average mortgage holder.”7

From Roxbury in Boston to New York’s Cooper Square to East Austin, Texas, community land trusts are helping neighborhoods retain their existing socioeconomic demographic, preserve their character, and resist mass displacement. This model seems to have great potential going forward, especially if municipalities work with local neighborhood advocates to build them out. For example, rather than simply auctioning off land that comes to the city through foreclosures and tax liens to the highest bidder, cities could donate or sell it at a discount to their local CLTs.

To some, things like increased protections for commercial renters and community land trusts may seem well outside the boundaries of traditional historic preservation. That, indeed, is the point.

As preservation is helping revitalize cities, we also need to be concerned about how that revitalization is affecting families. As historic buildings are creatively repurposed in ways that will attract new residents to a neighborhood, we can also make sure we are also doing right by existing residents and keeping them involved in the community’s future. In addition, while we think about how best to bring history into the present, we also need to confront related issues of equity and affordability, and make common cause with those who are already working hard to address these problems.

Excerpt from The Past and Future City by Stephanie Meeks with Kevin C. Murphy. Copyright © 2016 National Trust for Historic Preservation. Reproduced by permission of Island Press, Washington, D.C.

Notes
1 Alan Ehrenhalt, The Great Inversion and the Future of the American City (New York: Knopf, 2012), 233. Tom Slater, “A Literal Necessity to Be Re-Placed: A Rejoinder to the Gentrification Debate,” International Journal of Urban and Regional Research 32, no. 1 (March 2008): 212–23, http://www.geos.ed.ac.uk/homes/tslater/evictionrejoinder.pdf.
2 Partnership for Working Families, “Los Angeles Sports and Entertainment District CBA,” http://www.forworkingfamilies.org/resources/staples-cba. Michael Neibauer, “Wal-Mart, D.C., Strike Community Benefits Deal,” Washington Post, November 22, 2011, http://www.bizjournals.com/washington/blog/2011/11/wal-mart-dc-strike-community.html. Mike DeBonis, “Read Wal-Mart’s DC Community Benefits Deal,” Washington Post, November 22, 2011, https://www.washingtonpost.com/blogs/mike-debonis/post/read-wal-marts-dc-community-benefits-deal/2011/11/22/gIQAfL6alN_blog.html.
3 Tim Wu, “Why Are There So Many Shuttered Storefronts in the West Village?” New Yorker, May 24th, 2015, http://www.newyorker.com/business/currency/why-are-there-so-many-shuttered-storefronts-in-the-west-village.
4 Marisa Lagos and J. K. Dineen, “Taking Care of Business in S.F.’s High-Turnover Climate,” San Francisco Chronicle, October 12, 2014, http://www.sfgate.com/politics/article/Taking-care-of-business-in-S-F-s-high-turnover-5818417.php.
5 J. K. Dineen, “Is Prop J for Preservation, or a Slush Fund?,” San Francisco Chronicle, October 6th, 2015, http://www.sfchronicle.com/bayarea/article/Is-Prop-J-for-preservation-or-a-slush-fund-6554711.php. Broke-Ass Stuart, “Voters Must Protect The City’s Legacy,” San Francisco Examiner, October 8th, 2015, http://www.sfexaminer.com/voters-must-protect-the-citys-legacy.
6 Rich Jacobus and Michael Brown, “City Hall Steps In,” National Housing Institute, Spring 2007, http://www.nhi.org/online/issues/149/cityhall.html. Blumgart, “How Bernie Sanders Made Burlington Affordable,” Slate, January 19th, 2016, http://www.slate.com/articles/business/metropolis/2016/01/bernie_sanders_made_burlington_s_land_trust_possible_it_s_still_an_innovative.html.
7 Alexis Stephens, “Should Community Land Trusts Rank Higher in the Affordable Housing Toolbox,” Next City, November 3, 2014, https://nextcity.org/daily/entry/should-community-land-trusts-be-higher-in-the-affordable-housing-toolbox.


#ReUrbanism #Diversity #Sustainability

Permalink