Planning for Success

In an essay last month, John Norquist, president of the Congress for the New Urbanism and former mayor of Milwaukee, asked, “Is Gentrification Really A Threat?” (Planetizen.com). Citing three recent studies, he concluded that the fear of gentrification was overblown and used these studies to attack “local activists, CDCs and armchair liberals” who “assume the heroic mantle of protectors of the poor” and are standing in the way of urban development. He conceded that rents rise in gentrifying neighborhoods and said that “[i]f allowed to decide for themselves, low-income people might choose to divert some of their scarce income to paying higher rents and thus take advantage of the benefits of living in improving neighborhoods.”

But is this really the case? Kathe Newman and Elvin Wyly offer good evidence that in many gentrifying neighborhoods in New York City, the number displaced is actually higher than found by the studies Norquist cites. More importantly, Newman and Wyly conclude that without the array of supports found in NYC, such as rent control and stabilization, public housing and vouchers, limited-equity co-ops and informal housing opportunities, far more tenants would have been displaced. They are, after all, in low-rent neighborhoods not because they have chosen to spend their discretionary funds elsewhere (though some probably did), but because there is no choice for them to make. Unless spending on food or medicine is defined as discretionary.

While Norquist certainly has some good ideas to offer us, on this issue he takes the easy route of the ideologue. He and others conflate gentrification with development. No CDC or armchair liberal is questioning development. The real questions are: should those people who have suffered through the bad times in a neighborhood be allowed to stay when the neighborhood becomes more expensive and is the social goal of income diversity a meaningful one? If the answers are yes, the next question is… how?

In Mississippi, an evil confluence of long-term racism, environmental degradation and development “opportunities” is threatening the historically black communities of North Gulfport and Turkey Creek, both part of the city of Gulfport. While these areas suffer from high rates of abandonment and poverty, and can certainly use lots of development, residents there have decided to plan for success. In addition to their environmental justice work, Trisha Miller tells us, one group has created a land trust to make sure that homeownership opportunities remain for low-income residents when the community becomes gentrified.

This kind of “planning for success” rarely occurs when land is cheap and plentiful, as it is in so many Rust Belt cities and cities in the South like Gulfport. More than 30 years ago, however, New York City was in similar circumstances. There were vast wastelands of empty lots and vacant buildings as people with resources streamed out of its neighborhoods, leaving the poor and those committed to their communities. But a remarkable thing happened. Because there was so little competition by private developers and landlords, programs to convert rental units into limited-equity cooperatives (LECs) were created. While their original purpose may have been to take these properties out of the city’s hands (New York City had become the largest slumlord in America, by one account) an unplanned benefit occurred. LECs not only allowed residents to control the destiny of their homes, but also took their buildings out of the speculative market. A market that, while red-hot now, could hardly have been predicted then, when many observers wrote off the future of this city.

There are now tens of thousands of LECs in New York City. Susan Saegert, et al looked at several in the Clinton neighborhood. They found that LECs had succeeded in maintaining economic diversity and housing opportunities for low-wage earners in a quickly gentrifying Manhattan. Beyond that, they found that being a resident of an LEC gave people tools to more fully participate in the social and political life of their building, neighborhood and city. In today’s atomized and individualistic society, these “social capital” benefits are hard to undervalue.

Gentrification and abandonment may seem worlds apart, but they are two sides of the same coin: market failure. As these articles show, it is never too early to anticipate success and plan for a time when the benefits of development will bring along unwanted consequences that, historically, the poor have paid for. Whatever your context – hot market or weak market – community land trusts, limited-equity cooperatives and other shared-equity housing programs should be important tools in your affordable housing mix.

Research Update
We begin a new column this issue updating our research activities. Coincidently, but very appropriately, the first update is by John Davis, the principal investigator for the NHI study on shared-equity homeownership, which includes land trusts and limited-equity co-ops discussed in various articles in this issue. This research should enable practitioners and advocates to better understand how and when to use these models to provide long-term affordable housing solutions while increasing the opportunities for both individual and community asset development.

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