Photo by S. Davis via flickr, CC BY-NC-ND 2.0.
Large, adaptive-reuse, “sustainable development” projects are all the rage these days in urban planning circles. These are projects where large pieces of abandoned or underutilized infrastructure are repurposed as centerpieces of major urban redevelopment initiatives that are couched in the rhetoric of sustainable development.
They bring positive environmental amenities to an area, including added green space, increased walkability and bicycle-friendliness, and more local shopping and retail services.
These projects are often led by local governments or their affiliate agencies and tend to involve substantial public and/or philanthropic subsidy. Examples range from New York’s High Line, to Washington, DC’s 11th Street Bridge project, to Chicago’s 606 Trail.
Over the last twelve years, I have studied and closely monitored one such project, the Atlanta BeltLine, and drawn some lessons from the project, particularly for cities or regions where, overall, the housing market is strong. (These lessons do not apply directly to large-scale projects in cities with declining populations or “weak market” cities. In such cities, home values and rents are likely to be stagnant or declining, and large-scale redevelopment projects that improve the desirability of declining neighborhoods are more likely to be handled without large-scale affordability problems. This is not to say that gentrification or displacement cannot occur in pockets of weak-market cities, but the scale and speed of such change is likely to be more limited.)
I have come to the conclusion that, absent a fundamentally new approach to redevelopment planning that places housing affordability at the center of the process, large-scale sustainable development projects are likely to become engines of what has been termed “environmental gentrification.”
Photo by BeltLandia via flickr, CC BY 2.0.
The Atlanta BeltLine will ultimately connect 45 Atlanta neighborhoods via a 22-mile loop of trails, parks, and eventually a planned streetcar, all of which will follow abandoned railroad tracks that encircle Atlanta. According to Atlanta BeltLine, Inc., the quasi-governmental agency that is building and administering the BeltLine, as of 2016 the project consists of “four open trails; two trails under construction; seven parks; intensive planning for modern streetcar expansion; more than $3 billion in private economic redevelopment; hundreds of affordable workforce homes; free fitness classes; a linear arboretum; an urban farm; and the largest temporary public art exhibition in the South.
The BeltLine is being financed by a mix of public sector financing and corporate and foundation philanthropy, at the heart of which lies tax increment financing (TIF). As the BeltLine’s principal funding mechanism, the TIF redirects increases in property tax revenues that arise after its establishment to project-related expenses rather than to the regular general revenue budgets of the city, county, or school district. The duration of the TIF in this case is 25 years, which spans from 2005 when it was adopted to 2030 when the project is expected to be fully completed.
Projects like the BeltLine have the power to transform communities so rapidly and dramatically that they call for a new approach to planning and implementation that I call “Affordability First.” Contrary to the traditional, rational-comprehensive model of planning in which all aspects of community needs and assets are effectively put on equal footing, the Affordability First approach recognizes that when a project is of such a scale and impact that it has the potential to spur rapid increases in land and housing costs, provisions for preserving significant housing affordability must be put in place before other aspects of the project are considered.
The capitalization of expected amenities and improvements into land values is what makes housing different than other pieces of the development puzzle. In the case of these large, paradigm-shifting projects, the resulting level of speculation means land and housing prices will begin to rise well before shovels hit the ground. Without addressing affordability well before groundbreaking, there will be far less ability to provide for inclusive development in which affordable housing remains viable in the long run.
Of course, many sorts of community development efforts are expected to make neighborhoods more appealing to potential renters and homebuyers, and so should be expected to have some (upward) effects on rents and home values. Within some band of moderation, this is not necessarily a bad outcome and may benefit modest-income homeowners. Moreover, traditional community-based development is a challenging and incremental process, and so improvements tend to take place gradually over time. Thus, property values and rents are often affected incrementally and relatively slowly, which (ideally) allows community developers time to produce affordable housing options in the area to maintain the economic and social diversity of the area.
However, in the case of very large scale projects such as the BeltLine, large, anticipated increases in rents and values can induce speculation in the area by investors who purchase properties with the specific intent of flipping them (perhaps after some improvements are made, but not necessarily) for a sizable profit. Modest levels of buying-to-sell activity, especially when derelict properties are brought back into useful condition, can be a useful thing (and this sort of activity is often not what critics tend to mean by the term “speculation.”). But widespread speculation can rapidly drive up housing costs for both existing and potential residents with the benefits accruing largely to short-term or absentee investors.
Photo by Daniel Lobo via flickr, CC0 1.0.
Projects like the BeltLine often become engines of gentrification that transform large swaths of a city into areas that quickly become far too expensive for large segments of the population. Whether via direct displacement of existing residents, who are forced to move due to high rents or property taxes, indirect displacement, where residents no longer feel comfortable in a neighborhood, or just an increase in more affluent in-movers, the impacted neighborhoods become less affordable. Eventually, without ample affordability interventions implemented early on, the affected neighborhoods are likely to become ones of concentrated, segregated affluence. And if this is the end result of a project, one has to wonder, “to what purpose?” or “sustainable for whom?”
In Atlanta, the BeltLine has clearly been an engine of rapid gentrification. Even before groundbreaking in 2011, the BeltLine became the focal point of real estate conversations in the city. In the summer of 2015, the BeltLine frenzy culminated in a large, glossy special edition of “Intown Atlanta,” a magazine published by the Atlanta Journal-Constitution, that was entirely focused on the BeltLine. The Atlanta multiple listing service, which real estate agents and others use for searching for homes even added a search feature allowing users to select properties “near the BeltLine.” At the end of 2016, Atlanta BeltLine, Inc. identified the following outcomes of the BeltLine: over 15,000 housing units, over $3 billion in total development either constructed or underway, and 2 million square feet of new commercial space. Of the 15,000 new units, less than 800 are affordable by the project’s standards, which is below 80 percent of area median income.
My research shows that the BeltLine has fueled large housing price increases in nearby neighborhoods, as well. From 2011 to 2015, a home within a half-mile of the BeltLine can be expected to have seen its value rise by somewhere between 18 and 27 percent more than in other areas of the city of Atlanta (where prices already averaged increases of 32 percent over this period), depending on which part of the BeltLine the house was near. Most of these increases occurred in the three-year period from 2012 to 2015 when the larger housing market grew stronger. Ultimately, in the face of these impacts, the lack of substantial progress by the Atlanta BeltLine Inc. on affordable housing goals led to the recent replacement of its CEO.
Communities considering large-scale sustainable development projects should begin by recognizing that the amenities provided by such projects are rapidly capitalized into nearby land values, and so can spur higher housing costs very quickly. If effectively complete gentrification is to be avoided and at least some economic diversity is to be retained, housing affordability should be the central component of early stage planning for such projects. It is not enough to plan for trickle-down affordable housing development after the project gets up a head of steam. By then, land values will have increased too much, making the preservation and creation of affordable housing very difficult.
Planners and development agencies should adopt the Affordability First approach when planning projects like the BeltLine. Affordability First means beginning by putting in place an effective set of tools that both protect existing residents from rapid rises in rents or property taxes and provide for an ongoing supply of long-term affordable housing in the areas likely to be impacted by the project.
One type of tool that may prove useful is an income-based property tax “circuit breaker,” which limits the growth in property taxes paid by lower-income homeowners. (Some circuit breaker programs also provide financial assistance to renters who pay higher taxes via their rent.) Localities may employ property tax deferment programs, which effectively loan low-income homeowners funds to pay large increases in their property taxes; the loan is payable upon sale of the property. Owners or developers of rental property might be offered low-cost financing or property tax reductions in exchange for committing to long-term affordable rents for lower-income tenants. In addition, mandatory inclusionary housing policies should be put in place very early in the process.
Without prioritizing and putting in place these and other policies before undertaking large-scale sustainable urban development projects, communities are likely to experience outcomes similar to those seen in Atlanta, with rents and home prices rising rapidly and few opportunities for long-term inclusionary outcomes in the path of the project.
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5 thoughts on “Sustainable for Whom? Large-Scale Sustainable Urban Development Projects and “Environmental Gentrification””
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Thank you for sharing this research. I fully appreciate the idea that redevelopment projects should be made with community benefits in mind and your suggestions for ensuring inclusivity are good ones. I only wish you wouldn’t dubb the issue environmental gentrification, potentially pitting sustainability against sustained economic and racial diversity. Rather, I would hope that sustainability would be consistently defined as the United Nations does: “meets the needs of the present without compromising the ability of future generations to meet their own needs;” that includes meeting the needs of those presently in the community. Any redevelopment project can lead to gentrification without appropriate safeguards. If you deleted the word sustainable from all references to large scale urban redevelopment, the issues would still be the same. All redevelopment should consider the needs of both those presently in the community and the residents of the future.
Let’s keep in mind that these types of redevelopment/regeneration projects are carried out in the name of “economic development” or “urban renewal”, which, because they are “public purpose” organizations, must fulfill their legal requirements in addressing community needs. This is an inherent safeguard for area residents, yet still accomplish a “win-win” scenario; it’s a negotiated relationship. Gentrification per se isn’t always a negative, it can (and should) become a positive development if handled justly on all sides of the equation.
The political push needed is that re-gentrification of communities be for the benefit of the present residents of the community; and go back to the word’s definition to apply to the replacement or improved structures for middle class taste only and not to the people who will end up living in the re-gentrified properties.
Then ensure that the condemnation of buy-up of properties is broad enough to make the re-development in stages possible with temporary relocation into the shelters yet to be reached (or with temporary shelters) much as good “in house” high rise rehab can be done by keeping a floor or two vacant so that residents can temporarily relocate while one or two floors are being rehabbed is done.
Then concentrate on building cooperative housing so that the present residents can afford to acquire an affordable group ownership interest built upon their self determination through the participatory democratic processes inherent in the cooperative structure.
If it is truly the goal of community workers to inform residents of processes and let the residents make decisions, as discussed in other Shelterforce articles, then an accurate description of housing cooperatives will find residents choosing proprietary housing cooperatives with income caps for membership over short-lived affordable rentals with annual leases.
Existing housing cooperatives that have sustained themselves for 50 years or so are proof of their advantage for the residents in re-gentrified structures in which children and grand children can be expect to live.
Herb Fisher with 55 years of housing cooperative involvement.
Now the same thing is happening along Buford Highway in the City of Brookhaven, Dekalb Co. GA. It’s called the Peachtree Creek Greenway.
It’s really all about the developer.