Transcript Changing Neighborhood Dynamics

Dynamic Neighborhood
Taxonomy
“Building New Capacity for
Neighborhood Development”
City of Seattle, May 5, 2009
A Project of LIVING CITIES
By RW Ventures, LLC
Agenda
I
Background: Developing New Tools for the Field
II
Applying the DNT Tools: City Planning Examples
III
Moving Forward: Implications and Next Steps
IV
Discussion
About Living Cities
“A partnership of financial institutions, national foundations and federal
government agencies that invest capital, time and organizational
leadership to advance America’s urban neighborhoods.”
LIVING CITIES PARTNERS:
AXA Community Investment Program
Bank of America
The Annie E. Casey Foundation
J.P. Morgan Chase & Company
Deutsche Bank
Ford Foundation
Bill & Melinda Gates Foundation
Robert Wood Johnson Foundation
The Kresge Foundation
John S. and James L. Knight Foundation
John D. and Catherine T. MacArthur Foundation
The McKnight Foundation
MetLife, Inc.
Prudential Financial
The Rockefeller Foundation
United States Department of Housing &
Urban Development
The Challenge:
Scarce Resources, Many Options
 Community-Based Organizations: select
interventions, identify assets and attract
investment
 Governments: tailor policy and interventions
 Businesses: identify untapped
neighborhood markets
 Foundations: target interventions,
evaluate impacts
Information Resources
Increasingly available,
but more progress to be made
Gap between
practitioners and academics:
need “Clinical Economics”(Sachs)
Few decision systems for
neighborhood practitioners,
investors and service providers
A New Capacity for Neighborhood Development
 Strategic planning linking neighborhood, city
and region
 Centralized data and information systems
 Integrated analytic tools and impact
monitoring
 Ongoing evaluation of results
 Strategy adjustment and refinement
Comprehensive Neighborhood Taxonomy
Business
People
Real Estate Amenities
Social Environment
 Improvement or
deterioration within type
 Port of entry
 Gradual vs. Tipping point
 Bohemian
 From one type to another
 Retirement
 Urban commercialized
 Employment
 Education
 Crime
 Housing stock
 Investment activity
Theory and Data
PHYSICAL:
Distance from CBD, vacancies, rehab activity, …
TRANSPORTATION:
Transit options, distance to jobs, …
CONSUMPTION:
Retail, services, entertainment, …
PUBLIC SERVICES:
Quality of schools, police and fire, …
SOCIAL INTERACTIONS:
Demographics, crime rates, social capital…
Theoretical Framework
Housing
Price
Structure Rent
Amenities
 Use Demand for Housing as Proxy for Neighborhood Health
 Look at Quality Adjusted Housing Values to Capture
Neighborhood Amenities
 Look at Change in Quantity of Housing to Account for
Supply Effects
Final Product: The DNT RSI
RSI Estimation Coverage Using Case/Shiller Method
Time Period: 2000 - 2006
RSI Estimation Coverage Using DNT RSI Method
Time Period: 2000 - 2006
Improving upon traditional repeat sales indices, the DNT RSI can be estimated
for very small levels of geography, and is more accurate, more robust and less
volatile.
The Big Picture:
Drivers of Neighborhood Change
“The Goldilocks Theory” …
 Mobility is the key mechanism of change
 Movers are attracted to areas with undervalued housing
but sound economic fundamentals (employment, income,
education, young adults)
 Being connected is important: proximity to job centers,
access to transit, lower commuting times are positive
 Cultural and Recreational Amenities (art galleries, bars
and restaurants) help, but are not the main event
… Neighborhoods of Opportunity are “Just Right.”
The “Little” Picture: Few Silver Bullets
3'-By-4' Plot Of Green Space Rejuvenates Neighborhood
FEBRUARY 11, 2008 | ISSUE 44•07
DETROIT—Notorious for its abandoned buildings,
industrial warehouses, and gray, dilapidated roads,
Detroit's Warrendale neighborhood was miraculously
revitalized this week by the installation of a single, threeby-four-foot plot of green space.
The green space, a rectangular patch of crabgrass
located on a busy median divider, has by all accounts
turned what was once a rundown community into a
thriving, picturesque oasis, filled with charming shops,
luxury condominiums, and, for the first time ever, hope.
The Johansens, who just moved to
Warrendale, enjoy some outdoor time.
Exploring the Relative Importance of Different
Drivers of Change
(1994-2004 Random Effects Model, Standardized Coefficients with 95% Confidence Interval)
Summary  Implications
Two major implications:
1. We need a framework for understanding
neighborhoods as dynamic, specialized, and
nested in larger systems
2. We need much better tools for customized
analysis of local economies
Neighborhoods are Complex
Neighborhoods are Complex
Neighborhoods are Dynamic
Neighborhoods
Nested
in Larger
Systems
Neighborhoods areare
Nested
in Larger
Systems
which
drivethe
the
Flow
Capital
People
Which Drive
Flows
of of
People
and and
Capital
Functioning Neighborhoods Connect Residents
and Assets to Larger Systems
Connectedness
 Employment networks
 Entrepreneurial opportunities
 Business, real estate investment
 Expanded products and services
 Productive, healthy
communities
Poverty
 Undervalued,
underutilized assets
Productivity
Isolation
Applying the Framework
STEP 1A: What type of neighborhood do you want to be?
Applying the Framework
STEP 1A: What type of neighborhood do you want to be?
Starter Home Community
Applying the Framework
STEP 1A: What type of neighborhood do you want to be?
STEP 1B: What drivers will get you there?
• Specific Retail Amenities
• Child Care
• Schools
• Safety
• Affordability
Starter Home Community
Applying the Framework
STEP 2: Identify Relevant System
ECONOMIC SYSTEM
Retail
Markets
Starter Home Community
Applying the Framework
STEP 3: Identify Change Levers Within System
ECONOMIC SYSTEM
Commercial Land Assembly
Retail
Markets
(production – costs)
Specialized Market Data
(exchange – finding costs)
Starter Home Community
Applying the Framework
STEP 4: Specify Interventions
ECONOMIC SYSTEM
Commercial Land Assembly
Retail
Markets
(production – costs)
Specialized Market Data
(exchange – finding costs)
Starter Home Community
Developing New Tools for the Field
Question/Goal
Tool
Tracking Neighborhood Change
DNT Repeat Sales Index (RSI)
How will a specific intervention affect its surrounding area?
Impact Analyst
What drivers differentiate neighborhoods with respect to a
specific outcome of interest?
CART
Identify comparable neighborhoods based on drivers of
change and other key characteristics
Neighborhood Typology
What neighborhoods are similar along particular factors of
interest?
Custom Typologies
How does the impact of an intervention vary in different
places?
Geographically Weighted Regression
Track affordability and neighborhood housing mix
Housing Diversity Metric
Anticipate and manage neighborhood change
Pattern Search Engine
Identify “true” neighborhood boundaries
NeighborScope
Where We Are Today
The Product Development Process
Concept
Design
Prototype
Testing and
Refinement
Launch
Scaling Up
Where We Are Today
The Product Development Process
Concept
Design
Prototype
Testing and
Refinement
Launch
Scaling Up
DNT
Agenda
I
Background: Developing New Tools for the Field
II
Applying the DNT Tools: City Planning Examples
III
Moving Forward: Implications and Next Steps
IV
Discussion
Agenda
II
Applying the DNT Tools
a. Neighborhood Planning in Southeast Seattle
b. Informing Use of the Housing Levy
c. Zoning Changes in Northgate
d. Ongoing Impact Monitoring
Neighborhood Planning in Southeast Seattle
 Key Issues:
– Leverage light rail investment
– Retain existing businesses and attract new ones
– Minimize displacement as neighborhood improves
 Analytic Tools:
–
–
–
–
Neighborhood Typology
DNT RSI
Affordability reports
Impact Analyst
Area of Focus: North Beacon Hill
Logic and Approach
 Quickly Assess Current Conditions and Trends:
– Select relevant indicators, compare North Beacon Hill to
city and peers
 Identify Opportunities and Risk Factors Related to
Light Rail Construction:
– What do we know about impact of light rail and other
changes taking place to this type of neighborhood?
 Select Interventions and Support Implementation:
– What programs/interventions would make the most
difference and how should they be implemented?
 Monitor Outcomes and Evaluate Results:
– Are interventions achieving the desired outcomes? What
could be done differently?
Current Conditions and Trends:
Neighborhood Reports
Current Conditions and Trends:
Neighborhood Reports
Current Conditions and Trends:
Neighborhood Reports
“Neighborhood Reports +”:
Applying the DNT Neighborhood Typology
Key Dimensions:
•People
•Income
•Age
•Foreign Born
•Place
•Land Use
•Housing Stock
•Business Types
Variables
“Neighborhood Reports +”:
Applying the DNT Neighborhood Typology
Key Dimensions:
•People
•Income
•Age
•Foreign Born
•Place
•Land Use
•Housing Stock
•Business Types
Type 4:
“Port of Entry”
Variables
“Neighborhood Reports +”:
Applying the DNT Neighborhood Typology
 Type 4-D, “Port of Entry: Stable Residents”: Lower income, single
family homes, stable resident base. High foreign-born population,
high business diversity.
 Appreciating faster than its peers: since 2000, the RSI has increased
by 98%, compared to 91% for its peer group. Over the past 2 years,
properties have maintained their values, while they depreciated in
mid-south Beacon Hill.
 A Neighborhood in Transition: Type 4-D neighborhoods can transition
to Type 5-B, “Urban Tapestry: High Diversity” (higher income, lower
foreign born population, lower unemployment). Based on HMDA data
trends, it appears that such a transition is taking place, making this
area more similar to the southern portion of North Beacon Hill.
 Potential Issues:
– Signs of Financial Distress: high sub-prime lending activity; credit
indicators (accounts past due, credit balance to limit ratios)
reveal distress.
– Impact of Light Rail?
Anticipating Change: Measuring the Effect of Light Rail
Using the Impact Analyst
What This Tool Does:
 Estimates impact of an event (e.g. construction
of a light rail stop) on surrounding housing values
(or on other outcomes, e.g. crime)
Possible Applications:
 Evaluate the impact of a development policy
 Identify expected changes
 Choose among alternative interventions based on
estimated benefits to the surrounding community
 Advocate for a specific intervention
How It Works
Homes within 1000 ft of an LIHTC site
appreciate at a 4% higher rate than homes
DNT Repeat Sales Index, 1 = No Impact
Estimated Distance Decay Function – LIHTC Projects
between 1000 ft and 2000 ft.
Distance from Project Location (in Miles)
Monte Carlo Simulation to Estimate Impact Variation with Distance
PRELIMINARY – FOR ILLUSTRATION PURPOSES ONLY
Expected Impact in North Beacon Hill
Comparable Case Study: Dallas Light Rail Stop in Type 6 Neighborhood, 1996
Property values likely to increase significantly following
construction of light rail stop
Key Issue: Minimize Displacement as
Neighborhood Improves
What characterizes the neighborhoods that improved with less displacement?
DNT Findings:
Drivers of “Improvement in Place”
Improvement with Low Turnover Is Associated With:
 High Home Ownership Rates
 Low Vacancy Rates
 Access to Transit
 Reduction in Unemployment
 Presence of Employment Services
 High Social Capital
 High Percentage of Young Adults
Select Interventions: What Should We Focus on
Here?
Challenges and Opportunities Related to Light Rail
Investment:
 Helps connect people to jobs
 Catalyst for commercial and mixed-use development
 Drives up property values, potentially causing displacement
of original residents
Analytic Tools Can Help Select and Implement
Appropriate Interventions:
 Identify parcels for land banking
 Develop inclusionary zoning policy
 Target employment services and workforce development
Additional Tools and Applications
 Impact of Light Rail Stops on Other Factors (e.g.
Crime, Congestion, Retail Sales, etc.)
 Leveraging Light Rail Investment:
– Analyze impact of light rail in conjunction with other
factors (e.g. different retail mixes, condo vs. rental,
etc.) using DNT RSI and other outcome measures
 Commercial Corridor Analysis (Econsult):
– Current shopping patterns and factors affecting them
– Performance of individual shopping centers
– Model impact of changes in one corridor on other
retail centers in the city
 Ongoing Impact Monitoring
Agenda
II
Applying the DNT Tools
a. Neighborhood Planning in Rainier Valley
b. Informing Use of the Housing Levy
c. Zoning Changes in Northgate
d. Ongoing Impact Monitoring
Informing Use of the Housing Levy
 Key Issues:
– Making the Case for Affordability
– Targeting location of affordable housing units
– Informing Implementation
 Analytic Tools:
–
–
–
–
DNT RSI
Affordability reports
Impact Analyst
Neighborhood Typology
Logic and Approach
 Making the Case for Affordable Housing
– Track changes in housing affordability over time
 Targeting Interventions
– Opportunities for preservation: identify existing
pockets of affordability
– Siting new projects: examine characteristics of
project locations that have worked in the past,
identify current comparables
 Informing Implementation
– Identify features associated with affordable housing
projects that maximize their impact on residents and
community
Making the Case:
Percentage of Affordable Homes, 1986-2006
1986
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
1988
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
1990
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
1992
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
1994
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
1996
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
1998
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
2000
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
2002
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
2004
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Percentage of Affordable Homes, 1986-2006
2006
“Affordable” defined with respect to a household making AMI and spending 30% on housing
Targeting Interventions:
Identifying Existing Pockets of Affordability
Developing New Projects: What Worked in the Past?
Estimated Distance Decay Function – Seattle LIHTC Projects
DNT Repeat Sales Index, 1 = No Impact
Impact analysis of LIHTC projects:
• LIHTC Projects generally
positive for surrounding
property values
• No significant effect on crime
rates
Distance from Project Location (in Miles)
Seattle Results:
Larger, rehab projects had best results, particularly in lower income areas
Developing New Projects: What Worked in the Past?
Analyzing Individual Projects (EXAMPLE: Roxbury LIHTC)
Developing New Projects: What Worked in the Past?
Analyzing Individual Projects (EXAMPLE: Roxbury LIHTC)
Developing New Projects: What Worked in the Past?
 EXAMPLE: Working with developer to identify
promising sites based on neighborhoods where
previous projects were successful
 APPROACH: Develop scorecard using RSI, Typology
and housing values
Result: Scorecard Identifies Most Promising Candidates
Next Step: Isolate Factors Leading to Project Success
Additional Tools and Applications
 Refine Affordability Measures:
– Incorporate public and subsidized housing stock, tie size of
available units to size of households in need
 Identify Rapidly Appreciating Areas
– Apply NeighborhScope tool to identify areas at most risk of
displacement
 Impact of Other Housing Programs:
– Section 8, Trust Fund, ...
 Inform Implementation:
– Analysis of impact of specific projects
– Housing mix: best mix of housing for different types of
neighborhood
– “Housing in Context:” Identify mix of amenities and
supporting services that maximize positive impact for
residents and communities
 Ongoing Impact Monitoring
Agenda
II
Applying the DNT Tools
a. Neighborhood Planning in Rainier Valley
b. Informing Use of the Housing Levy
c. Zoning Changes in Northgate
d. Ongoing Impact Monitoring
Zoning Changes in Northgate
 Key Issues:
– Informing Visioning Process
– Guide Land Use Decisions
 Analytic Tools:
– Neighborhood Typology
– Impact Analyst
Logic and Approach
 Use Neighborhood Typology to Inform Visioning
Process
– What type of neighborhood do you want to be?
– What demographics are you seeking to attract?
– What mix of uses does that imply?
 Evaluate Impact of Alternative Uses
– What will be the impact of different land uses on property
values, crime, traffic, etc.?
 Support Land Development Process
– Commercial parcels database to help track ownership, tax
status, etc. to facilitate land assembly
– Specialized market analysis to identify most promising type
of retail and attract tenants
Possible Trajectories for the Neighborhood
Given Current status and type, 2 alternative visions are attainable:
Type 7: “No Place Like Home”
 Mostly residential, very stable neighborhoods with a “suburban” feel.
The single family homes that line the streets of these communities
house middle income families raising their children, as well as
retirees that stay in the neighborhood after their nests are empty.
Type 8: “Close, Cool, Commercial”
 Vibrant neighborhoods with high turnover in their population, which
is composed primarily of young professionals living in high-end rental
units and condos. Few children frequent the streets in these
communities, but the population of 19-34-year-olds enjoys a high
diversity and concentration of retail, services and entertainment
venues.
Transitioning to a Different Neighborhood Type:
Land Use Implications
Comparing Across Types:
Type 6
Type 7
Type 8
New Development
(Current)
Homeowners
Young
Professionals
Percent 19-34 Year
Old
35%
27%
44%
Home Ownership
Rate
25%
64%
23%
Mixed Use
Development
0.1%
0.3%
1%
8%
2%
25%
Single Family
Housing
24%
75%
21%
Entertainment
Venues
3.69
2.43
4.26
Commercial Land
Use
What Would it Take to
Become a Different
Type of
Neighborhood?
Evaluate Impact of Alternative Uses
EXAMPLE:
New Shopping Center
New Shopping
Center on Chicago’s
Southwest Side
Estimated benefits to the community: $29 million in increased
property values, or an average of $1,300 per home owner.
Additional Tools and Applications
 Facilitate Land Assembly:
– Reduce land assembly costs by increasing availability
of info on developable parcels, including location,
ownership, tax status, etc.
 Identify Most Promising Sectors:
– Perform retail market analysis to identify leakage by
retail sector
 Attract Developers and Retailers:
– Compile key market potential metrics by site
(including leakage, buying power, psychographic
profiles, etc.) to attract developers and retailers
 Ongoing Impact Monitoring
Agenda
II
Applying the DNT Tools
a. Neighborhood Planning in Rainier Valley
b. Informing Use of the Housing Levy
c. Zoning Changes in Northgate
d. Ongoing Impact Monitoring
Logic and Approach
 Track Impact Over Time
– See what’s working and what isn’t
– Mitigate side effects
 Conduct Formal Evaluation
– Formal impact analysis of alternative policies and
programs
– Evaluate what works best where
 Tie Impact to Cost
– Evaluate cost-effectiveness of alternative strategies
Ongoing Impact Monitoring
Monitor intervention results using select outcome measures
 Outcomes may include property values, crime, vacancy rates,
unemployment rates, etc.
 Relate outcome to costs in order to evaluate where the program is more or
less effective
Monitor Impact: Modeling Strategies
Starting at least 1 year after program inception,
conduct formal impact analysis to evaluate
interventions.
 Evaluate in which areas the program has worked best, and
why.
 Identify most cost-effective implementation strategies.
 Impact comparisons can be made across sub-areas within
the same community area, and across sub-areas in
different community areas but are the same neighborhood
“type”.
 Results can be used to refine strategies and
implementation, thus improving the effectiveness of
future interventions.
Agenda
I
Background: Developing New Tools for the Field
II
Applying the DNT Tools: City Planning Examples
III
Moving Forward: Implications and Next Steps
IV
Discussion
Where You Are Headed:
Information Resources for the 21st Century
Integrated data platform routinely
collects information from city
departments and outside sources
Established feedback loops between
“change theories” and
implementation results refine
knowledge base
Automated analytic systems deliver
answers, not just data, to inform
decision making and expand market
activity
From Data to Decision-Making Tools
Next Steps: How Do We Get There?
 Incrementally Build Information Infrastructure:
– Begin with centralized data capacity
– Expand database over time
– Start with metrics and tools that can be easily
automated (e.g. RSI, Affordability)
– Build technical skill set to refine analytics
– Develop user-friendly platform
 Integrate strategic planning approach
 Establish feedback loops to refine plan and
strategies based on implementation results
Agenda
I
Background: Developing New Tools for the Field
II
Applying the DNT Tools: City Planning Examples
III
Moving Forward: Implications and Next Steps
IV
Discussion
Dynamic Neighborhood
Taxonomy
“Building New Capacity for
Neighborhood Development”
City of Seattle, May 5, 2009
A Project of LIVING CITIES
By RW Ventures, LLC