Transcript Slide 1

Displacement-Free Development
Revitalization Strategies that Sustain and Benefit Long-Time Residents
Robert Damewood, Esq.
Regional Housing Legal Services
Hill District Consensus Group
Development Without Displacement
Pittsburgh, PA - November 12, 2012
RHLS
Regional Housing Legal Services is
a nonprofit law firm with unique
expertise in affordable, sustainable
housing and its related components
— community and economic
development, utility matters and
preservation of home ownership.
RHLS provides innovative project
and policy solutions that help create
sustainable communities offering
decent, safe and affordable housing
for lower-income Pennsylvanians.
Development in the Hill District
There are over 30 development
projects in the greater Hill District
that are currently under way or are
expected to break ground in the
near future
Demographic Trends in the Hill
As development has come to the Hill, housing prices have begun to
increase ...
Average Sales Price
1986-1990
2006-2010
… and racial demographics have begun to change.
% Black Population
1990
2010
The Challenges Facing the Hill Today
All neighborhoods need investment to thrive, but the return of significant
levels of investment to the Hill raises some serious questions:
Will long-time residents be able to
enjoy the benefits of a revitalized
neighborhood?
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Will some residents be forced to
relocate in order to make way for
new development?
Will all residents be able to afford
increases in rents and property
taxes?
Will residents have a chance to
build wealth and improve living
standards?
Historical Perspective - Redlining
From 1934 to 1968, FHA used “redlining” to direct federal mortgage assistance
to newly constructed White residential communities and away from older Black
and mixed-race neighborhoods. Private mortgage lenders followed suit.
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From 1934 to 1950, 3 out of 5 home
purchases were financed by FHA
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Until 1962 less than 2% of FHA loans
went to non-White buyers
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“White flight” was also subsidized by
highway funding and new public
infrastructure
Homeownership continues to be
subsidized through the mortgage
interest tax deduction and property
tax deduction
Historical Perspective, Cont’d.
During the post-war housing boom, housing policy for European-Americans
was affordable homeownership in appreciating neighborhoods:
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The flight of capital to newer White
neighborhoods created a strong tax
base, resulting in better funded
schools and municipal services
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Better access to education and jobs
led to increases in household income
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72% of White households in
Allegheny County own their homes
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Median White household income in
Allegheny County is $41,000
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Average White household wealth in
US is $110,000
Historical Perspective, Cont’d.
During the same period, housing policy for African-Americans was large-scale
demolition, subsidized rental housing, and urban renewal:
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The flight of capital from Black
neighborhoods depressed property
values and eroded the tax base
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New highways and urban renewal
separated Black neighborhoods
from commercial centers
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Only 39% of Black households in
Allegheny County own their homes
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Median Black household income in
Allegheny County is $22,000
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Average Black household wealth in
US is $5,000
Legacy of Redlining - Income
Discriminatory housing and community development policy has left
many Hill District residents with low incomes and insecure housing:
Hill District Tax Delinquencies 2011
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The median income in the Hill is only
$18,000
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1/2 of all renters in the Hill pay more
than 30% of their incomes on housing
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1/4 of all homeowners pay more than
30% of their incomes on housing
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41% of all housing in the Hill was built
before 1939
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21% of all properties in the Hill are tax
delinquent
These conditions make many residents vulnerable to displacement as
property values increase
Legacy of Redlining - Ownership
Discriminatory housing and community development policy left much
of the Hill District owned by others:
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Only 32% of all homes in
the Hill are owner-occupied
– compared to 52% for the
City as a whole
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40% of all homes in the Hill
are subsidized rentals* –
compared to 5% for the City
as a whole
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30% of all parcels in the Hill
are owned by government
entities
These conditions make residents more vulnerable to decisions made
by others and less able to build wealth as property values increase
Types of Displacement
Direct Displacement
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a.k.a. “relocation”
Eminent Domain
 Government takes property,
pays owner “fair market value”
 Relocated residents are entitled
to a “comparable replacement
dwelling”
Tenant Relocation
 Landlord (usually PHA or
developer) evicts or relocates
tenants for development
 Subsidized tenants are usually
entitled to a “safe and sanitary”
replacement dwelling
Indirect (Market) Displacement
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a.k.a. “gentrification”
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Increased housing costs/stagnant
incomes
 Property values/property taxes
and rents increase
 Resident incomes don’t keep up
with increased costs
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Greater demand for property
 Homeowners may lose homes
due to mortgage/tax foreclosure or
stepped-up code enforcement
 Landlords may decide to “opt out”
of rental subsidy programs
Direct Displacement - Social Networks
Involuntary relocation often destroys the social networks that low-income
families depend upon for survival.
Direct displacement has been linked to:
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Onset of depression
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Increase in mental illness,
domestic violence, marital
breakdown, accidents and
disease
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Homelessness
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Poor academic performance
Because of this, “temporary” relocation is rarely temporary. Nationally
for the HOPE VI program, only 24% of relocated residents return to the
redeveloped site.
Direct Displacement – Housing Choice
Most subsidized tenants are relocated using housing choice vouchers. Since
voucher rents are capped at the Section 8 “payment standard”, most voucher
residents live in very low income areas.
PNCIS – Section 8 Vouchers, 2009
PNCIS – Household Income, 2009
The social cost (human services, law enforcement, academic support, etc.)
of uprooting low-income families from social networks and reconcentrating
them in high- poverty areas has never been evaluated.
Market Displacement - The Hill
As development comes to the Hill District, long-time residents are already
being priced out:
“In a great irony that future
development risks repeating, Mrs.
[Thelma] Lovette was priced out of
her apartment in Crawford [Square],
the housing development that she
helped initiate as a board member of
the Hill Community Development
Corp.”
Pittsburgh Post-Gazette, 4/19/12
Strategies to Prevent Direct Displacement
Build First: Build replacement
housing first before relocating
residents. Examples: Bedford Hill,
Reed-Roberts/Dinwiddie
Advantages: Less social cost, only
need to pay for one move
Barriers: Availability of large off-site
parcels
On-Site Relocation: Consolidate
occupancy on one part of a site while
developing new housing on another
part. Examples: Second East Hills,
Millvue Acres
Advantages: Less social cost, only
need to pay for one move
Barriers: Need high vacancies; new
construction may be limited by utility
configuration
Property Management Approach:
Make capital improvements at unit
turnover and work with residents to
resolve negative behaviors.
Example: North Side Properties
Advantages: Less social cost, very
little if any relocation costs
Barriers: Requires different funding
mix than straight development deal
Strategies to Increase Incomes/Affordability
First Source Hiring: Require
funded developers to hire from the
community. Example: Hill CBA
Advantages: Potential win-win
Barriers: Requires funding and
planning to do it well
Tenant Support: Work with tenants
to improve functioning and access
opportunities. Example: North Side
Properties
Advantages: Turns affordable rental
housing into a community asset
Barriers: Funding, slow process
Inclusionary Housing/Business
Development: Set aside for lowincome residents/resident-owned
businesses. Example: Boston
Chinatown, San Jose
Advantages: Uses market potential;
less public subsidy required
Barriers: Works best in “strong”
markets; no local implementation
scheme in place
Entrepreneurial Support: Help
residents turn skills into business
ventures. Example: Ujamaa
Collective
Advantages: Residents control their
own economic situations
Barriers: Funding; can be a slow
process
Strategies to Stabilize/Increase Ownership
Home Repair Grants for code
issues, appearance and energy
efficiency. Example: Clairton
Advantages: Only way that some
homeowners can afford repairs
Barriers: Funding
Homeowner Support for tangled
title issues and mortgage/tax
delinquencies. Example: Clairton
Advantages: Prevents vacancy, blight
and homelessness
Barriers: Funding
Lease-Purchase Housing: Give
tenants an option to purchase new
rental housing. Example: Clairton
Advantages: Available funding (LIHTC)
Barriers: LIHTC requires a 15-year
rental period
Community Equity Stake: Give
tenants and community groups an
equity stake in new developments
along with the power to protect
community interests. Examples:
North Side Properties, Clairton
Advantages: Potential for greater
public benefit than typical approach
Barriers: Agency reluctance
Case Studies
North Side Properties
Clairton Southside
324-unit scattered site Section 8
property on the North Side
Comprehensive equitable revitalization
of a severely distressed neighborhood
1983: URA financed acquisition and
rehab in a way that provided funding
for a tenant buy-out
2002: Sanders Task Force awarded
funding to a developer for the Clairton
Southside revitalization and required
them to partner with the CEDCC
1998: Tenants formed NCFH to stop
mass eviction of 300+ families
2008: URA financed NCFH purchase
of a majority equity interest
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NCFH now has right to approve all
major decisions
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Cash flow is being reinvested into
the properties and tenant services
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Properties transformed into a
valuable community asset
CEDCC ensured that the revitalization
created homeownership opportunities
and benefitted existing residents
Won state and regional recognition as a
community development best practice
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2008 Innovation Award from the
Housing Alliance of PA
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2011 Community Development
Award from PCRG