Civic Engagement School is a series where we focus on how citizens, developers and government can work together to do neighborhood development better. Collectively, the methods and processes outlined in this series will arm you with a better understanding of what is needed to ensure equitable development. Read more about the context for this series in Part 1: How To Get a Developer to Listen.
This time we’re talking about strategies to help prevent or minimize displacement. Development induced displacement is when residents are priced out due to rising rents and costs of living, or evicted (and sometimes resettled elsewhere) to make way for new developments or higher income residents. Displacement is not only a threat to people’s homes but also to the greater community’s fabric. There are two major things that need to exist to mitigate displacement: affordable housing and livable wage jobs.
Affordable housing is a beast. It’s one of the biggest talking points for politicians on every level, and yet it’s something that we just can’t seem to get right. And without reliable affordable housing, some degree of displacement in the wake of development is inevitable.
A few years ago I sat down with Don Carter, the Director of the Remaking Cities Institute at Carnegie Mellon, to talk about “gentrification”. Carter has over 40 years of urban design experience and serves on a number of boards including this Pittsburgh land trust’s. When I asked about what we can do to stop or mitigate the negative effects of development, he declared without an ounce of doubt in his voice, “It’s a natural force, and the only way to counter it is to keep affordable housing in the neighborhood.”
Therein lies the problem– we more or less know how to provide affordable housing, but too often there aren’t safeguards in place to keep that affordable housing in place when it’s suddenly surrounded by rising property values. Carter went on to list two methods for combating the displacement of affordable housing and its residents: land trusts and community benefits agreements.
COMMUNITY LAND TRUSTS
Community Land Trusts (CLTs) are non-profit community-based organizations that own and steward land in a way that ensures housing prices remain affordable. The CLT retains ownership of their parcels of land in perpetuity, while prospective homeowners buy their condo or house and enter into long-term renewable leases for the land under them (generally 99 years). When it comes time for the homeowner to sell, the resale price is based upon a predetermined formula that provides a reasonable rate of return on the investment while keeping the home’s price within reach for future low to middle income buyers. While CLTs are better known for their owner-occupied housing, they have renters too. This innovative approach to community development provides a more stable housing market to low income residents and a bridge to the private market for first time buyers.
Unsurprisingly, CLTs haven’t caught on everywhere. Real estate professionals aren’t keen on the idea of a fixed value for a home’s appreciation, banks aren’t accustomed to giving out loans for solely the structures but not the land they sit on, and tax assessors charge taxes based on nearby properties rather than the value outlined on the CLT leases. Fortunately, some states have made CLT properties tax exempt, and hopefully more will follow suit. We’ve got a long way to go to normalize community land trusts, but it’s important to note that this is really the only truly foolproof way to prevent displacement.
COMMUNITY BENEFITS AGREEMENTS
Community benefits agreements (CBAs) are another helpful method that Carter suggested. Essentially a CBA is a contract between developers, public officials, and community organizations that guarantees certain benefits to the residents of the affected neighborhood. The benefits can range from a guaranteed percentage of affordable housing, job creation for pre-existing residents, investment in local businesses, recreational facilities and parks, to improvements of educational opportunities. Negotiating a CBA ahead of development is a good public engagement practice and has the potential to avoid community pushback later on. When a CBA is structured appropriately, it is legally binding and enforceable. However, a number of CBAs end up being non-binding resulting in developer non-compliance and community discontentment. You can read more about the features and limitations of community benefits agreements here.
Inclusionary zoning is a tactic that governments can employ to ensure a presence of affordable housing even when they’re not doing the developing. Inclusionary zoning policies encourage or require that new developments include a certain percentage of affordable housing units. To offset the costs of incorporating affordable housing, developers are offered benefits like density bonuses (allowing them to construct more units than conventional zoning allows) or fast-track permitting to allow them to build more quickly. It should be noted that the best inclusionary zoning policies require the affordable housing to be developed in proximity to or as a part of the market rate development to advance economic and racial integration. Read a policy brief on the effects of inclusionary zoning here.
Job Creation & Workforce Development
Long term job creation and workforce development programs help low-income residents build community wealth and socioeconomic mobility. This ensures that low and middle income residents will continue to be able to pay their rent or mortgage, even if prices go up. If we can’t control rising property values and if affordable housing isn’t incorporated into a development, then livable wage employment opportunities seem like the ideal way to enable residents to stay where they are.
In the article “7 Paths to Development That Bring Neighborhoods Wealth, Not Gentrification,” authors Marjorie Kelly and Sarah McKinley outline a number of strategies to be incorporated into a systems approach of neighborhood development. When it comes to employment, they offer a few key ideas that go beyond traditional social services.
One proposed strategy is to de-prioritize absentee-owned companies and invest in locally owned businesses instead, ideally creating opportunities for employee ownership in the form of cooperatives. Cooperative businesses are owned and run by a group of members, often employees, who get one share and one vote for all business decisions– this ensures that decisions balance pursuit of profit and the needs of the members and their extended communities. According to Kelly and McKinley, “when employees not only have a job but an ownership stake, they enjoy greater control of their economic fate”.
WORKFORCE DEVELOPMENT & JOB PIPELINE
Another strategy is to link workforce development to the needs of employers and large local institutions like hospitals and universities. By creating a pipeline for opportunities supplemented with ongoing support, this prevents participants from being strung out to dry after completing a skills development program. In setting aside a number of well-paying jobs for local residents, you help keep the wealth in the neighborhood. A prime example of this type of program is the Step Up to University Hospitals in Cleveland. Two weeks of pre-employment classes prepare participants for jobs in environmental and nutrition services at the hospital. University Hospitals then sets aside a number of spots which they fill specifically with individuals from the Step Up cohort, and then offers continued support and training for internal advancement. Read their case study here.
TRANSITIONAL EMPLOYMENT OPPORTUNITIES
Employment opportunities in low income neighborhoods must be inclusive to be effective. That’s why the final strategy is to provide training and transitional employment opportunities for those with barriers to employment, like criminal histories or disabilities. One noteworthy example is the nonprofit organization in Minneapolis called Emerge, which runs four social enterprises that provide job training and employment for ex-offenders, at-risk youth, and homeless fathers and their families. Locally, Franklinton Rising is a good local example of transitional employment for youth.
So when development appears inevitable, affordable housing and employment opportunities should be amongst the first things you rally around. Listed here are some of the most effective solutions to our housing, employment, and income crises, but no one strategy is a panacea. Solutions should always be systemic, place-based, and human-centered.
In part 3 of the Civic Engagement School series, I’m digging into community wealth building . Subscribe to make sure you don’t miss it.