The "one" policy prescription for weak market center cities*

Newark, the next bedroom community for New York City?

In the community development field, the term "weak markets" refers to those center cities that continue to leak population and businesses, and possess a large stock of vacant houses and lots and often large multi-story industrial, distribution and retail buildingd. Such cities would include Pittsburgh, Cleveland, Detroit. Baltimore and Philadelphia are in the middle, as certain neighborhoods are experiencing great increases in demand, although overall the cities have many vacant houses and parcels. Cities like Washington, the boroughs of Manhattan and Brooklyn, and Boston are strong markets.

Last week, in "Center City Renaissance," the Philadelphia Inquirer reported on the success of various center city revitalization efforts in the city that were pushed forward by the city's granting in 1997 of a ten year property tax abatement on the value of improvements when converting empty buildings to housing. In 2000, they extended this abatement to new construction.

One of the biggest problems in center city revitalization efforts (and municipal politics) is the difficulty of making hard choices, and focusing efforts where they can reap results in the shortest period of time. Politics makes this extremely difficult, because all politicians want to satisfy as many constituents as possible, and if spreading a little bit of money around to a lot of places helps achieve this, all the better (in the short run). The downside is that it takes a long long time to effect change, if ever. Even in DC, had there not been exogenous changes in the market, to wit, an increased willingness to live in the city, to partake of the urban experience, DC today could still be a weak market--it really only made the change in 2002-2003.

Center cities in most regions aren't going to be able to change completely, but they can begin to staunch the population outflow, and get more buildings back in productive use, more residents on the streets, who will build the demand for more retail, by making it easier for people to live in urban neighborhoods. That's what the Kyle Ezell focus on "Get Urban" is all about.

Andrew Cassel, the business columnist for the Philadelphia Inquirer, wrote about this on Friday, in the column "A city tax break worked wonders." From the column:

Back about 1997, somebody noted that a number of Center City office buildings were going dark and suggested they might be revived as apartments or condominiums. To give that process a kick, the government offered developers a deal: Convert commercial space into residences, and pay no property taxes on the improvements for 10 years. There wasn't a lot of fanfare, because nobody expected much to come of it. There was little demand for new upscale housing in Center City, much less the outlying neighborhoods.

John Kromer, then the city's housing director, said he wasn't even consulted about the plan. When the first applications came in, nobody even knew which city department should handle the paperwork, he recalled. Within a year or two, however, things began to change. People began snapping up the new lofts and condos in what had been old office buildings, warehouses and factories.

And after the tax-abatement program was expanded to include virtually all new residential development, Philadelphians discovered their city had suddenly acquired those three real estate essentials: location, location and location. In fact, according to some recent research by the University of Pennsylvania's Fels Institute, the program produced 1,876 property-tax abatements through the middle of this year, representing $458 million worth of renovation and new construction.

Sounds like a project to look into. And rather than make it neighborhood specific, even though targeting is preferred, have it work across the entire city. Don't make it any more complicated than it needs to be.

Cf. "Developers bank on downtown Newark luxury housing market," JANET FRANKSTON / Associated Press. "Now that Jersey City and Hoboken have become alternatives to Manhattan as havens for the hip and trendy, New York developers are banking on downtown Newark as the next place for upscale housing."

Who'd a thunk it? Newark, New Jersey?

* The Main Street principles say that there is "no one prescription," and that's true in a way but not true in another way. The "one" prescription is getting more higher income residents, and people with the ability to bring social and organizational capacity to bear on pressing issues.

Index Keywords: urban-revitalization; housing