Sexy and fashionable programs don't make blight go away

Vacant houses a few blocks from Penn Station in Baltimore. Note that one of the building has an "arts project" on it, as it's in the Station North Arts District (which has had some real positive impact on Charles Street and North Avenue with commercial property).

There is an op-ed in the New York Times, "The Bright Side of Blight," about the need to link employment development programs to revitalization programs for urban improvement. Even though I agree with the argument, I ended up responding to the article somewhat negatively on an e-list I'm on and there was a back and forth.

Image from Green For All

I think my negative reaction is a function of how difficult it is to work on these issues when most programs are conceived in flawed ways, are under resourced, and because they are band aid like responses to the financial leakage that has been created by suburban outmigration, sprawl, consolidation of industry generally, and then globalization of the world economy specifically and the creation of a new playing field where the U.S. is no longer the preeminent actor that can pay workers extranormal wages for rote work because it was performed in the U.S., but now labor must compete in a global market with countries where labor costs are 1/20 or less of U.S. workers.

So this is what I wrote originally--

Of course it's important to include job development and training within neighborhood revitalization programs. But the fundamental problem is a broken economy and lack of demand.

The problem with community development from the 1960s-2011 is that for the most part it has focused on making better housing, but not on fixing broken economies. (See "The Myth of Community Development" from a 1994 issue of the New York Times Sunday Magazine.)

Better urban housing is important, but it isn't economic development in and of itself. I wonder if this is the same case for the programs discussed in the article.

These kinds of programs are important, but not significantly ameliorative in terms of rebuilding broken microeconomies. Mostly they are about using stuff that is otherwise unused, or trying to build a market for better decision making and practice far in advance of the ability for the market to be sustainable, such as for "green collar jobs."

The key is triage and sorting. Neighborhoods that have the potential to be competitive within the regional residential landscape ought to get different treatments than the neighborhoods that in the next 10-20 years don't have that opportunity.

There was an interview, "'If you cut the rate, people will come'," in the Baltimore Sun last week with Loyola University economist Steve Walters about how reducing residential property taxes would be a boon to city residential attraction programs. From the article:

The Loyola University Maryland economics professor, pointing to the modern rebirths of San Francisco and Boston after tax revolts forced drastic rate cuts three decades ago, has long argued that Baltimore would become a much healthier city if it followed suit voluntarily. More people would move in, he says. More owners would fix up dilapidated properties. In several years, revenue collection would be back to its old levels — and then surpass them, he predicts. ...

Few argue that Baltimore's rate, more than twice as high as any county rate in Maryland, is good for the city. But elected officials, loath to severely tighten budgets to make up for revenue shortfalls in the near term for the hope of better times later on, have never permanently reduced the rate in a significant way.

So Walters, in a new paper written with former student Louis Miserendino, lays out a plan aimed at minimizing initial budgetary pain. They've dubbed it "cash on delivery." Amend the city charter to guarantee that the tax rate — now close to 2.3 percent — would drop to 1 percent in three or four years, they suggest. Then set aside the extra revenue as property sales and rehabilitations presumably ratchet upward in anticipation of the tax relief, and spend the revenue only after the rate drops.

-- How To Make Baltimore A Superstar City

This reminded me of the Philadelphia tax abatement initiative of no property tax for 10 years on converted multiunit housing buildings from what had once been abandoned warehouses and factories. The program has since been expanded to all commercial construction, not just conversion projects. ("BUILDING INDUSTRY ASSOCIATION: PHILADELPHIA TAX ABATEMENT ANALYSIS")

It's a good program, although soon these buildings are gonna have to start paying taxes--at least in Philly.

I don't know what a sortation and triage based revitalization program would be for Philly. The big problem is that cities don't operate in a vacuum, but within a regional landscape with many other actors and various levels of government over which the center city has no control.

I used to think that transit was essential to the maintenance of a viable city, but Philly is one of those center cities (other cities with comparable wide spread transit systems are Boston, San Francisco, Washington, Chicago, and San Fracisco + Montreal and Toronto in Canada) with a great transit system but the city is still economically unsuccessful.

Then, I wrote this--

After reading Rybczynski's Makeshift Metropolis last week in prep for a review, I am coming to the view that I need to write a primer/handbook on urban revitalization myself.

My disappointment with the book is that it is neither a polemic (think of the books by Kuntsler) or a primer (like Mike (Mihalio) Temali's great textbook Community Economic Development Handbook or some of the publications from the Main Street Center such as Marketing an Image for Main Street), even if it covers the subject well enough and has some good insights sprinkled throughout.

Granted were I to write a book it would be somewhat derivative, but it would focus in very practical ways on the topic, a true handbook/primer guide to people trying to figure stuff out overall, rather than a micro focus on whatever strategy is fashionable that day.

My criticism of the Smart Growth Manual by Duany, Speck and Lydon is that it while it is a useful guide of what to do in terms of development -- and granted there is a lot of bad development going on -- it's not instructional, and the book doesn't include the kind of follow up and more detailed information that people need in order to make knowledge actionable. In short, it is no Urban Design Compendium.

It would cover Temali's model, the Main Street Approach, entrepreneurship development and retail development programs (like the Historic Downtown LA Retail Project, Second Street in Austin, etc.), residential strategies (historic preservation, Elm Street model, resident attraction programs), sustainable transportation/transit, streetscape/livability infrastructure improvement programs, business and neighborhood programming operations and financing models (Business Improvement Districts, Community Service Districts, Community Benefits Districts, Main Street organizations, neighborhood associations, Community Development Corporations, etc.), arts programs and the difference between revitalization and community building, tempered by strong and weak real estate markets, the regional retail landscape, etc. + financing (tax abatements, special tax districts, bond initiatives), housing programs and land tenure practices (options of coops, land trusts, portfolio investment, etc.), business organization, municipal financing and tax policies, etc. Even regulation in some instances.

Revitalization is complicated and hard work and the accepted nostrums be they CDCs/housing, enterprise zones, big projects like convention centers or casinos or other wack job ideas, don't help all that much.

And frankly, even I only know how to help communities that are reasonably well connected by freeways, railroads, or transit. Small dis-connected communities, unless they are resource-blessed (natural resources, tourism, etc.), I can't help.

In my experience, in reasonably well connected places, transit--as long as it is the right kind of transit and not overly satisficed--is the public investment with the greatest ROI by far.

That's what I learned from observing the impact of the creation of the infill subway station at "New York Avenue." Irrespective of its anchor development impact on the "NoMA District," that subway station also positively impacted residential and commercial improvement and investment north of H Street, which had previously served as a hard and fast boundary for people with choices. This led to a revaluing of at $350 million for the residential properties north of H Street and south of Florida Avenue (an average increase of $200,000 per property).

And finally, I wrote this--

Basically, what I've come to believe is that is in weaker markets, you have to make choices, and even in weaker markets there are submarkets that have opportunity and can be "fixed."

I figured this out because I would think long and hard about my experience in DC, which was hard enough, and then try to figure out what to do in similar situations in Detroit, Baltimore, or Pittsburgh, but where the real estate markets are weak.

Eventually I figured out that if someone asks you "how do you fix Detroit?" that it would be crazy to not be totally paralyzed, but then you have to step back and recognize that you aren't trying to fix the entire city, that you break it down to the neighborhood/commercial district level.

And that, while every place is unique of course because it is a unique creation, few neighborhoods/commercial districts are exceptional and can't be compared. Using some pretty simple analytical tools, you can analyze neighborhoods and commercial districts at the block level, and you can develop strategies to move these places, both overall and at the block level, up the ladder of improvement.

That means making _hard_ choices about where to focus investment, and where not to invest, at least initially, to be able to substantively (re)build critical mass and then build on the critical mass--expanding and extending outward from these pockets of strength.

This is really hard to do politically though. Politicians like to spread money around and give a little bit to everyone. It doesn't make for very speedy improvement though. And people get all enamored with their urban garden programs and such, which dissipates the necessary focus on rebuilding the local economies.

(Remember that this was the central lesson of the Main Street program. People's interest in commercial district revitalization was driven by their interest in saving historic buildings. But very soon into the pilot program, the leaders realized that disinvestment in the buildings was a symptom of the real problem, a broken economy within the commercial district. It was the lack of success of the commercial districts, which had been supplanted by the development of regional shopping centers, which led to low rents below the requirements for maintaining buildings and/or vacancies leading to further disinvestment. The need then was to rebuild the economic success of these places as retail districts.)

Baltimore's Live Baltimore resident attraction program is one initiative that works to market the city and its neighborhoods in very specific ways. They do tours, provide incentives, market to potential residents, and have lots of programming initiatives. Baltimore's Healthy Neighborhoods program is another, which provides targeted assistance programs to neighborhoods that are in need of revitalization assistance. Other communities do similar programs. Cleveland Restoration Society has done a bunch of programs concerning restoration as well as specific improvement programs (so does the Famikos Foundation there). Community Design Center of Pittsburgh does a lot of great work wrt assisting homeowners with renovation. Some of these kinds of programs can be linked to low cost loan funds. They are in Cleveland.

Then there is the tax abatement program that happened in Center City Philadelphia to retrofit large unused buildings into multiunit residential properties, as mentioned above.

The Elm Street program created by the State of Pennsylvania applies the Main Street approach to neighborhood revitalization. (Maryland has copied this as "Pine Street" but I haven't seen much of its work, there was an initiative in Cambridge in fact, but I never got a chance to talk to them.) We can think of this as an extension and formalization of the ideas and concepts expressed by Rolf Goetze in Building Neighborhood Confidence.

And the kind of university-historic preservation joint venture as in Macon Georgia between Mercer U and Historic Macon (that program was recently touted as a new urbanist thing on this list, and maybe that's the case, but I've seen other presentations on this program and NU was never mentioned) as a way to target reinvestment to build critical mass. Of course, the University of Pennsylvania has done similar things in West Philadelphia.

And the general discussion in the book Changing Places about historic preservation. And revolving funds. Some communities have them, most don't. (We don't in DC, even though Historic Savannah created, arguably, the first preservation-based revolving fund in 1962.)

The problem though with preservation-based revitalization strategies is that in weak real estate markets, there is no question that the costs involved in maintaining a building to historic preservation standards are not made up in the back end by increased property values. So a 1200 s.f. rowhouse in the H St. neighborhood (which isn't even designated) is worth $400K, and $600-$700K closer in, in the designated Capitol Hill neighborhood, but might be worth $125K, in Rochester, NY, and less in cities like Detroit or Cleveland or in the suburbs of Pittsburgh.

Frankly, the addition of these kinds of housing programs to the program laid out in Temali's Community Economic Development Handbook provides a relatively complete approach to neighborhood and commercial district revitalization if you ask me + management programs (Main Street or whatever).