One of the issues that can arise when you are revitalizing is the potential for people from other areas and income groups to want to live in your (town) neighborhood. Many times the sudden influx causes demand in real estate, both residential and commercial. The commercial revitalization sometimes makes it hard for some stores to remain downtown when rents go up.
The real problem comes when residents feel pressure in the rental market by the increasing rents. I am starting a consultancy in Pittsburgh where there is enough money to make the section a hot spot, and offers promise of a successful revitalization. We are going to concentrate on the existing residents for an extended amount of services, to ensure that the neighborhood change is not too much of a cultural change.
In any town, there are people who can be homeowners, but for some reason either they choose not to, or don’t know how to become homeowners. Homeownership offers the advantage of building your equity in the house and perhaps using that equity to send your kids to college some day, or buy a sports car during some midlife crisis.
Homeownership offers stability, but it is also a hassle if you move around for your job. Many younger people have things to do and places to go and homeownership does not appeal to them. In this case, people will be approached no matter what their thoughts are and be asked if they would like to become homeowners.
As the houses become available, the houses will be acquired. Our project is to acquire 200 homeowner (for sale), 300 rental units and 200 units on the commercial strip. It is a lofty goal, but it is a little bit like playing monopoly. There will be a people factor. It is the intent of the developer to create a community sense of awareness with the indigenous population, to ensure that they are made aware of the intended changes and given an opportunity to participate in any potential real estate appreciation.
I remember when I was in Downingtown working as a main street manager, and initiating a brownfield development called Main Street Village. Most of the early houses in Main Street Village were selling in the low 100’s, and by the time I bought one they were selling for $150,000. The people that got in on the ground floor gained appreciation profit in their property. The development, called Main Street Village, later continued to appreciate in value. The remainder of the houses that surrounded Main Street Village also increased in value. Some of those houses were renters, and it really did not have a much of an impact upon them because the area experienced some flooding.
This effort is on a much grander scale and is a scattered site, versus a community created by a brownfield remediation. Grander will be the rewards to the existing indigenous homeowner population, which will also be conveyed to neighborhood renters being able to buy houses and get in on the ground floor. The economics are a winner for everyone. The people living in the area will secure appreciation greater than that I produced in Phoenixville. The big winner in Phoenixville was the borough government, with an extra $149,015,998 in assessed value. The fair market value probably at least doubles that number.
So yeah, the people make money, the long-term residents will be able to sell their home for more, the renters become homeowners, a good time had by all.
The strength of this project is the stabilization of the neighborhood through the indigenous population versus a gentrification. Gentrification means that people who cannot live in the wealthy suburbs start moving into more affordable housing. It helps if the area becomes an arts district, has good transit access or something “chi chi” about it, but the idea is the area is a good value.
There is an influx of new owners or renters but it is not to the detriment of the local indigenous homeowner population, as when an area gets noticed the prices go up. The difference in this situation is the developer is willing to work with the neighborhood to create a program for the indigenous renters, to enable them to become homeowners. The idea is to carry the character of the neighborhood over with the new investment. Of course there will be new people becoming part of the community, but if done correctly, the low to moderate income people will be enabled to stay in their property.
It is the dynamic of the two community forces working together to enable a blend of cultures. It is really not a blend where we would be attracting some kind of special group to the area, but more people from adjacent neighborhoods. Many of the cities like Pittsburgh and Philadelphia are really cities of neighborhoods. In Philadelphia, I had the New Kensington and also the Queens Village and Society Hill areas. Although I did not work for the neighborhood on South Street, it was a coalition, and I had a lot of contact through community watch. I did this kind of work in Baltimore too when I worked for a Neighborhood Housing Services in the late ‘70s with the restoration of the Butchers Hill properties on Baltimore Street in East Baltimore.
The human dynamic and the social implications of the work make it attractive to me.