Vacant Properties

Vacant Properties Resources

Building Markets

Influencing Neighborhood Choice | Three Strategic Approaches to Building Markets |

Increasing the Desirability of the Neighborhood’s Housing Stock: Tool 1- Homebuyers Protection Incentives;

If a neighborhood’s residential real-estate market is weak, the neighborhood is unlikely to be healthy in other ways. Organizations working in such neighborhoods should see building a stronger housing market as a key part of their strategy for neighborhood change. It should not be the only strategy however, because many other forces affect neighborhood health and need to be addressed. Many seemingly unrelated strategies, from crime-fighting to building a community park, may play a role in market-building. A CDC, therefore, should not only have a market-building strategy, but should look at other strategies not only as ends in themselves, but as contributions to the market-building effort.

Influencing Neighborhood Choice

Market-building is about people making choices. Neighborhood housing market change happens when more individuals choose to invest their financial and emotional resources in a particular neighborhood. The investor can be a family moving into the region selecting where to buy a house, a family already living in the neighborhood deciding whether to improve its present house or move elsewhere, or a builder deciding whether to buy a vacant lot and build on it. Their decisions are driven by how they evaluate the features of the neighborhood. Market-building is about changing the features of the neighborhood that affect the likelihood that people will choose it rather than somewhere else as a place to put their money and make their personal commitment.

The most important decision-makers are the people who already live in the neighborhood and future homebuyers, whether already in the neighborhood or outside. Every neighborhood has families whose income rises through a better job or business success. Market-building is as much or more about holding those families in the neighborhood as about attracting new families into the area.

Buyers typically start out by defining their housing needs and financial limits. In most regions, most middle- or upper-income buyers have many different neighborhoods in which they can find homes within their means. Where they search is defined by the information they have. Buyers will consider buying in certain neighborhoods, reject some areas, and not even consider others based on the information that they get about neighborhoods within the region. The choice they finally make is often based less on the desirability of a given house than on neighborhood stability and amenity value.

While “neighborhood stability” can mean many different things, it is used here to refer to those physical, economic or social features of the neighborhood that are associated with the preservation and potential increase in the value of a property-owner’s investment in a neighborhood. Neighborhood “amenity values” refer to the features of a neighborhood that contribute to the quality of life of its residents, and which are also likely to have an effect on the neighborhood’s competitiveness in the residential marketplace.

Three Strategic Approaches to Building Markets

A CDC or local government can pursue some combination of three distinct strategic approaches to influence buyer choice, depending on the assets and problems of the neighborhood and its housing stock.

CLICK ON EACH FOR MORE DETAILED INFORMATION, INCLUDING TOOLS

By increasing neighborhood quality in these three areas and effectively disseminating information about the neighborhood’s assets, the CDC or local government can enhance the neighborhood’s competitive position and build its housing market.

While buyers ideally would like to buy the best house in the most stable, high-amenity area, nearly all buyers are to some extent limited in their choices. Few buyers have unlimited funds, and the weight each prospective buyer gives the different features of the house or neighborhood varies widely. Buyers will forego some amenities if they can secure those that matter most to them. For example, a single artist might buy a larger, architecturally distinctive house in a less stable area, while a young couple with children might buy a more modest house in an area with the higher amenity values they are seeking, such as good schools.

The reality that people differ on what they regard as most important in their housing choices carries an important strategic message. A region or city is not a single housing market. The market is the sum of a series of separate submarkets, varying by age, education, ethnicity and other factors. Each submarket has its own preferences. Many developers and local governments identify separate submarkets based on lifestyles and residential choices in order to use this information to find the best fit between a particular group’s preferences and a neighborhood’s assets, and more effectively market individual projects or a neighborhood as a whole. The choice of strategies should always take into account the nature of the specific submarkets the neighborhood is trying to attract.

Increasing the Desirability of the Neighborhood’s Housing Stock

The typical homebuyer looks to see where she can find housing that fits her needs and means, and whether the price of the housing and its appreciation potential are acceptable in light of the features of the house and its neighborhood. As a result, the first question in framing market-building strategies is whether the neighborhood’s housing stock is competitive with other areas; if not, how it can be changed to become more competitive.

There are four distinct market deficiencies that may exist in the housing stock, rendering the housing stock less competitive, discouraging people from investing in it, and hindering the neighborhood’s revival:

Physical characteristics of housing do not reflect market demand;
Cost to build or rehabilitate housing exceeds market value of new or improved property;
Properties in neighborhood are not appreciating, or are losing value; and
Potential buyers are unaware of availability of desirable housing stock.

The quality and pricing of the housing in neighborhoods with weak market demand
varies widely. Some areas have many attractive houses that would be highly desirable if located in other neighborhoods. Other areas may contain properties that are too small or otherwise less attractive to today’s buyers. While in some cities CDCs have built new housing markedly different from the neighborhood’s traditional stock to draw potential buyers, seemingly unsuitable properties can sometimes be turned into an asset. The Azalea Park neighborhood in San Diego built a successful revitalization strategy by marketing its charming but small bungalows to the region’s gay community. CDCs in Baltimore and Philadelphia have combined small townhouses to create larger, more desirable homes.

The problem may not be the physical character of the stock, but its pricing or market value. The area may have a market for houses in good condition but no market for vacant houses requiring major rehab, because the rehab cost may exceed the market value of the house. Those areas will have vacant boarded houses scattered throughout, pushing down the value of the occupied properties. In such a neighborhood, a productive strategy might be to offer incentives for families to buy vacant properties and rehabilitate them for owner-occupancy. That will both make those properties competitive with sound properties and remove the fiscal drag that they represent on other houses, thus removing a constraint on overall market change.

Another financial constraint, particularly in older industrial cities, is the buyer’s concern that the property will not appreciate, or even lose value, over time. How to address this issue may vary. Some CDCs and local governments believe that the lower the price of the property and the greater its quality relative to its price, the less the prospective buyer will care about appreciation. Others address this issue indirectly by focusing on strategies such as reducing abandoned properties or improving schools, both of which relate closely to the likelihood of appreciation. A nonprofit organization in Syracuse, N.Y. has set up a home-equity-protection insurance program under which homeowners can buy insurance that ensures that they can get the value of their home back on resale, even if the market value of properties in their area declines.

Finally, lack of information can be another deficiency of the neighborhood’s housing stock. If prospective buyers cannot get good information about the neighborhood’s homes, they are unlikely to consider moving there, even if the homes might fit their needs. This problem is common in inner-city neighborhoods, which are often poorly served by the real estate industry. Similarly, people who move into a new area to take a suburban job are unlikely to learn about urban housing opportunities from their largely suburban co-workers. Marketing and promotional activities that might be carried out by a city, CDC, or neighborhood association are another way to increase the demand for a neighborhood’s housing stock, by getting information to people who lack it or providing more accurate information to people who may be excluding the neighborhood from their search because of stereotypes or erroneous information.

There are strategies that can be used to address each deficiency [see table below], and a variety of tools are available for each strategy. For example, if the strategy is to provide incentives for individuals to rehabilitate older houses, a city could use tax abatements, state historic preservation tax credits, tax increment financing, or capital subsidies, or it could create a program of technical assistance, including preparing rehab plans for the new owner without charge.

TABLE: Strategies to Increase the Desirability of the Neighborhood Housing Stock

In most neighborhoods, however, desirability of the housing stock is not the principal obstacle to market change, but part of a larger problem that includes neighborhood-wide issues. Strategies that focus solely on the desirability of the housing stock, therefore, may not change the neighborhood’s competitive position unless parallel efforts are being made to build neighborhood stability and amenity value.

TOOL 1: Homebuyer Purchase Incentives

The purpose of a homebuyer incentive in the context of building neighborhood markets is to give a neighborhood that is less than “first-choice” a competitive advantage so that it can more successfully attract owner-occupant buyers.

The incentive most often takes the form of a grant or loan for down payment assistance, but also has occasionally been a grant or loan for home improvement upon purchase, or access to free college tuition for academically qualified residents.

There are two important decisions to make about the design of a down payment assistance incentive:

1. Who will the down payment assistance be available to?

This decision is an important one, and should be made according to the goal of the incentive. If the goal includes building demand in the neighborhood, strengthening housing values, strengthening income mix and the like, the incentive should be available to as broad an income range as possible (the limiting factor may be funding source.)

The theory behind this approach is that even though a homebuyer earning 125 percent of median income has less financial need of the subsidy in order to afford the home purchase, the neighborhood needs that buyer to occupy a home, invest in that home’s upkeep and improvement, participate in the social life of the neighborhood, etc. Unless there is a financial incentive to sweeten the deal for such a homebuyer, they will very likely choose a neighborhood they perceive to be better, even if it costs more.

If the goal of the incentive is to subsidize lower-income buyers and protect affordability in the neighborhood, then it makes sense to restrict the incentive to buyers of more modest means. Typically, incentives of this type target buyers earning less than 80 percent area median income, or even less than 50 percent.

Although it is common practice, there is a danger in trying to accomplish both goals in a neighborhood that has a weak market with an excess of housing supply. If the only households who buy a home in a neighborhood are those with very low incomes, with no other choices, the neighborhood’s “brand” will be a place of last resort and it will struggle to become a place that can attract buyers with choices. Because concentration of poverty has overwhelming negative implications for people and places, this is something to be avoided.

2. To what extent will it be repayable, over what period of time?

Usually, homebuyer incentives take the form of down payment assistance, which can be an outright grant, a non-amortizing (“soft” or “silent”) second mortgage that is due on sale or a hybrid, in which at some point of tenure (typically five years), all or a portion of the loan is forgiven. For example, a homebuyer may be given a $20,000 incentive, all of which is due on sale or transfer of the property within the first five years of purchase; thereafter, one-fifth of the incentive is forgiven for each additional year the buyer continues to occupy the property.

It is always better from a funder’s point of view to recapture as much of the incentive as possible so that it can be used to incentivize additional buyers in the future. Further, it is reasonable to design the incentive to encourage the longest tenure possible, as stability of owner-occupants is generally good for neighborhoods. On the other hand, the incentive cannot be so restrictive that it fails to seem like a good deal to the prospective homebuyer. For example, an incentive that is forgiven over the course of twenty years instead of five is less attractive to a homebuyer. If the market is very strong, a lengthy forgiveness period may still be attractive, but if the buyer has many other choices, it may not be. This aspect of the incentive should be decided on the basis of market knowledge gained through talking to real estate professionals and buyers themselves.

Local governments or community development nonprofits typically administer downpayment or rehab incentives. In some cases, a lender may offer an incentive in tandem with its own first mortgage, but it is rarely tied to a particular geography. Sometimes a foundation or business will build the capacity to deliver an incentive they’ve funded.

The size of the down payment incentive should be determined by what will motivate buyers to choose the target neighborhood over other choices they may have. In practice, the size is also shaped by affordability gaps between a target income group and the typical home price, by the availability of funds, by whether it is a loan or grant and other, local considerations. In a low-cost market, down payment assistance may be as low as $5,000; in a very high-cost market, it may be $80,000.

3. Funding sources for downpayment or purchase-rehab assistance could include:

Federal block grants to states and municipalities: Community Development Block Grant (CDBG), or HOME. Both of these programs generally limit the income of recipients to 80 percent or less of area median income.
Neighborhood Stabilization Program (NSP) funds, which are federal grants to states, municipalities or consortia of nonprofits and other partners. This program limits the income of recipients to 120 percent or less of area median income.
Private funds raised from foundations, major employers located in a particular neighborhood or other private donors. These funds are income-limited only by the donor.
Proceeds of municipal bonds issued by a local government unit or housing finance agency. The limitations of these may be defined in any way.
Private funds through a program administered by a financial institution, attached to a first mortgage loan product they make.
A special tax-funded pool, such as the Florida Housing Trust in the State of Florida, funded by a real estate transfer stamp tax. The income limits of such a fund would be decided by the authorizing legislation.

►Go to information on the Florida Housing Trust

Specific universities have offered free college tuition programs for residents of a particular neighborhood. An example is Clark University in Worcester, Massachusetts. Clark offers free tuition to residents who meet the University’s admissions requirements and who have lived in UPP’s targeted Main South neighborhood for at least five years. Clark also incentivizes home purchases and renovations by its faculty and staff in the neighborhood.

►Go to information on the Clark University program

Kalamazoo Promise, which is funded by a group of anonymous donors, provides resident graduates of the Kalamazoo Public Schools with up to 100 percent of their tuition and mandatory fees for four years at Michigan’s public universities and community colleges. The program is not limited to homeowners, but is meant to attract more residents of all incomes to live in the city and to attend public schools.

►Go to more information on the Kalamazoo Promise

TOOL 2: Homeowner Rehab and Curb Appeal Incentives

The purpose of incentives to homeowners for home improvement, repair and curb appeal improvements is to:

Make visible improvements to the housing stock;
Increase housing value;
Improve neighborhood image; and
Raise the standard for housing quality, hopefully to be emulated by other residents.

In order to accomplish the goals above, the incentives should ideally a) favor exterior improvements, b) not be income-limited and c) not be restricted to owner-occupants. However, restrictions associated with common funding sources often compromise these goals. For example, CDBG and HOME funds may require a full inspection and code compliance (which, while contributing to the health and safety of the property, often results in only minimal improvements to the basic systems, which are invisible to the public), including lead paint abatement, be limited to a certain income group, and be limited to owner-occupants. Because of these limitations, it can be very useful to secure an alternative source of funding (financial institution, foundation, major employers, bond proceeds, dedicated tax district or transfer tax, etc.).

Financial incentives to individual homeowners may take the form of a full grant or matching grant, a low-interest loan, or a rebate.

The allowable uses of the financial incentive can range from landscaping to paint to windows, doors, siding, roofs, etc. Design guidelines may be suggested or required in order to make the greatest impact possible.

The New Orleans Redevelopment Authority (NORA) sells vacant lots to nearby homeowners, and through the Growing Home program and offers a discount of up to $10,000 off the cost of the lot for landscaping improvements that the buyer makes.

►Go to the Growing Home program and see the detailed schedule of improvements and deductions

Grants and technical support may also be made to groups of neighbors, usually on one block, to implement a beautification activity that they decide on. These kinds of grant programs are usually also designed with the goal of getting neighbors to interact with each other and to adopt a sense of shared responsibility and efficacy for the appearance of the block. The City of Geneva, New York runs a program like this annually, called The Great Geneva Neighborhood Challenge.

►Go to more information on The Great Geneva Neighborhood Challenge

Non-financial incentives may also be employed, such as:

Free architectural design assistance (offered by the City of Geneva, New York through a partnership with an architecture firm);
Workshops on specific types of home improvements, conducted on a house in the neighborhood;
Group purchasing programs, which facilitate the purchase of labor or materials for one type of improvement by a group of neighbors (i.e., driveway replacement in Holland, MI) in order to get a lower price;
Paint Your Heart Out, or similar programs, that offer free or discounted paint (or a rebate on paint purchases) to any resident that paints their home’s exterior within a certain timeframe, and also offer volunteer assistance to elderly or disabled residents;
Discounted landscaping material and free landscape design assistance (done by a now-defunct program in Hartford, CT); and
Awards programs that recognize visible home improvements, such as the Best House on the Block program run by Neighborhoods, Inc. in Hammond, IN.

TOOL 3: Marketing the Neighborhood

The purpose of neighborhood marketing is to build a positive image that attracts the desired investments of time, money and energy that support the neighborhood’s revitalization goals.

Neighborhood marketing often fails because it is confused with the goals of marketing an organization’s work there, or of simply getting publicity for a housing program or activities such as the crime-fighting efforts of the neighborhood watch. Successful neighborhood marketing is very clear about what it hopes to accomplish, who its target markets are, and the messages that will cultivate the desired response from those target markets.

The timing of successful neighborhood marketing is sensitive to neighborhood health and the progress of revitalization. Neighborhood marketing will be most successful when the following foundations are in place:

Organized neighborhood leadership with the capacity to make decisions on behalf of the neighborhood and assist in marketing activities. If there is little organization among neighbors, time may be better spent solving that problem before taking on marketing.
A reasonable sense of security. If crime is a significant issue, efforts may be better spent on bringing it under control.
A comprehensive revitalization strategy designed around the neighborhood’s particular strengths and weaknesses. Think of the neighborhood as a “product” being marketed to prospective buyers, and design strategies and programs around making the product better match the preferences of target markets.
If the neighborhood is very large, and/or has sub areas of varying type and quality, it might be helpful to have sub-neighborhood names, with associated marketing plans, to allow for different paces of marketing effort.

Some basic steps for neighborhood marketing include:

Define the Goal: Decide on what you want marketing to accomplish. What will be the evidence that a marketing strategy is successful? More owner-occupant buyers? More neighborhood residents engaged in the community? More positive media stories about the neighborhood?
Identify Target Markets: Who do you need to “speak to” with your marketing efforts in order to accomplish your marketing goal? If you want more owner-occupant buyers, you might need to “speak to” real estate agents and potential buyers with your marketing efforts. If you want greater engagement by residents in the day-to-day management of the neighborhood, you might need to “speak to” neighborhood residents. If you want more positive media stories, “speak to” the media. If you want enhanced city services, “speak to” those who provide them.
Decide Core Components of Neighborhood “Brand”: What are the first three things you want target markets to think/feel when they hear the name of the neighborhood? If you focus in on three things, you can promote them relentlessly, through all of your marketing strategies, until they crowd out the other images people have of your neighborhood. These core messages will be your neighborhood’s “brand.” Examples include: friendly neighbors, quirky and interesting, green, great for fitness activities, safe, cool place to be, a great opportunity to get in before the neighborhood gets too hot, close to downtown, family-friendly, a great value, great looking houses, neighbors are proud to be here.
Get a Logo with Which to Reinforce the Neighborhood’s Brand: Engage a graphic designer to create a logo (and maybe a tagline) for the neighborhood that conveys in images or words the three core images you chose. Use this logo on everything you can – newsletter, website, house flags, decals or stickers for cars and house windows, yard signs for best porch contests, letterhead, blog, entryway signage and so forth.
Align Neighborhood Activities, Communication and Other Strategies to Reinforce the Neighborhood Brand: As is true with any other branding strategy, consistency is important. If the desired brand includes having the neighborhood be known for its leadership in green technology, many strategies could help reinforce that. For example, a rehab loan or grant program that reduces energy consumption, a rain barrel collection program with neighbors, use of the color green in the neighborhood’s logo and marketing material, green home tours, infill construction with green building material and techniques, energy audits and workshops for neighbors, etc.
Flood Communication Channels with Positive Stories about the Neighborhood to Dilute Other Messages: You may not be able to prevent every negative media story or correct every untruth, but you can dilute the messages you don’t want with messages that reinforce your desired brand image. Look for every opportunity to influence the opinions your target markets have about your neighborhood. Be careful that you are not accidently putting out a negative message (“War on Drug Dealers Declared by Elm Street Neighborhood”) when you could turn it into a positive message (“Elm Street Neighborhood Hosts First Annual Good Neighbor Oscars”.) You can still fight the drug dealers, just don’t use that as the lead message or the neighborhood will be synonymous with drug dealing.
Reinforce the Three Core Components of the Brand: The more you repeat the brand message the more it will stick. Put the neighborhood logo on decals and give them to kids to put on their bikes and to neighbors to put in their windows. Turn it into a stencil for kids to use in a public art project. Put it on house flags and award one to new homebuyers, leaders of the neighborhood association, winners of the Good Neighbor Awards or Best Garden Awards or Best Porch Contest. Incorporate the logo into a house number plaque and sell it to neighborhood residents to raise money for other activities. Put the logo on street light banners and mount them on the main street or business district of the neighborhood – or rotate them among blocks that complete a joint beautification process.

►Go to Ten Tips For Marketing Neighborhoods as Places of Choice

Increasing Neighborhood Stability

Six factors that either promote or discourage neighborhood stability are:

Property abandonment
Foreclosure
Property investment by owners
Concentration of poverty
Crime
Homeownership rate

Four of these factors—abandonment, foreclosure, poverty concentration and crime – are negative, while two – property investment and homeownership rate – are positive and need to be increased in order to render the neighborhood more stable.

A neighborhood is a network of interrelated physical and social elements. What happens to one property on a block affects the other properties, just as crime and drug activity affect all those in the vicinity, whether or not they are directly victimized. By reducing the incidence of destabilizing features, or increasing the incidence of positive features that enhance stability, a city or CDC can change a neighborhood’s attractiveness to potential homebuyers.

From a market-building perspective, the goal of neighborhood stability strategies is to
make catalytic changes to local dynamics that will ultimately create a cycle of positive market change.

A decline in property maintenance or an increase in abandoned properties may lead to lower property values, as will an increase in violent crime or poverty concentrations. Changing those dynamics can have a positive effect on property values and market activity. Increasing the homeownership rate, which leads to greater stability of tenure and maintenance investment, may also have a positive effect on property values. At the same time, focusing on the quality, appearance and level of maintenance of the neighborhood’s rental housing, particularly if it makes up a large part of the area housing stock, may be as important a factor in enhancing neighborhood stability.

Many stability issues lend themselves to more than one strategy. The choice of strategies depends on a CDC’s or a government’s mission or the available opportunities. One could try to reduce poverty concentrations through a strategy to build the neighborhood’s middle-income population, or by increasing low-income residents’ job skills and employment opportunities. At a regional level, concentrations of poverty can be fought by creating low-income housing opportunities in more affluent suburban areas in the region.

Seemingly similar strategies may lead to significantly different outcomes. Reducing the number of abandoned properties through a program under which a CDC rehabilitates properties with HOME funds, selling them to lower-income homebuyers, and reducing them by the same number through a program of incentives to get middle-income buyers to rehabilitate the properties for their owner-occupancy may look similar in terms of the properties themselves, but may have very different outcomes in terms of the subsequent impact on the area’s housing market.

The former strategy may have significantly less market-building impact than the latter, both because of the economic characteristics of the families buying the houses, and the smaller financial investment that they are making. The goal in providing incentives for families to buy and rehabilitate vacant houses is not only to get those homes rehabbed, but to trigger a cycle where the neighborhood in general, and the neighborhood’s vacant properties in particular, gradually become more desirable to homebuyers, so that the incentives can be gradually reduced and ultimately eliminated. This is an example of a catalytic strategy.

The CDC or city has a wide range of strategy options to build greater neighborhood stability [see table below], including changing the physical environment, changing the financial climate within which property owners make decisions about their properties, counseling, training and educational programs or community-building and organizing strategies.

TABLE: Strategies to Increase Neighborhood Stability

TOOL 1: Reducing Abandonment and Preventing Foreclosure

The destabilizing effects of multiple foreclosures and of vacant properties in neighborhoods have been extensively documented since the foreclosure crisis:

Declining property values;
Declining property conditions;
Increase in vandalism, squatting and fires;
Loss of neighborhood leaders when they are foreclosed or leave as the neighborhood deteriorates; and
Erosion of the social connections among neighbors that are the basis for problem solving.

In this context, the purpose of strategies to reduce abandonment and prevent foreclosure is to keep properties occupied and maintained, keep “eyes on the street” and keep neighborhood social connections and leadership as intact as possible.

A number of strategies are being tried throughout the nation to avert more foreclosures and to reduce abandonment.

Foreclosure Intervention Counseling: Most communities have access to local nonprofits that provide foreclosure intervention counseling for free, and all communities can access this kind of assistance by phone through national counseling agencies.

1-888-995-HOPE is a national hotline that assesses cases by phone and will refer households to local agencies if they prefer and one is available, or provide full services by phone and email. Counselors will assist at-risk homeowners with accessing all available resources, from short-sale to loan modification, forbearance, and any state or federal programs.

One significant challenge in connecting households at risk of foreclosure to these services is their own reluctance to act until the problem is severe. There are many resources available to assist with outreach at foreclosurehelpandhope.org, a joint project of the Ad Council, NeighborWorks America and the Homeownership Preservation Foundation.

►Go to foreclosurehelpandhope.org

Foreclosure Risk Monitoring and Targeted Outreach: In Cleveland, Ohio, a partnership of Neighborhood Progress, Inc. (NPI), Case Western Reserve University (CRWU) , Cleveland State University, 14 local CDCs, and Empowering and Strengthening Ohio’s People (ESOP), a local foreclosure prevention agency meets monthly to review data on target neighborhoods and plan targeted interventions . Through a unique web-based data system, the team is able to identify, map and research a number of relevant risk factors and opportunities, including:

Potential acquisition/renovation targets;
Blighted properties that threaten to undermine existing neighborhoods assets and housing renovation projects; and
Occupied homes at risk of foreclosure and abandonment.

The data allows the team to prioritize and categorize destabilizing properties, and to link properties with the appropriate stabilization intervention, such as acquisition, tax foreclosure, nuisance abatement, receivership, demolition, code enforcement and foreclosure prevention.

►Learn about the Neighborhood Stabilization Team

Short Sale Acquisition and Lease Back to Former Owner: Boston Community Capital operates the Stabilizing Urban Neighborhoods (SUN) Initiative that prevents the displacement of families and the neighborhood destabilizing effects of vacancy and abandonment by acquiring foreclosed properties before evictions occur and reselling them to their existing occupants with mortgages they can afford. Launched in late 2009, SUN has prevented the eviction of over 200 Massachusetts residents, helping homeowners and tenants facing eviction reduce their monthly housing payments by more than 40 percent.

►Go to the Stabilizing Urban Neighborhoods Initiative

Acquisition, Rehab and Rent or Sale of Foreclosed Property: Through the federal Neighborhood Stabilization Program (NSP), local government, nonprofits and private developers are acquiring and rehabilitating thousands of foreclosed (usually vacant) single- and multi-family homes. Most often, the goal is to sell these properties to low- and middle-income owner-occupants; however, the distressed nature of many of the neighborhoods the properties are located in, as well as the tightening of the credit market has made it challenging to sell homes in some places. In these cases, developers may seek to rent homes with an option to purchase (“lease-purchase”) or simply rent the homes. In total, $7 billion has been allocated to NSP, and there is a substantial amount of literature available on the subject.

►Go to HUD’s NSP Resource Exchange
►Go to StableCommunities.org
►Go to foreclosure-response.org
►Go to the National Community Stabilization Trust

TOOL 2: Reducing Crime

Crime is a key stated concern in destabilized neighborhoods throughout the nation. Often, concerns about “crime” include a range of issues having to do with whether neighbors feel safe, or outsiders perceive the neighborhood to be safe, regardless of actual crime rates. The effects of unsafe neighborhoods can include:

Risk of physical harm and property loss;
Diminishing engagement by neighbors in community-building activities;
Disinvestment in property;
Reduced demand by homebuyers and neighborhood-friendly investors;
Reduction in property values;
Reduced outdoor activity by adults and children, with related health effects; and
Stress and other mental health impacts for adults and children.

Crime prevention or public safety initiatives will be most effective if they address not only actual crime, but all issues that impact feelings of safety, such as trash in the streets, social behaviors perceived as threatening, street lighting, building conditions, etc.

The following are brief descriptions of a few common approaches to improving safety in neighborhoods, excerpted from http://stablecommunities.org:

1. Crime Prevention Through Environmental Design (CPTED)

This model examines how physical design of a community can make it easier for residents to “police” public spaces and deter criminal activity. Basic elements of this approach include:

Increasing “natural surveillance” – the ability of residents to observe what is happening – through lighting, landscape design and placement of buildings and windows;
Clearly differentiating between public and private space; and
Creating a stronger sense of ownership over space.

?Go to The Design Centre for CEPTED for a wealth of information on basic crime prevention and CEPTED design principles.

2. Developmental Approaches to Work with At-Risk Individuals

These approaches to reducing crime look at impacting the factors that can lead people to committing crimes, and helping populations such as at-risk youth and ex-offenders to take advantage of positive opportunities. Generally, such models posit that people are less likely to engage in crime when they have:

A sense of hope for the future;
A positive self-image;
Rewarding opportunities to pursue;
The skills to take advantage of these opportunities (life skills, job skills, leadership and interpersonal skills, etc.); and
For young people, a relationship with a caring adult who can help to generate these other positive factors.

These approaches therefore emphasize building relationships with people at risk of engaging in crime, brokering opportunities and helping them to acquire skills. Some resources and examples include:

The Institute for the Study and Practice of Nonviolence. The Institute, in Providence, RI, approaches the issue of violence-involved youth from a variety of innovative angles, including training in nonviolence skills, youth programs, victim’s assistance programs, and a streetworker program to reach out to gang members.

YouthBuild. While their workforce development and housing benefits extend well beyond the issue of promoting safety, many YouthBuild organizations serve at-risk youth.

Manchester-Bidwell Corporation. Manchester-Bidwell Corporation engages at-risk youth in a variety of activities, including teaching them work with ceramics and to grow orchids in a commercial greenhouse operation. A related reading resource is the book by the Corporation’s founder, Bill Strickland (2007), Make the Impossible Possible, from Doubleday.

CeaseFire Chicago. CeaseFire focuses on street-level outreach and conflict mediation to change community norms and reduce violence. CeaseFire’s efforts call upon outreach workers and “violence interrupters,” faith leaders and other community leaders to intervene in conflicts and promote alternatives to violence. The organization also involves cooperation with police and depends heavily on public education to instill the message that shootings and violence are not acceptable. A related reading source is the book by one of the founders of the CeaseFire approach, David M. Kennedy (2011), Don’t Shoot: One Man, a Street Fellowship, and the End of Violence in Inner-City America.

3. Building Community “Collective Efficacy”

“Collective efficacy” is the degree to which residents know one another in a community and believe that they can rely on one another to manage neighborhood issues. Academic studies have found that lower levels of collective efficacy in a neighborhood are directly correlated with higher levels of violent crime.

This approach to crime prevention emphasizes the importance of building relationships among residents, and helping residents work together on efforts that help them establish some control over their environment.

?Neighborhood block watches are one example of a strategy that builds relationships between residents while preventing crime. USA on Watch offers a nationwide list of block watches, provides tools for setting up programs and has a full Resource Center. Go to the Resource Center.

?Toledo’s Neighborhood Block Watch won a 2008 Neighborhood Watch Award. One goal of the group has been to improve quality of life for all – beyond reducing crime – including health, infrastructure, and issues of nuisance/vacant properties, which has been accomplished through outreach efforts. The program supports model block programs, neighborhood clean-ups and beautification projects, educational trainings, youth outreach for clean-ups and social events and other programs. Read about the awards.

?Solutions for America summarizes program strategies that research shows are effective in addressing important community issues. Go to Solutions for America. The Neighborhood Crime Prevention & Safety Section summarizes the latest research on the subject and links to a number of other helpful websites covering actions residents can take in their own neighborhoods. Go to the Crime Prevention & Safety Section.

4. Community Policing

Community policing is a philosophy and management approach that promotes community, government and police partnerships, proactive problem solving and community engagement to address the causes of crime, the fear of crime and other community issues. Key elements of a community policing strategy include:

Building a partnership between the police and community members;
Adopting a problem-solving mindset to analyze safety issues; and
Community policing generally involves a higher level of interaction and communication between police officers and residents than in more traditional approaches.

?The Office of Community Oriented Policing Services (COPS) at the US Department of Justice provides information about what community policing is, and information about the COPS funding program. Go to the COPS website.

?Citizens Police Academies are used throughout the country to educate citizens on the basics of the law enforcement profession and to help build a partnership with the police. The concept originated in the United Kingdom in 1977 and was called the Police Night School. Go to the National Citizens Police Academy Association.

?Since 1998 the International Association of Chiefs of Police Community Policing Committee has recognized the best practices of agencies around the world. Entries are categorized by population, featuring innovative ideas utilizing the power of community policing, through collaboration and partnerships, to make local, national and global communities safer from crime and terrorism. Go to the IACP Community Policing website.

?The Local Initiatives Support Corporation (LISC) also has a number of available resources through its Community Safety Initiative, including an interactive crime prevention tool called Developer+Police=Results. Go to the CSI website.

Increasing The Amenity Value And Quality Of Life In The Neighborhood

Neighborhood revitalization requires that one builds value to attract buyers and other investors into the neighborhood and to retain existing residents. Amenities and quality of life are a key part of the value offered by a neighborhood.

Many different elements go into building a neighborhood’s amenity values. The table below identifies more than 25 separate elements that must be at least considered in framing a neighborhood market-building strategy.

The table does not indicate which elements should be pursued in a market-building strategy. Strategies to build amenity value must emerge from the particular conditions and opportunities, physical and locational assets that the neighborhood offers. The features of existing parks, shopping or transportation networks will vary widely by neighborhood, as will the opportunities to create new parks, employment centers or public-transit routes.

TABLE: Elements Impacting Neighborhood Amenity Value

While creating major new open spaces in urban areas is often difficult, opportunities do exist, often by reclaiming former industrial or railroad property . Other urban neighborhoods have existing parks that may have been neglected, but if restored, with better security and maintenance, can add far greater amenity value to the area than before.

Strategies to increase neighborhood amenity values must be firmly based on a clear idea of the characteristics and preferences of the population that the city or CDC is seeking either to retain or attract to the area. An effective strategy to build an area’s housing market requires not only identifying the target groups whom the neighborhood is trying to attract or retain, but identifying and carrying out the specific amenity value strategies that will most powerfully affect their decisions.