presents

What’s Happening tothe Neighborhood?

Summer 2008

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What’s Happening to

the Neighborhood?

WHAT’S HAPPENING TO THE NEIGHBORHOOD?

Introduction by Mark Carl Rom

AFFORDABLE HOUSING

Preserving Affordable Housing in Buckingham by Lois Athey

Homeownership: Benchmark for a Vital Community by Dru Bergman,with additional contributions by Kathy Kregor and Susannah Levine

Cooperatives: A Shared Equity Solution by Jim Gray

The Hope IV Program by Julio Barreto, Jr.

COMMUNITY DEVELOPMENT

Community Redevelopment and Neighborhood Revitalization:The Genesis and Phoenix Projects by Buddy LaChance

Financial Services in the Nation’s Neighborhoods: Bank Branches andAccess to Financial Services by Jamie Wolf

Community Development Corporations: Drawing Capital into Low-WealthNeighborhoods by Jane DeMarines and Bernie Mazyck

COMMUNITY ORGANIZATION

Fostering Public Life in the New Suburbia through Community Organizingby Tom Lenz

Responding to Neighbors’ Health Needs by Julie Trocchio and Nancy Mulvihill

The Generational Transfer of Leadership: Community Building Organizationsand Their Leaders in the 21st Century by Jeff Nugent and Kristina Samson

NEIGHBORHOOD PLANNING AND DATA

Neighborhood Planning in the New Millennium by Lynn M. Ross andMegan S. Lewis

Measuring the Well-Being of America’s Neighborhoods: The New Potentialby G. Thomas Kingsley

Summer 2008

WHAT’S HAPPENING TO THE NEIGHBORHOOD?WHAT’S HAPPENING TO THE NEIGHBORHOOD?WHAT’S HAPPENING TO THE NEIGHBORHOOD?WHAT’S HAPPENING TO THE NEIGHBORHOOD?WHAT’S HAPPENING TO THE NEIGHBORHOOD?Mark Carl Rom, Ph.D., Georgetown University - Project Director

We all live in neighborhoods – for better orworse. For better, when the neighborhoods areaffordable, safe, friendly and vibrant. For worse,when the community is deteriorating, or whenhousing becomes too expensive for those whowork there, or when residents become afraid,lonely, and isolated.

Neighborhoods matter. Next to our families,our neighborhoods are often the most importantsource of our comforts or our woes. Our rela-tionships with other individuals and institutions– our jobs and houses of worship, our trips tothe grocery store and bank, our children’sfriends and their schools – are profoundly af-fected by the neighborhoods in which we live. Ifour neighborhood is good, our life is good, butwhen it’s not, all these relationships becomemore difficult, more tenuous.

We all know these things in our hearts.Millions of individuals and thousands of organi-zations also put this knowledge into practice asthey work to improve the quality of life in ournation’s neighborhoods. This project was in-spired by them, and also hopes to serve as aninspiration to them as they pursue their mis-sions.

But this project also has another goal: toreach out to the nation’s policymakers. Cer-tainly these policymakers – national, state, andlocal officials alike – are themselves deeplyrooted in their communities, care for them, andserve them faithfully. Yet our policies oftenseem to ignore the neighborhoods which, next tothe family, serve as the bedrock of individualand public life. At the national and state levels,our policies often focus either on individuals(through such programs as Social Security,Medicare and Medicaid, and Food Stamps) orlarger political jurisdictions such as cities and

counties. At the local level, policymakers arelikely to be more attentive to the concerns ofindividual neighborhoods but, perhaps, theymay focus this attention on the neighborhoodsthat are best organized and most active, notnecessarily on those most in need of nurture.

This first volume of What’s Happening to theNeighborhood seeks to bring awareness aboutthe conditions in our neighborhoods and theactivities being taken to improve them. It claimsneither to be exhaustive nor definitive, but toreveal a series of ‘snapshots’ on selected issuessuch as affordable housing, community develop-ment, and community organizing and organiza-tions. The volume need not be read from begin-ning to end, as each chapter makes a uniquecontribution to our understanding of the chal-lenges – and opportunities – facing our neigh-borhoods. All offer suggestions for improvingneighborhoods through policy and program-matic innovations. These recommendationsrepresent the views of the chapter authors, butare not the official position of the NNC Board;we offer them as a way to generate discussion.

Each chapter also reveals the power of infor-mation. With adequate data and persistentsmart advocacy, individuals and non-profitorganizations, private sector firms and govern-ment officials can come together to address –and improve – the problems that neighborhoodsconfront. Adequate data are a rare and preciouscommodity, however. Too rarely are the rightdata collected at the neighborhood level, ormade readily available to the public in easilyaccessible formats. If the nation is to get seri-ous about improving the quality of its neighbor-hoods, it is essential that it also devotes greaterresources and energies to producing, packaging,and distributing this information.

What’s Happening to the Neighborhood isdivided into four main sections: affordablehousing, community development, communityorganizations and organizing, and neighborhooddata. Like the communities they portray, thesechapters are diverse and rich in ideas, practices,styles and voices. Individually, they each revealfascinating accounts of the ideas and activitiesthat can be used to enhance our neighborhoods.Collectively, they convey the message of what isbeing done, what can be done, and what needsto be done to strengthen our communities.

I. AFFORDABLE HOUSING

Preserving Affordable Housing in Buckinghamdescribes the evolution of a single urban villagein Arlington, Virginia. This neighborhoodchanged dramatically over the years, becomingan enclave for recent, primarily Latino, immi-grants living in rental housing. Located alongthe Metro subway line, the neighborhood’sresidents became increasingly threatened withdisplacement by high-priced residential develop-ment. Against the odds, the residents organizedto preserve affordable housing, as well as thehistoric character of the Buckingham neighbor-hood.

Homeownership: Benchmark for a Vital Com-munity broadens the scope to show how commu-nity organizations in DuPage County, Illinois –located just west of Chicago – worked together toamplify affordable housing opportunities both byenhancing the ability of individuals to buyhomes and by increasing the supply of suchhomes.

Cooperatives: A Shared Equity Solution out-lines one promising approach for affordablehousing. In shared equity housing, the resident-owners of housing ‘share’ any appreciation inhousing values among themselves and alsofuture owners. By doing so, they also share the

rights, responsibilities and benefits ofhomeownership with the larger community. Thesuccess of the Capital Manor Cooperative inWashington, DC, illustrates the possibilities ofcooperative ownership.

The HOPE VI Program examines the federalprogram that allows for a variety of approachesfor revitalizing public housing by using federalfunds to attract other public, non-profit, andfor-profit financing in developing mixed housingin once blighted areas. These new developmentscan contain rental units – both subsidized andunsubsidized, privately-owned houses, andpublic housing units. The design, structure anddécor of these new developments are intended toattract a greater mix of households and to con-form more closely to the surrounding commu-nity.

II. COMMUNITY DEVELOPMENT

Community Redevelopment and NeighborhoodRevitalization: The Genesis and Phoenix Projectsportrays the strategies and tactics the CityWideDevelopment Corporation of Dayton, Ohio usedto recreate two troubled neighborhoods in thecity. Through comprehensive plans for develop-ing residential, commercial and social capital inthese neighborhoods, these projects have guidedthe communities toward renewed vitality.

Financial Services in the Nation’s Neighbor-hoods: Bank Branches and Access to MainstreamFinancial Services assesses one key componentof community development: the ability of neigh-borhood residents to use neighborhood banks.After presenting data showing the bankingdisparities across select cities based on theeconomic and demographic characteristics oftheir neighborhoods, the chapter offers strate-gies for improving the equity of branch banklocations.

Community Development Corporations: Draw-ing Capital into Low-Wealth Neighborhoods con-siders the roles that CDC can play in promotingaffordable housing and employment opportuni-ties in our nation’s more distressed neighbor-hoods. It highlights the new approaches andtechniques that the CDCs are using to augmentthe ability of these communities to tap into thecapital markets.

III. COMMUNITY ORGANIZING ANDORGANIZATIONS

Fostering Public Life in the New Suburbiathrough Community Organizing presents ideas forreinvigorating neighborhood organizations infast-growing areas where residents face thegrowing stresses of modern life in America.Emphasizing a personal, one-at-a-time approachto building relationships, it shows how membersof diverse communities can come together incommon cause to enact change.

Responding to Neighbors’ Health Needs illus-trates the possibilities for providing neighbor-hood-based health services to the uninsuredwith many other needs. Using tools developedby the Catholic Health Association, it describeshow organizations can provide ‘communitybenefit’ by assessing neighborhood problems andstrengths, budgeting to meet community needsand ensuring that programs are effective.

The Generational Transfer of Leadership:Community Building Organizations and TheirLeaders in the 21st Century depicts the chal-lenges that non-profit organizations face in the

coming years, especially with regard to recruit-ing, training, and supporting future leaders.A model program for leadership developmentsuggests that such training can producegreater organizational capacity, financialstability and programmatic innovation.

IV. NEIGHBORHOOD PLANNING AND DATA

Neighborhood Planning in the New Millen-nium delineates the principles for developingand implementing good plans for neighborhoodrevitalization. Using the Hannibal Squareneighborhood in Winter Park, Florida as anexample, the chapter also reveals how theseprinciples can be put into practice.

Measuring the Well-Being of America’s Neigh-borhoods: The New Potential identifies the keyelements of beneficial neighborhood datasets,the historical difficulties in assembling data inways that are useful and accessible, and thepotential for building new, more constructivedatabases. Several promising data sources anddata collection efforts are identified and as-sessed.

What’s Happening to the Neighborhood? ishardly the final step in finding ways to enrichthe communities in which we live. We hope,however, that it is a sturdy first step, and thatfuture editions can move us further down theroad to building a nation where vibrant, pros-perous and cohesive neighborhoods are ones inwhich we all live.

What’s Happening toThe Neighborhood?AFFORDABLE HOUSING

Preserving Affordable Housingin Buckingham

Lois Athey, ConsultantBU-GATA Tenants Association

BACKGROUND

Buckingham is a neighborhood like anyother in America: full of working-class familieswho struggle to make a living and pay the rent.The housing is primarily one and two-bedroomrental apartments, which represents 75 percentof the housing stock in this community. Overthe years Buckingham has been home to wavesof young people who rented their first one-bedroom apartment in this urban village. Butunlike many neighborhoods, its multi-familyrental housing stock is quite varied. While thevast majority of the units are composed of older,private, affordable rental housing, the commu-nity also includes two small, project-basedSection 8 complexes, as well as several afford-able senior housing complexes for retirees.

The original Buckingham Village complex,comprising 1800 units built between 1937-1950, was one of the first two-story gardencomplexes built in this country. It housed work-ers flocking to World War II-era jobs in Washing-ton, DC. The community also has a smatteringof condos, some of which converted from rentalhousing in the 1980’s, and others that arenewer high-rises housing a higher income clien-tele. Surrounding the large garden-style rentalcomplexes are a limited number of owner-occupied, single family homes. A small commer-cial strip is located at the busy crossroads ofthis community, and several pre-schools oper-ate within the boundaries of the neighborhood.One public elementary school is located at thefar end of Buckingham.

This neighborhood has three notable charac-teristics. First, it is located in Arlington County,Virginia, a densely populated, wealthy inner-ring suburb that sits within walking distance ofa major rapid transit system. Second, the

neighborhood experienced a major demographicshift in the 1980’s. A majority white populationwas displaced by a fast-growing Latino popula-tion. As the apartments deteriorated, middle-income households moved out and lower-incomefamilies moved in. By 1990 Buckingham had

PRESERVING AFFORDABLE HOUSING IN BUCKINGHAMPRESERVING AFFORDABLE HOUSING IN BUCKINGHAMPRESERVING AFFORDABLE HOUSING IN BUCKINGHAMPRESERVING AFFORDABLE HOUSING IN BUCKINGHAMPRESERVING AFFORDABLE HOUSING IN BUCKINGHAMLois Athey, Consultant, BU-GATA Tenants Association

become an ethnic enclave where first-generationLatino immigrants made their homes. Third,over the past 20 years it has had two activetenant associations, one led by white rentersand the second by (originally) African Americanand (later) Latino residents – both of which haveforced political leaders and county housing staffto develop affordable housing plans that werecreative and responsive as waves of gentrifi-cation swept this neighborhood. In many ways,Buckingham has been at the center of debate inArlington about the tools of affordable housingpolicy and how to use them.

BU-GATA picnic (2005) kids painting at tableinside the cul de sac of the Gates of Ballston apart-ment complex (can see garden-style brick buildingsin the background)

BU-GATA: THE EARLY YEARS

Efforts to preserve affordable housing inBuckingham began in the early 1990’s with thefounding of a tenant association. (The associa-tion was renamed BU-GATA, short forBuckingham and The Gates of Arlington, in2002. African Americans helped create theassociation, but most of the few living in thesecomplexes eventually moved away. For clarity,the association will be called BU-GATA through-

for existing tenants. To gain leverage with theowners, local activists secured “local historicdesignation” for several of these buildings. Vir-ginia is a state where property rights are para-mount, and developers have a great deal ofleeway to demolish and redevelop their proper-ties. (Tenants rights are extremely limited inVirginia. They do not have first right of refusal ifan owner decides to demolish or convert rentalunits to another use. State law requires onlythat the owner issue a 120-day notice if thecomplex will be demolished or undergo substan-tial renovation. Arlington requires a relocationpayment only if the owner is applying for countyfunds or needs site plan approval.) Historicdesignation forces owners either to renovate theexisting buildings or try to sell them to someonewho will preserve the units. The elected CountyBoard did designate part of Buckingham ashistoric, and demolition was stopped. However,the sale of the rental properties to the non-profitfell through at the last minute because the sellerended up in bankruptcy.

This attempt to displace tenants and rede-velop several hundred units was only blockedmomentarily, however. In 1995, the first wave ofrenovation took place when a for-profit developerstruck a deal with Arlington to renovate 512units in the Buckingham Village I complex, whileagreeing to maintain the historic character of theexisting structures. The BU-GATA tenants asso-ciation had secured outside technical assistanceand was prepared to fight for their rights as“vested” tenants. But the relocation plan pre-sented by the developer was full of clauses thatkept tenants from receiving adequate benefits orreturning to the renovated units.

At that time, the Latino population comprisedthe largest minority of Arlington’s total popula-tion, but the county was not responsive to theneeds of this ethnic community. The system wasdependent on tenants being pro-active, and mostof the immigrant households did not know howto solicit help. Even if tenants knew how to

out this chapter.) Led by a Peruvian immigrant,the association primarily recruited Salvadoransand Bolivians from the two major Buckinghamcomplexes: The Gates of Arlington (467 units)and Buckingham Village I and II (981 units).These tenants felt marginalized because thewhite tenants refused to include them in theirmeetings or because they felt uncomfortable inmeetings organized by white tenants. The whitetenants were very connected to the establish-ment, county officials, and a local housing non-profit organization.

The owners of these two complexes werethreatening to sell their run-down propertiesand tear down the brick structures. Efforts wereunderway in 1992 to have the non-profit pur-chase some of the buildings and renovate them

Tenants at the Buckingham Community Festival(2004)-- the Multicultural Mural painted by theBuckingham Youth Brigade teens can be seen in thebackground on the Glebe Market wall.

contact code enforcement officials, the officialsdid not speak Spanish, and translation serviceswere non-existent. No housing information wasavailable in Spanish. The receptionist inArlington’s housing division was the only personon the housing staff who spoke both Spanishand English. When code enforcement personneldid inspect apartments, they would frequentlycite tenants for overcrowding which in turnwould lead to eviction. As one tenant leadercommented: “When I found rats scurryingaround my apartment, I bought a cat to get ridof the vermin. That was how you dealt with ratinfestation in El Salvador.”

Arlington did operate a neighborhood out-reach center for “newcomers,” but the centerwas not prepared to respond to tenant housinginterests or needs, and it was not open on week-ends when tenants were home from work. Thecounty also ran a housing grants program thatprovided tenant subsidies to low-income, work-ing-class households who could not afford therent. But few of the Buckingham tenants knewabout the program, and county staff mademinimal effort to assist tenants who were eli-gible for the funds. From the owner’s perspec-tive the Latino renters were good tenants be-cause they were always prompt with their rentalpayments, and they kept paying the rent eventhough they were living in moldy apartmentswhere hot water was frequently turned off. Butthe tenants were frustrated when the rentsstarted to rise and their constant oral com-plaints about maintenance continued to fall ondeaf ears. It was common for tenants to repairtheir ceilings when major storms caused rain topour into living rooms, paint their peeling walls,or fix the plumbing when it was leaking orstopped up.

When BU-GATA heard about plans to dis-place them for a planned renovation of theirunits, it encouraged tenants from the variouscomplexes to testify at County Board hearings

and attend community planning meetings re-garding the future of their housing. But officialswere not receptive. Again, translation serviceswere not provided, nor were tenants educatedabout their rights. Notices were sent in English,and the relocation plan was not available inSpanish.

After months of meetings, in 1995 Arlingtonfinally approved an affordable housing packagethat would tap several million dollars (a $2.5million loan) from a county housing fund, to-gether with an allocation of federal Low-IncomeHousing Tax Credits (LIHTC) to renovate theunits. The goal was to preserve 45 percent of thecomplexes’ units for households earning under60 percent of the Area Median Income (AMI).Despite the fact that the tenants associationdocumented the special needs of householdsearning 40 or 50 percent of AMI, Arlingtonrefused to craft a more creative and enhancedsubsidy program. The for-profit owners’ reloca-tion payment did not even meet county guide-lines. Finally, many tenants had families andneeded two and three-bedroom units whichwould not be available after the renovation wascomplete.

Gates of Ballston tenant with her child at theBU-GATA picnic held inside the cul de sac of theGates of Ballston apartment complex (2005)

To summarize: Latino families who hadstabilized a deteriorating neighborhood were nowbeing forced from their homes. In the end, theLatinos had no political clout. They were able toget the support of a local Catholic church, butbeyond that, they had little access to otherArlington activists or civic groups. When renova-tion was complete in October 1997, only 20percent of the tenants moved back.

EXPANDING EFFORTS TO PRESERVETHE NEIGHBORHOOD

Forming coalitions with other organizationsand activists is critical to gaining support forissues in Arlington. But this was almost impos-sible for this underserved constituency.Arlington’s traditional civic structure is based oncivic associations that represent a majority ofthe county’s neighborhoods. But the civic asso-ciations have traditionally representedhomeowners’ interests. Tenants did not partici-pate in these active neighborhood bodies. Infact, because Buckingham was predominantly arenter neighborhood, it did not even have a civicassociation. While several neighboring civic

associations participated in the myriad of meet-ings regarding the future redevelopment ofBuckingham Village I, they were primarily con-cerned with “cleaning up the neighborhood” andpreserving the trees.

After the 1995 experience, BU-GATA contin-ued to meet, and it began to focus on securingresources for other needs and access to countyservices. The Community Development BlockGrant (CDBG) program allocated annualamounts to programs that were supposed toserve Buckingham, but it was clear that manytenants were not benefiting from these pro-grams. In 2000, however, Arlington definedBuckingham as a neighborhood in distress(called a ‘Neighborhood Strategy Area’ or NSA.The measures used to make this determinationincluded economic status, housing conditions,and other indicators.) As an NSA, Buckinghamcould receive more targeted CDBG funds.

With technical assistance from the Center forCommunity Change, BU-GATA used CDBG rulesand regulations, including a requirement forcommunity participation in the design of theConsolidated Plan and other forums, to nudgeArlington to do more for the Latino population.In 1998, BU-GATA submitted a proposal for aCDBG-funded after-school program for teenag-ers. The tenant leaders had watched as teenswere often the spokespersons for their familiesregarding housing code violations. Becausemany of the parents could not speak English,the teens often filled out forms and helpedtranslate in front of government officials orservice providers. However, the county did notfund any programs targeted to Buckinghamteenagers. In part because Arlington had notprovided CDBG funding to Latino community-based groups, and also because the CDBGdirector at that time was Latino, BU-GATAreceived a small county grant to start up theBuckingham Youth Brigade program.

Tenants at the Buckingham Community Festival(2004) - the Multicultural Mural painted by theBuckingham Youth Brigade teens can be seen in thebackground on the Glebe Market wall.

Over the next nine years, the BuckinghamYouth Brigade has grown to the point that it hassecured foundation funding for a full-time staffperson. In addition, by diversifying its activities,BU-GATA was able to secure multi-year regionalfoundation funding for a multicultural commu-nity mural that was designed, planned, andinstalled by the Buckingham youth at the mainintersection of the bustling neighborhood. Thetenants association had secured the support ofGlebe Market, the local grocery, which wasowned by a Korean immigrant but was oneanchor of the Latino community. Together withthe Glebe Market, BU-GATA established a col-lege scholarship fund for neighborhood youthwho were high school graduates. All of theseactivities brought positive feedback from themainstream community, including the localgovernment officials.

Finally, BU-GATA created and produced anannual festival during the hot summer monthswhen children have no place to go. One of thecomplexes had had a community swimmingpool, but when the apartments were renovated,the swimming pool was torn down for the exten-sion of a local road. Beginning in 2000, thefestival moved to a public street – which is stra-tegically located at the center of this neighbor-hood. At first, police were reluctant to issue apermit to a Latino-oriented festival. They wereworried that if Latinos were allowed to gather ata public event, they would create problems anddrink in public. At one point BU-GATA had toappeal to county elected officials to secure thepermit for this annual neighborhood event. Oncethe event was held and hundreds of familiesenjoyed the music, children games, and food,the police reported back that they were sur-prised that “nobody was arrested for drinking.”The festival, together with the mural and theyouth program, created a level of recognition forBU-GATA, as well as the Latino community.

Given the eight year track record of persis-tent advocacy and successful programs, BU-GATA was included as a partner in countydiscussions regarding the possible sale andredevelopment of the second large private, rentalcomplex, the Gates of Arlington. By 2000, rentshad skyrocketed, and land values began toclimb. When the out-of-town owners of Gatesdecided to sell, they signed an option to pur-chase with a local for-profit developer. However,when the developer began to do due diligenceand realized the buildings had “historic designa-tion” and could not be torn down right away, hewithdrew his offer. That gave Arlington andcitizen activists time to negotiate a deal that wasmore favorable to the tenants. In a first forArlington, elected county leaders, staff andcommunity housing advocates met to define aprocess whereby the community would develop alist of priorities, and developers would be invitedto submit bids. A community housing advocatewas able to talk directly to the owner, and theowner agreed to the county’s suggestions, aslong as he was able to obtain a fair market valuefor his property. This strategy led to an eventualsale of the Gates of Arlington apartments for $37million to a local non-profit that promised tokeep 75 percent of the units as affordable hous-ing. No units would be torn down, and theexisting tenants were offered a relocation pack-age that met Arlington guidelines.

That renovation got underway in 2004 and isscheduled to be finished in 2007. Renovationmeans higher rents, however. Estimates werethat rents would increase by an average of 15percent. BU-GATA did not want a repeat of the1995 renovation of Buckingham Village I wherelow-income tenants were forced out becausethey could not afford the new, higher rents.Based on survey data, BU-GATA estimated that100 households would need some rental assis-tance. With the goal of preserving the commu-nity, Arlington approved a project-based Tenant

Assistant Fund (TAF) that would help subsidizerents for tenants who earned 40-55 percent ofthe AMI. BU-GATA believed that this made theproject more viable for existing tenants, manyof whom had lived in the complex for 10 or moreyears.

RECENT DEVELOPMENTS

In the past few years, upscale development inthe Buckingham neighborhood has continued ata fast pace. Development around the nearbymetro station forced more tenants to be dis-placed as their dilapidated buildings were torndown. The last large complex left standing wasBuckingham Village II with 457 units, many ofwhich were two and three-bedroom apartments.In 2005, maintenance workers told BU-GATAthat the owners planned to demolish 84 units(Village 2) and replace them with luxurytownhouses. Unfortunately, this complex did nothave historic designation, so the owner had theright to demolish the units and build townhouses. He did not even have to provide tenantswith a relocation package. In February 2005tenants held a meeting with two elected CountyBoard members, but there was little hope any-thing could be done to preserve the community.BU-GATA joined together with other local hous-ing activists, including a recently createdcountywide tenant advocacy group, BRAVO, andcalled for a “Save Buckingham Coalition.” Timewas of the essence; the owner was ready to sendthe required legal notice emptying Village II oftenants. After several anguished meetings andstrategy sessions, one of the savvy former Plan-ning Commissioners unearthed a section of thelocal law that would allow Arlington to designatethe Buckingham Village II complex as an historiclandmark. Everybody agreed that the complexwould qualify for this status. The owner was notpleased with this possibility; historic designationcould stop his plans to demolish Village II. Afterextensive planning and organizing betweenmembers of the “Save Buckingham Coalition”

and county officials, the owner agreed to partici-pate in a working group to outline commongoals.

After several weeks of discussions that in-cluded BU-GATA representatives, Arlingtonsigned a memorandum of understanding withthe owner. The county agreed not to declareVillage II historic, thus allowing the owner todemolish these units and displace all the ten-ants, one of whom had lived at the complex for35 years. In exchange, the owner agreed to workwith the community and county housing staff tocraft a housing plan that would preserve thecommunity and some of the buildings. But thetenants were still a long way from achievingtheir goals. The tenants wanted to develop af-fordable homeownership opportunities and notbe forced to live in rental housing that is subjectto rigorous guidelines, complex certificationrequirements, and unpredictable annual rentincreases. The owner was not interested inselling his property to a tenants group. Even ifhe were, how could BU-GATA come up with thefinancial resources? The various communitygroups and activists, together with BU-GATA,insisted there be a series of meetings to discussoptions. A new structure called “The CommunityPreservation Committee (CPC)” was establishedto respond to the community’s desire to partici-pate in deliberations. Other county commissionswould weigh in, but the CPC would become thevenue for meaningful participation by tenants.Many meetings were held, and as a result asmall miracle occurred. Arlington agreed topurchase one of the villages and declare it his-toric – thus pleasing various constituencies. Thecomplicated plan calls for the owner to developtwo new multi-family buildings over a two-year,phased process, with a certain percentage ofunits affordable at 60 percent of AMI. Finally,Arlington, together with tenants, will exploreoptions to develop an affordable homeownershipprogram for one of the villages.

When the housing activists discovered thefederal New Market Tax Credits (NMTC) programfor homeownership opportunities, they learnedthat Buckingham met the census guidelines foran NMTC investment. This meant that Arlingtoncould perhaps establish a community land trustto keep the land values from escalating yetagain. But this whole project is a first for Arling-ton: never before had the county purchased landfor affordable housing. Since Arlington does nothave a public housing authority, it is not allowedto own housing complexes. The current plan isfor Arlington to purchase the land and turn theaffordable housing project over to a qualifieddeveloper who will then renovate the units. Aspart of the package BU-GATA will receive acounty-funded contract for housing needs – afirst – to aid tenants in their efforts to continueto live in Buckingham. As one County Boardmember said: “It’s the largest investment ever inaffordable housing in Arlington.”

The tools of affordable housing policy arevery limited as the federal government has

gotten out of the business of producing low-income housing. As thousands of low-cost hous-ing units have been displaced by luxurytownhouses and expensive condos in Arlington,the local government has responded with largerfinancial commitments for rental housing that isaffordable to households earning 60 percent ofthe AMI. But not all stories have had happyendings. When the Arna Valley complexes weretorn town in Arlington in 1999, housing activistsblamed the county for allowing the for-profitdeveloper to displace all the families, many ofwhom were recent immigrants. As a result ofthis defeat, Arlington tried to put in place newhousing policies and targets to produce moreaffordable units, but the programs themselvesdo not guarantee that tenants can stay. Only byadvocacy and organizing by an active tenantgroup together with a strong broad-based com-munity coalition has Arlington been able toproduce creative housing solutions for its low-income population.

Tenants at the Buckingham Community Festival (2004)

1. Strong Leadership: A few leaders who saw the need and provided a vision were critical tothe creation of a united and representative tenants association. Persistence and continuity ofthe same leaders over a period of time was critical to the success of tenants in the Buckinghamcommunity.

2. Multiple strategies and programs led to housing victories: By creating a youth programand designing and installing a multicultural community mural, and by organizing an annual,public festival, BU-GATA skillfully raised the visibility of the Latino community in Arlington. Acounty that was reluctant to fund tenant advocacy has now changed its policies.

3. Access and Participation by the Latino community: Over the years, BU-GATA testified onissues affecting the Latino community. From translation services to fair housing discrimination,BU-GATA made the county aware of the lack of access to services for its Latino residents. De-spite the surging rents and ever-rising tide of gentrification, the Latino community has re-mained the largest minority in Buckingham. Today, Buckingham Village II has the largest con-centration – approximately 86 percent — of Latinos in any one complex in Arlington.

4. Access to financial resources: BU-GATA could not have had any success without access toa number of small seed grants for organizing. Since both the local government and communityfoundation were not supportive of tenant organizing and advocacy efforts, access to grants fromnational foundations was absolutely critical. Without part-time hired organizers, the tenantscould never have achieved their goals. Support from one local business also made a tremendousdifference for BU-GATA’s success.

5. Other critical changes that contributed to the tenants’ success include the following:

a. A growing awareness by elected officials and activist citizens of the critical need for afford-able housing in neighborhoods facing gentrification;

b. The continued demolition of older garden apartment complexes near the major transporta-tion corridor;

c. A change in the elected political leadership at the top. In 1992 the five-member elected Ar-lington County Board had no minority members. First, an African American was elected, andwhen he died suddenly, a Latino was elected in a special election. Having a bi-lingual CountyBoard member has helped raise the visibility of Arlington’s Latino population.

d. The importance of building coalitions: one tenants association cannot achieve much by itself.The growth of an active and committed community of housing advocates has been critical;several churches have been very active leaders in these coalitions. These activists work indepen-dently of Arlington’s system of civic associations and appointed commissions. Their support fortenant rights and preserving a diverse community have been critical to BU-GATA’s successes.

LESSONSLEARNED

What’s Happening toThe Neighborhood?AFFORDABLE HOUSING

Homeownership:Homeownership:Homeownership:Homeownership:Homeownership:

Benchmark for a Vital CommunityBenchmark for a Vital CommunityBenchmark for a Vital CommunityBenchmark for a Vital CommunityBenchmark for a Vital Community

Dru Bergman, Executive Director, DuPage Homeownership Center

with additional contributions by

Kathy Kregor, Co-Chair, DuPage Housing Action Coalition

Susannah Levine, Senior Policy Analyst

Business and Professional People for the Public Interest

If the DuPage County, Illinois real estatemarket had an endangered species list, theaffordable starter home would be right at thetop. Rising land costs, the proliferation ofteardowns in established communities and abooming service sector have created an afford-able housing crisis for low- and even moderate-income first-time homebuyers. Average workingfamilies who just half a generation ago were ableto establish roots in the communities theyserved and move up the economic ladderthrough equity accumulation are now beingpriced out of the DuPage market.

Just ask Joe and Linda Smith (their nameshave been changed to protect their privacy).Joe, a custodian, and Linda, a part-time legalsecretary, have a total annual household incomeof just under $46,000. In 2006, they came tothe DuPage Homeownership Center (DHOC), aHUD-certified non-profit housing counselingagency, seeking to purchase their first home.Based on their financial profile, a DHOC housingcounselor determined they could afford a housepriced at about $175,000. So what options didthe Smiths have? As they quickly discovered,not many. A one-day snapshot of the MultipleListing Service in November 2006 showed only16 single-family homes in the entire county (0.43percent of all listings) were in their price range.

The Smiths are hardly alone. They are repre-sentative of the growing ranks of service-sectorworkers in this high-cost suburban area locateddirectly west of Chicago. Approximately one-third of DuPage households have a total annualincome of less than $50,000 (U.S. Census Bu-reau 2005).

Recognizing both the moral and economicimplications of these facts, a broad-based net-work of concerned organizations and individualslaunched a campaign (Homeownership: Bench-mark for a Vital Community) to create a paradigmshift in the way people view affordable housingin DuPage. The goal of this multi-facetedgrassroots movement is to increase the supply ofaffordable starter homes (see DuPageHomeownership Center n.d.).

ROOTS OF THE PROBLEM

DuPage County encompasses 334 squaremiles in northeastern Illinois and includes all orpart of 39 municipalities, each with its own landand zoning policies, as well as unincorporatedareas which fall under county jurisdiction.Since 1970, the county’s population has grown96 percent (from 488,000 in 1970 to 933,000 in2006), fueled initially by suburban flight fromChicago, and more recently, by immigration(DuPage County 2006; U.S. Census Bureaun.d.).

Over the past 30 years, DuPage has trans-formed from a string of bedroom communitiesalong the metro rail lines into a major hub forlow-wage, service-sector jobs. Such jobs havegrown more than three times the rate of higherpaying manufacturing jobs. In fact, DuPageCounty has seen the highest growth in low-wageservice jobs of any county in the Chicago region(Brookings Institution 2003).

While the number of low-wage jobs inDuPage continues to grow, the supply of rentalhousing, which tends to be more affordable, hasnot kept pace. More than 130,000 new jobs

HOMEOWNERSHIP:HOMEOWNERSHIP:HOMEOWNERSHIP:HOMEOWNERSHIP:HOMEOWNERSHIP:

Dru Bergman, Executive Director, DuPage Homeownership Center with additional contributions by

Kathy Kregor, Co-Chair, DuPage Housing Action Coalition

Susannah Levine, Senior Policy Analyst, Business and Professional People for the Public Interest

BENCHMARK FOR A VITAL COMMUNITYBENCHMARK FOR A VITAL COMMUNITYBENCHMARK FOR A VITAL COMMUNITYBENCHMARK FOR A VITAL COMMUNITYBENCHMARK FOR A VITAL COMMUNITY

were created in DuPage between 1990 and 2000,but only about 5,500 new rental units were builtduring the same period (Chicago Metropolis2020 2002). The prob-lem is equally acute forworking families wishingto purchase housing.While the median incomein DuPage increased byjust over three percentbetween 2000 and 2004,the median single-familyhome value shot upabout 40 percent (U.S.Census Bureau 2000,2004; Multiple ListingService, Northern Illinois2000, 2004). In the firstquarter of 2007, themedian price for anexisting single-familyhome was over $340,000(the highest of anycounty in Illinois), 28 per-cent above the median pricefor the Chicago metropolitanarea and 86 percent abovethe state median (IllinoisAssociation of Realtors 2007).

As of 2003, only about six percent of thecounty’s land remained undeveloped (DuPageCounty 2003) and the construction that hasoccurred in recent years has been almost exclu-sively upscale. Municipalities and school dis-tricts in Illinois rely heavily on property taxesand impact fees, creating an incentive forpolicymakers to favor high-end development.And it would be disingenuous to ignore the rolethat NIMBYism (Not in My Backyard) plays inlocal development decisions.

On top of the dearth of new construction,DuPage is facing a loss of its existing affordablestock. In many communities (particularly alongcommuter rail lines), working-class starter

homes are being demolished to make way forpricey “McMansions,” driving up property valuesand real estate taxes.

The City of Wheaton,located in the heart ofDuPage County, offersjust one example. In2005, the city had 52teardowns; in 2006, thatnumber jumped to 76(Carr 2007). While thecommunity lost 76 rela-tively affordable proper-ties in 2006, they did see28 sales of newly con-structed homes – at anaverage price of$812,000 (MultipleListing Service NorthernIllinois n.d.).

As this scenario playsout out in townsthrough

out DuPage, more and more low- and moderate- income families are being

priced out of the very communities they serve.

Since 1980, DuPage has seen a300 percent increase in the number of commut-ers coming into the county to work. DuPageCounty is now a net importer of jobs; 256,000residents of other counties commute daily intoDuPage, while 191,000 DuPage residents com-mute out to other counties (DuPage County2006).

This trend has implications for all countyresidents and businesses in terms of trafficcongestion, pollution, suburban sprawl, absen-teeism and worker recruitment and retention.According to a Chicago Metropolis 2020 report,the direct costs of the jobs-housing mismatchamounts to $200 to $300 million per year in theChicago region (Chicago Metropolis 2020 2002).

Percentage change in employment by economicsector, 1970 2000, Bureau of Economic Analysis.Source: Brookings Institution Center on Urban

and Metropolitan Policy

Commuting patterns in the Chicago Metro Region

CREATIVE FINANCING AND SUPPLY-SIDE SOLUTIONS

chase price of a home using mortgage revenuebond financing offered through an intergovern-mental agreement between DuPage County andthe Illinois Housing Development Authority. Thebalance of the purchase is financed with a 30-year fixed-rate second mortgage at 4 percentinterest from Harris Bank and deferred, zero-interest third and fourth mortgages from theIllinois Affordable Housing Trust Fund andDuPage County’s HOME federal block grantprogram.

Since 1991, the DuPage HomeownershipCenter (DHOC) has been helping low-incomefamilies become homeowners in DuPage County.In order to address the affordability problem,DHOC offers the DuPage Homestead Program, apublic/private partnership that provides pre-purchase education and counseling and a spe-cial mortgage financing plan that boosts thebuying power of income-eligible households byapproximately 40 percent. The program sup-plies a first mortgage for about half of the pur-

Source: Brookings Institution: Center on Urban and Metropolitan Policy

Even with the substantial boost the DuPageHomestead Program provides, DHOC’s clientsstill struggle to find affordable properties. Thisprompted the agency to team with the DuPageHousing Action Coalition, a network with broad-based grassroots participation that advocates foraffordable and fair housing, to convene a sympo-sium in March 2006 that brought together over160 community leaders and housing industryprofessionals to identify barriers to increasingand preserving the supply of affordable starterhomes in DuPage.

The symposium was designed to promote theproductive sharing of ideas among builders,developers, lenders, governmental officials,realtors, social service agency representativesand members of faith communities. To addresssystemic impediments to affordable housing, thedeliberations created four volunteer task forces:

• Land/Zoning – to examine regulatoryissues affecting land and development costs

• Government Engagement – to exploreways to educate local policymakers aboutaffordable housing

• Employer Engagement – to conductfocus groups with local employers to gaugetheir awareness of affordable housing issuesand to identify messages and opportunities toengage employers as affordable housingadvocates

• Perceptions of Affordable Housing – togather research and formulate messages torefute common misconceptions and stereo-types about affordable housing

Each group was chaired by a respectedcommunity leader, several of whom had not beeninvolved previously in affordable housing advo-cacy.

The groups worked throughout 2006 on theirrespective issues and reconvened in November of

that year to share their recommendations (fullcopies of the reports can be found atwww.dhoc.org) and to enlist volunteers commit-ted to fulfilling them.

IMPLEMENTATION

In 2007, the effort moved into the implemen-tation phase, forming a new set of work groupsto carry out the recommendations. The founda-tion of that effort is Community Outreach. Ineach of the four original work groups, discussionalways seemed to return to the same issue:political will. Participants stressed that therewould be no substantive progress on affordablehousing until communities developed the politi-cal will to make it happen.

It is a generally accepted rule of thumb thatany social movement must reach between 1.5and 2 percent of the population in order tocreate change; in DuPage County, that trans-lates to about 15,000 to 20,000 people. TheCommunity Outreach team has taken the mes-sages created by the Perceptions task force and,working with staff from Business and Profes-sional People for the Public Interest, developed aPowerPoint presentation on affordable housingin DuPage County. They are training volunteerspeakers to spread the message through meet-ings with local employers, churches, civic groupsand other organizations in order eventually toreach a sufficient critical mass to create thepolitical will for substantive policy changes thatwill facilitate the development of affordablehousing. At the end of each presentation, at-tendees will have an opportunity to register foremail alerts on affordable housing issues in theircommunities.

The Government Advocacy team will moni-tor affordable housing issues at the municipallevel and send email alerts to all of these newlyregistered volunteers regarding specific advocacyopportunities. In order to maximize impact,

their initial efforts have focused on selectedmunicipalities where organizing efforts andallies already exist, with plans to expandcountywide later.

The group is using the expertise of estab-lished organizations in DuPage interested inaffordable housing. For example, local Leagueof Women Voters chapters are being asked toassist by setting up observers to monitor citycouncil, planning and zoning committee meet-ings in the selected municipalities for localactivities that affect affordable housing.

In order to anticipate potential opportunities,the Government Advocacy group is compiling alist of community projects that might incorpo-rate an affordable component, such as theproposed North-South Metra Star rail line. Thisallows the group to focus on areas with thegreatest potential for development proposalsand proactively advocate for the inclusion ofaffordable housing.

The Government Advocacy group also iscontacting DuPage County organizations andindividuals interested in affordable housing thathave email lists to join the email alert system.This will allow both countywide and targetedmobilization as the municipal meeting observersidentify advocacy opportunities.

Finally, the group plans to acknowledgemunicipalities that further affordable housinggoals by recognizing them with a “Blue RibbonHousing Award.” The Government Advocacyteam is in the process of gathering ideas forspecific criteria by examining successful prac-tices used elsewhere.

While creating political will through educa-tion and advocacy, three teams are working onvarious projects that will show local communi-ties how to create quality affordable housing.The Northeast Illinois Chapter of the AmericanInstitute of Architects (AIA Northeast Illinois)

has adopted Homeownership: Benchmark for aVital Community as their signature project incelebration of their 150th anniversary. AIANortheast Illinois members are conducting threeDesign Charrettes at actual sites in DuPageCounty. A charrette is a kind of design forumfor developing solutions to specific communityissues.

The group held their first charrette in April2007 in the City of Wood Dale at the behest ofthe city council. About 35 to 40 AIA NortheastIllinois members and community representativesbrainstormed ideas for mixed-use, mixed-incomeredevelopment of a specific downtown site. Theworkshop format was designed to facilitate anopen discussion between all community stake-holders.

In June 2007, the AIA Northeast Illinoisvolunteers presented four alternate concepts formixed use, mixed income retail and residentialdevelopments to the Wood Dale City Council.The designs incorporated condominiums, townhomes and substantial green space.

The presentation was well-received by com-munity leaders. As reported in The Daily Herald,Wood Dale 2nd Ward Alderman Ed Kneip stated,“I personally found this concept very enlighten-ing. Sometimes you get into conversations thatare all ‘What if? What if?’ but our ‘What ifs’ werebeing put down on paper. The process hasresulted in a real model for us to work with” (TheDaily Herald 2007).

The City of Wood Dale is considering whetherto create a tax increment financing (TIF) districtin the targeted area to encourage redevelopment.The city also will use the charrette concepts toassist in creating new community developmentguidelines and rewriting its zoning ordinance.

Given that DuPage County has so little re-maining undeveloped land, this kind of creativeredevelopment can offer a win-win solution for

affordable housing advocates and municipalities.Two additional charrettes are being planned inother communities later in 2007.

Other ideas to facilitate development arebeing explored by the Overlay District group.Chaired by a developer and a village manager,the team currently is working with a local non-profit, the Community Housing Association ofDuPage, to create a model town home projectincorporating regulatory accommodations rec-ommended by the Land/Zoning work group.

In addition to nurturing home-grown solu-tions, another group is compiling a TechnicalAssistance Bank with information on bestpractices from other high-cost areas around thecountry and available resources for local govern-ment officials. Since affordable housing is arelatively new issue for local officials in theChicago region, they often are not familiar withbest practices or available resources. The Tech-nical Assistance Bank will collect, summarize

AFFORDABLE HOUSING: NOT YET EXTINCT

and catalogue information (e.g., housing poli-cies, affordable housing development, housingprograms, financing) and make the resourcesavailable electronically on a dedicated publicweb site hosted by the DuPage Mayors andManagers Conference, in collaboration withDuPage County and DuPage housing organiza-tions. While focused on assisting local govern-ments, the information also will be available toother interested parties who wish to access it.

A Steering Committee composed of thework group leaders and co-chaired by a leadingarea employer and a prominent local builder isproviding guidance, coordination, and oversightto all of these efforts. Although DHOC and theDuPage Housing Action Coalition continue toquarterback the overall process and providestaff support, they have made a very consciouseffort to engage new work group leaders at eachphase of this initiative to expand support forthe cause.

Affordable starter homes may be an endangered species in high-cost communities such as DuPage, but we’re confident the trendcan be reversed. Creative solutions, such as the mixed densityoverlay districts, are available, but government officials must findthe political will to implement them. The ideas described in thischapter – particularly the design charrettes – offer a blueprint forwinning community support by engaging stakeholders in both theproblems and the solutions. The battle for affordable workforcehousing will be won on the ground, one heart at a time, throughconversation, education and advocacy that eventually makes itunacceptable for hard-working families like the Smiths to be pricedout of the very communities they serve.

LESSONS LEARNED Homeownership: Benchmark for a VitalCommunity has broken new ground inDuPage County in terms of grassroots col-laboration to solve a pressing communityproblem. It also has provided a number oflessons that any organization or communityworking for change might find useful:

• Promote conversation between stake-holders. The dialogue at the initialhomeownership symposium was enrichedimmeasurably by intentionally arranging theseating to encourage people with differingperspectives to interact.

• Set a tone of collaboration, not confron-tation. The moderators and table captainsat the initial symposium created a climate ofrespect that has carried through the entireprocess and encouraged involvement.

• Respect diverse opinions and listen toother viewpoints with an open mind. Thenew people who became a part of this processoften challenged the statements and assump-tions of the traditional affordable housingadvocates, forcing them to reexamine issuesfrom a different perspective, which sharpenedtheir arguments.

• Constantly be on the watch for poten-tial new leaders for the cause. For in-stance, former Illinois Attorney General JimRyan was not an affordable housing advo-cate; however, as the head of the Center forCivic Leadership and Public Service atBenedictine University, he was interested incivic engagement and approached the causefrom that perspective. His impassionedspeech about the importance of citizen actionat the November symposium inspired 95attendees to sign up on the spot to volunteerfor the implementation phase of the effort.

• Build on existing networks. Rather thanreinventing the wheel, the groups identifiedorganizations, such as the League of WomenVoters, who already had the infrastructure inplace to carry out some of the proposedactivities.

• Research your audiences and tailor yourmessages. For example, the Employer Engage-ment task force learned through their focusgroups that their assumptions were not alwayscorrect as to which affordable housing mes-sages would resonate most with employers.

• Find common ground by building on eachstakeholder’s self interest. For employers, itmay be recruitment and retention costs, forbuilders, it may be regulatory relief. All partiesmay not agree on all issues, but if you main-tain a respectful, inclusive dialogue, you canfind common ground on which to build.

• Make your voices heard. Elected officialsrespond to numbers, and time and again theytold the work groups that they rarely hear fromproponents of affordable housing.

Education is important, but educatingpeople without organizing them to act is notgoing to create the political will. There needsto be significant investment toward developingleaders to be active citizens and teachingleaders the tools to get organized and be avoice in their community. Those in need ofaffordable housing need to be at the center ofthis effort. Leaders from DuPage United, anaffiliate of the Industrial Areas Foundation,whose mission is to nurture and develop citi-zens to take collective action for structuralchange, have been approached to be part ofthis partnership.

Local governments incorporate consider-ation of workforce housing needs in any con-sideration of changes to land use regulations,building codes or building materials.

Local governments give priority to andstreamline approval processes for subdivisionsthat include workforce housing units, possiblyby creating a Workforce Housing Ombudsman

Developers receiving these incentives forworkforce housing place restrictions on resaleof the units to maintain affordability andimplement strong property management andmaintenance regulations.

REFERENCESREFERENCESREFERENCESREFERENCESREFERENCESBrookings Institution. 2003. New Realities fora New Region: Not Your Parents’ Chicagoland.Center on Urban & Metropolitan Policy. Presen-tation to the MacArthur Foundation, October2003.

Carr, Mayor C. James. 2007. “State of theCity” Address. Wheaton, Illinois. January 18.

Chicago Metropolis 2020. 2002. Recommenda-tions for Developing Attainable Workforce Hous-ing in the Chicago Region. Website atwww.chicagometropolis2020.org/housing.pdf

The Daily Herald. 2007. “Ideas Blossom forWood Dale.” June 15. Website atwww.topix.net/city/wood-dale-il/2007/06/ideas-blossom-for-wood-dale

DuPage County. 2006. Department of Eco-nomic Development and Planning. DuPageCounty Economic Profile.

POLICY RECOMMENDATIONSPOLICY RECOMMENDATIONSPOLICY RECOMMENDATIONSPOLICY RECOMMENDATIONSPOLICY RECOMMENDATIONS In terms of specific policies communities can enact to facilitate development of affordable hous-ing, the Land and Zoning work group recommends the creation of Mixed Density Overlay ZoningDistricts (in preference to inclusionary zoning). For example, there could be two “MD” designations:

• MD-1 would be a zoning classification for smaller infill developments where mixed densityand mixed income housing is provided on adjacent properties.

• MD-2 would be a zoning classification for larger developments where mixed density andmixed income housing are provided within the new development.

The MD would incorporate the following provisions:

• Developer incentives of a 25 percent increase in housing density provided that at least 25percent of the units are designated as affordable workforce housing.

• Modification of bulk regulations, including setbacks and minimum lot sizes, to accommo-date the increased density.

• Reasonable modification of subdivision regulations to accommodate increased density.

• Reasonable modification of landscaping, storm water and wetland requirements to accom-modate increased density without compromising the intent of those regulations.

• Reduction or elimination of impact fees for workforce housing units.

• Establishment of design and architectural standards and housing types (including “cot-tage” housing) for the overlay district.

In addition, the work group recommends that local governments modify their comprehensiveplans to show potential sites for mixed density overlay districts.

DuPage County. 2003. Department ofEconomic Development and Planning.DuPage County 2003 Land Use Analysisand Trends Report.

DuPage Homeownership Center. N.d. Websiteat www.dhoc.org/symposium.html.

Illinois Association of Realtors. “Quarterly Hous-ing Survey by County, Single Family Home SalesQ1 2007”.

Multiple Listing Service, Northern Illinois.2000 and 2004. Website at www.mlsni.com/

U.S. Census Bureau. N.d. State & CountyQuickFacts. Website atwww.QuickFacts.census.gov

U.S. Census Bureau. 2000, 2004, 2005.American Community Survey. Website atwww.census.gov/acs/www/

What’s Happening toThe Neighborhood?AFFORDABLE HOUSING

The Hope VI Program:The Hope VI Program:The Hope VI Program:The Hope VI Program:The Hope VI Program:A New StrategyA New StrategyA New StrategyA New StrategyA New Strategy

for Neighborhood Revitalizationfor Neighborhood Revitalizationfor Neighborhood Revitalizationfor Neighborhood Revitalizationfor Neighborhood Revitalization

Julio Barreto, Jr., Former Department Director for DevelopmentSpecial Initiatives and International Affairs

National Association of Housing and Redevelopment Officialswith additional assistance by Dan Moore

Duluth Housing Authority

The city of Tucson, Arizona, faced a commonurban problem: its public housing was in poorshape, and it faced a continuing shortage ofaffordable housing. To address these chal-lenges, Tucson used a ‘HOPE VI’ grant of nearly$15 million to raise an additional $48 million forthe Barrio Santa Rosa/Connie Chambers Revi-talization Plan. This plan called for demolishing200 public housing units at the former ConnieChambers site and replacing them with 60public housing units and 60 units that areincome restricted under the Low Income Hous-ing Tax Credit Program. Off site the City pur-chased 123 scattered site units in non-minority,non-low income census tracts and created 17new units of public housing in the TucsonHouse. Additionally, Tucson, working with thenon-profit community, constructed 60 houses inthe Greater Santa Rosa Neighborhood forhomeownership programs. The HOPE VI grantwas successfully completed in January 2003,and the new development in the Barrio SantaRosa, the Posadas Sentinel, is 100% occupied.

The funds raised through this HOPE VIproject did more than just revitalize publichousing, however. The project made severalimprovements to the community for servicedelivery as well as recreation. The Santa RosaLearning Center, the Santa Rosa Child Develop-ment Center, and the Santa Rosa Park werecreated and have been fully operational since2003. Renovation of the Santa Rosa RecreationCenter will be completed in the near future.

Through HOPE VI, Tucson also providedeconomic development programs for the neigh-borhood and provided employment opportunitiesfor area residents and economic assistance to

retail businesses. All of the economic develop-ment components have been completed exceptfor the building of a grocery store, which hasbeen delayed until a major highway constructionproject is finished. To slow down traffic andcreate a more friendly shopping area, HOPE VIfunds were also used for road improvements inthe neighborhood; these enhancements arecompleted as well.

The final component of this HOPE VI projectwas the renovation of a five unit complex into aresidential studio Art & Culture Center. The Art& Culture Center has two apartments for artists,who pay a reduced rent in exchange for provid-ing art instruction and programs to the neigh-borhood. The Center has space for instructionand exhibit space. A local arts agency managesthe programming and a private managementcompany maintains the two units.

In Tucson, the community learned thatstrong and open communication with all stake-holders was a major key to the project’s success.All available resources that could be brought tothe projects — not just those available from localagencies – were identified and used. Hard workincorporated the residents’ concerns into theprocess and made them feel that their opinionswere valued. In the end, all celebrated theaccomplishments made possible, in part, by theHOPE VI program.

THE HOPE VI PROGRAM

As it did in Tucson, the HOPE VI programcan alter the future of public housing in ournation’s neighborhoods. It can raise the pros-pects for revitalizing blighted neighborhoods bycreating mixed income communities in areas

THE HOPE VI PROGRAM : A NEW STRATEGY FORTHE HOPE VI PROGRAM : A NEW STRATEGY FORTHE HOPE VI PROGRAM : A NEW STRATEGY FORTHE HOPE VI PROGRAM : A NEW STRATEGY FORTHE HOPE VI PROGRAM : A NEW STRATEGY FORNEIGHBORHOOD REVITALIZATIONNEIGHBORHOOD REVITALIZATIONNEIGHBORHOOD REVITALIZATIONNEIGHBORHOOD REVITALIZATIONNEIGHBORHOOD REVITALIZATION

Julio Barreto, Jr., Department Director for Development, Special Initiatives and International AffairsNational Association of Housing and Redevelopment Officials

with additional assistance by Dan Moore, Duluth Housing Authority

in which competition for public housing hastaken a back seat. Therefore, with federal hous-ing subsidies for the poor being reduced, mixedincome projects provide an alternative revenuestream to help house the poor.

BACKGROUND OF HOPE VI

The HOPE VI Program grew out of a series ofrecommendations submitted by the NationalCommission on Severely Distressed PublicHousing to Congress in the early nineties. Frus-trated with approximately 80,000 to 90,000public housing units that were eyesores and inneed of extensive repair, Congress created theCommission to recommend ways to remedyhousing that was uninhabitable (i.e., ‘severelydistressed’) because of poor design or location,because they were located in areas with concen-trated poverty and high rates of vandalism orcriminal activity, or because they contributedsignificantly to disinvestment in the surroundingcommunity.

The commission made two general recom-mendations. First, the distressed housingneeded massive transformation: physical im-provements, better management, and bettersocial and community services. Second, localhousing authorities should be given some flex-ibility in determining how to accomplish thesegoals, even if this involved demolishing existingunits and replacing them with new ones.

Prior to the creation of HOPE VI, the federalgovernment had imposed a ‘one-for-one’ rule,which required local housing authorities toreplace any unit it removed from its inventory.For many years this rule meant that demolishingpublic housing units was a political non-starterfor local housing authorities, especially in urbancommunities where land costs were high. Re-moving this rule in 1998 paved the way for theHOPE VI program to develop a mix of housingtypes in these once blighted areas.

After much debate, Congress created theHOPE VI program in 1993. Originally a demon-stration program, Congress has continued tofund HOPE VI, although the program has notbeen permanently authorized. According to theDepartment of Housing and Urban Development(HUD), since its inception the program hasissued 607 total grants totaling more than $6.2billion. Of the total amount awarded, roughly$5.8 billion consists of revitalization grants.

HOPE VI IN PRINCIPLE AND PRACTICE

HOPE VI allows local housing authorities toapply for federal grants that must be leveragedto attract other public and private resources torevitalize distressed developments. The revital-ization grants fund the capital costs of majorrehabilitation, new construction and otherphysical improvements; the demolition of se-verely distressed public housing units; theacquisition of sites for off-site construction; andcommunity and supportive service programs forresidents, including those relocated as a resultof revitalization efforts. Smaller communitiesare eligible to receive what are called Main Streetgrants which are intended to provide assistancefor revitalizing older downtown business dis-tricts while retaining the areas’ traditional andhistoric character. Any families needing to berelocated are provided financial aid through theHousing Choice Voucher Program.

HOPE VI’s main innovation for public housingwas its ‘mixed finance’ element. This requiredlocal housing authorities to use Federal funds toraise other public, private and non-profits fundsfor community revitalization. While HUD mustapprove the local plans, the program allowed fora variety of approaches to revitalizing thesedevelopments. The program showcases innova-tive mixed-income, mixed-finance housing devel-opments and public-private partnerships thatplace schools, churches, civic and communityservices and employment in or near the develop-

ments. The new developments could consist ofrental units (subsidized and unsubsidized),privately owned houses, and public housingunits. The design, structure and décor of thesenew developments were designed to attract agreater income mixed of households and con-form more closely to the surrounding commu-nity.

While HOPE VI has produced innovations incommunity revitalization, it is no panacea: inmany cases the program has reduced the totalnumber of affordable housing units as it hassought to integrate poor families into areas ofless concentrated poverty. Residents of publichousing have remained skeptical of thegovernment’s ability to provide them with betterhomes and more opportunity. Strife amongresidents, HUD and housing agencies slowed theimplementation of early grants, sometimes byyears. HUD now insists that residents shouldbe a part of this partnership process, and mustbe included in the revitalization process. Betterguidance to residents and agencies has im-proved these relationships. HUD continues torefine the administration of the program, whichtends to draw criticism for being overly regula-tory from some perspectives, and not regulatedenough from others.

It may not be the only answer to the issuesconfronting public housing, but the programdoes demonstrate what can occur when stake-holders — the federal government, public hous-ing officials, residents and local political andcommunity leaders – come together with aninterest in solving a common problem. To illus-trate the promise that HOPE VI provides, thenext sections contain other examples of HOPE VIprojects.

HOPE VI IN SAN ANTONIO

The San Antonio Housing Authority (SAHA)has secured three HOPE VI grants. In 1994

SAHA secured a $48.8 million grant, and lever-aged $4.3 million in additional funding, to revi-talize the Springview Apartments. The originaldevelopment consisted of a 421 units. Theseunits were replaced with 347 affordable unitsand 31 market rate single-family homes. Part ofthe plan also called for the renovation of a his-torical structure, a convent that was convertedand now provides space for 25 public housingunits, childcare, counseling, training and officespace. It also provides 21 office rental spacesand meeting rooms. The new development con-tains single family homes, multi-family townhomes, senior citizens apartments and a com-munity center in addition to the converted con-vent. Off site there are 21 single family homesand 59 senior citizen apartments. The projectwas completed in 2006.

In 1995, SAHA was awarded a $48.2 milliongrant that leveraged an additional $1 million torevitalize the Mirasol Homes. This was a 500-unit development that was demolished and isexpected to be replaced by 174 public housingunits and an additional 216 replacement unitsoff-site. The off-site units contained 160 single-family homes that were available to public hous-ing residents on a lease-purchase agreement.This provided homeownership opportunities.

In 2003, HUD approved an $18.7 millionHOPE VI grant to SAHA to revitalize the VictoriaCourts which is an area within walking distanceof many of the city’s downtown historic attrac-tions. The new development calls for replacing660 public housing units built in 1940 with 602units of mixed income and mixed use develop-ment. Approximately $6.7 million of the HOPEVI funds have been expended and have led to$20.5 million in leveraged funds. All HOPE VIfunds are to be expended by September 2008and all development work is to be completed inlate 2009. There are four phases; the first phase(for which funds have been expended) calls for

50 public housing units, 55 affordable units and105 market rate units. The second phase willinclude a total of 44 public housing units thatwill be available for homeownership and 102market rate units. The final phase will includemulti-family rental dwellings.

HOPE VI IN THE DISTRICT OF COLUMBIA

The District of Columbia Housing Authority(DCHA) has received a number of HOPE VIgrants since the programs inception but twoprojects stand out: the Townhomes of CapitolHill and the Capitol Gateway Project.

Formerly known as the Ellen Wilson projects,DCHA received a $25 million HOPE VI grant in1993 to redevelop the site as the Townhomes ofCapitol Hill. The original 134 units in two-andthree-story walkup apartment buildings weredemolished and replaced by 134 town-homesthat were sold to families of mixed incomes in acooperative structure. Thirteen lots were offeredas ‘fee simple’ market rate town-homes. (Feesimple means having the absolute power ofownership in real estate, including the right tosell the property or pass it on to heirs withoutlimitation.) The units were sold in 2000 with acooperative board elected to govern functionsafter development. The Co-op is self-governingbut DCHA is responsible for enforcement of theregulatory and operating agreement. There wasa Community Advisory Committee created todirect the planning of the Community and Sup-portive Services Program that accompanied thedevelopment. The committee consisted of repre-sentatives of local churches, service providers,public housing residents from neighboringdevelopment and residents from the surround-ing community.

As a result of the development, the area ismore economically diverse, providing greaterstability to the neighborhood. The developmentreceives no on-going subsidy and has main-

tained a budget surplus. Twenty-four formerpublic housing and Section 8 residents wereable to become home owners as a result of theeconomic development initiatives that accom-pany the project.

Another project for which DCHA received aHOPE VI grant was the Capitol Gateway Project.In 2000 DCHA received a $30.8 million grantfrom HUD which leveraged $130 million in otherfunds and services. The leveraged funds andservices included commitments from the Wash-ington, DC Housing Finance Agency, the DCDepartment of Housing and Community Devel-opment, the DC Department of EmploymentServices, DCHA non-federal sources, tax exemptbonds, and low income housing tax credits, afederal Housing Administration grant, privateequity and other private investment.

The project calls for replacing two publichousing developments and a foreclosed HUDproperly on a contiguous site that contained1,107 units. It will be replaced by a total of 761units of which a 152 unit building for seniorcitizens was completed in late 2004. The elderlydevelopment is near a newly renovated park andis reserved for low-income seniors and subsi-dized by a housing choice voucher program.

The site will eventually include 231 units forhomeownership, of which more than 50 will beformer public housing residents who have suc-cessfully completed a training program whichhelps them with the transition to home-ownership. There is a planned 95,000 squarefoot commercial center that will be constructedwithin walking distance of the development. TheEast Coast View Community Development Cor-poration has been formed as a resident ownedand operated corporation. It will be housed in anewly constructed community center which willalso contain family and career counseling of-fices, a multi-purpose room, a computer trainingcenter and other facilities for community and

supportive services. There has also been a com-mitment from community partners for at least50 temporary construction jobs, over 100 non-construction jobs and other jobs associated withthe commercial center as a result of the project.

HOPE VI IN DULUTH, MINNESOTA

The Duluth HOPE VI project was a 2002application funded in March of 2003. The HOPEVI grant of $20 million initially leveraged anadditional $86 million for a total of $106 million.However, since the beginning of the implementa-tion process the total budget has grown to $175million for a leverage figure of $155 million.

The original site comprised 200 severelydistressed public housing units with barracksstyle construction in the Harbor View complex.All 200 families were relocated as of October2004. Seven of the families were able to relocatedirectly from the old units into the first phase ofcompleted construction on-site. All originalHOPE VI Harbor View families have been offeredthe opportunity to return to the redeveloped site.

Thus far, three of seven phases have beencompleted. The work completed thus far in-cludes:

• Phase I on-site was the second completedphase, which included 44 units of townhomestyle duplexes and fourplexes. The 44 unitsinclude 11 public housing replacement units, 24tax credit rental units, and nine market raterentals.

• Village Place is a 55-unit apartment off-sitebuilding with 16 public housing replacementunits, 27 tax credit rentals, and 12 market raterental units. This building is strategically lo-cated close to two hospitals which provide em-ployment opportunities and also related commu-nity and supportive services job training pro-grams for HOPE VI residents.

• The third completed phase is the Village at

Matterhorn which is a 96 unit complex of twoapartment buildings with 81 units and 15townhomes. Thirty units are replacement publichousing, 49 units are tax credit rentals, and 17units are market rate rentals. This developmentis strategically located in close proximity to ashopping mall where numerous retail employ-ment opportunities and public transportation isavailable.

Phase II on-site rental began construction inJuly of 2007 and includes the next 42 units ofrental housing with very similar designs toPhase I, and a new child care center along withthe first 17 units of homeownership construc-tion. Phase III on-site is funded with low incomehousing tax credits and will start construction inthe fall of 2007 with 41 units and the construc-tion of a new community center on the VillageGreen. Phase IV tax credits have been appliedfor and construction is expected to start in thespring of 2008. The 104 on-site homeownershipconstruction will continue as units are sold andwill likely be completed in late 2010. These unitswill include 54 affordable units and 50 availableat market rate. Designs will include single familyhomes, duplex and fourplex townhomes andcondominium units.

The other major off-site homeownershipunits includes a development in the east side ofDuluth known as Hawk Ridge Estates, whichwill include 133 units of affordable (40 percent)and market rate (60 percent) housing consistingof 130 single family homes and three publichousing replacement rental units, one duplexand one single family home.

One additional development will be built at asite yet to be determined. Total unit productionincludes 655 units of rental and homeownershipunits within five developments yielding a netgain of 455 new housing units in Duluth, plusthe replacement of the 200 original public hous-

ing rental units. The HOPE VI program hastruly transformed not only the originalblighted Harbor View neighborhood into anexemplary new mixed-income neighborhood ofchoice as a 269 unit “Village with a View,” andimproved the lives of many residents throughcommunity and supportive services programs,but it has also acted as a catalyst for theconstruction of additional housing at all in-come levels and provided an economic boost tothe community that has created $175 millionin new residential value, as well as numerousconstruction jobs throughout the 5 year imple-mentation process.

CONCLUSION

HOPE VI creates tremendous opportunitiesto revitalize neighborhoods beset with a myriadof social and economic ills that can only becured through dramatic action. It is not aperfect solution but one that warrants theopportunity to mature into the type of neigh-borhood revitalization tool that balances theoverall community needs with the individualneeds of public housing tenants.

Harbor Highlands – Phase I – “A Village with aView” - 44 on-site units including 11 public housingunits, 7 of which are occupied by HOPE VI residents

A GALLERY OF HOPE VI SUCCESSES

Harbor Highlands Phase II Current Construction –42 new units + child care including17 public housing replacement units

Village Place – 55 new rental units near hospitals,including 16 public housing unit

Village at Matterhorn - 96 new units including 30public housing units - near retail jobs

Hawk Ridge Estates - Market-rate constructionstimulated by HOPE VI.

What’s Happening toThe Neighborhood?AFFORDABLE HOUSING

Cooperatives:Cooperatives:Cooperatives:Cooperatives:Cooperatives:A Shared Equity SolutionA Shared Equity SolutionA Shared Equity SolutionA Shared Equity SolutionA Shared Equity Solution

Jim Gray, NCB Capital Impact

“ In just the three years from 2001 to 2004,the number of households paying more than halfof their incomes for housing shot up by 1.9 mil-lion. This increase brought the total number oflow- and middle income households with severecost burdens to 15.6 million.”

“ Until 2000, nationally weighted average homeprices rose closely in line with median incomesand general price inflation. Since then, however,house price appreciation has shot ahead of thesebenchmarks, outstripping income growth morethan six-fold from 2000-2005. As a result, themedian house price exceeded the median house-hold income by at least four times in a record 49of 145 metro areas and by more than six times in14 metros” (Joint Center for Housing Studies2006).

THE CAPITAL MANOR COOPERATIVE

The District of Columbia, an example of one ofthese pricey metro areas, has faced an increasein gentrification due primarily to the renovationof multifamily housing into high-priced condo-miniums. Although most individuals living inthese communities cannot afford to buy theindividual condominiums, D.C. law offers tenantsthe opportunity to remain in their homes througha shared-equity solution. Under the cooperativemodel for multifamily housing, tenants have theopportunity to buy the building from its owner asa route to affordable homeownership.

The Capital Manor Cooperative in D.C. servesas an example of a very successful tenant pur-chase that helped 102 families avoid displace-ment from their neighborhood. With funding fromthe District’s Department of Housing and Com-munity Development and private loans throughNCB and NCB Capital Impact; with assistancefrom developers and lawyers; and with key resi-dent involvement and much perseverance, thesefamilies established an affordable housing coop-

erative and purchased their building. Since theinitial building purchase in 2003, the coopera-tive has maintained its affordability by restrict-ing resale of shares to other low-income buyers.

Though housing prices and income changesover recent years have made it more difficult formany families to purchase a home, the dreamneed not be out of reach. One possible means ofachieving broader access to homeownership isthrough cooperative housing. This chapteroutlines cooperative housing as one of severalshared-equity solutions.

HOUSING COOPERATIVES: KEY TOPICS

A housing cooperative is a means for peopleto join together on a democratic basis to ownand control the building (or buildings) in whichthey live. It is based on seven principles, appar-ent in its form and operation:

1. Voluntary and open membership

2. Democratic member control

3. Member economic participation

4. Autonomy and independence

5. Education, training and information

6. Cooperation

7. Concern for community

Resident owners form a corporation, elect aboard of directors and pay a monthly amountthat covers the cost of owning and operating theproperty. Residents buy “shares” or a member-ship in the co-op corporation and the right tolive in a particular unit in the building. As aninvestment to each shareholder, co-ops sharemany characteristics with other forms ofhomeownership: they count as an income taxdeduction, are excluded from capital gain taxa-tion on sale, and can build equity over time.

Jim Gray, NCB Capital Impact

COOPERATIVES: A SHARED EQUITY SOLUTIONCOOPERATIVES: A SHARED EQUITY SOLUTIONCOOPERATIVES: A SHARED EQUITY SOLUTIONCOOPERATIVES: A SHARED EQUITY SOLUTIONCOOPERATIVES: A SHARED EQUITY SOLUTION

A share loan is the debt of an individualcooperative member for their purchase of inter-est in the cooperative corporation, and their“right” to live in the building. The process ofpurchasing a cooperative share through a loanis much like purchasing a condominium using aloan from a bank or credit union. Although thebank requires the co-op corporation to agree tothe loan, only the individual member is respon-sible. The co-op corporation has no obligation topay any part of the share loan.

What is a blanket loan?

A cooperative corporation’s ownership of itsreal estate is typically financed with a blanketmortgage loan. Because the corporation ownsthe land and buildings, this entity can take outa mortgage on the property as a whole. Coopera-tive corporations can use a blanket mortgage tofinance the initial purchase of the real estate, torefinance, or to pay for major improvement andrehabilitation projects. While the cooperativecorporation is liable for the blanket mortgage,the individual members are not. Members areliable only to the cooperative corporation, andpay their portion of its blanket mortgage pay-ment through their monthly payments.

How much does cooperative living cost eachmonth?

The cooperative’s annual budget of expensesreflects its best estimate of the cost of properlyoperating and maintaining the building(s). Thebudget may include funding appropriate re-serves for items such as repairs and makingpayments on the cooperative’s blanket mortgage.Members pay monthly charges consisting oftheir proportionate share of one month’s coop-erative expenses. Size and other factors influenc-ing the relative value of individual units affectthe proportion of the resident’s monthly share.These monthly payments are referred to bydifferent co-ops as “occupancy charges” or“carrying charges.”

Capital Manor Cooperative serves as a suc-cessful example of a conversion from a rentalbuilding to a multifamily housing cooperative.The first step of the housing cooperative forma-tion was to create a board of directors thatwould ensure the co-op principles were met.Subsequently, Capital Manor members educatedthemselves on the purchase process and theshared ownership model, and received trainingfrom the non-profit group Housing CounselingServices. The cooperative corporation took out ablanket mortgage for the land and buildings andreceived city financing assistance, while theindividual residents purchased shares to becomeowners. Today, all co-op members rendermonthly payments to cover on-going operatingcosts and the blanket mortgage for the property.Thus, Capital Manor created democratic mem-ber control and developed member economiccooperation for affordable housing.

How does a co-op compare to condominiumownership or rental housing?

A cooperative is a way for people to jointogether on a democratic basis to own andcontrol the buildings in which they live. Whilethe process of joining an existing cooperative asa resident owner is relatively similar to theprocess of buying a condominium unit, thecondo owner’s purchase consists of the dwellingunit, plus an interest in the common elements ofthe building and land. The condo association,through which the condo unit owners demo-cratically govern the building, does not own anypart of the condominium land or buildings. Bothdevelopment and closing costs are usually lowerfor cooperatives than for condos.

In a rental building, tenants do not own thebuilding in which they live. They have no oppor-tunity to earn equity over time or receive taxbenefits; rather they are paying rent to a land-lord. They have no responsibility for mainte-nance or repairs of the building and no control

over who moves into the building. Under bothhousing cooperatives and condominiums, theresident owners must manage these responsi-bilities of ownership.

What is an affordable cooperative and alimited equity cooperative?

An affordable housing cooperative is madeavailable especially for moderate- or low-incomefamilies, and is usually made possible by someprivate or public subsidy. A limited-equity coop-erative, more specifically, has resale price re-strictions on cooperative interests. The purposeof these restrictions is to keep acquisition pricesaffordable to future generations of cooperativemembers, with affordability and membershiptargeted to potential homeowners that are at orbelow a certain percentage of area median in-come (AMI). Depending on the specific restric-tions, a particular balance is struck betweenaffordability to the next purchaser and equitygrowth for the current owner. Detailed informa-tion on such restrictions (including maximumshare sale price) is usually found in the co-opbylaws or in a regulatory agreement or land-lease between the cooperative and some thirdparty. These documents also typically establishmaximum income limits allowed for incomingmembers.

Capital Manor Cooperative has establishedre-sale price restrictions on its cooperativeshares to keep the units affordable to futurebuyers. When a member decides to sell a share,the co-op board must approve the new buyer,and determine that the new buyer’s income doesnot exceed the income limits set. CapitalManor’s re-sale price restrictions maintain theaffordability of the co-op over the long term,while at the same time maintaining some oppor-tunity for equity growth to the owner at the timeof sale.

What is a market-rate cooperative?

In contrast to a limited equity cooperative, amarket-rate cooperative puts no price limits onthe resale of its cooperative interests. Thisresulting sale price tends to equal the fair mar-ket value of comparable condominium units. Ina cooperative, the sale price is made up of theshare price plus the obligation to pay the unit’sproportionate share of the cooperative’s blanketdebt.

Co-ops as a policy solution

Like other shared equity models, cooperativesprovide an option for more working families toaccess homeownership. What makes coopera-tives special? Cooperatives can be considered astrong policy solution for affordable housing, forthe following reasons:

• They are cost-effective in closing costsand operations;

• They offer long term financing and refi-nancing options;

• They build democratic, personal responsi-bility in building management and owner-ship;

• They have proven to be successful overtime with lenders and Fannie Mae;

• They yield decreased crime and healthiercommunity statistics;

• They present flexibility in combinationwith other models.

Entry and operation costs

Members of affordable cooperatives enjoylower closing costs than condominium andsingle-family homeowners, making entry intoownership a bit easier. Purchasers usually donot have to pay title fees in closing, but canusually enjoy tax benefits in the same manneras condo and single-family homeowners.

Cooperatives operate at a cost determined byan annual budget that reflects a best estimate ofthe exact cost needed to operate and maintainthe property. These costs can include manage-ment, maintenance of the grounds and buildingstructures, funding appropriate reserves, payingproperty taxes and insurance for the cooperativeand making principal and interest payments onthe co-op’s blanket mortgage. The University ofWisconsin Center For Cooperatives finds that co-ops operate often 15-20 percent below marketrate. One study cited in the Cooperative HousingJournal also found that cooperatives’ averageoperating costs were 21 percent lower than thatof rental properties. This lower cost can bepassed on to resident owners, helping to main-tain affordability for them and future buyers.Instead of paying a profit margin to the buildingowner as in a rental, the cooperative memberscan enjoy some savings in building operations.

Long-term financing benefits

Many advantages of cooperativehomeownership come from the flexibility avail-able in financing. Because the cooperative cor-poration owns the land and buildings as awhole, the property can be mortgaged as awhole. The cooperative can use its blanketmortgage to pay for the initial acquisition of realestate, refinance existing debt, or finance majorimprovement and rehabilitation projects. Be-cause each individual cooperative homeownerhas an ownership interest, he or she can borrowagainst that interest in the same way that asingle-family or condominium homeowner canborrow against his or her ownership interest.

Performance for lenders

Cooperatives are also a good solution forlenders. Cooperatives outperformed all otherloan types in a study conducted by the UrbanInstitute of HUD’s multi-family insured mortgageprograms. In addition, Fannie Mae reports,

“share loans routinely outperform the rest oftheir single-family portfolio, labeling co-op shareloan performance stellar.” This performancesuggests that cooperatives are less risk forforeclosure than single-family homes, so mayprovide for a safer investment for lenders.

Healthier communities

Cooperatives are especially relevant fortoday’s affordable housing, an increasinglymarket driven environment. The model empow-ers low- and moderate-income families throughtheir ownership and control of their own hous-ing. Residents experience the direct conse-quences of their management decisions in thecost and quality of their housing.

Deborah Thomas, president of Capital ManorCooperative, has seen this empowerment in hermembers: “After the renovation, people transi-tion out of the rental mentality…. You take pridein something you can call your own.” CapitalManor members gained many skills from theirconversion to a cooperative, including how toexercise their legal rights and how to overcomebarriers via cooperation (in this case, amongstco-op members, the developer, the government,and lender). Residents also benefited from edu-cating themselves about the conversion processand responsibilities that come with a buildingpurchase, and learned to be creative whenselling their vacant co-op units at reasonablecost. In addition, the structure of a cooperativeis such that the members are able to exercisetheir newly-empowered voices in their communi-ties in a way they would not necessarily experi-ence in rental housing.

What are some challenges of co-ops as apolicy solution?

Although cooperatives have many strongpoints as an affordable housing option, there areseveral hurdles that co-op advocates continue to

address: perceived complexity, owner education,tenant organization and participation, and sharelending.

Although common in New York City, coopera-tives are found less frequently in other metro-politan areas, and are even more scarce outsidemetropolitan areas. For this reason, the estab-lishment of cooperatives can be perceived asmore complex than condominiums. Lenders,developers, and lawyers — essential players inthe process of cooperative development — mightbe less familiar with cooperatives and less ableto advise on establishing their structure. Simi-larly, many lenders find it a challenge to provideand service the small share loans needed forresident owners of affordable cooperatives topurchase in to the corporation.

The necessary high level of involvement byresident owners of a cooperative has its chal-lenges as well as its benefits. First, it can be achallenge for tenants to organize themselveswhen they wish to purchase the building andmaintain successful coordination throughoutthe process. These potential owners may notknow what steps to take, or may lack the sup-port resources to learn how to establish andmanage their cooperative. Additionally, residentsmay face financial obstacles. The group oftenants may have difficulty securing the initialcapital contributions needed to purchase andrehabilitate their property, and individuals mayhave trouble accessing share loans to purchasetheir interest in the affordable cooperative corpo-ration.

SHARED EQUITY

Although there are various types of sharedequity models, affordable cooperatives are cre-ated with the goal that shared equityhomeownership will make housing more reason-ably-priced for present and future generations

by controlling re-sale prices and sharing operat-ing expenses. Under shared equity, the resaleprice of a property is controlled to increase thestock of affordable housing. In addition to en-abling long-term affordability, shared equitymodels often address rising housing costs otherthan sale price — such as insurance, heatingfuel, and maintenance — by approaching themon a shared basis that creates an economy ofscale. Sometimes called “third sector housing,”shared equity homeownership models includecooperatives, land trusts and deed-restrictedhousing. As of 2006, over half a million sharedequity homes were in existence, and the num-bers are rapidly growing.

Shared equity homeownership has threedistinguishing features: owner-occupancy,equity allocation, and rights-sharing. The firstfeature, owner-occupancy, prevents people frompurchasing a home, then renting out their hometo other individuals for profit. The second char-acteristic, equity allocation, helps to ensurefuture affordability by establishing the distribu-tion of gains from the sale of a unit. For ex-ample, in a limited equity cooperative with resalerestrictions, the current owner obtains equity –but not the full amount — by selling the prop-erty. The leftover equity goes towards the coop-erative share and helps maintain affordability.Thus, the equity allocation means that some ofthe appreciation value of the property goes tothe current generation and some to future gen-erations. Finally, the last distinctive attribute isthe sharing of rights, responsibilities and ben-efits between homeowners and the larger com-munity. For example, under a community landtrust, the actual title of the land remains ownedand operated by a community group rather thanindividual property owners. This feature allo-cates benefits and responsibilities of ownershipto the broader community.

What are some examples of shared equitymodels?

In addition to a limited-equity cooperative, theshared equity model can assume the form of acommunity land trust or a deed-restricted home.Although variations and specific details exist foreach type, some of these models can be brieflysummarized.

Deed restrictions are legal documents thatplace limits on the resale price or eligible pur-chaser of a home. Policymakers can use variousapproaches to balance the preservation ofaffordability and the equity-building opportuni-ties for assisted homeowners. These approachescan be applied in deed-restricted homes, forexample.

• Area Median Income (AMI) Index ResaleFormula— Policymakers assure that the saleprice of their affordable housing stock meetscertain restrictions. They use the initial pur-chase price plus an additional amount based onan area median income formula to derive theresale price.

• Affordable Housing Cost (AHC) ResaleFormula—This model also restricts the sale priceof affordable housing stock using AMI. At thetime of resale, policymakers use the current areamedian income, interest rates and insurancecosts to determine how much families of a par-ticular income bracket can afford. This informa-tion is used to define the affordable housingprice.

One advantage of deed restrictions is thatthey can be attached relatively easily to eithermulti-family or single-family homes. In addition,they do not require any potentially time-con-suming democratic governance. Although theyare often not permanent, they can be enacted fora long or short period of time. The more perma-nent the restrictions, the easier it is for policymakers to maintain their affordable housingstock.

A community land trust is land owned by anonprofit or community-based corporation onwhich homes may be built. The individualhomeowners then simply lease the land and onlypossess title to the home built on the land. Landtrusts can be composed of a block of land in onegeographic area, or dispersed in multiple parcelsof land throughout a city. One advantage ofcommunity land trusts is its democratic ap-proach to the governance of the land for agreater community purpose. Another advantageis permanence; often land trusts are in place forlong periods. One disadvantage of land trusts isthat they are a relatively newer shared-equitymodel and thus not as well-tested as coopera-tives. In addition, for purposes of affordablehousing, this model requires multiple deedrestrictions and can be a bit more difficult toenforce. For this reason, land trusts are gener-ally better-suited for single-family homes.

A mutual housing association is a groupthat owns one or more parcels of land and build-ings that are operated by their residents orsubstantially involve residents in asset or build-ing management. Although mutual housingassociations can provide economies of scale forhomeowners through the association, they tendto demand more complex management. Forexample, multiple housing cooperatives may jointogether to form a housing association for thepurpose of economies of scale.

Shared equity mortgages are different fromshared equity homeownership described abovebecause they combine both debt and equity.Although shared equity mortgages can takemany forms, one example would be an agree-ment in which a borrower is able to make loweror even no monthly interest payments toward ahome in return for giving the lender a definedportion of the equity upon resale. One advantageof a shared equity mortgage is its potential to beused for either a single- or multi-family building(like a deed restriction). It does not, however,

generate greater community benefits as it lacksthe democratic governance mechanism that iscentral to the land trust and cooperative models.

Strength in combination

Co-ops can be combined with these othershared-equity housing models to provide hybridsolutions too. For example, a cooperative couldbe formed on top of a land trust, or a mutualhousing association could be composed of sev-eral cooperative buildings. Their associationcould provide professional management or otherservices to its member-cooperatives at econo-mies of scale. Additionally, cooperatives canmake use of mechanisms like deed restrictionsto maintain affordability over long periods oftime. This flexibility in conjunction with othermodels makes it especially attractive forpolicymakers.

All of the above policy approaches face thechallenge of balancing public money used increating affordable housing stock with providingopportunity for wealth creation of individualhomeowners. When models tend to support orpermit more wealth creation for the home-owners, they risk limiting the amount of afford-able housing stock for future buyers and avail-able public subsidies for the future.

HOW CAN WE INCREASE AND PRESERVEAFFORDABLE HOUSING?

Although shared equity models cannot en-tirely solve the affordable housing problem, theydo provide an immediate option for bothpolicymakers and potential homebuyers. En-suring that the boards of directors and residentowners have the educational resources andtraining they need is one of the first steps forstrengthening and preserving the affordablehousing cooperatives that exist already.

We also propose broadening access to allshared equity options including community landtrusts and various forms of deed-restricted

homes. As housing prices rise faster than wages,widening access will require increasing the costof subsidy per unit. Developers can also makethe best use of public subsidy by supporting thecreation and preservation of shared equity mod-els.

For homeowners, taxpayers and policy-makers alike, getting the best value for publicmoney will require longer term preservation sothat subsidies are not lost within one generationof affordable housing. This might require morepermanent resale restrictions under each modelso that affordability may be retained for futuregenerations.

NEED MORE INFORMATION?NEED MORE INFORMATION?NEED MORE INFORMATION?NEED MORE INFORMATION?NEED MORE INFORMATION?

Although NCB Capital Impact is moreexperienced with cooperatives, we providetechnical assistance for other sharedequity homeownership models such asdeed restricted homes, community landtrusts, and mutual housing associations.We work with our customers to help themdetermine which one is the best fit fortheir particular situation. Our staff issmall and we only work in certain partsof the country.

NCB Capital Impact’s Together WeCan (TWC) affordable housing programpromotes shared equity as an effectivemeans to preserve affordable housingand create homeownership opportunitiesfor low to moderate-income families. Topreserve and develop affordable coopera-tive housing, we employ technical assis-tance, training, advocacy, and pre-development capital for experienced non-profit developers. For more informationcontact us at NCB Capital Impact,www.ncbcapitalimpact.org

Burlington Community Land Trust. 2007. “What is Cooperative Housing? Principalsand Resources.” Website at http://www.bclt.net/coop-history.shtml

Calhoun, Charles and Christopher Walker. 1994. “Performance of HUD SubsidizedHousing Loans: Does Cooperative Ownership Matter?” National Cooperative Bank andthe Urban Institute.

Carlin, Andrew, James Carr, Frederick Pollock, Zhong Yi Tong, Kheng Mei Tan andTrivikraman Thampy. 2007. “Shared Equity Mortgages, Housing Affordability, andHomeownership.” Fannie Mae Foundation.

Davis, John. 2006. “Shared Equity Homeownership: The Changing Landscape ofResale Restricted Owner-Occupied Housing.” National Housing Institute.

Jacobus, Rick. 2007. “Shared Equity Transformative Wealth Policy Brief.” Center forHousing Policy, Harvard University. April.

Joint Center for Housing Studies. 2006. The State of the Nation’s Housing. HarvardUniversity. Website at http://www.jchs.harvard.edu/publications/markets/son2006/

National Association of Housing Cooperatives. 2005. “Housing Cooperatives: An Op-portunity to Expand Homeownership for Moderate Income Families.” Website athttp://www.coophousing.org/housingcoops.pdf

NCB Capital Impact. 2007. “Capital Manor Case Study.” Website athttp://www.ncbcapitalimpact.org

NCB Capital Impact. 2007. “Home Base: The Playbook for Cooperative Development.”

Parliament, Claudia; Stephen B. Parliament, and Anita Regmi. 1990. “Operating Low-Income Housing: The Cost of Cooperative vs. Rental Units.” CURA Reporter. February.

Sazama, Gerald W. 2000. “Lessons from the History of Affordable Housing Coopera-tives in the United States: A Case Study in American Affordable Housing Policy.”American Journal of Economics and Sociology. October.

University of Wisconsin Center for Cooperatives and Cooperative Development Services“More Than Just Co-op Housing.” 2006.Website at http://www.uwcc.wisc.edu/info/uwcc_pubs/coopHouse02.pdf

REFERENCES AND RESOURCESREFERENCES AND RESOURCESREFERENCES AND RESOURCESREFERENCES AND RESOURCESREFERENCES AND RESOURCES

What’s Happening toThe Neighborhood?

COMMUNITY DEVELOPMENT

Community RedevelopmentCommunity RedevelopmentCommunity RedevelopmentCommunity RedevelopmentCommunity Redevelopmentand Neighborhood Revitalization:and Neighborhood Revitalization:and Neighborhood Revitalization:and Neighborhood Revitalization:and Neighborhood Revitalization:The Genesis and Phoenix ProjectsThe Genesis and Phoenix ProjectsThe Genesis and Phoenix ProjectsThe Genesis and Phoenix ProjectsThe Genesis and Phoenix Projects

Buddy LaChance, Neighborhood Development Director

CityWide Development Corporation

Dayton, Ohio’s Fairgrounds and Fairviewneighborhoods were in deep distress by the mid-1990s. The CityWide Development Corporation,working with multiple other stakeholders, en-gaged in the Genesis and Phoenix projects torecreate and revitalize these neighborhoods.These efforts have led these neighborhoods torise, like the mythical Phoenix, almost literallyfrom the ashes.

EARLY EXPERIENCES

For more than 35 years, CityWide has been anon-profit association whose mission is to pro-vide leadership in creating and implementingstrategies that address Dayton’s need for eco-nomic growth and viable, attractive neighbor-hoods. For many years our core services fo-cused on providing gap financing to attract andexpand business development in the city, pro-viding lending products that support Daytonhomeowners, and developing real estate insupport of major revitalization efforts. Throughthese efforts CityWide has learned much abouturban neighborhoods and in the last decade ithas been a key player in designing and imple-menting comprehensive neighborhood revitaliza-tion initiatives throughout Dayton

CityWide’s approach to neighborhood revital-ization evolved over time through experience.Like many other community development orga-nizations, most of its early efforts focused onphysical development. The organization wasinvolved in a number of “Rehabarama” effortsdesigned to concentrate money and technicalassistance to targeted neighborhoods. Onelesson of this early work is that physical devel-opment projects have greater success in neigh-borhoods with a strong civic structure and the

presence of continuing investment, particularlyfrom homeowners. While the question of whatratio of homeowners constitute a “stable” neigh-borhood continues to be debated, the fact re-mains that the presence of committed organizedhomeowners, even few in numbers, was a keyfactor in the success in these projects. CityWidealso learned that geography matters in produc-ing a comprehensive community developmentstrategy.

While early planning often focuses on themost disinvested areas of a neighborhood, wediscovered the importance of a broader scan. Ifall of your resources and time are focused on theworst areas of a neighborhood, what happens tothe areas that are thriving while you spend fiveyears trying to fix the blight? Most comprehen-sive community development programs have ahomeownership component because of thestrong correlation between homeownership andneighborhood stability. If that is true, then it’simportant to pay attention to the stable areas ofa neighborhood as well as the area where obvi-ous disinvestment has occurred. When CityWidebegins working in a neighborhood, we recognizethat the people who are still there, caring fortheir homes and finding ways to contribute tothe neighborhood are its greatest asset. There-fore, in deciding on the “target area” for itsprojects we made sure to include a large enougharea to include portions of the neighborhoodthat were still viable. By offering programs andstrategies that are inclusive of a broader area,CityWide sent a strong message to people whohave lived in the community a long time: wewant you to stay. Both of these early lessons clearly point tothe value of committed citizens and organized

COMMUNITY REDEVELOPMENT AND NEIGHBHORHOODCOMMUNITY REDEVELOPMENT AND NEIGHBHORHOODCOMMUNITY REDEVELOPMENT AND NEIGHBHORHOODCOMMUNITY REDEVELOPMENT AND NEIGHBHORHOODCOMMUNITY REDEVELOPMENT AND NEIGHBHORHOODREVITALIZATION: THE GENESIS AND PHOENIX PROJECTSREVITALIZATION: THE GENESIS AND PHOENIX PROJECTSREVITALIZATION: THE GENESIS AND PHOENIX PROJECTSREVITALIZATION: THE GENESIS AND PHOENIX PROJECTSREVITALIZATION: THE GENESIS AND PHOENIX PROJECTS

Buddy LaChance, Neighborhood Development Director, CityWide Development Corporation

groups in neighborhood redevelopment efforts.But how does an organization that has beenprimarily been focused on bricks and mortaradd these elements to their strategy? CityWideasked itself: what does the “people” piece of ourwork look like? While our major redevelopmentefforts pour financial capital into distressedneighborhoods to repair and build, CityWidecame to believe another type of capital wasequally important.

Social capital remains a fundamental build-ing block of a healthy neighborhood. The at-tachments among residents and the capacity ofresidents to leverage their relationships andnetworks into effective community action is asign of neighborhood strength (Temkin and Rohe1998). While academic scholars have soundedthe alarm on the decline of social capital inAmerica (Putnam 2000), others have identifiedthe vital role commuity organizing can play inrebuilding social capital in distressed neighbor-hoods. This understanding on CityWide’s parthas meant that community organizing has beena vital part of its comprehensive communitydevelopment work.

CITYWIDE’S APPROACH TO COMPREHEN-SIVE COMMUNITY DEVELOPMENT

Neighborhood Analysis

CityWide’s first step in redeveloping a neigh-borhood is to learn as much as we can about it.We compile and assess census data, profilesdone by local government, housing and marketanalysis, property ownership records, crimestatistics and any plans that might already existfor the neighborhood.

One key tool is the ability to map and plotdata. Mapping helps create a visual snap shot ofthe neighborhood that is easy to understand foreveryone from our financial stakeholders toresidents at a neighborhood meeting. A simpletwo color coded map depicting homeowners’properties and rental properties can convey

information more quickly than can raw numbers.Mapping also becomes a strategic tool inCityWide’s community organizing efforts: we canprecisely identify where homeowners live, forexample, if we seek to organize them. Most re-cently, CityWide has been able to target its youthprograms very specifically because it obtaineddata from the local school district showing wherethe young people lived. Residents have alsobecome involved in the mapping efforts as a wayto learn more about their own neighborhood andtarget their membership and capacity buildingefforts.

While data collection and mapping are ongo-ing strategies that continue to inform CityWide’sstrategic development, nothing replaces informa-tion gathered in “real time”. Neighborhoods canbe fluid places, especially given volatile housingmarkets. The relationships CityWide buildsthrough its community organizing work areanother important part of our work to under-stand neighborhoods. As these relationshipsdevelop, CityWide learns things about the com-munity that can only be discovered throughpersonal relationships. The recent discovery inone neighborhood that quality rental housingwould be accepted and needed as part of the newhousing being developed was verified as much byanecdotal information from residents and part-ners as it was by a professional market study.

Neighborhood Relationships

One element in CityWide’s preliminaryneighborhood analysis is determining how theneighborhood “works” and what if any civicorganizations exist. Dayton has a rich history ofactive and involved citizens and neighborhoodorganizations but the strength of these groupsvaries by neighborhood. Community organizingis a way to develop or build the civic infrastruc-ture so necessary for neighborhood stability.

Through a partnership with the FamilyService Association’s Neighborhood DevelopmentProgram, CityWide hired community organizers

to work with it on neighborhood redevelopmentefforts. Through such partnerships, we began tounderstand the nuances of working with resi-dents and learned about the vital role they canplay in solving problems and advancing strate-gies for change. For example, engaging residentsto work with community police officers assignedto their neighborhoods has been an effective toolin reducing crime in the neighborhoods. Resi-dent engagement also helps us learn more aboutthe needs of families and children in the neigh-borhoods, allowing us to identify partners and toprovide needed support and amenities to itsneighborhood redevelopment strategy. Moreover,residents are the best advocates for neighbor-hood improvement and for communicating thevitality that exists and is continuing to be built.

Neighborhood Capacity Building

One tool CityWide uses in its communityorganizing efforts is the “Neighborhood ProjectFund.” This fund finances small projects thathelp a community sponsor activities and en-courage involvement. From neighborhood clean-ups to children’s festivals, CityWide has learnedthat an investment of $10,000 can yield a yearfull of projects that build interest and engage-ment. The fund, set up as a small grant applica-tion, also helps teach residents the skills of howto apply and manage grant funds. The grantrequires a “match” that is provided by volunteerhours to implement the projects.

In other neighborhoods, CityWide has setaside dollars for social work services or youthprograms depending on what the data and theneighborhood have told us. In our Phoenixproject, Early data revealed nearly 1000 childrenunder the age of 18 living in the target area. Theresidents’ groups also expressed an affinity forengaging young people positively. This ledCityWide to convince one of the project stake-holders to set aside funds for youth developmentactivities. Used as “seed money” to attract otherdollars, we used these funds to bring new part-

ners and funding to the community that willcontinue after our funds are gone.

Safety

All of the neighborhoods CityWide hasworked in have had crime and safety issueswhich eroded the confidence of remaininghomeowners and seriously threatened theeconomic interests in and around those neigh-borhoods. Therefore, community policing hasbeen an important part of our communitydevelopment work for the last decade. Whileresidents of the target neighborhoods experi-enced dramatic improvements in their quality oflife, policing efforts were also important tochanging the perception of the neighborhood topeople and institutions outside of the commu-nity. The presence of engaged officers on thestreet or on bicycles changed the way peoplethought about the neighborhood, even whenphysical redevelopment were only marginallybetter. Further, as officers began to assist theneighborhood in tackling long standing problemssuch as drug houses, real momentum was built.

Housing

Increasing homeownership and improvingexisting housing stock are primary goals in ourcomprehensive community development efforts.CityWide has worked to develop new housingwithout gentrifying the community. Preservingeconomic diversity means that the neighborhoodoffers a variety of housing styles and prices. Inboth the Genesis and Phoenix projects, ourmajor stakeholders and investors were localhospitals. They had a vested interest in theneighborhoods they were located in being stable,attractive and safe. Moreover, both have a largeworkforce that they believed could be potentialresidents of these neighborhoods with the rightincentives. Hospitals employ all types of peopleat different pay ranges which fit our strategy ofcreating a diverse housing options.

Acquisition and Land Banking

Both of the neighborhoods profiled in thisreport had serious blight and disinvestment. Inthe Genesis neighborhood, many older homeshad been converted into illegal rooming houses.In the Phoenix area, many nuisance and aban-doned properties were deteriorating. CityWidepursed strategies on several tracks to acquirethese properties and to assemble land for newdevelopment. Where possible, we initiated ’REAP’– a ‘real estate acquisition process’. In Dayton, ifa property has been vacant for two years andowes at least $1,000 in back taxes it is eligiblefor REAP. This process essentially notifies theowner that someone else is making a viable bidfor their property. In some cases, property own-ers will step up, pay the taxes they owe, fix theproperty and or sell it. If this does not happen,the property will go to sheriff’s sale. CityWidehas been able to pick up several properties thisway.

In other instances, with stakeholder ap-proval, CityWide has bought properties on theopen market. One of the lessons of straight outpurchases is that the longer the project can“stay below the radar” the more affordable theproperties will be. We also have employed a thirdparty agent with no “visible” relationship to theproject to buy properties to ensure a fair price ispaid.

Much of the property purchased in the Gen-esis and Phoenix areas was in very poor condi-tion and could not be rehabilitated. Demolitionof slum and blighted properties was an impor-tant signal of change and promise. In somecases, the worst eyesores in the neighborhoodwere removed as part of this process, givingresidents real hope in the project’s potential.

Support to Existing Homeowners

In neighborhoods with many existinghomeowners it’s important to encourage theircontinued investment. CityWide has structured

a forgivable loan program that allows existinghomeowners to receive matching dollars forhome improvements that are forgiven over aperiod of five years. As long as they remain inthe home, they do not have to pay back theloans. The hospital partner has a similar pro-gram to make it more attractive for their em-ployees who own homes in the neighborhood.Because these programs can be layered, homeimprovement becomes an attractive option,especially for hospital employees. Both hospitalsextended this concept by offering an employeebenefit directly related to home purchase fortheir employees as the project developed.

Economic Development

Although much of the physical developmentwork we pursed in our comprehensive commu-nity development projects has focused on hous-ing, the connection between housing and com-mercial development cannot be ignored. BothGenesis and Phoenix neighborhoods had aging,somewhat successful commercial districts bor-dering their neighborhoods before our projectsbegan. The questions for CityWide were: Couldour investments in neighborhood redevelopmentpay dividends to the community beyond newhousing? Can neighborhood redevelopmentspur commercial interest and growth? We be-lieve the answer is yes, but timing matters. Thesuccess of redevelopment efforts, often drivenprimarily by public dollars, lies in how long ittakes the private sector to “kick in.” As our casestudy of the Genesis Project demonstrates, thecommercial success of the Brown Street busi-ness district has far exceeded anyone’s expecta-tions.

THE GENESIS PROJECT

The Genesis Project was a cooperative ven-ture of public and private organizations workingtogether with the common goal of rebuilding andenhancing the Dayton’s Fairgrounds neighbor-hood and the adjacent Brown-Warren business

district. The Fairgrounds neighborhood is lo-cated 1.5 miles south of downtown Dayton. It’spart of a larger area known as the Rubicon ParkDistrict. This residential enclave is bordered byStewart, Main, Wyoming and Brown Streets andis adjacent to Miami Valley Hospital and theUniversity of Dayton.

were no longer appropriate and contributed tothe deterioration of the housing stock and thelivability of the community. Prior to the develop-ment of the Genesis Project, only 45 percent ofthe 175 properties were owner occupied andonly 50 percent of the properties were in fair orgood condition.

At the urging of community stakeholders, in1996 Dayton began an assessment of the prob-lems facing the Fairgrounds neighborhood. Thisprocess ended in 1999 with the adoption of theRubicon Park Master Plan. The highest priorityof the Plan called for the rebuilding of the Fair-grounds neighborhood.

With this mandate in hand the major stake-holders in the area, Miami Valley Hospital, theUniversity of Dayton and the City came togetherto form the Genesis Project. With leadership andmanagement provided by CityWide Development,a vision for rebuilding and enhancing the Fair-grounds Neighborhood to become a safe andvibrant neighborhood was launched.

The Genesis Strategy

An overarching strategy to improve the socialenvironment of the area began first with theestablishment of a Neighborhood Life Team. Ledby CityWide, the team included two communitybased police officers, a MVH social worker, a cityhousing inspector, a credit counselor for thosewho need assistance in financially preparing forhomeownership, and two community organizersfrom Family Service Association. The teamhelped facilitate communication within theneighborhood, assisted existing residents whomay be moving within or out of the neighbor-hood, helped to build the strength of the neigh-borhood organization, and engaged residents inthe long range planning for their neighborhood.

To spur interest in the new housing that wasplanned, Miami Valley Hospital launched anemployee benefit they called “homestead assis-tance” which encouraged their employees to buy

History of the Neighborhood

While the residential portion of the Fair-grounds neighborhood began developing around1900, the neighborhood as a whole dates back tothe early 1800’s. The Montgomery County Fair-grounds opened in 1853 and today is the site ofthe annual Montgomery County Fair and nu-merous other special events. In 1894, the firstMiami Valley Hospital (MVH) building was com-pleted and dedicated.

Historically, residents of the Fairgroundsneighborhood have included NCR employees,University of Dayton students, and MVH nursingstudents. The majority of homes were modest insize and wood frame, WWI vintage with 25 feetfrontages. Zoning from the 1950’s and 1960’s,which addressed the community’s housingshortage and preferred lifestyles of the times,

homes in the Fairgrounds neighborhood sur-rounding the hospital. Working with CityWidethe hospital developed a benefits package to helpemployees become successful homeowners. Thepackage included:

Homebuyer Training: A course helped poten-tial homeowners with budget planning andcredit analysis to determine how much homethey could afford. The classes also helped buy-ers understand the loan underwriting process,loan commitment and conditions, and insurancerequirements.

Private Counseling: One-to-one assistancehelped individuals address specific problemareas (such as credit repair, debt reduction,budget tips and explanation letters) that mightbe encountered in applying for a loan.

Down Payment Assistance: MVH providedbuyers a grant of $7500 towards the downpayment required for purchase and out ofpocket costs required by a bank at closing.

Low Interest Loans: Through participatinglenders, employers could receive reduced (by twopercentage point) interest rates on their loans

thereby reducing their monthly costs by $50-$100 dollars.

This package proved very appealing and 14Miami Valley Hospital employees purchasedhomes in the Fairgrounds neighborhood duringthe Genesis Project and many more joined awaiting list for future opportunities.

GENESIS ACCOMPLISHMENTS

Over the course of the project, Genesisacquired 68 residential and commercial proper-ties, demolished 41 properties, rehabilitated 11single-family homes, and constructed 23 newsingle-family units. All of the single-family unitsare sold. With assistance from the HOME Pro-gram, County Corp and National City Bank, 21(62 percent) of the units have been sold tohouseholds below 80 percent of the Dayton-Springfield income limits. With the help ofCommunity Development Block Grant funds,the entire neighborhood’s curbs, sidewalks andstreet surfaces are being replaced and 200 treeswere planted.

These are significant achievements, but moreimportant than the “bricks and mortar” work in

41 Jasper Street (before) 41 Jasper Street (after)

the Fairgrounds neighborhood wasthe rebuilding of a neighborhoodcommunity and growing of socialcapital that now includes a strongneighborhood association completewith neighbors ready, willing, andable to plan for, develop, and protectthe future of their neighborhood.

Now resident volunteers organizeneighborhood watch activities, pre-pare and distribute monthly newslet-ters, plan social events, sponsor family gamenights, plan back-to-school rallies, and encour-age further beautification in the neighborhoodthrough holiday lighting and landscaping com-petitions.

for business customers, made land available forredevelopment, acquired several key commercialstructures on Brown Street and made low inter-

est loans available. Todaythe area boasts over adozen new businessesincluding national chainssuch as Panera Bread,Chipotle and Starbucks.

The project succeededbecause residents werewilling to work with thetwo large institutions thatdominated their land-scape, the University ofDayton and Miami ValleyHospital. While theserelationships can often betenuous, residents werenot intimidated. Theparticipants recognized

their own self interests and how they could becombined for the greater good (Rizvi, 2003).

The success of the Genesis project encour-aged CityWide to continue to look for broadopportunities for community change organizedaround mutual self interest. While still in itsformative stages, the Phoenix project is a goodexample of our community development ap-proach at work.

Neighborhood Back-to-School Rally

With all these successes, the one that neigh-bors feel brings the greatest cause for celebra-tion is the fact that area children were able tosafely trick-or-treat door-to-door the year theproject was completed — a first in anyone’smemory.

The Genesis Project has also successfullystimulated reinvestment in the Brown-Warrenbusiness districts. The project improved parking

THE PHOENIX PROJECT

The Phoenix Project is a public-private part-nership that is investing millions of dollars forredevelopment activities in the greater Fairviewneighborhood of Dayton, Ohio. This neighbor-hood is home to Good Samaritan Hospital, oneof the largest employers in the area. The hospi-tal recently celebrated its 75th anniversary ofservice to families in Dayton. Yet parts of theneighborhood surrounding the hospital hadbegun to decline and the ravages of predatorylending practices destabilized the housing mar-ket. The hospital was very concerned about theimpact the neighborhoods had on its ability torecruit and retain staff, to obtain patients, andto protect the safety of visitors to their facility.

The City of Dayton shared a mutual concernabout the neighborhood. Dayton’s economy issluggish and the health care sector is one of thefew market segments that is growing. Healthcare-related employment is the second largestsector of employment in the region. The resi-dents of the three neighborhood associationssurrounding the hospital also had a concern.Many had lived in the neighborhood for years inbeautiful turn-of-the-century homes. Theseresidents saw the decline of the neighborhood ona daily basis and were concerned about theirfuture and whether they should continue livingin the community.

CityWide believed that these organizationscould work together for mutual gain to improvethe neighborhood in ways similar to the Genesismodel. In 2004 the Phoenix stakeholders orga-nized into a group called the Phoenix Investorsand a comprehensive strategy for neighborhoodrevitalization was developed.

The project began with community organizingto build productive relationships between theneighborhoods and the private sector leadersthat CityWide had brought to the table. A slowand tenuous process at first, the organization

worked diligently to build a mandate for theimprovement of these communities and thedevelopment of goals that everyone could share.Those goals included: (1) commercial and eco-nomic revitalization of a major avenue runningthrough the community; (2) expansion ofhomeownership opportunities through thecreation of new housing; (3) the development ofpartnerships with the nonprofit sector to en-courage them to bring their resources to theneighborhood to provide needed social supports;and (4) strengthening the civic infrastructure ofthe community through resident engagementand community organizing (DeMasi, LaChanceforthcoming).

In 2004, Dayton and Good Samaritan Hospi-tal pledged an initial $5 million dollars each tothese neighborhood improvement efforts.CityWide is managing the project and is provid-ing a $1 million loan pool for secondary financ-ing in the form of home improvement and com-mercial loans. CityWide also worked with GoodSamaritan to create two incentive plans to en-

Phoenix Project Area

courage Good Samaritan Hospital employeesand others to buy homes in the neighborhood. Inaddition, the Phoenix Home Improvement Loanprogram is enabling existing homeowners toimprove their homes. Important partnershipswere established with the Dayton Police Depart-ment, area youth serving agencies and theDayton Public Schools to enhance the quality oflife for the area’s youth and families. The center-piece of this project, known as Fairview Com-mons, will create a new civic space in the inte-rior of an urban neighborhood, linking publicamenities (K-8 school, park and pool) to newhousing.

PHOENIX ACCOMPLISHMENTS AS OF JUNE 2007 • Fifty derelict and nuisance properties have been purchased and demolition is under-

way;

• Six homes were sold, half to GSH employees;

• Fourteen home improvement loans were closed, five to GSH employees;

• Nine homes were renovated through a partnership with Rebuilding Together;

• The neighborhood association has been strengthened and had contested elections in2005, the first time in a decade;

* Major crime is down 35 percent in the last two years;

* Resident activity has resulted in 20 community projects ranging from neighborhoodclean ups to a community garage sale;

* A concept plan for Fairview Commons has been developed and approved with enthusi-astic neighborhood support.

Fairview Commons will create a new civicspace in the interior of an urban neighbor-hood, making public amenities (K-8 school,

park and pool) to new housing.

The Phoenix Project demonstrates how mutual self interest of diverse parties--the hospital, theCity of Dayton and the neighborhood association--can be a motivating force for change. Thereis a true working partnership engaged towards the common goal of a vibrant neighborhood.

LESSONS LEARNED One of the most important lessons we havelearned is to create space in the organizationfor reflection and discussion. No project isexactly the same, and there is always some-thing new to learn. The list below, while notinclusive of every lesson we have learned atCityWide, covers a lot of ground and may beuseful to you in your community developmentwork.

Lesson One: No one can do this alone. Com-mitted stakeholders who come to consensusaround mutual self interest can do greatthings.

Lesson Two: The bigger the idea, the betterthe opportunity to gain support. People likebold thinking that is grounded in reality. Don’tforget to “think big” and defend your strategieswith data, facts and best practice examples ofwhat worked elsewhere.

Lesson Three: The CityWide approach takesmore than a one year commitment. This ishard work. Urban neighborhoods did not get intheir current state overnight; we need time andresources to implement bold ideas.

Lesson Four: Self interest can be harnessedfor mutual gain if people are willing to behonest. Stakeholders rarely will agree on everyaspect of a project. Find common ground andadmit differences. Then, agree to disagree butkeep moving towards the common good.

Lesson Five: GIS mapping plans and con-cept drawings are worth a thousand words.The visual impact of these tools cannot be

underestimated for their ability to transmitideas to a variety of audiences.

Lesson Six: Develop a plan and guidingprincipals for your efforts. Put them inwriting. Keep everyone on the same page byreferring to this document often.

Lesson Seven: Develop an open process forguiding the decisions of your project.Develop a management structure for theproject that is transparent so everyone under-stands their roles and how decisions aremade.

Lesson Eight: Physical change is slow, sodon’t forget the “soft” side. Some peoplewill not believe in your project until demoli-tion ends and construction starts. This makesit extra important to engage residents in yourplans and ideas so they can understand thedevelopment strategies at work and whythings can take a long time. Pursuit of com-munity policing, neighborhood capacity build-ing and youth programs are ways to keeppeople engaged and encouraged. Active,committed residents are your best allies.

Lesson Nine: Change happens, plan for it.Make sure you have a system in place torespond to changes in the project and marketdemand so you don’t lose momentum. Buildin the flexibility to embrace change as aninevitable factor in this type of work.

Lesson Ten: Patience. You will need anendless supply. Remember, Rome wasn’t builtin a day. Stay the course.

REFERENCES AND RESOURCES

Collapse and Revival of American Community.New York: Simon & Schuster.

Rizvi, Teri. 2003. “Miracle on Frank Street”University of Dayton Quarterly. August: 12-15.

Temkin, K., and W. Rohe. 1998. “Social Capitaland Neighborhood Stability: An Empirical Inves-tigation.” Housing Policy Debate, 9(1): 61-88.

DeMasi, K., and E. LaChance. Forthcoming.“Description of Comprehensive NeighborhoodDevelopment and the Phoenix Project.” In Con-sensus Organizing: A Community DevelopmentWorkbook. DeMasi, K. and M. L. Ohmer, editors.Dayton, OH: CityWide Development Corporation.

Putnam, Robert D. 2000. Bowling Alone: The

What’s Happening toThe Neighborhood?

COMMUNITY DEVELOPMENT

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Jamie Wolf, Senior Research Analyst

National Community Reinvestment Coalition

FINANCIAL SERVICES IN THE NATION’S NEIGHBORHOODS:FINANCIAL SERVICES IN THE NATION’S NEIGHBORHOODS:FINANCIAL SERVICES IN THE NATION’S NEIGHBORHOODS:FINANCIAL SERVICES IN THE NATION’S NEIGHBORHOODS:FINANCIAL SERVICES IN THE NATION’S NEIGHBORHOODS:BANK BRANCHES AND ACCESS TO FINANCIAL SERVICESBANK BRANCHES AND ACCESS TO FINANCIAL SERVICESBANK BRANCHES AND ACCESS TO FINANCIAL SERVICESBANK BRANCHES AND ACCESS TO FINANCIAL SERVICESBANK BRANCHES AND ACCESS TO FINANCIAL SERVICES

In Midwest America, there is an African-American single mother raising two children who,like 22 million other households, does not cur-rently have a checking account (GAO 2002). Thissingle mother rents her place of residence, andlike half of those ‘unbanked’ in America, hadpreviously held a checking account with a main-stream banking institution. This was until twoyears ago when she closed her account due tominimum balance fees and the hassle of process-ing electronic transactions (debit and credit).Shortly after closing her account, she turned topayday lenders to whom she still owes money,even though she stopped using their servicesrecently. Now most of her financial transactionsare conducted with money orders or with one ofthree debit cards: one provided by her studentloans, one for her child support, and one she hasset up with a tax service provider. She cashes herpaycheck at the financial institution where hercompany banks, which limits the exorbitant feesof check-casher services. Although in her earlythirties, she has no credit cards and has neverapplied for a mortgage. While complicated detailssurround the circumstances of this mother’ssituation, her initial challenges with mainstreambanking institutions did not serve her well, andshe consequently lost her purchasing power andthe opportunity to help her build assets.

Financial services and community bankingare critical to neighborhoods because they pro-vide asset-building and homeownership oppor-tunities. A major conduit for providing commu-nity banking is the neighborhood (‘brick andmortar’) branch bank. In low- to moderate-income and minority neighborhoods, many areeither underserved or not served at all by the

mainstream banking industry and its branchbanks. In this chapter the mainstream bankingindustry comprises commercial banks, creditunions, and savings and loans that provideretail bank accounts with the means to cashchecks, pay bills, and save with no or low feesfor these services. The mainstream bankingindustry has undergone major structuralchanges over the past 20 years, leading to greatchanges in the distribution of banking offices.This has left many neighborhoods vulnerable tohigh-cost “fringe banking” outlets such as pay-day lenders, cash checkers, pawn shops andrent-to-own stores.

This chapter started with an illustration ofthe issues faced by the “unbanked,” those forcedto rely on fringe banking outlets for financialservices. Next, this chapter discusses how bankbranches tend to be located less frequently inlow-income and minority neighborhoods. Theuneven distribution of bank branches is one ofmany barriers keeping the unbanked andunderserved from mainstream banking services,acting as a major constraint to neighborhoodsbecoming economically prosperous. Finally, thischapter concludes with stories of branch clos-ings that were prevented in low- to moderate-income areas, helping to sustain financiallyvibrant neighborhoods.

THE PREVALENCE OF THE UNBANKED ANDUNDERBANKED

How common is our single mother’s story?Unfortunately, it’s more prevalent than onemight expect. In 2004, it was estimated that 10percent of U.S. households were unbanked.While households with checking accounts have

Jamie Wolf, Senior Research Analyst, National Community Reinvestment Coalition

increased recently, the percentage of familieswith other types of accounts (savings, moneymarket, etc.) has declined (Bucks, Kennickeland Moore 2006). As the Government Account-ability Office (GAO) reported, those who areunbanked are primarily low-income, minorities,and immigrants (GAO 2002). According to asurvey by the Joint Center for Housing Studies,52 percent of those unbanked were African-American, 35 percent were Hispanic, and 34percent were immigrants (Berry 2004). Thesepotential customers are apparently of littleinterest to banks. A recent survey of bankingexecutives found that the institutions polledwere not pursuing unbanked consumers orwere only exploring the market (AmericanBanker 2007).

Access to financial services is a criticalconstraint to the unbanked, but many low- tomoderate-income households with checkingaccounts provided by mainstream financialinstitutions still go without adequate asset-building financial services. In fact, the share offamilies with savings or money market ac-counts has been steadily declining, with onlyabout fifty percent of families having savingsaccounts (Bucks et al. 2006). Coupled with thenegative saving rate of the average U.S. house-holds, the lowest since the Great Depression, adisturbing picture emerges (Tanneeru 2006).

Increased access to bank branches for low-to-moderate income households can mitigatethese trends. Thus, it is important to examinethe distribution of bank branches – the maingateway to community banking and asset-building mainstream financial services.

RECENT DEVELOPMENTS IN BANK BRANCHDISTRIBUTIONS

Many families in modest income and minor-ity neighborhoods rely on the high-cost “fringe

banking” outlets for their financial services,instead of the mainstream banking industry. In1995 low-income areas had the lowest numberof branches per capita, relative to moderate-,middle-, and upper-income areas (Avery, Bostic,Calem, and Canner 1997). From 1985 to 1995the number of branches in low-income areasdecreased, both in absolute numbers and intheir proportion relative to moderate-, middle-,and upper-income areas (Avery et al. 1997). Infact, low- and moderate-income zip codes ac-counted for almost two-thirds of the total declinein bank branches between 1985 and 1995.

The trend of bank branch closings has sinceslowed as large banks have rapidly increasedtheir number of branches. The change is aresult of bank executives’ perception thatbranches are revenue generators, due to tellers’ability to open a variety of accounts and marketnew products to customers. This is in markedcontrast to the mid 1990s, when banks wantedtheir customers to contact them primarilythrough automated teller machines (ATMs) andonline banking. However, many consumersindicated they prefer face-to-face interactionswith a teller. While branch building has been onthe rise, there are many examples that provideevidence of uneven increases in bank branchesacross neighborhoods of varying income (Dash2006). In a handful of wealthy suburban Chi-cago municipalities such as Lake Forest andHighland Park, local governments enacted mora-toria on branch building, as banks were crowd-ing out other retail stores in shopping districts.At the same time, low-income and minoritysuburban Chicago municipalities experienceddeclines in bank branches (Smith 2005). Thequestion this chapter seeks to answer is whetherthe recent branch activity is being applied to allmarket segments, absent disparate treatmentbased on race or income.

The database of bank branch addresses usedin this chapter was procured from the FederalDeposit Insurance Corporation (FDIC). TheFDIC and Office of Thrift Supervision (OTS)collect data annually on the deposit balancesand office locations of all banks and thrifts.These records can be downloaded through theFDIC’s website and using Geographic Informa-tion System (GIS) software, their addresses canbe geocoded and placed on a map. Our analysisincludes all “full-service” type branches (FDIC2006). The bank branch data in this report arefrom 2005, the most recent data available fromthe FDIC at the time of this study (NCRC 2007).

The main measure explored in this chapter,persons per branch, illustrates that the propor-tion of bank branches is much higher in middle-and upper-income (MUI) tracts than in low- andmoderate-income (LMI) tracts in the majority ofthe cities surveyed. Using the persons perbranch metric, 18 of 25 metropolitan areas hadhigher persons per branch results in LMI areasthan in MUI areas. (See Figures 1 and 2 for

additional details.) A positive example was Se-attle, Washington, where branch banks served anaverage of 2,601 persons in LMI tracts. This is incontrast to New York City, where the averagebranch in LMI areas served 9,751 individuals.

Figure 3 illustrates that in 24 of 25 MSA’sthere were more persons per branch in minorityneighborhoods than non-minority neighbor-hoods. San Francisco stands out as the onlyMetropolitan Statistical Area (MSA) where thistrend was reversed, showing 3,662 persons perbranch in minority neighborhoods and 3,731persons per branch in predominantly non-minor-ity neighborhoods. As a stark contrast, theMinneapolis MSA had 13,473 persons perbranch in minority tracts, and only 3,729 per-sons per branch in non-minority neighborhoods.Disparities are greater by minority level of neigh-borhood than by income level. The mediandifference in persons per branch by minoritylevel of the neighborhood was 3,705 as opposedto 925 persons when considering the incomelevel of the neighborhood.

BANK BRANCH DISTRIBUTION DATA AND METHODOLOGY

Figure 1.Figure 1.Figure 1.Figure 1.Figure 1. Persons per Branch in Low-and Moderate-Income Census Tracts, 2005.

SUCCESS STORIES OF NCRC AND MEMBERCOMMUNITY GROUPS

Given these significant income and racialdisparities in branching, the National Commu-nity Reinvestment Coalition (NCRC) and ourmember organizations have engaged in researchand advocacy efforts to promote branch expan-sion in traditionally underserved neighborhoodsand to prevent branch closures in these commu-nities. For example, NCRC assisted the WesternNew York Law Center to prevent bank branchclosures in two minority and working classcommunities in Buffalo, New York. Likewise,community organizations in Philadelphia workedwith a bank to turn over its branch to a creditunion instead of closing the branch. In anothercase, NCRC worked with community organiza-tions in rural Mississippi to persuade a smallbank to keep its branch open in an African-American community. In these cases, NCRCprovided technical assistance on how to engagebanks and their federal regulatory agencies in adialogue with community organizations. Fed-eral agencies cannot prevent bank closures, butthey have the discretion to convene meetingswith the bank and concerned stakeholders. Inthese cases, the meetings convinced the stake-holders to pursue alternatives to closure, suchas new marketing approaches to attract moredeposits.

NCRC has also provided research and techni-cal assistance to public agencies as a means ofpromoting branch building in working class andminority communities. For the cities of Philadel-phia and Cincinnati, NCRC conducted studiesassessing the performance of banks receivingcity deposits in making loans, providingbranches and bank services to minority andworking class communities. The studies werethe subject of city council hearings that received

much media attention. By holding banks receiv-ing city deposits publicly accountable to cityresidents, the studies motivate the banks tomaintain and/or increase lending and bankbranching in traditionally underserved neighbor-hoods. More recently, NCRC completed a reportfor the Appalachian Regional Commission(ARC) describing how bank branches are vital forincreasing small business lending in Appalachia.By demonstrating a linkage between bankbranches and small business development, thestudy will enable ARC to encourage stakeholdersto maintain and expand branch networksthroughout Appalachia.

CONCLUSIONS AND POLICYRECOMMENDATIONS

This chapter suggests that minority andworking class communities represent businessopportunities for banks. While some banks haverealized the economic value of these communi-ties, too many lenders continue to neglect mi-nority and low- and moderate-income neighbor-hoods. The example of the single mother dem-onstrates that bank fees remain high and prod-ucts are inflexible for many consumers. This isunfortunate as fringe banking services aresignificantly more expensive for consumers(Carr and Scheutz 2001). Thus, banks shouldcontinue to expand their array of products forthe unbanked and underbanked. These prod-ucts should include basic checking accounts,debit cards, alternative payday loans, and Indi-vidual Development Accounts (IDAs). In addi-tion, banks should continue expanding bankbranches into low- and moderate-incomeneighborhoods.

The primary motivation for banks to followthese recommendations is not altruism; it isprofitability. Lower income neighborhoods have

significant revenue generating potential. Low-and moderate-income communities, whichoften have a higher population density, cancompensate for lower per capita purchasingpower due to their strength in numbers.

Finally, banks also have an affirmativeobligation imposed by the Community Reinvest-ment Act (CRA) to meet credit and depositneeds of U.S. citizens. In order to ensure thatmore banks realize that working class andminority communities are promising businessopportunities, the CRA exams must bestrengthened. Federal agencies conduct CRAexams which rate banks based on how manyloans, investments and services they offer tolow- and moderate-income areas. The mainlimitation is that the ‘Service Test’ of the CRAexam is inadequate as it does not fully comparebank branching patterns to demographic data.More rigorous accountability in examinationscould provide powerful incentives for banks toincrease their branching in traditionallyunderserved communities. In addition, CRAexams only measure bank service to low- andmoderate-income borrowers and communities.The NCRC study found that disparities in bankbranching are greater when viewed in terms ofrace than when viewed by the income of theneighborhood. To reduce disparities in minor-ity neighborhoods, CRA exams must thereforeexamine lending and branching by level ofminority households in that neighborhood.

In conclusion, while there are positive stepsbeing taken by LMI and minority neighborhoodactivists to ensure the availability of main-stream financial services, there is still muchwork to be done to provide LMI and minorityneighborhoods with sound banking and asset-building services.

REFERENCES

American Banker. 2007. “Executive Forum 4Q ’06: Consumer Finance at a ChallengingTime.” American Banker. (February 16).

Avery, Robert B., Raphael W. Bostic, Paul S. Calem and Glenn B. Canner. 1997. “Changesin the Distribution of Banking Offices.” Federal Reserve Bulletin. (September).

Berry, Christopher. 2004. “To Bank or Not to Bank? A Survey of Low-Income Households.”Joint Center for Housing Studies Working Paper Series, BABC 04-2. (February).

Bucks, Brian K., Arthur B. Kennickel and Kevin B. Moore. 2006. “Recent Changes in U.S.Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances.” FederalReserve Bulletin. (March).

Carr, James H. and Jenny Schuetz. 2001. “Financial Services in Distressed Communities:Framing the Issue, Finding Solutions.” Fannie Mae Foundation.

Dash, Eric. 2006. “A Bank for Every Block.” New York Times. (August 9).

Federal Deposit Insurance Corporation (FDIC). 2006. Summary of Deposits Information.Website at http://www2.fdic.gov/sod/

Government Accountability Office. 2002. “Electronic Transfers: Use by Federal PaymentRecipients Has Increased but Obstacles to Greater Participation Remain.”

National Community Reinvestment Coalition (NCRC). 2007. “Are Banks on The Map? AnAnalysis of Bank Branch Location in Working Class and Minority Neighborhoods.” (March).

Smith, Geoff. 2005. “Increase in Bank Branches Shortchanges Lower-Income and MinorityCommunities: An Analysis of Recent Growth in Chicago-Area Bank Branching.” WoodstockInstitute.

Tanneeru, Manav. 2006. “Do American’s Plan for the Long Haul?” CNN. Website athttp://www.cnn.com/2006/US/02/15/planning.overview/index.html.

What’s Happening toThe Neighborhood?

COMMUNITY ORGANIZATION

Jane DeMarines, Executive Director of the National Allianceof Community Economic Development Associations andBernie Mazyck, President and CEO of the South Carolina

Association of Community Development Corporations

Community Development Corporations:Drawing Capital into Low-Wealth

Neighborhoods

Talk about a makeover. A Detroit neighbor-hood called Mexicantown, once emblematic ofblight, is now poised to make an impressive firstimpression upon visitors coming off the Interna-tional Bridge from across the Canadian border.Upon a Grand Opening as part of theneighborhood’s Cinco de Mayo celebration, theInternational Welcome Center (IWC) andMercado — a $17 million project of theMexicantown Community Development Corpora-tion — will provide a permanent venue for eco-nomic and cultural development, highlightingMexican culture and Latin traditions, and bring-ing Mexican merchandise (imported as well ashandcrafted) and authentic food to regionalshoppers and residents. Already opened in theIWC is the DTE Energy Customer Service Center,and soon to locate there are the State of Michi-gan Welcome Center, the Mexicantown Commu-nity Development Corporation (CDC) office, andother offices. The Mercado, a public market, willhouse an upscale Mexican restaurant, a cafete-ria, 15 independent retail stores, and a businessincubator for those with further entrepreneurialideas for saving the 1 million-plus visitors ex-pected each year.

In this chapter, we will explain how nonprofitCDCs are adapting to the American marketplacein this intensely profit-focused era. EnterprisingCDCs — like Mexicantown’s — have made them-selves into a worthwhile investment and a wor-thy business partner, while remaining true totheir community and cultural roots. We willconclude this chapter with policy recommenda-tions for further facilitating the raising ofAmerica’s low-wealth neighborhoods.

Jane DeMarines, Executive Director of the National Alliance of CommunityEconomic Development Associations and Bernie Mazyck, President and CEO of

the South Carolina Association of Community Development Corporations

COMMUNITY DEVELOPMENT CORPORATIONS:DRAWING CAPITAL INTO LOW-WEALTH NEIGHBORHOODS

A Comprehensive Approach to Partnerships and Service

OF, BY, AND FOR THE COMMUNITY

Mexicantown CDC, a Michigan 501(c)(3)nonprofit organization, emerged in 1989 as aresult of businesses and residents joining to-gether to address the desolation in the neighbor-hood.

Nationwide, there are some 4600 locallybased CDCs, organized to benefit their neighbor-hoods comprehensively through building housesand developing community-sustaining institu-tions, like the Mexicantown CDC. Most go bythe name of their neighborhood. Some havebecome highly successful businesses employinghundreds in property management, construc-tion, and other trades.

CDC boards typically have a majority ofmembers who are neighborhood residents, whoensure accountability to and knowledge of theneighborhoods in which they function. The bestCDCs are savvy about layering resources to-gether to provide subsidies to help low-wealthresidents become homeowners and to encouragebusiness development.

THE CHALLENGE OF THE TIMES

The ascent of laissez-faire or pro-businessand anti-government market values has been ahallmark of American culture for most of the 40-year history of the CDCs. Federal support foraffordable housing fell 70 percent between 1981and 1989 and has continued at low levels sincethen (Moy 2001), and private enterprise hasbeen taking over services traditionally providedby governments and nonprofits.

Capitalizing on Relationships

Seeing the writing on the wall, enterprisingCDCs have pre-empted their demise by collabo-rating with enterprise. To the partnership theybring their community orientation and commit-ment to mission, which can be realized throughthe resources brought by their profit-makingpartners. Whereas in the past CDC’s focused onraising and leveraging capital for neighborhooddevelopment, now they are leveraging theserelationships to do more broad-based commu-nity revitalization.

Generally, CDCs prefer to collaborate withfor-profits as co-interested partners, althoughrare circumstances may call for a merger or aclient-subcontractor relationship. The jointventure model provides the greatest mutualadvantage, and a number of CDCs are well ontheir way in this regard. In the Boston area,CDCs are involving large funders such as NewBoston Fund and Trinity Financial. The UnitedWay is another great CDC partner, helpingdevelop an affordable housing community. TheMassachusetts Association of CDCs (MACDC)conducted a joint forum with the Urban LandInstitute earlier this year to promote these typesof partnerships.

Partnering with entrepreneurs, the moreproactive CDCs are in the strongest position asconduits for the flow of capital to their commu-nities. The strategy is similar to that of welfareagencies. Strategic partnerships in that re-formed industry have resulted in more holistictreatment of clients (Skloot 2000).

For CDCs, the up-front cash and credibilityof the partnership allows for economies of scalethat attract more funds for quality personneland technology, fueling the cycle that generatessmart sustainability: a sensible balance betweenthe community mission and profit for profit’ssake.

Public sector relationships still count big,too. It took 12 years of persistently educating

legislators on the value of their work, but SouthCarolina CDC advocates won allocations forcommunity development funding in the statebudget in 2006. Nationally, in large part due toCDC efforts, all but two states in the countryhave launched affordable housing trust funds toaddress a need that is burgeoning in the wake ofcutbacks in popular federal housing programssuch as the Community Development BlockGrant, HOME, Section 8 rental vouchers, home-less housing, and others. For example, theIndiana Association for Community and Eco-nomic Development (IACED) helped convene aresearch report, “The Indiana Affordable Hous-ing Development Fund: 2006,” which this yearcontributed to advocacy efforts that convincedstate lawmakers to approve legislation for adedicated funding source for that program(CEDAM 2007).

BROADENING THEIR GRASP YETMAINTAINING THEIR ROOTS

By regionalizing their approach, CDCs areattracting more partners. This trend has madestate associations of CDCs a powerful driver incoalition building to obtain funding from bothpublic (federal and state) and private sources.

This regionalization of CDCs mirrors thetrend in their funding sources. This trend canbe attributed in part to bank mergers (some8,000 of them between 1980 and 1998 (Moy2001)) — which have consolidated mortgagelending activity dramatically. As recently as the1990s, the nation’s top 25 originators accountedfor only 28 percent of the overall monetaryvolume, but by 2002 the figure was 78 percentand in the subprime market more than 88percent (JCHS 2004).

Often a community develops a personablerelationship with a local bank; that relationshipchanges when the bank goes national. Will thatbank still want to invest in the community? Themerger or a key person’s retirement may resultin no strong community advocate within the

bank, leaving CDCs to make the case them-selves.

Technological advances, such as instanta-neous telecommunications and automated loanprocessing (e.g., Desktop Originator), have maderemoteness and large size all the more viable forthe mortgage industry (JCHS 2004), thus facili-tating CDC regionalization. Along with a strongeconomy and favorable interest rates, the re-structured system has facilitated access topreviously disinvested populations, as demon-strated in the rising number of home purchaseloans to low-income borrowers and/or commu-nities from 742,000 in 1993 to 1.3 million in2001 (JCHS 2004). That 80 percent increase farexceeded the 48 percent growth of home pur-chase lending overall during that period (JCHS2004). This vastly expanded opportunity is atribute to the depth of commitment of CDCs aswell as the rise of the subprime mortgage mar-ket.

BRINGING WALL STREET TO MAIN STREET

CDCs are increasingly creative on accessingcapital. Wall Street Without Walls (W3), a pro-gram promoting community development organi-zations in the marketplace, is creating a newfinancial guaranty insurance and specialtysurety company, Community Development &Housing Assurance LLC, to complement (notcompete with) banks and existing financialguaranty companies (W3 2006b).

This type of innovative nonprofit entrepre-neurship — embodying community values andthe spirit of collaboration — is also seen inanother W3 initiative, which creates a pool of“dead” assets for community development.These unproductive, and under-deployed assets— typically government-seized or bequeathed —will be used as loaned collateral and sold incapital markets, with the proceeds going backinto community development and affordablehousing (W3 2006a). One model would augment

use of New Markets Tax Credits with commu-nity-based economic development financingprograms (W3 2006a).

GAINING POPULAR APPEAL

Although the low-income population is themost natural CDC constituency, the middle-class squeeze is increasingly adding firefighters,teachers, and the like to those who stand tobenefit from community development. If “hous-ing for the poor” wasn’t so appetizing to theaverage citizen, “workforce housing” — the termnow popularly used in the CDC industry — maybe more like bread and butter. Now, John andJane Q. Public have a direct stake in communitydevelopment. Given the recent problems in thehousing markets, CDCs can help them. Al-though the foreclosure crisis has hit low-incomeneighborhoods disproportionately, families whohave achieved homeownership with help of aCDC are typically in better shape due to coun-seling as well as to down payment assistancemaking the home more affordable at the outset.

The expanded constituent base provides allthe more reason for CDCs to expand theirsources of capital and embrace change. It’s apopular imperative.

POLICY RECOMMENDATIONS

Therefore, we recommend that:

Community Development Block Grant (CDBG)

• Restore and increase funding to $4.1 billion;

• Ensure no area of the country experiencesdrastic reductions;

• Restore CDBG TA funds.

HOME Investment Partnerships Program(HOME)

• Restore to FY04 funding levels (plus inflation)to $2.1 billion;

• Increase the funds allocated to CHDOs from15% to 20% of total allocation;

• Restore TA funding in the CHDO TA andHOME TA programs.

Rural Community Development

• Restore funding for the: Section 515 RentalDirect Housing Program; Section 502 SingleFamily Direct Loan Programs; Section 523 Self-Help TA Program; and Section 504 Very LowIncome Repair Program to FY 2007 levels withadjustment for inflation;

• Support authorization of HUD’s Rural Housingand Economic Development;

• Support reauthorization and expansion of theNew Markets Tax Credit program;

• Restore the Rural Preservation with SavingAmerica’s Rural Housing Act.

National Housing Trust Fund

• Support establishment of the National Hous-ing Trust Fund;

• Support H.R.1427, the Federal Housing Fi-nance Reform Act of 2007, which would createan affordable housing fund from a percentage offunds from the GSE.

Community Reinvestment Act (CRA)

• Expand the CRA to include credit unions andnon-depository financial institutions:

• Support H.R. 1289, the CRA ModernizationAct of 2007;

• Support requirements on small businesslending similar to HMDA.

REFERENCES AND RESOURCES

CEDAM (Community Economic DevelopmentAssociation of Michigan). 2007. “Member Up-date.” (September 26). Website atwww.cedam.info.

Joint Center for Housing Studies. 2004. Credit,Capital and Communities: The Implications of theChanging Mortgage Banking Industry for Commu-nity Based Organizations. (Cambridge, MA:Harvard University) Website atwww.jchs.harvard.edu.

Moy, Kirsten and Alan Okagaki. 2001. Chang-ing Capital Markets and Their Implications forCommunity Development Finance. (New York:Surdna Foundation, Inc.)

Skloot, Edward. 2000. “Evolution or Extinction:A Strategy for Nonprofits in the Marketplace.”Nonprofit and Voluntary Sector Quarterly. (29):315-324.

W3 (Wall Street Without Walls). 2006a. DeadAssets: Innovative Uses of Collateral to EnhanceLoan Portfolios. Website atwww.wallstreetwithoutwalls.com.

W3. 2006b. Financial Guarantee: A CED Fi-nance Innovation Work in Progress. Website atwww.wallstreetwithoutwalls.com.

What’s Happening toThe Neighborhood?

COMMUNITY ORGANIZATION

Fostering Public LifeFostering Public LifeFostering Public LifeFostering Public LifeFostering Public Lifein the New Suburbiain the New Suburbiain the New Suburbiain the New Suburbiain the New Suburbia

through Community Organizingthrough Community Organizingthrough Community Organizingthrough Community Organizingthrough Community Organizing

Thomas Lenz, Lead Organizer

Lake County United/Industrial Areas Foundation

Six years ago, when I told my city-dwellingfriends that I was taking a job as lead organizerfor a new community organization in the sub-urbs north of Chicago, I was met with blankstares. Organizing in the suburbs? Aren’t thesuburbs by definition the place that people fleeto when they want to avoid the problems associ-ated with the city? And aren’t suburbanitesconservative or apolitical in their outlook? Whywould you want to organize in the suburbs andhow on earth could it work?

This is the story of one effort to apply theideas and approaches of broad-based commu-nity organizing pioneered by the Industrial AreasFoundation to Lake County, which lies approxi-mately 20 miles from Chicago’s Loop businessdistrict. The Industrial Areas Foundation or IAFis the nation’s oldest and largest network ofindependent community organizations.(Founded by Saul Alinksy in 1940, the organiza-tion currently works with 57 broad-based citizenorganizations in the U.S., United Kingdom,Canada and Germany. For more information,see http://www.industrialareasfoundation.org.)

With 713,000 residents, Lake County hasmost of the features of similar suburban regionsoutside America’s major cities. As such, it mayoffer clues on how public life in these fast-growing areas can be enhanced and deep-seatedsocial and economic problems might be ad-dressed.

NOT YOUR FATHER’S SUBURBIA

In the popular imagination, the suburbs areleafy quiet towns filled with middle class, whitenuclear families. Suburban Chicago, like mostof suburban America, no longer fits this stereo-type. Sweeping social, economic and demo-

graphic changes have created a suburban land-scape that has much of the outward appear-ances of traditional suburbia but reveals a muchmore complex reality below the surface.

For one, the suburbs are increasingly di-verse. In Lake County’s case, from 1990 to 2000the majority of the 128,000 people who movedinto the county were non-white. The biggestshare of the increase in population came fromLatin America, but the African American andAsian populations increased as well. WhileWhites constituted 87 percent of the County’spopulation in 1990, by 2006 they representedfewer than 70 percent.

Many of the problems once associated withthe city have also cropped up in the suburbs.Lake County is home to 30 public schools thatare in various stages of academic “watch” or“warning.” Homeless people can be found sleep-ing in parks or forest preserves even in affluentareas and the “CeaseFire” anti-violence initiativehas a presence in the town of North Chicago.While not as prevalent as in the nation’s bigcities, “urban” problems can be found welloutside the city.

Middle class life is also not as secure as itonce was. In a recent book, DePaul Universitysociologist John Koval notes that the “hourglasseconomy” dominated by the affluent and thepoor is the new norm for the Chicago region withthe “middle class lifestyle of the majority” un-likely to be maintained (Koval et al. 2007).

The steep decline in unionized manufactur-ing jobs and the on-going downsizing andoutsourcing of white collar positions havepushed many formerly middle class householdsinto the ranks of the working poor. Declines in

FOSTERING PUBLIC LIFE IN THE NEW SUBURBIAFOSTERING PUBLIC LIFE IN THE NEW SUBURBIAFOSTERING PUBLIC LIFE IN THE NEW SUBURBIAFOSTERING PUBLIC LIFE IN THE NEW SUBURBIAFOSTERING PUBLIC LIFE IN THE NEW SUBURBIATHROUGH COMMUNITY ORGANIZINGTHROUGH COMMUNITY ORGANIZINGTHROUGH COMMUNITY ORGANIZINGTHROUGH COMMUNITY ORGANIZINGTHROUGH COMMUNITY ORGANIZING

Thomas Lenz, Lead Organizer, Lake County/United Industrial Areas Foundation

the availability of health insurance and pensionbenefits, the high cost of housing and socialfactors like divorce have left many middle classfamilies much more vulnerable to economichardship (Warren and Tyagi 2003).

In part because of the pressures of the neweconomy, public life in the suburbs is often verythin or non-existent. Corporate managers inLake County may shuttle in for a couple ofyears before moving on to their next workassignment or a new employer in another city.One suburban pastor remarked to me that hisnew parishioners “figure out where the schools,church, soccer fields, and shopping mall are anddrive an endless loop between them – with littleor no time to volunteer at any one place.”

Moreover, as Robert Putnam and others havepointed out, the stress of two parents workingfull time jobs and the wide array of divertingentertainment options have stripped manytraditional civic groups (such as PTOs and PTAs,Leagues of Women Voters, and service clubs) ofmembers (Putnam 2000). What strategies canwork to re-invigorate public life in the face ofthese challenges and trends?

CIVIL SOCIETY AS THE STARTING POINT

Community organizing is a broad term thatencompasses a number of approaches to bring-ing together people – especially low- and middle-income individuals — to press for change. Fororganizations affiliated with the Industrial AreasFoundation (IAF), the starting place for organiz-ing is the institutions that make up civil society.This includes religious congregations of alltypes, unions, schools and non-profit associa-tions (such as health centers, human serviceorganizations and advocacy groups).

The choice of civil society as the startingpoint for organizing is both philosophical andpractical. Civil society is the part of Americawhere you can talk about what “should be”

versus “what is now.” Religious institutionshave great narratives of social justice as do theirsecular counterparts like the NAACP or unions.Civil society has been the jumping off point forsocial change throughout the nation’s historyfrom struggles to end slavery, to the fight forjustice in the workplace, to campaigns for immi-grant civil rights.

More pragmatically, the institutions of civilsociety have the leaders and potential leadersneeded to build independent, effective organiza-tions. They also have resources such as mem-bers, places to meet, money for dues and accessto other institutions. Put another way, theyhave organized people and organized money, thetwo components of power, a necessary ingredientof any push to reform and improve social oreconomic conditions.

ORGANIZING ONE RELATIONSHIP AT A TIME

If “civil society” answers the “where” questionof broad based organizing, “disciplined relating”answers the how. The chief tool in this style oforganizing is the one-on-one relational meeting.This is, as IAF Executive Director Ed Chamberssaid, “the most radical thing we teach” becauseit goes against the dominant culture’s preoccu-pation with the speed and quantity of interaction(Chambers and Cowan 2003: 44). In buildingbroad based civic groups, e-mails, telephonecalls, and instant messages are no substitute forthe slow patient work of building durable publicrelationships.

The purposes of individual meetings aretwofold: to find leaders or potential leaders andto identify the problems or concerns which theymight work to address. At the outset of anorganizing effort, relational meetings are usuallyinitiated by a professional organizer. The IAF’sMike Gecan once described the organizer’s jobas to “encourage, coach, and agitate citizens toplay their rightful roles and claim their rightful

places in the public arena of our nation” (Gecan2002: 3).

As the campaign unfolds, volunteer leaderstake up the practice, particularly within theircongregation or group. Sustained individualmeetings, accompanied by small group or‘house’ meetings and leadership training ses-sions, often comprise the early phase of anorganizing drive, often called the ‘sponsoringphase.’

In Lake County United’s case, the sponsoringphase lasted almost two-years. Seed fundingfrom local and regional religious institutionspaid my salary and benefits and provided mewith the space and time for this phase of disci-plined relating and leadership training to bedone well. I spoke with scores of institutionsand thousands of real and potential leadersduring these two years - yielding a harvest oftalented, passionate leaders and an initial set ofissue ideas.

The initial leaders and issues came togetherin a powerful way at Lake County United’sfounding assembly in April 2003, when 2,000people gathered at Libertyville High School inthe center of the county. While dozens of politi-cal leaders were on hand, the real action was onthe stage, as a diverse group of volunteer leadersannounced their intentions to work togetheracross lines of faith and race to tackle the big-gest challenges facing the county.

As the dust of the sponsoring phase settled,what emerged was an organization made up of37 churches, synagogues, mosques, unions, andnon-profit groups. Each organization committedto pay annual dues (based upon its membershipsize) and to work to identify and train a group ofleaders. As of the summer of 2007, LakeCounty United employs two professional organiz-ers and has a budget just over $200,000 a year.

“I’M TIRED OF THE TOWN GETTINGSNOBBIER AND SNOBBIER”

Once it was up and running, Lake CountyUnited’s leaders worked to translate the con-cerns heard in the sponsoring phase into issuecampaigns. One of the earlier issues identifiedwas the lack of affordable housing.

The concern was raised in a variety of ways.Synagogue volunteers who worked in thecounty’s homeless shelters were alarmed by thegrowing numbers of people without shelter.Middle class parents noticed that their childrenwho returned from college to take jobs in LakeCounty could not find affordable apartments.Pastors of several churches reported that theircongregants were moving as far away as Wiscon-sin to find affordable single family homes.

In one-on-one meetings and small grouplistening sessions people reported a nagging fearthat the older, more economically mixed townswere losing their diversity as ‘McMansions’ werebuilt on the surrounding farmlands and nearthe train stations in suburban downtowns. Asone longtime resident of Libertyville put it: “Iremember when the town barber could afford tolive on our block. And I’m tired of the towngetting snobbier and snobbier.”

Translating this concern and anger intoeffective action has taken years of hard work.The team of volunteer leaders who have workedon the issue of affordable housing has usuallynumbered between 12 and 15, but they havecollectively had the ability to mobilize between10 and 20 times as many of their neighbors andfellow members when needed for a public meet-ing. Their accomplishments include:

• Boosting the County’s affordable housingbudget by 66 percent to $500,000;

• Obtaining affordable housing set asides inLibertyville – and working with the village to

codify that commitment in an inclusionaryhousing ordinance;

• Stopping the planned displacement of 252Mexican families at an apartment complex inHighwood slated for condominium conversion;and

• Winning a campaign to build a new $31 mil-lion county-run skilled care facility for thosewith limited means.

Other volunteer teams have won similarvictories in expanding health care for the unin-sured and in getting thousands of immigrants topursue citizenship and register to vote. Theorganization’s latest push is to improve educa-tional outcomes in the struggling schools ofWaukegan and North Chicago.

NEIGHBORHOODS AND OTHER CIVILSOCIETY INSTITUTIONS

The practice of community organizingemerged in urban neighborhoods in the 1930s.Even today, most people associate ‘communityorganizing’ with efforts to protect and improvecity neighborhoods. What roles – if any – doneighborhoods play in broad based organizing inthe suburbs?

Dense, identifiable neighborhoods are gener-ally rare in suburban Lake County, the excep-tions being older industrial cities such asWaukegan and the village cores of older railwaytowns like Libertyville. When asked “where doyou live” residents tend to speak of their subur-ban town, their subdivision or, if it is large, theirapartment complex. For Lake County Unitedthese smaller units of geography have not playeda significant role in the organizing activities.

That is not to say that neighborhoods areunimportant parts of civil society in the sub-urbs. Living on a safe block with good neigh-bors is valued everywhere. Fortunately, for now,that tends to be the rule and not the exception

in Lake County.

Other suburban civil society institutions areevolving and maturing to meet new challenges.For example, community colleges like the Collegeof Lake County (CLC), have grown to play aprimary role in preparing people for collegedegrees and the world of work. Over 16,000students attend CLC classes at three campusesmaking it by far largest college in the County.

Catholic schools are also evolving to respondto new realities. As more traditional middleclass high schools like Carmel Catholic inMundelein have grown, new Catholic highschools following the ‘Cristo Rey Model’ havebeen founded. St. Martin de Porres is one suchexample in Waukegan. The school focusesprimarily on lower-income African American andMexican students and makes their educationaffordable through each student’s participationin corporate internships (for more information,see www.cristoreynetwork.org orwww.smdpwaukegan.org).

One way of thinking about broad basedorganizing – whether in the city or the suburbs –is to ask which institutions matter most inpeople’s lives? And how can these institutions –old, new, and yet to be created – serve as thebase from which the issues of the area can beaddressed? In a suburban setting neighbor-hoods matter, but religious congregations,schools, and civic associations matter more.

THREE CHALLENGES AND THREEOPPORTUNITIES

Organizing is challenging in any situationand the suburbs are no exception. In its firstfour years of its operation, Lake County Unitedhas had to deal with three main challenges,some of which are unique to the suburbs andsome of which affect all broad based organiza-tions.

First, the suburbs are characterized by mul-tiple and at times overlapping political jurisdic-tions. No single unit of government is respon-sible for addressing big challenges like failingschools or the lack of affordable housing. Illi-nois has, in fact, the most units of local govern-ment of any state in the nation, a whopping6,904 (Illinois State Comptroller, n.d.). LakeCounty alone has 189 local units of government(Illinois State Comptroller 2000).

This often means one must organize suburbby suburb and town council by town council tohave an impact on issues like land use andaffordable housing. There is no one, powerfulmayor with whom to to negotiate, nor onenewspaper with a wide readership. No singlenewspaper covers Lake County in its entirely.A reporter for the largest local circulation paper,the Daily Herald, told me they do not covermatters “east of the Tri-State Tollway” wheremost of the lower-income and minority residentslive. This splintering of power and civic lifepresents a challenge to organizers and leadersalike.

The time that people have available for publiclife is also quite limited. Long work hours,lengthy commuting times, and the plethora oforganized sports teams and music and artsprograms parents involve their children inmeans most adults struggle just to get throughthe week. The situation for low-wage workers,forced to take multiple jobs to get anywhere neara decent income, is even worse.

Time constraints, and widespread skepticismor disgust with politics, means many parentswould rather spend their precious volunteerhours on child-oriented activities. To the extentthey have time for other volunteer commitments,they often gravitate toward non-controversial,one-time/one-stop community service optionslike Habitat for Humanity.

Finally, many of the religious denominationsthat are mainstays of community organizing arefacing struggles of their own. Membership inmainline Protestant churches continues todecline and Roman Catholic congregations areoften preoccupied with fallout from the abusescandal and the dwindling number of clergy. Ascongregations turn inward to deal with thesechallenges, interest in and energy for public lifecan be limited.

But if organizing in the suburbs faces chal-lenges, it also has a number of opportunities.First, if acting at the local level is frustrating,acting at the state level is a possibility - withincreasing breadth. In Illinois there are four IAFaffiliated organizations, three in each of Lake,Cook, and DuPage Counties and PACT (PublicAction for Change Today) targeted to youngadults. While each acts independently, at timesthey have teamed up to press for state levelpolicy changes.

United Power for Action and Justice, based inChicago and suburban Cook County, took thelead on passing FamilyCare health insurance inIllinois, with critical support from the DuPageand Lake County sister organizations. In Mas-sachusetts, the Greater Boston Interfaith Orga-nization (GBIO) played a pivotal role in passingthat state’s universal health care plan (Klein2006). The lesson is that even without the den-sity of membership and power to win every localbattle in the suburbs, organizing across countiescan result in impressive wins on the state level.

Second, religious congregations are still keyplayers in public life in most communities.Immigration has resulted in a host of new con-gregations being formed, many of which arehungry to play a role in their communities. Thisis particularly true of non-Christian groups likeMuslims and Hindus who in many ways arewhere the Catholics and Jews were a centuryago.

REFERENCES

The Boston Foundation. 2006. “A Time LikeNo Other: Charting the Course of the NextRevolution: A Summary of the Boston Indica-tors Report, 2004-06 Boston, MA: The BostonFoundation.

Chambers, Edward T. with Michael A. Cowan.2003. Roots for Radicals: Organizing forPower, Action, and Justice. (London, UK:Continuum Press).

Freedman, Samuel G. 2007. “An AdvocateLends a Hand as Social Justice Goals UnifyFaiths.” New York Times. (June 16).

Gecan, Mike. 2002. Going Public. (Boston,MA: Beacon Press).

Illinois State Comptroller. N.d. Website athttp://www.ioc.state.il.us.

Illinois State Comptroller. 2000. Website athttp://www.apps.ioc.state.il.us/ioc-pdf/ffOct2000.pdf.

Klein, Ezra. 2006. “Credit Hog: Mitt RomneyGot More Props than He Deserved for Health-Care Reform.” The American Prospect.(June).

Koval, John P., Larry Bennett, Michael I. J.Bennett, Fassil Demissie, Roberta Garner,and Kiljoong Kirn, editors. 2007. The NewChicago: A Social and Cultural Analysis.(Philadelphia, PA: Temple University Press).

Putnam, Robert D. 2000. Bowling Alone:The Collapse and Revival of American Commu-nity. (New York, NY: Simon & Schuster).

Warren, Elizabeth and Amelia Warren Tyagi.2003. The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke.(New York, NY: Basic Books).

In metropolitan Chicago, IAF organizationshave been especially important to the entry ofMuslims in public life (Freedman 2007). Givenworld-wide anxieties about how to prevent a“clash of civilizations,” broad-based organizingprovides a strong argument that new immigrantgroups can be incorporated into democraticpublic life.

A final note on religious congregations andorganizing is in order. Recent work in the Jew-ish community suggests that good organizingpractices can help revitalize congregational life.That is the premise of ‘Just Congregations,’ aninitiative of the Union for Reform Judaism whichpromotes organizing as a means to make “oursynagogues stronger, helping us find and de-velop each other as leaders, and strengtheningthe fabric of our community” (see http://urj.org/justcongregations/index).

Finally, despite the pressures that inhibitparticipation in public life, the appetite to relateacross differences of class, faith, and race and todevelop oneself as a leader remains strongamong many people. At their best, broad basedorganizations are ‘schools for public life’ that fillthe innate human desire to grow and learn.

Thinking of broad based organizations ashaving an educational mission raises the ques-tion of how to effectively link such groups withcolleges, universities, seminaries and other civicinstitutions that have education at their center.To date this has happened fitfully. A challengegoing forward would be to develop new partner-ships that can link the institutional heft ofAmerican universities with the talent and impactfound on the ground in the nation’s communityorganizations.

What’s Happening toThe Neighborhood?

COMMUNITY ORGANIZATION

Responding to Neighbors’Responding to Neighbors’Responding to Neighbors’Responding to Neighbors’Responding to Neighbors’Health NeedsHealth NeedsHealth NeedsHealth NeedsHealth Needs

Julie Trocchio, Senior Director of Community Benefitand Continuing Care, Catholic Health Association of

the United States and Nancy Mulvihill, Vice President,Corporate Communications, Covenant Health Systems

RESPONDING TO NEIGHBORS’ HEALTH NEEDSRESPONDING TO NEIGHBORS’ HEALTH NEEDSRESPONDING TO NEIGHBORS’ HEALTH NEEDSRESPONDING TO NEIGHBORS’ HEALTH NEEDSRESPONDING TO NEIGHBORS’ HEALTH NEEDS

In Reno, Nevada, a team made up of a socialworker, police officer and medical staffer fromSt. Mary Hospital’s ‘Knock and Talk’ programgoes door-to-door at a local low-budget motel.The motel serves as home to over a hundredfamilies and individuals, many of whom areshut-ins or without health insurance, and all ofwhom are poor. Outside, St. Mary’s van isparked with medical and nursing staff ready togive check-ups, flu shots, medical advice andtreatments.

ministered in swamps, in cholera and malariainfested areas and often without adequate provi-sions to provide care. They toiled and begged forfunds to ensure their services kept up withchanging needs, and sought friends and alli-ances who could support their work.

A MODEL THAT WORKS

The early sisters pioneered a model with fourcomponents: looking at what is needed,partnering with others, finding the necessaryresources and monitoring progress. Today, thisprocess is known as providing community ben-efit.

Community benefits are programs and ser-vices provided in response to community needs.These programs improve health in communitiesand increase access to health care services.

The Catholic Health Association of the UnitedStates (CHA), in cooperation with VHA, Inc. (anational organization of nonprofit hospitals) andother organizations, has developed tools to helphospitals and long term care organizationsbetter serve their communities. The tools enablethese direct-care institutions to provide commu-nity benefit by assessing community problemsand strengths, budgeting to meet communityneeds and making sure programs are effective.

Seeking Out and Responding to Needs

One approach to utilizing the communitybenefit model is to begin by asking questionsabout potential areas of concern, and what rolelocal institutions could play in addressing thoseproblems. Is asthma among school children aserious problem in this community? If so, wouldthe local school be willing to work with thehospital to provide information to parents and

Julie Trocchio, Senior Director of Community Benefit and Continuing Care,Catholic Health Association of the United States and Nancy Mulvihill, Vice

President, Corporate Communications, Covenant Health Systems

Each motel room receives the same visit: theSt. Mary’s team knocks, then asks tenants ifthey are okay and whether they want to use anyof the van’s services. No charge. While thehealth care is of great value to the low-incomeresidents, recipients agree that the visits fromthe Knock and Talk team bring something elsejust as important; they bring a sign that peoplein the community care about them.

This kind of community service provided byCatholic and other nonprofit health care organi-zations continues a service tradition that beganwhen health care was first delivered in ouremerging nation. For Catholic health care, thistradition began in 1627 when six religious sis-ters from France stepped on the shores of NewOrleans, one of our oldest cities. They nursedthe sick and visited the poor, responding to theneeds of their day.

Catholic health care grew out of the ministryof those early sisters — educated and dedicatedwomen from France, Germany, Ireland andother European countries. The tradition ofservice spread as these early Americans mi-grated westward across the newly-developedland. In support of their mission, these womenprovided care at the peril of their own lives; they

students on how to avoid acute episodes?Would the local housing authority help identify ifthere are environmental asthma triggers in thepublic housing units?

Often, these questions may involve lookingclosely at a minority or traditionally excludedgroup. Is diabetes a growing problem amongnewly arrived Spanish speaking neighbors?Obesity, too? Would the local church be inter-ested in offering screening and education afterSunday services? Could the local Boys and GirlsClubs and the senior center help their partici-pants get fresh fruits and vegetables or hosteducational programs on nutrition and exercise?

After conducting relevant research, Catholicand other not-for-profit health care organiza-tions employ a community benefit framework inwhich they: identify priorities based on theseverity of the problems uncovered and whatthey are best equipped to address; evaluate theopportunity to form partnerships with others;define program goals; and budget for the re-sources needed. Finally, in order to fully carry-out the model, the providing organizationsevaluate whether their services are making adifference.

One example of the community benefit modelprocess can be seen in the work of Holy CrossHospital in Silver Spring, Maryland. After find-ing there were increasing numbers of undocu-mented and uninsured women who neededobstetrical care, Holy Cross set a goal to providefree or affordable obstetrical care for all low-income immigrant women.

The hospital took two major steps: expandingtheir overall maternity program so they wouldhave more resources from insured patients toshift into free care and engaging other hospitalsin the county in discussions about sharing theburden of these deliveries by joining the county

Maternity Partnership program.

In 2006, Holy Cross Hospital registered 2,349maternity patients for prenatal, obstetrical andpost partum care. Holy Cross was also able tointerest two other county hospitals in joining theMaternity Partnership (with a third consideringjoining). In total, this expansion of the programgave access to an additional 700 patients.

Budgeting

Financial resources for community benefitcome from various sources. Sometimes thesavings resulting from the new program aresubstantial enough to completely cover the costof implementation. For example, a Californiahospital found that many uninsured personswere being admitted as “charity care” patientsfor conditions that could have been avoided ifthere had been adequate primary care available.By placing mobile health clinics with preventionand primary care services in neighborhoodswhere these uninsured persons lived, charitycare decreased because conditions were eitherprevented or treated before warranting hospital-ization.

Some community benefit programs are madepossible through government or other grants.For example, Covenant Health Systems sponsorsMarguerite’s House in Lawrence, Massachusetts.This low-income assisted-living facility wasfunded by a series of U.S. Department of Hous-ing and Urban Development (HUD) grants re-ceived through the Assisted Living ConversionProgram (ALCP). The nearly $7 million in grantswere used to retrofit a senior housing projectunder the HUD section 202/8 program so that itwould be better suited to serving a more frailassisted-living client population. Grant fundsmeant lower costs to the facility’s residents,making it possible to serve a low-income popula-tion.

Measuring Effectiveness

Health care organizations using a communitybenefit approach continually review their pro-grams to make sure they are current with needsand are doing what they were intended to do.

For example, CHRISTUS Health, an inte-grated health system in Texas and Louisiana, isaddressing the needs of the uninsured andunderserved with chronic illnesses. The pro-gram, CarePartners, provides Community HealthWorkers to assist patients in locating a medicalhome, prescription medications and other ser-vices; it also provides the patients with supportin self-management of their health. The Commu-nity Heath Worker is from the community andunderstands the patients, their culture andneighborhood. It is “neighbors helping neigh-bors”. CarePartners has been implemented inthe Texas rural coastal bend, east Texas andcentral Louisiana. Texas A&M’s School of RuralPublic Health is evaluating the program. Prelimi-nary data have demonstrated decreased use ofthe emergency department and improved healthoutcomes.

CHALLENGES

Two of the major challenges facing healthcare organizations as they strive to meet com-munities’ health needs are the growing numbersof uninsured persons and the multiple humanneeds faced by poor, uninsured and otherwisevulnerable persons.

The Uninsured

Health needs, especially among working poorfamilies, are reaching a crisis point. Around 46million Americans lack health insurance. Thisoften means that unless they visit an emergencyroom, the uninsured lack access to health care.

Many not-for-profit hospital communitybenefit programs are working with others intheir communities to improve access for theuninsured. For example, Ascension Health, thelargest U.S. Catholic health system, pioneered amodel program designed to “leave no one be-hind.” Its “5-Step Model to 100% Access©” in-volves:

Developing a program infrastructure includ-ing forming a coalition and building a sharedinformation system;

Filling service gaps, such as dental, mentalhealth, and affordable pharmaceuticals;

Redesigning the care model to provide coordi-nated care resulting in improved healthoutcomes;

Engaging private physicians to voluntarilyaccept a certain number of uninsured pa-tients into their practices thus providingthose patients with permanent medicalhomes;

Achieving sustainable funding in partnershipwith local leaders in government and busi-ness.

Beginning in 2006, Ascension Healthlaunched its “Access Leadership” program forthe CEOs of its hospitals and related facilities.Each CEO participating in the effort has devel-oped an access leadership plan focusing on atleast one element of Ascension Health’s 5-StepModel. Across the country, the plans – whichstress community engagement and ‘ego-lesscollaboration’ – are starting to have an impact.Ascension Health has developed a unique na-tional tool for ongoing measurement of accessmodel success and is beginning to collect datafrom several communities.

CONCLUSION

Catholic and other not-for-profit health careorganizations are having a positive impact onthe health of America’s communities and neigh-borhoods, but public policies could and shouldhelp these efforts. Federal and state healthpolicies could and should improve access andsecure health care insurance for all persons.Public financing policies could and shouldrealign the health care system to be more ori-ented to promoting health, preventing diseaseand managing chronic illness, rather thanemphasizing expensive “rescue medicine” whenpeople become acutely ill.

Local governments could and should encour-age partnerships among government and privateorganizations to address community healthproblems that could work in collaboration tofind lasting solutions. It is through cooperativepartnership among organizations sharing mu-tual goals that America’s communities andneighborhoods will be stronger and healthier.

“For us to be successful and achieve thegoals that we’re targeted to reach, we needeveryone’s involvement,” said Patrick Murtha,President and CEO of Ascension Health’s St.Joseph Health System in Tawas City, Michigan.

Patrick Madden, Ascension Health’s MinistryMarket Leader for Gulf Coast/North Florida andPresident and CEO of Sacred Heart HealthSystem in Pensacola, Fla., agreed: “You’ve got tobe passionate about this issue. You’ve got to betenacious. And we are. And we’re going to besuccessful.”

Many Needs

Another challenge is that poor, uninsuredand other vulnerable people in our communitiesare likely to have multiple needs in addition tohealth care problems. Low-income and other at-risk individuals and families often face otherdifficulties such as paying for quality child care,finding affordable housing and getting jobs thatpay a living wage. Therefore, health care organi-zations in their community benefit programsoften must provide services beyond health care.

In Savannah, Georgia, St. Joseph CandlerHospital worked with Mercy Housing, a not-for-profit organization, sponsored by several ordersof Catholic Sisters to respond to the need foraffordable housing. Working in coalition, theseorganizations were able to convert an abandonedhistorically-black hospital into a low-incomehousing project with services that includedafter-school help, referrals for social services,and a training program for preparing profes-sional bakers.

Sisters of Charity are Somali immigrants whoselives were jeopardized in their homeland whencivil war erupted in 1991. Few speak Englishwhen they arrive and many cannot read or writein their native language. Through a series offocus groups with Somali women, Sisters ofCharity has tailored the way the clinic delivershealth care to this population.

• Food Pantry and Lots to Garden: For morethe 25 years a food pantry has operated indowntown Lewiston. When its sponsoring orga-nization shifted focus to state-wide food distri-bution, the Sisters of Charity Health Systemagreed to step in and assume operations of thepantry. The Food Pantry served 22,935 peoplelast year. From its downtown locale, the pantryprovides more than meals. It also educatesfamilies on food purchasing, nutrition andcooking. The Lots to Garden program provides14 seasonal gardens supplying food to 50 fami-lies. Over 120 youth and 100 adult volunteershelp in the gardens and workshops, which aredesigned to develop the skills and knowledge forlifelong and community-wide change.

• Take Charge!: This is a comprehensivehealth screening program that gives participantsa personalized assessment of their overallhealth. It eliminates the barrier of health insur-ance coverage and reduces the barriers of costand transportation. More than 4,500 individu-als have had the 30-minute health screening,which involves a questionnaire, a blood sampleand a simple breathing test. Appropriate refer-rals are made based on the results. In follow-upsurveys 3-6 months later, 57 percent of patientsreport they have made health or lifestylechanges since their screenings.

The Sisters of Charity Health System inLewiston, Maine, with roots that began over 100year ago, takes a comprehensive approach tocommunity health to serve people most in need.Their community benefits include:

• Neighborhood Housing Initiative: Knowingthat the health of a community is linked to thewell-being of its residents, Sisters of Charitytook action to improve a deteriorating neighbor-hood. In 1999, they established the Neighbor-hood Housing Initiative to construct an afford-able, 15-unit owner-occupied housing initiativein the most economically distressed section ofdowntown Lewiston. It was the first new homeconstruction there since 1940. The Sisters ofCharity program served as a catalyst for housingdevelopment in the area and the redevelopmentof new construction investment by developersand private parties exceeds $15 million.

• Club W!: Recognizing that health of the spiritand physical health are inseparable, Club W!offers education and networking programs towomen at little or no cost. It is a safe place forwomen to equip themselves with the tools theyneed to be strong, active members of their fami-lies and communities. In a region where medianearnings for full-time employed women areabout $22,000, Club W! created a series ofdevelopment programs to address education andcareer advancement.

• Making Healthcare Affordable: As part ofthe B Street Community Center created in 2003,Sisters of Charity operates a medical office forunderserved residents of the downtown commu-nity. It accepts all patients and provides compre-hensive primary care. In 2004, Sisters of Char-ity opened a pediatric dental program there forunderserved youth. Many in the area served by

A CASE STUDYA CASE STUDYA CASE STUDYA CASE STUDYA CASE STUDY

What’s Happening toThe Neighborhood?

COMMUNITY ORGANIZATION

The Generational Transfer of Leadership:Community Building Organizations and

Their Leaders in the 21st Century

Jeff Nugent, President/CEO and

Kristina Samson, Vice President

Development Training Institute

Following the race riots of the late 1960s andearly 1970s, Chicago’s west side was inshambles, experiencing poverty, unemploymentand despair. Steven McCullough grew up aspir-ing to get out. He obtained an MBA and workedfor several years in the corporate world. He hadall the creature comforts perceived to besociety’s mark of success. Yet those comfortsalways lay in stark contrast to the memories ofhis childhood and the struggles he had wit-nessed in his Chicago community.

When a social sector opportunity becameavailable, Steven decided to pursue it and washired as the Chief Operating Officer for BethelNew Life, a nationally known faith-based organi-zation that creates living-wage jobs, rehabilitateslow-income multi-family housing, and developscommunity education and health care programsfor residents of Chicago’s west side whereSteven grew up. Bethel New Life trained andplaced in employment over 4000 people, estab-lished a community recycling facility, convertedan abandoned block into a park, created over1000 units of housing, sparked a $3 million cityrenovation of the local public library and invigo-rated residents to create a new vision for theneighborhoods in Chicago’s west side. Life wasgood, yet Steven felt he could do more to serve.So when the organization’s founding executive

director of 26 years announced her retirement,Steven applied for the position. He was one of sixfinalists in the national search conducted byBethel New Life to replace their retiring leader.

“As the Chief Operating Officer, I was theonly internal candidate for the job. I was uncer-tain regarding how I would be judged relative tothe other prestigious external finalists and manytimes I considered withdrawing my application.”It was with these sentiments that Steven enteredBank of America’s Neighborhood ExcellenceLeadership Program™ for Emerging Leaders.“The support and confidence displayed in me,and the wise counsel I received from the other59 emerging leaders and the training teamsignificantly raised my confidence and renewedmy commitment to go for it in a way that wasmagical.” At the next gathering, Steven sharedthat he had indeed been selected as Bethel NewLife’s executive director. His journey continuesand Steven speaks regularly about his leader-ship transition and growth experience.

Steven’s story points to the level of passionsupport needed to create a pipeline of next-generation leaders to shape community buildingorganizations to meet the needs of diverse neigh-borhoods and a changing society.

THE GENERATIONAL TRANSFER OF LEADERSHIP:THE GENERATIONAL TRANSFER OF LEADERSHIP:THE GENERATIONAL TRANSFER OF LEADERSHIP:THE GENERATIONAL TRANSFER OF LEADERSHIP:THE GENERATIONAL TRANSFER OF LEADERSHIP:COMMUNITY BUILDING ORGANIZATIONS AND THEIRCOMMUNITY BUILDING ORGANIZATIONS AND THEIRCOMMUNITY BUILDING ORGANIZATIONS AND THEIRCOMMUNITY BUILDING ORGANIZATIONS AND THEIRCOMMUNITY BUILDING ORGANIZATIONS AND THEIR

LEADERS IN THE 21LEADERS IN THE 21LEADERS IN THE 21LEADERS IN THE 21LEADERS IN THE 21STSTSTSTST CENTURY CENTURY CENTURY CENTURY CENTURY

Jeff Nugent, President & CEO and

“Not everything that is faced can be changed, but nothing can bechanged until it is faced.” (James Baldwin)

“The best way to predict the future is to create it.” (Peter Drucker)

A STORY

Kristina Samson, Vice President, Development Training Institute

The goal of this chapter is to advocate for thedevelopment of next generation leaders and forthe ways the capacity of social sector organiza-tions can be supported to fulfill their missions.

This chapter lays out the broader challengesfacing neighborhoods across America to illus-trate the magnitude of services that communitybuilding organizations are faced with providing.We outline how demographic shifts in populationand age lead to a competition for talent thatdecreases the ability of organizations to servecommunities. We briefly review the response toleadership transition and use the DevelopmentTraining Institute’s (DTI) experience workingwith community building organizations and itsresults from a recent program to make recom-mendations for supporting and attracting thenext generation’s leaders to the social sector andfor building the capacity of organizations thatpromote positive change.

CHALLENGES FACING AMERICA’SNEIGHBORHOODS

The federal deficit is close to $9 trillion andgovernment increasingly turns to the non-profitsector to provide services to meet the needs ofunderserved communities.

Some sobering statistics provide context forthe systemic issues non-profits work on to helpindividuals, families, youth and elderly overcomechallenges in neighborhoods across America:

• More than five million American householdsare renters who receive no government assis-tance, make less than 50% of the area medianincome and/or pay more than half of theirincome for rent/utilities;

• In major U.S. cities, the average high schooldrop-out rate is approximately 50 percent;

• From 1969 to 2000, the overall high schoolcompletion rate dropped from 77 percent to 70percent;

• The number of adults in correctional facilities

increased from 1.8 million in 1980 to over 7million in 2005;

• Since 1995, over half the increase in stateprison populations is due to an increase in thenumber of prisoners convicted of violent of-fenses;

• A recidivism study of prisoners released in1994 found that 68 percent of released prisonerswere rearrested for a new crime within 3 years ofrelease;

• The United States holds the highest rates ofteen pregnancy and births in the industrializedworld;

• The sons of teen mothers are 13 percent morelikely to end up in prison while teen daughtersare 22 percent more likely to become teen moth-ers themselves;

• Forty-six million Americans or nearly 16percent of the population are without healthinsurance;

• In 2006, 29 states faced a decline in theirfederal medical assistance;

• The elderly population is projected to nearlydouble by 2020 and to triple by 2050;

• From 2000 to 2030, the number of people onMedicare is projected to rise from 40 to 78 mil-lion while the number of workers supportingbeneficiaries is projected to decline from 4 to 2.4workers per beneficiary;

Solutions to these types of problems cannotbe effectively addressed by a social sector that isexperiencing leadership transitions and in-tensely competing for talent on a national scale.

DEMOGRAPHIC SHIFTS SHAPING THESOCIAL SECTOR

Steven’s story speaks to the leadership tran-sitions that many of this country’s non-profitorganizations are about to experience and thetype of support emerging leaders need to move

successfully into executive positions. Many nextgeneration leaders will face such challenges inlight of the dramatic demographic shifts nowtaking place.

Eighty million baby boomers (those bornbetween 1946-1962) will soon reach retirementage and the pool of successors — Generation X,born between 1963-1980, currently aged 35-54years — numbers only 35 million. A 2005 studyby the Annie E. Casey Foundation found that 50to 85 percent of all non-profit executives plan toleave their positions and organizations duringthe next 5-7 years (Bell and Wolfred 2006). A2006 Chronicle on Philanthropy article statedthat three-quarters of executive directors plan toleave their jobs within the next five years, andmost do not want to be an executive directoragain (Rogers 2006).

During the next decade, non-profit organiza-tions (excluding universities and hospitals) withoperating budgets of $250,000 or less will need640,000 new leaders. This is 2.5 times thecurrent number of leaders in such non-profits.The challenge faced is equivalent to attractingover 50 percent of every MBA graduating class,at every college and university across the coun-try, every year for the next ten years, into non-profit leadership (Bridgespan 2006).

Sixty percent of non-profit executives are firsttime executives. In addition, while communitiesserved by non-profits are becoming more andmore ethnically diverse, only 16 percent of non-profit organizations are currently led by peopleof color.

Another trend shaping the non-profit land-scape is the rising number of larger non-profitswith budgets exceeding $250,000, increasingfrom 62,800 to 104,700 with an annual growthrate of 6 percent in the years 1995 to 2004.

The societal challenges cited above, alongwith the impact of demographic shifts and theresulting leadership deficit, combined with the

increasing demand for non-profit services fromever more diverse communities potentially desta-bilizes organizations and hinders their ability tocontinue to provide high-quality services, leavingpopulations underserved.

CHALLENGES TO MEETING THE NEED FOR ANEW GENERATION OF LEADERS

The response to these demographic changeshas largely focused on improving executivetransition services and increasing the use ofsearch firms, mechanisms that address thedemand side of the equation. However muchthese responses have helped to address thecrisis, the supply side of the equation is provingto be inadequate. We are only just beginning tofocus on how to create a large enough pipeline ofnext generation leaders who will be ready to stepup into executive roles.

Non-profits will have to compete with theprivate and public sectors to find, attract andretain talent. The non-profit sector does nothave the infrastructure and human resourcesfor management-education or executive searchesthat are available to the private sector.

The average college student now graduateswith $27,600 of debt, almost three and a halftimes what it was a decade ago. Eighty-fourpercent of African American students and 66percent of Latino students graduate with debt.And 39 percent of all student borrowers gradu-ate with unmanageable levels of debt, accordingto the Department of Education.

While corporate businesses fill 60 to 85percent of their management positions throughinternal promotions, non-profits average closerto 30 to 40 percent. This characteristic is furthersupported by CompassPoint’s Daring To Lead2006 study that says, “Many small and mid-sized non-profits lack the staffing depth todevelop leaders inside the organization; only halfof executive directors say they’re actively devel-

oping a future executive director” and “only athird of charity leaders say they now have seniorofficials on staff who are capable of taking overthe top job” (Bell and Wolfred 2006).

Due to the lack of qualified internal candi-dates, non-profits hire management or executivesearch firms that are more costly than hiringfrom within (Tierney 2006). To attract talent,non-profits must be able to offer competitivesalaries, benefits, and work-life balance or thebest and brightest will leave or never enter thenon-profit sector, which would negatively impactnon-profit innovation.

Organizations must therefore be supported inbuilding their internal leadership through theprovision of core operating grants that can beused to retain and build their leadership capac-ity. The next section describes one approach todevelop leaders and build the capacity of com-munity building organizations and the impactthis approach has had on their services.

COMBINING LEADERSHIP DEVELOPMENT

WITH CORE FUNDING

Bank of America’s Neighborhood ExcellenceInitiative™ (NEI) is a core operating supportgrant and a leadership development programmanaged by the Development Training Institute(DTI) in partnership with the Bank of AmericaCharitable Foundation, Inc.

Using a competitive selection process, Bankof America annually awards $18 million in$200,000 mission-oriented grants to 90 com-munity building organizations in 43 cities inthe United States as well as London in theUnited Kingdom. By the end of 2007, the bankwill have awarded $62 million in core operatingsupport to 310 high-performing communitybuilding organizations. This core operatingsupport enables non-profits to increase theircapacity as they deem fit rather than restrictingthem with funds tied to a specific program.This unique program goes further and com-bines mission-oriented funding with relevantand research-based leadership developmentconducted by DTI.

By the end of 2007, 620 executive directors

WHO ARE THE NEXT GENERATION LEADERS?

A profile of next generation leaders based on a series of Generational Leadership ListeningSessions conducted by The Building Movement Project in 2004 reveals that young leaders:

• Are inspired by social change but wish to be treated and paid as professionals in ways thatallow them to pay their educational debts and live a reasonable lifestyle.

• Are reluctant to become executive directors because of the lack of work-life balance.

• Want more participatory, transparent, and accountable non-profit decision-making struc-tures.

• Urgently need mentoring structures from exiting baby boomers.

Based on this information of what will attract next generation leaders, non-profit organiza-tions will need to build their capacity and develop frameworks and structures that address theneeds of existing and incoming leaders.

Providing non-profits with operating support as well as leadership development opportunitiesare key elements in building their ability to innovate, create succession plans, increase the skillsets of existing management, and develop the systems necessary to attract required leadership.

and emerging leaders will have enrolled in theNEI. These leaders represent a cross section ofthe non-profit sector working in the fields ofcommunity development and affordable hous-ing, education and youth development, healthand human services, and arts and culture.

Bank of America’s multi-layered supportincludes significant core operating funds,public recognition and state-of-the-art leader-ship development, and has had a tremendousimpact on its non-profit grantees. An evalua-tion of the first 60 organizations funded from2004-2006 found that providing unrestrictedcore operating support in conjunction withexecutive leadership training allowed organiza-

tions to address vital organizational needs suchas:

• Increasing organizational capacity(through improved management systems,increased staffing and/or enhancedboards of directors);

• Increasing financial stability (throughaugmented unrestricted net assets andimproved cash flow as well as leveragedgrant and project financing);

• Increasing innovation (in terms of newprograms, projects, and approachesdeveloped and implemented).

Participants in Bank of America’s Neighborhood Excellence Leadership Program™ reportedthe program prepared them for leadership succession and transition as well as provided newmodels that increased their leadership capacity.

“Little Village CDC’s improvement in organizational capacity since receiving the NeighborhoodBuilder’s award is most clearly illustrated by our growth over the last two years. Our organiza-tional budget grew from $905,000 in 2004 to $2,329,000 in 2006. Our staff grew from 7 full-timeemployees to 26 full time employees and over 30 part-time employees. In addition, LVCDClaunched its first website (www.lvcdc.org). This astounding growth would not have been possiblewithout NEI.” (Little Village Community Development Corporation, Chicago, Illinois)

“One of the most important aspects of winning the Neighborhood Builder Award for Carrfour wasthe leadership training provided to the Executive Director and to an emerging leader in the organi-zation. I was the emerging leader selected by my organization to attend the training sessions. Ihad no idea at the time that I would soon be the organization’s Executive Director. The trainingprovided by DTI prepared me for this challenge. The succession planning sessions were invalu-able. Having the opportunity to spend time focused on Carrfour’s future leadership with theorganization’s founding Executive Director was critical to my ability to step into her shoes.”(Carrfour Supportive Housing, Miami, Florida)

“The story that most directly affects me is that by allowing us to involve our Emerging Leaders, Ihave seen the person I wanted to succeed me one day become the person who can succeed meone day. The confidence gained and the ‘take charge’ attitude established from this experience isevident on a daily basis. It has also shown me the importance of having a Succession Plan(which I now have) and the benefit of that to the organization. I recently saw the results of a long-term leader leaving her organization without one and how the agency floundered after her leav-ing. It has meant that her successor has not only had to acclimate herself to the organization butalso start from scratch in developing her position. My successor will not have to do that and canmake a very smooth transition.” (Hope Haven, Inc., Charlotte, North Carolina)

P t t di h i ld d k d ti f th fit t

RECOMMENDATIONS FOR THE FUTURERECOMMENDATIONS FOR THE FUTURERECOMMENDATIONS FOR THE FUTURERECOMMENDATIONS FOR THE FUTURERECOMMENDATIONS FOR THE FUTURE Francis Kunreuther’s research on executivetransitions and Building Movement Project in2005 sponsored by the Annie E. Casey Founda-tion and the Evelyn and Walter Haas, Jr. Fundrecommends “investing in young leaders, identi-fying and nurturing more leaders of color, mak-ing it viable for directors to leave their organiza-tions, broadening sites of intergenerationaldiscussion, examin[ing] organizational struc-tures and expectations, and promoting ahealthier balance between work and personal/family life” (Kunreuther 2005).

Bridgespan’s 2006 study of the non-profitsector’s leadership deficit calls for “investing inleadership capacity, refining management re-wards to retain and attract top talent, and ex-panding recruiting horizons and fostering indi-vidual career mobility” (Tierney 2006).

The CompassPoint/Meyer Foundation’snational survey of non-profit executive leader-ship, Daring to Lead 2006, found that “Increasedgeneral operating support and multi-year sup-port were cited as the two funder actions thatwould help executive directors the most”(CompassPoint and Eugene & Agnes E. MeyerFoundation 2006).

DTI’s national experience in designing andconducting leadership development for non-profit organizations yields additional recommen-dations to the existing body of research.

• Recognize that the private and public sectorseach have the ability to recruit, develop andretain next generation leaders using financialand career development capacity that greatlyexceeds the resources of the social sector.

• Foundations or federal and/or state govern-ments should initiate programs to create incen-tives for new college graduates to enter the socialsector where, for example, organizations couldapply for certification as recipients and wherestudents, after five years of service, can pay offeducation loans.

• Support research, design, and pilot testing ofnew models to develop next generation andtransitioning leaders with particular attentionpaid to intergenerational models of leadershipdevelopment.

If you want to achieve a breakthrough onany vexing social problem, it is essential thatinvestment be made in developing diverse, re-sults driven leaders in high impact organizationsto invent and to try out new ways of making adifference. The magnitude of need and thescale of leadership challenges organizations areexperiencing makes it essential not only toprepare the next generation of leaders to assumeexecutive and leadership positions, but also toenable them to reinvent organizations with agreater capacity to address the larger issues inour society.

REFERENCES

Bell, Jeanne and Timothy Wolfred. Daring to Lead 2006: A National Study of Nonprofit Executive Leadership.

CompassPoint and Eugene & Agnes E. Meyer Foundation. Website at http://www.compasspoint.org/assets/

194_daringtolead06final.pdf.

Kunreuther, Frances. 2005. Up Next: Generation Change and the Leadership of Nonprofit Organizations, Execu-

tive Transitions Monograph Series, Volume 4. Annie E. Casey Foundation and the Evelyn and Walter Haas, Jr. Fund.

Website at http://www.aecf.org/upload/PublicationFiles/LD2928K643.pdf.

Rogers, Julie. 2006. “Foundations Are Burning Out Charity CEO’s.” Chronicle of Philanthropy (March 9).

Tierney, Thomas, J. 2006. The Nonprofit Sector’s Leadership Deficit. The Bridgespan Group. Website at http://

www.bridgespangroup.org/kno_articles_leadershipdeficit.html.

What’s Happening toThe Neighborhood?

NEIGHBORHOOD

PLANNING AND DATA

Neighborhood Planningin the New Millennium

Lynn M. Ross, AICP, formerly Planning Advisory Service Manager,American Planning Association and currently Director of State and

Local Initiatives, National Housing Conference and Center forHousing Policy and Megan S. Lewis, AICP, formerly

Senior Research Associate, American Planning Association andcurrently Executive Director, The Land Connection

NEIGHBORHOOD PLANNING IN THE NEW MILLENIUM

Lynn M. Ross, AICP, formerly Planning Advisory Service Manager, American Planning Association andcurrently Director of State and Local Initiatives, National Housing Conference and Center for HousingPolicy and Megan S. Lewis, AICP, formerly Senior Research Associate, American Planning Association

and currently Executive Director, The Land Connection

INTRODUCTION

When we think of great neighborhoods, wetend to imagine dynamic, vibrant, welcomingplaces. One quality that often accompaniessuch places is change. Neighborhoods areplaces that change, sometimes dramatically, andnot always for the better. While neighborhoodchange is generally accepted, it is not alwaysplanned for or viewed as an opportunity. Be-cause the elements of a neighborhood are sointerconnected, when change happens it oftenhas a ripple effect that can be overwhelming. Amajor employer may leave an area, causing asignificant employment decline that contributesto reduced property values. Or a neighborhoodmay become “hot,” with new or rehabilitatedresidential development and the possibility ofgentrification.

Because they are not static environments,neighborhoods are exciting places to live, work,and recreate. But how can neighborhoodchange be processed in a way that allows us toplan for change? It may be useful to think ofneighborhood change as part of a life-cyclepattern. Developed by land economist RichardAndrews, the life-cycle model of land-use changeis particularly helpful when applied to neighbor-hoods. The model has six phases:

1. Growth: Neighborhood is healthy as evi-denced by residential and commercial growth.

2. Maturity: Neighborhood remains stable andproperty values continue to rise.

3. Decline: Residents and business ownersbegin to show concern over the future of theneighborhood as property turn-over takes place.

4. Uncertainty: Neighborhood is in transition.Owner-occupied units may become rental andthe neighborhood experiences significant eco-nomic pressure.

5. Late decline: Decline of the neighborhood iscertain. Private market interventions alone areunlikely to reverse the trend of decline.

6. New growth: Neighborhood revitalizationefforts begin to take hold. Commercial andretail uses return. The housing market isstabilized.

Understanding how neighborhoods changeallows for a planning process and revitalizationefforts that result in places that express all ofthe qualities of a great neighborhood. Thischapter provides guidance on how communitiescan positively address neighborhood changethrough an inclusive neighborhood planningprocess.

NEIGHBORHOOD REVITALIZATIONGENERALLY

Planning for neighborhood revitalization isnot a new concept, but it has gained renewedinterest in recent years. Across the country,residents have moved to assert more control overtheir neighborhoods. Also, governmental pro-grams have shifted the emphasis of financialresource allocation towards a decentralized andtargeted approach. Federally sponsored blockgrants and empowerment zones, along withpublic-private partnerships, incorporate a citizenparticipation component that ideally combinestop-down and bottom-up planning techniqueswith inclusive leadership.

Neighborhood revitalization efforts generallyfall into one of three categories: (1) locally spon-sored citywide planning programs; (2) indepen-dently organized efforts by indigenous neighbor-hood or community organizations; and (3) feder-ally sponsored community development pro-grams, which operate through the same frame-work as the first two categories.

Locally Sponsored Citywide PlanningPrograms. Intended to balance citywide plan-ning goals and policies with “an all-inclusive andmeaningful citizen oriented process,” this ap-proach identifies neighborhood priorities andissues and reconciles conflicts between the two.Plans resulting from such an effort can conceiv-ably become the blueprint for all local govern-ment, nonprofit, and community revitalizationefforts. Following this model, a number ofstates and cities—Minnesota, Nashville/Davidson County, the District of Columbia—have established programs formalizing the roleof neighborhoods in the planning process.

Independently Organized Efforts. Thistype of effort is led by business, civic, or neigh-borhood development groups with interests inbroader efforts to maintain or revitalize theneighborhood. This type of effort can also beorganized by an informal group that comestogether over a specific issue or threat (real orperceived) to the neighborhood. Some commu-nities require neighborhood groups to receiveofficial recognition in order to participate in theformal planning process, whereas other commu-nities create citizens boards to ensure residentrepresentation.

Whether led by the city or neighborhoodresidents, successful neighborhood revitalizationefforts do not fear change. On the contrary,successful efforts embrace change. Take theexample of the Hannibal Square neighborhoodin Winter Park, Florida.

KEY SOLUTIONS IN PRACTICE: THEHANNIBAL SQUARE STORY

Founded in 1881, Winter Park, Florida, wasoriginally an upscale residential and resortcommunity for New England industrialistslooking to escape bleak northern winters. Cityfounders designated an area on the west side oftown for African American grove and hotel work-ers. Despite its prejudicial roots, this neighbor-hood, Hannibal Square, became a stronghold ofculture, history, and community pride for WinterPark’s African American residents.

Not unlike other segregated neighborhoodsacross the country, Hannibal Square fell on hardtimes in the 1960s. Spurred by changing eco-nomic realities and new cultural attitudes, thepercentage of owner-occupied properties de-creased, with rental properties and vacanciesfilling the void. By the 1980s, the physical andsocial infrastructure of this once-thriving neigh-borhood had deteriorated, even as other areas ofthe city were experiencing increased commercialand residential development. However, cityplanners and residents saw Hannibal Square’spotential and organized revitalization efforts.Those efforts have come to fruition. In thetradition of Jane Jacobs, the community hasworked together to preserve Hannibal Square’sunique character. At the same time positivechange has resulted from an infusion of com-mercial redevelopment, affordable and market-rate residential infill development, and infra-structure improvements.

At the center of the Hannibal Square revital-ization is Winter Park’s Community Redevelop-ment Agency (CRA) Plan, adopted in 1994. Thepurpose of the plan, according to the city’swebsite, “is to explore the critical factors thathave shaped Winter Park and to identify oppor-tunities to create a quality environment forresidents and businesses.” While the plan en-

compasses a slightly larger geographical areabeyond Hannibal Square, the revitalization ofthe neighborhood is the focus. The plan pro-vides the vision for Hannibal Square againstwhich all proposed projects are measured. TheCRA plan, along with Winter Park’s comprehen-sive plan, has been used to protect thecommunity’s character by ensuring that redevel-opment occurs at a scale and density matchingthe vision for Hannibal Square. It includesdesign guidelines for both commercial andresidential infill development. Those guidelineshave been particularly important in addressingopposition to new affordable housing projects.

One aspect of Hannibal Square’s revitaliza-tion worth particular mention is the approach toaffordable housing. While market-rate housingin Hannibal Square would come as a naturaloutgrowth of improvement efforts and develop-ment pressures, it required innovative thinkingto create a mixed income neighborhood thatavoided gentrification. Winter Park has suc-cessfully used strategies like an affordablehousing ‘linkage fee’, partnerships with thehousing authority and Habitat for Humanity,and the creation of the Hannibal Square Com-munity Land Trust to create housing choicewithout large-scale displacement. (A linkage feeis a requirement placed on new industrial orcommercial developments to offset the impact ofthe development on housing needs in the com-munity. The fees collected are placed into atrust fund for the local government or otherauthority to use in building affordable housing.Winter Park has a linkage fee of $0.50 persquare foot of non-residential development. Tolearn more see the Central Florida WorkforceHousing Toolkit developed by Orange County, FLavailable online at http://www.orangecountyfl.net/cms/WorkforceHousing/Financial.htm).

The revitalization of Hannibal Square is notlimited to housing. The city, in partnershipwith its redevelopment agency, has initiated anumber of other community improvementsdesigned to rebuild area infrastructure, encour-age new mixed use development, increase eco-nomic development, and enhance thestreetscape. A dilapidated water treatmentplant serving the area has been replaced with astate-of-the-art structure. A number of trafficand parking improvements have also beenimplemented, including the restoration of thecommunity’s original brick streets and theaddition of street lamps. The streets not onlyadd to the aesthetics of Hannibal Square, butalso improve walkability by calming traffic.

Hannibal Square represents what can hap-pen when the change is viewed as an opportu-nity to develop a vision that creates a neighbor-hood of choice.

PRINCIPLES OF GOOD NEIGHBORHOODPLANNING

Successful neighborhood planning is groundedin five principles: establishing partnerships,defining both needs and assets, creating a vision,developing an inclusive plan, and communicatingthat plan. Each of these principles is describedbelow.

Establishing Partnerships

Although local government typically takes thelead in neighborhood planning, the processmust not take place in a vacuum. No oneknows a neighborhood better than those wholive and work in it. Building and sustainingpartnerships among a variety of stakeholderscan help to ensure a plan is representative of theneighborhood. These relationships are also keyto the successful implementation of the plan.Residents, business owners, and neighborhood

groups are more likely to support the plan over-all, not to mention a specific project, if theyplayed a meaningful role in the development ofthe plan. For example, Winter Park officialshave partnered with neighborhood residents andbusiness owners throughout Hannibal Square’srevitalization.

Defining Neighborhood Needs and Assets

Defining neighborhood needs is fundamentalto the planning process. In order to best planfor future neighborhood services and facilities, asolid understanding of community needs isrequired. A needs assessment can measurephysical conditions, social services, culturalamenities, and commercial resources.

Good neighborhood plans, however, go be-yond simply defining needs. Good plans recog-nize that all neighborhoods have assets. Neigh-borhood assets can be defined using a processpioneered by McKnight and Kretzmann calledasset mapping (McKnight and Kretzmann 1993).Asset mapping is the process of identifying theindividual, organizational and institutionalcapacities as well as the resources of a particu-lar community. Assets might include culturalor religious organizations, neighborhood busi-nesses, resident associations, schools, parks,police and fire protection, and even vacantbuildings or land.

Despite being in decline, Hannibal Squareboasted a number of community assets — va-cant land, a rich history, parks — that becameintegral to rebuilding the community. The citytransformed a centrally located but rundownopen space near the community center intoShady Park. It features a water spray pool thatis enormously popular with children on hotsummer days and has become a natural gather-ing place for community events, including thecity’s annual Unity Heritage Festival, which

celebrates local family history and raises fundsto educate disadvantaged young people.

Creating a Vision

Visioning is a process involving acommunity’s citizens that establishes a desiredfuture for the community’s development bysetting a course for public action and policychange. Visioning exercises help communitiesadvance a shared sense of purpose while en-couraging the leadership needed to fulfill thatpurpose.

Community visioning efforts help cities adaptto change by identifying mutual values andaspirations. In Winter Park, the vision forHannibal Square was critical to the developmentof the CRA plan and its implementation. Whenpotentially contentious issues are on the hori-zon, the visioning process can smooth the way topolitical consensus. Before crafting a vision,adequate resources must be available and keycommunity institutions and opinion makersmust be on board.

One successful model for community vision-ing was developed in the state of Oregon. TheOregon Model frames the visioning processusing four questions:

1. Where are we now?

2. Where are we going?

3. Where do we want to be?

4. How do we get there?

Communities can employ any number oftechniques including public meetings and‘charrettes’. (According to the NationalCharrette Institute, a charrette is a multiple-daycollaborative design and planning workshop heldon-site and inclusive of all affected stakeholders.For more information see Lennertz andLutzenhiser (2006).) Visioning is a unique expe-

rience for every neighborhood. The tools se-lected should reflect the cultural and politicallandscape of the neighborhood in question.Often, the community is skeptical aboutwhether any element of the vision will actuallybe implemented. If visioning is to be effective,the creative and collaborative aspects of thevisioning process must be balanced by realisticgoals and objectives, grounded in action plansor benchmarking systems. That said, a fifthquestion can be added to the visioning processduring implementation: Are we getting there?

Develop an Inclusive Plan

Inclusiveness is an important element notonly in the planning process, but in the planitself. The plan should be based on the visiondeveloped by a variety of stakeholders. Inaddition to the vision, the plan must reflect allof the data from the needs assessment, as wellas the information gained from the asset map.The inclusive plan strikes a balance among themany needs and desires expressed during theplanning process. Moreover, the plan ensuresthat implementation of the plan also is aninclusionary process. All of the stakeholderscreating the plan should be invited to partici-pate in an ongoing evaluation of the plan’simplementation.

The plan for Hannibal Square was verymuch an inclusive effort. The plan was createdwith significant involvement from citizens andother stakeholders. Winter Park has partneredwith a number of public and private entities,including banks, local schools, civic groups,and architecture and real estate trade groups tomove the plan forward, and this ongoing col-laboration ensures its continued relevance andsuccessful implementation.

Communicate the Plan

The work of neighborhood planning does notend with the production of the plan—you needto communicate the plan to sustain ongoingsupport. This is another opportunity to use thepartnerships developed during the planningprocess. Neighborhood residents, businessowners, and civic organizations can serve asplan or project boosters in ways that local gov-ernment cannot.

There are a variety of communication ve-hicles available to build ongoing support for aplan:

• Create a simple message that expresses thebenefits of the plan. Consistent use of a mes-sage helps reach key audiences and helps themretain important information. The messageshould resonate with residents, business own-ers, and civic organizations. It should bememorable, short, and used on all plan promo-tional materials.

• Work with the local newspaper to write anarticle about the plan or submit an opinion pieceand letters to the editor advocating continuedsupport of the plan. Multiple individuals cansign the opinion piece or submit letters to illus-trate broad community support for the plan.

• Use a website to keep the neighborhood in-formed about the plan, including updates andprogress reports.

• Start an e-mail distribution list to send outregular updates and information to residents.

• Make window flyers and yard signs availablefor residents and business owners to displaytheir support for the plan.

• Hand out buttons for individuals to wear toshow their support for the plan.

In Winter Park, Hannibal Square residentsare kept abreast of plan implementation throughregular meetings and a monthly newsletter onthe city’s website.

SUCCESSFUL NEIGHBORHOOD PLANS

As neighborhoods change, local leaders needto make every effort to engage citizens in theplanning and decision making process. Suchefforts should seek to foster or sustain a senseof community within neighborhoods. Thus,local governments should create a clear set ofguidelines to follow when creating neighborhoodplans.

The information below discusses what needsto be in place before neighborhood planningstarts, what information a neighborhood planshould contain, and how implementation of theplan priorities should occur.

Before Plan Preparation

The local planning agency should:

• Adopt rules or guidelines that must be fol-lowed for preparing neighborhood plans andmake those rules or guidelines available to allprivate entities, organizations, or agencies thatwill be preparing neighborhood plans.

• Routinely conduct inventory and analysisstudies of topic areas relevant to thecommunity’s neighborhoods. Examples oftopics typically addressed include:

• Population profiles

• Employment opportunities

• Housing conditions

• Infrastructure conditions

• Transportation services and accessibility

• Educational institutions

• Commercial activity

• Vacant properties

• Public safety

• Historic structures and sites

• Community services

• Overall quality of life

• Update these studies regularly (e.g. every fiveyears) and ensure the involvement of all privateentities, organizations, or agencies that would bepreparing neighborhood plans.

• Design a participation program that involvespeople from underrepresented populations,including minorities and non-English speakers,and provides the resources necessary to allowthem to participate. A few examples include theuse of interpreters at meetings, promotion withmultilingual written notices, free provision ofchild care, and scheduling meetings at uncon-ventional times, such as weekends.

Plan Contents

Neighborhood plans should address a widerange of issues. However, plans should also betailored to meet the specific needs of a commu-nity. The following are suggestions to allow forboth the broad treatment of topics and focusedattention on key issues with a neighborhoodplan.

Background Materials

• Definition of and a map showing neighborhoodboundaries, including a description of how theywere derived and how they apply to municipalservice areas.

• Description of the neighborhood and maps ofthe existing land use, community facilities,transportation choices, neighborhood assets,neighborhood challenges, and other neighbor-hood matters that can be graphically repre-sented.

Plan Substance

• Vision statement, developed through a publicprocess.

• Summary of the plan’s goals, objectives, andactions, matched with both the vision statementand the broader local comprehensive plan al-ready adopted by the local government. Ifapplicable, the plan should also be connected tothe goals, policies, and guidelines of the regionalplan.

• Clear statement of opportunities, problems,issues, and priorities that arose out of the plandevelopment process.

• Detailed description of the plan’s goals, objec-tives, and actions.

• Plan for the neighborhood describing proposedimprovements to the neighborhood, includingmaps of future land use, community facilities,transportation and mobility choices, and otherneighborhood matters that can be graphicallyrepresented.

• Plan for implementation (detailed below).

• Design guidelines for development and rede-velopment projects.

Supporting Materials

• Directory of participants.

• Directory of individuals not involved, butwhose involvement would benefit the plan.

• Directory of resources.

• Date of adoption and date for the next reviewor update.

• Statement of acceptance by the municipality.

• Schedule for periodic plan revision, e.g. everyfive years.

Implementation

Every plan, to be effective, needs to have animplementation strategy. That strategy pro-vides a basis for committing local governmentfinancial resources, as well as private financialresources to carry out proposals and programs,especially capital projects. The following de-scribes the implementation components thatshould be included in neighborhood plans.

The implementation strategy should:

• Be as specific as possible, detailing all tasks tobe performed as identified by the plan; a sched-ule of priorities for short, medium, and long-term tasks; specific funding sources identifiedand earmarked for each task; and the agencyresponsible for implementing each task.

• Include an implementation chart summarizingthe above information in an “at a glance” format.

• Include short term implementation projectsthat can happen quickly, to build support andmomentum. The timeframe for the neighbor-hood plan’s implementation should be shorterthan the city or region’s broader comprehensiveplan’s implementation program.

• Include actions already being taken by thelocal government and by other governmentalagencies, nonprofit group, and for-profit groupsthat are related to the plan priorities.

• Explore emerging tools to implement projects,such as community benefits agreements. (Com-munity benefits agreements are contracts signedby community groups and developers that setforth a range of community needs that the devel-oper agrees to provide as part of a developmentproject. For more information, see Gross,LeRoy, and Janis-Aparicio 2005).

• Use measurement tools like neighborhoodindicators to measure progress, both over the

course of the plan and to prepare for the nextplan.

• Have a strategy for informing new residents ofthe plan, such as a display at the local publiclibrary, inclusion in neighborhood associationmeetings, and information on a website. Seethe earlier discussion about communicating theplan for more strategies.

POLICY RECOMMENDATIONS FORNEIGHBORHOOD PLANNING

The following are selected American PlanningAssociation (APA) policy positions related toaddressing change in neighborhoods. Thestatements here are intended to apply to thoselarge jurisdictions that have identified areas ofthe community as distinctive neighborhoods.

Neighborhood Collaborative Planning

1. Neighborhoods should be encouraged to seekthe best organizational structure that is suitedto achieve their goals and objectives such as,but not limited to, neighborhood associations,co-ops, and community development corpora-tions.

2. Neighborhood-based coalitions that assist inthe development of individual neighborhoodorganizations, articulate neighborhood views oncommunity wide issues, and facilitate coordina-tion in the planning process should be encour-aged and supported by local government.

3. To be effective in many cases, neighborhoodplanning needs to go beyond addressing thephysical conditions of the area and also examineissues of social equity. To that end, plannersshould work with social service, housing, eco-nomic development, public health, educational,recreational, judicial and other organizations toensure that the issues of social equity, childrenand families receive attention [in the plan].

4. City government should be encouraged tocoordinate the resources of the city according toapproved neighborhood plans. This includesfunds for transportation, community policing,solid waste services, housing and communitydevelopment, school and library funding andeconomic development and tourism amongothers.

5. Local capital improvement plans, service areaboundaries, community and human serviceallocations and other community resource strat-egies should link funding to neighborhood priori-ties. The municipality should actively solicitneighborhood participation in the overall budgetprocess to truly reflect neighborhood needs andinterests. Neighborhoods should see tangiblebenefits come out of their work and the cityshould favor neighborhoods that undertakeneighborhood planning.

6. Effective neighborhood planning requiresthat the municipality provide regular opportuni-ties, formal and informal, for neighborhoodleaders across the municipality to meet amongthemselves and with local officials to discusshow the implementation of neighborhood plan-ning is going, and to compare progress withtheir own and the community’s overall goals.

Housing

1. Use plans and development regulations toreduce housing stratification and spur thedevelopment and preservation of affordablehousing.

2. Promote better balance between the locationof jobs and housing.

3. Encourage and implement residential devel-opment practices that result in more innovativehousing options for diverse populations andwhich foster sustainable development.

Redevelopment

1. Support adequate funding of programs thatassist communities with community redevelop-ment.

2. Support adequate funding for urban parksdevelopment and maintenance.

3. Support tax incentives for the reuse andrehabilitation of historic and other qualifyingexisting structures.

Smart Growth

1. Support strategies that promote reinvestmentwithin urban communities to reverse the generaldecline of urban neighborhoods and the trendtoward isolated, concentrated poverty.

2. Encourage mixed-income neighborhoods asthe foundation for healthy regions.

3. Require affordable housing to be provided inall new-growth areas or through the reinvest-ment in core communities.

4. Enhance public education systems, whichare an essential component of community build-ing in urban, suburban, and rural areas, andwhich ensure that children have an opportunityfor an excellent education in existing communi-ties.

5. To further such opportunities, advocate forstrategies that increase neighborhoods that areeconomically and socially diverse.

6. Support locating new development, especiallypublic facilities, in areas supported by a bal-anced transportation network that provides avariety of transportation choices and supportsmore active, healthy lifestyles.

REFERENCES AND RESOURCES

American Planning Association. 2002. Grow-ing Smart Legislative Guidebook. Website athttp://www.planning.org/growingsmart/.

American Planning Association. 2006. Plan-ning and Urban Design Standards. (Hoboken,NJ: John Wiley and Sons).

American Planning Association. Various years.Policy Guides on Neighborhood CollaborativePlanning; Housing; Public Redevelopment;Smart Growth. Website at www.planning.org/policyguides.

Gross, Julian, Greg LeRoy and Madeline Janis-Aparicio. 2005. Community Benefits Agree-ments. (Washington, DC: Good Jobs First andCalifornia Partnership for Working Families).Website at http://www.californiapartnership.org/downloads/CBA%20Handbook%202005%20final.pdf.

Kretzmann, John P. and John L. McKnight.1993. Building Communities from the Inside Out:A Path Toward Finding and Mobilizing aCommunity’s Assets. (Evanston, IL: Center forUrban Affairs and Policy Research, Neighbor-hood Innovations Network, Northwestern Uni-versity).

Lennertz, Bill and Aarin Lutzenhiser. 2006. TheCharrette Handbook: The Essential Guide forAccelerated, Collaborative Community Planning.(Chicago: APA’s Planners Press).

Ross, Lynn M. 2007. “Winter Park Creates aNeighborhood of Choice.” Planning. (April): 20-1.

Winter Park, City of. 2007. Community Redevel-opment Agency. Website at http://www.ci.winter-park.fl.us/2005/depts/cra.shtml.

What’s Happening toThe Neighborhood?

NEIGHBORHOOD

PLANNING AND DATA

Measuring the Well-Being of America’sMeasuring the Well-Being of America’sMeasuring the Well-Being of America’sMeasuring the Well-Being of America’sMeasuring the Well-Being of America’sNew Neighborhoods: The New PotentialNew Neighborhoods: The New PotentialNew Neighborhoods: The New PotentialNew Neighborhoods: The New PotentialNew Neighborhoods: The New Potential

G. Thomas Kingsley, Director

Center for Public Finance and Housing

The Urban Institute

MEASURING THE WELL-BEING OF AMERICA’SNEW NEIGHBORHOODS: THE NEW POTENTIAL

G. Thomas Kingsley, Director

Center for Public Finance and Housing The Urban Institute

Community advocates and practitioners, aswell as scholars, have long recognized that thehealth of America’s urban areas cannot bemeasured by looking at statistics for cities as awhole. Wide disparities exist across the neigh-borhoods of all urban areas. A slight improve-ment in the city-wide average may well be mask-ing deteriorating conditions in the most dis-tressed neighborhoods being offset by modestimprovements in many others. (For a review ofthe evidence on how neighborhood conditionsmatter in outcomes for families, see Ellen andTurner (1997).)

Obtaining adequate information at the neigh-borhood level, however, has been a serious andongoing frustration. We have been able to findout a considerable amount about neighborhoodwell-being nation-wide just after each decennialcensus but, up until recently, we have hadvirtually nothing to indicate even the broaddirections of neighborhood change betweencensuses. Ten years is a long time to wait whenso many critical decisions are dependent on up-to-date knowledge of neighborhood trends.

Finally in this decade, however, the potentialfor better year-to-year information about neigh-borhoods is improving markedly. The improve-ments are occurring on three fronts.

• First, effective local data intermediaries havenow been established in many U.S. cities andthey are assembling a rich array of automatedadministrative records from local agencies (forexample, on crime rates, vital statistics, propertysales volumes and prices) and taking advantageof increasingly inexpensive Geographic Informa-tion System (GIS) technology to produce and

analyze annually updated information on neigh-borhood conditions.

• Second, at the national level, a growing num-ber of nation-wide data files are being madeaccessible that have data at the neighborhoodlevel (the best example is the annually updateddataset on mortgage lending activity at thecensus tract level, mandated by the Home Mort-gage Disclosure Act – HMDA).

• Third, the U.S. Census Bureau’s AmericanCommunity Survey (ACS) will begin to providecensus tract level data in 2010, although it mustbe emphasized that ACS data at that point willnot be the same as the full census “long-form”data of old.

Census tracts are small statistical subdivi-sions of counties averaging about 4,000 inhabit-ants. The Census Bureau makes data from thedecennial censuses available for them and willdo so with ACS data in the future. Most werereasonably homogeneous when originally de-fined, and boundaries are periodically changedto try to keep them that way, but they are nowfar from perfect in that regard. Nonetheless, fornational analysis, tracts are small enough thatthey capture most of the variation that shouldbe of interest in assessing trends in neighbor-hood well-being across cities.

This chapter reviews the potentials on all ofthese fronts, then ends by considering what itmight take to prepare sound statistically-basedannual reports on the well-being of neighbor-hoods at both the city and national levels. Be-forehand, however, to guide these inquiries, weoffer views about why learning more about

neighborhoods remains important, and aboutthe kinds of information that need to be devel-oped.

WHY WE NEED TO LEARN ABOUTNEIGHBORHOODS

Concerns about neighborhoods intensified inthe last half of the twentieth century with therecognition that poverty was becoming more andmore concentrated in inner-city neighborhoods,bringing considerable suffering to their residentsand undermining the social and economichealth of the surrounding urban areas (see, inparticular, Wilson 1987). It can be argued that,as the century began to draw to a close, interestin the problem was waning. Public interest inany problem can only be sustained when thereis a belief that there is some reasonable possibil-ity of fixing it, and by 1990 even many respon-sible observers seemed to have given up hope.

But then the decade of the 1990s offered asurprising change in course. Poverty began todisperse. The share of the metropolitan poorthat live in ”high-poverty neighborhoods” (pov-erty rates of 30 percent or more), which hadincreased from 25 to 31 percent in the 1980s,dropped back to 26 percent in 2000. Otherconditions generally improved as poverty rateswent down. And the improvements were wide-spread, with overall drops in concentrated pov-erty in all but 17 of the 100 largest metropolitanareas (Kingsley and Pettit 2003 – see alsoJargowski 2003).

It is important to understand, however, thatthis shift did not represent the complete turn-around some recent press accounts seem tosuggest. The reality was much more complex.More recent research (Kingsley and Pettit 2007)contrasted census tracts in the 100 largestmetropolitan areas that improved in a decade(poverty rate decreased by 5 percentage pointsor more) with those that worsened (poverty rate

increased by 5 points or more). They found that,indeed, a larger share improved in the 1990s (11percent) than in the 1980s (8 percent). But thateven though some census tracts were improving,the shares that worsened were actually larger inboth decades: 15 percent in the 1990s downfrom 19 percent in the 1980s. (Many of thetracts that worsened started out at low povertylevels so they tended to increase the share in themiddle ranges of poverty rather than the high-end that defines “concentrated poverty”.) Inmetropolitan areas with strong markets, theshare of neighborhoods that improved washigher than where markets were weak, but theresults were always a mix; some neighborhoodsworsened even in the strongest markets and viceversa. This analysis found no simple set ofindicators as of 1990 that reliably differentiatedwhich tracts would improve or worsen over thesubsequent decade.

This research also found a worsening ofneighborhood poverty in the 1990s was oftenaccompanied by the in-migration of lower-income minorities, but comparatively few of theimproving tracts experienced large changes inracial composition, suggesting that gentrificationwas not the dominant explanation. While therewere many exceptions, tracts that improved weremost often found in the inner portions of thecentral city and the outer rings of the suburbs.In contrast, tracts that worsened were moreprevalent in the outer portions of the cities and,in particular, the inner ring of the suburbs.

This situation has all of the features thatshould make a very strong case for more invest-ment in neighborhood information: (1) the cir-cumstances in U.S. cities are promising in manyways - clearly far from hopeless; but (2) seriousproblems remain and there is no indication thatthey are self-correcting; (3) those problems arecritical to our national interest in terms of eco-nomic competitiveness as well as social justice

(recent research suggests that the health of ourcities is more critical to the overall economythan was generally believed a decade ago); and(4) while much has been learned about thecomplexity of neighborhood realities (we havemoved beyond the misleading stereotypes) westill do not know enough about neighborhooddynamics to guide the process effectively.

WHAT DO WE NEED TO KNOW?

What information is needed to understandand address neighborhood challenges and op-portunities? That depends in part on who isgoing to use the data and for what purposes.Our view is that the central priority should be tosubstantially improve the information base fordecision-makers at the local level. They are theones that make almost all of the choices thatrely on data on differences between neighbor-hoods and have the most profound effects onneighborhood outcomes. Clearly, state- andnational-level players need information onneighborhoods too (so they can keep score over-all and make broader corrections to policies andprograms), but they do not need the same levelof richness or detail.

There are differences of opinion about thetypes of data that should be developed. Someargue for selecting a very simple set of indicators(the things local society most cares about) - eventrying to boil it all down to a single index ofneighborhood quality if possible. The problemwith this approach is that once such indicatorshave told you whether things are getting betteror worse you almost immediately want to figureout what to do about it – whether and how tointervene – and that kind of thinking inevitablyrequires more data.

Any simple fixed set of indicators is notenough. With today’s best practices, local civicleaders have the flexibility to reach into sizeable“data warehouses” to find indicators that fit the

immediate question at hand. They do not (couldnot) use them all at once, but they are therewhen their path of inquiry leads to them.Today’s information technology has dramaticallyreduced the costs of assembling, storing andinterpreting large amounts of data – things thatcould not be done when the theory favoringsimple indicators sets was first formulated. Weare now able to handle a much richer informa-tion environment.

This is not to say that choosing a short-list ofsummary indicators and developing indexes arenot also good ideas, as long as the need for aricher database to back them up is recognizedas well. It is like the popular question of the1990s about whether society should rely on“people-based” or “place-based” policies to ad-dress our urban ills. The obvious answer then,and in this case, is to “do both.”

If one had to choose only one neighborhoodindicator to monitor over time, most scholarswould probably choose property value, sinceother aspects of neighborhood quality should bereflected in property value roughly in proportionto their importance as the market sees them.Indeed much of the research that offers thehighest potential to more reliably predict futureneighborhood change, and the impacts of vari-ous interventions on neighborhood quality,focuses on property value or surrogate measures(see, for example, Galster, Tatian and Accordino2006, and Bodini and Weissbourd, forthcoming).

Nonetheless, even after taking full advantageof property value data, local stakeholders aresure to want to know more about how otheraspects of their neighborhoods compare andchange. Looking across the data holdings of thelocal members of the National NeighborhoodIndicators Partnership (NNIP – discussed in thenext section), many maintain one or more indi-cators in each of the following domains. Neigh-

borhood trends in all of these areas should be ofinterest to national audiences as well as localones.

• Population composition and mobility(diversity, stability)

• Housing and community development

• Physical environment

• Employment, income and wealth of resi-dents

• Children and youth

• Education

• Health

• Safety

• Social networks

• Arts and culture

• Commercial and social services

• Neighborhood economy

DEVELOPING LOCAL NEIGHBORHOODINDICATOR SYSTEMS

The first recent improvement in the availabil-ity of neighborhood level data is the developmentof local information intermediaries in manyAmerican cities. Civic groups doing this workjoined with the Urban Institute in 1995 to createthe National Neighborhood Indicators Partner-ship (NNIP) which now has local partner organi-zations in 29 cities. All of the local partnershave developed computer-based informationsystems with a host of regularly updated indica-tors on changing neighborhood conditions intheir cities and commit to using the data tosupport practical applications in policy develop-ment and community building.

NNIP was established to further the develop-ment and effective application of neighborhoodinformation in localities across the country. (Itswork is documented at http://www.urban.org/

nnip.) Its activities as a partnership have in-cluded (1) preparing tools and guidebooks basedon experience of the partners; (2) conductingcross-site policy studies (on welfare-to-work andneighborhood health conditions, as well as ourcurrent projects on prisoner reentry and landmarket tools); (3) holding several major topicalconferences; (4) operating an actively used website and email list-serve; (5) assembling nationaldata sets with small area data and disseminat-ing excerpts to expand the data holdings of localpartners; and (6) providing data starter kits andlimited technical assistance to help build similarcapacities in new cities. The Annie E. Casey andFannie Mae Foundations have been the primaryfunders of NNIP over the past few years.

NNIP’s work became possible because of twoadvances: (1) the fact that most local agencieshave automated their records of administrativetransactions (for example, crime reports, prop-erty sales, code violations, birth certificates),yielding a host of descriptive information alongwith geographic identifiers (street addressesand/or land-parcel numbers) in each record;and (2) the availability of powerful GIS softwarethat can assign geographic coordinates to ad-dresses, almost instantaneously add up suchtransactions to calculate indicators for smallareas (for example, blocks, block groups, censustracts) and display the results in maps, charts,and tables.

Many local government agencies are nowusing GIS to plot their own data. The realpower, however, comes from systems that havetwo additional characteristics that distinguishNNIP partners: (1) incorporating data from manylocal agencies together so one can gain a coher-ent understanding of how neighborhoods arechanging (socially, physically, economically,financially); and (2) making the data public sothey can be shared by all users — private andcivic as well as public, community groups in

low-income neighborhoods as well as privateinvestors and metropolitan planning organiza-tions.

What kinds of organizations perform thiswork? Interestingly, while local governmentagencies are always involved, they have seldomplayed the lead role in multi-source systemsbuilding. More often, the leading player hasbeen a nonprofit civic leadership group (commu-nity foundation, United Way affiliate, or indepen-dent civic intermediary). University-basedinstitutes have taken also taken the lead in anumber of cities, and they play supporting rolesin many more. In some cities, new entities havebeen created for this purpose with representa-tives of public agencies and nonprofits on theirgoverning boards.

One of the key features of NNIP is how part-ners work together to create a one-stop shop.What happens today in most cities is extremelyinefficient. Community groups and serviceproviders, as well as city agencies, generallyrecognize the need for cross-topic neighborhood-level data. Many waste a great deal of time inredundant efforts to collect the data typicallyavailable, but these groups have other missionsand would not be willing or able to take on thetask of building a central system.

The logical alternative is to assign that job toone intermediary as its central mission — oneorganization that will collect the data from allrelevant sources and build a system to serve alluser groups efficiently. Building an adequatesystem of course entails some cost, but it isalmost sure to represent a net savings comparedwith the current resources so many local groupsnow spend on data with such unsatisfyingresults. And this is to say nothing of the sub-stantial benefit that should be realized when allusers can access richer and higher-quality datathan have been available in the past.

How NNIP partners use their information ismost important. They recognize that their pri-mary job is to use data to support policy devel-opment and action agendas that will facilitatepositive change, not just to create data andresearch for their own sake. This work hastaken many forms, ranging from helping neigh-borhood associations plan and implement im-provement programs to city-wide campaignswhere new data have been key to changing a lawor redirecting a program (see Cowan 2007, andKingsley and Pettit 2007). Only a few of them sofar have taken on the task of preparing a regularcomprehensive report on changing neighborhoodconditions in their cities using multiple indica-tors. Probably the best known of these is theVital Signs project of the Baltimore Neighbor-hood Indicators Alliance (2004) which reportschanges to 76 indicators on an annual basis.(Other recent editions include: CommunityResearch Council (2006) and Temple University(2005).) The prospects for more work of thiskind in the future are discussed in the lastsection of this chapter.

NEIGHBORHOOD DATA FROM NATIONALDATA FILES

The second recent improvement is the grow-ing number of nation-wide files with data forsmall areas that are now being made accessibleto users at all levels. Most of the files we notecontain indicators that are either not availablefrom, or very hard to assemble from, local datafiles so they generally serve as useful comple-ments to, rather than duplicates of, the types offiles maintained by local data intermediaries.

As noted earlier, probably the best example ofa nation-wide file is the annually updateddataset on mortgage lending activity at thecensus tract level, mandated by the Home Mort-gage Disclosure Act (HMDA). Originally estab-lished to monitor mortgage discrimination, thisfile contains many other useful indicators, such

as: mortgage origination rates, changes in me-dian loan amounts, share of loans by purchas-ers that do not intend to occupy the properties,share of owner loans by race and income ofborrowers, and share of loans that are sub-prime and high cost, as well as denial rates byrace/ethnicity of applicants. A comprehensivereview of the HMDA data and its uses is pro-vided in Pettit and Droesch (2004).

The public can obtain HMDA files from theFederal Financial Institutions ExaminationsCouncil (FFIEC, http://www.ffiec.org/hmda).The FFIEC data CD is useful for limited areasand inquiries but, overall, the files are large andcomplicated. Extracting the key informationneeded for most policy and program analyses isa job much beyond the capacities and budgets ofmany would-be users. This introduces the factthat “accessibility” of national data files likethese usually requires two things. First, thewillingness of the responsible agency to makethem public and, second, the efforts of someentity to work with the source files to clean andstreamline them so they become much easier toaccess and apply.

In the case of HMDA (and a number of otherfiles at this level) the latter is being done via theweb-site DataPlace (http://www.dataplace.org.DataPlace was established by the Fannie MaeFoundation in 2002 and is now operated byKnowledgePlex, Inc.) The site displays data inmany easy-to-use forms (tabular profiles, charts,maps) for a variety of geographic levels (rangingdown to the zip code and census tract whereavailable) derived from a sizeable number ofregularly updated national data files like HMDA.The Urban Institute does the work of acquisi-tion, cleaning and streamlining under contractwith KnowledgePlex, Inc. It also prepares guide-books and illustrative analyses to make theDataPlace displays easier to understand anduse.

Some of the other files with small-area dataand nation-wide coverage now available are asfollows (original sources are identified but datafrom all of these either are or will be also avail-able on DataPlace).

• Internal Revenue Service. Data aggregated tothe zip-code level from individual income taxreturns on a number of variables including, forexample, income level, income by category(wages and salaries, interest, etc.), EITC status,number of exemptions (http://www.irs.gov/taxstats/indtaxstats/article/0,,id=98123,00.html).

• Zip Business Patterns. Number of businessestablishments and employment by establish-ment size and industry type categories at the zipcode level (http://www.census.gov/epcd/www/zbp_base.html).

• A Picture of Subsidized Households. Data fromthe U.S. Department of Housing and UrbanDevelopment (HUD) on characteristics of house-holds that receive HUD subsidies, by program.Point-locations are provided for project data (sothose with adequate GIS software can addacross projects to create summaries at anygeographic level), and data on households as-sisted by housing vouchers are aggregated at thetract level (http://www.huduser.org/datasets/assthsg.html). (HUD provides separate files forsome programs that are more up to date thanthe information on this overall file).

• National Center for Education Statistics (NCES).Data for individual public schools (point-loca-tions) with indicators on topics such as enroll-ment, racial composition of enrollment, student/staff ratios, eligibility for free and reduced-pricelunches http://www.nces.ed.gov/ccd/).

• FDIC Insured Institutions. Information on thelocations of full-service and limited-service bankbranches (http://www2.fdic.gov/sod/).

THE AMERICAN COMMUNITY SURVEY

The final innovation we note is the AmericanCommunity Survey (ACS), and it is an importantone. For decades, the decennial census has hadtwo parts: (1) “short-form” data, which resultsfrom the Census Bureau’s efforts to collect alimited amount of information through fullenumeration (covering all households and per-sons living in group quarters); and (2) “long-form” data, collected via a sample survey (aboutone in five households was interviewed). Muchof the information that people interested in thefortunes of neighborhoods care about have comefrom the long-form, for example: householdcomposition, income and poverty, employment,occupations, housing values and rents.

The ACS is a different type of sample surveythat will entirely replace the long-form in 2010(there will no long-form survey as a part of the2010 census or thereafter). The ACS has aboutthe same content as the long-form. ACS datawill ultimately be made available for the samelevels of geography as the long-form, includingthe tract level (see http://www.census.gov/acs/www). The major difference is that the ACSinvolves continuous interviewing (instead ofinterviews being conducted once every ten yearsas was done with the long-form), and permitsthe release of new data every year. Thus, theACS will eliminate the major problem with cen-sus data for neighborhood use noted at the startof this chapter – the fact that it was availableonly once a decade.

A problem, however, is that the meaning ofthe data at the tract level will not be the same asthat yielded by the long-form. Year-by-year ACSestimates for larger sub-areas of states (nowdown to those with populations of 65,000 ormore) are already being provided. However, inACS data at the tract level (to be released first in2010), an indicator will actually represent a sort

of moving average for that indicator for the tractover the five preceding years (2005-2009) ratherthan the value as of a specific point in time.Given the differences in the sampling and themeaning of the estimates, comparing, say, theemployment rate for a tract produced by thecensus in 2000 with the employment rate pro-duced by the ACS in 2010, will not be straightfor-ward. The Census Bureau has not yet providedguidance on how such comparisons should bemade or interpreted.

Later on, it should be possible to compareACS tract estimates across years, but interpreta-tion will remain troublesome. One will not beable to say, for example, that “the employmentrate for the tract went down from 60 percent in2012 to 55 percent in 2014.” Rather one will besaying that “the 2010-2014 rate was 60 percentcompared to a 2012-2016 rate of 55 percent.”Also, there will still be confidence intervalsaround the point estimates with the ACS as therewere with the long-form. We do not yet know howmuch we will be able to say about change reliablyyear-to-year.

Nonetheless, it seems likely that a few yearsinto the coming decade, scholars and practitionerswill have found satisfying ways to interpret ACSdata. While it may not be advisable to makemuch of year-to-year changes in tract level re-ports even then, comparisons over somewhatlonger periods should begin to offer meaningfulunderstanding of trends within decades.

THE PROSPECTS: REPORTS ON THESTATE OF THE CITY’S (OR NATION’S)NEIGHBORHOODS

Comprehensive periodic (perhaps biennial)reports on neighborhood change using multipleindicators should prove extremely valuable forindividual urban areas and for the nation as awhole. It would not be expected that such re-

ports would motivate major changes in policiesevery time they are produced, but they shouldprovide early warnings of emerging threats andopportunities that should allow decision-makersto set priorities and address issues much morequickly and effectively than they have been ableto in the past.

Particularly important at the national level,such reports would shatter the simplistic stereo-types that often mislead public perceptionsabout the realities of urban change and,thereby, drive misguided policies and programs.Neighborhood trends are considerably morecomplex than has generally been perceived.Such reports would also help make neighbor-hood policy more prominent in the public con-versation.

At the local level, we noted that only a fewNNIP partners now produce reports like this.Doing so is a big job and the commitment to itcannot be taken on lightly. However, as theirlocal data systems expand and more examplesare available, we expect more of them to begin toadd the preparation of a comprehensive indica-tors report to their agendas. At the nationallevel, no organization has yet attempted toproduce a comprehensive neighborhood indica-tors report between censuses.

An important reminder is that the contents ofthe three types of data discussed here (localadministrative data, national administrativedata and the ACS) do not overlap very much. Agood report would include data from all three.The prospects differ, however, for such reportsdiffer depending on the level being considered.

At the local level, we judge that most individualNNIP type intermediaries should be able toproduce high-quality comprehensive reports onneighborhood conditions today. Baltimore’sVital Signs report, which has been updated

annually since 1999, demonstrates the point. Itrelies almost entirely on local administrativedata and could be improved if it took moreadvantage of the national level administrativefiles we have noted. At present, these reports dosuffer from the lack of census-type indicators forneighborhoods (for example, on basic populationchange, racial/ethnic composition, householdtypes and income, and housing expenses). Inthe coming decade, when tract level ACS dataare produced regularly and we understand moreabout how to take advantage of them, that gapwill be addressed. Though still imperfect in anumber of respects, the basics that urban re-searchers have hoped for at this level will finallybe available.

Producing a comprehensive neighborhood indi-cators report at the national level is much moredifficult. Opportunities for using our three typesof data for this purpose vary and trying to takeadvantage of local administrative data for thispurpose is by far the most problematic. With avery few exceptions, local administrative dataare not defined in a comparable way acrosscities. Also, even if more of them were compa-rable, assembling them from all, or even most,U.S. urban areas one by one would clearly becost-prohibitive.

That does not mean some work along these linescannot be productive. NNIP has previouslycollected historic tract data on a few comparableindicators (mostly vital statistics, crime ratesand a few others) from several of its partnercities and compilations like these could certainlycontribute to a national report. (The feasibilityof this approach is demonstrated in Howell, etal. (2005) where a decade’s worth of comparableneighborhood level maternal and child healthindicators were assembled from five NNIP part-ners to contrast trends between hi- and low-poverty neighborhoods in their cities.) They

cannot pretend to be representative of all U.S.cities, but they offer insights about how condi-tions and trends (year-by-year) vary in quitedifferent cities, and that is much more thanhas been known to this point. More effortslike this by others – assembling data fromselected local data systems to help fill out anational portrait - should be encouraged.

Alternatively, the ACS will be the best basisfor a State of the Nation’s Neighborhood reportwhen it is fully up and running. The ACS willbe the only source with a wide range of consis-tently defined indicators, nation-wide. Evenso, however, we would recommend efforts toincorporate some local administrative dataand data from national administrative datafiles that we have discussed. The standard“census” variables cover many of the topics ofinterest, but the administrative data can bothbroaden the topical coverage and verify pat-

terns and trends suggested by the ACS indica-tors.

Still, it may be five years or so before tract levelACS data are adequate to support a nationalindicators report. Should we just wait? Wethink not. In our view, it should be very in-structive to try before then to assess compre-hensively the new trends evidenced by thenational administrative data files we havenoted (particularly the IRS, HMDA, NCES filesthat have never been analyzed together in thisway before). While indicators available fromthese files are limited, looking at them in thecontext of census evidenced trends from the1990s should prevent misinterpretation, andselected data from local indicators systems canbe brought in to enhance understanding aswell. And, considering the importance of theissues involved as discussed earlier in thischapter, time is of the essence.

Baltimore Neighborhood Indicators Alliance.2004. Vital Signs. (Baltimore MD: University ofBaltimore.) Website at http://www.ubalt.edu/bnia/indicators/.

Bodini, Ricardo and Robert Weissbourd. Forth-coming. Dynamic Neighborhood TaxonomyInterim Results: Neighborhood Evolution. (Chi-cago, IL: RW Ventures.)

Community Research Council. 2006. State ofthe Chattanooga Region Report: BiAnnual ReportTracking More than 60 Indicators at the Neighbor-hood Level. (Chattanooga, TN: CommunityResearch Council.)

Coulton, Claudia J. 1995. “Using CommunityLevel Indicators of Children’s Well-Being inComprehensive Community Initiatives, ” inJames P. Connel, Anne C. Kubisch, LisbethSchorr, and Carol H. Weiss, editors. New Ap-proaches to Evaluating Community Initiatives:Concepts, Methods and Contexts. (Washington,DC: The Aspen Institute.)

Cowan, Jake. 2007. Stories: Using Information inCommunity Building and Local Policy. A NationalNeighborhood Indicators Partnership Guide.(Washington, DC: The Urban Institute.)

Ellen, Ingrid G., and Margery Austin Turner.1997. “Does Neighborhood Matter? AssessingRecent Evidence.” Housing Policy Debate 8: 833–866.

Galster, George C., Peter Tatian and JohnAccordino. 2006. “Targeting Investments forNeighborhood Revitalization.” Journal of theAmerican Planning Association 72(4): 457-471.

Howell, Embry M., Kathryn L.S. Pettit and G.Thomas Kingsley. 2005. “Trends in Maternaland Infant Health in Poor Urban Neighborhoods:Good News from the 1990s, but ChallengesRemain.” Public Health Reports. 120: 409-417.(July-August.)

Jargowsky, Paul A. 2003. Stunning Progress,Hidden Problems: The Dramatic Decline of Con-centrated Poverty in the 1990s. (Washington, DC:Center on Urban and Metropolitan Policy, TheBrookings Institution.)

Katz, Bruce. 2004. Neighborhoods of Choiceand Connection: The Evolution of American Neigh-borhood Policy and What it Means for the UnitedStates. (Washington, DC: The Brookings Institu-tion.)

Kingsley, G. Thomas. 1999. Building and Oper-ating Neighborhood Information Systems. (Wash-ington, DC: The Urban Institute.)

Kingsley, G. Thomas, and Kathryn L. S. Pettit.2007a. Neighborhood Information Systems: WeNeed a Broader Effort to Build Local Capacity.(Washington, DC: The Urban Institute.)

Kingsley, G. Thomas, and Kathryn L. S. Pettit.2007b. Concentrated Poverty: Dynamics ofChange. (Washington, DC: The Urban Institute.)

Kingsley, G. Thomas, and Kathryn L. S. Pettit.2003. Concentrated Poverty: A Change in Course.(Washington, DC: The Urban Institute.)

Pettit, Kathryn L.S., and Audrey E. Droesch.2004. A Guide to Home Mortgage Disclosure ActData. (Washington, DC: The Fannie Mae Foun-dation.)

Rawlings, Lynette, Laura Harris and MargeryTurner. 2003. Race and Residence: Prospectsfor Stable Neighborhood Integration. (Washing-ton, DC: The Urban Institute.)

Temple University Department of Geography andUrban Studies, Where We Stand 2005: Indicatorsfor the Philadelphia Region. (Philadelphia, PA:Temple University.)

Wilson, William Julius. 1987. The Truly Disad-vantaged: The Inner City, the Underclass, andPublic Policy. (Chicago, IL: University of ChicagoPress.)

REFERENCESREFERENCESREFERENCESREFERENCESREFERENCES

IMMEDIATE PAST CHAIRSIMMEDIATE PAST CHAIRSIMMEDIATE PAST CHAIRSIMMEDIATE PAST CHAIRSIMMEDIATE PAST CHAIRS

JULIO BARRETO JR.

THOM SHELLABARGER

U.S. Conference of Catholic Bishops

AT-LARGE MEMBERSAT-LARGE MEMBERSAT-LARGE MEMBERSAT-LARGE MEMBERSAT-LARGE MEMBERS

NOREEN BEATLEYThe Enterprise Foundation

ALLEN FISHBEINConsumer Federation of America

DUSHAW HOCKETTCenter for Community Change

JOHN HOLDSCLAWNCB Development Corporation

JEFF NUGENTDevelopment Training Institute

MARCIA SIGALCouncil of State Community Development Agencies

THERESA SINGLETONHousing Assistance Council

JULIE SEWARDLocal Initiatives Support Corporation

LINDA SORDENNational Trust for Historic Preservation

NANCY WILLISUnitarian Universalist Affordable Housing

Corporation

2008 BOARD OF DIRECTORS

ABOUT THE EDITOR Mark Carl Rom is associate professor of Government and Public Policy atGeorgetown University. He is the former director of the DC Family Policy Seminarand the author of "Investing in Individuals for Independence" and "From WelfareState to Opportunity, Inc.: Public-Private Partnerships in Welfare Policy" as wellas numerous other books and articles on American social welfare policy.

FOUNDING CHAIRFOUNDING CHAIRFOUNDING CHAIRFOUNDING CHAIRFOUNDING CHAIR

RAUL YAGUIRRENational Council of La Raza

VICE CHAIRSVICE CHAIRSVICE CHAIRSVICE CHAIRSVICE CHAIRS

JANE DEMARINES National Alliance of State Community Development

Agencies

CONRAD EGANNational Housing Conference

LISA HASEGAWANational Coalition for Asian Pacific

American Community Development

TREASURERTREASURERTREASURERTREASURERTREASURER

STEVE TUMINARONeighborhood Reinvestment Corporation

SECRETARYSECRETARYSECRETARYSECRETARYSECRETARY

KIRK GIBSONNational Alliance to End Homelessness

“What’s Happening to the Neighborhood” was designed and produced byLaura Kregel Nickle, president of Communi-k, Inc. of Falls Church, Virginia.

What’s Happening toThe Neighborhood?A FINAL WORD FROM THE

NATIONAL

NEIGHBORHOOD

COALITION

With pride and a sense of accomplishment,the National Neighborhood Coalition (NNC) willleave a powerful legacy after more than 26 yearsas the voice of the nation’s neighborhoods. Since1982, NNC has provided information and sup-port for equitable national policies which pro-mote healthy and sustainable low and moderateincome neighborhoods. NNC has been a coalitionof national and local organizations dedicated toimproving neighborhoods so thatevery American has a nice neigh-borhood to call home, regardlessof their economic status.

Over the years, NNC hasadvocated for changes in manyarenas which impact life in mostlow-income neighborhoods, suchas banking and communityreinvestment, smart growth andequitable planning, federal fund-ing for public housing, redevelop-ment, preservation of affordablehousing and affordablehomeownership. Many of the articles in thisreport address those very issues and provideexcellent insights into what is happening todayin low and moderate income neighborhoodsacross the country.

In recent years, NNC has been reassessingour purpose and direction to determine how acoalition such as ours can be useful and rel-evant in light of today’s neighborhood issues.One of our initial or primary functions had beento act as the leading national provider of infor-mation about federal policies impacting low-income neighborhoods. NNC has stayed at theforefront of national housing policy and pre-sented forums of experts to educate affordable

housing providers and advocates on significantissues. But the need for this kind of informationhas become highly specialized, and since ourcoalition began several of our members, indi-vidual national organizations, have taken on theresponsibility of providing this very specializedinformation as well as analysis about how fed-eral policies impact specific neighborhood is-sues. Therefore, it seems as though the kind of

information NNC once providedis no longer urgently needed as itonce was by our member organi-zations.

Another of our primary func-tions has been to be an advocatefor policies, programs and fund-ing to help improve the quality oflife in low-income neighborhoods,such as smart growth initiativesto link low-income neighbor-hoods with regional economicopportunities. Again, many ofour member organizations have

grown into powerful advocacy organizations thattend to focus solely on one or two aspects offederal policy impacting low-income neighbor-hoods. Consequently, the need for NNC to advo-cate as a coalition on behalf of several groupsseems to be diminished. (Our member base hasbecome both too diverse and specialized to reachthe kind of broad consensus necessary to advo-cate as a group on specific policy issues.)

We are proud to have helped nurture organi-zations that have become strong national advo-cates for low-income neighborhoods. As we passthe torch to these organizations, one recurringtheme in our discussions is the need for a peri-odic report which provides data and analysis on

the “state of our nation’s neighborhoods.” Overthe lifetime of this coalition, we know that agreat deal of change has taken place at both thefederal and neighborhood levels that has im-pacted the lives of low-income people and theirneighborhoods. What we lack is a system ofbenchmarks and outcome measures to trackand assess those changes and how they haveimproved (or not) low-income neighborhoods.Has the quality of life for low-income peopleimproved by changes in policies which impactlow-income neighborhoods and if so, how? Ifchange for the better or worse has occurred, howdo we know?

The Government Performance and ResultsAct of 1993 (GPRA) calls for performance mea-sures for federal programs. Over the past fiveyears, federal agencies have been developingoutcome measures by which to measure theresults of federally funded projects and pro-grams. Data for these evaluations comes from avariety of survey research tools, such as theCensus and America Communities Survey (ACS),and data reported by the state and local agen-cies administering these programs based onperformance indicators adopted for each pro-gram. The Office of Management and Budgetrates and evaluates the effectiveness of manyfederal programs on the basis of this data.However, like many federal efforts, these ratingsand evaluations are done within “silos” and donot cut across programmatic lines to provide acomprehensive view of neighborhood life.

NNC would like to see data and indicatorsdeveloped to help measure the quality of life inlow-income neighborhoods, to examine inequitybetween low-income neighborhoods and other

places in the rest of the country, and to examinewhether and how federal policies and programsimpact improvement in the quality of life forpeople living in low-income neighborhoods. Thistype of report, “the state of our nation’s low-income neighborhoods” developed and publishedconsistently on a periodic basis, could help tracktrends and shape policy priorities. For example,within this report, “What’s Happening to theNeighborhood?,” we address several aspects ofneighborhood life for low-income people, includ-ing banking, health care, public housing,homeownership, community leadership, equityin planning, etc. The chapter in this report,“Measuring the Well-Being of America’s NewNeighborhoods” discusses some importantissues to be considered when developing such aproject and offers some good ideas on resourcesand data which could help this type of projectget started. The data from program reportsinstituted as a result of GPRA may also proveuseful.

As we look back on 26 years as the voice ofour nation’s neighborhoods, we feel confidentthat the nearly 100 NNC member organizationsand associate members will continue to providea strong chorus, effectively voicing the needs oflow and moderate income neighborhoods. Weurge our member organizations to continueadvocating for federal performance measuresthat cut across programmatic lines to provide acomprehensive measure of the effectiveness offederal programs. We believe that the data,analysis and benchmarks achieved will be criti-cal in your efforts to shape successful federalpolicy and advance national policies that pro-mote healthy and sustainable neighborhoods.