The e-Advocate Quarterly Magazine Zechariah 8 | Amos 9:11-15
Inner-Cities Strategic Revitalization Planning
“Helping Individuals, Organizations & Communities Achieve Their Full Potential”
Vol. IX, Issuu XXXVIII – Q-3 July | August | September 2023
The Advocacy Foundation, Inc. Helping Individuals, Organizations & Communities Achieve Their Full Potential
Inner-Cities Strategic Revitalization Planning
“Helping Individuals, Organizations & Communities Achieve Their Full Potential
1735 Market Street, Suite 3750 Philadelphia, PA 19102
| 100 Edgewood Avenue, Suite 1690 Atlanta, GA 30303
John C Johnson III, Esq. Founder & CEO (878) 222-0450 Voice | Fax | SMS
www.TheAdvocacyFoundation.org
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Biblical Authority ______
Zechariah 8 (RSVA) 1 And the word of the LORD of hosts came to me, saying, 2 "Thus says the LORD of hosts: I am jealous for Zion with great jealousy, and I am jealous for her with great wrath. 3 Thus says the LORD: I will return to Zion, and will dwell in the midst of Jerusalem, and Jerusalem shall be called the faithful city, and the mountain of the LORD of hosts, the holy mountain. 4 Thus says the LORD of hosts: Old men and old women shall again sit in the streets of Jerusalem, each with staff in hand for very age. 5 And the streets of the city shall be full of boys and girls playing in its streets. 6 Thus says the LORD of hosts: If it is marvelous in the sight of the remnant of this people in these days, should it also be marvelous in my sight, says the LORD of hosts? 7 Thus says the LORD of hosts: Behold, I will save my people from the east country and from the west country; 8 and I will bring them to dwell in the midst of Jerusalem; and they shall be my people and I will be their God, in faithfulness and in righteousness." 9 Thus says the LORD of hosts: "Let your hands be strong, you who in these days have been hearing these words from the mouth of the prophets, since the day that the foundation of the house of the LORD of hosts was laid, that the temple might be built. 10 For before those days there was no wage for man or any wage for beast, neither was there any safety from the foe for him who went out or came in; for I set every man against his fellow. 11 But now I will not deal with the remnant of this people as in the former days, says the LORD of hosts. 12 For there shall be a sowing of peace; the vine shall yield its fruit, and the ground shall give its increase, and the heavens shall give their dew; and I will cause the remnant of this people to possess all these things. 13 And as you have been a byword of cursing among the nations, O house of Judah and house of Israel, so will I save you and you shall be a blessing. Fear not, but let your hands be strong." 14 For thus says the LORD of hosts: "As I purposed to do evil to you, when your fathers provoked me to wrath, and I did not relent, says the LORD of hosts, 15 so again have I purposed in these days to do good to Jerusalem and to the house of Judah; fear not. 16 These are the things that you shall do: Speak the truth to one another, render in your gates judgments that are true and make for peace, 17 do not devise evil in your hearts against one another, and love no false oath, for all these things I hate, says the LORD." 18 And the word of the LORD of hosts came to me, saying, 19 "Thus says the LORD of hosts: The fast of the fourth month, and the fast of the fifth, and the fast of the seventh, and the fast of the tenth, shall be to the house of Judah seasons of joy and gladness, and cheerful feasts; therefore love truth and peace. 20 "Thus says the LORD of hosts: Peoples shall yet come, even the inhabitants of many cities; 21 the inhabitants of one city shall go to another, saying, 'Let us go at once to entreat the favor of the LORD, and to seek the LORD of hosts; I am going.' 22 Many peoples and strong nations shall come to seek the LORD of hosts in Jerusalem, and to entreat the favor of the LORD. 23 Thus says the LORD of hosts: In those days ten men from the nations of every tongue shall take hold of the robe of a Jew, saying, 'Let us go with you, for we have heard that God is with you.'" Page 4 of 69
Amos 9:11-15 (RSVA) 11 "In that day I will raise up the booth of David that is fallen and repair its breaches, and raise up its ruins, and rebuild it as in the days of old; 12 that they may possess the remnant of Edom and all the nations who are called by my name," says the LORD who does this. 13 "Behold, the days are coming," says the LORD, "when the plowman shall overtake the reaper and the treader of grapes him who sows the seed; the mountains shall drip sweet wine, and all the hills shall flow with it. 14 I will restore the fortunes of my people Israel, and they shall rebuild the ruined cities and inhabit them; they shall plant vineyards and drink their wine, and they shall make gardens and eat their fruit. 15 I will plant them upon their land, and they shall never again be plucked up out of the land which I have given them," says the LORD your God.
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Table of Contents Inner-Cities Strategic Revitalization Planning
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Biblical Authority I.
Introduction
II.
Urban Renewal
III.
Business Improvement Districts
IV.
Special Purpose Districts
V.
The Washington, D.C. Model
VI.
The Philadelphia, Pennsylvania Model
VII. Joint Powers Authority VIII. The War On Poverty IX.
The Great Society
Attachments A. Revitalizing Inner-City Neighborhoods B. The Business Improvement District Model C. Promising Strategies
Copyright Š 2015 The Advocacy Foundation, Inc. All Rights Reserved. Page 7 of 69
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Introduction For families to succeed, sometimes the dynamics of their neighborhood have to change. Neighborhood Revitalization is a holistic approach that expands [the] traditional partnership with new homeowners and volunteers to include neighbors and local organizations for a far greater impact. While new home construction continues to play a vital role, a bigger toolbox that includes repairs and other services allows [us] to serve more families. Neighborhood Revitalization starts at the grassroots level — with people in the community determining the goals for their neighborhood. “Neighborhood Revitalization is the way of the future and is an essential element of [our] work. By focusing on entire neighborhoods, we can greatly increase our impact.” — Jonathan Reckford, CEO, Habitat for Humanity International
Revitalization of Our Inner Cities Can Transform Our Culture - by Scruffus - “It is only when the basic needs are met that culture can thrive. Revitalization of our inner cities is the innovation that will allow for maximum cultural growth in this country. Making sure that all Americans have access to opportunity and technology will ensure future generations of city dwellers do not live in poverty. By investing in these areas, developers and businesses are investing in the base of this country. Music, art and the sciences require a healthy, vibrant, and supportive community and the work being done to rebuild our inner cities is essential to our culture as a whole.”
Spanning the Delaware River, the “Trenton Makes” Bridge in giant neon red letters proclaims to all, "Trenton Makes, The World Takes.". Hearkening back to the time when Trenton was a center of manufacture, these days the sign seems a bit of an anachronism. Trenton and many other American cities have decayed to the point that they are shells of their former selves. Businesses and people slowly disappeared from American cities over the decades since the sixties. No longer centers of thriving industry, they are now crime-ridden, politically corrupt, and decaying. Despite this, cities are now the focus of revitalization efforts. If done properly, revitalization can be a way to alleviate the poverty and crime suffered in many American inner cities. Revitalization is a recent innovation that takes advantage of the existing enterprise and infrastructure in cities and tries to bring value back to the community there. Efforts to revitalize cities meet with varied success. It is important to elevate the standard of living for the existing community, not just shove it aside in the pursuit of a gentrified city. Giving the existing people a chance at independence raises the standard of living for all residents in the city and preserves the rich heritage and character of the city. Page 9 of 69
In the effort to attract people back to the cities, revitalization increases the independence of all Americans, utilizes existing infrastructure, and encourages cultural growth. One cannot speak of a city's and a people's independence without speaking of their economic independence. The ability of people to obtain jobs and meet their basic needs is a huge determinant of how well that people's culture will flourish. It is difficult to pursue the arts or education if one is impoverished. The rebuilding of inner cities can raise the quality of life for many Americans by bringing businesses that provide jobs and opportunity back to the cities. Also, a city that has a thriving business community has a healthy tax base to support its public education system. The public school is an integral part of revitalization. Providing students with a high-quality, technology-based education prepares them to become successful, contributing citizens. Inner city school systems are notorious for their high dropout rates and general difficulty in producing good students. By revitalizing inner cities, parents are given access to jobs and can provide a better home environment for their children. The use of existing infrastructure in revitalization efforts reduces suburban sprawl. Areas that were long ago developed for housing and business are made attractive through remodeling, which is less costly and environmentally destructive than building new homes in the suburbs. Encouraging city living also encourages use of mass transit systems, decreasing reliance on the automobile. Our current culture is very much entwined with the automobile. Reduction of our reliance on automobiles is beneficial in reducing pollutants. Additionally, inner cities have often been characterized as food deserts, where nutritious, low-cost food is difficult to find because large supermarkets refuse to build there. Hopefully with the influx of jobs and money to the cities, supermarkets will follow. Bringing new life to cities will definitely improve the options available to all residents there. Cities are where culture, technology and the arts can flourish. The exchange of ideas and openmindedness to these ideas occurs because of the cosmopolitan nature of cities. By renewing interest in our cities, we can create dynamic centers of innovation and technology that are not found in our suburbs. Suburban living has long been cliched to have sapped the creativity and vitality from our society. There is a grain of truth to this. Suburbanites often do not meet their neighbors and spend a great deal of time driving to their destinations. Urban areas, by design, force people to interact with their surroundings. It is this interaction that allows the acceptance of new ideas that build up culture. ______
revitalization noun [U] ( UK also revitalisation)
The process of making something grow, develop, or become successful again (e.g. A new indoor sports arena has played a key role in the revitalization of its neighborhood). - Cambridge Dictionaries Online
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Urban Renewal Urban renewal is a program of land redevelopment in areas of moderate to high density urban land use. Renewal has had both successes and failures. Its modern incarnation began in the late 19th century in developed nations and experienced an intense phase in the late 1940s – under the rubric of reconstruction. The process has had a major impact on many urban landscapes, and has played an important role in the history and demographics of cities around the world. Urban renewal involves the relocation of businesses, the demolition of structures, the relocation of people, and the use of eminent domain (government purchase of property for public purpose) as a legal instrument to take private property for city-initiated development projects. This process is also carried out in rural areas, referred to as village renewal, though it may not be exactly the same in practice. In some cases, renewal may result in urban sprawl and less congestion when areas of cities receive freeways and expressways. Urban renewal has been seen by proponents as an economic engine and a reform mechanism, and by critics as a mechanism for control. It may enhance existing communities, and in some cases result in the demolition of neighborhoods. Many cities link the revitalization of the central business district and gentrification of residential neighborhoods to earlier urban renewal programs. Over time, urban renewal evolved into a policy based less on destruction and more on renovation and investment, and today is an integral part of many local governments, often combined with small and big business incentives. The concept of urban renewal as a method for social reform emerged in England as a reaction to the increasingly cramped and unsanitary conditions of the urban poor in the rapidly industrializing cities of the 19th century. The agenda that emerged was a progressive doctrine that assumed better housing conditions would reform its residents morally and economically. Another style of reform – imposed by the state for reasons of aesthetics and efficiency – could be said to have begun in 1853, with the recruitment of Baron Haussmann by Louis Napoleon for the redevelopment of Paris.
In The United States Large scale urban renewal projects in the US started in the interwar period. Prototype urban renewal projects include the design and construction of Central Park in New York and the 1909 Plan for Chicago by Daniel Burnham. Similarly, the efforts of Jacob Riis in advocating for the demolition of degraded areas of New York in the late 19th century was also formative. The Page 12 of 69
redevelopment of large sections of New York City and New York State by Robert Moses between the 1930s and the 1970s was a notable and prominent example of urban redevelopment. Moses directed the construction of new bridges, highways, housing projects, and public parks. Moses was a controversial figure, both for his single-minded zeal and for its impact on New York City. Other cities across the USA began to create redevelopment programs in the late 1930s and 1940s. These early projects were generally focused on slum clearance and were implemented by local public housing authorities, which were responsible both for clearing slums and for building new affordable housing. In 1944, the GI Bill (officially the Serviceman's Readjustment Act) guaranteed Veterans Administration (VA) mortgages to veterans under favorable terms, which fueled suburbanization after the end of World War II, as places like Levittown, New York, Warren, Michigan and the San Fernando Valley of Los Angeles were transformed from farmland into cities occupied by tens of thousands of families in a few years. The Housing Act of 1949 kick-started the "urban renewal" program that would reshape American cities. The Act provided federal funding to cities to cover the cost of acquiring areas of cities perceived to be "slums". Those sites were then given to private developers to construct new housing. The phrase used at the time was "urban redevelopment". "Urban renewal" was a phrase popularized with the passage of the Housing Act of 1954, which made these projects more enticing to developers by, among other things, providing FHA-backed mortgages. Under the powerful influence of Multimillionaire R.K. Mellon, Pittsburgh became the first major city to undertake a modern urban-renewal program in May 1950. Pittsburgh was infamous around the world as one of the dirtiest and most economically depressed cities, and seemed ripe for urban renewal. A large section of downtown at the heart of the city was demolished, converted to parks, office buildings, and a sports arena and renamed The Golden Triangle in what was universally recognized as a major success. Other neighborhoods were also subjected to urban renewal, but with mixed results. Some areas did improve, while other areas, such as East Liberty and the Hill District, declined following ambitious projects that shifted traffic patterns, blocked streets to vehicular traffic, isolated or divided neighborhoods with highways, and removed large numbers of ethnic and minority residents. An entire neighborhood was destroyed (to be replaced by the Civic Arena), displacing 8000 residents (most of whom were poor and black). Because of the ways in which it targeted the most disadvantaged sector of the American population, novelist James Baldwin famously dubbed Urban Renewal "Negro Removal" in the 1960s. The term "urban renewal" was not introduced in the USA until the Housing Act was again amended in 1954. That was also the year in which the U.S. Supreme Court upheld the general validity of urban redevelopment statutes in the landmark case, Berman v. Parker. In 1956, the Federal-Aid Highway Act gave state and federal government complete control over new highways, and often they were routed directly through vibrant urban neighborhoods— isolating or destroying many—since the focus of the program was to bring traffic in and out of Page 13 of 69
the central cores of cities as expeditiously as possible and nine out of every ten dollars spent came from the federal government. This resulted in a serious degradation of the tax bases of many cities, isolated entire neighborhoods, and meant that existing commercial districts were bypassed by the majority of commuters. Segregation continued to increase as communities were displaced and many African Americans and Latinos chose to move into public housing while some whites moved to the suburbs. In Boston, one of the country's oldest cities, almost a third of the old city was demolished— including the historic West End—to make way for a new highway, low- and moderate-income high-rises (which eventually became luxury housing), and new government and commercial buildings. This came to be seen as a tragedy by many residents and urban planners, and one of the centerpieces of the redevelopment—Government Center—is still considered an example of the excesses of urban renewal. Reaction In 1961, Jane Jacobs published The Death and Life of Great American Cities, one of the first— and strongest—critiques of contemporary large-scale urban renewal. However, it would still be a few years before organized movements began to oppose urban renewal. The Rondout neighborhood in Kingston, New York (on the Hudson River) was essentially destroyed by a federally funded urban renewal program in the 1960s, with more than 400 old buildings demolished, most of them historic brick structures built in the 19th century. Similarly illconceived urban renewal programs gutted the historic centers of other towns and cities across America in the 1950s and 1960s (for example the West End neighborhood in Boston, the downtown area of Norfolk, Virginia and the historic waterfront areas of the towns of Narragansett and Newport in Rhode Island). By the 1970s many major cities developed opposition to the sweeping urban-renewal plans for their cities. In Boston, community activists halted construction of the proposed Southwest Expressway but only after a three-mile long stretch of land had been cleared. In San Francisco, Joseph Alioto was the first mayor to publicly repudiate the policy of urban renewal, and with the backing of community groups, forced the state to end construction of highways through the heart of the city. Atlanta lost over 60,000 people between 1960 and 1970 because of urban renewal and expressway construction, but a downtown building boom turned the city into the showcase of the New South in the 1970s and 1980s. In the early 1970s in Toronto Jacobs was heavily involved in a group which halted the construction of the Spadina Expressway and altered transport policy in that city. Some of the policies around urban renewal began to change under President Lyndon Johnson and the War on Poverty, and in 1968, the Housing and Urban Development Act and The New Communities Act of 1968 guaranteed private financing for private entrepreneurs to plan and develop new communities. Subsequently, the Housing and Community Development Act of 1974 established the Community Development Block Grant program (CDBG) which began in earnest the focus on redevelopment of existing neighborhoods and properties, rather than demolition of substandard housing and economically depressed areas. Page 14 of 69
Currently, a mix of renovation, selective demolition, commercial development, and tax incentives is most often used to revitalize urban neighborhoods. An example of an entire eradication of a community is Africville in Halifax, Nova Scotia. Gentrification is still controversial, and often results in familiar patterns of poorer residents being priced out of urban areas into suburbs or more depressed areas of cities. Some programs, such as that administered by Fresh Ministries and Operation New Hope in Jacksonville, Florida, Hill Community Development Corporation (Hill CDC) in Pittsburgh's historic Hill District attempt to develop communities, while at the same time combining highly favorable loan programs with financial literacy education so that poorer residents may still be able to afford their restored neighborhoods. Around the World The Josefov neighborhood, or Old Jewish Quarter, in Prague was leveled and rebuilt in an effort at urban renewal between 1890 and 1913. In Rio de Janeiro, the Porto Maravilha (pt) is a large-scale urban waterfront revitalization project, which covers a centrally located five million square meter area. The project aims to redevelop the port area, increasing the city center attractiveness as a whole and enhancing the city's competitiveness in the global economy. The urban renovation involves 700 km of public networks for water supply, sanitation, drainage, electricity, gas and telecom; 5 km of tunnels; 70 km of roads; 650 km² of sidewalks; 17 km of bike path; 15.000 trees; and 3 plants for sanitation treatment. Other programs, such as that in Castleford in the UK and known as The Castleford Project[21] seek to establish a process of urban renewal which enables local citizens to have greater control and ownership of the direction of their community and the way in which it overcomes market failure. This supports important themes in urban renewal today, such as participation, sustainability and trust – and government acting as advocate and 'enabler', rather than an instrument of command and control. During the 1990s the concept of culture-led regeneration gained ground. Examples most often cited as successes include Temple Bar in Dublin where tourism was attracted to a bohemian 'cultural quarter', Barcelona where the 1992 Olympics provided a catalyst for infrastructure improvements and the redevelopment of the water front area, and Bilbao where the building of a new art museum was the focus for a new business district around the city's derelict dock area. The approach has become very popular in the UK due to the availability of lottery funding for capital projects and the vibrancy of the cultural and creative sectors. However, the arrival of Tate Modern in the London borough of Southwark may be heralded as a catalyst to economic revival in its surrounding neighborhood. In post-apartheid South Africa major grassroots social movements such as the Western Cape Anti-Eviction Campaign and Abahlali baseMjondolo emerged to contest 'urban renewal' programs that forcibly relocated the poor out of the cities.
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The politics of urban renewal which frequently relies on the state's dominance in the discourse of removing the character and infrastructure of older city cores, with that which is required by existing market based constituents has to be examined further. Professor Kenneth Paul Tan of the National University of Singapore has this to say "Singapore‘s self-image of having achieved success against all odds puts tremendous pressure on its government and people to maintain and exceed this success. The push for progress and development destroys many things in its path, often indiscriminately, sometimes unwittingly. To cope psychically with such losses, Singapore‘s culture of comfort and affluence has been attained through the self-mastery of repressive techniques. Desiring economic progress, upward mobility, affluent and convenient lifestyles and a ‗world-class‘ city." "Singaporeans have had to repress the loss of their sense of place and community, family ties, passion and compassion, Asian customs and values, openness to the rest of the world and even the discipline, hard work and thrift associated with earlier capitalist–industrial attitudes. But no repressive efforts can be complete, consistent and fully successful, even in dominant hegemony. Therefore, the ‗now‘ is always a complex and fractured world of disjunctive values, attitudes and ideals. The supernatural intrusions featured in these five films should tell us something about the impossibility of a coherent world of ideology and experience." Long-Term Implications Urban renewal sometimes lives up to the hopes of its original proponents – it has been assessed by politicians, urban planners, civic leaders, and residents – it has played an undeniably important role. Additionally, urban renewal can have many positive effects. Replenished housing stock might be an improvement in quality; it may increase density and reduce sprawl; it might have economic benefits and improve the global economic competitiveness of a city's centre. It may, in some instances, improve cultural and social amenity, and it may also improve opportunities for safety and surveillance. Developments such as London Docklands increased tax revenues for government. In late 1964, the British commentator Neil Wates expressed the opinion that urban renewal in the USA had 'demonstrated the tremendous advantages which flow from an urban renewal programme,' such as remedying the 'personal problems' of the poor, creation or renovation of housing stock, educational and cultural 'opportunities'. As many examples listed above show, urban renewal has been responsible for the rehabilitation of communities—as well as displacement. Replacement housing – particularly in the form of housing towers – might be difficult to police, leading to an increase in crime, and such structures might in themselves be dehumanising. Urban renewal is usually non-consultative. Urban renewal continues to evolve as successes and failures are examined and new models of development and redevelopment are tested and implemented. An example of urban renewal gone wrong is in downtown Niagara Falls, New York.[citation needed] Several failed projects such as the Rainbow Centre Factory Outlet, Niagara Falls Convention and Civic Center, the Native American Cultural Center, the Hooker Chemical (later the Occidental Petroleum) Headquarters building, the Wintergarden, the Fallsville Splash Park, Aquafalls, a Page 16 of 69
multi-story parking ramp, an enclosed pedestrian walkway/bridge, the Falls Street Faire/Falls Street Station amusement complexes, parts of the Robert Moses State Parkway, and the Mayor E. Dent Lackey Plaza closed within twenty years of their construction. Many demolished blocks were never replaced. Ultimately, the former tourist district of the city along Falls Street was destroyed. It went against the principles of several urban philosophers, such as Jane Jacobs, who claimed that mixed-use districts were needed (which the new downtown was not) and arteries needed to be kept open. Smaller buildings also should be built or kept. In Niagara Falls, however, the convention center blocked traffic into the city, located in the center of Falls Street (the main artery), and the Wintergarden also blocked traffic from the convention center to the Niagara Falls. The Rainbow Centre interrupted the street grid, taking up three blocks, and parking ramps isolated the city from the core, leading to the degradation of nearby neighborhoods. Tourists were forced to walk around the Rainbow Center, the Wintergarden, and the Quality Inn (all of which were adjacent), in total five blocks, discouraging small business in the city.
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Business Improvement Districts A Business Improvement District (BID) is a defined area within which businesses pay an additional tax (or levy) in order to fund projects within the district's boundaries. The BID is often funded primarily through the levy but can also draw on other public and private funding streams. BIDs may go by other names, such as business improvement area (BIA), business revitalization zone (BRZ), community improvement district (CID), special services area (SSA), or special improvement district (SID). BIDs provide services, such as cleaning streets, providing security, making capital improvements, construction of pedestrian and streetscape enhancements, and marketing the area. The services provided by BIDs are supplemental to those already provided by the municipality. Development The first BID was the Bloor West Village Business Improvement Area, which was established in Toronto in 1970 and was an initiative by local private business. The first BID in the United States was the Downtown Development District in New Orleans in 1974, and there are now 1,200 across the country. BIDs have been established around the world, including in New Zealand, South Africa, Jamaica, Serbia, Albania, Germany, Ireland, the Netherlands and the United Kingdom. Legislation is necessary to permit local governments to create BIDs. The process for creating a BID varies from one jurisdiction to another. In the United States, it generally involves three steps. First, some number of businesses in the area petition the local government to create the BID. Second, the local government determines that a majority of businesses want the BID. Third, the local government enacts legislation creating the BID. Prior to this occurring, state legislatures need to grant local units the authority to create BIDs. BIDs in England and Wales are funded by a levy on the occupiers rather than the owners of the properties within the area. If voted in by local businesses, the BID levy is an extension to existing non-domestic business-rates. "In the UK, for a BID to go ahead the ballot must be won on two counts: straight majority and majority of rateable value. This ensures that the interests of large and small businesses are protected." The operating budgets of BIDs range from a few thousand dollars to tens of millions of dollars. Page 19 of 69
A BID may be operated by a nonprofit organization or by a quasi-governmental entity. The governance of a BID is the responsibility of a board composed of some combination of property owners, businesses, and government officials. The management of a BID is the job of a paid administrator, usually occupying the position of an executive director of a management company. Throughout the world Business Improvement Districts (BIDs) are challenging and re-shaping traditional assumptions of public management—its promises and performance—at the most local of government levels, the neighborhood and town centre. Key to this metamorphosis is the concept and application of public-private partnerships that merge public and private management technologies, public entrepreneurship, and social capital. This merger forges a distinctive form of public management—public-private partnership management—an expertise within public administration—that brings together the knowledge and skills of business, government, planning, and community development in a collaborative manner and achieves a form of citizen-driven governance. When we look world-wide, the BID model is becoming a mainstream policy and management tool for local governments in collaboration with their business districts to apply entrepreneurship, social capital, and the management of a public-private partnership at the heart of community revitalization and development. Distribution
United States There are nearly 1,000 BIDs in the United States. New York City has 67 BIDs, the most of any city. BIDs exist in almost every one of the top 50 largest cities in the United States, including Los Angeles, Chicago, Houston, Philadelphia, Atlanta, San Francisco, Seattle, and Washington, DC. Minneapolis and Boston have been the last of the top 20 largest regions to adopt a business improvement district. The State of Wisconsin has adopted the most for smaller towns, with about 90 in the state, 25 of those being in Milwaukee and the rest throughout the state.
Canada In Canada, Toronto has 78 BIAs within its city limit. Montreal – where BIAs are called Sociétés de Développement Commerciale (SDC) – has 14. The City of Winnipeg has 15 "Business Improvement Zones," the first of which were formed in 1987, with the amendment of The City of Winnipeg Act. In the province of Alberta, they are termed "business revitalization zones". There are nine zones in the city of Calgary and 10 in Edmonton. Regina, Saskatchewan has two Business Improvement Districts: Regina Downtown (BID) and The Warehouse District. Saskatoon, Saskatchewan has 4 Business Improvement Districts: The Broadway BID, The Downtown Partnership, The Sutherland BID and The Riversdale BID. Some work has been made on creating a 5th BID in Saskatoon for the area of 33rd Street. It is estimated that there are over 400 BIDs in Canada but no count has been made. There are 8 business improvement districts in the Halifax Regional Municipality. Halifax Regional Municipality has passed by laws in 2012 regarding the formation and conduct of these BIDs. The 8 BIDS are: Downtown Halifax Business Commission, Downtown Dartmouth Business Commission, Spring Garden Area Business Association, North End Business Association, Quinpool Mainstreetand District Page 20 of 69
Association Ltd. Sackville Business Association, Spryfield Business Association, Main Street Dartmouth Business Association. BIDs have also become a powerful lobby group, lobbying government for improvements such as new sidewalks, trees, park benches and other restorations. BIDs can also lobby different levels of government for a complete facelift on their area if they feel it is necessary to improve business. The Rideau Street BIA in Ottawa has lobbied the city for years to give the entire street a face-lift because of its "run down" look.
United Kingdom In England and Wales, BIDs were introduced through legislation (the Local Government Act 2003) and subsequent regulations in 2004. The Circle Initiative, a five-year scheme funded by the London Development Agency, set up the first pilot BIDs, five in London, all of which had successful ballots by March 2006. Association of Town Centre Management-coordinated pilot 'talking shops' in 22 locations in England and Wales corresponded with the development of BIDs' regulations. As of October 2007 there were 36 proposed or operational BIDs across Greater London. By late 2014, there were over 180 BIDs in operation in the United Kingdom. The New West End Company is the management and promotional company for Bond Street, Oxford Street and Regent Street. As one of the largest Business Improvement Districts (BID) in Europe, New West End Company brings together the commercial interests of over 600 retailers, property owners and West End businesses working closely with the Mayor of London, Transport for London, Westminster City Council, the Metropolitan Police and local neighbours in a collective vision to drive forward the nations retail heartland. Better Bankside was the third BID to be established in the UK, the second in London and the first south of the river. It was founded in 2005, and underwent a successful re-ballot in 2010 with 82% of businesses in favour. The Better Bankside BID was set up and is managed by The means, a regeneration consultancy company.
Scotland The legislation in Scotland (The Planning etc. (Scotland) Act 2006) is different from the England and Wales legislation in that it allows property owners as well as occupiers to be included in a BID. There are also differences in the timescales, reballot and requirements of the BID Proposer. The intention of the legislation is that BIDs are not restricted to towns and city centres to allow different kinds of BIDs to be developed across the country. The consultation of 2003 proposed that the BIDs model could be used in business parks, tourism and visitor areas, rural areas, agriculture and single business sectors. The legislation, and subsequent regulations were passed by the Scottish Parliament in 2006 and 2007 respectively. In March 2006, the Scottish Government announced funding for six pilot BIDs in Scotland, Bathgate (town centre), Clackmannanshire (business parks), Edinburgh (city centre), Falkirk (town centre), Glasgow (city centre) and Inverness (city centre). There are currently nineteen operational BIDs in Scotland with a further nineteen in development, including two tourism BIDs (TBIDs) with the BIDs model being considered (by whom?) for themed BIDs, such as 'cultural BIDs' and food and Page 21 of 69
drink BIDs. The Scottish Government is currently awarding a grant of up to ÂŁ20K to local business associations or groups, working in partnership with their local authority to develop and implement a Business Improvement District. Business Improvement Districts Scotland is the national administrative organisation for BIDs in Scotland set up to implement the Scottish Government's BID programme, providing central support to operational and developing BIDs, whilst also promoting and encouraging the development of BIDs across Scotland.
Germany Six of the sixteen German Bundeslander (Federal States) introduced the requisite legal framework to create BIDs: Hamburg, Bremen, Hessen, North Rhine-Westphalia, Saarland and Schleswig-Holstein. BID projects in implementation exist only in a few German cities, yet – e.g. in Flensburg, Hamburg and Giessen.
Criticism Whilst BIDs have been heralded for improving the trading environment, BIDs have also received noteworthy criticism. BIDs have been accused of being by their very nature undemocratic, and that they concentrate power in a geographic area into the hands of the few. Small businesses who fall below the BID levy threshold, although not liable to pay the BID levy, are often priced out of an area because BIDs tend to increase rental values. Larger businesses are more able to absorb these rent increases, particularly the multiple stores. BIDs have also been criticized in the past by anti-poverty groups for being too harsh on the homeless and poor who may congregate around businesses. BIDs have also been known to be opposed to street vendors such as hot dog vendors and chip wagons.[citation needed] In London, street traders who sold small items to tourists were barred from Oxford Street in London. President of Civic Voice, Griff Rhys Jones criticised the creation of a BID in central London neighbourhood saying that is undemocratic: "Neither the people who live there, nor the many intriguing small shops and businesses, have been allowed to vote or have even been consulted.". "I am wary of this initiative because of what may become unintended consequences (or indeed intended consequences) that help one sort of business (the property letting business) but will cause problems to smaller businesses and the large and wholly integrated residential population of the district". He also criticised some of the methods to oppose the BID.
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Special Purpose Districts
Special-Purpose Districts or Special District Governments in the United States are independent governmental units that exists separately from, and with substantial administrative and fiscal independence from, general purpose local governments such as county, municipal, and township governments. As defined by the U.S. Census Bureau, the term special district governments excludes school districts. In 2007, the U.S. had more than 39,000 special district governments. Special districts serve limited areas and have governing boards that accomplish legislatively assigned functions using public funds.
Areas Served Special districts provide specialized services to persons living within the designated geographic area and may contract to provide services outside the area. Special districts often cross the lines of towns, villages, and hamlets but less frequently cross city or county lines. Increasingly, however, regional special districts are being created that may serve a large portion of a state or portions of more than one state.
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Governing Body Each district is governed by a board of directors, commissioners, board of supervisors, or the like. These boards may be appointed by public officials, appointed by private entities, popularly elected, or elected by benefited citizens (typically property owners). Sometimes, one or more public officials will serve as an ex officio member on the board. The board of a special district serves primarily as a managing board and often appoints a chief executive for day-to-day operations and decision making and policy implementation. In the New England states, special districts are often run in the same town meeting fashion as other local governments. Most districts have employees,[4] but some districts exist solely to raise funds by issuing bonds and/or by providing tax increment financing.
Functions Special districts perform many functions including airports, water ports, highways, mass transit, parking facilities, fire protection, libraries, parks, cemeteries, hospitals, irrigation, conservation, sewerage, solid waste, stadiums, water supply, electric power, and gas utility. Most of these functions can also be provided by private companies. Basic Capitalist theory holds that the privatization of public infrastructure and services often results in lower quality and higher prices. Furthermore, as most special districts provide only a single service, privatization of these functions is vulnerable to monopolization. As a result, there are many examples of successful remunicipalization efforts around the world, including in Paris and Buenos Aires.
Legal Basis Originated from English custom, special districts are authorized by state law and must have public foundation, civil office, and public accountability.
English Custom Special districts in the United States follow the English custom. The earliest known general law in England authorizing special purpose authorities was the Statute of Sewers of 1532. Single purpose authorities created by individual charters also existed at the time. However, the early authorities were temporary and unconnected to local government structure. The first laws authorizing permanent authorities connected to local governments were the Incorporated Guardians of the Poor, which were created by special acts in the 17th century. Turnpike trusts were an early and popular special purpose authority in England.
State Law Special districts in the United States are founded by some level of government in accordance with state law (either constitutional amendment, general law, or special acts) and exist in all states. Special districts are legally separate entities with at least some corporate powers. Districts are created by legislative action, court action, or public referendum. The procedures for creating Page 25 of 69
a special district may include procedures such as petitions, hearings, voter or landowner approval, or government approval. Tribal governments may create special districts pursuant to state law and may serve on the boards of special districts.
Public Foundation Special districts, like all public entities, have public foundation. The landmark case of the U.S. Supreme Court addressing public versus private charters was Dartmouth College v. Woodward in 1819. Dartmouth established the fundamental differences between public and private organizations. Critically, a government must be founded by all of the people of a governmental area or by their governental representatives.
Civil Office Special districts possess some form of civil office, that is, the board has received a delegation of sovereign power from the state. Some boards may be appointed by only landowners. Private entities may appoint some or all of the members of a special district; however, there must be evidence of civil office. In addition to special districts with privately appointed boards, a special district may have a privately founded board; however, such a board could not be given the power to set a tax.
Accountability There is a citizen-government fiscal accountability relationship. To maintain accountability for special districts, states must maintain ultimate control (the power to repeal the authorizing law at any time). Due to of public foundation and, thus, ultimate control, the state can freely delegate sovereign power (such as the power to tax) to special districts and can allow them to act autonomously with little supervision.
History There is little information available on the earliest special districts in the United States. It is known that park districts existed in the 18th century. Toll road and canal corporations existed in the 19th century. The first general statute authorizing irrigation districts was adopted by California in 1887. The U.S. Census Bureau began identifying and collecting data on special districts in 1942.
Trends "Services once supplied by cities are increasingly supplied by special districts." Legislatures increasingly authorize special districts that perform a variety of functions. Regional special districts are increasingly created.
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The state of California leads the nation in the number of special districts with Illinois close behind. State counts of their special districts may differ from the federal count because the states may have different definitions of a special district than the U.S. Census Bureau.
Examples All of the following examples have been found by the U.S. Census Bureau to be special districts. See the Census of Governments Government Organization publications at a depository library or visit http://www.census.gov and select Governments Division.
Alabama: Alabama Municipal Electric Authority (special act) Alaska: regional electrical authorities (general law) Arizona: drainage districts (general law) Arkansas: fire ant abatement districts (general law) California: Lower San Joaquin Levee District (special act) Colorado: ambulance districts (general law) Connecticut: Pomperaug Valley Water Authority (special act) Delaware: tax ditches (general law) Florida: Daytona Beach Racing and Recreational Facilities District (special act); Walt Disney World Resort (special act) Georgia: airport authorities (special acts) Hawaii: Office of Hawaiian Affairs (constitutional amendment) Idaho: auditorium districts (general law) Illinois: Chicago Transit Authority (special act) Indiana: Northwest Indiana Regional Development Authority (special act) Iowa: library districts (joint or regional) (general law) Kansas: industrial districts (general law) Kentucky: Louisville-Jefferson County Air Pollution Control District (general law with special application) Louisiana: Abbeville Film and Visitors Commission District (special act) Maine: cemetery districts (special acts) Maryland: water and sewer authorities (general law) Massachusetts: Goose Pond Maintenance District (special act) Michigan: recreation authorities (general law) Minnesota: Metropolitan Mosquito Control District (special act) Mississippi: lighting districts (special acts) Missouri: Jackson County Sports Complex Authority (special act) Montana: county rail authorities (general law) Nebraska: Omaha Metropolitan Utilities District (general law with special application) New Hampshire: housing authorities (general law) New Jersey: port authorities - 1948 law (joint or regional) (general law) New Mexico: cotton boll weevil control districts (general law) New York: Hyde Park Fire and Water District (special act) North Carolina: Research Triangle Regional Public Transit Authority (special act) North Dakota: vector control districts (general law) [44] [45] Ohio: new community authorities, special improvement districts, transportation improvement districts (general law) Oklahoma: public library systems (general law) Oregon: geothermal heating districts, port authorities -1909 (general law) Pennsylvania: Philadelphia Regional Port Authority (special act) Rhode Island: East Providence Special Development District Commission (special act) South Carolina: Myrtle Beach Air Base Redevelopment Authority (executive order) South Dakota: television translator districts (general law) Page 27 of 69
Tennessee: utility districts (general law) Texas: Palacios Seawall Commission (special act) Utah: irrigation districts (general law) Vermont: Vermont Public Power Supply Authority (special act) Virginia: Buchanan County Tourist Train Development Authority (special act) Washington: hydroelectric resources authorities (general law) West Virginia: Hatfield-McCoy Regional Recreation Authority (special act) Wisconsin: local professional baseball park districts (general law) Wyoming: resort districts (general law)
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The Washington, D.C. Model by Gerry Widdicombe
The story of downtown Washington, D.C.'s revitalization is about more than resurrecting a languid office district that now rivals the dynamism and economic success of New York, San Francisco, Boston, London and Tokyo. A perfect storm of converging forces took hold in the late 1990s and propelled the downtown area toward an economic crescendo in 2007. Today, a district that once resembled a desolate office park — with acres of parking lots and derelict buildings — has evolved from being dull, dirty and dangerous into a 24/7 environment anchored by a thriving office market and energized by new housing, retail, theaters, restaurants and museums. How did this happen? It took a committed business community, the political will of City government and a renewed interest from the federal government in its home city. HARD TIMES FOR D.C. In some ways, the story of urban decline is not particular to D.C.: After World War II, the City faced huge demographic and cultural shifts — a problem for most American cities during the same period. But D.C. planners were also weighed down by obstacles of their own making, some the result of its complicated relationship with the federal government. From 1955 through 1995, D.C. faced the loss of its middle-class tax base. As residents fled to suburbia, they sought things not offered in the city: lawns and two-car garages, shopping malls, Page 30 of 69
lower taxes, better schools and government services. In D.C., the damage from the 1968 riots was so severe that many downtown and neighborhood businesses never reopened. The City also made a host of fateful bad decisions. First, upon receiving self-governance in 1974, the City accepted an unfunded pension liability — amounting to $300 million — for federal workers who became City employees. That amount ballooned to $4.5 billion in 1997 (when the federal government assumed this liability). By the late 1980s D.C. had become known as the "murder capital of the world." The arrest of the mayor in 1990 for drug use fueled this perception of a risky investment environment. The national recession in the early 1990s dealt the final blow, further weakening what was already a depressed economy. A successful 1990 rezoning effort that created today's thriving mixed-use section of downtown further depressed real estate values in the early 1990s. Over this same period of time, the federal government, the City's primary employer, remained indifferent to the city it called home. In 1963, Congress ordered D.C. to replace its 210-mile streetcar system with buses. The construction of Interstate 395 in and around downtown, and a federal "urban renewal" plan in the southwest, severely damaged the city's original street grid, leading to bleak neighborhoods. The Pennsylvania Avenue Development Corporation (19721995), a quasi-public entity created by Congress, received inconsistent federal funding — not enough to create a critical mass of redevelopment that would become self-sustaining, but enough to create a culture of dependency in D.C. on the federal government for transformative downtown investment. The decision of some federal agencies — including the Patent and Trade Office, the Food and Drug Administration and the Federal Deposit Insurance Corporation (FDIC) — to move their operations to the suburbs contributed further to the city and downtown's decline. Even the construction of D.C.'s subway (an excellent long-term investment) had negative short-term construction impacts on local business. Finally, the federal government owns 40 percent of the land in D.C. but pays no property tax — the City has responded by raising commercial property and corporate income taxes to balance its budget. On the positive side, the federal government supported the Smithsonian, other museums and the Kennedy Center — all regional, national and international tourist draws. By 1995, downtown D.C. had languished from years of neglect. Too many properties sat vacant. Its most prestigious department stores, Garfinckel's and Woodward & Lothrop, were closing their doors. In 1995, the downtown area's 120 commercial blocks had 70 surface parking lots and 50 vacant or boarded-up buildings. The future looked bleak.
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Since 1997, the downtown area of Washington, D.C. has experienced solid population and job growth. Downtown now generates 23 percent of the city‘s tax revenue and has a net fiscal impact $797 million (roughly the same as the city‘s public school budget). Following on this success, developers, the City and the federal government are working to make investments in the emerging markets of the Center City. THE GREAT TURNAROUND In the mid-1990s, business and civic leaders planned and pushed for both a new downtown sports and entertainment arena and the establishment of a downtown business improvement district stretching from the White House to the Capitol Building. The goal was to produce a "living downtown" to complement office buildings with more housing, culture and entertainment. In 1995, ground was broken for the new arena. In 1996, the mayor and city Page 32 of 69
council enacted a Business Improvement Districts Act to help rejuvenate neighborhoods and spur economic development. The Downtown Business Improvement District (BID), the city's first BID, began operations in November 1997. In December 1997, the revitalization of downtown D.C. began in earnest. The plan for the $300 million MCI (now Verizon) Center was the first big, transformative project that helped to catalyze more development downtown. The City contributed $100 million to this project in the form of a below-market land lease, property tax abatement and by issuing bonds for the construction of a new subway entrance adjacent to the arena that were supported by a new temporary gross receipts tax on D.C.'s larger businesses. The Center's opening drew record crowds, attracting sports fans from every ward of the city as well as suburbanites, who returned to the inner city for the first time in years. The City also had the support of the Clinton Administration. The National Capital Revitalization and Self-Government Improvement Act of 1997 enabled financial recovery as the federal government assumed the City's $4.5 billion unfunded pension liability, and agreed to increase the City's Medicaid reimbursement rate to 70 percent from 50 percent in exchange for a reduction of the federal government's annual payment from $660 million to $190 million. In 1998, the D.C. government approved the construction of a new convention center, completed in March 2003. The City contributed $40 million of land to the project, and the hotel and restaurant industries agreed to new taxes to fund its $850 million construction. The City's nonvoting member of Congress, Eleanor Holmes Norton, achieved many successes retaining and attracting federal agencies. The federal government's planning agency, National Capital Planning Commission, began to support plans for the revitalization of downtown rather than focusing solely on the needs of the federal agencies. NCPC assisted in the development of D.C.'s circulator bus system in the early 2000s, and developed the National Capital Framework Plan in 2007-2009 for the areas of the city around the National Mall, including suggesting a new use for the site of the FBI headquarters building. The city's new image and policies of the late 1990s, under Mayor Anthony Williams, supported business development, which enabled significant employment and population growth. A wide array of business sectors, including legal services, international banking and finance, management services and communications continued to grow and create new jobs. Many of these employers were responding to market globalization, and located in D.C. as a lower-cost alternative to New York or London. With the improvement in the City's financial condition, the mayor and the city council were able to implement modest tax relief under a program of "tax parity" with surrounding jurisdictions.
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Downtown D.C. has lost approximately 22,000 federal jobs since 1990, but has experienced a gain of 6,000 jobs since 2005. Meanwhile, growth of federal government jobs and federal government ―support‖ jobs (profession and business plus information and technical services) in Virginia and Maryland suburbs has been steadily rising since 1990. The City and downtown business leaders created a Downtown Action Agenda in 2000 that set goals for the growth of downtown.1 Several tools were used: preferred uses on City-owned land, tax increment financing, tax abatements, arts grants and zoning changes. The key to all these projects was in-depth economic analysis to make the case that strategic investments by the City were (1)necessary to build a critical mass of economic activity in order to be self-sustaining, (2) likely to accelerate other development by several years, and (3) had a positive return on investment for the City by producing new future tax revenues. This required bringing City staff and officials together with developers to go over their financial models in detail. The collaborative spirit of these public/private partnerships was partly the result of both the public and private partners having experienced together the difficult days of the early and mid-1990s. To date, the City made net economic development investments in downtown of approximately $300 million in projects totaling $2.3 billion, and total downtown private investment has been approximately $10 billion. To fufill D.C.'s ambitious social agenda, Mayor Williams and current Mayor Adrian Fenty invested heavily in social development — hundreds of millions of dollars in affordable housing, job training and public school renovation and new construction — and in neighborhood economic development projects to assure an equitable social contract for D.C. In 2008, Mayor Fenty announced the Center City Action Agenda, which builds on the achievements of the 2000 Downtown Action Agenda by establishing a $400 million economic development investment plan to realize similar development and place-making goals in the undeveloped areas of D.C.'s emerging Center City. Page 34 of 69
To complete and maintain the revitalization of downtown D.C. and extend its development momentum to the entire Center City area will require more work and continued public/private partnerships. In particular, to continue to attract private and federal government capital and partnerships, D.C. needs to maintain its investment in economic infrastructure and amenities (in balance with its important social investments), and continually monitor its competitive position in the metropolitan marketplace (and take action when necessary). Only in this manner will downtown and the emerging Center City area continue to evolve into a remarkable urban experience for all D.C. residents, workers and visitors while contributing significant financial resources to the City's robust social agenda. ENDNOTES 1
The Downtown Action Agenda created 6,000 new apartments or condominiums; 215,000 square feet (SF) of retail; 50 new restaurants; two new live theatres (1,032 seats)1 992 new hotel rooms; and 10 million SF of new office space.
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The Philadelphia, Pennsylvania Model
After World War II, Center City Philadelphia was described in architectural design journals as a dark and blighted city in social and economic decline. Residents of the city began moving out to the suburbs in search of space and greenery. The car was an instrument of everyday life as people commuted to the city for work and hurried home at five leaving the city deserted. There was a shortage of available office space in the city, and business also began looking to move out to the suburbs. As workers did not find reason to stay downtown after work hours, pedestrian traffic was slow. Stores and businesses suffered. Two major department stores (Lit Brothers and Snellenberg) had closed and a third (Gimbals) was considering a move out of the city. The heyday of city living seemed to be over (Progressive Architecture, 1976). In 1963, city officials announced a redevelopment plan that would revitalize Center City Philadelphia and attempt to draw the middle class back to the city, according to an article in Progressive Architecture (1976). Vincent Kling played a major role in this redevelopment with the design of towers, plazas and transportation hubs that would occupy center city along Market Street west of City Hall. The driving force behind his design was his theory of architecture for the people which would become his underlying philosophy throughout his career. Kling was a relatively unknown young architect in Philadelphia at the time of redevelopment. His role in the project shaped the urban design of Philadelphia today, and established him as a modernist icon. This report will examine the work of Vincent Kling during the critical years of urban renewal in Philadelphia and how his vision changed the built environment of the city for the everyday lives of Philadelphians. In 1950‘s, the Pennsylvania Railroad demolished the ―Chinese Wall‖ that ran along Filbert Street separating the city into north and south. The wall, designed by Frank Furness, was a transportation viaduct that was 16 tracks wide and eight blocks long. It connected the commuter Page 37 of 69
trains lines of Reading and Penn Central. Trains ran on the upper level and cars passing through arched openings on the lower level. The wall was problematic in that it discouraged passage visually and physically. Pedestrians were hesitant to pass through the dark archway in the evening, and the city was visually cut off. The demolition of this wall created the opportunity for redevelopment (Progressive Architecture, 1976). In 1963, city officials announced a redevelopment plan for center city. The intent of the plan was to revitalize downtown in order to lure the middle class from the suburbs back to the city, retain those who stayed and reestablish the urban economy. The land cleared by the removal of the Chinese wall was an opportunity to build shops, offices and plazas and reconnect the north side and south side of the tracks. What was needed was a strong clear vision, and Edmund Bacon was there to provide it. As an architect and planner Bacon was the executive director of the City Planning Commission from 1949- 1970. He attempted to commission Louis Kahn as the architect of the masterplan, but Kahn declined due to the lack of a client and program and therefore he believed lack of reality. Bacon then turned to Vincent Kling who accepted the commission marking the beginning of a long and successful line of projects. Kling and Bacon devised a masterplan of the city based on the ideology of urban design as described in an article for Architectural Record by Bacon (1961). William Penn‘s original layout of the city would stay intact. Penn‘s layout consisted of two major axis and five squares, one at the center and one in each quadrant. The automobile would be welcomed into the city, as it had become an undeniable part of everyday life. The development west of city hall would collectively be called Penn Center. Penn Center would consist of underground concourse filled with shops that was open to air at certain intervals. The concourse would be connected to above ground buildings and plazas. The area was to be pedestrian friendly with minimum building ground coverage for maximum green space. Because the plan was devised without a client, budget, or program, many believed that the project never would happen. Kling‘s interpretation of designing for the people is evident in his vision of Penn Center. The plan not only included the office towers and parking garages but also considered the scale of the pedestrian level. The redevelopment included pleasant pedestrian paths, designated underground vehicle traffic, courtyards, and consideration of light and air into underground passage and concourses as published in Architectural Record (1955). Kling considered how the person would enter the city in a car, park underground and ascend above ground to their office. A pleasant park or courtyard would be provided at street level for lunch. In the event of rain, worker could utilize the underground concourse for traveling to other buildings and service all while undercover. Shopping would draw in the tourists and non working suburbanites. The underground concourses were envisioned to be full of stores convenient to parking.
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The timeline to the right will be the guide through the development of Philadelphia building by building. The map below shows the area of Philadelphia affected by this redevelopment plan.
Timeline: 1952: Demolition of the Chinese Wall 1956: The Transportation Center Building and Greyhounf Station 1963: The Municipal Services Building 1965: Love Park 1965: The IBM Tower 1965: The Stock Exchange Building 1969: The Central Penn National Bank Building 1972: City Hall West Plaza 1972: The Fidelity Mutual Life Insurance Building 1973: Centre Square 1991: The Bell Atlantic Building
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Joint Powers Authority A Joint Powers Authority (JPA) is an entity permitted under the laws of some states of the USA, whereby two or more public authorities (e.g. local governments, or utility or transport districts), not necessarily located in the same state, may jointly exercise any power common to all of them. Joint Powers Authorities may be used where: 
an activity naturally transcends the boundaries of existing public authorities. An example would be the Transbay JPA, set up to promote the construction of a new transit center in San Francisco, with several transportation boards and counties around the San Francisco Bay Area as members;

by combining their commercial efforts, public authorities can achieve economies of scale or market power. An example is U.S. Communities, a purchasing consortium of local government agencies.
Joint powers authorities are particularly widely used in California (where they are permitted under Section 6502 of the State Government Code), but they are also found in other states. A joint powers authority is distinct from the member authorities; they have separate operating boards of directors. These boards can be given any of the powers inherent in all of the participating agencies. The authorizing agreement states the powers the new authority will be allowed to exercise. The term, membership, and standing orders of the board of the authority must also be specified. The joint authority may employ staff and establish policies independently of the constituent authorities. Joint powers authorities receive existing powers from the creating governments; thus, they are distinct from special districts, which receive new delegations of sovereign power from the state.
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The War On Poverty The War on Poverty is the unofficial name for legislation first introduced by United States President Lyndon B. Johnson during his State of the Union address on January 8, 1964. This legislation was proposed by Johnson in response to a national poverty rate of around nineteen percent. The speech led the United States Congress to pass the Economic Opportunity Act, which established the Office of Economic Opportunity (OEO) to administer the local application of federal funds targeted against poverty. As a part of the Great Society, Johnson believed in expanding the federal government's roles in education and health care as poverty reduction strategies. These policies can also be seen as a continuation of Franklin D. Roosevelt's New Deal, which ran from 1933 to 1935, and the Four Freedoms of 1941. The legacy of the War on Poverty policy initiative remains in the continued existence of such federal programs as Head Start, Volunteers in Service to America (VISTA), TRIO, and Job Corps. The popularity of a war on poverty waned after the 1960s. Deregulation, growing criticism of the welfare state, and an ideological shift to reducing federal aid to impoverished people in the 1980s and 1990s culminated in the Personal Responsibility and Work Opportunity Act of 1996, which, as claimed President Bill Clinton, "end[ed] welfare as we know it."
Major Initiatives
Social Security Act 1965 (Created Medicare and Medicaid) – July 19, 1965 Food Stamp Act of 1964- August 31, 1964 The Economic Opportunity Act of 1964 which created the Community Action Program, Job Corps and Volunteers in Service to America (VISTA), centerpiece of the "War On Poverty" – August 20, 1964 Elementary and Secondary Education Act - April 11, 1965
The Office of Economic Opportunity was the agency responsible for administering most of the War on Poverty programs created during Johnson's Administration, including VISTA, Job Corps, Head Start, Legal Services and the Community Action Program. The OEO was established in 1964 and quickly became a target of both left-wing and right-wing critics of the War on Poverty. Directors of the OEO included Sargent Shriver, Bertrand Harding, and Donald Rumsfeld. The OEO launched Project Head Start as an eight-week summer program in 1965. The project was designed to help end poverty by providing preschool children from low-income families Page 43 of 69
with a program that would meet emotional, social, health, nutritional, and psychological needs. Head Start was then transferred to the Office of Child Development in the Department of Health, Education, and Welfare (later the Department of Health and Human Services) by the Nixon Administration in 1969. President Johnson also announced a second project to follow children from the Head Start program. This was implemented in 1967 with Project Follow Through, the largest educational experiment ever conducted. The policy trains disadvantaged and at-risk youth and has provided more than 2 million disadvantaged young people with the integrated academic, vocational, and social skills training they need to gain independence and get quality, long-term jobs or further their education. Job Corps continues to help 70,000 youths annually at 122 Job Corps centers throughout the country. Besides vocational training, many Job Corps also offer GED programs as well as high school diplomas and programs to get students into college. Results and Aftermath In the decade following the 1964 introduction of the war on poverty, poverty rates in the U.S. dropped to their lowest level since comprehensive records began in 1958: from 17.3% in the year the Economic Opportunity Act was implemented to 11.1% in 1973. They have remained between 11 and 15.2% ever since. The ‗absolute poverty line‘ is the threshold below which families or individuals are considered to be lacking the resources to meet the basic needs for healthy living; having insufficient income to provide the food, shelter and clothing needed to preserve health. Poverty among Americans between ages 18–64 has fallen only marginally since 1966, from 10.5% then to 10.1% today. Poverty has significantly fallen among Americans under 18 years old from 23% in 1964 down to less than 17%, although it has risen again to 20% in 2009. The most dramatic decrease in poverty was among Americans over 65, which fell from 28.5% in 1966 to 10.1% today. In 2004, more than 35.9 million, or 12% of Americans including 12.1 million children, were considered to be living in poverty with an average growth of almost 1 million per year. According to the Cato Institute, a libertarian think tank, since the Johnson Administration almost $15 trillion has been spent on welfare, with poverty rates being about the same as during the Johnson Administration. A 2013 study published by Columbia University asserts that without the social safety net, the poverty rate would have been 29% for 2012, instead of 16%. According to Page 44 of 69
OECD data from 2012, the poverty rate before taxes and transfers was 28.3%, while the poverty rate after taxes and transfers fell to 17.4%. The OEO was dismantled by President Nixon in 1973, though many of the agency's programs were transferred to other government agencies. According to the "Readers' Companion to U.S. Women's History", Many observers point out that the War on Poverty's attention to Black America created the grounds for the backlash that began in the 1970s. The perception by the white middle class that it was footing the bill for ever-increasing services to the poor led to diminished support for welfare state programs, especially those that targeted specific groups and neighborhoods. Many whites viewed Great Society programs as supporting the economic and social needs of low-income urban minorities; they lost sympathy, especially as the economy declined during the 1970s. United States Secretary of Health, Education, and Welfare under President Jimmy Carter, Joseph A. Califano, Jr. wrote in 1999 in an issue of Washington Monthly that: "In waging the war on poverty, congressional opposition was too strong to pass an income maintenance law. So LBJ took advantage of the biggest automatic cash machine around: Social Security. He proposed, and Congress enacted, whopping increases in the minimum benefits that lifted some two million Americans 65 and older above the poverty line. In 1996, thanks to those increased minimum benefits, Social Security lifted 12 million senior citizens above the poverty line ... No Great Society undertaking has been subjected to more withering conservative attacks than the Office of Economic Opportunity. Yet, the War on Poverty was founded on the most conservative principle: Put the power in the local community, not in Washington; give people at the grassroots the ability to stand tall on their own two feet. Conservative claims that the OEO poverty programs were nothing but a waste of money are preposterous ... Eleven of the 12 programs that OEO launched in the mid-'60s are alive, well and funded at an annual rate exceeding $10 billion; apparently legislators believe they're still working." Reception and Critique President Johnson's "War on Poverty" speech was delivered at a time of recovery (the poverty level had fallen from 22.4% in 1959 to 19% in 1964 when the War on Poverty was announced) and it was viewed by critics as an effort to get the United States Congress to authorize social welfare programs. Some economists, including Milton Friedman, have argued that Johnson's policies actually had a negative impact on the economy because of their interventionist nature, noting in a PBS interview that "the government sets out to eliminate poverty, it has a war on poverty, so-called "poverty" increases. It has a welfare program, and the welfare program leads to an expansion of problems. A general attitude develops that government isn't a very efficient way of doing things." Adherents of this school of thought recommend that the best way to fight poverty is not through government spending but through economic growth. Page 45 of 69
Prof. Tony Judt, the late historian, said in reference to the earlier proposed title of the Personal Responsibility and Work Opportunity Act that "a more Orwellian title would be hard to conceive" and attributed the decline in the popularity of the Great Society as a policy to its success, as fewer people feared hunger, sickness, and ignorance. Additionally, fewer people were concerned with ensuring a minimum standard for all citizens and social liberalism. Conservative Research Fellow at the Independent Institute James followed this line of thinking when he wrote that "the war on poverty was a costly, tragic mistake [because]...abolishing poverty did not seem far-fetched to the activists ... [and] it was a perspective that led to intolerance ... The simple economic theory of poverty led to a single underlying principle for welfare programs ... In adopting the handout approach for their programs, the war-on-poverty activists failed to notice—or failed to care—that they were ignoring over a century of theory and experience in the social welfare field ... The war-onpoverty activists not only ignored the lessons of the past on the subject of handouts; they also ignored their own experience with the poor." Others took a different tack. In 1967, in his book Where Do We Go from Here: Chaos or Community? Martin Luther King "criticized Johnson's War on Poverty for being too piecemeal," saying that programs created under the "war on poverty" such as "housing programs, job training and family counseling" all had "a fatal disadvantage [because] the programs have never proceeded on a coordinated basis...[and noted that] at no time has a total, coordinated and fully adequate program been conceived." In his speech on April 4, 1967 at Riverside Church in New City, King connected the war in Vietnam with the "war on poverty": "There is at the outset a very obvious and almost facile connection between the war in Vietnam and the struggle I, and others, have been waging in America. A few years ago there was a shining moment in that struggle. It seemed as if there was a real promise of hope for the poor -- both black and white -- through the poverty program. There were experiments, hopes, new beginnings. Then came the buildup in Vietnam and I watched the program broken and eviscerated as if it were some idle political plaything of a society gone mad on war, and I knew that America would never invest the necessary funds or energies in rehabilitation of its poor so long as adventures like Vietnam continued to draw men and skills and money like some demonic destructive suction tube. So I was increasingly compelled to see the war as an enemy of the poor and to attack it as such. Perhaps the more tragic recognition of reality took place when it became clear to me that the war was doing far more than devastating the hopes of the poor at home." Page 46 of 69
This criticism was repeated in his speech at the same place later that month when he said that "and you may not know it, my friends, but it is estimated that we spend $500,000 to kill each enemy soldier, while we spend only fifty-three dollars for each person classified as poor, and much of that fifty-three dollars goes for salaries to people that are not poor. So I was increasingly compelled to see the war as an enemy of the poor, and attack it as such." The next year, King started the Poor People's Campaign to address the shortcomings of the "war on poverty" and to "demand a check" for suffering African-Americans which was carried on briefly after his death with the construction and maintenance of an encampment, Resurrection City, for over six weeks. Years later, a writer in The Nation remarked that "the war on poverty has too often been a war on the poor themselves," but that much can be done. In 1989, the former executive officer of the Task Force on Poverty Hyman Bookbinder addressed such criticisms of the "war on poverty" in an op-ed in The New York Times. He wrote that: "Today, the ranks of the poor are again swelling ... These and other statistics have led careless observers to conclude that the war on poverty failed. No, it has achieved many good results. Society has failed. It tired of the war too soon, gave it inadequate resources and did not open up new fronts as required. Large-scale homelessness, an explosion of teen-age pregnancies and single-parent households, rampant illiteracy, drugs and crime these have been both the results of and causes of persistent poverty. While it is thus inappropriate to celebrate an anniversary of the war on poverty, it is important to point up some of the big gains ... Did every program of the 60's work? Was every dollar used to its maximum potential? Should every Great Society program be reinstated or increased? Of course not ... First, we cannot afford not to resume the war. One way or another, the problem will remain expensive. Somehow, we will provide for the survival needs of the poorest: welfare, food stamps, beds and roofs for the homeless, Medicaid. The fewer poor there are, the fewer the relief problems. Getting people out of poverty is the most costeffective public investment." In March 3, 2014, as Chairman of the Budget Committee of the House of Representatives, Paul Ryan released his "The War on Poverty: 50 Years Later" report, asserting that some of 92 federal programs designed to help lower-income Americans have not provided the relief intended and that there is little evidence that these efforts have been successful. At the core of the report are recommendations to enact cuts to welfare, child care, college Pell grants and several other federal assistance programs. In the appendix titled "Measures of Poverty", when the poverty rate is measured by including non-cash assistance from food stamps, housing aid and other federal programs, the report states that these measurements have "implications for both conservatives and liberals. For conservatives, this suggests that federal programs have actually decreased poverty. For liberals, it lessens the supposed need to expand existing programs or to create new ones." Several economists and social scientists whose work had been referenced in the report said that Ryan either misunderstood or misrepresented their research.
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The Great Society The Great Society was a set of domestic programs in the United States launched by President Lyndon B. Johnson in 1964-65. The main goal was the elimination of poverty and racial injustice. President Johnson first used the term "Great Society" during a speech at Ohio University, then unveiled the program in greater detail at an appearance at University of Michigan. New major spending programs that addressed education, medical care, urban problems, and transportation were launched during this period. The program and its initiatives were subsequently promoted by him and fellow Democrats in Congress in the 1960s and years following. The Great Society in scope and sweep resembled the New Deal domestic agenda of Franklin D. Roosevelt. Some Great Society proposals were stalled initiatives from John F. Kennedy's New Frontier. Johnson's success depended on his skills of persuasion, coupled with the Democratic landslide in the 1964 election that brought in many new liberals to Congress, making the House of Representatives in 1965 the most liberal House since 1938. Anti-war Democrats complained that spending on the Vietnam War choked off the Great Society. While some of the programs have been eliminated or had their funding reduced, many of them, including Medicare, Medicaid, the Older Americans Act and federal education funding, continue to the present. The Great Society's programs expanded under the administrations of Richard Nixon and Gerald Ford.
Economic and Social Conditions Unlike the old New Deal, which was a response to a severe financial and economic calamity, the Great Society initiatives came just as the United States' post-World War II prosperity was starting to fade, but before the coming decline was being felt by the middle and upper classes. President Kennedy proposed an across-the-board tax cut lowering the top bracket marginal Income tax in the United States by 20%, from 91% to 71%, which was enacted in February 1964 under President Johnson (three months after Kennedy's assassination). The tax cut also significantly reduced marginal rates in the lower brackets as well as for corporations. The gross national product rose 10% in the first year of the tax cut, and economic growth averaged a rate of 4.5% from 1961 to 1968. Johnson's tax cut measure triggered what one historian described as "the greatest prosperity of the postwar years." GNP increased by 7% in 1964, 8% in 1965, and 9% in 1966. The unemployment rate fell below 5%, and by 1966 the number of families with incomes of $7,000 a year or more had reached 55%, compared with 22% in 1950. In 1968, when John Kenneth Galbraith published a new edition of The Affluent Society, the average income of the American family stood at $8,000, double what it had been a decade earlier.
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Disposable personal income rose 15% in 1966 alone. Federal revenues increased dramatically from $94 billion in 1961 to $150 billion in 1967. As the Baby Boom generation aged, two and a half times more Americans would enter the labor force between 1965 and 1980 than had between 1950 and 1965.
Racism Grave social crisis confronted the nation. Racial segregation persisted throughout the South. The Civil Rights Movement was gathering momentum, and in 1964 urban riots began within black neighborhoods in New York City and Los Angeles; by 1968 hundreds of cities had major riots that caused a severe conservative political backlash. Foreign affairs were generally quiet except for the Vietnam War, which escalated from limited involvement in 1963 to a large-scale military operation in 1968 that soon overshadowed the Great Society.
1965 Legislative Program and Presidential Task Forces U.S. President Kennedy had employed several task forces composed of scholars and experts to craft New Frontier legislation and to deal with foreign affairs. The reliance on experts appealed to Johnson, in part because the task forces would work in secret and outside of the existing governmental bureaucracy and directly for the [White House] staff. Almost immediately after the Ann Arbor speech, 14 separate task forces began studying nearly all major aspects of United States society under the guidance of presidential assistants Bill Moyers and Richard N. Goodwin. The average task force had nine members and generally was composed of governmental experts and academics. Only one of the task forces on the 1965 legislative program addressed foreign affairs and foreign economic policy; the rest were charged with domestic policy (agriculture, anti-recession policy, civil rights, education, efficiency and economy, health, income maintenance policy, intergovernmental fiscal cooperation, natural resources, pollution of the environment, preservation of natural beauty, transportation, and urban problems). After task force reports were submitted to the White House, Moyers began a second round of review. The recommendations were circulated among the agencies concerned and were evaluated by new committees composed mostly of government officials. Experts on relations with Congress were also drawn into the deliberations to get the best advice on persuading the Congress to pass the legislation. In late 1964 Johnson reviewed these initial Great Society proposals at his ranch with Moyers and Budget Director Kermit Gordon. Many of them were included in Johnson‘s State of the Union Address delivered on January 4, 1965. The task-force approach, combined with Johnson's electoral victory in 1964 and his talents in obtaining congressional approval, were widely credited with the success of the legislation agenda in 1965. Critics later cited the task forces as a factor in a perceived elitist approach to Great Society programs. Also, because many of the initiatives did not originate from outside lobbying, some programs had no political constituencies that would support their continued funding.
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1964 Election and the Eighty-Ninth Congress With the exception of the Civil Rights Act of 1964, the Great Society agenda was not a widely discussed issue during the 1964 presidential election campaigns. Johnson won the election with 61% of the vote, the largest percentage since the popular vote first became widespread in 1824, and he carried all but six states. Democrats gained enough seats to control more than two-thirds of each chamber in the Eighty-ninth Congress with a 68-32 margin in the Senate and a 295-140 margin in the House of Representatives. The political realignment allowed House leaders to alter rules that had allowed Southern Democrats to kill New Frontier and civil rights legislation in committee, which aided efforts to pass Great Society legislation. In 1965, the first session of the Eighty-ninth Congress created the core of the Great Society. The new Congress began by enacting long-stalled legislation such as Medicare and federal aid to education and then moved into other areas, including high-speed mass transit, rental supplements, truth in packaging, environmental safety legislation, new provisions for mental health facilities, a teachers‘ corps, manpower training, Operation Headstart, aid to urban mass transit, a demonstration cities program, a housing act that included rental subsidies, and an act for higher education. The Johnson Administration submitted eightyseven bills to Congress, and Johnson signed eighty-four, or 96%, arguably the most successful legislative agenda in U.S. Congressional history.
Major Policy Areas Civil Rights Historian Alan Brinkley has suggested that the most important domestic achievement of the Great Society may have been its success in translating some of the demands of the civil rights movement into law. Four civil rights acts were passed, including three laws in the first two years of Johnson's presidency. The Civil Rights Act of 1964 forbade job discrimination and the segregation of public accommodations. The Voting Rights Act of 1965 assured minority registration and voting. It suspended use of literacy or other voter-qualification tests that had sometimes served to keep African-Americans off voting lists and provided for federal court lawsuits to stop discriminatory poll taxes. It also reinforced the Civil Rights Act of 1964 by authorizing the appointment of federal voting examiners in areas that did not meet voter-participation requirements. The Immigration and Nationality Services Act of 1965 abolished the national-origin quotas in immigration law. The Civil Rights Act of 1968 banned housing discrimination and extended constitutional protections to Native Americans on reservations.
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Poverty The most ambitious and controversial part of the Great Society was its initiative to end poverty. The Kennedy Administration had been contemplating a federal effort against poverty. Johnson, who, as a teacher had observed extreme poverty in Texas among Mexican-Americans, launched an "unconditional war on poverty" in the first months of his presidency with the goal of eliminating hunger and deprivation from American life. The centerpiece of the War on Poverty was the Economic Opportunity Act of 1964, which created an Office of Economic Opportunity (OEO) to oversee a variety of community-based antipoverty programs. Federal funds were provided for special education schemes in slum areas, including help in paying for books and transport, while financial aid was also provided for slum clearances and rebuilding city areas. In addition, the Appalachian Regional Development Act of 1965 created jobs in one of the most impoverished regions of the country. The Economic Opportunity Act of 1964 provided various schemes in which young people from poor homes could receive job training and higher education. The OEO reflected a fragile consensus among policymakers that the best way to deal with poverty was not simply to raise the incomes of the poor but to help them better themselves through education, job training, and community development. Central to its mission was the idea of "community action", the participation of the poor in framing and administering the programs designed to help them.
Programs The War on Poverty began with a $1 billion appropriation in 1964 and spent another $2 billion in the following two years. It spawned dozens of programs, among them the Job Corps, whose purpose was to help disadvantaged youth develop marketable skills; the Neighborhood Youth Corps, established to give poor urban youths work experience and to encourage them to stay in school; Volunteers in Service to America (VISTA), a domestic version of the Peace Corps, which placed concerned citizens with community-based agencies to work towards empowerment of the poor; the Model Cities Program for urban redevelopment; Upward Bound, which assisted poor high school students entering college; legal services for the poor; and the Food Stamp Act of 1964 (which expanded the federal food stamp program). Programs included the Community Action Program, which initiated local Community Action Agencies charged with helping the poor become self-sufficient; and Project Head Start, which offered preschool education for poor children. In addition, funding was provided for the establishment of community health centers to expand access to health care, while major amendments were made to Social Security in 1965 and 1967 which significantly increased benefits, expanded coverage, and established new programs to combat poverty and raise living Page 52 of 69
standards. In addition, average AFDC payments were 35% higher in 1968 than in 1960, but remained insufficient and uneven.
Education The most important educational component of the Great Society was the Elementary and Secondary Education Act of 1965, designed by Commissioner of Education Francis Keppel. It was signed into law on April 11, 1965, less than three months after it was introduced. It ended a long-standing political taboo by providing significant federal aid to public education, initially allotting more than $1 billion to help schools purchase materials and start special education programs to schools with a high concentration of low-income children. During its first year of operation, the Act authorized a $1.1 billion program of grants to states, for allocations to school districts with large numbers of children of low income families, funds to use community facilities for education within the entire community, funds to improve educational research and to strengthen state departments of education, and grants for purchase of books and library materials. The Act also established Head Start, which had originally been started by the Office of Economic Opportunity as an eight-week summer program, as a permanent program. The Higher Education Facilities Act of 1963, which was signed into law by Johnson a month after becoming president, authorized several times more college aid within a five-year period than had been appropriated under the Land Grant College in a century. It provided better college libraries, ten to twenty new graduate centers, several new technical institutes, classrooms for several hundred thousand students, and twenty-five to thirty new community colleges a year. This major piece of legislation was followed by the Higher Education Act of 1965, which increased federal money given to universities, created scholarships and low-interest loans for students, and established a national Teacher Corps to provide teachers to poverty-stricken areas of the United States. The Act also began a transition from federally funded institutional assistance to individual student aid. In 1964, basic improvements in the National Defense Education Act were achieved, and total funds available to educational institutions were increased. The yearly limit on loans to graduate and professional students was raised from $1,000 to $2,500, and the aggregate limit was raised from $5,000 to $10,000. The program was extended to include geography, history, reading, English, and civics, and guidance and counselling programs were extended to elementary and public junior high schools. The Bilingual Education Act of 1968 offered federal aid to local school districts in assisting them to address the needs of children with limited English-speaking ability until it expired in 2002. The Great Society programs also provided support for postgraduate clinical training for both nurses and physicians committed to work with disadvantaged patients in rural and urban health clinics.
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Healthcare Medicare The Social Security Act of 1965 authorized Medicare and provided federal funding for many of the medical costs of older Americans. The legislation overcame the bitter resistance, particularly from the American Medical Association, to the idea of publicly funded health care or "socialized medicine" by making its benefits available to everyone over sixty-five, regardless of need, and by linking payments to the existing private insurance system.
Medicaid In 1966 welfare recipients of all ages received medical care through the Medicaid program. Medicaid was created on July 30, 1965 under Title XIX of the Social Security Act of 1965. Each state administers its own Medicaid program while the federal Centers for Medicare and Medicaid Services (CMS) monitors the state-run programs and establishes requirements for service delivery, quality, funding, and eligibility standards.
Welfare A number of improvements were made to the Social Security program in terms of both coverage and adequacy of benefits. The Tax Adjustment Act of 1966 included a provision for special payments under the social security program to certain uninsured individuals aged 72 and over. The Social Security Amendments of 1965 included a 7% increase in cash benefits, a liberalization of the definition of disability, a liberalization of the amount a person can earn and still get full benefits (the so-called retirement test), payment of benefits to eligible children aged 18–21 who are attending school, payment of benefits to widows at age 60 on an actuarially reduced basis, coverage of self-employed physicians, coverage of tips as wages, liberalization of insured-status requirements for persons already aged 72 or over, an increase to $6,600 the amount of earnings counted for contribution and benefit purposes (the contribution and benefit base), and an increase in the contribution rate schedule. The Social Security Amendments of 1967 included a 13% increase in old-age, survivors, and disability insurance benefits, with a minimum monthly benefit of $55 for a person retiring at or after age-65 (or receiving disability benefits), an increase from $35 to $40 in the special age-72 payments, an increase from $1,500 to $1,680 in the amount a person may earn in a year and still get full benefits for that year, monthly cash benefits for disabled widows and disabled dependent widowers at age 50 at reduced rates, a liberalization of the eligibility requirements for benefits for dependents and Survivors of women workers, an alternative insured-status test for workers Page 54 of 69
disabled before age 31, new guidelines for determining eligibility for disability insurance benefits, additional non-contributory wage credits for servicemen, broadened coverage of clergy and members of religious orders who have not taken a vow of poverty, and an increase in the contribution and benefit base from $6,600 to $7,800, beginning in 1968. In addition, the social Security Amendments of 1967 provided the first major amendments of Medicare. These social security amendments extended the coverage of the program to include certain services previously excluded, simplified reimbursement procedures under both the hospital and medical insurance plans, and facilitated the administrative procedures concerning general enrollment periods. The Food Stamp Act of 1964 made the program permanent, while the Social Security Amendments of 1967 specified that at least 6% of monies for maternal and child health should be spent on family planning. By 1967, the federal government began requiring state health departments to make contraceptives available to all adults who were poor. Meal programs for low-income senior citizens began in 1965, with the federal government providing funding for ―congregate meals‖ and ―home-delivered meals.‖ The Child Nutrition Act, passed in 1966, made improvements to nutritional assistance to children such as in the introduction of the School Breakfast Program.
Arts and Cultural Institutions National Endowments for Arts and Humanities In September 1965, Johnson signed the National Foundation on the Arts and Humanities Act into law, creating both the National Endowment for the Arts and National Endowment for the Humanities as separate, independent agencies. Lobbying for federally funded arts and humanities support began during the Kennedy Administration. In 1963 three scholarly and educational organizations—the American Council of Learned Societies (ACLS), the Council of Graduate Schools in America, and the United Chapters of Phi Beta Kappa—joined together to establish the National Commission on the Humanities. In June 1964, the commission released a report that suggested that the emphasis placed on science endangered the study of the humanities from elementary schools through postgraduate programs. In order to correct the balance, it recommended "the establishment by the President and the Congress of the United States of a National Humanities Foundation." In August 1964, Congressman William S. Moorhead of Pennsylvania proposed legislation to implement the commission's recommendations. Support from the White House followed in September, when Johnson lent his endorsement during a speech at Brown University. In March 1965, the White House proposed the establishment of a National Foundation on the Arts and Humanities and requested $20 million in start-up funds. The commission's report had generated other proposals, but the White House's approach eclipsed them. The administration's plan, which called for the creation of two separate agencies each advised by a governing body, was the Page 55 of 69
version approved by Congress. Richard Nixon dramatically expanded funding for NEH and NEA.
Public Broadcasting After the First National Conference on Long-Range Financing of Educational Television Stations in December 1964 called for a study of the role of noncommercial education television in society, the Carnegie Corporation agreed to finance the work of a 15-member national commission. Its landmark report, Public Television: A Program for Action, published on January 26, 1967, popularized the phrase "public television" and assisted the legislative campaign for federal aid. The Public Broadcasting Act of 1967, enacted less than 10 months later, chartered the Corporation for Public Broadcasting as a private, non-profit corporation. The law initiated federal aid through the CPB for the operation, as opposed to the funding of capital facilities, of public broadcasting. The CPB initially collaborated with the pre-existing National Educational Television system, but in 1969 decided to start the Public Broadcasting Service (PBS). A public radio study commissioned by the CPB and the Ford Foundation and conducted from 1968 to 1969 led to the establishment of National Public Radio, a public radio system under the terms of the amended Public Broadcasting Act.
Cultural Centers Two long-planned national cultural and arts facilities received federal funding that would allow for their completion through Great Society legislation. A National Cultural Center, suggested during the Franklin Roosevelt Administration and created by a bipartisan law signed by Dwight Eisenhower, was transformed into the John F. Kennedy Center for the Performing Arts, a living memorial to the assassinated president. Fundraising for the original cultural center had been poor prior to legislation creating the Kennedy Center, which passed two months after the president's death and provided $23 million for construction. The Kennedy Center opened in 1971. In the late 1930s the U.S. Congress mandated a Smithsonian Institution art museum for the National Mall, and a design by Eliel Saarinen was unveiled in 1939, but plans were shelved during World War II. A 1966 act of the U.S. Congress established the Hirshhorn Museum and Sculpture Garden as part of the Smithsonian Institution with a focus on modern art, in contrast to the existing National Art Gallery. The museum was primarily federally funded, although New York financier Joseph Hirshhorn later contributed $1 million toward building construction, which began in 1969. The Hirshhorn opened in 1974.
Transportation Transportation initiatives started during President Johnson's term in office included the consolidation of transportation agencies into a cabinet-level position under the Department of Transportation. The department was authorized by Congress on October 15, 1966 and began operations on April 1, 1967. Congress passed a variety of legislation to support improvements in transportation including The Urban Mass Transportation Act of 1964 which provided $375 Page 56 of 69
million for large-scale urban public or private rail projects in the form of matching funds to cities and states and created the Urban Mass Transit Administration (now the Federal Transit Administration), High Speed Ground Transportation Act of 1965 which resulted in the creation of high-speed rail between New York and Washington, and the National Traffic and Motor Vehicle Safety Act of 1966--a bill largely taken credit for by Ralph Nader, whose book Unsafe at Any Speed he claims helped inspire the legislation.
Consumer Protection In 1964, Johnson named Assistant Secretary of Labor Esther Peterson to be the first presidential assistant for consumer affairs. The Cigarette Labeling and Advertising Act of 1965 required packages to carry warning labels. The Motor Vehicle Safety Act of 1966 set standards through creation of the National Highway Traffic Safety Administration. The Fair Packaging and Labeling Act requires products identify manufacturer, address, clearly mark quantity and servings. The statute also authorizes HEW and FTC to establish and define voluntary standard sizes. The original would have mandated uniform standards of size and weight for comparison shopping, but the final law only outlawed exaggerated size claims. The Child Safety Act of 1966 prohibited any chemical so dangerous that no warning can make it safe. The Flammable Fabrics Act of 1967 set standards for children's sleepwear, but not baby blankets. The Wholesome Meat Act of 1967 required inspection of meat which must meet federal standards. The Truth-in-Lending Act of 1968 required lenders and credit providers to disclose the full cost of finance charges in both dollars and annual percentage rates, on installment loan and sales. The Wholesome Poultry Products Act of 1968 required inspection of poultry which must meet federal standards. The Land Sales Disclosure Act of 1968 provided safeguards against fraudulent practices in the sale of land. The Radiation Safety Act of 1968 provided standards and recalls for defective electronic products.
Environment Joseph A. Califano, Jr. has suggested that Great Society's main contribution to the environment was an extension of protections beyond those aimed at the conservation of untouched resources. In a message he transmitted to Congress, President Johnson said: “The air we breathe, our water, our soil and wildlife, are being blighted by poisons and chemicals which are the by-products of technology and industry. The society that receives the rewards of technology, must, as a cooperating whole, take responsibility for [their] control. To deal with these new problems will require a new conservation. We must not only protect the countryside and save it from destruction, we must restore what has been destroyed and salvage the beauty and charm of our cities. Our conservation must be not just the classic conservation of protection [against] development, but a creative conservation of restoration and innovation.�
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— Special Message to the Congress on Conservation and Restoration of Natural Beauty; February 8, 1965
At the behest of Secretary of the Interior Stewart Udall, the Great Society included several new environmental laws to protect air and water. Environmental legislation enacted included:
Clear Air, Water Quality and Clean Water Restoration Acts and Amendments Clean Air Act of 1963 Wilderness Act of 1964 Endangered Species Preservation Act of 1966 National Trails System Act of 1968 Wild and Scenic Rivers Act of 1968 Land and Water Conservation Fund Act of 1965 Solid Waste Disposal Act of 1965 Motor Vehicle Air Pollution Control Act of 1965 National Historic Preservation Act of 1966 Aircraft Noise Abatement Act of 1968 National Environmental Policy Act of 1969
Housing In 1964, the quality of the housing program was improved by requiring minimum standards of code enforcement, providing assistance to dislocated families and small businesses and authorizing below market interest loans for rehabilitating housing in urban renewal areas. The Housing and Urban Development Act of 1965 included important elements such as rent subsidies for low-income families, rehabilitation grants to enable low-income homeowners in urban renewal areas to improve their homes instead of relocating elsewhere, and improved and extended benefits for relocation payments. The Demonstration Cities Act of 1966 established a new program for comprehensive neighborhood renewal, with an emphasis on strategic investments in housing renovation, urban services, neighborhood facilities, and job creation activities.
Rural Development A number of measures were introduced to improve socio-economic conditions in rural areas. Under Title III of the 1964 Economic Opportunity Act, Special Programs to Combat Rural Poverty, the Office for Economic Opportunity was authorized to act as a lender of last resort for rural families who needed money to help them permanently increase their earning capacity. Loans could be made to purchase land, improve the operation of family farms, allow participation in cooperative ventures, and finance non-agricultural business enterprises, while local cooperatives which served low-income rural families could apply for another category of loans for similar purposes. Title III also made loans and grants available to local groups to improve housing, education, and child care services for migrant farm workers, while Titles I and II also included potentially important programs for rural development. Title I established the Job Corps which enrolled school dropouts in community service projects: 40% of the corpsmen were to work in a Youth Conservation Corps to carry out resource conservation, beautification, and development projects in the National Forests and countryside. Arguably more important for rural areas were the Community Action Programs authorized by Title II. Federal money was allocated Page 58 of 69
to States according to their needs for job training, housing, health, and welfare assistance, and the States were then to distribute their shares of the Community Action grants on the basis of proposals from local public or non-profit private groups. The Public Works and Economic Development Act of 1965 reorganized the Areas Redevelopment Administration (ARA) into the Economic Development Administration (EDA), and authorized $3.3 billion over 5 years while specifying seven criteria for eligibility. The list included low median family income, but the 6% or higher unemployment applied to the greatest number of areas, while the Act also mentioned outmigration from rural areas as a criterion. In an attempt to go beyond what one writer described as ―ARA‘s failed scattershot approach‖ of providing aid to individual counties and inspired by the European model of regional development, the EDA encouraged counties to form Economic Development Districts (EDDs) as it was recognized that individual distressed counties (called RAs or Redevelopment Areas) lacked sufficient resources for their own development. EDDs encompassed from 5 to 15 counties and both planned and implemented development with EDA funding and technical assistance, and each EDD had a ―growth center‖ (another concept borrowed from Europe) called a redevelopment center if it was located in an RA or development center if in another county. With the exception of the growth centers, EDD counties were ineligible for assistance unless they were RAs, but they were all expected to benefit from ―coordinated districtwide development planning.‖
Labor Amendments made to the 1931 Davis-Bacon Act in 1964 extended the prevailing wage provisions to cover fringe benefits, while several increases were made to the federal minimum wage. The Service Contract Act of 1965 provided for minimum wages and fringe benefits as well as other conditions of work for contractors under certain types of service contracts. A comprehensive minimum rate hike was also signed into law that extended the coverage of the Fair Labor Standards Act to about 9.1 million additional workers.
Conservative Opposition Despite conservatives who attacked Johnson's Great Society making major gains in Congress in the 1966 midterm elections, and with anger and frustration mounting over the Vietnam War, Johnson was still able to secure the passage of additional programs during his last two years in office. Laws were passed to extend the Food Stamp Program, to expand consumer protection, to improve safety standards, to train health professionals, to assist handicapped Americans, and to further urban programs. In 1968, a new Fair Housing Act was passed, which banned racial discrimination in housing and subsidized the construction or rehabilitation of low-income housing units. That same year, a new program for federally funded job retraining for the hardcore unemployed in fifty cities was introduced, together with the strongest federal gun control bill (relating to the transportation of guns across State lines) in American history up until that point. Page 59 of 69
By the end of the Johnson Administration, 226 out of 252 major legislative requests (over a fouryear period) had been met, federal aid to the poor had risen from $9.9 billion in 1960 to $30 billion by 1968, one million Americans had been retrained under previously non-existent federal programs, and two million children had participated in the Head Start program.
The Legacies of the Great Society The War on Poverty Interpretations of the War on Poverty remain controversial. The Office of Economic Opportunity was dismantled by the Nixon and Ford administrations, largely by transferring poverty programs to other government departments. Funding for many of these programs were further cut in President Ronald Reagan's first budget in 1981. Alan Brinkley has suggested that "the gap between the expansive intentions of the War on Poverty and its relatively modest achievements fueled later conservative arguments that government is not an appropriate vehicle for solving social problems." One of Johnson's aides, Joseph A. Califano, Jr., has countered that "from 1963 when Lyndon Johnson took office until 1970 as the impact of his Great Society programs were felt, the portion of Americans living below the poverty line dropped from 22.2 percent to 12.6 percent, the most dramatic decline over such a brief period in this century." The percentage of African Americans below the poverty line dropped from 55 percent in 1960 to 27 percent in 1968. From 1964 through 1967, federal expenditures on education rose from $4 billion to $12 billion, while spending on health rose from $5 billion to $16 billion. By that time, the federal government was spending $4,000 per annum on each poor family of four, four times as much as in 1961.
African-American Family Structure Thomas Sowell, argues that the Great Society programs only contributed to the destruction of African American families, saying "the black family, which had survived centuries of slavery and discrimination, began rapidly disintegrating in the liberal welfare state that subsidized unwed pregnancy and changed welfare from an emergency rescue to a way of life."
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References 1. http://open.salon.com/blog/scruffus/2009/01/25/revitalization_of_our_inner_cities_can_tr ansform_our_culture 2. http://www.lorlenehoyt.com/yahoo_site_admin/assets/docs/Hoyt__GopalAgge_GECO.40112310.pdf 3. http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/w12-1_morgan.pdf 4. http://en.wikipedia.org/wiki/Urban_renewal 5. http://www.spur.org/publications/article/2010-01-10/fall-and-rise-downtown-dc 6. http://en.wikipedia.org/wiki/Business_improvement_district 7. http://en.wikipedia.org/wiki/Special-purpose_district 8. http://en.wikipedia.org/wiki/Joint_powers_authority 9. http://www.brynmawr.edu/cities/archx/05-600/proj/p2/fwda/Front_Page/webcontent/Urban_Renewal.html 10. http://www.brynmawr.edu/cities/archx/05-600/proj/p2/fwda/Front_Page/webcontent/Urban_Renewal.html 11. http://abandonedphiladelphia.com/category/urban-renewal/ 12. http://www.habitat.org/neighborhood 13. http://en.wikipedia.org/wiki/War_on_Poverty 14. http://en.wikipedia.org/wiki/Great_Society 15. http://admin.bhbl.neric.org/~mmosall/ushistory/textbook/Chapter%2028%20New%20Fro ntier%20Great%20Soc/ch%2028%20sect%203%20Great%20Society.pdf
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Attachment A Revitalizing Inner-City Neighborhoods
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(Re)vitalizing Inner-City Neighborhood Business Districts An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits Jeffrey Morgan Edward M. Gramlich Fellowship in Community and Economic Development
November 2011
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
NEIGHBORWORKS® AMERICA Neighborhood Reinvestment Corporation, DBA NeighborWorks® America, was established by an Act of Congress in 1978 (Public Law 95-557). A primary objective of the corporation is to increase the capacity of local, community-based organizations to revitalize their communities, particularly by expanding and improving housing opportunities. These local organizations, known as NeighborWorks® organizations, are independent, resident-led, nonprofit partnerships that include business leaders and government officials. All together they make up the NeighborWorks® network. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY The Harvard Joint Center for Housing Studies advances understanding of housing issues and informs policy. Through its research, education, and public outreach programs, the center helps leaders in government, business, and the civic sectors make decisions that effectively address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and internship opportunities, the Joint Center also trains and inspires the next generation of housing leaders. ___________________________________________
This paper was written with the support of the NeighborWorks® America’s Edward M. Gramlich Fellowship in Community and Economic Development, which provides opportunities for highly qualified professional students at Harvard University to research and publish applied analytical projects of interest to the community development field. The program provides master’s-level Harvard University students with the opportunity to spend a summer on an analytical project suitable for publication as a working paper, while working directly with NeighborWorks staff and JCHS faculty, and presenting their research in Washington, D.C., at a policy briefing arranged by the JCHS. The fellowship program is named in honor of the corporation’s past chairman. ___________________________________________
The opinions expressed represent solely the opinions of the author, not those of NeighborWorks® America, the JCHS of Harvard University, or of any of the persons, entities or organizations providing support to, or affiliated with, these entities. The findings and conclusions of this report are solely the responsibility of the author. This analysis was performed with the support of NeighborWorks® America, with editing and production by Jennifer Ford and David Plihal The corporation has full rights to use and distribute this document. Copyright © 2011 by Jeffrey Morgan Harvard Joint Center for Housing Studies Harvard University 1033 Massachusetts Avenue, 5th Floor Cambridge, MA 02138 (617) 495-7908 www.jchs.harvard.edu
November 2011
NeighborWorks® America 1325 G Street, NW, Suite 800 Washington, D.C. 20005 (202) 220-2300 www.nw.org
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
About the Author Jeffrey Morgan is an architect, urban designer and real estate developer. He has also been adjunct faculty in design at Drake University and Iowa State University. He received his Bachelor of Arts in Architecture degree in 1981 and his Bachelor of Architecture degree in 1983, both from Iowa State University. Morgan’s work as an architect has included market-rate and affordable multifamily housing design and infill mixed-use and retail design in multicultural neighborhoods. His urban design work includes redevelopment strategies for distressed neighborhood business and warehouse districts. His design projects have garnered awards in affordable housing, interior design, preservation, master planning and urban design. As a real estate professional, Morgan has owned and managed market-rate residential properties and commercial office/artist adaptive reuse buildings. He has also participated as a developer on pioneering efforts to revitalize targeted distressed urban areas. Morgan returned to higher education in 2010 to further his academic studies and research in real estate, affordable housing, urban development, and community and economic development at the Harvard University Graduate School of Design where he will receive a Master in Design Studies degree with concentration in Real Estate and Urban Development in the spring of 2012.
Acknowledgements The author is grateful to his advisors, Sarah Greenberg and Christopher Herbert, for their excellent guidance throughout the research process and development of the paper. In addition, Eric Belsky provided stimulating conversation that helped clarify the intent of the work, while Brooke Finn and David Dangler provided invaluable assistance and advice at key points during the research. The author wishes to also acknowledge the many talented professionals doing the work of community and economic development that contributed to the clarity and depth of information needed to prepare this report. A list of those interviewed and the participants in focused meetings is included at the end of this report. If there are any errors in the information presented in this report they are borne solely by the author.
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
Abstract Stabilization and regeneration of neighborhood business districts (NBDs) creates positive conditions for neighborhood life, including improved access to goods and services, greater social and political connectivity, and improved property values. In addition, it contributes to resident wealth-building by fostering local retail entrepreneurialism. Community development corporations (CDCs), though well positioned for the work of NBD revitalization, have achieved limited success. This reflects a need to pursue effective action and best practices in four core domains rarely found in a single organization: (1) commercial real estate development, (2) business funding, (3) business development and (4) business district organizing and improvement. This report considers an integrated approach to NBD revitalization using the CDC as a base of operation, drawing upon the CDCs’ existing strengths and developing the additional core capacities needed either internally or through partnering to maximize the potential for effective revitalization, transformation and long-term success of neighborhood business districts. In addition, this report provides an assessment framework and initial decision-making process for CDCs to use in considering whether to pursue this area of economic development work, determining the capacity needed for effective action and assessing the potential and opportunity for success.
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
Contents About the Sponsors About the Author Abstract I.
Executive Summary
II.
Introduction
III.
Methodology
IV.
Typologies and Characteristics of Shopping Districts and Microbusinesses Shopping district typology and characteristics Microbusiness typology and characteristics
V.
Framing the Opportunity to Pursue NBD Revitalization Expanding role of community development corporations Trends and benefits to NBD revitalization
VI.
Key Actors and Partners Nonprofit organizations: CDCs, CDFIs, Main Street, and BIDs The neighborhood: property owners, business owners and residents Municipalities and politicians Banks and savings associations
VII. Four Core Domains of Action Real estate development: commercial retail and mixed-use Business development: microbusiness Business funding: microbusiness Business district organizing and improvement Coordinating the four domains of action VIII. Decision Road Map Preplanning: assess the need and opportunity for NBD redevelopment Planning phase 1: determine economic and physical assets and potential Planning phase 2: determine the capacity of the community for action Planning phase 3: determine the capacity of the CDC for action Implementation: an integrated and coordinated strategy for action IX.
Policy Considerations
X.
Conclusion
XI.
Resources
XII. Interviews and Meeting Attendees Appendix — Sources of Capital November 2011
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
I. Executive Summary Neighborhood business districts (NBD) can be interesting and vibrant community centers for neighborhoods. They provide social, recreational and entertainment opportunities for a community while providing the day-to-day shopping needs for the neighborhood. They are important and meaningful in creating a sense of place and in providing a shared identity for residents. Revitalizing them matters. New policy directions from the U.S. Department of Housing and Urban Development (HUD) with the Choice Neighborhoods initiatives and the Small Business Jobs Act of 2010 make it an excellent time to look again at NBD economic development as an important component of a more holistic and integrated approach in creating sustainable neighborhood revitalization. Key Nonprofit Actors Community development corporations (CDCs) are nonprofit organizations incorporated to provide programs, offer services and engage in the activities of community development. They typically serve a geographic area such as a neighborhood or town. Activities include real estate development, technical assistance in personal and business finance, workforce development, education, youth employment and leadership development, community planning, and organizing. Community development financial institutions (CDFIs) are financial institutions that provide credit and other financial services to underserved markets and populations. They may be a community bank, community development credit union, community development loan fund, or community development corporation. They are certified by the U.S. Department of the Treasury, which provides funds to them through a variety of programs. Main Street is a program founded by the National Trust for Historic Preservation. It is an economic development tool focused on revitalizing downtown and neighborhood business districts using a comprehensive four-point strategy of organization, promotion, design, and economic restructuring that addresses a variety of issues and problems challenging commercial districts.
The four primary nonprofit nongovernment organizations involved in the work of NBD economic development and revitalization are community development corporations (CDCs), community development financial institutions (CDFIs), Main Street programs, and business improvement districts (BIDs). CDCs are well positioned to lead the work of NBD revitalization but have historically achieved limited success. This reflects a need to pursue an integrated approach of best practices in four core competency domains that have been employed individually or in different combinations by the various organizations but are rarely collectively found in a single organization: (1) commercial real estate development, (2) business funding, (3) business development, and (4) business district organizing and improvement.
Business improvement districts (BIDs) are defined areas within cities whereby businesses elect to pay an additional tax or fee in order to fund improvements within the district boundaries. In addition, grant funds acquired by the city can be used for special programs.
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
Four Domains of Action in Business District Development 1. Commercial real estate development Among the tasks and actions of commercial real estate development are assembling and acquiring property, whether raw land or an existing building; determining the program for improving the property; hiring architects, engineers and other professionals to design the improvements; securing financing for the improvements; hiring contractors to build the improvements; and either selling or maintaining the property in the long term. 2. Business development The work of business development ranges from providing technical assistance in enhancing credit, budgeting, marketing, and business plan development to finding, training, and mentoring upstart entrepreneurs. 3. Business funding Economic development finance is the primary work of business funding and includes locating grant and loan sources to capitalize business endeavors. For microbusiness development in inner-city neighborhoods, this often involves locating and working with targeted programs that address underserved markets, groups, and individuals. Sources of capital include federal programs, foundations and intermediaries. 4. Business district organizing and improvement Organizing the business owners of a district for collective action for mutual benefit is the primary purpose of this work. Efforts and actions may include promotion and marketing, beautification, safety, and business retention and recruitment.
The report therefore recommends combining all four domains of action by developing greater capacity within the CDC or through partnering to maximize the potential for better outcomes. Developing capacity within or working in partnership with the other nonprofit organizations and other key actors in the community, CDCs can deepen their capacity to take more effective action in the work of NBD revitalization. This report also provides an assessment framework and initial decision-making process or road map for a CDC to use in assessing the economic development and opportunity in a neighborhood market and whether to undertake this work. Why is this work critical to the future of communities? As the health of the commercial center of a neighborhood goes, so goes the health and stability of a neighborhood. A healthy NBD creates positive conditions for neighborhood life including improved access to goods and services, greater social and political connectivity, and improved property values. It stabilizes neighborhoods, creates asset building opportunities, inspires residents to participate in community activities, and contributes to a socially and economically strong community.
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
CDC Decision Road Map Preplanning Assess the Need and Opportunity for NBD Redevelopment • Determine if there is a problem with the neighborhood business district. • If no problem exists, an opportunity for improvement remains. Planning Step 1 Determine the Economic and Physical Assets and Potential for Success • Prepare a market and economic potential study. • Prepare a spatial and physical study of the business district. • Prepare a real estate development plan for the targeted area for infill and renovation opportunities. Planning Step 2 Determine the Capacity of the Community for Action • Prepare a business plan to determine budget, goals, and economic and development potential. • Review and update strategic plan, including organizational mission. • Assess and catalogue community and social capital assets for competencies and commitment. • Prepare a capital assessment availability study for business and real estate development. • Assess the CDC in the four core domains of action. Planning Step 3 Determine the Capacity of the CDC for Action • Assess internal capacity. • Assess others in the field for partnering opportunities. Implementation An Integrated Organizational Strategy for Action • Develop internal capacity. • Leverage partnering opportunities.
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
II. Introduction Since the 1960s, community development corporations (CDCs) have been leaders in advocating for and developing affordable housing for low-income families in distressed urban neighborhoods. Though CDCs have also been involved throughout their history in economic development initiatives, they have primarily focused on housing. Communities have learned that housing development alone is not sufficient to fully revitalize neighborhoods and strengthen their local economies (Seidman 2004). More recently CDCs have been moving toward not only mixed-income housing but mixed-use development, combining housing and ground-floor retail in the commercial areas in neighborhoods thereby turning their attention more solidly back to the business districts of neighborhoods as an important aspect of the health and vitality of a neighborhood. Yet the work of neighborhood business district (NBD) revitalization across the United States has had limited and often isolated success. CDCs have typically engaged in this work as either commercial real estate developers, often by virtue of renovating the upper floor housing portions of mixed-use buildings, or by providing business development technical assistance to local entrepreneurs. In the former, the leasing of the commercial space is left to market forces that are generally not attracted to the inner city, and in the latter, there remains higher risk of business failure with less long-term stability of the real estate at economically viable rent levels. CDCs seem to rarely couple the two activities with programs for business development and funding in conjunction with economically viable commercial real estate development to more effectively renovate and fill vacant storefronts and abandoned buildings in NBDs. With a strategic approach to both commercial real estate and microbusiness development, CDCs and other community-based organizations1 can bring to bear existing capabilities in real estate development and finance, accessing capital, and microbusiness support programs for a more complete and effective approach to sustainable neighborhood revitalization. Historically, the NBD has been an essential component in the everyday lives of the residents in urban neighborhoods. Planned before the proliferation of automobiles, they were located along primary roads with streetcar rail line connections back to the employment center — the central business district (CBD). In some cases they were planned working class neighborhoods, in other cases they were the first vestiges of urban escape by the wealthy from the dirt and grime of the industrial CBD. In still other cases they were separate and independent towns eventually annexed by the adjacent growing city. 1
In this report, community development corporation (CDC) refers to a nonprofit community-based organization that develops real estate as part of its mission. CDCs can be focused exclusively or primarily on developing low-income housing and/or commercial real estate or neither. In addition, other communitybased organizations such as community development financial institutions (CDFIs), though specifically recognized as financial entities for the receipt and distribution of federal funds for targeted community programs, may also develop real estate.
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These first-tier suburbs were planned with specific intent to relate the NBD, or town center, within convenient walking distance to adjacent surrounding neighborhood housing and to provide essential day-to-day goods and services. In addition to being the local shopping centers for neighborhoods, they have served a variety of essential functions and roles — physically, economically, socially, politically and symbolically. As the business, civic and social centers for communities they provide the context for important networking. As subcomponents of the larger city and often given names, they are the public face and the front door of the neighborhood, with an image often woven into the identity of the residents. The condition of the NBD is an important part of the image of the neighborhood and is evaluated for desirability when considering a neighborhood as a place to live, work, shop or play. Also, it is a key consideration of employers, real estate developers, and other businesses when determining whether to invest. In some cases the reputation and image of the neighborhood reaches far beyond its borders and takes on regional or even national prominence. Greenwich Village, SOHO, Lincoln Park, Watts, Chelsea, Harlem and the Castro are representative neighborhoods that conjure up images and experiences relating emotionally and symbolically back to their residents. NBDs and the neighborhoods they inhabit have, however, faced difficult times over the last several decades. The onslaught of the automobile led to the disappearance of streetcars and, along with other pressures including regional supermarkets, big-box retailing, and suburban flight, caused neighborhoods and their business districts to erode over time (Seidman 2006; Murphy and Cunningham 2003). Though some NBDs were able to adjust and remain viable assets to varying degrees for their neighborhoods, many went through long periods of distress and decline and still have numerous abandoned storefronts and derelict vacant buildings. Though revitalization of NBDs emerged as an important component of community and economic development in the 1980s and 1990s (Seidman 2004), examples of successfully revitalized NBDs across the country are limited. Past efforts to revitalize NBDs have therefore received criticism regarding their economic viability (Porter 1995). These past efforts typically involved either renovation of the building structures or business development technical assistance, but not both. In the first case this left unfilled retail space that was not attracting businesses and in the second, upstart entrepreneurs were left to fend for themselves in finding affordable storefront locations (Murphy and Cunningham 2003). In addition, real estate developers, including CDCs, often find that commercial real estate development without an upfront strategy for leasing or developing microbusiness retail tenants is not easily financed, often requires the housing portions in mixed-use developments to financially support the development, and typically have a higher risk of failure. Microbusiness development support services alone may not result in effective and holistic neighborhood transformation. The combination of commercial real estate development and long-term microbusiness support programs may, however, increase the potential for successful neighborhood commercial district regeneration.
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
While CDCs and other community-based nonprofits have made great strides in inner-city affordable housing over the last 20 years, their work to revitalize NBDs has lagged. There has been little consideration of more effective and concerted efforts by nonprofits in the redevelopment and economic recovery of NBDs often leaving them to the forces of a commercial real estate leasing market that does not fully appreciate, understand or see the opportunities in inner-city locations. Residents of inner-city neighborhoods therefore continue to not only be isolated from jobs but lacking in access to basic day-to-day retail services in their neighborhoods. Many inner-city neighborhood business districts remain economically distressed and are limited in the diversity of retail and employment opportunities they provide the community (Imbroscio 2004). Though many planning and urban development strategies have been used to stem the tide of economic inequity and to revitalize distressed neighborhoods, the problem remains systemic. A primary strategy for improving economic equity has been population mobility, which has historically played an important role in enhancing economic opportunity in the United States (Fainstein 1983). An alternative strategy to combat the problems of concentrated urban poverty is to encourage greater movement into poor neighborhoods by the working and middle classes. The idea behind this strategy is to (re)create mixed-income communities in urban spaces where concentrated urban poverty now exists (Imbroscio 2004). Though economists, such as Michael Porter, have explored the regeneration of the local economies of inner-city neighborhoods with approaches that include small business clustering models (Porter 1995), these businesses typically offer only low-paying jobs to residents. In addition, ownership of these small businesses is typically outside of the inner-city neighborhood. Real wealth-building for residents in low-income neighborhoods is often a mission of CDCs but has typically been pursued primarily through homeownership programs, while workforce development and training assistance programs have been the primary approach to improve the incomes of inner-city residents. Yet part of truly building a neighborhood-based economy requires retaining more of the business profits in the neighborhood and developing higher paid managerial-level employment. Therefore, tapping into the local talent and spirit of existing and potential small and microbusiness entrepreneurs in conjunction with revitalizing NBDs can serve multiple purposes: repurposing vacant buildings, lots and storefronts; recreating a vital business district; creating microbusiness ownership opportunities for residents; and retaining more retail dollars in the community while potentially capturing additional retail dollars from adjacent areas. Though the current economic recession has exacerbated efforts to revitalize NBDs and foster microbusiness development in inner-city neighborhoods, recent federal policy changes attempting to channel funding to small businesses through mission-based organizations may be an opportunity for renewed efforts by CDCs. However, before a CDC enters the economic development sectors of microbusiness development and commercial real estate development of
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NBDs, they would benefit from assessing the existing conditions for viability of the NBD for redevelopment and the capacity of their own organization, the neighborhood and larger community, and the existing business owners in the district for their ability to take effective actions to maximize success. This report therefore addresses the potential role of CDCs in this market sector of economic development by considering the current structure of core actions that have been taken by CDCs and other mission-oriented community based nonprofits in this work. It further considers an assessment process to determine the capacity needed and partnerships that may address capacity shortfalls to increase the potential for effective action needed to revitalize inner-city NBDs. It is important to insert an overarching caveat to this report. An ancillary point to the thesis of this report is that microbusiness development can be an effective strategy for building wealth for residents. However, it is important to note that there appears to be little direct research on this topic. In addition, retail entrepreneurial and real-estate development activities are often high-risk businesses. Success rates vary greatly depending on a multiplicity of variables, many of which are out of the control of the individual businessperson and are driven by market dynamics that are not altogether predicable. Suffice to say some business people may do very well and others will fail. The purpose of this paper is less about substantiating the approach than about recognizing that entrepreneurialism is a fundamental aspect in the American economy, that there are opportunities of this type in the inner city, and these opportunities could be more equitably accessible to underserved individuals within those neighborhoods with support from CDCs and similar organizations.
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
III. Methodology The research and study for this report was primarily conducted in the summer of 2011. It employs four methods for obtaining the information used in making the arguments presented: (1) review of existing literature in periodicals, academic journals and other publications on the various disciplines that intersect with this topic; (2) interviews with community development practitioners, lenders and policy makers;2 (3) feedback obtained from a focus group of community development affiliates at a NeighborWorksŽ America Training Institute in Atlanta and a policy briefing in Washington, D.C.; and (4) development project examples that are representative of issues, conditions and concerns to support the arguments and recommendations of the report.3 The techniques are primarily qualitative rather than quantitative methods or real estate financial analysis. The consideration of business district revitalization coupled with business development at the neighborhood scale as practiced by CDCs requires engaging the disciplines of design and planning, community development, economics, and to some extent sociology and politics. It should be noted there is not one strategy for successfully addressing the economic and structural issues of the inner city; every neighborhood situation and circumstance is different and requires care in assessing the particular issues driving the local conditions; and there is not unanimity on the part of academics or practitioners as to any of the issues or potential solutions to the problem. However, as is pointed out in the report, while there is no one-size-fits-all strategy, there are a common set of competencies needed and a common set of questions to address in developing a strategy for neighborhood business district revitalization.
2
A list of those interviewed is included at the end of this report. Examples of neighborhood business district (NBD) revitalization projects by CDCs in Des Moines, Iowa, and Dorchester, Mass., were used for reference purposes and as a context for considering the recommendations of this report. Each incorporated some degree of business development work in the redevelopment strategy. Other real estate and business development projects of CDCs and CDFIs that were not specifically related to NBDs were also considered in support of the recommendations. 3
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(Re)vitalizing Inner-City Neighborhood Business Districts: An assessment and strategy framework for integrated microbusiness and real estate development by nonprofits
IV. Typology and Characteristics of Shopping Districts and Microbusinesses This research is focused on NBDs, which are a particular type of shopping district, and microbusiness development, which is a particular type of small business. The following typologies and characteristics of shopping districts and businesses are presented in an effort to more fully clarify these distinctions. Shopping district typology and characteristics4 Because many CDCs are neighborhood focused, this research specifically considers NBDs as distinct from CBDs or secondary business districts (SBDs). Though there are some exceptions, economic development and urban redevelopment approaches for NBDs are generally different than for other types of shopping districts employing a multiplicity of culturally and economically motivated strategies. CBDs are the downtown business core of a city with multiple department stores and mid- to high-rise office buildings that occasionally have ground-floor storefront retail. They are generally characterized as high density with mid- to high-rise office towers and a lower density of residential use. Commercial office use includes a high degree of large corporate financial and support services businesses. The department stores are generally grouped together with long blocks of window display areas. Their market area encompasses the entire city and often with a regional or, even in the case of large cities, a national draw. SBDs are smaller than CBDs and typically center on one or possibly two anchor department or variety stores. They often serve multiple neighborhoods and may, depending on the nature of the stores, have a regional draw. They are often one story in height and do not have upper-story uses. They often have large parking lots. NBDs, the focus of this report, are centered on satisfying the day-to-day convenience shopping needs of a neighborhood. They typically have buildings that are one to three stories in height though may extend higher with small-footprint storefronts for the retail and service businesses. The upper stories are either small commercial office or residential space. The buildings and associated storefronts are typically on the right-of-way at the sidewalk and offer a contiguous pedestrian shopping experience including a grocery or variety store anchor along with several small stores such as convenience stores, dry cleaners, food retailers including bakeries, bank(s), multiple restaurants and bars, post office, liquor store, clothing and novelty stores.
4
Other shopping district types not included here are convenience shopping centers often referred to as strip-malls and regional and super-regional shopping centers that are fully enclosed, often referred to as shopping malls.
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They were specifically built on primary transportation corridors extending out from the central city core of larger cities and often had streetcar lines that connected them back to the city center. They were generally located within a 10- to 15-minute walk from their resident market area. An increasing number of national chains and franchises have discovered the economic advantages to being on these primary transportation corridors within inner-city urban neighborhoods. Parking is primarily on the street, at the back of the buildings or occasionally on the sides of the buildings. As older neighborhoods, they often have a rich narrative history that adds to their identity. Many experienced periods of white flight to the outer suburbs, have high levels of poverty, and have a multiplicity of ethnic residents. They are common entry points for the more recent wave of immigrants. Microbusiness typology and characteristics As previously mentioned, finance professionals are beginning to make distinctions between small business and microbusiness. Because the culture, funding and technical assistance needs of microbusiness are unique from small business, this distinction in terminology is necessary for clarity and understanding of how a CDC might engage in this type of business development work. What many laypeople would still call small business is now more consistently termed microbusiness by economists and lending practitioners. Microbusiness is typically defined as five or fewer employees and less than $50,000 in capital funding needs. Small businesses on the other hand as defined by the Small Business Administration are independently owned and operated, organized for profit and not dominant in their field. Number of employees is determined by business sector: for example, 100 to 500 employees for wholesaling and 500 to 1,500 employees for manufacturing. Annual receipts for retailing may not exceed $5 million to $21 million. These businesses are often organized under corporate legal structures with professional accounting services. Microbusiness owners refer to themselves as soloists, independents, consultants, craftsmen, artists, musicians, freelancers, free agents and self-employed people.5 The majority of these companies are one-person and family oriented enterprises. Many of these businesses start out operating from their homes and many have part-time help and hire from family members and friends. As a legal structure they are typically sole proprietors though some set up their business as a limited liability corporation. Many handle their own bookkeeping but hire independent tax services that may or may not be certified accountants. This different, more informal, level of business acumen is what often makes working with microbusiness owners challenging for banks and other financial institutions. Since sole proprietors are not legally required to fully separate 5
This definition was developed in part from Lloyd Lemons’ article “What Is a MicroBusiness?: MicroBusiness Defined� [Internet]. Version 5. Knol. 2008 Jul 28. Available from: http://knol.google.com/k/lloyd-lemons/what-is-a-microbusiness/20h4ns8tiuhc5/2
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out business from personal finances, many of these so called “mom-and-pop” businesses are an extension of the family’s personal source of money. This practice of comingling personal and business funds is the source of the term “living out of the business.” It is also important for CDCs to understand that there are numerous cultural differences typical of microbusiness owners in inner-city neighborhoods that require unique skill sets for effective interaction and communication. Because many of these business owners are of various ethnic backgrounds and many are recent immigrants with a first language other than English, skills are needed to bridge the cultural differences. This need for cultural competence, a cultural sensitivity and understanding in engaging with business owners of other cultures, includes trust building, language skills, and understanding of a more intimate and familial way of doing business.
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V. Framing the Opportunity to Pursue NBD Revitalization Many forces seem to be driving the efforts to more effectively address inner-city urban issues. Past efforts to deconcentrate poverty with person-based living subsidies proved only modestly effective because social structures of, and ties back to, neighborhoods were too strong to break (Imbroscio 2004). Despite the physical deterioration, people were more comfortable living near friends and family and simply did not want to give up their communities, believing they should not have to leave their homes to have a better life. In addition, concern about the environment and energy usage as well as systemic inequity in job opportunities and access for inner-city residents has contributed to greater focus on improving the lives of people in cities through better planning to improve the living conditions of inner-city neighborhoods (Imbroscio 2004). Revitalizing the NBD is therefore an essential part of improving conditions for residents who either cannot leave or choose to stay in the inner city. A community-oriented goal of NBD revitalization, therefore, would be to create a more socially and economically connected neighborhood with businesses that provide day-to-day services necessary to an increased quality of life in the community. Microbusiness owners, however, are typically made up of families working long hours. They need community support through technical assistance, access to capital and affordable financing options. CDCs with a mission to improve the quality of life for residents of inner-city low-income neighborhoods offer unique combinations of competencies for providing real estate development along with technical assistance programs, organization and access to funding streams. Expanding role of community development corporations Since the 1960s, CDCs have been leaders in advocating for and developing affordable housing for low-income families in distressed urban neighborhoods. More recently, CDCs have been moving toward not only mixed-income but mixed-use development throughout neighborhoods. Many have also developed unique models for microbusiness retail food incubators in larger facilities that were repurposed industrial buildings.6 Yet NBD revitalization has been only modestly successful over the last 20 years. In addition, microbusiness retail development as a service sector for CDCs has typically been left to free market forces and only supported when a potential entrepreneur steps forward — an incidental opportunity instead of a focused program for tapping into and fostering an entrepreneurial culture.
6
Examples include Fruitvale Public Market by The Unity Council CDC in Oakland, Calif., and Mercado Central, a cooperative in Minneapolis, Minn., developed by graduates of Neighborhood Development Center’s Entrepreneur Training Program. Midtown Global Market in Minneapolis developed by Neighborhood Development Center is another example of a successful large-scale, food-oriented development created by a CDC in a repurposed historic Sears building.
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Trends and benefits to NBD revitalization What the United States now calls the Great Recession has led to even greater unemployment in these older neighborhoods. Periods of high unemployment also typically coincide with increased entrepreneurialism as people seek solutions to earning a living and use times of unemployment to pursue long-held dreams of owning their own business. This time has great potential for tapping the intellectual capital and entrepreneurial spirit of the un- or underemployed. In addition, recent studies have pointed to the importance of a vital community business center that intersects the social and business aspects of residents’ lives for the purpose of networking to gain valuable knowledge of employment opportunities (Harrison and Weiss 1998). It is common knowledge that the Great Recession has also led to significant housing foreclosures. Less talked about are the amount of small business and commercial building foreclosures occurring and anticipated.7 These may be opportunities for CDCs in both business ownership, if the business can be made viable again, and/or commercial building ownership. National retailers have discovered NBDs in inner-city locations as untapped markets for various franchise-type retail operations such as McDonalds, Subway, and Dollar Stores. Though there is ongoing debate about their benefits in NBD redevelopment, and not without challenges that need to be sorted out, they can provide youth employment, managerial employment, needed goods, and even resident ownership or CDC ownership opportunities. Lastly, the 2010 Census revealed that there has been a population shift from more people living in rural areas to more people living in urban areas. The reasons for this are beyond the scope of this report but revitalization efforts in CBDs and other urban neighborhoods can continue to capitalize on this increase in urban dwellers. There is also new interest on the part of young professionals and empty-nesters to live in higher density urban areas to be closer to entertainment and other lifestyle amenities. Inner-city neighborhood revitalization can tap into this movement, which can have the benefit of drawing a mix of incomes and a younger generation with higher education to a location, thereby improving retail viability, property values, and employment- and wealth-building opportunities.
7
From a discussion with Marcus Weiss.
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VI. Key Actors and Partners There are a number of nonprofit organizations working in the area of NBD revitalization. In addition, the important constituencies in a neighborhood include property owners, existing business owners and residents. The support of municipalities and politicians is also critical to the success of a revitalization effort. And banks and credit unions round out the complement of actors and partners needed for effective action. The following section outlines the nonprofits and other key actors that are important in the work of NBD revitalization and business development. Nonprofits There are numerous nonprofit organizations, in a variety of forms, that engage in services and other activities for the support and betterment of the community. These include real estate development, economic development, business development and funding, education, community organizing, and neighborhood and NBD revitalization. Each type of organization is defined broadly. The purpose of this report is not to provide clarity regarding the nature of the specific work and structure of these organizations. The intent here is to consider these organizations’ common strengths and capacities in terms of NBD revitalization and microbusiness development to reveal to CDCs entering this market sector some ways of tapping their respective skill sets for more effective action. CDCs that have been involved in affordable housing real estate development have already built a substantial degree of capacity germane to the commercial real estate development field. Though additional competencies such as increased expertise in building systems and regulatory requirements may be needed to transition from residential to commercial real estate development, of the typical array of nonprofits in the field, CDCs are more closely positioned to enter this area of work. In addition, CDCs working in the affordable housing services arena often provide financial training and assistance programs in preparation for homeownership. This would allow them to transition well into business training assistance programs. Though some CDCs provide lending services, many are providing only referral assistance to other lending institutions. Community development financial institutions (CDFIs) are financial institutions that provide credit, financial services and lending in underserved markets and to underserved groups — their key strength. They are certified by the U.S. Treasury to access federal dollars from the CDFI Fund. Many are also designated Small Business Administration (SBA) lenders. Some are CDCs and provide real estate development services though this is generally not a core competency or service area. Using various forms of programs available, many have successfully navigated the field of microbusiness lending as unique from small business lending. Along with lending, many CDFIs offer business technical assistance and entrepreneurial development programs that
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provide training, mentoring and coaching for business owners both pre- and postlending which are purported to lower the risk of business failures.8 CDFIs generally have a closer relationship with borrowers and have greater skills than banks in assessing the opportunities in lending to nontraditional borrowers that may not meet the criteria mandated by bank regulations or industry standards. This makes them particularly suitable to partnering with for-profit banks in the flow of capital to microbusiness enterprises. Main Street is a community revitalization program established in the 1980s by the National Trust for Historic Preservation that focuses on a holistic approach to business district revitalization using a four-point strategy of design, promotion, economic restructuring and organization.9 The National Trust Main Street Center leads a national network of more than 1,200 state, regional and local programs using a preservation-based strategy for rebuilding the places and businesses in commercial centers. It has been an effective program in the revitalization of traditional small downtowns, particularly rural towns, and is increasingly effective at working in neighborhood districts in larger urban centers where they are, however, not as effective in the area of economic restructuring (Seidman 2004). Anecdotally, their greatest strengths tend to be in developing programming events for the promotion of a district. Festivals, food and art fairs, and farmers markets are typical events implemented by Main Street programs. They also are strong at organizing business owners and working with municipalities to take action on beautification projects for individual buildings and the entire district. But faรงade improvement projects and streetscape design projects may be their sole strength. As a mostly volunteer organization, they lack capacity to plan and implement larger scale redevelopment efforts and, though they work well with existing business owners, lack the skills and capacity needed to fully nurture and assist emerging entrepreneurs and develop new businesses. Their access to funding is generally limited to operating expenses provided by the city, foundation grants and private individuals. Funding needed for projects generally comes through the city and business owners. Business improvements districts (BIDs) are locally legislated and typically formed when a majority of the property owners in a district agree to an additional property tax assessment fee to provide supplemental municipal services to their business district. These services typically include additional security, trash removal, upgrading streets and sidewalks with furnishings and fixtures, and other beautification and landscaping projects. Though some BID boards of directors, made up of the property owners, engage in collective marketing and promotion efforts for the district, this is not the norm. Their primary strength is in leveraging their additional tax assessment dollars as another funding stream and in their business and political clout with cities and local politicians.
8
Information obtained from discussions with Dana Brunett, Kevin Smith and Rosa Rios Valdez. Information obtained from the National Trust for Historic Preservation website: http://www.preservationnation.org/main-street/about-main-street/ 9
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The neighborhood: property owners, existing business owners and residents The myriad players in the context of a neighborhood is in some ways less complex than the nonprofit finance world, yet these players can be less predictable and more challenging to organize for action. Property owners arguably wield the greatest amount of control in revitalization efforts. If they are not on board to improve and invest or sell their properties to others at reasonable prices, they can derail or stall for years the best laid redevelopment plans. Developing trusting relationships is essential. Though eminent domain is a tool cities can use to obtain property for community development projects, it is an expensive and contentious legal process. It has spurred significant debate over its legality and caused cities to be highly reticent to employ it. On the other hand, a property owner that sees the financial benefits to participating in a revitalization process can be a vital asset that should not be underestimated. Property owners can support an NBD strategy in many ways. They might clean up their properties and work with nonprofits to find retail tenants, donate properties for a tax deduction, or partner on a real estate redevelopment deal as an equity investor. Existing business owners are a key first constituency to develop in a revitalization effort. Some may even be the owners of the properties in question. In any event they are the eyes and ears of the street. They typically know the goings-on of the district better than anyone else, and many have already considered some of what the area needs, from greater security to trash pick-up to additional services and retail business. They are a wealth of information and a valuable resource. However, it is important to foster the relationships over time in order to enroll them in the development effort. They may be skeptical, having seen no change in difficult areas for years. They may also fear competition from others or increases in rental rates with gentrification. Organizing them as a group for common benefit may require patience and perseverance, but it is well worth the effort. Finding a leader who most of the other business owners trust can substantially improve the process. In addition, developing cultural competence to overcome cultural barriers that include language skills and understanding differing ways of doing business will more effectively improve and build relationships. Recent immigrants, for example, may tend to keep to themselves and may require developing trust over a long period of time. Because many of the existing business owners work long hours, they are also not readily available to meet in groups outside of their places of business. Going to them to talk in person and going often over a sustained period of time will engender more lasting and meaningful relationships. Residents have a vested interest in the business district. Those who are willing to participate in planning efforts can, in addition to the business owners, bring a wealth of local knowledge to the process. There always seems to be at least one or two that are well versed in the history, culture and community flavor of an area. Typically these “old heads” or “wise ones” are knowledgeable activists, often highly vocal and influential with other residents. Often they are retired from fulltime employment and therefore can invest the time needed to more fully participate. They are essential components of the stakeholder group.
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Municipalities and politicians The complexity of real estate and community and economic development can rarely be navigated effectively without the support of the city/municipality. Local mayors and council members along with city managers and planning and development staff may or may not be in alignment with each other, much less with the desires and needs of a neighborhood. It may be necessary to educate and facilitate strategic interactions over time to build a constituency for action. In the best case, planning staff has already considered redevelopment notions that can be a framework for beginning discussions. Once consensus is achieved on a need for action, city staff and politicians are essential advocates in moving plans forward, removing barriers, navigating stakeholder interests and fostering constituencies. Banks and savings associations Though the current economic recession has significantly tightened the access to capital needed for real estate and business development, for-profit lending institutions remain an important component in the area of economic development for cities and could play an even larger role in the work of inner-city revitalization. The Community Reinvestment Act (CRA) encourages and incentivizes banks and savings associations to meet the lending needs in low- and moderateincome neighborhoods. Partnering with CDFIs is one way for these financial institutions to obtain positive CRA performance ratings. In addition, bank and savings association branch office locations in NBDs can be part of a real estate redevelopment strategy that also provides residents access to a multitude of day-to-day retail banking services.
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VII. Four Core Domains of Action Building commercial and mixed-use real estate that includes retail is highly rewarding work, but it is risky, particularly without a strategy for filling the building spaces. Economic development work by a CDC that incorporates and combines real estate and business development, including access to funding and long-term organization and promotion, is becoming increasingly complex and sophisticated. It requires expertise in design and planning, finance, marketing, policy and politics, and community relations to navigate the complex worlds of the physical environment, business economics, real estate finance, local politics and the social forces of diverse cultures living in increasing proximity to each other. The implementation of NBD redevelopment requires four core competency domains or areas of action. Each domain has its own needs in terms of coordination and skill sets. There is, however, some crossover between each domain of activity, because actions taken within each area relate to an aspect of another. For example, there is a business networking component in both the business development area and business organization areas. Likewise, players working in all four domains are considering market conditions and business opportunity, albeit through the lens of their particular interests and concerns. This dynamic alone is a strong argument for an integrated approach that combines and coordinates all the efforts to leverage the intellectual capital of each domain. Not only might the CDC evaluate and assess their current capacity in these areas but also it may want to look at adding competencies or partnering with other organizations to provide the full complement of skills and talents suggested. 1. Real estate development: commercial retail and mixed-use Real estate development requires a broad spectrum of skills and activities, including purchasing and assembling parcels of land or buildings (the property); establishing and determining the market demand for the proposed program, such as housing, retail, or office; and coordinating the efforts of architects, designers, and engineers. It also involves obtaining the necessary public approvals; working with lenders and investors to obtain the financing and funding required to build the project; managing contractors to build the structures; leasing, managing, and potentially selling the property (Peiser, Frej, and Urban 2003). Commercial real estate development, broadly defined, involves any property owned to produce income, including industrial and multifamily residential property. In terms of construction use types, it is more typically defined to include office, retail shops and shopping centers, parking structures, and various public assembly buildings. Essentially, in includes places where public commerce and service occur. For the purpose of this report it is more specifically distinguished from single-family and multifamily residential development and refers more specifically to retail and office/service uses for public access. It may also include a mix of uses, such as retail or professional service uses like banks on the ground floors of multistory buildings with offices and/or residential space on upper floors.
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For a CDC the distinction between commercial and residential development is important in determining the skill sets and capacities a developer needs. Commercial construction is more complex than residential construction. Although residential buildings are primarily built of wood, commercial buildings are more commonly built of steel and/or concrete. Zoning and building codes are also more complex when the public has access and the complexity of construction requires a higher level of skill from the designers, engineers and building trades involved. Financing and leasing commercial projects also requires greater skill sets. Commercial development is typically considered riskier than residential. Lenders generally require that the developer prelease large portions of a project before financing can be committed. Therefore, an understanding of the intended market and/or relationships with commercial leasing agents is often necessary. Many commercial real estate projects can take advantage of various funding sources (which are discussed later in this report), such as the New Market Tax Credit (NMTC) program, if the project scale is large enough to warrant the legal and administrative costs. In addition, the Low Income Housing Tax Credit (LIHTC) program can be used if the project is mixed-use with housing comprising a portion of the project. These tax credits may even cover the cost of the commercial development if the housing is proportionally large enough in relation to the commercial component. These more complicated funding structures, however, require additional management and knowledge. 2. Business development: microbusiness The field of economic development is broad and typically includes work that promotes the economic health and standard of living of an area. For a CDC it includes workforce development, personal and business finance and credit assistance programs, and youth employment programs. Business development for the purpose of this report is a more specific subset of economic development and refers to locating, cultivating, educating and fostering entrepreneurs in starting and maintaining very small and, specifically for this report, microbusiness enterprises. It also extends to actively developing a business climate and culture and finding businesses that can work within the structure of the district and local market. Assessing the types of businesses needed and appropriate for an NBD in a specific setting requires an understanding of the existing economic conditions of the local business community. It also requires an understanding of the market demographics and conditions of the local economy with a specific eye toward assessing the viability of the market for the types of businesses envisioned. In other words, identify what is already in place that may need support as well as what could viably fill retailing gaps. This will entail hiring and/or partnering with those who can provide the information and data needed to assess the viability of the market including the specific types of businesses that work well in the context of the neighborhood.
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Although it is valuable, the typical technical assistance model many CDCs provide — often oriented toward family financial planning, credit enhancement, budgeting, and sometimes business basics and the preparation of business plans — is not enough to improve the outcomes of microbusiness success. Programs with greater measurable success are often called microenterprise or entrepreneurial development programs and include not only focused training, but ongoing mentoring and coaching both pre- and postlending. These programs often employ or involve partnerships with industry experts and/or college and university faculty specializing in concerns and issues particular to microbusiness.10 Business incubator programs can be an excellent business development program for CDCs providing ease of entry into a market for upstarts and providing for more direct interaction and learning for emerging business owners working in close proximity to other similar businesses. These programs relate closely to the business district organization domain in that they include a social-business networking component that fosters peer-to-peer relationships between business owners, locates new entrepreneurs, and organizes and plans for common interests. An on-going coaching approach, typically more directed than mentoring, involves identifying aspirations, setting measurable goals, and providing resources and a structure for success. Professionals in the same field of business and/or experts in business coaching models are often employed. 3. Business funding: microbusiness A multiplicity of skill sets is needed to find, access, and apply a variety of funding streams in the work of microbusiness lending including banking and finance, economics, market knowledge, law, and policy. The field is highly complex and information intensive, with policy and programs changing continuously. Arguably one of the greatest skill sets needed are in the social and cultural competencies required to relate to and earn trust from the various ethnicities and cultures represented in a neighborhood. CDCs and CDFIs that operate at a neighborhood scale or partner with those who have fostered trusting relationships at the local levels report greater success at finding opportunities, supporting microbusiness efforts and placing funds. Access to business funding for microbusiness is difficult even in a strong economy. It is particularly challenging in low-income inner-city areas. However, there recent changes in small business lending policy through the Small Business Jobs Act of 2010 allow mission-focused lenders to make SBA 7(a) loans by allowing community development loan funds to access the U.S. Treasury’s Small Business Lending Fund. Many CDFIs have also created loan pools from foundations and repayment of SBA loans that can be used for microbusiness funding. The SBA also provides funding for pre- and postlending 10
Many CDFIs interviewed who are also SBA lenders provide or partner with others to provide entrepreneurial development programs. They claim greater long-term business success and less loan defaults as a result of longer term relationships to assist entrepreneurs through the early startup years of a microbusiness.
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microbusiness technical assistance programs. In addition, microlending in amounts from $25 to $25,000 has been developed into an almost social phenomenon with projects such as Kiva11 that started in emerging countries and recently began working in Detroit, Michigan. 4. Business district organizing and improvement Long-term success of a business district can be enhanced by organizing the business owners to work together for mutual benefit. Organizing not only benefits the business owners, but also it benefits the neighborhood. Events and festivals that can be effective in marketing and promotion of the district require coordinated efforts and volunteer assistance from the community and contribute to the development of the neighborhood identity and social structure. Business owners working collectively can also exercise greater leverage with city staff and politicians in obtaining many benefits for the community from special permits for the events and festivals, to additional security, to funding of neighborhood beautification projects. And as mentioned above, with an organized structure of business owners, BIDs can be established to leverage additional tax assessment dollars as another funding stream for improvements to the district. The skill sets needed in this domain are primarily that of organizing communities and groups to take effective action and to develop important relationships with municipalities and politicians. In multiethnic and multicultural neighborhoods this may also include connecting with specific business alliance associations representing a larger geographic and specific ethnic constituency. Many cities have African American, Hispanic Latino, and Asian business alliance associations that can be an excellent resource for developing relationships and business opportunities. Coordinating the four domains of action These four core areas of action have been employed in various combinations in many city shopping districts throughout the county by each of the various nonprofits. The content of actions and skill sets needed in each area is not new. Putting them all together to maximize the potential for more effective and long-term sustainability may be the key, however, to better outcomes. Before venturing down the path of employing these areas of action in microbusiness development and NBD real estate development, a CDC would benefit from assessing the additional capacities needed not only in their own organization but in the neighborhood and the community at large.
11
Kiva is a nonprofit organization that connects borrowers and lenders through the Internet utilizing a network of individuals and microfinance institutions. Source: www.kiva.org.
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VIII. Decision Road Map To identify the potential for action in NBD revitalization and microbusiness development, a CDC can benefit from a focused process of assessing (1) the capacity of its own organization to take action; (2) the potential and viability of the existing NBD to be further developed; and (3) the capacity of the neighborhood and larger community to support the efforts. As in any business venture it is important to determine if there is a market for the activity and services to be provided. A CDC seeking to enter the market of business district revitalization that includes microbusiness development would benefit greatly from surveying the existing neighborhood resources. This would include an inventory of the physical capital of occupied and vacant buildings along with available sites. It would also include an assessment of the human or social capital of existing neighborhood businesses and resident advocates, their level of experience and their skills and resources. The following is a framework for deciding the potential and opportunity to take action. It is by no means complete or comprehensive. However, it provides a structure for much of what is important to consider in the planning and preparation process to get to a point where action can be determined. It is organized into a four-step process leading to an implementation strategy. 1. Pre-planning: Assess the need and opportunity for NBD redevelopment This first question to ask is whether the existing NBD exhibits any deficiencies. In some districts the answer is obviously yes. There are no grocery stores, pharmacies, restaurants, banks, or other day-to-day retail and service businesses. There may also be the obvious signs of abandoned buildings and storefronts. In more extreme cases there are additional signs of blight and vandalism. In less obvious cases, there may be subtler indicators such as a gradual decline in the higher income population with people moving out in search of neighborhoods that provide better services and/or entertainment options. Talking with business owners, residents and leaders within the business and resident communities can shed light on the possibility of decline. Even if the district is in seemingly stable condition, it could be at the edge of distress and vulnerable to even slight dips in the market. The volatility of gasoline prices, for example, can quickly affect the spending habits of consumers and immediately affect businesses already operating with thin margins. Even if there is not a problem per se, there may be an opportunity to support the business district in taking its next growth steps. A solid and stable business district that meets many of the service needs of local residents can, with greater organization and access to additional capital, grow into an exporting economy that attracts consumers from outside of the neighborhood. With increased interests in cultural heritage, ethnic neighborhoods that capitalize on their unique heritage can develop into destination locations attracting not only local tourism but regional, national and even international tourism.
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There may be opportunities for projects related to for-profit developers seeking development opportunities. With the current challenge of tight capital markets that includes increased lending criteria and underwriting standards on the part of banks, for-profit real estate developers are increasingly looking to the nonprofit lending and development sector for both equity and debt financing. Even developers with strong credit, that would have been considered prime borrowers and therefore low risk, are finding it difficult to access debt financing. With lower regulation barriers to financing through nonprofit lenders, the funding gap can be filled and provide good investment risk and partnership opportunities for CDCs and CDFIs. Assisting for-profit developers in accessing capital may be a way of leveraging their interest to develop projects in the neighborhood. Lastly, for CDCs with missions that include neighborhood revitalization and resident wealth building, and the NDB is a concern, this may be a natural evolutionary step in expanding the impact of their work and building on their existing capacity of affordable housing development. Those nonprofits looking to expand their economic development sector opportunities may find this to be an ideal time and opportunity to have a greater impact on and make a greater difference in the lives of those in their communities by taking advantage of these conditions to grow their operations. This may ultimately, however, require the CDC to engage in a facilitated strategic planning process to assess the vision and mission of the organization. The assessment process may include addressing questions of geographic focus, affordable housing versus commercial real estate focus, and whether to develop the capacities needed within for long-term operations or to partner with others in addressing shorter term issues and opportunities. Changes to the organization’s mission may be needed in the end to expand into the work of economic development and, in particular, NBD development work. If, after a preliminary anecdotal assessment, there is either a need or an opportunity for business district redevelopment, the next step is to construct the various parts of a business plan. This includes identifying various strengths, weaknesses, opportunities and threats to the business district. It also includes considering the situation from the perspectives of economic, social and spatial potential to substantiate whether or not there is a viable opportunity for economic development through NBD and microbusiness development. In addition, it includes an assessment of the capacity of the CDC and the community to take action. These considerations are generally covered in the following two planning phases. 2. Planning phase 1: Determine the economic and physical assets and potential In this phase of the planning process the intent is to determine if there is a “there there.� It is a key step for determining if there is truly a market for the regeneration or expansion of the business district. It addresses both the economic and physical assets of the business district and the potential for improvement.
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The market and economic potential study Market studies can be effective tools in determining the market demand for developing new and expanded retail and service businesses. They can demonstrate the capacity of local buying power and tabulate retail leakage from the neighborhood. But care should be taken in selecting competent consultants who will provide realistic and honest data collection and evaluations. One of the most difficult points to face is that there may not truly be a market — there may be only a desire to have one where it doesn’t exist. Facing this fact allows communities to consider real solutions to the poor condition of the business district. It would be far better to find out there is not a market for retail business development than to pursue development where there is not a real market and suffer the consequences of reoccurring business failures and misplaced efforts. That said, lenders often require market studies for commercial development, and if they are valid, they can show a market where others thought there was none. This can convince the city, residents and business community that the district has more potential than they originally anticipated. Market studies will also be necessary to attract potential regional or national retailers to the area that can act as catalysts for growth and that can support nearby businesses. National franchises such as McDonalds, Subway and various discount pharmacies have access to market data or have strategies that assist them in determining the market viability of an area. Partnering with them can be an effective way to substantiate a market. Their very presence in a commercial area can be the catalyst for turning the business district around, creating the traffic needed for other existing businesses and attracting new businesses. These companies can become essential and effective players in the revitalization of an urban business district and can offer management and ownership opportunities for residents. In addition, national franchises can also be ownership opportunities for CDCs. City planning staff may also be a valuable participant in the development of a market study and many municipalities will fund these efforts as part of larger economic development analysis work for the city and region. The market demand for retailing is determined through the market study process. This includes identifying existing businesses that serve that demand. In addition, a supply assessment for available buildings and property is also needed to determine suitability for serving that additional demand through new development. Therefore, a spatial and physical study goes hand-in-hand with the market demand study to determine approaches for the redevelopment of the NBD. The spatial and physical study The spatial assessment of a business district and the physical assessment of buildings and land often involve working with design and building industry professionals. This is best done in concert with the market demand study as it informs the different approaches resulting from assessing the physical conditions. Urban planning and design brings into focus the larger
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regional context of the business district and can reveal important adjacent markets and demonstrate essential transportation and transit connections. Once again, the city planning staff can be a valuable resource. There may already be preliminary plans in place that have considered the macro-level opportunities and challenges of the business district within the region. At the building scale, local builders and architects can be a valuable resource for assessing the viability of existing buildings for renovation and parcels of land for new development. Some buildings simply need minor cosmetic changes that may have dramatic positive impacts, such as opening boarded-up storefronts — a typical condition of neighborhood corner taverns and bars in derelict areas. Other buildings need significant structural improvements and need to be assessed for viable reconstruction and rehabilitation. The market demand study coupled with an assessment of the physical attributes of the NBD can be grouped into four primary assessment conditions. There is no firm criteria for these categories but they are offered here as a framework for making value and viability judgments. Condition 1: There is not enough of the business district left to save and a better strategy would be to abandon the NBD altogether. This is determined in relation to the market demand study. If there is no market whatsoever, then the best choice is most likely to abandon the business district altogether and repurpose the land for other nonretail or civic uses. Whole districts that have outlived purpose, market demand or other uses may be better utilized as a community park area for the neighborhood. However, sometimes one vacant historic building well placed in the urban context and well suited for a specialty anchor business, such as a restaurant that can attract customers from outside the neighborhood, may be a viable redevelopment use. If there is market demand but not much in the way of existing buildings, there may be other locations that are better suited for a new business district or an alternative planning approach for pocket retail at select locations along an extended corridor. Condition 2: There are enough buildings to reasonably save but there are too many vacant buildings to fill with the indicated market demand. This assessment may lead to a combination of stabilization through rehabilitation and giving up portions of the business district. This involves consolidating buildings and businesses and moving viable businesses to better buildings or locations within the district or other parts of the neighborhood. Even whole buildings can be moved to better locations. Abandoned buildings can be repurposed for other civic uses or demolished for needed adjacent parking or small pocket parks providing access to parking in the backs of buildings.
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Condition 3: There is a good retail market and there are enough buildings and viable businesses left to build upon although they may be in rough condition and in need of façade improvements. There are opportunities for selective demolition and additional infill. This condition would typically result in saving the business district and strategically adding to it. This approach often requires a surgical approach to redevelopment so that existing businesses survive the redevelopment process. Building new structures in such close proximity to existing businesses can cause significant disruptions in business that can tip vulnerable businesses over the edge of failure. Great care is needed in supporting the existing businesses even to the extent of providing business interruption assistance grants. Condition 4: There is a strong retail demand, although it is not yet fully recognized by typical commercial developers. The business district is reasonably stable and has a contiguous supply of buildings and spaces. There may be some vacancies and their condition is good but worn, with poor-quality earlier renovations. They are in need of beautification and updates. There is opportunity for additional microbusiness development and the potential to develop the district into a destination area that taps outside retail dollars. This condition is where the CDC may determine that although there may not be a need to intervene for stabilization, the for-profit market may not yet be attracted to the area and there may be an opportunity for additional microenterprise development for underserved groups. The neighborhood may be on the verge of gentrification, having already been discovered by young professionals as being a more economical location within which to live. But it has not yet reached the tipping point and is still rough and distressed in areas. This type of condition may include older historic neighborhoods that have begun to capitalize on their ethnic heritage and tap into citywide tourism development. There are typically fewer long-term abandoned buildings but there may be a need to repurpose buildings in the industrial areas of the district and improve the retail and service selections, or densify the district through selective demolition developing larger and higher mixed-use buildings. Planning phase 2: Determine the capacity of the community for action After an assessment of the potential for development and of the economic and physical conditions that will inform and define the development process, the next phase is to assess the CDC’s capacity to take needed action on the development plans. Identifying and understanding the capacity of the neighborhood and larger community as well as the CDC to take action is essential in preparing the plan of action to implement any development efforts.
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Community development assessment process During a process often referred to as asset-based community development (ABCD) 12, the CDC seeks to uncover and utilize strengths communities can use as a tool for long-term sustainable development. Part of the process is to assess existing community resources by collecting information on the social capital of a community by talking to residents and business owners, social organizations and networks, and associations and institutions to determine the skills, experience, and other resources available. Surveys could be employed, although interviews may be more informative and reveal additional valuable information. It can save time and develop trust by contacting existing business owners in the neighborhood early in the process. Talking with them one-on-one and multiple times to build a relationship can reveal a wealth of information. Who are their bankers and are they being well served? What do they need in the way of capital, technical assistance, marketing or other business services? What are the political inclinations and connections that can be brought to bear on the issues? Answers to these questions can inform the potential for the CDC to intervene in a positive and constructive way and may introduce potential lending partners. Another aspect of the process is to support communities in discovering what they care enough about to act upon. This may involve a number of visioning work sessions that may include design professionals engaged to flush out common values, ideas, needs, interests and concerns. The final step in ABCD is to determine how the full community of citizens can act together with shared values and concerns across constituency groups to achieve the intended and collective goals. By identifying themes that people feel strongly about and connecting them with talents, skills and other community assets, motivation for action can be determined. The business, political and municipal communities There are multiple constituencies of a business community to consider in the development process. The domain of business includes not only the existing local business owners throughout the neighborhood, and existing business owners within the specific district, but citywide business alliances and regional business leadership groups and associations along with the local chamber of commerce. Beyond the business community and often overlapping it is the political community, including the mayor and council members. They are essential advocates and partners necessary to leverage community support, funding sources and easing barriers to the process and implementation of the development project. Often closely related to the larger business and political community is the community and economic development staff of the municipality. They also are often intertwined with the larger business community in that many business leaders volunteer on boards and commissions that 12
An excellent resource for ABCD is the Asset-Based Community Development Institute: School of Education and Social Policy Northwestern University, http://www.abcdinstitute.org.
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review and approve development and building projects. These boards and commissions are staffed by the employees of the community and economic development departments of a city. The support of staff in the plans for a development, although not required, can significantly help in smoothing the way for a development project. They are also valuable resources for information on the neighborhood and can assist in making the connections and constituencies needed for partnering on important components of the development process such as assisting in preparing market studies and providing planning documents. The neighborhood resident community The residents of the neighborhood community should not be underestimated. The NBD is not only the business center of the community but often serves as the social center and identity for the neighborhood residents. Activists in the neighborhood are a wealth of information on what is needed and are essential in coordinating and building alliances as well as recruiting volunteers for community events centered around the business district. Their support and involvement is a key consideration in moving projects forward, easing barriers, obtaining approvals to build projects and supporting the local microbusinesses. Plans for NBD improvement that meet the needs and retail demands of the residents are far more likely to succeed. Planning phase 3: Determine the capacity of the CDC for action There are many flavors of CDCs throughout the country; they are as diverse as the communities they work within. Some are primarily community building and service oriented with no real estate development experience, while others have been highly effective in neighborhood organization and affordable housing development but have little or no experience in economic development. Assessing the capacity of the CDC to work in the area of business district and microbusiness development requires knowing first what strengths and capabilities are needed and second what is missing and therefore needed for more effective action. In some if not many areas of action it may be more effective and efficient to partner with other organizations that possess the skill sets, capabilities and capacity needed. Developing the capacity within an organization may be difficult to achieve, therefore care should be taken in understanding the skill sets staff may require to be competent in the areas of real estate development, microbusiness development and business finance and funding. It is also important to determine the likelihood of the need and use of this capacity in the long term. Organizations with business development goals generally need the scale of a region to be successful economically, so neighborhood-focused CDCs should probably rely on partnering to deepen capacity in lieu of developing it within. But a CDC with regional focus may have the ability to make use of the new capacity in other areas. If, however, the capacity already exists and is readily available elsewhere it may be more prudent to partner for efficiency. If capacity does not exist or make sense within one organization, then again partnering to create capacity may be a better option.
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The following options may be of assistance in assessing core competencies needed either through building capacity from within or by gaining it through partnering. Increase core competencies within the organization Some, if not all, of the skill sets needed for commercial real estate development and microbusiness development may already exist within the organization. If real estate development for example has been a part of the core work, then an assessment of existing employee skill sets will be needed in this area. Project managers for real estate development may already possess the knowledge and capabilities, or they may be able to efficiently obtain the knowledge needed through some additional training. Community organization skills may translate well to business organization, or employees working in workforce development areas may be capable of translating their skills to business organizing. Once again, an assessment of employee skills will reveal the depth of the employee base. The areas of capacity more typically lacking in a common CDC are entrepreneurial enterprise education, training and coaching along with more sophisticated microbusiness funding expertise. This may lead to developing these capacities within, which takes time and operational funding sources for hiring of training employees for the skill sets needed. This will likely require certifications to qualify for access to funding sources such as SBA lending, CDFI funds and NMTCs. Locating certified CDFI partners already working in this area may be the most efficient avenue to gaining this capacity. Partner with other CDCs and/or CDFIs to increase capacity and knowledge In more highly concentrated urban areas there are multiple CDCs doing the work of community and economic development, and some may already be working in adjacent targeted areas. Partnering with other CDCs to leverage and increase capacity can be an effective entry point to the market. Adjacent neighborhoods are an obvious first consideration as there may be common interests such as transportation and transit that may be common to multiple areas in the region. CDFIs may also offer natural opportunities for partnering. Many CDFIs are larger operations that would benefit from partners that have more direct connections to borrowers and can provide valuable local knowledge that CDFIs do not possess nor can access easily, while the CDFIs provide the structure and access to capital CDCs need to channel funding to microbusinesses. Partner with Main Street programs The Main Street program is a proven district management strategy13 that can be employed to provide long-term support for improved results over time. The greatest challenge to Main Street working in urban neighborhood districts has been the economic restructuring component of their 13
From “Inner City Commercial Revitalization: A Literature Review,� an unpublished report by Karl F. Seidman.
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approach and the lack of access to real estate development. The strength of Main Street coupled with the real estate development and technical assistance programs of a CDC can provide the capacity to overcome challenges Main Street has had with economic restructuring when working in urban areas and that CDCs have had in the marketing and promotion of business districts. Though there is some overlapping of capabilities between the Main Street program and CDCs, some of the partnering initiatives in the past have been effective. There is however a need to clarify organizational responsibilities and coordinate efforts to minimize leadership conflicts and redundancy. Implementation: An integrated and coordinated strategy for action The implementation stage for taking action on an NBD redevelopment project and structuring a longer term program within the operations of a CDC or through partnering requires considering the overall organizational structure of competencies and actions that need to be brought to bear on business district redevelopment. If a partnering approach is determined to be the best approach then the relationships and responsibilities of the partners need to be clarified and coordinated for effective action. The figure below shows a more integrated and coordinated organizational approach for bringing the four competencies to bear. This approach uses the CDC as a platform or base of operation with overall coordinating responsibility and operational authority. Each designated partner in the diagram can be considered a separate entity or can be considered a set of competencies reflecting the four core domains of action. For example, the CDC could be partnered with a Main Street program or could adopt the competencies that have been effectively employed by the Main Street program by developing them from within. In the organizational model shown, the CDC is vested with the responsibility and authority for the integrated effort, yet it works in concert with neighborhoods (who may already be organized into an association), politicians, and the community and economic development staff of municipalities. The CDC is primarily responsible for organizing efforts and the real estate development work while partnering with a CDFI to provide the capital needed for both the real estate and microbusiness funding. The CDFI also provides the entrepreneurial microenterprise training programs and may partner with colleges and universities to provide faculty and curriculum for the training programs. The CDC may collaborate with a Main Street program or incorporate the best practices of that program, having developed the capacity within. The BID may be phased in later in the process after the business community has been organized.
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Organizational model for an integrated microbusiness and NBD development program using partners for core actions There are any number of alternate ways of developing the organizational mapping for capacities, actions, responsibility and authority. For example, CDFIs that already provide microbusiness funding and enterprise training and development may choose to expand capacity by creating a CDC for the real estate development program. There are a number of examples throughout the United States of this type of structure already in place where CDFIs have a CDCs component. These models may benefit from expanding their capacity by partnering with Main Street to target a specific NBD.
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IX. Policy Considerations There are several policy considerations that emerge from this focused study on the revitalization of inner-city NBDs and microbusiness development. Possibly the most important is for commercial business district revitalization to be an explicit policy goal of city and state agendas along with other urban revitalization and community and economic development concerns (Seidman 2006). Cities in particular could recognize that for a neighborhood to be healthy and vital and therefore a “neighborhood of choice,” along with affordable housing, schools and social services, a business district is important in providing the day-to-day shopping needs of the residents. Inner-city business districts do not become revitalized only through market-based economic strategies or as a result of improved housing and higher income residents. They require targeted resources and programs oriented to infrastructure improvements and the fostering of the next generation of entrepreneurs as microbusiness owners within renovated and new infill development within the districts. In addition, Main Street programs and BID legislation could be expanded to support inner-city urban neighborhoods. Entrepreneurial and microenterprise development programs oriented to inner-city urban business development need to be supported if they exist and created if not. Small business development centers, supported by the SBA, could include a focus on NBD entrepreneurial and existing business and employment growth opportunities. Funding could be provided to public colleges and universities for the development of business programs addressing needs for entrepreneurs, job creation and inner-city business district development. Cities could implement urban planning and community development policies that emphasize mixed-use and mixed-income development. In addition, they could support and fund urban planning initiatives that incorporate the needs of neighborhoods and include market and economic studies to address the development of local economies including the day-to-day retail and service needs. Commercial real estate development focused on inner-city areas can get bogged down in complex city approval processes. Projects that are oriented to NBD revitalization that are done in conjunction with a microbusiness entrepreneurial program could be given higher priority. Federal regulations on banks continue to make it difficult to obtain the capital needed for real estate development projects. Community-based, mission-oriented nonprofits such as CDCs and CDFIs could be reinforced as important conduits for channeling funds toward economic recovery projects. For this to happen, funds could be allocated for capacity building and/or to incent partnering to provide effective project delivery structures. In addition, to keep commercial retail space affordable for microbusinesses, other funding sources could lower the overall cost of the real estate development projects and/or subsidize the businesses so rents can be maintained at affordable rates. For example, finance mechanisms that subsidize real estate development costs could be developed for startup microbusinesses within the first few years of operations with conditions that tie the business to commercial real estate
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owned by mission-based nonprofits in targeted neighborhood districts. These could include specific focus on incubator programs that incorporate shared facilities and functions, equipment and staff. For microbusiness enterprises to be competitive in hiring employees they need to be able to hold down costs. For example, heath insurance costs are often too high for many microbusinesses to offer as benefits to employees. New tax laws could reduce this cost burden. There could be a systematic rethinking about the importance and role of small business and microbusiness in the engine of the national economy in order to level the playing field of competition with large business big-box retail interests. And finally, the U.S. Department of Housing and Urban Development is perceived by many as mostly engaged in housing concerns. With their more comprehensive approach to urban development through the Choice Neighborhoods program, which ties together resources on education, health and human services, and transportation, they could expand this concept to include economic development that addresses revitalization of business districts within neighborhoods.
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X. Conclusion The purpose of this research was to consider the issues around NBD revitalization coupled with microbusiness development and the role that CDCs play in this work. The report presents a strategy framework for CDCs to use in making the decision to venture into this area of work and to hopefully provide additional information and insight for those CDCs that are already doing this important work. Because past efforts to revitalize urban commercial districts have had mixed results, this report provided an organizational model for an integrated microbusiness and NBD development program using partners to bring greater capacity to bear in the implementation of development projects. The model incorporated the four core domains of action that could maximize the outcomes of this work. Utilizing the strengths and skill sets of the traditional actors in the field leverages their capacity for an integrated full-on approach for long-term sustainable business district development. Neighborhood business development within inner-city neighborhood commercial districts is difficult to accomplish. There are limits to what can be done or, more importantly, what one can expect in terms of outcomes, but there is an argument for doing what can be done to provide improved living conditions for the residents of an inner-city neighborhood. Though this report does not address the metrics for assessing success for the individual components of real estate, businesses, CDC and community, the measures will not be the same as in affordable housing where the number of units built can be counted and the direct income generated from the properties can be tabulated. But with a renewed interest in addressing the issues of the inner city, progress can be made with greater outcomes over the next couple of decades in providing decent affordable housing as well as addressing the larger urban environment — the socioeconomic concerns that include a vital and viable business district for a more complete, attractive and desirable living experience in inner-city neighborhoods. As the country moves toward a new economy, local economic development that includes focused efforts in developing neighborhood-based economies and revitalized business districts for neighborhoods can be an innovative strategy on the road back to prosperity for our communities and for the country.
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XI. Resources The following references were used as general context and background for framing the topic of this report. They were not all cited within the body of the report but are included here for having provided valuable perspectives and as a resource for others. Barringer, P. (2010). Community development economic development principles, practices and strategies. Washington, D.C.: NeighborWorks America. Blakely, E. J., & Bradshaw, T. K. (2002). Planning local economic development: Theory and practice. 3rd ed. Thousand Oaks, CA: Sage. Cummings, S. L. (2001, Dec.). Community economic development as progressive politics: Toward a grassroots movement for economic justice. Stanford Law Review, 54(3), 399–493. Dunne, P. M. (2008). Retailing. Cincinnati, OH: College Division, South-Western Pub. Co. Eng, T. (2003). Community development corporations: Commercial leasing strategies and social objectives. Professional report. Berkekey, CA: University of California, Berkeley. Available at http://interactiveu.berkeley.edu/gems/yplan04/TiffanyEngPR.pdf. Fainstein, S. S. (1983). Restructuring the city: The political economy of urban redevelopment. New York: Longman. Fainstein, S. S., & Gray, M. (1995). Economic development strategies for the inner city: The need for governmental intervention. Review of Black Political Economy, 24(2), 29–38. Farr, D. (2008). Sustainable urbanism: Urban design with nature. Hoboken, N.J.: Wiley. Ferguson, R. F., & Dickens, W. T. (1999). Urban problems and community development. Washington, D.C.: Brookings Institution Press. Galster, G., Levy, D., Sawyer, N., Temkin, K & Walker, C. (2005). The impact of community development corporations on urban neighborhoods. Washington, D.C.: The Urban Institute. Gittell, R. (1999). Inner-city business development and entrepreneurship: New frontiers for policy and research. In Urban problems and community development. Washington, D.C.: Brookings Institution Press. Glaeser, E. (2011). Triumph of the city. New York: The Penguin Press.
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Harrison, B., & Weiss, M. S. (1998). Workforce development networks: Community-based organizations and regional alliances. Thousand Oaks, CA: Sage. Hughes, M. A. (1989, July). Misspeaking truth to power: A geographical perspective on the "underclass" fallacy. Economic Geography, 65(3): 187–207. Imbroscio, D. L. (2010). Urban America reconsidered: Alternatives for governance and policy. Ithaca, NY: Cornell University Press. ———. (2004). Fighting poverty with mobility: A normative policy analysis. Review of Policy Research, 21(3), 447–461. Immergluck, D. (1998). Neighborhood economic development and local working: The effect of nearby jobs on where residents work. Economic Geography, 74(2), 170–187. Murphy, P. W., & Cunningham, J. V. (2003). Organizing for community controlled development: Renewing civil society. Thousand Oaks, CA: Sage. Peiser, R. B., & Frej, A. B. (2003). Professional real estate development: The ULI guide to the business. 2nd ed. Washington, D.C.: The Urban Land Institute. Porter, M. (1995, May-June). The competitive advantage of the inner city. Harvard Business Review, 73(3), 55–71. Seidman, K. F. (2006). Inner city commercial revitalization. Cambridge, MA: MIT. ———. (2004). Revitalizing commerce for American cities. Washington, D.C.: Fannie Mae Foundation. Simon, W. H. (2001). The community economic development movement: Law, business, and the new social policy. Durham, NC: Duke University Press. Temali, M. (2002). The community economic development handbook: Strategies and tools to revitalize your neighborhood. St. Paul, MN: Amherst H. Wilder Foundation.
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XII. Interviews and Meeting Attendees Eric Belsky Joint Center for Housing Studies Harvard University Cambridge, Massachusetts Carol Bower Hatch Development Group Formerly with Neighborhood Development Corporation Des Moines, Iowa Dana Brunett PathStone Rochester, New York David Dangler NeighborWorks America Boston, Massachusetts Susan Fainstein Harvard University Graduate School of Design and Kennedy School of Government Cambridge, Massachusetts Sarah Greenberg NeighborWorks America Washington, D.C. Jack Hatch Hatch Development Group Des Moines, Iowa Christopher Herbert Joint Center for Housing Studies Harvard University Cambridge, Massachusetts Ann Houston Chelsea Neighborhood Developers Chelsea, Massachusetts
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Joe Kreisberg MACDC Boston, Massachusetts Gail Latimore Codman Square Neighborhood Development Corporation Dorchester, Massachusetts Maurilio Leon Unity Council Oakland, California Hilary Marcus NeighborWorks America Boston, Massachusetts Harold Nassau NeighborWorks America Boston, Massachusetts Kennedy Smith The Clue Group Arlington, Virginia Kevin Smith Community Ventures Corporation Lexington, Kentucky Aaron Todd Center on Sustainable Communities Des Moines, Iowa Marcus Weiss Economic Development Assistance Consortium Boston, Massachusetts Heidi Wessels Neighborhood Development Corporation Des Moines, Iowa Rosa Rios Valdez Business and Community Lenders of Texas Austin, Texas
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NeighborWorks America Luncheon Attendees Atlanta Training Institute, August 2010 Romanique Cerien Pierce Beyond Housing/Neighborhood Housing Services of St. Louis St. Louis, Misourri Rachel Meketon Chelsea Neighborhood Developers, Inc. Chelsea, Massachusetts Joseph Garlick NeighborWorks Blackstone River Valley Woonsocket, Rhode Island Gary Pollio Interfaith Community Housing of Delaware, Inc. Wilmington, Delaware Ross Ojeda The Unity Council Oakland, California Marco Mariani South Bend Heritage Foundation South Bend, Indiana Laura Vinton Hope Enterprise Corporation
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Gramlich Fellows Policy Briefing Attendees Washington, D.C., August 2010 Peter Beard United Way Worldwide Marc Diaz D.C. office of Planning and Economic Development Conrad Egan National Housing conference William C. Kelly, Jr. Stewards of Affordable Housing for the Future Jill Khadduri Abt Associates Alan Mallach National Housing Institute/Brookings Institution Jonathan Miller Federal Deposit Insurance Corporation Danilo Pelletiere National Low Income Housing Corporation Luke Tate U.S. Department of Housing and Urban Development Chris Walker Local Initiatives Support Corporation Paul Weech Housing Partnership Network
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APPENDIX — Sources of Capital Microbusiness and real estate development capital sources Part of the assessment process for a CDC entering the market is to consider the available funding streams for debt and equity to fund capital improvements and microenterprises. There are various sources of capital available from each level of government and from foundations, intermediaries and private benefactors. A capital sources study to determine the appropriate funding and layering of funds available for a proposed project will bring additional clarity to the process and may inform the development strategies. The following is a selective listing of funding sources.14 Department of Housing and Urban Development (HUD) Community Development Block Grants This is an entitlement program of grants allocated annually to larger cities and urban counties in support of community and economic development activities primarily in low and moderateincome areas. www.hud.gov/offices/cpd/communitydevelopment/programs
Community Renewal Initiative Originally called the Empowerment Zones (EZ) and Enterprise Communities program, this HUD initiative makes funds available to eligible businesses in EZs and Renewal Communities. After completing a strategic planning process, local communities may apply for funding. Selected communities have access to a pool of federal resources and are eligible for tax incentives. The incentives are intended to encourage businesses to open, expand and hire local residents. They include employment tax credits, a waiver of tax on capital gains, increased tax deductions on equipment and accelerated real property depreciation. www.hud.gov/offices/cpd/economicdevelopment/programs/rc/index.cfm
Small Business Administration (SBA) SBA 79(a) Loan Program The SBA 79(a) Loan Program is the largest loan program of the SBA. It provides a guarantee of up to 90% of a loan issued by a private lending institution to qualified businesses with 14
Information for this section of the report was obtained from NeighborWorks Training Institute course materials (Barringer 2010) and the website of the U.S. Department of Housing and Urban Development. Information was also obtained from the Small Business Administration website and other sources whose links are provided throughout the section.
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special requirements. Funds are available for businesses that handle exports to foreign countries, for businesses that operate in rural areas and for other very specific purposes. Funds can be used for property acquisition, construction, inventory and working capital. The Small Loan Advantage and Community Advantage 7(a) Loan Initiatives is part of the SBA 7(a) Loan Program and is discussed in further detail below. www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/sba-loan-programs/7aloan-program
Small Loan Advantage and Community Advantage 7(a) Loan Initiatives SBA has expanded access to capital for small businesses and entrepreneurs in underserved communities through this program. It offers a streamlined application process for SBA 7(a) loans up to $250,000. The Small Loan Advantage is structured to encourage larger existing SBA lenders to make lower-dollar loans to benefit businesses in underserved markets. Community Advantage allows community-based, mission-focused lenders to make SBA 7(a) loans of up to $250,000 with the regular 7(a) government guarantee. www.sba.gov/content/advantage-loan-initiatives
CDC/SBA 504 Loan Program The CDC/SBA 504 loan program provides small businesses with long-term, fixed-rate financing to acquire fixed assets for expansion or modernization. These loans are obtained from a local lender called a certified development company. These are private, nonprofit corporations set up to contribute to economic development in the community. Certified development companies work with SBA and private sector lenders to provide financing to small businesses. A project using this program is typically structured with a senior loan from a local private lender for 50% of the project cost, a junior loan for 40% of the project cost from the certified development company (backed 100% by SBA), and 10% equity from the borrower. www.sba.gov/content/cdc504-loan-program
SBA Microloan Program The SBA Microloan Program is available in most states through nonprofit communitybased intermediary lenders. The program provides small shortterm (a maximum of six years) loans to small businesses for working capital, inventory and supplies, furniture and fixtures, and machinery and equipment. It cannot be used for existing debts or real estate. Intermediaries are required to provide business training and technical assistance to borrowers. The maximum loan amount is $50,000.
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A CDC can participate in three ways: (1) as a microbusiness intermediary lender and technical assistance provider, (2) as only a technical assistance provider to borrowers, or (3) as only a technical assistance provider to lending intermediaries. As a lender, CDCs can assess a direct loan of up to $750,000 in the first year of operation. These funds are then lent to microbusinesses at a fixed rate for up to six years in amounts up to $25,000. Technical assistance grants are provided with local matching contribution requirements for intermediary lenders and technical assistance providers. www.sba.gov/content/microloan-program
Small Business Investment Company (SBIC) Program SBICs are privately owned and managed equity investment companies that provide venture capital for startup and growth of small businesses. There is a minority enterprise SBIC program as well. The SBA does not invest directly but licenses these companies and the SBIC debentures are pooled and sold in public markets in the form of an SBA guaranteed certificate. www.sba.gov/content/about-office-investment-0
Small Business Development Centers (SBDC) SBDCs are located in all 50 states, the District of Columbia, Puerto Rico and the U.S. Territories. They can operate on a statewide or state regional level. They are typically partnerships between the SBA and colleges/universities to provide educational services for small business owners and aspiring entrepreneurs. Services include business planning and financial assistance; enhancing and obtaining credit; marketing plan development; assistance with production, organization, engineering, and technical issues; and feasibility study development. They often run free or lowcost business seminars. www.sba.gov/content/small-business-development-centers-sbdcs
Department of the Treasury Community Development Financial Institutions (CDFI) The CDFI Fund is a component of the United States Department of the Treasury. It makes funds available for economic and community development through CDFIs around the country. CDFIs can be community development credit unions, community development banks, or other communitybased loan funds. They must meet eligibility requirements and obtain designation. Funds are allocated by the U.S. Treasury on a competitive basis and require matching funds from other sources. Funds can be used for many purposes, including business equity and debt,
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affordable housing projects, and commercial real estate development, financial services, and internal capacity building. www.cdfifund.gov/
New Markets Tax Credits (NMTC) NMTCs are allocated by the U.S. Treasury through the CDFI Fund to community development entities (CDEs) who in turn offer these federal income tax credits to equity investors in the CDE who then makes investments in projects in low-income communities. The CDC can make loans or equity investments in any qualified active low-income community business. CDCs can invest in a variety of activities, including: debt or equity investments in businesses, debt or equity investments in real estate projects, and investments in other CDEs. The process for obtaining tax credits is competitive and complicated. Administrative and legal costs associated with NMTCs typically require the project size to be at least $2,000,000 but preferably as much as $5,000,000. www.cdfifund.gov/what_we_do/programs_id.asp?programID=5 www.realestateandconstructionlaw.com/real-estate-finance/an-introduction-to-new-market-tax-credits/
Bank Enterprise Awards Program (BEA) The BEA provides financial incentives to FDICinsured depository institutions (i.e., banks and thrifts) that make investments in CDFIs and increase lending, investment and service activities within economically distressed communities. CDFIrelated activities can include equity investments, equitylike loans, grants, loans and technical assistance. Community financing and service includes a variety of activities, including affordable home mortgage loans, affordable housing development loans, small business loans, home improvement loans, education loans, commercial real estate loans, and community and financial assistance services. www.cdfifund.gov/what_we_do/programs_id.asp?programID=1
Internal Revenue Service (IRS) and other tax incentive programs Low Income Housing Tax Credits (LIHTC) The LIHTC program is run by the IRS and allows companies to invest in lowincome housing while receiving 10 years of tax credits. It involves a competitive application process that works through state housing finance agencies who administer the program on a state level. It is a dollarfordollar federal income tax credit that can be used for raising equity capital in lowincome housing real estate development. In mixeduse developments it can be used on the residential portions and, depending on the size and scale of the development, it can significantly support the commercial retail portions.
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Historic Preservation Tax Credits Federal law provides an investment income tax credit equal to 20 percent of approved costs for qualified rehabilitation of certain historic buildings for income-producing use. There is a companion 10-percent tax credit program with lower rehabilitation criteria for certain structures. The federal income tax credits are administered by each state historic preservation office. Many states also have a companion state historic income tax credit program. The rehabilitation projects must be approved by the National Park Service and follow the Secretary of the Interior’s Standards for Rehabilitation. National Trust for Historic Preservation The National Trust for Historic Preservation offers various types of financial assistance to nonprofit organizations involved in preservationrelated projects. The National Trust Loan Fund (NTLF) supports preservation-based community development. As a CDFI, it has a mission of providing financial and technical resources to organizations that use historic preservation to support the revitalization of underserved and distressed communities. NTLF funds may be used for predevelopment, acquisition, mini-permanent, bridge and rehabilitation loans for residential, commercial and public use projects. Eligible borrowers include not-for-profit organizations, revitalization organizations or real estate developers working in certified Main Street communities; local, state or regional governments; and forprofit developers of older and/or historic buildings. The National Trust Community Investment Corporation (NTCIC), a forprofit subsidiary of the National Trust for Historic Preservation, makes equity capital investments in the rehabilitation of historic properties eligible for the 20 percent federal historic rehabilitation tax credit. NTCIC invests in development projects of at least $6 million in total development costs and that generate at least $1.5 million in historic tax credit equity. The Small Deal Fund for equity investment is used for smaller development projects. The National Trust Preservation Fund includes funds that provide matching grants for preservation planning and educational efforts and intervention funds for preservation emergencies. Matching grant funds may be used to obtain professional expertise in areas such as architecture, archeology, engineering, preservation planning, landuse planning, fundraising, and organizational development and law as well as to provide preservation education activities to educate the public. http://www.preservationnation.org/resources/findfunding/
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Foundations There are many private philanthropic foundations throughout the country that support community and economic development actives, projects and programs. Many are sponsored by families or corporations. The most active ones include the Ford Foundation, the Surdna Foundation, the Annie E. Casey Foundation, the Charles Stewart Mott Foundation, the Northwest Area Foundation and the Knight Foundation. Intermediaries Enterprise Community Partners, Inc. As well as being a national leader in providing development capital and expertise to create affordable homes, Enterprise is a community development entity (CDE) certified by the CDFI Fund for New Markets Tax Credits and administers some of the largest allocation of NMTCs in the nation. They use NMTCs to enhance financing for commercial and mixeduse projects in qualifying lowincome census tracts that have a demonstrable community impact. The investments include all major real estate types: mixeduse, forsale housing, office, retail, hospitality, community centers, shelters, theaters and schools. http://www.enterprisecommunity.org/financial_products/new_market_tax_credits/
Local Initiatives Support Corporation (LISC) LISC is a national organization that provides technical and financial assistance to local CDCs in select cities and rural areas. Originally funded by the Ford Foundation and six large corporate sponsors, it channels funds from the private and philanthropic sectors into local community revitalization activates. www.lisc.org/
NeighborWorks America (NWA) NeighborWorks America is a public nonprofit organization chartered by the U.S. Congress. NWA provides direct funding and resources for affordable housing and community and economic development through a national network of over 235 local communitybased affiliates. www.nw.org/network/aboutUs/history/default.asp
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Local funding Tax Increment Financing (TIF) TIF is a public financing method that uses future gains in property tax as a subsidy to finance current redevelopment and community improvement projects. It has been used in many countries including the United States for more than 50 years. TIF is used by cities to provide funding for improvements in distressed or underdeveloped areas where development might not otherwise occur. Every state and the District of Columbia, except Arizona, have enabled legislation for TIF. Some states, such as California and Illinois, have used TIF for decades; others have only recently passed or amended state laws allowing them to use this tool. Property Tax Abatement Programs Property tax abatement allows a property owner to defer property taxes levied on improvements or phase in payment of property taxes over a designated period. This period may be any number of years between 1 and 10. The abatement may be in whole or part of the assessed value of the property or improvement for the given period. The designating body, whether county or municipality, determines the amount and period. It is often used to incent development in distressed areas.
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Attachment B The Business Improvement Business Model
Page 64 of 69
Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x
The Business Improvement District Model: A Balanced Review of Contemporary Debates Lorlene Hoyt* and Devika Gopal-Agge Massachusetts Institute of Technology
Abstract
This article presents an overview of the burgeoning literature on business improvement districts (BID) by highlighting its historical underpinnings, identifying the economic and political factors that explain its transnational proliferation, and demonstrating how the model varies within and across nations. It also provides a balanced review of the key debates associated with this relatively new urban revitalization strategy by asking the following questions: Are BIDs democratic? Are BIDs accountable? Do BIDs create wealth-based inequalities in the delivery of public services? Do BIDs create spillover effects? Do BIDs over-regulate public space?
Introduction For more than three decades, a new form of private–public partnership in the realm of local governance commonly known as business improvement districts (BID) has operated and proliferated throughout North America. In recent years, the BID model has transferred to other continents including Africa, Europe, and Asia. Despite its widespread adoption and use, there is no standardized naming convention or definition for BIDs (Davies 1997; Hoyt 2005c). Throughout the United States, the nomenclature as well as the rules for establishing and operating BIDs are set forth by state-enabling legislation, thus a range of designations such special improvement districts (New Jersey); public improvement district (Texas); and neighborhood improvement districts (Pennsylvania) exist (Hoyt 2005c). In Canada, where the model originated, BIDs are known as business improvement areas. In South Africa, they are called city improvement districts (Hoyt 2005c). For the purposes of this discussion, we use the term ‘BID’ to refer to such entities and we define BIDs as privately directed and publicly sanctioned organizations that supplement public services within geographically defined boundaries by generating multiyear revenue through a compulsory assessment on local property owners and/or businesses. © 2007 The Authors Journal Compilation © 2007 Blackwell Publishing Ltd
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Historical Underpinnings The BID model is increasingly controversial because controversy surrounds its historical, economic, and political underpinnings. In addition, as the model transfers from one nation to the next, academics and practitioners have raised more questions than answers regarding the effect of BIDs on such issues as democracy, accountability, and the regulation of public space. To set the stage for an examination of these issues, we begin by describing how the model emerges from a long history of private sector-led initiatives for revitalizing the downtown. In an effort to devise a collective strategy for revitalization after an earthquake and fire devastated the center city, business leaders in San Francisco rallied to establish one of the first downtown associations in the world, the Down Town Association of San Francisco (Fogelson 2001). In the 1930s and 1940s, business leaders in cities throughout the United States formed voluntary membership organizations such as the Detroit Business Property Owners’Association and Downtown Council of Chicago to combat decentralization – the unrelenting migration of firms, retail establishments, and customers from downtown to outlying suburban municipalities. Much like their contemporary counterparts, the members of these associations aligned their attention to crafting strategies aimed at increasing property values and retail sales by attracting customers and investors to the downtown using promotional mechanisms like parades, tours, and window displays. These organizations also functioned as advocates for the downtown, communicating the need for projects ranging from the construction of new parking facilities to the demolition of so-called blighted areas (Fogelson 2001). In the 1950s and 1960s, American business leaders continued with voluntary efforts to redevelop and reposition their downtowns, as evidenced by two classic examples – the Pittsburgh Allegheny Conference on Community Development and the Greater Baltimore Committee. In the mid-1960s, a small group of businessmen in Toronto, Canada, invented a new approach to circumvent the free-rider problem, where ‘free riders’ were business owners in the area who benefited from the monetary and other contributions that were made by members of the voluntary business association, but who did not contribute to the association themselves. Accordingly, they explored the feasibility of an autonomous, privately managed entity with the power to impose an additional tax on commercial property owners to fund local revitalization efforts (Hoyt 2006). Their success in passing the requisite legislation in 1969 represents the moment when the BID model was born. Since this time, the BID model has been adopted in eight countries, while enabling legislation is under consideration in at least eight others (Hoyt 2006). This includes: 185 in Australia; 347 in Canada; 225 in European countries; 261 in Japan; 140 in New Zealand; 42 in South Africa (Hoyt 2005c, 2006); and 404 in the United States (Mitchell 1999). © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
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Economic and Political Factors Although the BID model is a topic of interest to scholars in a variety of disciplines ranging from geography, to urban planning, to public administration, tracing its origins and explaining its subsequent transfer is difficult due to the absence of standard naming conventions, the potpourri of BID and BID-like organizations, and the lack of systematic adoption patterns in countries like the United States where the model is most prevalent (Brooks 2006; Hoyt 2005c). Despite these challenges, urban scholars link the growth of American BIDs to several socioeconomic and political factors such as the decline of city centers and town centers; urban sprawl aided by the development of an extensive highway network; growth and proliferation of new retail forms and environments; inability of the local governments to meet organizational and financial challenges due to declining tax base; and a shift to the use of public–private partnerships for urban revitalization (Gopal-Agge and Hoyt 2007; Briffault 1999; Burayidi 2001; Greenblatt 2006; Houstoun 2003; Lloyd et al. 2003; Wolf 2006). Similar explanations are used to describe the rise and proliferation of BIDs in Canada (Hernandez and Jones 2005, 2007), the UK (Lloyd et al. 2003; Page and Hardyman 1996; Reeve 2007), and other countries although the specific underlying sociopolitical and economic conditions causing decline varies from country to country (Hoyt 2006). In line with the introduction, some scholars believe that BIDs are ultimately enabled by the underlying belief that ‘cities exist to create opportunities for individual wealth accumulation and business leaders are best qualified to devise (or advise) policies toward that end’ – a condition that has played a central role in shaping the law and politics of American local government (Briffault 1999, 470; Morçöl and Zimmermann 2006b, 11 –12). This premise is also consistent with the UK broader urban policy approach that encourages private sector intervention in addressing socioeconomic decline in cities (Lloyd et al. 2003, 314). An empirical study on the adoption pattern of BIDs in the state of California suggests that BID model is consistently imported by older cities (Brooks 2006). Within this framework, the primary reason for the wide acceptability of the BID model for urban revitalization is its underlying flexibility that permits it to ‘microfit’ to local conditions (Lloyd et al. 2003, 305; Symes and Steel 2003, 303). The inherent flexibility of the BID model has also driven practitioners to use it to revitalize ancillary commercial districts (Stokes 2006). Value of the BID Model All BIDs are created by municipal designation pursuant to the authority granted by state-level enabling legislation. While these laws vary across countries and even across states as in the case of the United States, most require a ballot of relevant stakeholders to approve the institution of a BID © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
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for the area. Moreover, some level of accountability is achieved by the incorporation of sunset clauses that limit the life of a BID, usually to a few years. However, BIDs very rarely dissolve. Instead, as permitted by state-enabling legislation, BIDs renew and extend their term limits by means of a standard reauthorization process. Once established, BIDs typically implement services either as a nonprofit organizations, private–public or public–nonprofit partnerships (Briffault 1999, 368; Mitchell 1999). In North America, the BID model is essentially grounded in the concept of a benefit assessment district that allows for tax assessments on properties within a defined geographic area, whereby the revenues generated are directed back to the district (Briffault 1999; Mitchell 1999, 2001). This is the chief source of financing for BIDs and can range from a few hundred to several millions of dollars depending on local property values, the size of the district, and the assessment formula (Briffault 1999; Hoyt 2005c; Levy 2001; Mitchell 1999, 2001). This special assessment or ability to tax and therefore provide constituent members in a specific geography with supplemental public services gives the BID model considerable autonomy in problem-solving. It is seldom the only source of funding because BIDs are innovative fund raisers that typically rely on several sources of revenue to sustain their operations. According to the international survey of BIDs organizations, one-half of the BID managers in New Zealand (52%) and the United States (50%) reported that they received voluntary donations or in-kind contributions from tax-exempt properties in the district. Additionally, almost one-half of the BID managers in New Zealand (48%) and Canada (40%) indicated that they received financial support in the form of subsidies and government grants (Hoyt 2005a). Additional funding sources are particularly important for neighborhood BIDs where needs typically exceed resources (Stokes 2006, 183). In its most elementary form, a BID uses its budget to provide submunicipal local public goods like sanitation, security, and capital improvements that have been the universal driver of BIDs, especially in the United States (Hochleutner 2003; Hoyt 2005c; Mitchell 1999, 2001; Reeve 2007). However, BID services and service delivery patterns vary substantially both nationally and internationally (Hoyt 2005c, 2006; Mitchell 2001). For example, the international survey of BID organizations shows that security is the central mission of South African BIDs with Johannesburg’s central city BID spending nearly three-quarters of its budget on private security services compared to Philadelphia’s BID using only one-quarter of its budget for security (Hoyt 2005b,c). Consumer marketing, on the other hand, was the most frequently offered service in Canada, the United States, and New Zealand (Hoyt 2005b,c). This variation may be explained, to some extent, by city size (Mitchell 1999). And research on BIDs in New York City suggests that the range of services also depends on BID size (Gross 2005) where small BIDs attend to physical maintenance, mid-sized BIDs on marketing and promotional activities, and large BIDs © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
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encompass the entire range of activities, including capital improvements. Furthermore, as the model evolved, BIDs expanded their role to include playing a more proactive role in metropolitan governance and administration by establishing policy partnerships with local governments (Morçöl and Patrick 2006; Morçöl and Zimmermann 2006b; Reeve 2007;Ysa 2006, 43–45). The BID model also varies both intra- and internationally in terms of mission, authority, and the legal and financial frameworks under which such organizations operate (Hoyt 2005b,c). Although American BIDs served as a model of urban management for the UK (Ward 2006;Ysa 2006) and Japan (Miyazawa 2006), the mandatory taxing feature was modified when enabling legislation was crafted to fit the local legal and political context. The UK initially started with the town centre management model where the majority of initiatives are funded by both the local authority and the private sector, while others are funded solely by the public sector ( Jones et al. 2003; Reeve 2007). However, research on the town centre management model suggests that voluntary financing constrains their effectiveness because an inordinate amount of time is consumed by acquiring sponsorship and justifying the perceived benefits and costs to stakeholders (Reeve 2007; Ward 2006). This was addressed when the UK instated the BID legislation to formally constitute entities that rely on mandatory assessments as their principal source of financing. However, the legislation contains a clause that provides the local government with veto power on how the money is spent, giving rise to a range of debates on the way in which the North American BID model has been adapted in England (Blackwell 2005; Jones et al. 2003; Lloyd et al. 2003; Steel and Symes 2005). In Japan, town management organizations are wholly financed by the government, although the Shiodome-chiku Machizukuri Kyogikai town management organization was established as the country’s first pilot BID in 2003; it follows the mandatory assessment principle (Hoyt 2006; Miyazawa 2006). While the specific provisions vary within the United States and internationally, some evidence of support by the property owners is generally a prerequisite for the establishment and continuation of BIDs. Moreover, BIDs are increasingly sharing role identities, operating strategies, and organizational cultures that indicate that they are becoming institutionalized at an international level (Gross 2005; Houstoun 2003; Hoyt 2006; Mitchell 2001; Wolf 2006). Finally, recent case studies demonstrate that the BID model is a successful intervention in a range of contexts. For example, the academic literature highlights their role in promoting residential development (Birch 2002, 2005), argues their ability to strategically advance retail (Gopal-Agge and Hoyt 2007), and emphasizes the place-marketing component (Page and Hardyman 1996) to illustrate the link between BIDs and downtown revitalization. In contrast, some critics believe that BIDs are only effective for addressing the minor problems associated with urban decline (Lloyd et al. 2003). © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
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Concerns and Debates Since their inception, BIDs have raised concerns and a handful of debates have surfaced in tandem with the growing academic literature. The most common debates are centered on the following questions: Are BIDs democratic? Are BIDs accountable? Do BIDs create wealth-based inequalities in the delivery of public services? Do BIDs create spillover effects? Do BIDs over-regulate public space? ARE BIDS DEMOCRATIC?
Business improvement districts have been charged with being less than democratic in their structure and operation. In this context, the notion of democracy that is being challenged is a quarter-century-old debate over the advance of the private sector into activities such as street cleaning, safety, and provision of amenities, which are essentially the forte of the local municipal government (Briffault 1999, 470). Here, the success of the BIDs in providing such services is essentially seen as the failure of the local municipal government, as well as the potential de-legitimization of the public sector (Briffault 1999; Steel and Symes 2005). Moreover, researchers have criticized the organizational structure of BIDs where boards have inequitable representation of residents and the less privileged class and the legally enabled provision of weighted voting that devolves larger property owners more authority (Briffault 1999; Morçöl and Patrick 2006; Pack 1992; Schaller and Modan 2005). Critics argue that such practices are not democratic as they serve the interests of and concentrate power with the privileged classes. Due to these features, some allege that BIDs function more like ‘clubs’ of property and business owners that have been given the power to manage public spaces (Hoyt 2005b; Loukaitou-Sideris et al. 2004). Others challenge this charge, asserting that ‘business districts by their nature serve private interests best when they serve people’ that, in turn, minimizes any exclusionary tendencies ( Justice and Goldsmith 2006, 131). In the United States, residential membership and involvement is, in some cases, restricted, while in others it is more expansive. For example, in the District of Columbia, Georgia, and Pennsylvania, residential properties are not subject to the mandatory assessment, and residents are permitted to attend decisionmaking boards. However, they are not allowed to vote or formally participate in planning or decision-making processes (Morçöl and Zimmerman 2006a,b). In contrast, BID boards in New Jersey (Freehold Center Partnership and the Union Center Special Improvement District) have granted residents voting power by including residents in the governing structure ( Justice and Goldsmith 2006; Meek and Hubler 2006). Beyond the issue of board representation, proponents note that BIDs also generate policies that are helpful to BID residents such as the Alliance for Downtown New York’s work in utilizing tax abatements to promote residential redevelopment of older office buildings and the Center City BID’s work in Philadelphia that © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
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is aimed at improving city social welfare programs ( Justice and Goldsmith 2006). At the same time, those defending the democratic nature of BIDs also caution that some actively exclude people who are ‘deemed undesirable’ ( Justice and Goldsmith 2006, 131). Schaller and Modan (2005) examined this claim by studying the class and ethnic conflicts that surfaced when the Mount Pleasant BID, representing an economically and ethnically mixed neighborhood, was proposed. However, Gross (2005), who studies BIDs in New York City, believes that these issues may be overcome by understanding contextual factors like composition and balance of power and the wealth of the community to target the specific developmental needs of all the stakeholders. ARE BIDS ACCOUNTABLE?
In a democratic system, elected representatives are accountable to the public for their decisions and activities. The issue of accountability underlies the notion of one person, one vote; however, the constitutional issue apart, the question of accountability here is essentially a matter of the city government’s willingness to engage in a system for regularly monitoring BIDs (Briffault 1999). With powers ranging from the authority to operate a community court (Morçöl and Patrick 2006) to the acquisition of state and federal funds (Morçöl and Zimmermann 2006a), BIDs have been criticized for being autonomous legal entities that are not accountable to the district’s residents, the jurisdiction in which they operate, or the BID’s business or property owner constituents (Briffault 1999). Proponents argue that BIDs are politically accountable as long as certain measures such as annual reports, outside audits, and sunset and reauthorization requirements are instituted to ensure the continuous evaluation of BID performance (Briffault 1999; Hochleutner 2003;Wolf 2006). To compile a public account of their activities, prove their worth to participating property owners, and bolster their reputation, many BIDs opt to implement and monitor performance indicators like customer surveys, crime rates, occupancy rates, retail sales, number of jobs created, and pedestrian counts. Results from the international survey on BIDs indicate that the majority of organizations in South Africa (89%) and the United States (54%) have established performance indicators, while a smaller proportion of organizations in Canada (38%) and New Zealand (22%) rely on such measures (Hoyt 2005c). Although most American BIDs monitor performance, we have seen earlier there is tremendous variation in the way that BIDs operate from one state to the next. Studies of BID performance measures in Illinois (Caruso and Weber 2006) and Georgia (Morçöl and Zimmerman 2006a) show that BIDs rarely do a systematic performance evaluation and call into question whether BIDs should be granted independent legal status and the ability to raise public money. It is worth © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
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noting that South African BIDs have set new standards for accountability. In particular, BIDs in Cape Town enter into contractual performance agreements with public sector service providers, setting quantifiable benchmarks, and offering specific remedies for either party subject to breach of contract. It has been argued that BIDs which implement such monitoring systems not only benefit the community by providing supplemental services but also ensure that publicly funded services remain constant over time (Hoyt 2005c). While the importance of performance measures has been universally acknowledged and many researchers have proposed different methods and frameworks for measuring performance (Hernandez and Jones 2007; Hogg et al. 2004), critics argue that most monitoring systems are inadequate because they fail to separate the effects of extraneous variables that influence the real impact of BIDs (Caruso and Weber 2006, 203; Mitchell 2001, 122). However, as Briffault (1999) points out, it is unclear whether governments simply ignore their legal obligations and let BIDs operate in virtual independence or whether they try to hold BIDs accountable to the enabling laws. Some articles that explore the relationship between BIDs and democratic accountability within the governance structure include: Briffault (1999); Hochleutner (2003); Koppell (2000); Meek and Hubler (2006); Morçöl and Patrick (2006); and Morçöl and Zimmermann (2006a,b). DO BIDS CREATE WEALTH-BASED INEQUALITIES IN THE DELIVERY OF PUBLIC SERVICES?
There has also been some shared concern among scholars that BIDs serve narrow commercial interests, as they privatize city services and divert dollars from neighborhoods, thus creating wealth-based inequalities in the delivery of public services (Briffault 1999). According to a long-standing critic, BIDs ‘ensure a seamless continuum of middle class work, consumption and recreation’ (Davies 1997, 231). Others highlight the idea that BIDs concentrate efforts and resources within their spatial boundaries (Reeve 2007, 8). In contrast, BID advocates contest these criticisms explaining that BIDs are formed as a response to the local government’s inability to meet basic security and sanitation requirements. According to a survey of American BIDs, 87% of BID revenues come from self-assessments and not privatized city contracts (Mitchell 1999). Using data from case law and a state-wide survey of New Jersey’s BIDs, studies also demonstrate that BIDs are genuine public–private partnerships that ‘further public purposes in the course of advancing private interests’ ( Justice and Goldsmith 2006, 132). Ultimately, as many academics have pointed out, BIDs are created under the authority of and subject to local government and cannot employ fiscal or other coercive authority except under the sufferance of the governing municipalities that maintain the authority to dissolve them (Briffault 1999; Justice and Goldsmith 2006, 132). BIDs, as demonstrated by the reorganization of New York City’s politically powerful Grand Central Partnership, have no greater © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
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potential for redistributing power and wealth than do a variety of redevelopment partnerships or urban governing regimes (Justice and Goldsmith 2006, 132). DO BIDS CREATE SPILLOVER EFFECTS?
While there is considerable consensus around the notion that BIDs provide benefit to the property owners, businesses, residents, and visitors within their jurisdiction, critics express concern that BID services effectively displace crime and other problems outside service boundaries. Specifically, opponents believe that BID security patrols displace petty and serious crime to the neighboring areas, representing an external cost of BID operation (Caruso and Weber 2006; Garodnick 2000; Jones et al. 2003; Lloyd et al. 2003; Pack 1992). There have been mixed reactions to these allegations by the BID community. Some experts defend BIDs based on experience and case studies (Levy 2001; Mitchell 2001). Others have relied on statistical models to empirically test the impact of BIDs on crime spillover, the results of which are mixed. Although both studies analyze crime patterns in the city of Philadelphia, one concluded that BIDs may be responsible for displacing crime outside their boundaries (Calanog 2006), while the other reports that lower crime rates in the BID are not matched by higher crime rates in the surrounding blocks (Hoyt 2005a). However, studies on the question of spillover and BIDs are not limited to an examination of criminal activities. Researchers recently completed a study on the impact of BIDs on property values in New York City. Their findings suggest that large BIDs generate a significant and positive benefit to property owners and that spillover effects, while substantially smaller, are also positive (Ellen et al. 2006). Such studies underscore the necessity of developing sophisticated models to evaluate the impact of individual BIDs, as well as the aggregate impact of multiple BIDs operating in a single municipality (Hoyt 2004, 2005b). DO BIDS OVER-REGULATE PUBLIC SPACE?
The rapid spread and increasingly influential role BIDs are playing in policy making and in the provision of urban services has become a challenge to the conventional notion of public administration raising questions about the form of urban intervention it represents (Hochleutner 2003; Morçöl and Patrick 2006; Morçöl and Zimmermann 2006b). Anecdotal evidence suggests that there is often a conflict of values and priorities between BID managers and the local authority officers with many critics supporting the view that BIDs threaten to undermine the use of public space (Garodnick 2000; Reeve 2007). Accordingly, there is considerable debate in the literature on the subject of whether BID activities, namely the provision of supplemental security and maintenance services, over-regulate public space. The most prominent issue involves the way in which uniformed BID personnel interact with people living on the street. Scholars, drawing on analogy, remind us © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
The business improvement district model . 955
that ‘unlike malls, public streets do not have opening and closing times and neither do they have the legal right to refuse admission’ (Steel and Symes 2005, 328). This concern dominates such incidents as the lawsuit filed in Los Angeles against four separate BIDs for violating civil rights (Steel and Symes 2005, 329) and the court condemnation of a BID in Kent, UK, to ban an individual as a serious infringement of human rights (Reeve 2007, 29). Despite these legal conflicts, proponents claim that downtown managers of BIDs are often the ‘only ones with the portfolio to draw together the fragmented world of social services, advocates for the homeless, business leaders, and the police’ (Levy 2001, 127). It is also important to keep in mind that BIDs, especially those located in large cities, play a critical role in ameliorating homelessness by creating entry-level jobs and hiring formerly homeless individuals. Lastly, critics also allege that BID-driven brand marketing campaigns create a homogenous marketable image that, coupled with capital improvements that emphasize the implementation of uniform street furniture, create generic streetscapes that dilute the vitality of the areas they seek to revitalize (Caruso and Weber 2006, 205). In contrast, practitioners say that these activities are simply the necessary cost of ‘doing business and delivering a quality experience’ and should not be viewed as the disneyfication or over-regulation of public space (Levy 2001, 127). Concluding Remarks Despite the concerns and debates that have surfaced in the literature, there is some consensus that the BID model represents a success story because it generally functions to harness private sector creativity, solving complex municipal problems efficiently and effectively (Briffault 1999; Garodnick 2000; Levy 2001; Mitchell 2001). BIDs are commonly perceived as ‘net contributors to public life’ (Briffault 1999, 477) and a response to the ‘obsolescence of traditional municipal boundaries as governance migrates upward to respond to challenges best addressed on the regional level at the same time that it moves downward to handle opportunities best realized through a local focus’ (Levy 2001, 130). It is equally clear that, primarily over the past decade, BIDs have blurred the line between the traditional notions of ‘public’ and ‘private’. In response, researchers have put forth several theories and paradigms to understand this new phenomenon. They include: the ‘new governance’ paradigm that examines all for-profit and nonprofit organizations involved in public policy making and service delivery (Morçöl and Zimmermann 2006b); ‘new regionalism’ that draws on BID involvement in metropolitan policy making and issues (Wolf 2006); the ‘third way’ economic paradigm that speaks to the rise of market-based incentives while making way for the devolution of decision making (Lloyd et al. 2003); ‘new urbanism’ given their interventions in urban form (Davies 1997); and ‘network governance’ that is believed to offer a better understanding of relations among BIDs, between governments © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
956 . The business improvement district model
and BIDs, and the role of the agency in the formation and operations of BIDs (Morçöl and Patrick 2006; Morçöl and Zimmermann 2006b;Ysa 2006). The BID model’s ability to effect economic change and social change notwithstanding, Greenblatt (2006) offers a compelling comparison to highlight the relative magnitude of the BID model’s contribution. In comparing statistics between downtowns and suburbs, he points out that despite the contribution of BIDs and other successful urban revitalization efforts the fact is that ‘downtowns are still relatively small potatoes in the broader economic scheme of things’ as few downtowns have attracted more than a few thousand new residents, while the suburbs have drawn millions (Greenblatt 2006, 572). This argument is supported by others who suggest that while BIDs bring ‘wit, imagination, and entrepreneurial skills to the provision of public services’ they cannot fundamentally alter the economics brought on by a property enhancement project like a hotel or an entertainment project (Ratcliffe and Flanagan 2004, 394). Large or small, the fact remains that in the domain of urban revitalization, the BID model has been at the forefront and has managed to make a positive contribution that is being emulated at an astonishing rate worldwide. However, researchers and practitioners alike caution that prior to BID adoption it is important to devise and employ reliable methods of prospective policy evaluation. That is, advocates should undergo a public process whereby they critically assess the implications and potential effects of the BID model (Hoyt 2005b, 2006; Levy 2001; Lloyd et al. 2003). After all, the debates are just beginning to materialize. Short Biographies Lorlene Hoyt is an Assistant Professor in the Department of Urban Studies and Planning at the Massachusetts Institute of Technology in Cambridge, MA, USA. She earned a PhD in City Planning from the University of Pennsylvania. Devika Gopal-Agge holds a Master’s degree in City Planning from the Massachusetts Institute of Technology and is currently working as an Independent Researcher. She also holds a Master’s degree in Economics from Bombay University. Note * Correspondence address: Lorlene Hoyt, Department of Urban Studies and Planning, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Room 9-528 Cambridge, MA 02139, USA. E-mail: lorlene@MIT.EDU.
References Birch, E. L. (2002). Having a longer view on downtown living. Journal of the American Planning Association 68, pp. 1–27. © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
The business improvement district model . 957 ——. (2005). Who lives downtown. Brookings Institution Working Paper. Washington, DC: Brookings Institute. Blackwell, M. (2005). A consideration of the UK government’s proposals for business improvement districts in England: issues and uncertainties. Property Management 23 (3), pp. 194–203. Briffault, R. (1999). A government for our time? Business improvement districts and urban governance. Columbia Law Review 99 (2), pp. 365–477. Brooks, L. (2006). Unveiling hidden districts: assessing the adoption patterns of business improvement districts in California. Unpublished manuscript. Burayidi, M. (ed.) (2001). Downtowns: revitalizing the centers of small urban communities. New York: Routledge. Calanog,V. M. (2006). Business improvement districts: crime deterrence or displacement? Essays in the Economics of Development Strategies. Unpublished PhD. thesis. Philadelphia, PA: The Wharton School, University of Pennsylvania. Caruso, G., and Weber, R. (2006). Getting the max for the tax: an examination of the BID performance measures. International Journal of Public Administration 29, pp. 187–219. Davies, M. S. (1997). Business improvement districts. Journal of Urban and Contemporary Law 52 (187), pp. 187–223. Ellen, I. G., Schwartz, A. E., and Voicu, I. (2006). The impact of business improvement districts on property values: evidence from New York City. Unpublished manuscript. Fogelson, R. M. (2001). Downtown: its rise and fall, 1880–1950. New Haven, CT: Yale University Press. Garodnick, D. R. (2000). What’s the BID deal? Can the Grand Central business improvement district serve a special limited purpose? University of Pennsylvania Law Review 148, pp. 1733–1770. Gopal-Agge, D. G., and Hoyt, L. (2007). The retail-revitalization nexus: the business improvement model in Canada and the United States. In: Morçöl, G., et al. (eds) Business improvement districts: research, theories and controversies. Oxford, UK:Taylor & Francis Books. Greenblatt, A. (2006). Downtown renaissance: are center cities finally returning to health. Congressional Quarterly Researcher 16 (24), pp. 553–576. Gross, J. S. (2005). Business improvement districts in New York City’s low-income and high-income neighborhoods. Economic Development Quarterly 19 (2), pp. 174–189. Hernandez, T., and Jones, K. (2005). Downtowns in transition: emerging business improvement area strategies. International Journal of Retail and Distribution Management 33 (11), pp. 789–805. ——. (2007). The strategic evolution of the BID model in Canada. In: Morçöl, G., et al. (eds) Business improvement districts: research, theories and controversies. Oxford, UK: Taylor & Francis Books. Hochleutner, B. R. (2003). BIDs fare well: the democratic accountability of business improvement districts. New York University Law Review 78 (374), pp. 1–33. Hogg, S., Medway, D., and Warnaby, G. (2004). Town center management schemes in the UK: marketing and performance indicators. International Journal of Nonprofit and Voluntary Sector Marketing 9 (4), pp. 309–319. Houstoun, L. O. (2003). Business improvement districts.Washington, DC: Urban Land Institute. Hoyt, L. (2004). Collecting private funds for safer public spaces: an empirical examination of the business improvement district concept. Environment and Planning B: Planning and Design 31 (3), pp. 367–380. ——. (2005a). Do business improvement district organizations make a difference? Crime in and around commercial areas in Philadelphia. Journal of Planning Education and Research 25 (2), pp. 185–199. ——. (2005b). Planning through compulsory commercial clubs: business improvement districts. Economic Affairs 25 (4), pp. 24–27. ——. (2005c). The business improvement district: an internationally diffused approach to revitalization. Washington, DC: International Downtown Association. ——. (2006). Importing ideas: the transnational transfer of urban revitalization policy. International Journal of Public Administration 29, pp. 221–243. Jones, P., Hillier, D., and Comfort, D. (2003). Business improvement districts in town and city centres in the UK. Management Research 26 (8), pp. 50–59. © 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
958 . The business improvement district model Justice, J. B., and Goldsmith, R. S. (2006). Private governments or public policy tools? The law and public policy of New Jersey’s special improvement districts. International Journal of Public Administration 29 (1–3), pp. 107–136. Koppell, J. G. S. (2000). The politics of quasi-government: hybrid organizations and the dynamics of bureaucratic control. Cambridge, UK: Cambridge University Press. Levy, P. (2001). Paying for public life. Economic Development Quarterly 15 (2), pp. 124–131. Lloyd, M. G., et al. (2003). Business improvement districts, planning and urban regeneration. International Planning Studies 8, pp. 295–321. Loukaitou-Sideris, A., Blurnenberg, E., and Ehrenfeucht, R. (2004). Sidewalk democracy: municipalities and the regulation of public space. In: Ben-Joseph, E. and Szold,T. (eds) Regulating place. New York: Routledge. Meek, J. W., and Hubler, P. (2006). Business improvement districts in Southern California: implications for local governance. International Journal of Public Administration 29 (1–3), pp. 31–52. Mitchell, J. (1999). Business improvement districts and innovative service delivery. New York: The PricewaterhouseCoopers Endowment for the Business of Government. ——. (2001). Business improvement districts and the ‘new’ revitalization of downtown. Economic Development Quarterly 15, pp. 115–123. Miyazawa, M. (2006). Downtown revitalization in Japan: an examination of the town management organization model. Unpublished master’s thesis. Cambridge, MA: Department of Urban Studies and Planning, Massachusetts Institute of Technology. Morçöl, G., and Patrick, P. A. (2006). Business improvement districts in Pennsylvania: implications for democratic metropolitan governance. International Journal of Public Administration 29 (1 –3), pp. 131–171. Morçöl, G., and Zimmermann, U. (2006a). Community improvement districts in Metropolitan Atlanta. International Journal of Public Administration 29 (1–3), pp. 77–105. ——. (2006b). Metropolitan governance and business improvement districts. International Journal of Public Administration 29 (1–3), pp. 5–29. Pack, J. R. (1992). BIDs, DIDs, SIDs, and SADs: private governments in urban America. Brookings Review 10 (4), pp. 18–21. Ratcliffe, J., and Flanagan, S. (2004). Enhancing the vitality and viability of town and city centres: the concept of the business improvement district in the context of tourism enterprise. Property Management 22 (5), pp. 377–395. Reeve, A. (2007). Town centre management: developing a research agenda in an emerging field. In: Morçöl, G., et al. (eds) Business improvement districts: research, theories and controversies. Oxford, UK:Taylor & Francis Books. Schaller, S., and Modan, G. (2005). Contesting public space and citizenship: implications for neighborhood business improvement districts. Journal of Planning Education and Research 24 (4), pp. 394–407. Steel, M., and Symes, M. (2005). The Privatisation of public space? The American experience of business improvement districts and their relationship to local governance. Local Government Studies 31 (3), pp. 321–334. Stokes, R. J. (2006). Business improvement districts and inner city revitalization: the case of Philadelphia’s Frankford special services district. International Journal of Public Administration 29 (1–3), pp. 173–186. Symes, M., and Steel, M. (2003). Lessons from America: the role of business improvement districts as an agent of urban regeneration. Town Planning Review 74 (3), pp. 301–313. Ward, K. (2006). ‘Policies in motion’, urban management and state restructuring: the trans-local expansion of business improvement districts. International Journal of Urban and Regional Research 30 (1), pp. 54–75. Wolf, J. (2006). Urban governance and business improvement districts: the Washington, DC BIDs. International Journal of Public Administration 29 (1–3), pp. 54–75. Ysa, T. (2006). Back to the process in local collaborative public management: sustainability and local strategic partnerships. Unpublished manuscript.
© 2007 The Authors Geography Compass 1/4 (2007): 946–958, 10.1111/j.1749-8198.2007.00041.x Journal Compilation © 2007 Blackwell Publishing Ltd
Attachment C Promising Strategies
Page 65 of 69
Neighborhood Transformation Initiative
Neighborhood Transformation Initiative Many Philadelphia neighborhoods are in some state of decline. The age and deterioration of large portions of the housing stock in low-income communities and increasing housing abandonment and vacancy have contributed to a net decline in the quality and quantity of housing accessible to low- and moderate-income populations. These trends are symptomatic of underlying demographic and economic changes over the past 50 years, as suburban growth and the demise of industrialization resulted in a flight of population and jobs from Philadelphia. Housing policies and programs alone cannot solve these problems. It requires a dramatic change in government structure, policies and priorities. In April 2001, the City of Philadelphia unveiled its Neighborhood Transformation Initiative (NTI). NTI is a strategy to rebuild Philadelphia’s neighborhoods as thriving communities with clean and secure streets, recreational and cultural outlets and quality housing. NTI takes a multifaceted, comprehensive approach that stresses interagency cooperation and coordination in addressing every aspect of neighborhood development. The initiative also creates opportunities for government and citizens to work together, restoring civic pride and building community spirit. NTI strives to build the capacity of community-based organizations to identify needs and develop new housing and employment strategies within their communities while garnering the support of the private sector through innovative partnerships and by leveraging resources. Through its various components, NTI will help Philadelphia’s neighborhoods meet their potential as clean, safe and thriving places in which to live, work and play.
NTI Goals and Principles NTI establishes a framework for action with six goals to revitalize Philadelphia’s neighborhoods and to change the way the City operates:
Goal 3: Blight prevention Advance the quality of life in Philadelphia neighborhoods with a targeted and coordinated blight prevention program that enforces city codes and abates public nuisances. Goal 4: Assembling land for redevelopment Improve the City’s ability to assemble and dispose of land for redevelopment and establish a Land Bank that will oversee the continual maintenance of such land over time. Goal 5: Neighborhood investments Stimulate and attract investment in Philadelphia neighborhoods. Goal 6: Leveraging resources Leverage resources to the fullest extent possible and invest them in neighborhoods strategically. Effectively promoting new investment in Philadelphia’s neighborhoods requires transparent strategies, predictable administrative policies and a coordinated, comprehensive approach that mandates cooperation among public agencies, community residents and private and non-profit sector interests. Anchored by standards for quality neighborhoods, the City will employ a set of principles to guide the allocation of federal, state, and local resources that are available for investment in neighborhoods. These principles seek to: •
use planning as an investment tool;
•
balance affordable and market-rate housing;
•
invest to stimulate market activity;
•
foster competition to get the best product;
•
maximize private capital and minimize public subsidies; and
•
link housing with other public and private investments.
Goal 1: Planning Facilitate and support community-based planning and the development of area plans that reflect citywide and neighborhood visions. Goal 2: Blight elimination Eradicate blight caused by dangerous buildings, debris-filled lots, abandoned cars, litter and graffiti to improve the appearance of Philadelphia streetscapes.
3
Strategic Plan
NTI and the Year 31 Consolidated Plan The keystone for the successful execution of NTI is the issuance of approximately $295 million of bonds by the Redevelopment Authority of the City of Philadelphia (RDA) in several series. RDA may issue bonds from time to time during the period of seven years from the effective date of the enabling legislation. These bonds will enable the City to generate sufficient resources to eliminate the backlog of dangerous buildings that are safety hazards in Philadelphia neighborhoods; prevent the encroachment of blight into stable neighborhoods and create opportunities for redevelopment in the most distressed areas of the City. In addition, the Year 31 Consolidated Plan supports a variety of homeownership and rental projects that are consistent with NTI’s housing investment strategies. OHCD is committed to support projects that further key principles of NTI and address: 1) specific housing needs exhibited by extremely lowto moderate-income renter and owner households; 2) needs for housing and service resources exhibited by homeless families and individuals including prevention, permanent and transitional housing and supportive services; 3) housing and service needs for persons with HIV/AIDS and other special-needs populations; and 4) community development needs. The “Strategic Plan” conveys the City’s proposal to meet these needs by identifying funding priorities, specific programming objectives and the estimated number of households to be assisted over a threeyear time period. Also included is a description of the factors taken into consideration in determining relative priority needs and the connection between strategies and market conditions. In accordance with HUD regulations for the Consolidated Plan, the Strategic Plan is divided into four subsections, representing the basic categories of Priority Needs: •
Affordable Housing;
•
Homelessness;
•
Non-Homeless Special Needs;
•
Non-Housing Community Development.
The Priority Needs Summary Table on the next pages illustrates the relative ranking of specific housing and 4
community development needs (as either “high,” “medium,” or “low”) and provides estimates of the amount of federal entitlement funding (CDBG, HOME Investment Partnership Program, HOPWA and Emergency Shelter Grant), state and local NTI bond funds expected to be used to address these needs over a three-year period. No Housing Trust Funds are anticipated in this chart. Federal and state funding for FY 2007 and FY 2008 is assumed to be at the same level as FY 2006.
Priority Needs Summary Tables
Priority Needs Summary Table Priority Housing Needs (Households)
, Small
Large
RENTER Elderly
All Others
OWNER
Percent of Median Family Income
Need Level High Medium Low
Estimated Units
Estimated Dollars Needed to Address
0-30%
H
29,775
$9,335,000
31-50%
H
12,911
$4,379,000
51-80%
H
16,145
$5,476,000
0-30%
H
10,931
$3,701,000
31-50%
H
4,454
$1,511,000
51-80%
H
4,479
$1,519,000
0-30%
H
27,860
$8,353,000
31-50%
H
10,797
$3,662,000
51-80%
M
8,753
$1,781,000
0-30%
M
24,344
$4,422,000
31-50%
M
11,330
$2,306,000
51-80%
L
19,307
$2,619,000
0-30%
H
64,949
$36,272,000
31-50%
H
54,125
$30,227,000
51-80%
M
81,527
$20,489,000
Priority Special-Needs/Non-Homeless
Priority Need Level
Estimated Dollars Needed to Address
Elderly
H
$14,818,000
Frail Elderly
H
$1,646,000
Severe Mental Illness
M
$545,000
Developmentally Disabled
H
$491,000
Physically Disabled
H
$14,362,000
Persons With HIV/AIDS
H
$22,008,000
Persons with Alcohol/Other Drug Addiction
5
Strategic Plan
Priority Community Development Needs
Priority Need Level High, Medium, Low
Estimated Dollars Needed to Address
ECONOMIC DEVELOPMENT NEEDS Rehabilitation; Publicly/Privately Owned Commercial/Industrial Commercial/Industrial Land Acquisition/ Disposition Commercial/Industrial Infrastructure Development Commercial/Industrial Building Acquisition, Construction, Rehabilitation
H
$24,570,000
Other Commercial/Industrial Development
H
$380,000
H
$3,000,000
H
$23,133,000
Direct Financial Assistance to For-Profit Technical Assistance Micro-Enterprise Assistance
INFRASTRUCTURE NEEDS Flood Drain Improvements Water/Sewer Improvements Street Improvements Sidewalks Tree Planting Removal of Architectural Barriers Privately Owned Utilities
PUBLIC FACILITIES NEEDS Public Facilities and Improvements Disabled Centers Neighborhood Facilities Parks, Recreational Facilities Parking Facilities Solid Waste Disposal Improvements Fire Stations/Equipment Health Facilities Asbestos Removal Clean-up of Contaminated Sites Interim Assistance Non-Residential Historic Preservation
PUBLIC SERVICES NEEDS Public Services (General) Disabled Services 6
Priority Needs Summary Tables
Priority Community Development Needs
Priority Need Level High, Medium, Low
Estimated Dollars Needed to Address
Legal Services Transportation Services Substance Abuse Services M
$2,570,000
Planning
H
$5,750,000
HOME Administration/Planning Costs
H
$5,069,000
General Program Administration
H
$29,997,000
Indirect Costs
H
$60,612,000
H
$1,270,000
H
$31,470,000
Employment Training Health Services Mental Health Services
SENIOR PROGRAMS Senior Centers Senior Services
YOUTH PROGRAMS Youth Centers Child-Care Centers Abused and Neglected Children Facilities Youth Services Child-Care Services Abused and Neglected Children
PLANNING AND ADMINISTRATION NEEDS
Public Information Fair Housing Activities Submissions or Applications for Federal Programs HOME CHDO Operating Expenses
OTHER Urban Renewal Completion CDBG Non-Profit Organization Capacity Building CDBG Assistance to Institutes of Higher Education Repayments of Section 108 Loan Principal Unprogrammed Funds
TOTAL ESTIMATED DOLLARS NEEDED TO ADDRESS
$377,745,000
The Priority Needs Summary Table has been revised to reflect the amount of entitlement funding (i.e., Community Development Block Grant, HOME Investment Partnership Program, Housing Opportunities for Persons With HIV/AIDS, Emergency Shelter Grant, NTI bond funds and state DCED funds) projected to be used to meet each need over a three-year period.
7
Strategic Plan
CONTINUUM
OF
CARE HOUSING GAPS ANALYSIS CHART Inventory
Remaining Gap
Emergency Shelter* Units for families
383
0
1,118
0
Seasonal beds
470
n/a
Overflow beds
225
n/a
587
49
1,885
101
Units for families
1,229
1,463
Units for individuals
1,804
1,580
365
750
Units for individuals
Transitional Housing Units for families Units for individuals Permanent Supportive Housing
Units for chronically homeless (of units for individuals)
* Philadelphia has a policy of providing emergency shelter to all who are eligible and request it. So, while the need at any one time may exceed the “Inventory”, the “Unmet Need” is zero because the City is not seeking to develop additional year-round beds. The City currently has the capacity to quickly increase its inventory of emergency shelter by adding beds at existing sites and other locations.
8
Affordable Housing
Affordable Housing Basis for Assigning Relative Priority Needs High Priorities The City is assigning a high priority to the following household types: •
Extremely Low- and Low-Income Renter Households, including Elderly households, Small Households and Large Households with cost burdens, severe cost burdens and substandard conditions.
•
Extremely Low- and Low-Income Owner Households, including Elderly and Non-Elderly, with substandard housing and cost burdens.
•
Moderate-Income Renter Households and Owner Households with cost burdens, and other housing problems, including Elderly, Small and Large Renters, and Elderly and Non-Elderly Owners.
Extremely Low- and Low-Income Renter Households and Extremely Low-Income Owner Households in Philadelphia have the most urgent housing needs. Between 70 and 75 percent of these families face either housing costs in excess of 30 percent of income or housing that is deteriorated. Because these are among the most impoverished households in the city, cost burdens and severe cost burdens are particularly intolerable. The City proposes to continue funding affordable housing activities that will target all household types in these income categories. Support for homeownership for low-income and moderate-income families is a high priority for the City, due both to the positive neighborhood benefits generated by increased homeownership and the high cost of maintaining aging housing units. Assistance for Elderly and Non-Elderly current and first-time homeowners will continue as a funding priority. Homeownership rehabilitation and sales housing production in moderateincome neighborhoods will also receive support as an effort to promote stable communities and encourage middle-income homeowners to remain within the city. The housing needs of Moderate-Income Renter Households are assigned a high priority by the City, although the relatively greater needs of extremely lowand low-income families suggest that the bulk of funding go to the lower income groups. The City will continue to fund activities for moderate-income renters as funding permits, particularly programs targeting Elderly and Large Households.
Medium Priorities The City is assigning a medium priority to the following household types: •
Extremely Low-, Low- and Moderate-Income Owner Households with overcrowding only;
•
Extremely Low-, Low- and Moderate Income Large Renter Households with overcrowding only.
Some owner households do face high rates of overcrowding, and that overcrowding may be a particular problem in the Latino community. Large Renter Households were found to have the highest overall incidence of overcrowding. Because these families (both Owners and Large Renters) are also likely to have other problems identified as “high priorities” (such as cost burdens or substandard conditions), most households experiencing overcrowding will fall into other categories of need that will receive funding. As Low- and Moderate-Income Owner Households and Large Renter Households facing overcrowding alone become evident and as funding permits, the City may allocate resources for their assistance.
Low Priorities The City is assigning a low priority to the following household types: •
Extremely Low-, Low- and Moderate-Income Elderly Renter Households with overcrowding;
•
Extremely Low-, Low- and Moderate-Income Small Renter Households with overcrowding.
Overcrowding presents a housing emergency almost exclusively for Large Renter families in Philadelphia. Affordability and substandard conditions are the most immediate problems for Lower-Income Elderly and Small Renter Households. Elderly Renter Households, by census definition, are limited to one or two persons and are less likely to be found in overcrowded settings. Elderly heads of households with five or more family members would receive a priority for assistance as a Large Renter Household.
Strategy and Objectives for Meeting Priority Housing Needs The City’s affordable housing strategy responds to the unique features of the Philadelphia housing market. Both rents and home prices in Philadelphia remain lower than in many cities of comparable size across the country. However, affordability remains a problem for households at the lower end of the income distribution. Also, the age and deteriorated condition of the housing stock forces many low- and moderate9
Strategic Plan
income families to live in substandard conditions. Elderly homeowners on fixed incomes have a difficult time keeping up with repairs and thus, vacancy and housing abandonment are at crisis levels in many lowincome neighborhoods.
condition of the housing stock call for an aggressive policy of housing rehabilitation.
The City’s affordable housing strategy addresses these factors, emphasizing housing production to rebuild the deteriorated housing stock; housing preservation, to arrest the process of abandonment and vacancy; homeownership, to enable low- and moderate-income renter households to experience the benefits of homeownership and to encourage private investment in Philadelphia neighborhoods; and resource leveraging to ensure that scarce housing dollars support as much activity as possible, in response to the overwhelming levels of need in the city. Each aspect is described below.
Public Housing Production The Philadelphia Housing Authority (PHA) serves the lowest-income persons who are often the neediest. For this reason, supporting the production and management of public housing is perhaps the single most important strategy for meeting the needs of extremely low-income renter households. PHA’s large scale redevelopment activities, notably redevelopment funded through the HOPE VI Program, can transform blighted neighborhoods while producing mixed-income rental and homeownership units that serve persons of very low to moderate income. The NTI program supports acquisition at large scale in areas such as Mill Creek where HOPE VI activities are taking place. In the past, CDBG or HOME funding supported the redevelopment or replacement of obsolete PHA units at Southwark Plaza (now called Courtyard Apartments at Riverview), Martin Luther King Plaza and Schuylkill Falls.
Housing Production Rental and Homeownership Production Rental and homeownership production are key components of Philadelphia’s affordable housing strategy. In addition to increasing the net supply of housing units available to lower-income families, new construction is necessary to redevelop the hundreds of vacant lots that blight many Philadelphia neighborhoods. Vacant lots result from the process of housing decay, abandonment and ultimately demolition. Without attention, these areas can quickly become trash-strewn dumping grounds. At the same time, vacant lots present an opportunity for the development of more spacious dwelling units with private yards or off-street parking. Given the persistent downward trend in population, new construction can provide a means of redeveloping large portions of the low-income housing stock in a manner that incorporates advances in urban design and that provides enhanced accessibility for persons with disabilities. New construction at a large scale can also rebuild a housing market, leading to the reduction in subsidy required to produce additional housing units. Rental and Homeownership Rehabilitation Housing rehabilitation is an particularly important strategy for Philadelphia, given the large numbers of long-term vacant properties (some of which are suitable for rehabilitation) found in low-income communities. Through rehabilitation, rental units that are vacant and uninhabitable can be reoccupied and units occupied by extremely-low and low-income homeowners can receive critically necessary repairs and basic maintenance. Both the declining incomes of Philadelphia’s homeowners and the deteriorated 10
Housing rehabilitation should reinforce existing strong blocks or communities, consistent with NTI principles.
Housing Production Program Objectives In advancing this housing production strategy, the City reaffirms its commitment to preserve and revitalize neighborhoods by continuing the targeted development of rental and homeownership units in North Philadelphia and in low-income sections of West Philadelphia, South Philadelphia, Northwest Philadelphia, Frankford and Kensington. Specific programmatic objectives are: •
New construction for sales housing;
•
New construction for rental housing;
•
Vacant unit rehabilitation for sales housing;
•
Vacant unit rehabilitation for rental housing;
•
Large-scale homeownership development in targeted neighborhoods.
Promoting Homeownership and Housing Preservation To more effectively support economic development and reinvestment in Philadelphia, the City will continue to emphasize homeownership and preservation of the existing occupied housing stock. Homeownership and housing preservation are top priorities in the neighborhood strategic plans developed in coordination with OHCD. The City proposes to sustain housing counseling programs for first-time homebuyers and maintain
Affordable Housing
support for major systems repair programs for current homeowners. These activities encourage first-time homebuyers and also support current homeowners through preservation programs. Homeownership and Housing Preservation Program Objectives By strengthening housing preservation and homeownership programs, the City will help to prevent further housing abandonment, maintain neighborhood quality of life and assist low- and moderate-income residents in attaining the goal of homeownership. These goals will be accomplished by supporting the following objectives: •
Housing counseling;
•
Emergency repairs, housing preservation and weatherization; and
•
Home equity financing and rehabilitation assistance.
Leveraging Private Sector Resources The City’s Consolidated Plan can be an effective component of the City’s overall economic development strategy if available resources are organized to leverage substantial commitments of private sector funding and long-term investment in Philadelphia. Such activities can include attracting commitments of private debt and equity financing, making full use of the City-State Bridge Loan Program and sustaining private-sector support for Community Development Corporation (CDC) operations through targeted funding commitments made in coordination with private funding sources.
In continuing to develop rental and homeownership units, the City proposes to pursue strategies that will attract private capital into Philadelphia neighborhoods. These strategies maximize the impact of federal housing dollars by increasing the net amount of resources flowing into communities. Over the past several years, OHCD has supported the development of rental housing by providing financing to projects which leverage significant amounts of private funding. OHCD financing to rental projects has generated equity investment through the utilization of the Low-Income Housing Tax Credits (LIHTC) by corporations and equity funds such as the National Equity Fund (NEF). Additional private funds have been leveraged through use of the Pennsylvania Housing Finance Agency (PHFA) PennHOMES Program which provides permanent financing for the development of rental projects. Objectives for Leveraging Private Sector Resources In order to maximize private-sector investment in lowincome subsidized housing, OHCD proposes the continuation of policies that generate or sustain the following private sector funding commitments: •
Equity investment in Low-Income Tax Credit Ventures;
•
Private sector support for CDC operations and working capital;
•
Mortgages for first-time homebuyers;
•
Bank financing for rental rehabilitation; and
•
Anti-predatory lending products.
11
Strategic Plan
Proposed Accomplishments of Affordable Housing Strategy Rental Housing ’04 - ‘06
Table 3.1: Households Assisted With Rental Housing* Estimated Households Assisted FY ’04 - ’06
FY 2004
FY 2005
FY 2006
Extremely Low-Income
722
783
1020
Low-Income
358
403
444
20
16
16
1,100
1,202
1,480
Moderate-Income Totals
* Includes neighborhood rental and new construction, MEND II, rental assistance, special-needs development.
Homeownership ’04 - ‘06
Table 3.2: Households Assisted With Homeownership Units* Estimated Households Assisted FY ’04 - ’06
FY 2004
FY 2005
FY 2006
Extremely Low-Income
5,984
6,685
6,680
Low-Income
4,803
5,058
5,027
238
357
453
11,025
12,100
12,160
Moderate-Income Totals
* Includes CDC, Homeownership Rehabilitation Program, Neighborhood-Based Homeownership, Homestart, New Construction, Basic Systems Repair, Heater Hotline, Weatherization, PHIL Loan, Utility Emergency Services Fund, Targeted Basic Systems Repair, SHARP and Settlement Grants.
12
Homelessness
Homelessness Basis for Assigning Relative Priority Needs Within the context of the Consolidated Plan, the basis of assigning relative priority is the proposed use of federal CDBG, HOME or competitive McKinney resources to fund the identified activity/area of need. Philadelphia’s Continuum of Care (CoC) is nationally recognized for its coordinated, community-wide success in reducing the number of homeless individuals living on the street from 824 in the summer of 1997 to a recent low of 147. In the past year, HUD released “Strategies for Reducing Chronic Street Homelessness,” in which Philadelphia was one of only two cities that had all the elements of a successful strategy and approach. In March 2004, the National Law Center on Homelessness & Poverty (NLCHP) awarded Philadelphia its Solutions through Alternative Remedies (STAR) Award for effective, innovative, replicable strategies that address homelessness. Philadelphia’s efforts were highlighted in the San Francisco Chronicle’s Sunday front page (6/13/04) as “the city that knows how” to end chronic homelessness. In addition, 49 formerly chronically homeless individuals, living on the streets an average of three years and in shelter for eight, are no longer homeless thanks to Philadelphia’s “housing first” programs.
Homeless Subpopulation Needs As a result of the analysis of homeless housing needs in Philadelphia, two groups have emerged as requiring both housing and services to address housing needs: homeless victims of domestic violence and homeless youth.
Homeless Victims of Domestic Violence Data compiled by Women Against Abuse indicates that there were approximately 3,986 adults (singles and heads of household) and 345 children who were classified as homeless victims of domestic violence in 2004. According to the 2004 Continuum of Care Gaps Analysis, 143 households affected by domestic violence were assisted by the City’s shelter services. Domestic violence is prevalent among homeless families in Philadelphia, often surfacing as the root cause of homelessness. An estimated 40 percent of Philadelphia’s homeless children have witnessed domestic violence. Women Against Abuse operates
the City’s only shelter specifically focused on the needs of victims of domestic violence. In addition, Women Against Abuse operates a transitional housing program for victims of domestic violence, Sojourner House. In the Year 31 Specials-Need Housing Development Request for Proposals, the City has identified victims of domestic violence as a priority population for transitional housing funding opportunities.
Homeless Youth While it is estimated that more than 1,000 children sleep in emergency shelters in Philadelphia, this number does not reflect the number of unaccompanied youth in shelter. Data provided by Covenant House of Pennsylvania indicates that its crisis center provided emergency shelter and services to 447 unaccompanied youth during the 2003-2004 fiscal year. Unaccompanied youth aged 16-21, including youth aging out of foster care, have emerged as a distinct homeless subpopulation. Their needs differ from homeless children in families because they must navigate the challenges of homelessness by themselves. Covenant House provides a variety of services for this group; however, there remains an unmet need of emergency/crisis beds for youth under the age of 18 and for transitional housing for youth under the age of 21. To address this need, the City has included youth ages 16-21 who are emancipated or heads of household as a priority population in the Year 31 Special Needs Housing Development Request for Proposals for transitional housing funding opportunities.
Strategy for Meeting Priority Homeless Needs Philadelphia’s Continuum of Care Strategy is developed through a citywide process involving government officials, homeless housing/services providers, formerly homeless persons, homeless advocates, religious leaders, the business community, neighborhood groups, academia and local foundations. The City invests more than $60 million a year in the Continuum of Care System which involves a number of City departments including the Office of Adult Services (OAS), the Office of Emergency Shelter and Services (OESS), OHCD, the Department of Public Welfare (DPW) and the Office of Behavioral Health and Mental Retardation (OBH/MR). Philadelphia’s Continuum of Care has continued to develop new permanent and transitional housing for homeless individuals and families, adding a total of 13
Strategic Plan
95 new McKinney-supported units to the CoC inventory last year. The Philadelphia Housing Authority (PHA) has contributed to the CoC’s ability to expand its affordable housing resources: in addition to the 200 units committed under the Good Neighbors Make Good Neighborhoods Program, non-profit organizations operating housing for homeless individuals and families have successfully obtained 191 project-based vouchers to support operating costs at their transitional and permanent housing sites.
Many project sponsors have difficulty addressing real estate development issues such as predevelopment planning, project financing and development management. Attempts to address these limitations are diverse and include the solicitation of experienced housing developers and service providers and the support of joint venture partnerships. OHCD will continue to play an active role organizing and implementing transitional and permanent housing ventures and/ or programs.
In June 2004, the Mayor directed the Task Force on Homeless Services to complete a “Ten Year Plan to End Homelessness in Philadelphia.” To achieve this directive, the Philadelphia Continuum of Care will bring the thoughtful, expert planning conducted by several existing groups into one set of goals and objectives for ending all homelessness in Philadelphia. The Mayor’s Task Force on Homeless Services (MTF) was established by Mayor John F. Street in 1998 to allow the broader community to monitor the effects of the Sidewalk Behavior Ordinance, plan for additional supports for homeless individuals on the street, and educate the public about homelessness. The Sidewalk Ordinance stipulated that local police may not issue a citation to a homeless person until an outreach team has been called and given the opportunity to offer services to the individual.
To encourage the promotion or development of housing for homeless families or individuals with special needs, development funding awards to CDCs and other developers are contingent on development and setaside of transitional and permanent special-needs housing. All rental projects must set aside at least 20 percent of the units developed for the special-needs population which includes the homeless, elderly, physically disabled, mentally ill, those with mental retardation and developmental disabilities, substance abusers and persons with HIV/AIDS.
The work of strategic planning for Philadelphia’s Continuum of Care continues to be influenced by the document “Our Way Home: A Blueprint to End Homelessness in Philadelphia” (“The Blueprint”), legislative results of the Sidewalk Behavior Ordinance, and the priority of ending chronic homelessness. The City seeks to facilitate a coordinated, integrated approach to addressing homelessness in its urban areas. Philadelphia’s overall strategy for ending chronic homelessness is threefold: increase the availability and accessibility of permanent housing options; increase appropriate service utilization by those who are chronically homeless; and research and implement, to the extent feasible, new options to address the needs of hard-to-reach populations. Whenever possible, City initiatives utilize public and private sector advisory committees to coordinate policy, planning and service provision. The results of these initiatives also influence the strategic planning for determining Philadelphia’s homeless priority and housing needs. The City proposes to continue the provision of funding to support the development of transitional and permanent housing for homeless and special-needs populations through competitive RFPs.
14
Objectives for Meeting Homeless Needs Philadelphia’s strategy for ending chronic homelessness for 489 sheltered and 145 unsheltered homeless individuals (634 total) is threefold: 1) increase the availability and accessibility of permanent housing options; 2) increase appropriate services access and utilization by those who are chronically homeless; and 3) research and implement, to the extent feasible, new options to address the needs of hard-to-reach populations. The City has continued to make progress towards its goal of being the first city in America to end chronic homelessness. Specifically, the CoC: Continued to implement the New Keys Program, which targets 60 chronically street-homeless individuals; and the Home First Program, funded under HUD, Health and Human Services (HHS) and the Veterans Administration (VA) through the Interagency Council on Homelessness Collaborative Initiative to Help End Chronic Homelessness, which targets 80 chronic homeless with long shelter histories. Philadelphia’s “housing first” strategy now consists of two programs with a total of 140 slots. Initiated the process of obtaining Medicaid funding for New Keys and Home First services.
Homelessness
Opened Our Brother’s Place, a low-demand shelter consisting of 150 beds and day programming for single men.
Obtained mayoral and gubernatorial support for the Ten Year Plan process to end chronic homelessness.
Appointed a full-time Director of Chronic Homeless Initiatives for the City of Philadelphia, whose role is to coordinate with the Outreach Coordination Center, Safe Haven and mental health housing providers, and the various systems that serve chronically homeless individuals, including the City’s Office of Behavioral Health, the VA, the prison system and others.
Additionally the City will continue to strengthen its Continuum of Care by helping homeless persons achieve self-sufficiency through the provision of supportive services, if appropriate, and housing opportunities as identified in the following objectives: • homelessness prevention;
Initiated monthly data analysis to count the number of chronically homeless individuals, using outreach, behavior health, and city shelter data. The last count was 489 unduplicated individuals in the city and Behavioral Health System (BHS)funded shelters and 145 unsheltered homeless for a total of 634 chronic homeless individuals.
•
outreach, intake and assessment;
•
emergency shelter;
•
transitional and permanent housing development;
•
rental assistance;
•
supportive services such as substance-abuse treatment, mental-health services, HIV/AIDS services, case management, life-skills training, employment training and placement, transportation, child care and education.
Through the 2004 McKinney planning process, requested and was awarded funding for 52 new beds or units specifically for chronically homeless individuals.
Table 3.3: Proposed Accomplishments: Homelessness Estimated Households Assisted FY ’04 - ’06
FY 2004
FY 2005
FY 2006
Outreach/Assessment 1
4,519
4,971
5,423
Emergency Shelter 2
4,767
2,899
3,044
Transitional Housing 3
489
553
594
Permanent Housing
225
250
275
10,000
8,673
9,336
Totals
1. The projections are calculated by adding a 10 percent increase annually over the actual 2004 number which was 4,519 total. Outreach/assessment includes outreach, Connections, and for the first time this year, the FassT Program which provides outreach/assessment to families with behavioral health needs in shelter. The actual number for FY 2004 for outreach only was 3,811. 2. These numbers represent the number of new households projected to be assisted in shelter with the exception of FY’04, which is the actual number of new households assisted. The reason there is such a large drop from FY’04 is that new households in the relocation unit were being counted as well as those new to the shelter system and there was some duplicate counting. 3. Beginning in FY’05, this number includes 327 fixed sites and 226 units in three scattered-site programs under OESS/OHCD. This does not include SHP TH grants where HUD contracts directly with the provider for the units. In FY 06 and FY 07, new units anticipated via SHP to serve special populations are included. Note: The above numbers represent the new households proposed to be assisted.
15
Strategic Plan
Non-Homeless Special Needs The housing needs of non-homeless persons with special needs are great and most populations with special needs require supportive housing. Services provided to residents of supportive housing include case management, medical or psychological counseling and supervision, child care, transportation and job training.
Table 3.4 Summary of Estimated Housing Needs* Non-Homeless Special-Needs
Est. Est. Housing Pop. Needs
Persons with AIDS (EMA)
9,500
4,000
Persons with HIV (EMA)
20,000
8,000
Frail Elderly
30,000
7,500
Persons With Disabilities
354,409
66,000
Mental Health/ Mental Retardation
121,500
12,000
N/A
3,000
Substance Abuse
* Estimates of non-homeless special-needs population and housing needs are derived from information gathered from various public and private agencies as identified in the “Needs Assessment.”
Basis for Assigning Relative Priority Needs The category of non-homeless persons with special needs includes the most diverse population with the widest array of needs. Many persons with special needs are also the most dependent on government for their income and fundamental support while others are self-sufficient and only need accessible and appropriate housing. The City designates the following needs as priorities: transitional and permanent housing development, rental assistance and supported housing for persons with disabilities including people with HIV/AIDS and housing adaptations for persons with physical disabilities. These priorities are developed using information gathered from those City offices which assist persons with mental illness, mental retardation, drug- or alcohol-abuse issues and HIV/ AIDS and from information requested of private-sector agencies and advocates who assist persons with various special needs. As discussed in the section on homelessness, the priority of developing transitional and permanent housing and the City’s shelter census and housing needs should be considered with 16
reference to the federal funding climate, capacity limitations of project sponsors and neighborhood planning issues. Special-Needs Populations Because of the diversity of the special-needs population, it is important to design programs appropriate for many different needs. Historically, many housing programs for persons with special needs have come through the health or social welfare systems specific to individual type of special need. Thus, congregate care for persons with severe developmental disabilities has grown out of the developmental disabilities system while persons in recovery from addiction have entered residential treatment programs which may also provide transitional housing. Persons with physical disabilities may need only accessible units in order to live independently. Since persons with HIV/AIDS desire to live in their own, independent housing units as long as possible while availing themselves of a wide range of in-home services, rental assistance has been a primary focus in HIV/AIDS housing. The City supports housing programs which allow each person with a special need to live as independently as possible and which provide the appropriate level of supportive care for each person’s unique condition. Necessarily, a range of programs must be supported which allow for a continuum of care. The increasing number of persons who are dually diagnosed with more than one condition means that different departments and providers must increasingly work together in order to provide the best housing and supportive care possible. Not only must new, additional specialneeds housing units be created, new programs which can serve persons with more than one special need must also be created or supported. Following is a description of the major programs targeting each special-needs population.
Elderly Persons Philadelphia’s elderly population continues to grow despite declines in the overall population. There are an estimated 205,000 seniors living in Philadelphia with an average age of 75 years. The greatest proportion (50 percent) of seniors are in the 65-75 years old category. While the number of older persons 65+ is projected to decline over the next decade, the number of older persons 85 years old and older is projected to increase over the same period. A large number of seniors in Philadelphia are low-income: one third of the City’s elderly homeowners and 43 percent of elderly renters live on low incomes.
Non-Homeless Special Needs
A large proportion of seniors are living on their own (36 percent) or with one other person (41 percent). The majority (78 percent) of seniors in Philadelphia are homeowners. The types of housing-repair needs amongst senior homeowners are roof repair (17 percent) and plumbing repair (13 percent). Data from the Philadelphia Senior Center, Center in the Park and Intercommunity Action Inc. indicate that seniors are also requesting assistance with emergency fuel, heater replacement and weatherization. In addition to repair grants for elderly homeowners, these numbers suggest that there is also a need for affordable rental housing, programs to prevent vacancy and abandonment after a senior dies and technical assistance on senior issues for developers who are considering creating senior housing. In addition, there is an identified need for housing support for the 51,000 seniors (60+) who are caregivers to a sick spouse/partner, relative or friend as well as the 7,775 grandparents who are raising grandchildren. The housing needs of low-income seniors are inextricably linked to the challenges that can accompany aging, including increasing physical limitations, medical conditions and a diminishing circle of friends and family. Consequently, housing support for seniors must incorporate services to address this variety of needs. OHCD proposes to commit development subsidy funding support to elderly housing development projects that have commitments of HUD 202 financing. The OHCD subsidy is capped at $15,000 per unit, based on a dollar-for-dollar match of other funds and the availability of OHCD resources.
Persons With Disabilities There is an increased and growing demand for the development and availability of affordable and accessible/barrier-free housing for low-income persons with disabilities. There are an estimated 354,409 people with disabilities (1 in 5) who live in Philadelphia. An estimated 66,000 Philadelphians with disabilities are in need of permanent, affordable, accessible housing of their choice. Additionally, more than 70 percent of people with severe disabilities are unemployed and receive annual assistance of $6,000 or less. The City supports the expansion of affordable and accessible housing through program development and modification activities in compliance with federal requirements. OHCD does not mandate that supportive services be linked to any disabled-housing activity. The City requires full federal accessibility compliance regarding the production of all City-supported rental
and homeownership development projects. However, effective July 1, 2004, the City established the accessible housing development requirements at 10 percent for mobility and 4 percent for hearing and vision impairments for all rental and homeownership units developed with City financing. Unfortunately, the current low-income housing production industry does not produce affordable, accessible housing in sufficient supply to meet the demand of the population in need (families and individuals) due to limited local, state and federal funding resources. Additionally, OHCD proposes to commit development subsidy funding support to affordable, accessible housing development projects that have commitments of HUD 811 financing. The OHCD subsidy is capped at $15,000 per unit, based on a dollar-for dollar match of other funds and the availability of OHCD resources. OHCD understands and supports the desire of the disabilities community to have complete choice in their selection of housing. The only limitation to this support is that the OHCD housing development program is based upon the principles of neighborhood revitalization/community development. OHCD requires that developers and property managers of all City-funded housing leave accessible units open for a minimum of 30 days at initial rent-up or sale or following vacancy by the previous tenant, unless the unit is leased by or sold to a household with a person needing the accessibility features of the unit, in order to market the unit during this time exclusively to the disabled community . OHCD has developed a new resource to facilitate marketing accessible units directly to households that need the available accessibility features. Effective Dec. 1, 2003, developers and managers of OHCD-funded projects were required to post both newly developed accessible units and vacancies in existing accessible units on the Home Finder feature of the Technical Assistance Program (TAP) website. In order to ensure the success of the Home Finder, OHCD notified the disabled community about the website and has provided several trainings to both the disabled community and developers/property managers on how to use this feature. One of the goals of OHCD includes assisting persons with disabilities who desire homeownership as well as integrating persons with disabilities into the community. OHCD encourages persons interested in homeownership to utilize the housing counseling agencies as a resource for information and advice. Supported by the City, the Adaptive Modification Program affords low-income, disabled Philadelphians 17
Strategic Plan
accessibility to their homes by rendering adaptive modifications. However, due to continuing increased demand, and the age of the Philadelphia housing stock (which often necessitates additional home repairs so that adaptive modifications can be made), requests for adaptive modifications continue to exceed local program resources. To increase the program’s ability to respond to requests in an expedient manner, the City in conjunction with the Philadelphia Corporation for Aging (PCA) continues to apply for and has been granted Pennsylvania Access Grant Program funding through the Department of Community and Economic Development (DCED).
roadmap for the future and the beginning of an ongoing commitment to strategic planning.
Persons with Mental Illness Two years ago, the Philadelphia Office of Behavioral Health (OBH) launched a two-stage strategic planning process. The first stage, completed in 2003, resulted in the restructuring of OBH so that it would be better positioned to respond to the contemporary needs of consumers. That reorganization led to an Executive Order by Mayor John F. Street creating the Office of Behavioral Health. The Mayor’s order brought the Office of Mental Health (OMH), the Coordinating Office for Drug and Alcohol Abuse Programs (CODAAP), and Community Behavioral Health (CBH), a private agency that supports behavioral health services for the citizens of Philadelphia, under one roof.
The City has implemented a Housing First Strategy to address the housing needs of chronically homeless individuals/families with co-occurring substance abuse and mental health issues. Historically, this population represents the most difficult to serve of the homeless. The “housing ready” requirements of traditional supportive permanent housing programs typically preclude this group from eligibility. The principles of the “housing first” model include affordable, permanent housing in a location chosen by the participant that is linked to supportive services; support services that are flexible and individualized but not mandatory; and integration of service, accessibility and individual autonomy. In a collaboration among several organizations, the City has implemented two such programs, New Keys and Home First.
Led by a director (Arthur C. Evans, Ph.D.), and interagency executive committee and six steering committees, the office focuses on providing comprehensive services and ensuring high-quality care. This integration effort has made it easier for the behavioral health system to assist populations with special needs and those with multiple occurring issues. OBH now serves more than 100,000 service users and family members each year through 300 community-based providers. The restructuring of OBH laid the foundation for the second stage of strategic planning where the goal was to enhance services. OBH reached out to the behavioral health community, believing that broad participation in strategic planning would produce the best ideas for better services. The effort proved successful with a large number of stakeholders participating in the planning process. In addition to involving the community, OBH devised a planning process designed to produce achievable outcomes. Now, OBH in tandem with stakeholders, must create a prioritized agenda to implement recommendations and develop strategies to make them a reality. At present, OBH is preparing a detailed and specific 18
Persons in Recovery Individuals recovering from substance abuse need additional permanent housing resources, particularly to support the recovery process upon completion of transitional housing or half-way house programs. In addition to the increased availability of housing for this population through the Special-Needs Development Program, the McKinney Shelter Plus Care Program has enabled new units of housing to be developed and designated for persons in recovery.
Persons With HIV/AIDS and Families of Persons With HIV/AIDS The City supports housing activities for persons with HIV/AIDS across the continuum of care as needed. This continuum begins with persons who can live independently (with rental assistance, emergency payments, housing counseling and information and referral), to those who need more assisted living arrangements (including those with mental illness and those in recovery), to persons who need extensive supportive housing arrangements. As administrator of the HOPWA program, the City has funded HIV/AIDS housing developments and programs throughout the region, including the four Philadelphia suburban counties. Due to an increase in AIDS incidence reported by the City of Philadelphia to the Centers for Disease Control, the City secured an increase in formula funding under the HOPWA program in Year 27. The City proposed to use the additional funding in Year 27 to support a Shallow Rent Program (funded over two program years) and to support housing development financing to create new affordable units for people with HIV/AIDS. HUD did not approve the City’s request for waivers to implement
Non-Homeless Special Needs
the Shallow Rent Program. In Year 31, OHCD proposes to continue funding HIV/AIDS housing development financing at a somewhat reduced level due to a reduction in HOPWA funding.
Public Housing Residents Philadelphia has approximately 30,518 public housing residents living in developments and scattered-site units owned by the Philadelphia Housing Authority (PHA). For many low-income Philadelphians, PHA housing represents the only affordable housing option. OHCD plans to continue its participation in the planning efforts for major developments.
Strategy and Objectives for Meeting Priority Non-Homeless Special Needs There is an increasing need to combine affordable and accessible housing production with social services as needed to meet the specialized service needs of lowincome Philadelphians. Housing production alone may no longer be adequate and may require the provision of coordinated service delivery to support residents. The supportive service demands of persons with special needs are diverse. The levels and kinds of services vary widely. Some persons require only housing counseling and assistance to find housing. Other persons need homemaker services or other inhome services such as food delivery or medical supports. Other more fragile persons such as the mentally disabled or persons in the advanced stages of AIDS require supportive housing environments which offer on-site care. Intensive residential treatment programs which combine housing with mental-health or substance-abuse counseling are needed by some persons while others can benefit from these services while living more independently in rental assistance units. The City, through the Department of Public Health, Office of Emergency Shelter and Services (OESS), other departments and the private sector must provide a critical and wide range of housing and services for persons with all levels of special needs. The primary activities which the City will pursue to assist non-homeless special-needs populations include: housing production, adaptive modification, rental assistance and as needed, support services and facilities.
Non-Homeless Special-Needs Housing Production Through rehabilitation and new construction, new adaptable or accessible units are created. To the extent feasible, all new construction housing development projects must include “visitability” design features. In order to promote transitional and permanent housing development in Philadelphia communities, OHCD proposes to continue the practice of requiring that all rental assistance housing development projects selected for funding include “special needs” units equal to at least 20 percent of the total number of units developed. OHCD’s 20percent requirement will create new special-needs units in all OHCD-funded rental developments. PHA developments undergoing substantial rehabilitation will meet Section 504 requirements and provide additional units. Moderate rehabilitation programs allow disabled persons to remain in their own homes. Non-Homeless Special-Needs Housing Production Objectives The City has identified the need for more permanent housing as a critical goal in its housing and community development strategy. Pursuing increased funding and continuing to take advantage of opportunities to develop more housing for older adults, recovering substance abusers, physically and mentally disabled persons and people with HIV/AIDS continue to be areas of activity. Specific objectives that work toward this goal are: •
rehabilitation of rental units for large families and the elderly with low incomes;
•
home and basic system repairs for income- eligible elderly and persons with disabilities;
•
adaptive modifications to residences occupied by people with disabilities;
•
development of rental and homeownership accessible housing that is integrated within the community for people with disabilities as well as the development of housing that meets “VisitAbility” guidelines;
•
pre- and post-mortgage counseling to prepare persons with disabilities for homeownership;
•
technical assistance to the low-income housing development and program service community to promote affordable and accessible housing production for low-income persons with disabilities and the elderly; and,
•
housing counseling for low-income persons with disabilities and the elderly.
19
Strategic Plan
Non-Homeless Special-Needs Housing Assistance and Support Services Through rental assistance and housing counseling, assistance is provided to meet the immediate housing needs for persons with special needs, including the dually diagnosed. Rental assistance and housing counseling have been primary components of the City’s housing program for persons with HIV/AIDS and are funded through the Housing Opportunities for Persons With AIDS (HOPWA) program. Non-Homeless Special-Needs Housing Assistance and Support Service Objectives Acquisition to serve persons with special needs is largely incidental to rehabilitation and new construction in order
to provide sites for these primary activities. A small number of properties may be acquired for direct transfer to individuals or to groups serving these populations. However, in many cases housing production alone may not be adequate and may require the provision of coordinated service delivery to support residents. The City supports assistance to persons with special needs through the following objectives: •
acquisition assistance;
•
rental assistance, other housing assistance and supportive services to persons with HIV/AIDS; and
•
housing counseling for persons with disabilities, including persons with HIV/AIDS.
Table 3.5: Proposed Accomplishments: Non-Homeless Special-Needs Estimated Households Assisted in FY ’04 - ’06 HIV/AIDS Elderly Substance Abuse Persons With Disabilities Totals
20
FY 2004
FY 2005
FY 2006
925
900
885
60
80
90
0
0
0
150
155
155
1,135
1,135
1,130
Non-Housing Community Development
Non-Housing Community Development Basis for Assigning Relative Priorities The Philadelphia City Council through legislation adopted in 1982 mandated that no less than 50 percent of CDBG funds, exclusive of administrative and program management costs, be allocated to housing programs which benefit very low, low- and moderate-income persons. In May 2001, City Council mandated that at least 5 percent of CDBG funds be spent on economic development activities carried out by community-based organizations. Philadelphia has emphasized housing activities as the highest priority in its CDBG program and this emphasis is expected to continue in the future. As an aging urban community, Philadelphia faces challenges in many areas which are eligible for CDBG assistance. The priorities listed below reflect the emphasis on housing and economic development activities and the lower priority of most other types of activities. Nonhousing CDBG-eligible activities for which the City intends to spend CDBG funds are categorized as high priority needs. Activities on which the City will spend non-CDBG funds (usually locally generated revenue, state funds or non-HUD federal funds), or on which the City intends to spend CDBG funds in the context of housing program activity or where only a minimal amount of CDBG funds will be spent, are categorized as medium priority items. Low priority items are those for which there is a clear need but which will not normally receive City funding.
High Priority Needs Economic Development Needs After housing activities, the highest priority for Philadelphia’s CDBG program has been in economic development activities which create or retain jobs for low- and moderate-income persons. Philadelphia’s economy once supported a labor force of close to 1 million. The City now employs hundreds of thousands fewer persons. Even in periods of relative prosperity, the City’s job growth is disappointing. Revitalizing Philadelphia’s commercial and industrial sector is a necessary measure to promote job retention and job creation. Using CDBG and other local, state and federal funding through the Commerce Department, the Philadelphia Industrial Development Corp. (PIDC) and the Philadelphia
Commercial Development Corp. (PCDC), the City supports commercial-industrial rehabilitation, infrastructure and other improvements, supports business development and provides technical assistance. These categories, therefore, are considered high priority needs. Fair Housing Counseling, Tenant/ Landlord Counseling The City recognizes that many low- and moderateincome persons with housing needs can be assisted through a program of comprehensive housing counseling, including pre-purchase, post-purchase, mortgage default and delinquency, landlord/tenant and fair housing counseling. OHCD funds communitybased and citywide agencies to carry out this program. Existing rental assistance and housing counseling/ homebuyer assistance programs are a means of promoting nondiscrimination in Philadelphia neighborhoods. Since these programs are not “place-based” and can be associated with consumers and dwelling units anywhere in the city, they appear to be effective mechanisms to support fair housing. Other fair housing actions taken by the City are described in the Consolidated Annual Performance and Evaluation Report (CAPER). Planning and Capacity Building OHCD will continue to provide and coordinate a variety of resources and support services to be made available to established CDCs and newly emerging CDCs and non-profit organizations as they increase their capacity and further their organizational development. By supporting neighborhood-based planning activity and capacity building for community organizations, OHCD is better able to channel entitlement resources to targeted neighborhood revitalization projects that address the true needs of the community.
Low and Medium Priority Needs Public facilities are categorized as low or medium priority needs. Facilities such as health centers and parks and recreation centers normally receive direct City funding and are therefore considered medium priorities. Facilities which usually are privately funded or receive indirect City funding are considered low priorities. Infrastructure improvements, including water and sewer improvements, street improvements and the like, receive City funding and are therefore considered medium priority items. Sidewalk improvements (site improvements) are CDBG-funded only when they support an affordable housing development, and are therefore also categorized as a medium priority need. Public service needs are both privately and publicly funded. Accessibility, historic preservation, energy 21
Strategic Plan
efficiency and lead-based paint hazards are considered medium priority needs since they are CDBG-funded in the context of affordable housing development only. Code enforcement is considered a medium priority since it receives ongoing local government funding. Employment and training activities are primarily funded by the Philadelphia Workforce Development Corp. (PWDC) and are considered a medium priority. Only a minimal amount of CDBG funds support activities which are ineligible for PWDC funding.
Strategy and Objectives for Meeting Priority Non-Housing Community Development Needs The City’s non-housing community development plan complements its housing strategy by linking housing development with economic development and by supporting activities that serve to create jobs and revive commercial enterprise at the neighborhood level. In this way, communities can be targeted for comprehensive revitalization which involves coordinated investment in the commercial and industrial sectors; in people through the provision of employment and training opportunities (i.e., human capital investment); and in the housing stock. The goal of the City’s community development plan is to foster the creation and maintenance of healthy neighborhoods which support viable commercial and retail establishments, provide employment opportunities for their residents, and access to economic opportunities throughout the city and region. The following strategies will help to restore community vitality and end the economic isolation of Philadelphia’s low-income neighborhoods. Advancing Employment and Training By coordinating housing revitalization with economic development initiatives that help stabilize the city’s employment base and create or retain jobs for lowand moderate-income people, the City’s housing resources can help improve the economic prospects of Philadelphia residents. A community development strategy which requires substantial affirmative action and neighborhood resident employment and training could generate an economic development benefit for Philadelphia neighborhoods comparable to the impact of some of the largest downtown development projects of the past decade. The City can provide only very limited support to employment and training activities. Because of funding constraints, only activities ineligible for PWDC funding can be supported. The Neighborhood Benefit Strategy is a citywide initiative that serves to fortify the link between housing development activities and local job expansion. In 22
January 1995, Mayor’s Executive Order 2-95 was issued, requiring that every developer receiving CDBG subsidy funding work with OHCD and neighborhood organizations to try to achieve a goal of returning 50 percent or more of the economic benefit of the CDBG-funded venture to the immediate and surrounding neighborhood. OHCD will assist developers in creating Neighborhood Benefit Strategies by providing information about workers, contractors, consultants and suppliers located in the same zip code as the development site so that first consideration can be given to drawing on these community resources. After opportunities in this zip code have been fully explored, opportunities in adjacent and nearby zip codes will be considered, with information and technical assistance provided through OHCD. As a last step, opportunities to employ, contract and purchase in other areas of Philadelphia will be considered before resources are drawn from outside Philadelphia. Objectives for Advancing Employment and Training The fundamental goals of the City’s employment and training strategy are: to prepare unemployed residents for occupations in emerging sectors of the economy; to coordinate housing revitalization with economic development initiatives that help stabilize the city’s employment base and create or retain jobs for lowand moderate-income people; and maximize the access of community residents to programs and services administered by the PWDC.
Building the Capacity of Community Organizations The City proposes to support activities that increase the capability of community-based organizations to participate in developing and implementing neighborhood strategic plans, supported by OHCD development funding combined with capacity-building services. Since Year 16 OHCD has worked with technical assistance providers and funders to establish a technical support program for CDCs and other non-profit organizations engaged in community development and revitalization. Supportive services and resources have included board training, assistance in establishing fiscal management systems, core and advanced development training, market studies to support project planning and more recently, the development of neighborhood strategic plans and access to the Neighborhood Information System.
Non-Housing Community Development
Neighborhood strategic planning is most effective when organized and implemented at the neighborhood level by community-based organizations of two kinds: Neighborhood Organizations, which get community members involved in proposing, reviewing and responding to development projects and longterm plans; and Community Development Corporations which plan and implement specific real estate development ventures. Neighborhood Organizations: OHCD maintains a standing commitment to provide information to and coordinate planning activities with neighborhood organizations throughout Philadelphia, from block groups to area-wide coalitions. To advance neighborhood strategic planning, priority commitments of OHCD resources are made to neighborhood organizations which: •
are governed by boards of directors democratically elected by neighborhood residents, with most board positions held by neighborhood residents;
•
hold regular open public board and general meetings; and
•
involve the general community in decision- making on major issues.
Most neighborhood organizations function without office and staff, and operate entirely on a volunteer basis. In some areas of significant housing and community development activity, OHCD has funded neighborhood organizations to carry out neighborhood planning and community organizing services. Community Development Corporations (CDCs): CDCs are organizations governed by community members and legally incorporated to carry out specified development responsibilities within a defined geographic area. Some CDCs are affiliated with non-profit and/or volunteer neighborhood organizations. In an effective neighborhood strategic plan, CDCs implement real estate development ventures which are proposed and/or reviewed by neighborhood organizations and are approved by the community at large. OHCD defines the term “community development corporation” broadly to include non-profit organizations which engage in either of the following activities: •
Direct development activities, including acquisition and planning (the completion of marketing studies and architectural/ engineering work for specific development projects), financial packaging for development projects, general contracting, construction management, development administration, leasing and property management;
•
Development planning and promotion activities, including area-wide planning and area-wide and project-specific marketing and promotion to attract development and investment.
Community-based organizations are critically important to the effectiveness of neighborhood strategic planning because these organizations have first-hand knowledge of community needs and existing conditions; are committed to ensuring that community development benefits (such as production of quality housing and creation of jobs for residents) are achieved; and are accountable for development decisions because they are located in the community and are governed by community members. For these reasons, building the capacity of community organizations for neighborhood strategic planning has been a high priority for the City. Objectives for Community Organization Capacity Building Through pursuing a strategy of Community Organization Capacity Building, the City seeks to revitalize Philadelphia communities by strengthening its partnership with existing CDCs and supporting the establishment of new and developing CDCs. Objectives associated with Community Organization Capacity Building are: •
CDC support services and planning; and
•
neighborhood strategic planning.
Community Economic Development Community economic development strategies serve to promote business development and retention, encourage entrepreneurship among low- and moderate-income residents and provide technical assistance and financing to small businesses. These efforts are designed to restore a thriving economic base to Philadelphia’s neighborhoods, which is needed to provide additional employment opportunities for the city’s residents as well as to bolster the commercial/industrial sector in low-income communities. Community economic development activities are carried out by the three primary public and quasi-public economic development agencies in the city: the Philadelphia Industrial Development Corp. (PIDC); the Philadelphia Commercial Development Corp. (PCDC); and the City of Philadelphia’s Commerce Department, which receive funding from the CDBG as well as other local, state, private and federal sources. Detailed descriptions of proposed Community Economic Development Activities for the upcoming fiscal year are provided in the “Action Plan” section of the Consolidated Plan.
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Strategic Plan
Minority/women/disabled business development and expansion are also critically important to Philadelphia’s community economic development. Housing and community development funding is a powerful resource which must influence significant progress in these areas. OHCD proposes to continue the following actions: •
working closely with developers and builders to establish affirmative action and community employment/training plans at the beginning of development project review and establishing specific commitments to employment and training as a key factor in developer selection;
•
strengthening local resources available to assist minority/women/disabled business development and community employment and training, including working capital and performance bonding for contractors, quick voucher payment and on-site involvement of the PWDC to promote project-related employment/training opportunities to community residents; and
•
obtaining private-sector suppor t to address significant minority/women/disabled business development and community employment and training needs including availability of private financing and financial services for contractors, improved contractor access to insurance coverage and increased coordination with local building trades to expand training programs already initiated through the building trades.
Objectives for Community Economic Development Effective community economic development strategies can lead to the restoration of healthy, stable communities. Reinvestment in sound commercial, retail and industrial ventures in Philadelphia’s neighborhoods will help to reverse the crippling effects of decades of disinvestment. The following objectives will be undertaken through a coordinated effort among the city’s economic development agencies: •
small business loan/grant initiatives;
•
neighborhood economic development; and
•
minority/women/disabled business development.
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Neighborhood Revitalization Strategy In conjunction with a funding award from the U.S. Department of Housing and Urban Development (HUD) Economic Development Initiative (EDI) to establish a Homeownership Zone in the Cecil B. Moore neighborhood, OHCD has designated a portion of the Cecil B. Moore community as a Neighborhood Revitalization Strategy (NRS) area, as defined in the Consolidated Plan regulations at 24 CFR Part 91.215 (e)(2). The area in question is bounded by North 20th Street on the west; North Bouvier Street on the east; Master Street on the south; and Montgomery Avenue on the north. The area lies primarily within a federally designated Empowerment Zone and, in accordance with HUD guidance, is presumed by HUD to meet the requirements for a NRS. In addition to planned Empowerment Zone activities, which are described in detail in the Philadelphia and Camden Empowerment Zone Strategic Plan and in the Performance Review Reports (submitted biannually to HUD), the NRS area has been targeted for substantial residential development. Housing development activities have been funded with Homeownership Zone funding awarded by HUD ($5.52 million in EDI grant and $18 million in Section 108 Loan funding) as well as local CDBG and HOME funds. The plan for the Cecil B. Moore Homeownership Zone calls for the creation of 296 new units of homeownership housing. The NRS has allowed for a mix of incomes in the Homeownership Zone: up to 49 percent of all units developed have been made available to households with incomes of up to 120 percent of median income. The remaining 51 percent of housing units have been sold to low-and moderate-income households (with incomes at or below 80 percent of median). Planned expenditures of entitlement funding to support housing activities within the Cecil B. Moore Homeownership Zone/NRS area during the current fiscal year are described in the “Action Plan” under “Other Actions.” The map on the following page depicts the Cecil B. Moore Homeownership Zone/NRS area.
Non-Housing Community Development
Cecil B. Moore Homeownership Zone (NRS Area) in relation to the North Central Philadelphia Empowerment Zone boundary
1234 1234 1234 Homeownership Zone North Central Philadelphia Empowerment Zone
Bouvier Street
Montgomery Avenue Cecil B. Moore Avenue Oxford Avenue Jefferson Street
Thompson Street
18th Street
6th Street
Poplar Avenue 10th Street
13th Street
N
Girard Avenue
Broad Street
19th Street
20th Street
23rd Street
Master Street
Summary The City of Philadelphia’s Three-Year Strategic Plan is comprised of strategies which intersect the areas of affordable housing, homelessness, non-homeless special needs and non-housing community development. Integrated approaches recognize the close relationship between each of these priority need areas and the reality that individual strategies can simultaneously address housing, supported housing and community development needs. The City’s nonhousing community development strategy stresses
the link between housing production and community economic development—directly through the expansion of neighborhood jobs in the construction trades and indirectly by eliminating the blighted conditions that repel new businesses and potential business patrons. Leveraging private sector resources is another strategy that has application to affordable and supported housing production as well as to community development efforts.
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Strategic Plan
Geographic Allocation of Resources Poverty in Philadelphia is concentrated in distinct sections of the city—North Philadelphia, east and west of Broad Street; West Philadelphia; and parts of South Philadelphia, Northwest Philadelphia and Kensington/ Frankford. The 2000 Census documented that North Central Philadelphia (where 42 percent of the population was living below the poverty level) continues to have by far the greatest concentration of poverty. Twenty-nine percent of West Philadelphia, 25 percent of South Philadelphia and 22 percent of Northwest Philadelphia residents were also below the poverty line. Even here, however, conditions in specific neighborhoods have been much worse. Forty-four percent of the population in the distressed West Philadelphia neighborhood of Mantua and 34 percent of Point Breeze residents in South Philadelphia were living in poverty in 2000. The overwhelming need in these areas has dictated concentrated investment through CDBG and other programs. The general characteristics of these targeted areas of the city are described below, and additional detail on Year 31 activities by neighborhood is provided in the “Action Plan” section of the Consolidated Plan.
North Philadelphia The collapse of the manufacturing base of North Philadelphia’s economy in the 1960s, ’70s and ’80s led to a withdrawal of 43 percent of the community’s population between 1970 and 2000. According to the 2000 Census, 42 percent of North Philadelphia’s population is living in poverty, approximately twice the citywide figure. By 1980 depopulation also left the area with thousands of long-term vacant houses. For the past 15 years, OHCD has targeted much of its CDBG allocation to the North Philadelphia Plan District. This area encompasses 14.3 square miles. It is bounded on the south by Spring Garden Street, on the north by Route One and Wingohocking Street, on the west by the Schuylkill River and on the east by Front Street, “B” Street and Whitaker Avenue. It includes census tracts 130-142, 144-149, 151-157, 162-169, 171-176 and 194-203. Due to limited resources, it is impossible to renovate or rebuild more than a small portion of the district’s housing stock in any given year. Therefore, it is important to identify for rehabilitation those blocks where the City’s efforts can leverage a larger process of neighborhood recovery. North Philadelphia’s large tracts of vacant land have been identified as a priority for large-scale new-construction efforts such 26
as the Cecil B. Moore Homeownership Zone, Poplar Nehemiah development, APM Pradera Homes and Ludlow Village. The area of North Philadelphia East of Broad Street is one of the most diverse and distressed sections of the city. Located here are several Philadelphia Housing Authority (PHA) housing developments, including Richard Allen Homes, a HOPE VI development site. The American Street Corridor and Kensington Avenue constitute the eastern boundaries of the North Philadelphia Plan. Despite the poverty, there is an active real estate market in Eastern North Philadelphia which is the center of Philadelphia’s growing Latino population. Of four North Philadelphia census tracts that showed population increases from 1990 to 2000, three were in that area.
Kensington/Frankford/Northeast The area east of Front Street along the Delaware River has undergone enormous economic change in the last four decades as many factories closed and as a result, some families moved. New immigrants have joined the older residents in many communities. The area includes census tracts 143, 158-161, 177-193, 293-302, 315-318, 325-326 and 330-332. OHCD investment in these areas has included housing rehabilitation, strategic new construction and open space management programs.
West Philadelphia After North Philadelphia, West Philadelphia has received the next greatest share of CDBG resources for neighborhood planning, housing rehabilitation and economic development. The area includes census tracts 52-75, 77-88, 90-96, and 100-116. OHCD has funded neighborhood planning through community groups in Belmont, Carroll Park and Parkside. The renovation of row homes, rental units and PHA scattered-site houses in West Philadelphia had been a priority for OHCD in the 10 years through Year 19. These projects provided about 625 affordable housing units with Years 13-17 funding for a total public and private investment of more than $24 million. Parkside, Mantua, Belmont, Mill Creek, Carroll Park, Dunlap, Southwest Philadelphia, Paschall and Eastwick previously received development support from OHCD. OHCD investment in West Philadelphia has emphasized rehabilitation of large apartment buildings, scattered-site single family rehabilitation and large scale new construction. PHA’s funded Mill Creek HOPE VI venture will comprehensively revitalize the area around 46th Street, from Haverford Avenue to Lancaster Avenue.
Strategy for Removing Barriers to Affordable Housing
South Philadelphia South Philadelphia is one of the most economically and racially diverse areas of the city. Neighborhoods of desperate poverty coexist with those of considerable affluence, held together by a strong middle-income foundation of single-family row homes. The section of South Philadelphia targeted for OHCD assistance is comprised of census tracts 13-51. South Philadelphia neighborhoods that have received OHCD assistance include Queen Village, Pennsport, Whitman, Hawthorne, Point Breeze and Southwest Center City. Significant development initiatives in selected neighborhoods remain. The Port of Philadelphia is the newest Enterprise Zone under the auspices of the Commerce Department.
Northwest Philadelphia Northwest Philadelphia, encompassing Germantown, East Falls, Logan, Ogontz, West Oak Lane, Mount Airy and Chestnut Hill, is among the city’s most diverse sections. It includes census tracts 204, 205, 232-233, 236-239, 240-249, 252-253, 265-271 and 274-286. OHCD investment has focused on Lower Germantown, Logan, West Oak Lane and Fern Rock-Ogontz-Belfield.
HOPWA Resources In distributing Housing Opportunities for Persons With AIDS (HOPWA) resources through the entire metropolitan area, OHCD has worked with the two regional Ryan White CARE Act planning councils, AIDS advocates and AIDS organizations to allocate resources roughly in proportion to the AIDS caseload within the region. This distribution mirrors the way in which HOPWA funding is allocated nationally. Within the five counties of southeastern Pennsylvania, it is the City’s intention to provide funding roughly in proportion to the AIDS caseload. It is important to emphasize that, according to federal regulation, any housing assistance provided with HOPWA funds must be equally available to any eligible resident of the region, regardless of place of residence. OHCD enforces this provision contractually. More importantly, the needs assessment specialists at Intercultural Family Services, HOPWA-funded housing counselors and AIDS case managers throughout the region routinely refer clients for services outside their immediate localities when assistance is available.
Strategy for Removing Barriers to Affordable Housing Two main local issues can be identified as barriers to affordable housing development: the public property acquisition/disposition process, and the high cash requirement for first-time homeownership. Since 1993, the administration of public acquisition and disposition activities has been centralized at the Redevelopment Authority. While the process still remains cumbersome, clear lines of responsibility have been established and there is now one point of contact for the public and for developers wishing to obtain cityowned property. More importantly, eminent domain through the state’s Act 94 and Urban Renewal processes has replaced the Sheriff Sale as the primary means of acquiring privately owned, tax-delinquent or blighted properties. Condemnation is a less risky, faster means of acquiring privately owned, tax-delinquent or blighted properties than the Sheriff Sale process. As part of NTI, the property acquisition and disposition process will be streamlined and selected vacant land will be landbanked for future development. Philadelphia’s high transfer tax and down-payment requirements for obtaining a mortgage have hindered many low- and moderate-income families from becoming homeowners. In 1994, the effect of the transfer tax was partially mitigated by an exemption of properties conveyed to low- or moderate-income buyers by non-profit housing development corporations. In addition, transfers to non-profit housing development corporations which intended to re-convey to low- or moderate-income buyers were also exempted. The City has provided settlement assistance grants using NTI bond proceeds to help low- or moderateincome first-time homebuyers address the issue of cash required to purchase a home. In Year 30, the City received American Dream Downpayment Initiative (ADDI) funds which will help first-time homebuyers, especially those purchasing OHCD-assisted houses in areas of rapid price appreciation. In addition, the City is concerned about the potential impact of a strengthened housing market on lowerincome individuals who live in changing areas or who desire to purchase properties in these areas. Using NTI bond proceeds, in Year 31 the City will establish an Equitable Development Strategy to address these concerns. This program is more fully explained in the “Action Plan” and in the NTI Program Statement and Budget. 27
Strategic Plan
Lead-Based Paint Hazard Reduction Strategy Lead-Based Paint Hazards in Philadelphia Housing Lead is the leading cause of non-congenital mental retardation. Elevated blood lead levels in young children can lead to a range of problems from relatively subtle developmental disabilities to severe impairment or even death. Common effects include impaired cognition and functioning, slowed learning abilities and behavioral disorders. Often these manifestations are subtle during early childhood but become more pronounced as children progress through school. In the past four years Philadelphia has had at least one lead-related death. Lead poisoning is most likely to occur in old, poorly maintained dwellings with deteriorated paint. Philadelphia’s housing stock is largely pre-war; an unusually high proportion of lowincome residents own their houses but lack the means to prevent water damage and decay while those who must rent face an extreme shortage of safe, affordable rental housing. Though it has declined markedly in the past few years, there is still an alarming incidence of childhood lead poisoning in Philadelphia. More than 2,000 young children currently have blood lead levels above the Environmental Intervention Blood Lead (EIBL) level— 20 micrograms per deciliter (ug/dL), or two consecutive readings between 15 and 19 ug/dL—and approximately 3,500 are above the 10 ug/dL “level of concern.” Response to Lead Poisoning Until recently, public lead-hazard reduction activities have been primarily reactive: they are targeted to properties where a child has been identified with an EIBL level. The Health Department’s Childhood Lead Poisoning Prevention Program (CLPPP) offers remedies based on the blood lead level found in children 6 months to 6 years old. Children are screened through a citywide network of hospitals, public health clinics, private doctors and schools. EIBL levels are confirmed by laboratory reports. In addition to providing direct medical intervention as appropriate, the City seeks to minimize further lead exposure in the leadpoisoned child’s home environment. For children with blood lead levels of 70 ug/dL or higher, CLPPP attempts an environmental investigation at the home (or other suspected lead source) within 24 hours after EIBL is confirmed. Based on recent experience, only a few such cases are expected in FY 2005. For 28
children with blood lead levels between 45 and 69 ug/ dL, an environmental investigation is attempted within five working days after test results are received in the district health office. The investigation rate for this intermediate level of lead poisoning is approximately 90 percent. In less extreme, asymptomatic cases (where there may have been no physician follow-up), parents often have little sense of urgency. Despite follow-up contact attempts by Health Department staff, the expected investigation rate is only 70 percent. Following its hazard investigation, the Health Department orders the property owner to take corrective steps. When necessary it is empowered to declare properties unfit for human habitation. The objective of enforcement is not abatement (the permanent elimination of lead hazards), which is often prohibitively expensive, but hazard reduction. Hazard reduction uses a combination of measures to make the property currently lead-safe. As such measures are not necessarily permanent, this approach requires ongoing monitoring and control. Even the desired level of hazard reduction, however, is likely to cost several thousand dollars. When properties are deteriorated from lack of maintenance, extensive repair may be a necessary precondition. Thus hazard reduction can be prohibitively expensive for a low-income owneroccupant or for the owner of a low-income rental property whose cash flow barely covers current costs. The Health Department’s own crews are able to do emergency hazard control in a few properties per month. Under its “order and bill” authority, the department can have an abatement contractor do hazard control work (for which it then attempts to reclaim the cost from the owner); until 2002 this authority was seldom used. For several years very limited financial assistance, primarily through HUD grants, was available for hazard reduction. Most of it was targeted to low-income owner-occupants. As of February 2002, there were 1,405 properties with outstanding lead violations—636 rental units and 769 owner-occupied houses. About 2,100 children under age 6 were believed to be living in these properties, which are highly concentrated in the poorest neighborhoods of North Central and West Philadelphia. On average, violations are found in 36 new addresses each month. Renewed Commitment Recently the lead-poisoning danger to Philadelphia children has engendered an unprecedented level of public concern and political pressure. In the FY 2003 budget hearings, the Health Commissioner was
Lead-Based Paint Hazard Reduction Strategy
questioned about the adequacy of CLPPP’s lead hazard control services. Program capacity had been far less than would be needed to correct new violations found each month and ultimately eliminate the backlog of outstanding violations. The administration agreed to reallocate funds to make possible a large increase in the number of abatement crews. It directed city departments to work together in addressing the various facets of the problem. In close consultation with the Health Department, the Managing Director’s Office/ Adult Services (AS), Office of Emergency Shelter and Services (OESS), Department of Licenses and Inspections (L&I), Department of Human Services (DHS), and City Solicitor’s office—as well as OHCD, PHDC and PHA—framed a concerted strategy for bringing properties with lead violations into compliance. The Health Commissioner convened two interdepartmental teams, including representatives of all these agencies, which meet regularly to develop plans and monitor progress. With greater speed than normal procurement procedures allow, six experienced private lead abatement contractors were hired. Thanks to the cooperation of Municipal Court, a special Lead Court was established to deal with rental-property owners who ignore Health Department orders. For owneroccupied houses that need system repairs (such as structural repairs or a new roof) before abatement, the repair work is done either by PHA (which the Health Department reimburses) or through PHDC’s Basic Systems Repair Program. Arrangements were made to relocate families temporarily in furnished, lead-safe apartments or in motels while hazard control work was done in their homes. Facing serious legal sanctions, many previously uncooperative landlords took steps to bring their properties into compliance. By December 2004 the backlog of more than 1,400 outstanding violations had already been reduced to less than 500, most of which had no children present; no new cases were added to the backlog.
Since receiving approval to start work in February 2004, the department has completed remediation in 142 homes. More than 500 applications have been received for the grant. In addition, the department is a partner with the Commonwealth of Pennsylvania’s Lead Hazard Control Project. Since that Project began in April 2004, the department has completed 35 properties and expects to complete the remainder by May 2005.
In 2003, the Health Department obtained compliance with lead hazard abatement orders in 626 homes through a combination of increased enforcement and the availability of limited grant funding. More than 800 children resided in those homes and 733 had elevated blood lead levels. Last year the department was awarded a Lead-Based Paint Hazard Reduction Demonstration Grant.
In addition, under a local consent decree, lead hazard control work is required in all vacant properties to be sold by HUD as a result of FHA mortgage default. The Health Department is under contract with the local HUD office to inspect and clear this work.
In 2004, 424 houses were brought into compliance, with 624 children associated with these homes. The number of children with elevated blood lead levels was reduced to 552.
Primary Prevention The Residential Lead-Based Paint Reduction Act of 1992, known as “Title X, “ established a policy of primary prevention—eliminating lead hazards in the country’s housing stock rather than responding when children have already been harmed. Consistent with federal policy, the City has attempted to develop strategies and incentives which reduce children’s exposure to lead before they become lead-poisoned. An early step in this direction was a “disclosure” ordinance passed by City Council in 1995 in anticipation of the federal disclosure regulations later mandated by Title X. This ordinance gave consumers the right to obtain information about the lead safety of a residential property before buying or leasing it. The Health Department’s “Lead Safe Babies” Program provides outreach and education to new mothers and pregnant women. CLPPP workers identify potential hazards in homes and attempt to correct them. Under a new Title X regulation which finally took effect in FY 2001, steps must be taken to reduce lead hazards in almost all housing that receives HUD federal assistance—regardless of the status of current residents. Significant attention must now be given to lead hazard control in virtually all the City’s housing repair, rehabilitation, acquisition and rental assistance activities. The required level of intervention varies depending on the type of program and the amount of federal rehabilitation funding or rental assistance per unit.
In all of its housing rehabilitation programs which create new housing units, the City requires that properties be made lead-safe. Wipe tests are required. Through the Neighborhood-Based Homeownership, Neighborhood-Based Rental, Large Scale New Construction, Homestart and Homeownership Rehabilitation Programs, approximately 500 new leadsafe or lead-free units are created annually.
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Strategic Plan
Anti-Poverty Strategy Philadelphia’s housing problems will remain intractable as long as a high proportion of its population is economically dependent and lacks access to the skills and resources needed to succeed in today’s economy. According to 2000 Census data, approximately 23 percent of Philadelphia’s population have incomes at or below the poverty standard. The continued departure of jobs from the city as well as the higher educational requirements for occupations in the growing sectors of the economy have made it increasingly difficult for city residents from low-income communities to obtain stable, well-paying jobs. Measures which connect people to the labor force, support the creation of small businesses and encourage entrepreneurship among low-income residents are necessary to improve the economic prospects of city’s residents and alleviate poverty. The following initiatives help low-income residents gain access to jobs, skills and capital, and form the core of the City’s Anti-Poverty Strategy: •
•
The Neighborhood Benefit Strategy was inaugurated through Mayor’s Executive Order 2-95 and requires developers receiving CDBG funding to set a goal of returning 50 percent or more of the economic benefit of the CDBGfunded venture to the immediate and surrounding neighborhood; and The Empowerment Zone Strategy being implemented in the designated neighborhoods will generate new job opportunities, support local enterprises and help revitalize local neighborhood economies.
In addition to these core initiatives, job-training activities are undertaken by a number of local agencies including OHCD, PHA, OESS, the Department of Human Services and PWDC. Representatives from these agencies and other service providers meet regularly to coordinate resources and promote economic self-sufficiency programs. Several programs serving homeless persons include a self-sufficiency component. For example, Dignity Housing, Project Rainbow and People’s Emergency Center provide life-skills training and other services designed to increase economic and social selfsufficiency. PHA’s Family Self-Sufficiency Program provides Housing Choice Voucher rental assistance to program
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participants who also receive remedial education, counseling, job-training referral and placement. Education is another primary strategy that can aid in the reduction of poverty. Volunteers from the Mayor’s Commission on Literacy help Philadelphians improve their reading skills, and link education with neighborhood-based organizations. Effects of Welfare Reform Federal and state welfare reform will continue to have an effect on the city as more residents lose benefits by exceeding their lifetime limit or failing to meet work requirements imposed by the state. Homelessness and the demand on city social services are likely to increase as this happens. For example, the rising number of Philadelphia residents without Medical Assistance/Medicaid has resulted in more visits to city health care centers by uninsured individuals: in FY 1996, 49 percent of the visits to health care centers were by uninsured visitors while in FY 2001 that number reached 64 percent. Since FY 2003, efforts by the City’s Health Department to enroll patients in Medical Assistance and other insurance has reduced the number of uninsured visits to 53 percent, as of November 2004. Full enforcement of welfare reform and further policy changes produced by the federal and state governments may also have revenue impacts to the city. Philadelphia’s Department of Human Services depends heavily on federal support through the Temporary Assistance for Needy Families (TANF) program. Currently, increased City spending on health centers and human services continues in an effort to address the needs of TANF households as their resources are depleted. The City continues to maintain CDBG and HOME funding for critical housing and community development needs, and does not divert housing or community development funds to specific welfare reform activities. However, beneficiaries of these programs and funding sources do include families currently receiving or transitioning off TANF benefits.
Strategy for Improving the Institutional Structure
Strategy for Improving the Institutional Structure Planned Reorganization As part of the Neighborhood Transformation Initiative, the City will reorganize and streamline the public agencies which carry out affordable housing activities. Currently, much of the City’s housing development and preservation activities are carried out principally by three agencies—the Office of Housing and Community Development (OHCD), the Redevelopment Authority (RDA), and the Philadelphia Housing Development Corp. (PHDC). The City will reorganize and integrate many of the City’s housing and community development functions within the Office of Housing and Neighborhood Preservation (OHNP), under the leadership of a cabinet-level secretary reporting directly to the Mayor. The first Secretary of Housing and Neighborhood Preservation was appointed by the Mayor in December 2002. OHNP will focus on the following critical activities: •
speeding up the acquisition and disposition of vacant property;
•
emphasizing and creating incentives for private housing development;
•
instituting performance measures for the achievement of specific housing-related goals, including the development of 16,000 new housing units in the first five years;
•
monitoring and evaluating existing programs to determine their success and continued viability;
•
financing the preservation and stabilization of existing housing; and
•
facilitating access to the City’s housing programs by the public, including private developers.
An integrated approach will generate other benefits as well. Each of the three agencies currently has personnel, MIS, purchasing and legal operations. Reducing administrative costs will provide more funding for housing and other program activities. Because of its unique role and the extensive federal requirements under which it operates, the Philadelphia Housing Authority (PHA) will not be part of the actual reorganization effort. Instead, PHA and the RDA, a Commonwealth instrumentality that will continue to carry out its special statutory powers, will be guided by the strategic direction established by OHNP.
City of Philadelphia Departments OHCD OHCD is responsible for all policy making and planning related to housing and community development activities. The Secretary represents the Mayor in the management and execution of City housing policy and is the administration’s chief representative on housing and community development issues. OHCD is responsible for the organization and administration of the Consolidated Plan and the housing budget, including HOME funds, state Department of Community and Economic Development funds, and HOPWA funds. OHCD administers contracts with public agencies such as RDA and PHDC as well as with subrecipient non-profit organizations which conduct planning activities and perform services in support of the CDBG and related programs. Adult Services Reporting directly to the Director of Social Services, the Deputy Managing Director for Special-Needs Housing leads Adult Services (AS). AS was created in FY ’02 and is a reorganization of City agencies who work to prevent homelessness and provide emergency and transitional services to assist households in obtaining and maintaining permanent homes for themselves and their families. The primary responsibility of the AS Director is to set City policy on issues that impact homelessness and access to permanent housing, including eliminating chronic homelessness and increasing permanent supportive housing. This is accomplished through working within government as well as with the private and non-profit sectors. The AS Director has line authority over the Office of Emergency Shelter and Services which provides services to prevent homelessness and assists those who are homeless with shelter and support services. The Director also oversees Riverview Home, a personal care boarding home that provides housing and support services to vulnerable adults. In FY ‘03, AS created the Housing Support Center as a joint venture with DHS to assist households with worst-case housing need in their efforts to secure or maintain affordable housing.
Other City Departments Other City departments play lesser roles in providing affordable housing opportunities. The Office of Behavioral Health and Mental Retardation (OBH/MR) has primary responsibility for placing MH/MR clients. DPH’s AIDS Activity Coordinating Office (AACO) contracts with social service agencies for case management services. The Department of Licenses and Inspections enforces local building codes. The Commission on Human Relations enforces local non-discrimination laws. In Year 19, the 31
Strategic Plan
responsibilities of the Fair Housing Commission, which resolves disputes between landlords and tenants over rent increases and practices, were transferred to the Commission on Human Relations. The Mayor’s Office of Community Services (MOCS) administers the Community Services Block Grant and operates a network of neighborhood offices which aid in the distribution of food to the poor, help low-income persons apply for the Low-Income Home Energy Assistance Program, and act as advocate with utility companies and government agencies. The Mayor’s Commission on People With Disabilities assists disabled persons needing housing by acting as advocate and by referring to the appropriate resource. The City Planning Commission and Philadelphia Historical Commission provide the requisite environmental and historical reviews for federally funded projects.
Commonwealth of Pennsylvania and Related Agencies DCED The Department of Community and Economic Development (DCED) of the Commonwealth of Pennsylvania administers housing and redevelopment funds which are annually appropriated by the state legislature. Philadelphia has used DCED funds for its home-repair programs, for acquisition and to help finance homeownership and rental rehabilitation and new construction developments. DCED administers Pennsylvania’s federally funded weatherization program which is designed to reduce home-energy costs for low-income persons. Under contract to DCED, PHDC administers the weatherization program in Philadelphia. PHFA The Pennsylvania Housing Finance Agency (PHFA) is a state-chartered authority which issues bonds and funds affordable housing programs. PHFA funds are one component of many development financing schemes. In addition, PHFA provides low-interest mortgage loans for first-time homebuyers and provides mortgage counseling and restructuring aimed at preventing mortgage default.
Non-Profit Organizations Community Development Corporations Philadelphia has a large number of community development corporations (CDCs), many of which meet HUD’s definition of a Community Housing Development Organization (CHDO). CDCs are neighborhood-based corporations which are able to evaluate a community’s perceived development needs and desires. Housing development and 32
economic development efforts are then designed to meet these needs. CDCs may rehabilitate vacant and deteriorated buildings for resale to low- or moderateincome buyers or for rental purposes. Some CDCs also sponsor job banks or training programs, provide housing counseling, operate home-repair programs, or undertake commercial development. Recently, CDCs have built new-construction houses as a costefficient way to provide affordable housing. OHCD’s policy is to provide a substantial portion of its resources to housing activities sponsored by CDCs. In fact, whenever an eligible neighborhood is served by a CDC the City is committed to carrying out housing production through that organization. OHCD also works closely with the Philadelphia Association of Community Development Corporations (PACDC), a non-profit organization that serves to support CDC activity by providing technical assistance and by advocating for the interests of CDCs in the public arena. In addition to CDCs, there are several citywide private non-profit corporations which undertake housing rehabilitation and development. These organizations carry out a variety of activities including rental property management, permanent housing for the homeless, home-repair loans, community improvements and “sweat equity” homeownership development projects. Neighborhood Planning Organizations and Neighborhood Advisory Committees OHCD funds Neighborhood Advisory Committees (NACs) throughout the CDBG-eligible service area. NACs are governed by boards elected by their communities and are funded to provide neighborhood input on housing and community development and to provide information and outreach about affordable housing programs and related services. Non-Profit Housing Counseling Agencies Philadelphia supports a wide range of agencies which provide housing counseling services aimed at combating predatory lending, preventing homelessness, increasing homeownership and assisting individuals with landlord/tenant disputes. Some agencies provide services to specific at-risk populations, such as the elderly, the disabled or abused women, while other agencies provide services to the general population. The Homeownership Counseling Association of Delaware Valley was created to better coordinate the resources and activities of the strong network of housing counseling agencies that serve the Philadelphia region. OHCD will continue to work closely with both the association and individual counseling agencies to
Strategy for Improving the Institutional Structure
ensure that high-quality housing counseling services continue to be made available to area residents. Housing counseling aimed specifically at the homeless or at preventing homelessness is provided by several agencies which offer services ranging from rental assistance to life-skills development. Housing-related legal services are provided by at least three entities in the Philadelphia area. Community Legal Services represents low-income clients who have housing-related legal problems, including landlordtenant cases, mortgages and deeds, and disputes with home-repair companies. Regional Housing Legal Services offers legal assistance to non-profit housing agencies and CDCs. The Public Interest Law Center of Philadelphia is dedicated to protecting the right of housing consumers to live where they choose by enforcing fair housing laws.
Section 8), private owners are able to rent to lowincome families who could not otherwise afford the rent necessary to carry the expenses of the building. The extreme shortage of new Housing Choice Vouchers, however, has led to vacancies in some buildings while families remain on waiting lists. The high cost of rehabilitation and the low rents which poor Philadelphians can pay has meant that private developers are able to rehabilitate vacant buildings for affordable units on a large scale only with public subsidies. OHCD, PHFA, low-income and historic tax credits have all been used successfully for financing. The end of the federal Rental Rehabilitation program (called MEND in Philadelphia) has cut off one source of subsidy, especially for smaller developers. Philadelphia’s homeless population is cared for through a network of boarding homes and shelters largely run by private providers who contract with OESS.
Private Sector
Philadelphia Housing Authority
Several private entities that are active in Philadelphia provide financing for affordable housing developments. The Reinvestment Fund pools investments from individuals and institutional investors including religious organizations, educational institutions, corporations and foundations to provide a loan fund for housing development. The Local Initiatives Support Corp. (LISC) is a national non-profit corporation which is instrumental in providing project development funding for affordable housing projects. The Philadelphia Urban Finance Corp. provides short-term financing for projects using funds loaned by local churches and religious congregations.
The Philadelphia Housing Authority (PHA) is a statechartered agency which administers low-rent public housing and the Housing Choice Voucher program. PHA is governed by a five-member Board of Commissioners, two of whom are appointed by the Mayor, two by the City Controller and the fifth member by the other four. Traditionally, the fifth member is a PHA tenant who has been recommended by the tenant organizations. Having representatives appointed by the Mayor involved on the PHA Board helps provide effective oversight and ensures that PHA, City and HUD activities are well-coordinated.
In 1991, the Pew Charitable Trust announced a series of grants to support community development and neighborhood organizations, many of which also do housing development. Other local foundations may provide specific funding on occasion. During 1994, new state legislation was enacted which made it possible for businesses to obtain state tax credits for contributions to non-profit organizations, including CDCs. In Philadelphia, an initiative known as the Philadelphia Plan was organized in order to link local businesses with non-profit and communitybased organizations and to support these organizations through use of the tax-credit benefit. This state tax credit program was revised in 2004. Private Developers and Providers Many private developers, landlords and others provide affordable housing in Philadelphia. Through the Housing Choice Voucher program (formerly known as
Overcoming Gaps The housing agency reorganization will integrate housing and community development functions within OHNP. The office will be responsible for setting housing and community development policy and implementing the programs to carry out those policies. In coordination with NTI goals and funding, incentives will be created for private-market development, along with a continued emphasis on affordable housing funded with CDBG resources. OHNP will continue the coordination with the Deputy Managing Director for Special Needs Housing in planning and developing low-income housing, especially for persons with special needs, including the homeless. The Mayor’s Community Development Group, composed of the leadership of OHCD, PHDC, RDA, NTI, the Empowerment Zone (EZ), Philadelphia City Planning Commission (PCPC), OESS and PHA meets monthly with the Mayor to share information and coordinate responses to issues of common concern. 33
Strategic Plan
Strategy for Improving Coordination Intergovernmental Coordination Under the housing agency reorganization, the functions carried out by OHCD, PHDC and RDA will be integrated into the Office of Housing and Neighborhood Preservation, headed by a cabinet-level Secretary. In 2004 the City hired a consulting team to review the existing structure and make recommendations to the Secretary of OHNP. At the present time, OHCD serves as the coordinating center for the predominant share of federal funds that the City receives for housing rehabilitation and development. The OHNP Secretary is responsible for overseeing policy formation, planning, and program development related to the rehabilitation of significantly deteriorated and vacant housing and to the provision of housing assistance to low- and moderate-income homeowners and renters. The OHNP Secretary also advances the City’s interests in relation to PHA and works with the Deputy Managing Director for Special-Needs Housing to coordinate housing initiatives related to the homeless and other populations with special needs. OHCD exercises its coordinating function by three means: •
•
•
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Development of Consolidated Plan. OHCD is responsible for the preparation of the Consolidated Plan and annual applications for DCED funds. While it does not prepare the specific plans for modernization of public housing and for the provision of social services for the homeless, its role in integrating these plans into the Consolidated Plan helps ensure distinct City housing initiatives reinforce one another. Administration of CDBG funds for community development. OHCD has the authority to administer the CDBG. Programs are carried out by quasi-public agencies, public authorities, non-profit development groups and service providers, and for-profit developers under contract to OHCD or its major delegate agencies. The contracts define the objectives to be achieved by each initiative and spell out appropriate timetables and milestones for performance. This contractual system enables OHCD to oversee the implementation of most housing plans developed by the City. Monitoring of agencies administering CDBG programs. In its role as contracting agency, OHCD is responsible for monitoring all agencies implementing programs for rehabilitation
and housing assistance. The role of monitor enables OHCD ensure housing programs are executed in a timely and efficient manner. In addition, the Mayor convenes a monthly meeting with the directors of OHCD, RDA, PHDC, PHA, NTI, EZ, OESS and PCPC to discuss community development.
Private Sector The City has taken steps to increase coordination among intergovernmental agencies and the private sector through ongoing communication and planning sessions.
Services to the Homeless The mission of the City of Philadelphia’s homelessservices system is to provide a coordinated continuum of services to enable homeless men and women to obtain and maintain permanent homes for themselves and their families. The lead entity is the City’s Director of Social Services-Office of Adult Services, created in 2001, which is the sole public agency dedicated to providing services to individuals and families who are experiencing homelessness. It assists in their transition to independence and self-sufficiency. To achieve this, the Office of Emergency Shelter and Services (OESS), a unit within Adult Services, provides a variety of services including prevention and diversion, short-term shelter placement, case management, referral to alternative housing options and adult protective services. However, these efforts also involve a number of other City agencies, including OHCD, the Department of Public Health and the Department of Human Services. OHCD collaborates with OBH/MR, the Office of Social Services-Office of Adult Services, OESS, and AACO in issuing Requests for Proposals (RFPs) for transitional and permanent housing for the homeless. The purpose of these joint efforts is to maximize resources and ensure that all subpopulations are being served through the housing programs. OHCD also has provided technical assistance funding to the Greater Philadelphia Urban Affairs Coalition (GPUAC), a non-profit organization which assists other private organizations through workshops on homelesshousing and supportive services. In addition, the City participates in GPUAC’s Homeless Blueprint Committee which includes various private-sector participants. The Committee aims to alleviate the homelessness crisis in Philadelphia.
Strategy for Improving Coordination
An OHCD representative serves on the United Way Community Impact Planning Committee along with other private and public representatives. The purpose of this committee is to establish policy and planning strategies needed to create a greater level of selfsufficiency and community improvements with local United Way resources.
Services to Persons With HIV/AIDS In 2000, the City restructured the Ryan White Planning Council and eliminated the Housing Committee of the Philadelphia HIV Commission as a standing committee. OHCD now appoints an HIV/AIDS Housing Advisory Committee. Through this committee, local government representatives as well as advocates, persons with HIV/AIDS and service and housing providers meet to advise OHCD on HIV/AIDS housing policy and programs. DPH’s AIDS Activity Coordinating Office (AACO) convenes a Housing Admissions Committee comprised of Health Department staff, housing providers, case managers and others who make appropriate referrals for persons needing rental assistance.
Affordable Housing The Director of OHCD meets with the board of directors and staff members of CDCs to discuss policy and issues affecting the development of affordable housing by non-profit corporations. OHCD supports the Philadelphia Association of Community Development Corporations and the Homeownership Counseling Association of Delaware Valley.
Elderly Persons OHCD works primarily with the Philadelphia Corporation for Aging (PCA) on issues affecting the elderly. OHCD participates in the Senior Housing Advisory Group which includes representatives from state funders, advocates and service and housing providers. The group discusses issues in the provision of support services and housing to the elderly. OHCD also provides financial support to the Vacancy Prevention Program which works to proactively prevent housing abandonment with an emphasis on the elderly homeowner. OHCD continues to fund Interac’s Senior Housing Workshop Series: Matters of the Hearth. This consists of seven seminars providing technical assistance and advice on a range of topics specific to seniors including: home repairs, sale of home, home improvement/lifestyle enhancement, legal issues and a housing resource fair. In addition, OHCD funds three housing counseling agencies that have expertise in working extensively with the elderly: Center in the Park, Intercommunity Action Inc. (Interac) and the Philadelphia Senior Center.
Coordination With the State OHCD coordinates its planning and development efforts with DCED. OHCD submits annual funding applications to DCED to support a range of activities, including housing preservation programs. OHCD is responsible for administering DCED funds through contracts with PHDC or other non-profit agencies. OHCD staff work closely with DCED staff in monitoring the implementation of DCED-funded programs.
Persons With Disabilities OHCD coordinates activities with the Mayor’s Commission on People With Disabilities, the Office of Adult Services and other advocates. In addition, OHCD funds Diana T. Myers & Associates to provide technical assistance regarding accessible housing, fair-housing law and related matters of interest to individuals and organizations involved in housing persons with disabilities. Myers & Associates accomplishes this through symposia, workshops, meetings, a newsletter, clearinghouse announcements and a website. As of Dec. 1, 2003, the website features the Home Finder, a resource designed to assist developers/property managers in marketing accessible units to the disabled community.
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Strategic Plan
Public Housing Resident Initiatives The mission of the Philadelphia Housing Authority (PHA) is to provide quality housing to eligible persons, to deliver services efficiently, effectively and with integrity, to educate, advocate and increase opportunities for self-sufficiency for residents, to maintain strong relationships with residents, to contribute to the environment which enhances productivity, promotes respect and builds professionalism, and to manage resources effectively. PHA’s Board of Commissioners has adopted a resolution which promotes and ensures the institutionalization of Resident Initiatives.
Moving to Work In 2002, PHA was designated one of more than 30 local housing authorities to be allowed exceptional flexibility in consolidating programs and in using HUD-funded resources. PHA’s Moving to Work (MTW) demonstration program is expected to focus on helping families achieve self-sufficiency and on improving and increasing the stock of quality affordable housing throughout the city. PHA is presently working with HUD to agree upon a specific, comprehensive range of activities which will assist families in reaching their full potential and promote the revitalization of neighborhoods where MTW and MTW-eligible families live.
Education and Career Training A new youth program, Skills for Life, aims to connect youth to the world of work and the education necessary to achieve career success. It targets eighth-graders who are considered “at risk” because they have scored below basic on the Scholastic Achievement Test and demonstrated weakness in the core academic areas of English, science and math. The program’s goal is to equip students with the necessary academic and social skills to graduate from high school and enter post-secondary education. Skills for Life also offers computer instruction and laptop computers for their use while enrolled. It is the first of its kind in the nation with public/private donations for public housing children being used to provide year-round employment, educate and mentor youth from high school to graduation. The program provides services directly through neighborhood-based organizations. Partners in Skills for Life are the Philadelphia Workforce Development Corp./Philadelphia Youth Network, Philadelphia School
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District, Greater Philadelphia Federation of Settlements and the Boy Scouts Explorer Program. In partnership with the Department of Human Services and its Family Centers, Point Breeze Performing Arts Center, and Freedom Theater, PHA has expanded its after-school programs to serve additional school-aged youth.
Section 3 and Economic Development Programs and support are provided to residents to prepare them for meaningful public and private employment. Residents are provided support in utilizing resources made available at the local, state and federal levels. Residents seeking employment are included in a skills bank and matched with available positions. Positions are identified within and outside of PHA, and as part of the Section 3 requirements and Resident Hiring Policy. Residents also receive Adult Basic Education and GED instruction through referrals to PHA community partners. Training Opportunities Training opportunities are coordinated with the Philadelphia Workforce Development Corp., the Pennsylvania Department of Public Welfare, Temple University and the Pennsylvania Department of Labor and Industry. Pre-Apprenticeship Program This program helps prepare public and assisted housing residents for entry into Bureau of Apprenticeship and Training (BAT) approved apprenticeships in various local building maintenance and construction trades. Each major building trade – carpenters, electricians, painters, sheet metal workers, glaziers, cement masons, laborers, and plumbers – has committed to help create and teach the curriculum, supervise the on-the-job training components of the program and serve as sponsors who advocate for employment, union membership and apprentice sponsorships for PHA program graduates. The program is structured to provide educational, vocational and life skills improvement to strengthen the participants’ employability. PHA also operates a Job Retention, Advancement and Rapid Re-employment Program to provide continued support after graduation. Computer Laboratories PHA is establishing a network of computer laboratories at its developments that provide formal instruction in basic computer literacy, standard software and Internet use. The site-based laboratories are supplemented
Public Housing Resident Initiatives
by two Mobile Computer Labs operated and staffed by the PHA Police Department. The Mobile Labs provide computer access and training for residents on a rotating schedule. Stationary labs are operational at Tasker Homes (two), Westpark and Whitehall. Health Careers Training Through the Professional Healthcare Institute, PHA offers three training courses in the health professions — Certified Nurse Assistant, Pharmacy Technician and Medical Billing. Each program includes classroom and clinical training and job placement in local health care facilities. Economic Development PHA has signed a Memorandum of Understanding (MOU) with the U.S. Small Business Administration (SBA). There have been MOUs signed with city governments nationwide, but this is the first between a Housing Authority and the SBA. A One-Stop Shop will be aggressively marketed to residents of public housing for business development assistance and financing. Three residents have received business development loans through a PHA revolving loan program operated by PCDC. Homeownership PHA recently reorganized its Homeownership Program to provide comprehensive services, including coordination with CDBG-funded housing counseling agencies. Program components now include the 5h program which rehabilitates and sells Scattered Sites properties to residents, the Turnkey III program, a lease-purchase program at Whitman Park and Brown Street Village and the new Section 8 Homeownership demonstration component in which 50 families will be able to use their Section 8 rent subsidy for mortgage payments. To date, more than 250 public and assisted housing residents have purchased properties through the Homeownership Program. Resident Leadership Resident leaders actively participate in determining the course of services to be provided and offer guidance concerning general operations. Technical assistance is provided to all resident organizations to help strengthen leadership skills and capacity to service residents. In continuing PHA’s commitment to support resident management and other tenant-based programs, technical assistance is provided to resident organizations applying for training funds from HUD. As a result of their joint effort, 23 resident organizations were awarded
a grant from the Tenant Opportunity Program in the amount of $100,000. The grants are utilized to develop leadership skills and resident training opportunities and to support economic development initiatives. PHA will continue to support the development of leadership skills among residents through funding under the Capital Fund Program and other HUD and private resources. In addition to site-based Resident Councils, PHA also supports the jurisdiction-wide Resident Advisory Board and a non-profit PHA subsidiary, Tenant Support Services Inc. Tenant Support Services Inc. Tenant Support Services Inc. (TSSI) is a tax-exempt, non-profit organization created to enable PHA to pursue additional prospective funding resources which are currently unavailable. TSSI’s mission is to secure funds which will support resident programs and initiatives that will improve the quality of life for residents. TSSI has secured funds to serve additional Pre-Apprenticeship Program participants, explore the establishment of a resident credit union, provide homeownership counseling and technical assistance for several conventional developments, establish a computer laboratory in a Scattered Site community, develop resident-owned businesses, establish a Social Service Apprentice Program for residents in conjunction with Temple University and to provide leadership training for residents. TSSI has also received funding to provide fair housing education and training. Other Services and Resources for Residents Early Childhood Programs exist to support residents who are participating in job-training programs, who are currently employed or who otherwise need quality child care. PHA operates seven on-site Head Start Centers and Day Care Centers. The Head Start program provides a comprehensive, age-appropriate educational environment for children who are 3 to 4 years old. The program operates from 8:30 a.m. to 1 p.m., September through June. In addition, a full-day comprehensive educational curriculum is available for children, ages 2 ½ through 12, enrolled in the day-care program. These centers operate year round, from 7:30 a.m. to 5:30 p.m. PHA has added day care as a benefit for employees in the seven centers operated by PHA.
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Strategic Plan
Self Sufficiency Programs The Section 8 Family Self-Sufficiency (FSS) Program helps low-income families reach economic independence by linking families with private and public resources that can assist with child care, transportation, education, career and personal counseling, job training and job placement. Families participate in the program on a voluntary basis with the goal of reducing their need for public assistance and other entitlement subsidies. PHA will expand the program to include public housing residents over the next year. The HOPE VI Community and Supportive Services Programs provide comprehensive services to residents of developments undergoing rehabilitation under the HOPE VI program. Residents receive a range of services including access to job training and placement, education, case management, business development/entrepreneurship services to enable them achieve economic independence. In addition to HOPE VI programs at Richard Allen, Schuylkill Falls and Martin Luther King developments, PHA received HOPE VI funding for the Mill Creek (to be known as Lucien E. Blackwell Homes) development. The Supportive Housing Program provides intensive case management, life skills training and access to social, educational and employment services to homeless families who receive Section 8 assistance. One-Stop Shops. PHA is establishing One-Stop Shops. These facilities will feature services focusing on self-sufficiency as well as access to on-site services from other local human and social service providers. The first One-Stop Shop opened at Blumberg Apartments in Year 27 and includes 13 community partner agencies providing services to residents of North Central Philadelphia. Elderly Programs PHA operates two large and four satellite Senior Centers that provide meals, socialization, recreation and educational services to senior citizens. PHA also provides case management services at all its senior developments and operates a HUD-funded Congregate Housing Services program at Germantown House which provides two meals a day, homemaker and case management services.
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