Monday, June 4, 2018

Strategies for Responding to Gentrification

by Joe Kriesberg
MACDC
As more and more communities across the country experience gentrification—and others fear its imminent arrival—community developers are struggling to find ways to respond. At a minimum, we seek to slow, or mitigate the process to diminish the disruption to the lives of current residents. Ideally, we would find ways to create inclusive neighborhoods that welcome newcomers while enabling long-time residents to stay and benefit from new jobs, services, amenities, and maybe even better schools. Indeed, our best hope for reducing racial segregation in our country is to achieve such a result.



Not surprisingly, these issues are frequent topics of conversations I've had with members of the Massachusetts Association of Community Development Corporations (MACDC), as well as with our allies and partners. I don't presume to have answers, but I do want to offer a few ideas that I've been thinking about as those conversations have unfolded:
  • New affordable housing units (inclusionary or government-subsidized) may help retain the income mix of the neighborhood, but those units may or may not prevent displacement of existing residents because the people who move in could be from outside the neighborhood. To increase their efficacy as anti-displacement tools, we would need to offer a neighborhood preference for new tenants. Current fair housing rules, however, often prevent or severely limit such preferences.
  • Given this reality, I believe that key actors in the affordable housing system need to overcome their reluctance to acquire existing apartments and preserve their affordability before it is too late. This is the only way to truly prevent displacement of current residents since they live in buildings that already exist—not ones yet to be built. Several CDCs in Boston and nearby Somerville have begun to do this effectively. We have many brilliant affordable housing professionals in Massachusetts and we should be able to develop scalable models for doing more of this. I'm confident it can be done for less money than we now spend on new affordable housing developments.
  • The affordable housing system also needs to shift more of its resources to promoting homeownership as a stabilizing mechanism in gentrifying neighborhoods. Right now, the Commonwealth of Massachusetts spends 100 percent of its affordable housing development dollars on rental housing. Shifting 5 to 10 percent to homeownership could help stabilize our communities. Indeed, we need a full-scale effort to address the vast racial homeownership gap not only in our state, but in the rest of the country as well.
  • While housing displacement gets most of the attention, I am increasingly concerned about cultural and economic displacement. When longstanding, locally-owned small businesses are forced to move (or worse, close), it impacts not only the business owner, but the entire community. Similarly, as the demographics of a place change, many residents feel the loss of their cultural community and home. Advocates are now fighting to help local businesses stay open. CDCs and others are increasingly using the arts and creative place-making (and place-keeping) to claim (and retain) their communities' historic and cultural narratives. The good news is that, compared to housing development, these interventions are relatively inexpensive. The bad news is that there is little public funding to support such programs. This needs to change.
The biggest point of controversy, both among our members and in the broader community, is whether new housing development helps or hurts. Some argue that we must build new housing in gentrifying neighborhoods to take pressure off the market and to accommodate rising demand. Many urban planners promote greater density and large-scale development as a solution to gentrification. At the same time, others blame these very developments for accelerating the process of gentrification. They believe high-end units attract upper-income people to the neighborhood, bring higher-end retail, and begin to change the character of the place, even if they include a significant percentage of affordable units, which often are occupied by lower-income newcomers—not longstanding residents.

I agree with both sides. New development might very well speed up the gentrification process, but stopping development will also speed up gentrification, as pressure will continue to build on the housing stock in changing neighborhoods. Unfortunately, the intensity of this debate can itself become an impediment to progress because it can undermine trust among otherwise allied partners.

On balance, I'm generally inclined to support new development, but only if it is done wisely. I think we need to mitigate the impact of new development with more than just inclusionary units. Fighting over 15, 20, or even 25 percent affordability levels does not confront the core issue of neighborhood change. Instead, we should use some of the resources generated by new development to attack displacement more directly through measures such as acquiring existing properties, providing financial assistance to current homeowners and tenants, supporting locally-owned businesses, and making cultural investments that preserve a community's history and culture. We should also push for more three-bedroom units in new buildings because those units would allow more families to move into changing neighborhoods. Those families, in turn, not only might enroll children in local school,s, but they also are likely to press for improved schools, which would benefit all of the neighborhood's families.

I make these suggestions knowing there are no easy answers and no complete answers. Neighborhoods are always changing and demographics continually evolve. Sadly, in a society with vast and growing income and wealth inequity, these dynamics are going to continue. Perhaps the only long-term and scalable solution to gentrification and displacement is to restructure our economy in ways that will make it more fair and equitable.


This post is a response to the Panel 6 papers that were presented at our A Shared Future symposium in 2017. These papers are available on the JCHS website

Friday, June 1, 2018

Winner of 2018 Best Paper on Housing Prize Focuses on Philadelphia's Efforts to Address Climate Change and Affordable Housing

by David Luberoff,
Deputy Director
The Philadelphia Energy Campaign (PEC) is an unlikely success story of a municipal climate initiative prioritizing the needs of its marginalized residents by preserving affordable housing through energy policy, according to Caroline Lauer, a recent graduate of the Harvard Graduate School of Design, whose thesis on PEC received the 2018 Joint Center for Housing Studies Best Paper on Housing Prize.

In "A Pathway to Preservation? Planning Processes at The Intersection of Climate Change and Affordable Housing in Philadelphia, Pennsylvania", Lauer, who received a Master of Urban Planning, provides a detailed case study on PEC's history and goals, and links that history to literature on both planning and public policymaking.

Credit: Philadelphia Energy Authority/Jordan Baumgarten

PEC has an ambitious set of goals, writes Lauer. It aims to create jobs, strengthen communities, cut energy bills, and reduce Philadelphia's carbon footprint by leveraging $1 billion of public and private investment over ten years. This effort, she explains, is especially notable because, while cities across the United States have been actively planning for climate change for at least two decades, equity considerations, such as the impact of climate investments on disadvantaged communities, have often been overlooked or ignored when those plans have been prepared and implemented.

According to Lauer, the Philadelphia Energy Authority, which was created in 2010, became a notable exception largely because of the values and skills of Emily Schapira, who launched the PEC campaign not long after she became the authority's executive director in 2016. Lauer observes that, while the typical focal point of an energy initiative is the fastest or most efficient way to reduce energy consumption, the focus of the PEC has been the residents who will benefit the most from the energy reduction today. She adds that by "inextricably linking equity and energy, the PEC prioritizes the needs and interests of the many low-income and minority residents" in Philadelphia, which not only has the highest poverty rate of the ten largest American cities but has relatively old, poorly-maintained, energy-inefficient housing stock. Moreover, she notes that Philadelphia, a Democratic stronghold, has had to do much of this work without significant support from the state legislature, which was overwhelmingly Republican when the campaign got underway.

Succeeding in this complex milieu, she notes, has required skilled and committed leadership that not only is attuned to equity and energy issues but also is cognizant of, and responsive to, political considerations. Combining these approaches can be difficult, writes Lauer, who observes that "community development efforts to preserve affordable housing through energy efficiency are rare." However, she adds, "PEC demonstrates that merging both objectives into one program is a viable policy option."

Wednesday, May 23, 2018

How Do We Proactively Preserve Unsubsidized Affordable Housing?

by David Luberoff
Deputy Director
Robust land bank and land trust partnerships, long-term lease-purchase programs, and low-interest renovation loans with affordability requirements are three tools that policymakers and mission-driven organizations can use to get ahead of real estate price appreciation, according to Proactive Preservation of Unsubsidized Affordable Housing in Emerging Markets: Lessons from Atlanta, Cleveland, and Philadelphia, a new working paper jointed published by the Joint Center for Housing Studies and NeighborWorks® America. Written by Matt Schreiber, a Master of Urban Planning student at the Harvard Graduate School of Design who was a 2017 Edward M. Gramlich Fellow in Community and Economic Development, the paper draws on work done by public and non-profit entities in all three cities.

North Philadelphia (Credit: Tony Fischer/Flickr)

In those places, Schreiber notes, median house prices range from $60,000 to $250,000, which suggests that they have an ample supply of affordable units. However, housing in those markets actually remains out of reach for so many residents, whose incomes are not growing as rapidly as house prices, which, according to Zillow's Home Value Index, rose by 8-11 percent in 2017. Such increases, and the fact that prices rose in more than 90 percent of the zip codes in those three cities, led Schreiber to ask what policymakers and the leaders of mission-driven organizations could do to get ahead of real estate price appreciation and, in doing so, proactively preserve their city's stock of affordable housing.

Schreiber used a four-part methodology to answer this question. First, he identified emerging markets; those areas that have not yet experienced the price appreciation effects of gentrification, but are likely to do so in the near future because they are close to each city's central business district, anchor institutions, or its other already-gentrified areas. Second, he reviewed the housing stock in these "likely-to-gentrify" areas, which made it clear that most of the affordable housing in these places are unsubsidized units located in one-to-four unit buildings. Third, he interviewed local stakeholders and national experts to learn their views on promising ways to find the balance between improving the quality of the housing stock while preserving its long-term affordability for low-income residents.

Those interview informed the fourth and final step: identifying and assessing three strategies that may address this challenge: building stronger partnerships between local land banks and local land trusts, creating lease-purchase programs that make homeownership more accessible for people of modest means, and offering low-interest loans that help owners renovate unsubsidized affordable units in return for long-term commitments to keep those units affordable for many years to come. Taken together, he notes, these strategies can help maximize the efficiency of the limited resources available to preserve and develop affordable housing. Moreover, the experiences in the three cities suggest "it is possible for mission-driven organizations and policymakers to get ahead of gentrification and proactively preserve vulnerable, unsubsidized affordable housing for low-income residents."

Wednesday, May 16, 2018

What Would It Take for Cities Experiencing Gentrification Pressures to Foster Inclusion Rather than Replacement?

by Katie Gourley, Graduate Research Assistant

Fostering inclusion in gentrifying neighborhoods (rather than opening up exclusive suburbs) is the focus of four working papers released today by the Joint Center for Housing Studies. Originally presented at the Center's symposium on A Shared Future: Fostering Communities of Inclusion in an Era of Inequality, the papers focus on a variety of struggles for responding to gentrification taking place in a growing number of once-poor (and largely minority) urban neighborhoods. The promising approaches discussed by the authors include creating more permanently-affordable housing in changing neighborhoods, ensuring that existing low-income and minority residents have a greater voice in local decisions, developing policies that give long-term residents access to affordable homeownership options in their neighborhoods, and carrying out research that would help policymakers design and implement better policies for addressing key issues. The four papers are:

Ingrid Gould Ellen,
NYU Wagner
Can Gentrification Be Inclusive? by Ingrid Gould Ellen notes that while gentrification raises fears of displacement, it also offers some hope because the growth in higher-income households in previously poor areas can help to shore up city tax bases and possibly spur economic and racial integration. However, she warns, absent policy intervention, integration may be only fleeting because, left to its own devices, the market is unlikely to deliver on the promise of long-term integration. After reviewing some of the literature on gentrification, Ellen discusses three promising strategies. The first is to preserve existing affordable housing units in changing neighborhoods by investing in public housing, extending affordability restrictions on privately-owned units. The second is to expand the stock of long-term affordable units by making more strategic use of publicly-owned land, as well as tools like inclusionary zoning. The third is to work with local community groups to help ensure that low- and moderate-income residents can benefit from the expanded economic, educational, and social opportunities present in gentrifying neighborhoods. However, she cautions, none of this is easy or cheap. Some deals will simply be too expensive, but city and community leaders who wish to make gentrification more inclusive should be vigilant in searching for opportunities.

Malo Huston,
Columbia GSAPP
We Live Here Too: Incorporating Residents' Voices in Mitigating the Negative Impacts of Gentrification by Malo Hutson focuses on strategies for ensuring key actors hear and respond to the concerns of long-term residents in gentrifying areas. Hutson starts by reviewing key causes and consequences of gentrification, and notes that responding to its effects requires that longstanding community residents organize and make their voices heard. Moreover, he contends, governments and developers should work to include such residents in the planning of urban revitalization project from the outset. Hutson reports that community leaders in cities like Boston, Washington DC, and San Francisco have formed (or are forming) community coalitions focused on protecting their interests and transforming their communities into sustainable, healthy communities. Moreover, unlike some past efforts, these coalitions are not fighting to stop economic development and growth; rather, they are struggling to be a part of the new economic and social transformation taking place in their neighborhoods. Many of these initiatives, he adds, make use of legally-binding Community Benefits Agreements (CBAs), which define goals for housing, employment, and other facilities and programs that will be provided by the developers of major new projects. Such approaches, he notes, require not only extensive consultation with affected communities, but also that community leaders be willing to compromise. While a willingness to compromise has become more difficult in our current hyper-polarized political and social environment, he observes, it is often necessary for a community's goals to be realized.

Colvin Grannum,
Bedford Stuyvesant
Restoration Corporation
Inclusion through Homeownership by Colvin Grannum argues that increasing and stabilizing homeownership is a tangible means of fostering inclusion in communities experiencing rising home values and gentrification pressures, such as Brooklyn's Bedford Stuyvesant neighborhood. Grannum describes several policy levers for pursuing this goal including preventing foreclosures through rigorous prosecution of predatory lending practices; establishing mission-based nonprofit funds to purchase non-performing mortgages underwritten by HUD, Fannie Mae, and Freddie Mac; and re-examining local policies, such as the use of tax-lien sales, to make sure that they do not disproportionately harm minority, working-, and middle-class homeownership. Grannum also suggests that policymakers promote homeownership opportunities for prospective working- and middle-class homebuyers, especially African Americans. Examples of such policies include expanded shared equity homeownership initiatives as well as down payment assistance, perhaps through the use of Individual Development Accounts

Vicki Been,
NYU Law
What More Do We Need to Know About How to Prevent and Mitigate Displacement of Low- and Moderate-Income Households from Gentrifying Neighborhoods? by Vicki Been notes that while local governments, land use and housing officials, and affordable housing providers and advocates are scrambling to find effective ways to counter concerns about displacement, urban policy researchers have thus far found little evidence that lower-income renters move from gentrifying neighborhoods at higher rates than they move from non-gentrifying areas. Moreover, she adds, researchers generally have not thoroughly assessed the efficacy of many policies that jurisdictions use to address concerns about gentrification and displacement. She goes on to review what is known—and what is unknown—about the six strategies that comprise the current "toolkit" for addressing gentrification and displacement. These are: preservation of existing affordable rental units; protections of long-time residents who wish to stay in the neighborhood; inclusion to ensure that a share of new development is affordable; revenue generation that harnesses growth to expand financial resources for affordable housing; and property acquisition of sites for affordable housing. She concludes by noting that policymakers considering potential remedies should be mindful of how little we know about the problem or potential solutions. That is not to say that jurisdictions should ignore the tools available; rather, the point is that researchers could provide significant value to policymakers by helping to fill some of the gaps.



Additional papers from the A Shared Future symposium are available on the JCHS website. The papers will also be collected into an edited volume to be published later this year.

Monday, May 14, 2018

What are the Impacts of Fertility Rates on Housing Markets?

by George Masnick
Senior Research Fellow
Since families with children are primary drivers of household formation and housing consumption, changes in fertility rates can have significant impacts on housing markets. But tracking and understanding those changes can be challenging, as illustrated by two seemingly contradictory high-profile accounts of changing fertility patterns that appeared earlier this year.

First came the Pew Research Center, which in January 2018 issued a report titled "They're Waiting Longer, but US Women today are More Likely to Have Children Than a Decade Ago." However, less than a month later, The New York Times published the seemingly contradictory headline: "American Women are Having Fewer Children than They'd Like."

Is it possible that both headlines were accurate? Is it possible that more women are having children while the overall fertility rate also is trending downward?

Answering these questions requires paying attention to both the measures being used to describe fertility trends and the data source used to measure the trend. Such an approach shows that it is quite possible for more women to become mothers and for all women to have fewer children overall.

Explaining the Trends

The General Fertility Rate (GFR)—the number of births per 1000 women age 15-49—has been trending downward over the past decade, according to the National Center for Health Statistics (NCHS). The drop is due to sharp declines in the number of children born to mothers younger than 30, somewhat but not completely offset by increases in the birthrate for mothers older than 30. Consequently, the total fertility rate has declined (Figure 1).

Figure 1. The General Fertility Rate Has Been Declining Due to Steep Declines Among Young Mothers


Note: Since births to women ate 45-49 are so few, they were excluded from this figure, which makes the GFR line an approximation of the General Fertility Rate.

Source: JCHS tabulations of National Center for Health Statistics, National Vital Statistics System, Data Brief 287, Births in the United States, 2016.

It is noteworthy that, in 2016, for the first time ever, the fertility rate for 30-34 year olds exceeded the rate for 25-29 year olds. In contrast, the birth rate for women in their early 30s was about twice the birth rate for women in their late 30s, a trend that has no changed significantly in the past decade. Fertility rates for women in their early 40s did inch upward over the past decade, but remain at exceedingly low levels (rising from just under 1 percent to just over 1 percent).

What about the increase in motherhood highlighted in the Pew report? Motherhood is measured in that report by the share of women in each cohort having ever had a live birth by age 40-44. While that report indicates that the share of mothers is rising, there are important questions about the magnitude of its reported increase in motherhood. Specifically, the Pew report is based on an analysis of the Current Population Survey's biannual June Supplement, which asks women detailed questions concerning all children they have had over a lifetime. And these CPS data appear to show a significant recent increase in motherhood.

However, comparing the CPS data on the share of older women who have become mothers with vital statistics data from the NCHS suggests that the CPS may exaggerate the recent trend toward greater motherhood (Figure 2). Although the NCHS estimates are only available until 2010, the trends from the two data sources roughly parallel one another and show a sharp downward trend followed by a trend upward. But most importantly, the upward trend in the NCHS data began in 2000 and is more modest (a 2.1 percent increase over a 10-year period), while the CPS upward trend began in 2006 and is more dramatic (a 6.0 percent increase in 10 years). Significantly, most of the upward trend in the CPS since 2006 is accounted for by the change between 2010 and 2012, a period which accounted for more than half of the 6-point gain between 2006 and 2016.

Figure 2. Motherhood Is on the Rise, but Perhaps Not as Much as the Current Population Survey Indicates

Source: JCHS tabulations of US Census Bureau, Current Population Surveys, National Center for Health Statistics, National Vital Statistics System, Data Brief 287, Births in the United States, 2016.

The NCHS percentages of women who have become mothers are higher, partly due to the fact that the NCHS women are slightly older (all age 44), while some of the CPS women (age 40-44) were still having children in their early 40s. The NCHS trend line is also much smoother because it is based on much larger number of people in the vital statistics database.

However, some of the differences are due to measurement errors that produced the lower motherhood shares in the CPS prior to 2012. As a 2015 Census Bureau working paper on this topic noted: "The June 2012 Current Population Survey (CPS) Fertility Supplement data showed a significant decrease from 2010 in the percent of women aged 35-44 who are childless... However, due to numerous changes in data and data processing, it is reasonable to think that some of the apparent changes shown in the data may be artifacts of changes in measurement, not an indication of an actual demographic shift."

We should not be surprised that the more reliable NCHS data show that the percentage of all women age 44 who are mothers has been trending only modestly upward since about 2000. One key factor in this shift is that the percentage of women in this age group who are Hispanic also increased, rising form just over 10 percent in 2000 to just under 20 percent in 2016 (Figure 3). The growth in the share of women in their early 40s who are Hispanic is due to two trends. First, the number of Hispanic women age 40-44 has been increasing, as the younger migrants from previous decades approach middle age. Second, the total number of women age 40-44 has been declining because many members of the smaller Generation-X cohort are now entering their early 40s.

Figure 3. The Increase in Motherhood is Due in Large Part to the Growing Share of Hispanic Women

Source: JCHS tabulations of US Census Bureau, Intercensal Population Estimates and 2016 Historical Series.

This is significant because Hispanic women at the end of their reproductive ages are more likely to have become mothers than non-Hispanics of the same age. Unfortunately, the NCHS fertility data are only available for all whites (including Hispanics) and all blacks (including Hispanics). Consequently, we cannot use the data to calculate motherhood by both ethnicity and race. However, the CPS, which does ask about both race and ethnicity, shows significant racial and ethnic differences in the share of women in their early 40s who have had at least one child. The Pew report, for example, which averaged CPS data for 2012, 2014, and 2016, calculated that 90 percent of Hispanic women in their early 40s had at least one child, compared to only 83 percent of non-Hispanic white women; 85 percent of non-Hispanic black women, and 86 percent of non-Hispanic Asian women.

Potential Impacts

The NYT article emphasized that the fertility decline in the US is consistent with declines in other developed countries; that American women are bearing far fewer children that they would like to; that declines in marriage (and sexual activity among unmarried women), along with increasing use of reliable contraception, are at the root of the fertility shortfall; and that the fertility decline has been widespread throughout the country. Regardless of the reasons, this delay in childbearing could have a variety of impacts not only on individuals, families, and society, but on housing markets as well.

Fewer births to teens and women in their early 20s, for example, should mean that more women are likely to complete high school, pursue higher education, and secure higher-paying jobs. The Pew report describes how the largest increases in motherhood have been among college-educated older women, the group with historically the lowest levels of completed fertility and the highest percent childless. Discounting the fact that these motherhood gains might not be as large as the CPS data indicate, and are partly driven by increases in college-educated Hispanics, such a trend could have important implications for housing demand. College-educated mothers are likely to have higher incomes which means they are more likely to have the financial resources to become homeowners, should the choose, or to rent larger units in locations better suited for growing families.

However, fewer overall births and smaller family sizes could impact housing consumption by making renting more likely or by reducing the demand for larger housing units. Moreover, fewer births will produce a smaller future labor force that may find it hard to support the very large generation of millennials when they reach retirement. If doing so requires higher taxes on young workers, then households may have less disposable income that might otherwise be used to pay for housing.

Regardless of the impact on housing, it is clear that some subtle but significant changes are likely to continue to affect both the overall fertility rate, and the total number of children in the US. The fertility decline would be further exacerbated if, as some policy makers are proposing, the country reduces the number of immigrants allowed to enter the United States, or prioritizes immigrants likely to have fewer children.