Community Development and Hot Markets

Posted by Josh Ishimatsu on March 31, 2015

At the People and Places Conference earlier this month, we organized a mini-track around “Community Control and Hot Markets.” On the kick-off panel, Malcolm Yeung from Chinatown Community Development Center in San Francisco cited a mind-blowing number–SRO residential hotel units in San Francisco are seeing rents on the order of $1,300 per month.

Translated on a per square foot basis, this would be over $15,000 per month for a 1,000 square foot apartment. And these are not gussied-up SRO buildings with cucumber infused water in the lobby. These are your typical SRO units, with a single room less than 100 square feet, shared bath rooms, etc. The residential market in San Francisco is such that young professionals now see SROs as viable places to live. This means massive eviction/displacement pressure on the low income folks who have historically lived in SROs as landlords clamor for new tech worker and hipster tenants.

For example, as documented in a recent San Francisco Chronicle article, a new landlord for a Chinatown SRO is right now trying to mass evict two dozen families for violations such as putting up Chinese New Year decorations and hanging laundry up to dry (a very on-trend, environmentally friendly practice, by the way). This is a crisis for the families facing eviction, the low-income residents of Chinatown, and for the San Francisco Bay Area region. And it represents a larger crisis for community development as a whole.

The Presumption of Cold Markets

Community development was born in a time of white flight and disinvestment. Our programs, underlying assumptions, and many of our basic operating tactics are still fighting the old wars of cold markets and urban “blight.” But while inner city disinvestment is still a huge problem in many places, lots of urban areas now suffer for too much of the wrong kinds of investment.

Jane Jacobs, among others, has said that a little bit of gentrification can be constructive.  But a little can very quickly become too much. All across the country, tipping points are being crossed and neighborhoods are flipping from being funky/eclectic to elite/unaffordable.

There is a body of research that correlates mixed-income neighborhoods with the likelihood that low-income families will experience economic mobility. But the rampant gentrification that we are seeing in many of our urban centers is not creating mixed income neighborhoods. It is obliterating them.

Community development, as it is currently constituted, isn’t set up to deal with what is happening.  So much of what we tried to do in the past was to get private investment flowing into our neighborhoods, and now the spigot is turned on so high that decades of hard work are being washed away.

So What Next?

Much of what we’ve been doing in hot markets more recently–organizing around community benefits agreements, pushing for inclusionary housing, etc.–while valuable, has felt a little too ad hoc. Community development needs a bigger, better, more cohesive set of programs and practices that can happen concurrently at local, regional, state, and national levels. Some quick bullet points/thoughts/questions on this, mostly pulled from side conversations at People and Places:

• Is there a way that the new Affirmatively Furthering Fair Housing rule can be applied to encourage local jurisdictions to make deeper affordable housing investments in hot neighborhoods or to encourage new affordable housing developments to have stronger preferences for local residents?

• Can there be something from HUD like Promise/Choice Neighborhoods but specifically geared towards hot markets where low-income people already live in order to create truly, permanently mixed income neighborhoods?

• There needs to be more directed, strategic investment in acquisition/rehab of small site affordable housing – the types of projects that are not typically financially efficient/competitive within most LIHTC regulatory structures;

• What about gentrification vouchers?

• Ways to make development fights less project-by-project like mandatory community impact reports assessments, inclusionary zoning–other land use/entitlement process controls;

• The displacement of low-income residents is a huge issue, of course, but we should also be paying attention to the displacement of small businesses and arts/cultural/community nonprofit institutions.

Over the next several months, National CAPACD plans to collect and expand upon many more of these ideas. We will work with our members and with our People and Places partners and their members to form a practitioner’s working group on community development and community control in hot markets. From this working group we want to build and advance an advocacy agenda and a set of programmatic practices that can be tried in different hot markets across the country. More on this as more develops.

(Photo credit: Courtesy of National Alliance of Community Development Associations)

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Josh Ishimatsu is director of capacity building and research for National CAPACD.

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