Redevelopment without Displacement

Nora Lichtash has worked in the same neighborhood in Philadelphia for 40 years, and the affordable housing organization she runs, the Women’s Community Revitalization Project (WCRP), has been around nearly as long — 31 years.

She calls the area Eastern North Philadelphia, and it's shaped almost like a perfect square that’s bounded by Diamond, Front, Girard, and 10th streets.

The area once housed many factories and the workers who labored in them. “But a lot of people left to follow the jobs, so there’s a lot of vacancy,” she explains. To be exact, in 2008, one in four lots in the neighborhood was vacant.

Vacant land, of course, piques the interest of developers, who began eyeing property in Lichtash’s neighborhoods and its surrounding neighborhoods. The result has often been urban redevelopment that has shoved decades-long residents out of the area and left them struggling to find comparable housing at rates they could continue to afford.

According to WCRP data, in 2001-2002, the vast majority of homes in East North Philly sold for $40,000 or less. “In 2006-2007, almost no homes sold for $40,000, and along the edges of the neighborhood, homes were selling for $200,000,” reports Lichtash. “Between 2000 and 2012, the cost of housing went up 200 percent in our neighborhood, and income went down 6 percent.”

The hardest-hit population was African Americans, according to Lichtash’s data. In 2010, there were 22 percent fewer African-American households in East North Philly than in 2000. “In West and South Philly, there were 29 percent fewer African-American households,” she adds.

“What’s been pushed out are people of color and poor people,” asserts Lichtash. “They’re gone if they were renters, and even if they owned their property, it’s been hard to keep up with costs. Twenty-six percent of the households in Philly earn less than $15,000. We’re a poor city, and when the cost of real estate goes up, people can’t afford it. Fifty-two percent of the households in Philly are paying more than 30 percent of their housing in rent.”

Housing advocates like Lichtash are now pushing back against development that sweeps out existing, low- and moderate-income residents and replaces them with higher-income newcomers. Their battle is a difficult one that’s only just gaining steam. But gaining steam it is.

Evidence? Hard to come by

Housing advocates are convinced that what’s happened in Lichtash’s area is being repeated in urban areas throughout the country. They may not have perfect proof yet, but they’re working on it.

“There’s very much debate and very little research,” according to Miriam Zuk, director of the Urban Displacement Project and the Center for Community Innovation at the University of California, Berkeley. “We’re now planning a scholars’ conference on this exact topic.

“The relationship between development and displacement is unknown,” explains Zuk. “The way I understand the issue is that — especially in strong-market cities where prices are rising and people are feeling squeezed out in general — places where development is happening is where rents are rising. People are already feeling the squeeze, and when they see new housing, it’s the most visible and tangible thing to grab onto about that change and pressure they’re already feeling.

“I think the concerns are real, and the evidence doesn’t say it’s not happening,” notes Zuk. “But the concern is about lived experience and data on rising prices. There’s exciting research coming out, but it’s too preliminary to discuss.”

Housing advocates focus primarily on renters being displaced, but are homeowners also being squeezed out? Zuk says that’s also not clear. She’s among those who focus on the effect on tenants, but she says her scan of the limited research on ownership shows the issue has come up in many cities. As with rentals, data isn’t there on the sales side, either.

“I’ve read reports on this in New York City — one research article showed ambiguous results,” says Zuk. “It might be happening in certain neighborhoods and in certain pockets. I haven’t seen evidence of that being a widespread concern.”

Los Angeles tackles the data

No data? That’s a problem for Amanda Daflos and her team to solve!

Joking aside, Daflos is the director of the innovation team in the office of Los Angeles Mayor Eric Garcetti. “We work with city departments and the community to tackle some of the city’s harder questions,” she explains. “We’re often called the SWAT team.”

In 2013, city leaders were hearing from all corners about displacement that was swiftly sweeping through neighborhoods in the city, with Eagle Rock, Highland Park, and Boyle Heights mentioned over and over. But nobody had data to back up what people thought was happening.

Daflos’s team started by culling tax data from 2005-2013 for two ZIP codes. They found that in the 90026 ZIP code area, there was a large increase in high-income tax-filers coupled with a slight decrease in low-income tax-filers. The 90014 ZIP code saw a large increase in high-income filers coupled with a modest increase in low-income filers.

That data began to tell a story, but it wasn’t enough information on which to base policy. So the team kept digging. Maria Martinez has created a close network in the 15 years she’s lived in the neighborhood, and says, “We are like one big family.” Ruby Huntley has w atched the neighborhood change for the last half-centur y. The community garden that Amanda Staples started has attracted dozens of community volunteers and has become a green oasis. Slide

The city is funding efforts to end homelessness.

“We started with tax data, and now the data is more robust,” says Daflos. “We wound up speaking with residents to understand a bit about their experience — that in itself is data. We did surveys. We also looked at what numbers the city has. We spent a lot of time with the housing and other departments, such as those that handle small businesses. It was all about getting a handle on the data so the city could address this.”

The result was the release in late 2015 of what’s called the Index of Neighborhood Change. It’s been updated many times since its release, and it’s now on the city’s open portal so that anybody can take the data for a spin.

Armed with evidence of change, the city has been better able to respond. It has beefed up education on its rent stabilization ordinance (RSO), which permits a maximum 3-percent increase in rent each year in properties covered by the law.

“We have a lot of housing stock protected by the RSO,” says Daflos. “The innovation team has been working with the housing department and redid its outreach on rent stabilization, making sure tenants and landlords know their property is rent stabilized. That was launched in 2016, and we’re now getting ready to relaunch it.”

Daflos contends the city’s efforts are “absolutely making a difference” in combating displacement. “That program, homeforrenters.org, is part of our housing department’s

suite of things to help educate people in Los Angeles,” she says. “There are newly created handbooks — one for landlords and one for tenants — that simplify the law. We have hard copies given out at events, and they’re available for download. We measure impact by the number of times those have been downloaded. When we’re doing heavy campaigning, we see an uptick, so we know people are paying attention and that people want to know more.”

The city is funding efforts to end homelessness. Daflos’s team is also analyzing how to bring more housing units online, and one way to do that is by encouraging construction of additional housing units in existing backyards.

“The mayor lobbied for statewide legislation that was passed in 2016 to clarify that second units are an important part of the housing solution here in California and should be legal in all jurisdictions,” notes Daflos. “They’ve always been legal in Los Angeles and other places in California. But some cities were making them more difficult to build. What the government said by signing this legislation is that these are an important part of the housing solution.”

Daflos says there’s even more being done, but her message is that work is underway. “This is on the radar of the mayor and the city council,” she asserts, “and they’re definitely working on it.”

New legislation and beyond

In Philadelphia, Lichtash’s group is part of a coalition of 60 organizations pushing for legislation to impose an impact fee on new and gut-rehab residential development.

“The idea we’re most interested in is an impact fee, which in some places is called a linkage fee,” she explains. “We’re seeking a fee of roughly $2 per square foot. That money would go in our housing trust fund, which aids people who need help in housing.”

The Philadelphia city council is instead looking at a fee based on a percentage of construction costs rather than the square-footage-based fee the coalition is proposing, says Lichtash. Whichever method is used, her coalition argues that the extra cost wouldn’t significantly affect the development market.

Additional tools include tenants’ right to return and the right of first refusal; both allow tenants to return to a redeveloped property, though there are variations among policies. For instance, a right to return may not necessarily mean a literal return to that redeveloped property, but one the developer has designated elsewhere with rents similar to those the tenant was paying before redevelopment.

Hauswald says tenants sometimes band together and collectively transfer their right to return or right of first refusal to another entity, such as a developer of affordable housing. “In a multi-unit building, you wouldn’t often have a scenario where the tenants can independently

Organizations are pushing for legislation to impose an impact fee on new and gut-rehab residential development.

organize and finance the purchase of a building,” she says. “But they can do it with a nonprofit that can bring other resources to bear. The building can become a limitedequity co-op, or it might become condos.”

Those are the most common ideas being pursued by housing advocates, though experts stress that none will be right for all areas. What works in Los Angeles might not work in Atlanta. The key is to find out from community members how they best think development should proceed.

“There are a lot of policy options,” notes Robert Baird, an urban planner and project manager at the Prevention Institute, an Oakland, Calif.,-based nonprofit that focuses on preventive health and health equity. In 2017, the organization released a report on healthy development without displacement.

“When you’re planning improvements, you have to do that in a way that’s very much embedded in the community’s vision for itself and that gives power to the people who live there,” argues Baird. “That’s basically foregoing top-down planning.

“In communities under threat from gentrification, the conversations that need to happen are about the kind of housing that will serve the community and whether it’s affordable,” adds Baird. “It’s about doing good outreach and engagement and not to just check off a box. There has to be broad community buy in.”

Find out from community members how they best think development should proceed.

Baird notes that in some areas, a low-income set-aside — meaning the designation of some units in a development for low-income earners — would be welcome if rents were low enough and the property acceptable enough. However, that might not be the best solution elsewhere.

Ultimately, Baird’s organization advocates a multi-sector and interdisciplinary approach to ending displacement. “This can’t be solved by one segment of housing groups,” he contends. “Every agency that affects land has to be involved in the work, from planning to public works to the public health department.

“The core value for all of this is the idea of equity,” concludes Baird. “Communities shouldn’t be planned at a distance. What’s being recommended should be coming from those who live there and know what’s best.”

G.M. Filisko is an attorney and freelance writer who writes frequently on real estate, business and legal issues. Ms. Filisko served as an editor at NAR’s REALTOR® Magazine for 10 years.

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