Equitable Development Nashville’s Urban Core This report on equitable development was commissioned by NashvilleNext in response to the on this topic was held June 30, 2014 and was attended by over 300 persons; an indication of the community input was gathered in the form of a listening session and interviews with local and Jyoti Gupta A research report submitted to nashvilenext [eff Mom/?. Equitable Development CONTENTS ......................................................................................5 ......................................................................................................6 Problem overview .........................................................................................7 Develop a Comprehensive Equitable ...............................................................................11 ............................................................12 ............................................22 ...........................................26 .............................................................38 ..................................................................................................... 39 .................................................... 41 .................... 42 .................................................................. 43 ..................................................................................................... 44 ....................................................................................................................... 46 Web links ......................................................................................................................... 48 A research report submitted to nashvilenext Equitable Development This page intentionally left blank. A research report submitted to nashvilenext Equitable Development EXECUTIVE SUMMARY affordable living all neighborhoods, the city will continue to experience economic segregation and more households will face practices for maximizing the production of affordable housing and minimizing residential displacement1 study includes a review of relevant literature, interviews with local and national affordable housing and urban 2 affordable housing, protect vulnerable residents, or create neighborhoods where residents of all incomes can Equitable development is the redevelopment of neighborhoods that improves the quality of life for The focus of this report is on tools that Metro can use, rather than a review of MDHA’s tools. Having said that, any tools Metro adopts to help build and preserve affordable housing will be able to be leveraged by MDHA and other developers to better meet Nashville’s housing needs. 1 2 For a summary of community input, see Appendix B. A research report submitted to nashvilenext Equitable Development 1. understanding of the positive and negative impacts of revitalization, holistic in strategy and design, 2. with higher quality of life and opportunities, and develop strategies to increase access to quality services 3. that includes planning tools and services necessary to meet its affordable living goals, technical expertise will be needed to craft the particular regulations DEFINITIONS Neighborhood Revitalization: individual or collective efforts to make a place better – more healthy, safe, vibrant. Gentrification: The physical, political, social, economic, and/or cultural displacement of low-income populations resulting from the transformation of an area with high levels of affordable housing into an area targeting middle- and upper - income residential and/or commercial uses. Equitable Development: The redevelopment of neighborhoods that improves the quality of life for residents of all incomes. A research report submitted to nashvilenext Equitable Development PROBLEM OVERVIEW 3 most attractive to new Nashvillians are currently home to those most in need in neighborhood amenities and in more extreme cases, the deconcentration and relocation of 3 AMI is discussed in further detail on page 12. A research report submitted to nashvilenext Equitable Development the city will continue to experience economic segregation and more households will face a staggering Current response to problem social discord caused by exclusion, displacement, and broad demographic change, as well as resistance to the 4 5 4 MDHA has submitted an application to HUD to convert their stock of public housing to place-based voucher housing under the Rental Assistance Demonstration be sold or borrowed against, to privately held land, which can. This conversion provides housing authorities the opportunity to leverage outside funds to improve and/or redevelop there is concern among housing advocates that RAD undercuts long-term affordability, as it only requires converted units to remain affordable for 20 years, at which time they may be sold. Further, affordable units could be lost even sooner if housing authorities borrow against the land and foreclose. 5 An initial funding of $3 million dollars was allocated from existing federal grants. A research report submitted to nashvilenext Equitable Development Need There is a need for concrete planning tools that would assist in preserving economic diversity in the problem itself is multifaceted, planning tools and other promising practices should represent an array of the national housing policy conversation becomes more animated and actions on the federal level become expected to require local governments to devise new Through the collection, dissemination and analysis of extensive community data – including Opportunity A research report submitted to nashvilenext Equitable Development housing conditions. In addition to providing data, HUD intends to directly assist grantees? efforts to address historic and continuing trends of segregation, concentrated poverty, disparities in access to ?community assets? education, transit, employment, environmental health), and disproportionate housing needs. Due to take effect in the fall of 2014, the new HUD rule is evidence of the urgency and relevance of addressing the historic and continuing challenge of equity in housing on a national scale. A research report submitted to nashvilenext September 2014 pg 10 Equitable Development RECOMMENDATION: DEVELOP A COMPREHENSIVE EQUITABLE DEVELOPMENT STRATEGY create housing choice throughout communities, produce or preserve affordable housing, protect vulnerable that have been most successful at meeting the challenge of affordable living utilize a comprehensive 1. 2. 3. 1. Adopt an Equitable Development Approach understanding of the positive and negative impacts of revitalization, holistic in strategy and design, informed Rooted in the values of equity and diversity. want Nashville 6 Data provided by Metropolitan Nashville Planning Department. A research report submitted to nashvilenext Equitable Development choice throughout the city, creating and preserving affordable housing, and protecting vulnerable residents from displacement, many local housing and development experts are not convinced that city government as a WHO LIVES IN AFFORDABLE HOUSING?7 Affordable housing targets those earning up to 120% of local Area Median Income. In 2014, for a single person in Nashville/Davidson County this includes: 120% = $53,650 Nurse, IT/Programmer Analyst 80% = $35,850 Teacher, Electrician 50% = $22,400 Laborer, Bank Teller concern among NashvilleNext survey respondents; building community and political support for an equitable Balance the positive and negative effects of revitalization through holistic community development. 7 Salary information gathered from the following websites: http://www.huduser.org/portal/datasets/il/il2014/2014summary.odn; http://www.mnea.com/2013-2014_ Teacher_Salary_Schedule.pdf; http://www.state.tn.us/labor-wfd/wages/internet_files/Page0267.htm; http://www.glassdoor.com/Salaries/nashville-teller-salary-SRCH_IL.0,9_ IM604_KO10,16.htm; http://www.indeed.com/salary/q-RN-l-Nashville,-TN.html; http://www.glassdoor.com/Salary/IT-ALL-TECHNOLOGIES-Programmer-AnalystNashville-Salaries-EJI_IE429683.0,19_KO20,38_IL.39,48_IM604.htm A research report submitted to nashvilenext Equitable Development provides a range of services including renter assistance, homebuyer assistance, homeowner assistance, housing development assistance, neighborhood and commercial We need more collaboration development. We build houses and we put people there – but , a public/private partnership creating equitable We have to create partnerships with economic development and education to help people Informed by a racial equity lens. equity, a racial equity lens is something more foundational – a commitment to “paying disciplined attention access to opportunity experience disproportionately poor outcomes on any number of measures – including academic achievement, exposure to violence, health, and employment 8 For an excellent review, see Reece, J (2013). Place Matters: Using Mapping to Plan for Opportunity, Equity, and Sustainability. A research report submitted to nashvilenext Equitable Development strategies to correct both the legacy of structural inequality and to repair relationships, including professional development of a , which requires developers to design and execute a communications Nashville – through robust resident engagement and leadership number of steps toward addressing historic and present day communities through public education and dialogue; and passing a intercultural understanding, and a number of public and A research report submitted to nashvilenext Equitable Development adopted “ outlining N/NE Neighborhood from the federal to local level point to a long history of institutional racism that constrained opportunities coupling economic development with supporting neighborhood community development corporations Enacted through strong community partnerships. Every planning professional interviewed for this report cited strong community partnerships as essential neighborhood associations, including helping groups form effective governance structures; educating residents about city planning processes; supporting neighborhoods in tailoring neighborhood plans to meet their unique A research report submitted to nashvilenext Equitable Development 9 cities have the needed foundation from which to envision and implement community development where the 2. Monitor neighborhood demographics and resources development happens. We are Mapping Gentrification and Displacement Risk conditions that could lead to, or have resulted in, displacement and tailor interventions to neighborhoods based o Home supply/demand ratio o 9 Planning staff has scaled back involvement in neighborhoods during the NashvilleNext planning process, but remains committed to engaging and empowering neighborhoods. A research report submitted to nashvilenext Equitable Development o o 10 o o o o o o Opportunity Mapping 10 pp63- 65. A research report submitted to nashvilenext Equitable Development 11 Education Housing/ Neighborhoods Transportation & Mobility Health & Environment School proficiency Poverty rate Mean commute time High quality teachers Vacancy rate Transit access Proximity to parks and open space Student/teacher ratio Crime rate Automobile access Graduation rate High cost loan rate Distance away from toxic sites Access to healthy food then overlays demographic information to understand how different populations are situated relative to repeated on an ongoing basis to evaluate changes in neighborhood conditions and evaluate effectiveness of 3. Build an Equitable Housing Development Toolkit scope of this research; the following discussion is restricted to tools that maximize affordable housing and The Kirwan Institute has completed major mapping projects in King County, WA; Detroit, MI, Columbus, OH, Austin TX, among others. For a sample of their mapping projects, visit links at 11 A research report submitted to nashvilenext Equitable Development fund, build, and preserve affordable housing, and to retain different types of neighborhoods for different scales of development. Tools to fund, build, and preserve affordable housing; and to retain residents. A research report submitted to nashvilenext Equitable Development Seattle Example Fund: Build: The city uses funds to support the development of affordable rental and homeownership Preserve: Retain: o Result: Tools appropriate to different types of neighborhoods. weak dynamic/improving, neighborhoods may want to prevent displacement through strong Tools that are appropriate for different scales of development. A research report submitted to nashvilenext Equitable Development Fund it Build it Preserve it 12 Retain residents Affordable Housing Trust Fund Affordable infill policy Adopt ordinance to require lasting affordability Homeownership Education and Assistance Strategic use of federal funding Tax Increment Financing Inclusionary housing policy 13 Land banking Multifamily property tax exemption Tax freeze or deferral Retain currently affordable and/or expiring Home-repair assistance programs subsidy units Shared Equity Housing Neighborhood capacity building 12 13 that some tools span multiple categories 12 Rent control, a strategy used to preserve affordable rental units, is not included here as Section 66-35-102 of the Tennessee Landlord and Tenant Act preempts local governments from passing their own rent-control ordinances. 13 Inclusionary housing policies, as described in the following section, link jurisdictional approvals for construction of market-rate housing to the creation of affordable homes for low- and moderate-income households. There is broad variability in inclusionary policy design, and a corresponding range of names used to describe these programs, though they are most commonly known as “inclusionary zoning.” Given that some variations are not technically zoning, the term “inclusionary housing” is broader, and more accurately captures the breadth of program variations. A research report submitted to nashvilenext Equitable Development RECOMMENDED STARTER TOOLKIT FOR NASHVILLE economic environment and their ability to be brought to scale in order to greatly increase the availability and Fund it Affordable Housing Trust Fund Relation to other tools: build and preserve affordable units, and to retain A research report submitted to nashvilenext Equitable Development Market Applicability: Improving or Strong First steps: Build it Design and implement an Inclusionary Housing Relation to other tools: Market Applicability: Improving or Strong First steps: decision guide A research report submitted to nashvilenext Equitable Development Preserve it shared equity housing support the establishment of a Community Land Trust (CLT) Relation to other tools: Market Applicability: Weak or Improving First steps: Retain Residents Relation to other tools: Market Applicability: First steps: Weak or Improving A research report submitted to nashvilenext Equitable Development (such as improved marketing and/ or targeting to areas of high need) may be possible with current resources. 0 Develop shared marketing strategy among current provides, in partnership with neighborhood associations. 0 As increased funding is available, expand programs to offer range of programs at a variety of income levels, including no?cost assistance for very low?income as well as low?interest loans to low? to moderate incomes. These four tools work in concert with one another to create a comprehensive affordable housing strategy. Again, housing is only one part of a holistic community development strategy. Strategies to preserve and create affordable housing must be paired with robust economic development and education strategies. A research report submitted to nashvilenext September 2014 pg 25 Equitable Development THE EQUITABLE HOUSING DEVELOPMENT TOOLKIT Tools to Fund Affordable Housing Affordable Housing Trust Fund Current status in Nashville: Best use: Limitations/Resources Needed: Examples: Local feedback: The Barnes Fund enjoys enthusiastic local support, but without a sustainable funding source there is little Strategic use of federal funding (LIHTC, Multi-Family Tax-Exempt Bond, CDBG and HOME funds) A research report submitted to nashvilenext Equitable Development Current status in Nashville: Best use: 2013 report Limitations/Resources Needed Local feedback: Residents call for more strategic leveraging of Federal dollars to support affordable housing and address the impacts of rising property taxes. Still others say the planning community needs to be more involved in the state process of setting the priorities so the state can better match competitive process with local needs. Tax Increment Financing (TIF) A research report submitted to nashvilenext Equitable Development Current status in Nashville: Best use: Limitations/Resources Needed: Examples: 14 Tools to Build Affordable Housing Affordable Infill Policy Current status in Nashville: Best use: Limitations/Resources Needed: Examples: Local feedback: While there are mixed opinions on the desirability of increased density, ADUs might be a way toward density without drastically changing the housing character of a neighborhood. 14 Atlanta uses the language of Tax Allocation Districts (TAD) in place of TIF, though TAD and TIF are used interchangeably. A research report submitted to nashvilenext Equitable Development Inclusionary Housing Policy decision guide Current status in Nashville: Best use: homes, adopting or partnering with a shared equity homeownership organization is recommended, such as a Limitations/Resources Needed: 15 Effectively designing policies and the program is complicated; it is recommended that technical assistance from experts is sought to conduct an economic feasibility assessment and to design the policy and program economic feasibility assessment will analyze options for balancing developer incentives and affordable unit 15 A California court decision ruled against applying inclusionary policies to rentals in states with rent control, such as Tennessee. 16 For review of key questions to be addressed in the development of inclusionary zoning policy, see Appendix E. A research report submitted to nashvilenext Equitable Development Examples: Local feedback: Feedback is largely in support of inclusionary and/or incentive housing, though not exclusively. There are many strong supporters of inclusionary zoning who believe the city and private developers need to do more for low income residents – particularly in neighborhoods that are still transitioning where some units can be set aside in perpetuity (e.g., South Nashville, Woodbine, Antioch). Others are concerned NIMBYism is too pervasive to allow IZ success. Some are skeptical of the tool’s effectiveness and/or concerned about the negative consequences of further regulating development. There is consensus that in order to be successful, this approach needs to minimize risk/cost for developers. Land Banking Current status in Nashville Best use Limitations/Resources Needed Examples: A research report submitted to nashvilenext Equitable Development Local feedback: partner with land bank to scale up affordable housing development. Multifamily Property Tax Exemption This tool increases the portfolio of affordable rental and homeownership units, often in target areas, through Current status in Nashville: Best use: Limitations/Resources Needed: Examples: Tools to Preserve Affordable Housing Adopt ordinance to require lasting affordability Current status in Nashville: Best use: A research report submitted to nashvilenext Equitable Development Limitations/Resources Needed: Examples: Retain currently affordable and/or expiring subsidy units The buyout, rehabilitation and preservation of affordable multifamily housing, with priority given to expiring Current status in Nashville: Best use: Limitations/Resources Needed: Examples: Shared Equity Housing A research report submitted to nashvilenext Equitable Development may resell the home in the future in order to ensure it remains affordable for a household at a targeted income Current status in Nashville: called Our House; Best use: Limitations/Resources Needed: Examples: Local feedback: Some lack of clarity regarding the distinction between shared equity programs and community land trusts. and effective tool, particularly over the long term. Some concern that it is a complicated tool, requiring much in the way of explanation to avoid discontent at the time of selling. Community Land Trust (CLT) A research report submitted to nashvilenext Equitable Development Current status in Nashville: Best use: Best used in concert with inclusionary housing programs, whereby affordable units become part of Limitations/Resources Needed: Examples: Local feedback: Some lack of clarity regarding the distinction between shared equity programs and community land trusts. Cautious optimism that it can serve as an innovative and effective tool, particularly over the long term. Some concern that it is a complicated tool, requiring much in the way of explanation to avoid discontent at the time of selling. Tools to Retain Residents Home Repair Assistance Programs Current status in Nashville: Best use: A research report submitted to nashvilenext Equitable Development Limitations/Resources Needed: Examples: Local feedback: Unsure if current resources are enough to meet the need, or if residents know about resources that may be able to help. Tax Freeze, Credit or Deferral Current status in Nashville: Best use: Examples: review here Limitations/Resources Needed: Local feedback: Currently not doing enough to meet the need. Homeownership Education and Assistance A research report submitted to nashvilenext Equitable Development Current status in Nashville: Best use: Limitations/Resources Needed: Examples: Local feedback: Strong recognition that providing rental units is not enough – homeownership is the number one way to build equity – to transform families’ lives. Neighborhood Capacity Building produce tension between older residents and newer residents about neighborhood norms, expectations and businesses move into a neighborhood and do not seem to be considering the people who have called that area organizations, promote an ethic and practice of neighborliness, and foster productive intergroup dialogue and Current status in Nashville: A research report submitted to nashvilenext Equitable Development expertise in building capacity and effectiveness in neighborhood groups, and helping facilitate community Best use: Limitations/Resources Needed: Examples: examine how historical and present day institutional racism impacts individuals, communities and and institutional racism and to help create a city where all of us have the chance to live a long, healthy planning and implementation play in helping to create communities of lasting value, including an Local feedback: General agreement that Planning should prioritize social inclusion in order to address equity and reduce dichotomous community insider/outsider mentality. Some hesitation to promote “social engineering”, but recognition that communities resistant to change might need to adjust to what is best for the city overall. Strong support for community engagement (especially of ‘hard to reach’ populations), shared vision creation, and strategic partnership building. In some neighborhoods (e.g., District 5) the need for dialogue between old and new residents is especially needed. Developers, too, need to take initiative to talk to neighbors. A research report submitted to nashvilenext Equitable Development RESEARCH NOTE: TOOLS FOR CITIZENS city to understand their use and function, which can assist both the city and residents in achieving equitable Community Organizing Community Benefits Agreements (CBA) “Because development subsidies use taxpayer monies and may have a negative economic impact on taxpayers, “CBAs are critical in part because the current “back to the city” movement sees many large U.S. cities promoting economic parks, “big box” retail outlets, upscale residential projects, and other such developments are occurring regularly in urban areas—including many areas inhabited predominantly by low-income residents and people of color. These projects have the can be devastating to them.” A research report submitted to nashvilenext Equitable Development APPENDIX A. METHODS Interviewed planning professionals in the following cities Nashville, TN A research report submitted to nashvilenext 2013 population estimate (census) Equitable Development and opportunities for facilitating social inclusion. Participants represented a cross section of residents from neighborhoods in various stages of change. More than 300 individuals participated town hall meeting on housing and gentri?cation held on June 30th. Comments collected from the community conversation were collected and coded by planning staff, and are summarized in Appendix B. A research report submitted to nashvilenext September 2014 pg 40 Equitable Development APPENDIX B. A COMMUNITY CONVERSATION SUMMARY What are the positive and negative effects of revitalization? and, What strategies or tools can be used to address the negative effects? through multiple lenses, but also to develop a comprehensive strategy to equitable development – one that cuts Overall, participants expressed deep concern about displacement of current or longtime residents; the loss of affordable housing for homeowners and renters; social segregation, exclusion, and the loss of diversity writ large foster equitable development included access to low interest loans, shared equity housing, density bonuses, To counteract loss of neighborhood identity and social exclusion, participants called for intentional effort on parties, community education on land use and affordability, strengthening of neighborhood associations, urban brought about by revitalization, urban change, participants warn, will spell greater social disparity and cultural 17 Data drawn from written comments of participants. A research report submitted to nashvilenext Equitable Development APPENDIX C. EQUITABLE HOUSING DEVELOPMENT TOOLS-TO-MARKET MATRIX Market Conditions Fund it Weak Housing Market / Low Displacement Risk Build it Preserve it Retain Residents Affordable infill policy Adopt ordinance to require lasting affordability Tax freeze or deferral Land banking Multifamily property tax exemption Affordable Housing Trust Fund Retain currently affordable and/or expiring subsidy units Home-repair assistance programs Homeownership Education and Assistance Shared Equity Housing Improving Housing Market/ Increasing displacement Strategic use of federal funding Affordable infill policy Inclusionary housing Land banking Tax Increment Financing Multifamily property tax exemption Adopt ordinance to require lasting affordability Tax freeze or deferral Home-repair Retain currently assistance affordable and/or programs expiring subsidy Homeownership units Education and Assistance Shared Equity Housing Strong Housing Market/High levels of displacement and/or exclusion Affordable infill policy Inclusionary housing Adopt ordinance to require lasting affordability A research report submitted to nashvilenext Tax freeze or deferral Equitable Development APPENDIX D. EQUITABLE HOUSING DEVELOPMENT RENTAL/HOMEOWNERSHIPTO-MARKET MATRIX Weak Housing Market / Low Displacement Risk Rental Strategy Homeownership Strategy Retain currently affordable and/or expiring subsidy units Shared Equity Housing Multifamily property tax exemption Home-repair assistance programs Homeownership Education and Assistance Affordable infill policy Land banking Neighborhood capacity building Improving Housing Market / Increasing displacement Retain currently affordable and/or expiring subsidy units Shared Equity Housing Multifamily property tax exemption Tax freeze or deferral Home-repair assistance programs Homeownership Education and Assistance Inclusionary housing Affordable infill policy Land banking Neighborhood capacity building Adopt ordinance to require lasting affordability Strong Housing Market / High levels of displacement and/or exclusion Retain currently affordable and/or expiring subsidy units Tax freeze or deferral Inclusionary housing Affordable infill policy Adopt ordinance to require lasting affordability A research report submitted to nashvilenext Equitable Development APPENDIX E. AVAILABLE DATA TO MONITOR DEMOGRAPHIC CHANGE o o Examine home loan/home purchase data by race to indicate emergent neighborhood racial o o o Examine changes in rate of new construction residential or commercial properties to identify When using American Community Service (ACS) data, which relies on predicted vs. actual data, Dr. Bates recommended adjusting by the margin of error. As an example, she writes, “the 2006-2010 ACS estimate for the percentage of renter-occupied units in Portland was 44.8% +/- 0.6%, resulting in a threshold of 44.2%” (2014, p. 60). 18 A research report submitted to nashvilenext Equitable Development o o website may be of particular interest, in that A research report submitted to nashvilenext Equitable Development REFERENCES Center for Housing Policy Journal of Affordable Housing and Community Development, 16 National Housing Institute A research report submitted to nashvilenext Equitable Development Tennessee Advisory Commission on Intergovernmental Relations Staff Research Brief, 14 National Housing Conference, 2 RAND Corporation A research report submitted to nashvilenext Equitable Development WEB LINKS City of Austin Neighborhood Housing and Community Development (NHCD) http://www.austintexas.gov/department/housing Community Cornerstones http://www.seattle.gov/housing/Cornerstones/default.htm Good Neighbor Policy GOOD NEIGHBOR GUIDELINES.pdf http://www.portlandoregon.gov/oehr/62229 The Portland Plan http://www.portlandonline.com/portlandplan/index.cfm?c=56527& City of Portland Guiding Principles of Equity and Social Justice https://www.portlandoregon.gov/phb/article/432346 N/NE Neighborhood Housing Strategy https://www.portlandoregon.gov/phb/65193 Kirwan Institute http://kirwaninstitute.osu.edu/opportunity-communities/mapping/ The National Community Land Trust Network decision guide http://cltnetwork.org/wp-content/uploads/2014/08/Developing-an-Inclusionary-Housing-Program-Homeownership-8-14-14.pdf Austin, TX http://www.austintexas.gov/2013bond Charlotte, NC A research report submitted to nashvilenext Equitable Development Minneapolis, MN Seattle, WA National Community Land Trust Network 2013 report Atlanta Portland, OR San Francisco Chattanooga, TN Philadelphia, PA Austin, TX National Community Land Trust Decision Guide Montgomery County, MD A research report submitted to nashvilenext Equitable Development Chapel Hill, NC Fairfax County, VA Chicago, IL Chattanooga, TN Twin Cities MN Community Land Bank Mineapolis, MN Seattle, WA Vermont State Portland, OR Chicago, Ill. Oregon Housing Preservation Project A research report submitted to nashvilenext Equitable Development Portland, OR City of Boulder Home Works Athens (GA) Land Trust Chapel Hill, NC Community Home Trust Seattle, WA AARP Tax Abatement Report Home Ownership Center of Greater Cincinnati MEDA Louisville Healing Possible Quorum Philadelphia Citizens Planning Institute The Neighborhoods Resource Center A research report submitted to nashvilenext