Infill Development in Distressed Communities Continued

CPHA recently covered a report from the EPA titled Attracting Infill Development in Distressed Communities: 30 Strategies.  We focused on those suggestions pertaining to our new zoning code.  But it takes more than just good zoning to revitalize a community.  Other ways to increase demand, and provide a foundation from which to further development, include developing partnerships and changing the perception of an area.  The report also discusses ways to get funding for both the infill development itself  and for the infrastructure surrounding it.  Rather than list every strategy in the report, we will focus on those most interesting or relevant to Baltimore.

Partnerships with relevant community stakeholders are an important strategy for community development.  Anchor institutions such as hospitals and universities can play a vital role in this effort.  Anchor institutions have a clear interest in the areas surrounding them.  They may also have large financial resources.  Furthermore, since these institutions are nonprofits, they may be willing to invest in areas that are avoided by for-profit private sector developers.  Here in Baltimore, institutions like Johns Hopkins University, Johns Hopkins Hospital, and the University of Maryland at Baltimore heavily invest in their surrounding communities.  However, there have been concerns that anchor institutions will at times use the community development process to further their own interests at the expense of the surrounding communities.

The report also discusses forming partnerships with developers through a local developer capacity building program.  The idea behind such a program is that local developers may be more willing to take on the risk of investing in a struggling community than a large national developer.  However, they may lack the know how for such a project.  A local developer capacity building program can include classes on infill developments at local colleges and universities, as well as conferences and seminars on real estate development.

With regards to perception, complete streets are listed as an important tool for communities.  A complete street is a road that takes into consideration more than just the automobile in its design.  A complete street may include bike lanes, wide sidewalks with trees, and narrower or reduced automobile travel lanes.  Complete streets can make these neighborhoods attractive to the growing number of individuals and developers looking for communities that are not automobile dependent.  They can also increase the safety of an area through the addition of more eyes on the street.  Baltimore currently has a number of bicycle and pedestrian plans in the works.  However, many activists feel that the city is dragging its feet when it comes to implementing them.

Obtaining funding for redevelopment is both one of the most important and most difficult requirements when it comes to community revitalization.  Adding to this challenge is that many municipalities with large numbers of distressed communities do not have the financial resources to pay for such redevelopment on their own.  One strategy mentioned is that of a land bank.  Land banks are often run by local governments and operate by acquiring vacant and abandoned properties in a distressed community.  It then redevelops these properties and sells them.  The major benefit of a land bank is that it is able to deal with issues such as tax liens and environmental contamination that make such properties unattractive to investors.  A land bank was proposed for Baltimore City under Mayor Sheila Dixon but was killed by Mayor Stephanie Rawlings-Blake.

Another mechanism for funding development can be found through a land value tax.  Such a tax works through taxing the land itself without including the improvements located on it.  Since property owners are paying a set fee, this reduces the incentive for an owner to sit on an undeveloped property since they are already paying taxes based on the highest possible use of the land.  A recent op ed in the Baltimore Sun discussed how such a tax could benefit Baltimore.

One of the more innovative funding ideas mentioned in the report is that of crowdfunding.  The practice of crowdfunding is most often seen through websites like GoFundMe  Kickstarter, and Indiegogo.  But it also has the potential to be used for redevelopment and the SEC is in the process of issuing regulations for such a process.  Most notably, crowdfunding would allow for smaller investors, such as community residents, to have a hand in community development.  It is also a useful tool for getting investment into communities that more conventional development investors feel are too risky.  Crowdfunding is a new idea and is still in development, though it appears to hold a great deal of potential.

Besides funding for projects themselves, often the infrastructure around them needs to be improved as well.  One of the strategies mentioned here is that of a tax increment financing district or TIF.  Under a TIF, a local government will pay for infrastructure improvements upfront and the property taxes paid for by future development will go towards paying for the infrastructure instead of into the general fund.  No additional taxes are paid by the property owner.  This strategy was used for the development of Harbor Point and proved to be highly controversial, due to the sheer size of the TIF and Harbor Point’s location in a thriving part of the city.

There are no easy answers when it comes to fixing the many issues that plague our nation’s many distressed inner city communities.  But the strategies outlined in this report provide a starting point for how local governments can work to encourage development given their limited resources.

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Gregory Friedman

Gregory Friedman

This article was written by Gregory Friedman. Click here to meet our writing team.

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