Category Archives: The Housing Crisis

Confronting Urban Population Decline

Can I interest you in buying an entire block? West Village, Detroit

The fact that many American cities are experiencing significant population decline is old news.  This trend has been occurring since 1950, particularly in the older cities that were once part of the “Great American Manufacturing Belt” that stretched across the northern tier of the country from New England to just west of the Mississippi River.

What is not old news, however, is that many of these same cities are now experiencing serious problems with vacant and abandoned properties.

These problems are relatively new in many places, and unlike population loss per se, the loss of taxpaying households poses an existential threat to the fiscal healthof these cities.

Not only are these cities continuing to lose residents at an alarming rate, but they are now also losing households.  This means that they are losing housing units, which, in turn, means that they are losing much of their built environment.

Residential properties sit vacant and abandoned, as do the commercial properties that used to serve them.  The public infrastructure (streets, utilities, etc.) which used to knit these properties together into cohesive neighborhoods remains, but is increasingly underutilized.

While the infrastructure might be underutilized, it still needs to be maintained.  Schools, safety forces, public utilities, and sanitation services all need to be supported at levels that don’t shrink proportionately with the population.

In the future, residents will be paying a lot more in taxes for a lot less in services,unless a way is found to grow the population (and the tax base) again.

But why is widespread vacancy and a glut of abandoned property a relatively recent phenomenon, while population loss is not?

In order to understand this, we need to know a bit more about how urban population decline actually works.

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Vacant lots that once contained houses, York St., Akron

Understanding the Problem

This piece by Alex Ihnen on population change in St. Louis is one of the best posts that I’ve ever read on understanding urban population decline.

St. Louis is an excellent case study, for it has experienced the single largest percentage population decline of any major American city – shrinking 63% from its 1950 peak of 857,000 to its current population of 319,000.

In his piece, Ihnen argues that if policy is to be directed at growing the city’s population, we must understand more about the history of population decline, which factors led to the downturn, and think about what an increasing population would look like today.

The most important point that Ihnen makes is that a significant level of urban population decline experienced since the 1950s was inevitable (i.e. attributable to widespread demographic changes).  Chief among these is the rapid decline in average household size in the United States.

Think about what was going on around 1960.  Take an older, industrial city, like Cleveland, Detroit, or St. Louis, that is “built out” – that is, nearly all of the residential property in the city is built at the maximum development density that it is zoned for, and the city has very little, if any, available land upon which to build new housing.

At the same time you have several extremely consequential demographic trends occurring all at the same time:

  • Rising divorce rates
  • Rising age of first marriage
  • Rising life expectancy
  • Declining birth rates

These trends all began to emerge in the late 1950s, took deep root in the late 1960s, and continued virtually unabated up through the late-1990s.

So, set aside any preconceptions you have about the disadvantages of city living versus suburban living.

Forget, for a minute, the usual suspects in urban decline, such as “white flight”, larger suburban houses and yards, highway construction, increasing automobile usage, crime, declining schools, etc.

Focus instead on the profound social trends which occurred between 1960 and 1990.  Those involving:

  • Marriage (divorce and delayed marriage, resulting in more singles)
  • Health care (increased longevity, resulting in more widows and widowers)
  • Reproduction (the development of “The Pill” in 1960, and legalized abortion in 1973, resulting in less children).

The end result of these trends?  A much smaller average household size.

So, if these older cities were unable to build more housing units, they were going to shrink to a significant degree, regardless of the crime rate, or school quality, or “white flight”, or any of the other common explanations for urban population loss.

Remember that none of the aforementioned social trends happened in isolation.  They all happened simultaneously.

It is truly an astounding convergence of demographic trends.  From a historical perspective, it is a change in household structure the likes of which our nation has never seen.

Think about it – more single older adults (divorce); more single younger adults (delayed marriage); more widows and widowers (rising life expectancy); less children (declining birth rates).

Every single one of these trends implies that, all things being equal, the average household will be much smaller.

And that’s exactly what happened.  Imagine a city with 900,000 inhabitants and 300,000 households – for an average of three people per household.

Now, imagine that same city, decades later, with 600,000 inhabitants and 300,000 households – for an average of two people per household.

The implications are astounding.   This city could theoretically lose one-third of its population without even one additional vacant house or apartment, simply by dropping from an average household size of three to two.

Indeed, this is precisely what happened in older cities like St. Louis, which dropped from a population of 857,000 in 1950 to 319,000 in 2010.

While not all of this population loss was attributable to a decline in average household size, much of it was.  St. Louis’s average household size dropped from 3.1 people per household in 1950 to 2.2 people in 2010.

In fact, Ihnen estimates that decreasing average household size accounted for 46% of the city’s observed population loss between 1950 and 2010 – a far from inconsequential number.

Similar social trends were also occurring in suburban areas, but one mitigating factor was that these areas were being settled disproportionately by families with children.

Suburban areas also had lots of room to build new housing, while the core cities did not.  In a developing suburban area, it did not matter if your average household size shrank a bit between 1950 and 2010.  If you added an additional 10,000 housing units in that same time period, your community was going to grow – a lot.

The role of shrinking household size in urban population loss may be the most under-reported story about urban decline of the entire 20th century.

Yes, the interstate highway system, “white flight”, the desire for larger homes and larger yards, concerns about crime (real or perceived), etc. were all very important factors in why older cities shrank, and why suburban areas grew.  They still are.

But one of the most important factors (and certainly the most overlooked) was the simple fact that households everywhere were getting smaller, and population was only going to be able to grow in places where you could add households.

Unsurprisingly, these places were primarily new, suburban areas, outside of the central cities.

This fact should give urban advocates, city leaders, and urban residents some degree of comfort, for it demonstrates that a fair amount of urban population loss in the decades immediately following the 1950s was not really anyone’s “fault”.  Your city could have done everything right, but, given a static amount of housing, you were going to shrink.

Urban population decline in the 20th Century, was, in many ways, an unavoidable demographic reality that could only have been mitigated by rezoning and building at even higher densities – a housing trend that would have been running exactly counter to the prevailing market wisdom at the time.

And yet…this explanation only takes us so far.

The explanatory power of average household size weakens substantially after the 1990s, when the demographic trends governing it began to stabilize, and as urban housing continued to “age-out”.

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Vacant house, Van Dyke St., Detroit

Housing Supply and Demand in the 21st Century

It was not really until the 21st Century that we began hearing about, reading about, and witnessing first-hand an ever-expanding problem with vacant and abandoned properties in many older urban areas.

Prior to the 1990s, most older cities were shrinking without an appreciable or especially noticeable impact upon the built-environment – particularly in residential areas.

Commercial structures are another story, as many were abandoned beginning in the 1970s and 1980s, being as they are more sensitive to fluctuations in total population and household purchasing power.

Alarmingly, as the 21st Century dawned, many older cities began shrinking, not primarily as a result of national demographic trends (household size) or lifestyle preferences (suburban development), but simply due to the fact that many of them were losing their supply of marketable housing.

In short, the houses and apartments in these cities were getting old – too old to be marketable, in most cases, and not nearly enough was being done (or perhaps, could have been done) to replace them.

In some cities, this might have been due to an overall lack of demand, but it is hard to say that it was due to lack of demand for urban living, as such.

All we really know for sure is that there was a lack of demand for most of the product currently on the urban housing market – namely older houses with high front-end renovation costs, significant ongoing maintenance and upkeep costs, and many obsolete features – not enough closets, not enough electrical outlets, small kitchens and bathrooms, no garage, etc.

What we don’t know is whether or not newer, more modern homes might have been marketable had they been built, because in most older cities, they never werebuilt, so there is no way to test the hypothesis.

Maybe the demand wasn’t really there.

Maybe it was.

Maybe the perceived lack of demand was a self-fulfilling prophecy confirmed by a lack of marketable product.

In many places it was likely a combination of both a lack of supply and a lack of demand – how much it was of each, largely depends on the city, or even the neighborhood.

So it would appear that, all things being equal, there is a correlation between the amount of older housing that a city has and the degree of population loss that it has experienced.

In other words, cities with the highest percentage of old houses and apartments are likely to be the ones that are losing the most residents.

Or perhaps it is the other way around?

I decided to test this theory by obtaining data on housing age in every U.S. city that contains over 25,000 housing units.

Governing magazine wrote a fascinating piece on this recently that contained a treasure trove of interesting data.  I used these data in my analysis.

My working definition of “old housing” is housing units that were built prior to 1960.

1960 is a good demarcation for separating new housing from old.  Houses built before 1960 are over 50 years old, which is the point in a house’s life-cycle where ongoing maintenance costs begin to become quite significant.

1960 is also the year when housing and neighborhood design began to change significantly.

Prior to 1960, most houses were still built in a traditional, walkable neighborhood pattern, on a grid, with street lights and sidewalks, and access to public transportation; located in reasonable proximity to commercial and retail development.

After 1960, most neighborhoods were no longer built to conform to this pattern.

So what did I find?

In the United States today, there are 620 cities that contain at least 25,000 housing units.

Of these, 140 can be considered “older cities” with at least 50% of their housing stock built before 1960.

The vast majority of these older cities are located in the Northeast, the Great Lakes, and on the West Coast.  Very few of them are located in the South or the Intermountain West.

The 10 Fastest Shrinking Cities in the U.S.

1. St. Louis, MO (63% decline, 77% built pre-1960)
2. Detroit, MI (61% decline, 81% built pre-1960)
3. Youngstown, OH (61% decline, 77% built pre-1960)
4. Cleveland, OH (57% decline, 79% built pre-1960)
5. Gary, IN (55% decline, 63% built pre-1960)
6. Buffalo, NY (55% decline, 84% built pre-1960)
7. Pittsburgh, PA (55% decline, 75% built pre-1960)
8. Niagara Falls, NY (51% decline, 84% built pre-1960)
9. Flint, MI (48% decline, 70% built pre-1960)
10. Scranton, PA (47% decline, 76% built pre-1960)

I found a strong correlation (0.533) between the age of the housing (% of total units built prior to 1960) and the percentage of population lost since the city’s peak.

This finding is not particularly shocking, and to be sure, the correlation likely runs both ways.

That is, cities with a lot of old housing are often shrinking cities, because the old housing is not as marketable.

Conversely, shrinking cities often have a lot of old housing, because they are losing population and therefore don’t have lot of demand for new housing.

Regardless of the overall strength or direction of the correlation, this fact remains:

In the 21st Century, given today’s demographic trends, it is near-mathematically impossible for shrinking cities to ever grow again, without building new housing.

These cities have an over-supply of housing that people do not want, and an under-supply of housing that people do want.

Much of the older housing is blighted, vacant, or abandoned, and it is being torn down at a much faster rate than new housing is being built.

These cities will continue to lose population unless they figure out how to do more than simply tear houses down.  They need to learn how to rebuild their neighborhoods from the ground up.

It all boils down to simple arithmetic: less occupied housing units + less people per household = less households, and less people.

No matter how great these cities are, no matter how many casinos or stadiums they build, no matter how safe they are, no matter how low their taxes are, no matter how much else they “do right”, they will inexorably continue to lose population if they don’t learn how to build lots of marketable new housing – and at a much faster rate than they are tearing houses down.

Why is new housing the only way to go?

The only possible means for a shrinking city to grow again are:

1) increase average household size

2) rehabilitate/renovate existing housing

3) build new housing.

Option #1 is not going to happen anywhere in the United States (with the possible exception of places attracting high levels of immigration).  It flies in the face of a fifty-year long demographic trend – that of shrinking American household size, described earlier in this post.

Option #2 is possible, but in most cities it is exceedingly difficult.

Rehabilitating and renovating old houses and buildings is a costly proposition and is only feasible on a large scale in places where:  1) the overall demand for urban housing is high and the supply is low; and 2) the quality of the older housing is such that it is still marketable.

This strategy can work in places like New York, San Francisco, Washington, D.C., and Boston, where both sufficient demand exists, and where there is a large stock of under-utilized high-quality construction (much of it built prior to 1920) with historic character and value.

Where this strategy is not likely to work is in the classic shrinking cities of the Rust Belt – places like Buffalo, Cleveland, Detroit, Pittsburgh, and St. Louis, where overall demand is much lower, and where there is a large excess stock of vacant low-quality housing (much of built hastily, and rather poorly, between 1920 and 1960 for industrial workers).

Much of this housing, especially in smaller, working-class cities like Flint, Gary, and Youngstown is functionally-obsolete.  As much as our hearts may wish it to see preserved, our heads (and pocketbooks) will carry the day.

It is simply not worth saving.  There is far too much of it, there is far too little demand for it, and (the final nail in the coffin) so much of it has been vacant for so long that it is in wretched condition.

So that leaves us with Option #3.  Build brand-new housing.

Is this a major challenge?  You bet.

Building new housing in cities is often more expensive than building new housing in undeveloped areas (due to land acquisition, environmental mitigation, and demolition costs).

In many cities (again, frequently the fastest shrinking ones in the Rust Belt) building new housing is an uncertain market proposition.

In most of these markets, it has not been attempted on a large scale, and many developers are understandably reluctant to invest in rebuilding large-swaths of inner city neighborhoods, for fear that they will lose their shirts if sufficient demand does not materialize.

But what is the alternative?

A vicious-cycle of further decline, more blight, higher taxes, and more disinvestment.

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Rolling with the punches: Kercheval-Parker Park, Detroit

Why Bother?

If they do not embark upon an innovative, cross-sector, comprehensive effort to build new housing, shrinking Rust Belt cities will face an existential social and economic crisis that will be far more costly (in both human and monetary terms) than the status quo.

I’ve written about this previously:

Regardless of what some advocates of regionalism might say, city boundaries are not arbitrary and meaningless.  Although some may claim that shrinking cities are no big deal as long as the metropolitan region overall is growing, central cities will continue to profoundly matter, especially to the people (often disproportionately poor) that remain.

Municipal boundaries are not irrelevant, whatever the regionalists may tell you. Economies may be regional, but in most of the nation’s fastest declining cities, government is not.  Municipal boundaries affect taxation, land use policy, public safety, education, public infrastructure, and the delivery of social services.

When a city’s population declines precipitously, the proportional demand for the public services that it provides shrinks less than its population, with the end result that its residents end up paying more in taxes, for less in services.  Even if this were not the case, it is expensive and (politically speaking) exceedingly difficult to scale-back and shrink long-term capital investments in public infrastructure – as “shrinking cities” like Detroit and Youngstown have discovered.

What goes on within a given city’s actual municipal boundaries has incredibly important ramifications for its tax base; its employment base; the performance of its schools; the distribution of everyday amenities like grocery stores, shops, and restaurants; the delivery of public services; and less tangible, but equally important things like its sense of place and its sense of itself.  As cities are abandoned, decline, and become hollowed out, access to social and economic opportunities diminishes along with the population:  the jobs disappear, the doctor’s offices disappear, the grocery stores disappear – relocated, often, to a distant and increasingly inaccessible locale.  To pretend as though the economic and social well being of city residents is not directly impacted by population decline is to turn a blind eye to reality itself.

Brent Larkin of the Cleveland Plain Dealer, makes similar, extremely compelling points:

Cleveland may be about half as big, population-wise, as it was in 1970, but in inflation-adjusted dollars the cost of running the city is about the same…

Although Cleveland spends five times more in actual dollars today to serve a city with twice the population in 1970, Councilman Michael Polensek said city services are the worst since he took office in 1978.

“In all my years of public office, I’ve never experienced such a breakdown in the level of city services,” said Polensek. “Quality of life services – street repair, grass cutting, waste collection, caring for abandoned property, police protection – have never been this bad. And that includes when we were in default.”

Although the city has far fewer residents, it must pay to maintain an infrastructure built to support a million residents.

Yet, you hear precious little about the need to build new housing in most shrinking cities. There is certainly no comprehensive strategy, in most places, to actually doit.

Instead, we hear a lot about stadiums, casinos, convention centers, and hotels.

We hear a lot about these cities as places to play – but precious little about these cities as places to live.

I have even heard public officials remark on more than one occasion that residential development is a net liability, because residential development costs the city more in services than it generates in terms of tax revenue.

Taken to its logical conclusion, this means that the most profitable city would be one with no people living in it.

It’s sheer lunacy.  Talk about “destroying the village in order to save it.”

Furthermore, as Brent Larkin points out in the aforementioned column, shrinking cities are already paying to provide these services – what is missing are the people and the necessary tax base to pay for them.

Far too many cities in the Rust Belt have fatalistically resigned themselves to population loss.

It is a terrible long-term strategy.

James Howard Kunstler says it well:

Detroit is so far gone, the argument goes, that the only conceivable use for all that abandoned real estate is to re-ruralize it. This speaks to our lack of confidence in architecture and urbanism per se, and leads to the current default remedy whenever our cities fail: tear things down in favor of green space.

Such thinking is the result of architecture’s decades-long inability to provide buildings worthy of our affection; municipal planners’ design ignorance and extreme reliance on traffic engineers; the environmental movement’s focus on wilderness, wildlife, and disdain for human activities; and, of course, suburbia itself, which prompts most of us to despise any human imprint on the landscape.

Yes, figuring out how to build new housing and re-populate our shrinking urban centers will be difficult.

But we have to try.

What is our alternative?

This is not just about bricks and mortar infrastructure, or civic pride.  It’s about people.

As ruinously as the built environment and urban landscape in our cities has fared, many of their remaining residents have fared even worse.

The poor are increasingly isolated from social and economic opportunities, as metropolitan regions continue to sort themselves geographically by race, class, and socioeconomic status.

As our core cities continue to be abandoned, the poor, the working class, and many minorities are left behind in the places with shrinking tax and resource bases, while the wealthy continue to concentrate themselves in places that are increasingly homogeneous, with greater access to social and economic opportunities.

That doesn’t sound like “The American Dream” to me.

Rust Belt cities are presently on the hook to dig deeper into their already decimated tax bases, and foot the bill, alone, to deal with the blight and disinvestment.

They are in a no-win situation:  ignore the problem, and watch the blight and disinvestment spread even farther, or spend money that they don’t have, raise taxes, and drive more residents and businesses away, in order to try to keep things from getting worse.

What we have on our hands is a vicious-cycle of decline, and disinvestment, and more decline.

What we need to create is a virtuous-cycle of investment, and renewal, and more investment.

In the Rust Belt, growing your city’s population is not about chasing a number, or “keeping up with the Joneses”.

Increasingly, it is going to be about survival.

Today’s political and economic reality is that no one from the federal government, the state, or the rest of the metropolitan region is going to step in and save these cities.

They are going to have to figure out how to do it themselves.

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Renovated houses along Parker St., Detroit

Worrisome Trends in Akron

In every culture, you have a “creation myth” – a story you tell yourself (that may or may not be entirely true) about where you have been, where you are, and where you are going.

In Akron (the city that I live in, and love) our “creation myth” goes like this:

We were a world-renowned city, the global center of the rubber and tire industry, for roughly the first three-quarters of the 20th Century; we struggled mightily in the 1970s and 1980s; we began a comeback in the 1990s; and we have been on an upward trajectory ever since, outpacing most of our Rust Belt peers (minus the road bump of the 2008 recession).

There is a lot of truth to this myth, but like any unifying narrative, it glosses over some details that might get in the way.

Like our continued population loss, and our corresponding failure to figure out how to renew our community as a place to live.

To be clear:

We did weather the storm of the collapse of our primary industry far better than most Rust Belt cities did.

We have an amazing stock of high quality, older housing on the city’s west side that is likely to sustain it for years to come.

We are the least racially-segregated major city in Ohio, and one of the least-segregated older industrial cities in the entire U.S.

We have consistently economically outperformed every major city in Ohio (except Columbus), and have held our own compared to our Rust Belt peers nationwide.

We enjoy political and economic leadership that is the envy of most cities, and that has served us extraordinarily well throughout the aftermath of the collapse of the rubber and tire industry.

But much of what I discussed earlier about population decline in St. Louis applies directly to Akron.

With a current-day population of 199,000, we have now lost 91,000 people since we reached our peak population of 290,000 in 1960 (a 31% decline).

After losing only 6,000 residents in the 1990s, we lost 17,000 in the 2000s.

In 2010, we shrunk to below 200,000 for the first time since 1910.

So, since the beginning of the 21st Century, our population loss has actually accelerated, rather than decelerated – by a factor of three.

That’s concerning.

Even more worrisome is the fact that, since 2000, we have seen a significant decline in the number of households – for the first time since 1960.

Most of our shrinkage through 2000 was due to the changes in household size that I described at the beginning of this post.  These changes were still concerning, but they were not out of step with what was going on in most other older cities.

Almost unbelievably, between 1960 and 2000, we had the same number of households, despite the fact that we lost 73,000 people.

It’s really quite remarkable.

But since 2000, we have been losing people and households.

This is extremely concerning, because it is the loss of households that has directly contributed to our growing vacant and abandoned property problem and the erosion of our tax base.

Here are Akron’s numbers by decade.  They are dramatic:

Year       Population         Households        Avg. HH Size

1960          290,351                  90,004                    3.23

1970          275,425                  91,592                    3.01

1980          237,177                  90,576                    2.62

1990          223,019                  90,119                    2.47

2000          217,074                  90,143                    2.41

2010          199,110                  83,718                    2.38

So despite losing 73,000 residents, the number of households in Akron was consistent for 40 years.

But since 2000, we lost another 17,000 people and over 6,000 households.

Even worse, this unprecedented loss of households came at a time when average household size was starting to level off.  If we had been able to keep the same amount of households, we could have retained a lot of the people that we lost during this past decade.

In fact, if we had retained the same number of households, we would have lost less than 3,000 people in the last decade.

But we didn’t.

Maybe we couldn’t have retained these households.

Maybe we didn’t have the available housing to do it.

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Brand new houses along Hickory St., Akron

Moving Forward

The 21st Century represents a true demographic turning point for our city.  Our loss of not just population, but now households, too, is a direct result of our using up all of the viable, marketable housing that we had, and our tearing down more housing than we have been able to rebuild.

Simply put – we are now at the place where we are physically unable to grow, because we are experiencing a net loss of housing – year after year, as it gets older and older.

On average, we tear down 500 houses every year in this city. On average, we build 10.

New residents can move to Akron, of course, but they will simply be replacing someone who already lives here.

We are playing “musical chairs” with our housing stock – one person replaces another, and every once in a while, another chair is taken away.

It is a very disturbing trend.

It is also a very underreported trend.  I had never seen this information until I pulled it from the census for this blog post.  I’m not sure that anyone else even knows this.

So what should we do?

We have to learn how to build new housing in this city – a lot of new housing.  And we have to learn how to market it well.

Rehabilitating old houses (where practical) will certainly help us, but my guess is that, even in a best case scenario, we will tear down five houses for every one that is renovated.

The houses that we have left are simply getting too old and obsolete.  The best ones, in the best neighborhoods, are already occupied and are being cared for.

I think Downtown’s future is as a mixed-use residential center, rather than as an office center.  This trend is already happening in many cities.  It is happening on a significant scale in Cleveland, as more and more office space is vacated and retrofitted as residential space.  We should intentionally support that same thing here.

We have lots of undeveloped and underutilized land in this city that could be re-purposed as new densely-developed, mixed-use urban neighborhoods.  Especially if we got creative.

Rolling Acres Mall, for example, could be redeveloped as a huge, new residential neighborhood.  I’ve heard talk of reusing it as an industrial park, but I’ve never heard anyone mention the possibility of redeveloping it as an actual neighborhood.

We should think about it.

We have schools that are shutting down.  The former Perkins Middle School, for example, could be redeveloped as a cluster of new homes in an already quite attractive and convenient residential neighborhood.

We have a lot of underutilized parks in this city.  Grace Park, for example, has been a crummy park for over 60 years.  My grandfather, a former APD Captain used to tell me about how he would bust drug dealers and prostitutes there, even back in the 1950s.

Grace Park could probably be shrunk down to 1/3 of its current size, with the other 2/3 of the existing park redeveloped as a new, densely-developed, mixed-use urban neighborhood.

The remaining 1/3 of the existing park could be preserved, re-sized, and with new adjacent residential properties, might actually see some use.

It’s an extremely attractive site – located immediately adjacent to Downtown Akron, the University of Akron, and Summa Akron City Hospital.

Some of these ideas are probably infeasible.  They might even be kooky.

There would be lots of legal, administrative, and marketing hurdles involved in transforming an infamous Dead Mall like Rolling Acres into a vibrant urban neighborhood.

Grace Park was bequeathed to the City of Akron by Simon Perkins (Akron’s founder) himself, and God only knows what kinds of legal and administrative hurdles would be involved in violating that near-sacred covenant.

But even if these ideas prove to be crazy, there have to be other creative and innovative ideas out there for rebuilding our city.

Not enough people are publicly thinking about this, or proposing audacious ideas about how to grow again.

But this is the kind of thinking that actually repopulates your city.

As important as they are, a stray infill house here and there (like the ones pictured above) is simply not going to get the job done.

The oldest neighborhoods, like West Hill, or University Park, that are closest to the core of the city may eventually begin to redevelop as attractive residential areas, as Highland Square has begun to.

But, at the same time, many of the older, formerly stable working-class neighborhoods like Kenmore, North Hill, and Goodyear Heights will begin to “age-out”, as their housing becomes increasingly obsolete and difficult to maintain. Ellet and Firestone Park may not be that far behind.

Much of West Akron will continue to age gracefully and is likely to remain a stable, attractive area for years to come, but we can’t rely on it forever.

We are likely to experience a lot of ups-and-downs in terms of neighborhood revitalization and decline over the next several decades.

We will probably need half-a-dozen (or more) different redevelopment strategies for our neighborhoods, depending on which neighborhood we are talking about.

We will need to learn how to bring the public sector, the private sector (specifically developers, home builders, and realtors), non-profits, and residents together in order to strategically, intentionally, and creatively rebuild each one of our neighborhoods.

It will be challenging, but we can do it – working together.

As a community, we need to adopt some bold and audacious goals involving population growth and residential redevelopment.

I, for one, would like to see us grow back to a population of 250,000 before I die.

In the meantime, we could start with a more modest goal of growing our population back above 200,000. Given current trends, it is not going to be as easy as it sounds.

If we could get one in five homebuyers in Summit County to end up purchasing a house in Akron (who would not have otherwise) we could get back above 200,000 – provided that we are building enough new housing that we are not simply playing musical chairs with the existing housing.

Attracting one in five prospective homebuyers in Summit County to Akron is doable, and that includes families with children.

To those who would offer knee-jerk arguments that prospective homebuyers would never send their kids to the Akron Public Schools, or be willing to pay for private schools, it is important to point out that, today, less than 30% of American households are even composed of families with children.

I would also argue that social problems like poor public school performance are every bit as much an effect of urban population decline as they are a cause of it.

Rebuilding the middle class in Akron would do far more to restore the performance of the Akron Public Schools than additional funding or an imaginary set of better teachers would.

If we can learn how to build new housing, and attract new residents to Akron, we could begin to mitigate our abandoned and vacant property problem; begin to restore our tax base; and begin to create new markets for entrepreneurship and small-business development in our neighborhoods.

It would create new opportunities, new jobs, and provide more people with a wonderful place to live.

It would also leave plenty of residential growth to go around for the remainder of Summit County.  After all, the City of Akron still accounts for 37% of the county’s population, so attracting 20% of the new homebuyers is far from an unreasonable or an inequitable goal.

Restoring the residential housing market in Akron would also be good for taxpayers throughout Summit County.  As property values decline in the urban core, it is suburban homeowners who end up having to make up the difference.

I think that Akron has the human capital, and the innovative and collaborative culture to figure out how to do this.

But we have to get intentional about it.  It’s not going to happen on its own.

–By Jason Segedy. Originally published at his blog Notes from the Underground.

 

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Block Parties: A New Solution to the Rust Belt Housing Problem?

Rust Belt cities have numerous neighborhoods that are sometimes called “transitional.” Unfortunately, it’s not always clear in which direction they are transitioning. On one hand, these neighborhoods often offer proximity to downtown or another immobile amenity such as a waterfront or a university. This makes them desirable to young professionals, couples without children, and some parents who choose to raise their children in an urban setting. On the other hand, these neighborhoods have far more housing units than households due to decades of sprawl and filtering. This keeps rents low and means the neighborhoods cannot offer the exclusivity always found in gentrified core neighborhoods of the coastal cities.

The potential buyers walk around their favorite Rust Belt core neighborhood and see homes for sale that they like, or inexpensive fixer-uppers that they could work wonders on. But they also see tons of “for sale” signs. For every one of those signs, they have to wonder, “who is going to buy that one?” Will it be friendly neighbors who will maintain it attentively, or a neglectful, out-of-state speculator? As the neighborhood continues to transition over the next several years, will it become safer or less safe? When it’s time to sell, will the home have at least held its value, or will they lose everything they invested?

There could very well be enough young professional home buyers to purchase all of the homes for sale on the block, but only a few will have the guts to take the chance. The others may take the safe bet in the suburbs. This situation is what academics (“game theorists” in particular) label a coordination game. Independent actors could be better off if they all choose one action, but any one person is worse off if they choose the action and others don’t. Coordination games end well when there is a way to share information, or better yet, have actors make a commitment. With a little effort and creativity, sellers’ agents or a neighborhood advocate could make this happen.

Here’s the recipe I’m proposing. First, identify a small geographic area in a transitional neighborhood that has several homes on the market–six to twelve homes on two or three face blocks, for example. Schedule a meeting with the agents representing the homes. Choose one or two days in the spring or early summer and schedule short (2-3 hour) joint open houses that we’ll call a block party. The time window should be limited because in addition to viewing the homes, the purpose of the block party is for potential buyers to meet each other. This only works if they’re in the area at the same time, rather than scattered throughout the day. As buyers walk from house to house, the agents should explicitly encourage them to meet each other and talk about where they live now, where they work, why they like the area, and their plans for the future.

Now that the buyers know something about the houses and each other, we bring in the commitment mechanism. Buyers can submit contingent contracts that say, in the necessary legalese, “I will buy the house at 123 Water St. on September 1st for $X if 6 of the 8 other block party homes have offers from block party buyers.” The seller can accept or reject the offer, and they retain the right to sell the home to a higher bidder if one appears before the first of September. Of course, this setup presumes that housing demand is weak and offers are rare. If the block parties fail to generate enough offers to trigger the contracts, the buyers can resume their search. In some cases, they may have set their hearts on the home and opt to buy anyhow. If the parties work, then the neighborhood takes a big step in a good direction. Block party buyers would probably be willing to attend and greet people at a similar party the next year on an adjacent block.

— This article was submitted anonymously by someone very smart.

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Pittsburgh’s PHLF Preservation Group Takes on Major Downtown Project

Check out the work being done by the folks at the Pittsburgh History & Landmarks Foundation, which they highlighted in this video.

Learn more about their history and their work downtown, which has gotten some recent publicity.

-KG

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Study: Housing Bust Turns Parts of Sun Belt…into Rust Belt

Frequent Rust Wire readers know we’ve written before about the housing crisis creating Rust Belt-like conditions in some Sun Belt cities, such as Las Vegas (See here and here).

Now there appears to be actual data to back that up, according to a study from the Research Institute for Housing America, a division of the Mortgage Bankers Association.

The Los Angeles Times explains:

“A traditional city in decline is one that has suffered a sustained population drop, leaving behind empty houses, apartment buildings, offices and storefronts. Cleveland and Detroit, for instance, suffered from the erosion of manufacturing and the loss of residents, who left in search of jobs.

Instead of eroding a particular industry, however, the housing bust left a glut of homes because of overbuilding and the foreclosure crisis. Follain (The study’s author) argues that the future of these cities is threatened in similar ways to that of Rust Belt cities.

‘Long-vacant neighborhoods are going to develop, and we can imagine what can happen,’ he said, including potentially higher crime and lower property taxes.”

Particularly hard-hit, are inland areas of California, this article says, as well as places in Florida and Nevada.

Read the study here.

-KG

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Chicago to Redevelop Former Steel Site

The former US Steel South Works in South Chicago will be redeveloped, The New York Times reports.

The “ambitious” $4 billion plan will remake the 470-acre site with homes, a marina, commercial space and a school, the paper reports. It is the largest undeveloped parcel in the city.

You can learn more about the history of the site here; take a look at the before and after photos from the mill’s heyday (below).

This history site notes that 20,000 people once worked at the mill, which closed in 1992 after operating 110 years. It also notes that plans to redevelop the site have come and gone.

There is reason to be skeptical this plan will come to fruition. The Times notes, “the city is overwhelmed with unsold condos and housing units left over from the housing bubble. ‘We currently have years and years of oversupply,’ said James Kinney, the vice president for luxury sales at Baird & Warner real estate.”

Read more history about the site here and see some Flickr shots here.

-KG

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Cleveland Takes its Fight Against Wall Street to the Supreme Court

We’ve previously written about Cleveland’s lawsuit against 21 big banks over the mess that was created by the foreclosure crisis.

This article in Cleveland Scene summarizes the case nicely:

“The case against the banks isn’t a class action about individual homeowner losses, or whether they were tricked into signing commitments they couldn’t keep. (Attorney Joshua) Cohen knows that’s a common misunderstanding. Instead, it’s about the big picture from the city’s point of view — an attempt to recover money Cleveland has been forced to spend cleaning up the mess Wall Street left behind.

The foreclosed homes often end up as abandoned, ugly board-ups that are a haven for crime. The city is left to mow the grass when neighbors complain about rodents. The police end up dealing with festering drug problems. All of that costs money. And ultimately, the city must demolish thousands of these derelict properties at a cost of $7,000 each or more. But Cleveland is not alone: A similar case filed by the City of Buffalo, New York, claims the maintenance, police attention, and eventual demolition of foreclosed homes totaled as much as $16,000 per building. Of course, Buffalo was left holding the tab.

‘Was it irresponsible lenders or borrowers?’ Cohen asks rhetorically. ‘You could argue that until the cows come home. But whatever conclusion you reach, Cleveland was an innocent bystander. It’s amazing to me that the financiers have not been called to answer for this in any meaningful way.'”

Where does the case, filed in 2008, stand now?

Headed for a long-shot run at the US Supreme Court.

In addition to Cleveland, similar suits have been filed by Buffalo, Cincinnati, Baltimore and Memphis, the article states.

-KG

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Cleveland Housing Judge Cracking Down on Vacant Property Owners

Cleveland Housing Court Judge Raymond Pianka is making news again for his aggressive stance on dilapidated properties- especially those purchased by people outside of Cleveland and hoping to make a quick buck.

Judge Pianka’s work was previously highlighted on Rust Wire and in this New York Times Magazine cover story last year. (Read more about him here.)

The Plain Dealer reports he is ordering absentee owners of vacant homes to pay restitution to neighbors whose property values have been eroded by the vacant structures nearby.

“What is happening (in Cleveland) is certainly at the forefront of initiatives seeking to impose liability upon the owners of substandard properties,” Frank S. Alexander, a professor at Emory University School of Law and general counsel for the Center for Community Progress, told The Plain Dealer.

What do you think? Is this a good way to deal with such properties?

-KG

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