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Planning for Proximity: How a Study in Real Estate Development Can Promote Social Mobility

Emily Garr Pacetti — Former Associate Director
Sandra Lobo — Executive Director, Northwest Bronx Community & Clergy Coalition
Katherine Mella — Program Associate, Community Innovators Lab, MIT
Photo by Christopher Burns on Unsplash

Local businesses, governments, and neighborhood advocacy groups generally have one thing in common: a desire for thriving neighborhoods where old and new residents can increase incomes, build wealth and invest back into their local community. Recent research by the Center for Real Estate and Analysis at the George Washington University (GWU), with support from The Rockefeller Foundation, suggests that one promising and profitable way to achieve that vision is to identify and invest in affordable neighborhoods that are close to both transit and jobs. This ensures residents have opportunities to build skills and wealth not only for them and their families, but the community generally.

The first-of-its-kind survey of land use in New York-New Jersey-Connecticut tri-state region (residential, commercial, industrial, hotel and office use) points out that walkable neighborhoods tend to be more socially equitable neighborhoods. In this case, socially equitable is roughly defined as 1) affordable 2) accessible to jobs within 45 minutes and 3) close to transit.

A Fair Conclusion?

Evidence from the New York City region shows that more walkable places tend to be more equitable places, but just because walkable places seem to be more equitable now, doesn’t mean it will stay that way.  The New York City region has “some of the most iconic and globally significant walkable urbanism on the planet”—and most walkable of the top largest metro areas in the U.S.  But how equitable these neighborhoods are, or can remain in the face of rising housing and gentrification pressures, is debatable.

While we subscribe to the general optimism that developing for density has benefits for long-time residents, it comes with a dose of realism and caution. Often the things that make places more desirable for real estate investors and home buyers, also make places less (not more) equitable over time.

These “socially equitable” places as measured, often rely on proactive housing policy and subsidies that increase affordability and preservation of residential properties, to help the retention of long-term, low- or moderate-income residents. Yet like many places across the country, efforts to promote affordability by local governments in the tri-state region, and New York City, in particular, seem insignificant in the face of increasing market pressures. Over the past 5-7 years, real estate prices have risen in New York City metropolitan area (an area roughly similar to the tri-state region used in the GWU study that includes PA but not CT), while relative poverty increased (defined in Brookings’ recent 2017 Metro Monitor as the share of people earning less than half of local median wage).

Nowhere is this more apparent than in the five boroughs of New York City, where the neighborhoods defined as most “walkable” and most “socially equitable” tend to be concentrated. The Bronx in particular, despite being ranked highly walkable and socially equitable in the GWU study, also has the highest proportion of tracts of any county in the region at risk for displacement, according to another 2017 study by the Regional Plan Association.

Getting the Scale Right

The implications of the data and the findings are both urgent and important. They feed into long-term planning efforts, such as the Regional Plan Association’s Fourth Regional Plan, and is an opportunity for real estate developers, neighborhood groups, and local governments to identify solutions for some of the most at-risk neighborhoods that provide a win-win-win for all parties.

Unfortunately, real estate, advocacy, and government stakeholders tend to work on different geographic scales. While policy is generally enacted at the city level, planning and advocacy happen at the local and neighborhood levels, and real estate industry often looks at the submarkets of a region—boroughs (counties) in New York City case. Since real estate is a key development force, aligning on a similar scale of analysis could allow for more meaningful collaboration across stakeholder groups and increase the viability of inclusive outcomes.

For example, the GWU study recommends “inclusionary zoning,” which typically requires a minimum percentage (usually 10-20 percent) of affordable housing in each new development as a way to guarantee affordable housing within walkable urban places. The City of New York has done this in its Mandatory Inclusionary Housing (MIH) policy.  In theory, MIH can be an important way in which to protect against gentrification pressures and ensure existing residents are not displaced by new market rate development.  However, affordability was calculated using a city-wide income measure that undermines the ability of these communities to retain low or moderate income populations.

Let’s go back to the Bronx for a second, which counts on the lowest incomes of any borough in New York City. The median income for a household in the Bronx is about $35,000. This compares to more than $70,000 in Staten Island and Manhattan. Even within a borough, incomes can fluctuate substantially, e.g. 84 percent of Longwood residents’ median incomes are below $40,000, compared to 51 percent of residents’ incomes in the East Bronx.

Although imperfect, a better scale at which to develop a benchmark for inclusionary zoning would be on the borough level.

Planning and coordination at that level would reflect the unique demographic, economic (e.g. housing prices, median family incomes) and environmental (e.g. land use regulations, green space, coastal conditions and risks) circumstances and trends of each place.

The Bronx Cooperative Development Initiative (BCDI), a network of grassroots organizations, labor, anchor institutions, elected officials, and finance partners in the Bronx, uses this borough-wide approach to combat displacement. Since January 2017, BCDI has played a coordinating role and bringing additional technical assistance and strategic planning capacity to a table of community organizations advancing “development without displacement” efforts across the borough. The organization is using the data from this study to help complement efforts to understand existing trends and identify areas of opportunity.

This research signals a major opportunity and challenge for stakeholders across the tri-state region: an opportunity to identify and invest in places that offer affordable neighborhoods that are near jobs and transit – a critical lever for residents’ upward mobility, and also a challenge to maintain such places that already exist. The stakeholder audience for the study’s findings are varied and include organizations like BCDI in the Bronx, cities like New York City, and real estate investors such as those that helped co-sponsor the GWU study.

Spatial proximity, such as access to goods, services, and job markets, has undeniable benefits for low and middle-income populations, but planning processes can also exclude and marginalize. It is important that inclusion be actively and intentionally fostered. And a borough-wide strategy that leverages a community’s unique assets, needs, and aspirations can help ensure that the rich social fabric, culture, and local contributions that make so many of NYC’s neighborhoods desirable, affordable, and walkable places remain that way for residents and businesses, old and new, for years to come.

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