This is true for market rate developers who bring forward upscale, glitzy, high-end projects designed to serve and attract middle and upper class urban consumers. No mater where or what type the project, challenges and obstacles always arise to the threaten success of most every deal.
Of course, for-profit real estate developers usually enjoy the powerful advantage of adequate investment capital, political influence and community support and, very often, the buy-in of public officials who invest city funds in hopes of realizing significant returns through a growing tax base, at least eventually.
Beyond the direct investment of community funds, upper end real estate deals often benefit from tax abatements and/or deferments, code exemptions or exceptions of various kinds, infrastructure development on the public tab and positive community influence moved to action by marketing dollars and public relations campaigns. A number of Dallas projects currently underway come to mind as I'm writing here.
Real estate and economic development aimed at benefiting low-income, inner-city neighborhoods and the people living in and around the urban core of a place like Dallas is much, much harder. In fact, the magnitude of comparative difficulty can only be fully understood by those who attempt to make such deals work!
Developers, interested in bringing new housing stock along with new, viable retail opportunities to low-income consumers, face unique obstacles and challenges:
- Timely acquisition of property, including the ability to hold property while assembling remaining parcels for a proposed development plan
- Funding for predevelopment costs--appraisals, preliminary designs, market analysis, public relations, legal costs, staff costs, etc.
- Interim financing for planning, design, construction and bringing the project to market
- Delays associated with working in a bureaucratic environment that often lead to significant price increases over time, forcing deals to be restructured and/or redesigned, sometimes again and again
- If a project intends to develop and sell single-family homes, mortgage assistance funding is almost always required to make such deals work, dollars that often are either not available or are offered at a level that are inadequate
- Community resistance that takes the form of "not in my backyard" thinking and political pressure and opposition
- Limited public funding for such developments due to community and political priorities
- Bias that takes various forms against low-income persons and their assumed capacity to improve their lives
- Fear that such developments will lower surrounding property values
The list could go on.
One thing is very clear to me. Real estate and economic development efforts aimed at improving the lives and the living environments of residents of inner-city and core city neighborhoods are extremely difficult to accomplish.
Such projects will not be accomplished at any significant scale without the commitment of public dollars, the formulation of new incentives that encourage both non-profit and for-profit developers to enter the market, and the political support and will necessary to see a comprehensive strategy through to completion over a significant period of time.
If our goal really is the redevelopment of inner city communities, depending on free market forces alone will not get the job done.
One thing I know for sure: Developing quality real estate in inner city and urban core neighborhoods is not just about dollars and zoning and agreeable contracts.
It is primarily about community values.