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.
2 comments:
If you think there is poverty now, what will happen if the so called "immigration reform" becomes law. On average, low skill immigrant households receive $19,588 more in immediate benefits than they pay in taxes each year. Thats nearly 1.2 million in lifetime costs for each household, paid by taxpayers. This will vastly expand the welfare state.
As soon as the President signs the immigration bill, should it be voted in, the immigrants immediately become legal and as such entitled to all fiscal benefits of citizens. They do not have to wait until they become citizens. Indeed, very few will even care about that since it supposedly will cost $5,000. Not that it will be enforced, of course. There will be talk of taking food from the mouths of children, etc.
Factor in the fact that the newly legal people can bring in their 4th cousins and you have perhaps a hundred million low income, unskilled immigrants. This country just cannot afford this!
It's thought that one reason the President wants this bill is because there is not enough wage earners paying into the social security system. However, the immigrants will use more services than their SS payments would amount to since they are mostly unskilled.
There are many more reasons why this bill should die but this is one of the main reasons.
I wonder how long it will take to overcome NIMBY-ism in light of such political actions by local governments. This email was sent recently to the Office of Inspector General and Federal Officials voicing such concerns.
Dear Sir,
I wish to ask for yours' and the Committees' assistance in a manner concerning the McKinney-Vento Homeless Assistance Act. As you know, all retired (surplus) military property is prioritized for the use of "homeless programs". A property will soon become available in Dallas and non-profit agencies have shown an interest using it for housing. (SRO’s)
Instead of giving ample opportunities to the agencies, the City has decided to take the property for itself.
This was not the first time this has happened in Dallas over the last 6 years. I have enclosed part of one email from a nonprofit outlining the problem. Also, I have forwarded this information to the National Law Center for Homeless and Poverty and the National Coalition for the Homeless. Any Assistance would be greatly appreciated. I believe Federal Law should be in the hands of the Federal Government and not in local hands, which can subvert the process.
Respectfully,
James K Waghorne
From: Liam Mulvaney [mailto:lmulvaney@lifenettexas.org]
Sent: Friday, May 25, 2007 2:58 PM
To: Jesse Aguilera
Cc: 'Tras Livingston'; 'Faenza, Mike'; 'Melodie Shatzer'
Subject: MDHA Membership Meeting
Last year, the federal government declared the Army Reserve Center on Northwest Highway to be “surplus” and announced that it will be closing. There is Federal law, which governs how such surplus property is to be disposed of. In its wisdom, the federal law requires a diligent process of determining whether and how the property in question could be used for homeless assistance purposes. If, and only if, the outcome of that due diligence is that there is no conceivable way for the property to be used for the purpose of assisting the homeless, then the law allows for a “public benefits conveyance for a non-homeless assistance purpose.
LifeNet last year submitted a Letter of Interest (LOI) on the property and we stated that we would consider using the property for SRO housing for the homeless. Several other entities submitted LOI’s also. No one from the City of Dallas (which was designated as the “Local Redevelopment Authority (LRA) ever contacted LifeNet for more information about our plans. It is my understanding that no one from the City talked to MDHA about their thoughts on any possible homeless assistance use for the property. Nonetheless, in May the staff of the City of Dallas disclosed that they are recommending that the property be given to themselves (through the Parks and Recreation Department).
To: James Waghorne
From: Jesse Aguilera
My apologies to you for not letting you know sooner. I read the City Draft and it is a plan with some obvious flaws. This plan gives the false impression that the Homeless Assistance Center is being built so this fed property is not needed for this purpose so let's appease the neighbors and use it as a park property. Yet none of the applications for this property was for the HAC but only for housing. Besides, the location for HAC was decided to be near Downtown years before the BRAC process even started. The draft even has drawings of the HAC. The proposed use of the property for housing was not even addressed. In my 3 minutes at the hearing I spoke about the lack of consideration to their Ten Year Plan to End chronic Homelessness. I also mentioned the Presidio in San Francisco as a good example of a BRAC process resulting in homeless housing SRO mixing well with single-family housing and offices. I toured the SRO and was impressed with how they preserved the historic value with the housing needs of the community.
The real heros are those who are friends to the poor. Nelson Mandela
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