Americatalyst Conference 2013 "Renting the Future"

Last week I had the chance to join a panel at the Americatalyst Conference.  We had a very productive conversation on community revitalization.  To learn more about the discussion read the summary below. 

You Can Fix a House, but can you fix a neighborhood?

Leading initiatives in neighborhood and community revitalization. 

Participants:

Moderator: Toni Moss, AMERICATALYST LLC

Co-Moderator: Julia Gordon, Director, Housing Finance and Policy, CENTER FOR AMERICAN PROGRESS

Ethan Handelman, Vice President for Policy and Advocacy, NATIONAL HOUSING CONFERENCE     

Robert Klein, Chairman, SAFEGUARD PROPERTIES and Chairman, RIK ENTERPRISES    

Craig Nickerson, President, NATIONAL COMMUNITY STABILIZATION TRUST

Tom Deyo, Vice President, NEIGHBORWORKS AMERICA

 
The initial promise of single-family rental was the large-scale renovation of foreclosed properties to stem the tide of neighborhood decline resulting from the crisis. Institutional investors have, for the most part, focused entirely on individual properties, leaving it to the non-profits to revitalize neighborhoods. The need for community redevelopment is so great that today, non-profits are increasingly partnering with for-profit firms with surprisingly profitable outcomes. This panel discussed some of the more unique opportunities, initiatives, and cutting-edge projects that make a crucial difference in distressed communities around the country.

Craig Nickerson began the discussion by talking about the group of individuals who were hit the hardest by foreclosure crisis and how they continue to be affected.  Low to moderate income families were hit in two waves with subprime mortgages and now do not qualify for loans.  Their only option is to rent  There is a lot of research that says the primary people who want to invest in these neighborhoods are the people who already live there.  Inevitably,  the same residents are opponents of rental markets in these communities. 

Toni Moss built on Craig’s thoughts and asked the panel where can NSP funds be utilized under these circumstances and what is the current status of the $7 billion allocation.  Ethan Handleman responded to this question by addressing the challenges around the use of these  and the associated timelines.  The money had to be spent in a very subsidy intensive way. NSP served as a capacity creator and generated a lot of lessons for non-profits who have become more sophisticated as a result.  What we are seeing now is a real recognition that the work that needs to be done goes well beyond $7 billion dollars.  Robert Klein asserted that NSP did not create a sustainable model for revitalization.  Tom Deyo added that NSP taught us the value of non-profits and brought us to place an emphasis on the history these organizations have in their communities.  It ultimately led us to understand what non-profits are good at and realize the importance of public private partnerships.  Craig Nickerson posed the question to the panel, where do we go from here? What we have today Is a realization that public private collaborations are necessary and we increasingly see these types of partnerships. 

 

To provide a real picture of how of how non-profits and private organizations can work together in this manner, Robert Klein discussed a concept he has developed and is implementing in Cleveland’s Slavic Village. Klein explained that the Slavic Village Recovery project is a private/non-profit partnership coming together to fight blight by rehabilitating a neighborhood where between 23% and 30% of the homes are vacant.  This project is unlike any other because it targets several properties at a time to bring large scale change to a neighborhood.  The holistic approach, using both demolition and rehab, is being viewed a case study for the creation of an affordable housing model that can be replicated in communities around the Country.  The project does not use public funds but has support from the City of Cleveland, as well as local stakeholders.  The goal of the SVRP is to acquire homes at little or no cost from the local land bank and lenders for rehabilitation and resale for a price up to $60,000.  Klein emphasized that one of the most important premises being utilized in the Slavic Village Recovery Project is that the public/private partnership should be operated like a business. 

Craig Nickerson added another perspective and spoke about the role investors can play in community revitalization.  Nickerson explained that there can be misconceptions about who investors really and the perception that these individuals do not have an interest in community stabilization.  Nickerson said that there is a need to change the perception on who these investors are and how they can revive a single-family rental market. Robert Klein responded by explaining that investors would not be successful with a home by home approach in helping to rebuild a community and empathized that a revitalized rental market would require several properties to be rehabilitated.  This approach also discourages the flipping of homes. 

The panel concluded with the participants agreeing that it is necessary to embrace the spirit of collaboration and the idea that not every investor is harmful to a community when reviving a single family rental market.