Strategic Neighborhood Redevelopment: Part 1 – Six Problems Perpetuating Economic Disinvestment and Distress

By Ian Colgan | Redevelopment & Revitalization | Jun 29th

This article is Part 1 of a four part series titled “Framework for Strategic Neighborhood Redevelopment.” This series provides the considerations involved in formulating a meaningful neighborhood redevelopment strategy. From Development Concepts Inc.’s 19 years of redevelopment experience, we’ll explain what is involved in establishing redevelopment strategies that produce sustainable private investment.

Since the rise of suburbs after World War II, many urban neighborhoods in central cities throughout the country have suffered from disinvestment and distress. In order to redevelop and revitalize these neighborhoods, it is important to craft a strategy for neighborhood redevelopment. Before crafting a neighborhood redevelopment strategy however, it is important to understand the common problems that exist in these distressed neighborhoods.

There are a host of reasons contributing to the economic abandonment of a neighborhood. Initially, one or two causes may have played a significant role in precipitating an area’s decline – ultimately resulting in a new and expanding list of factors that serve to expedite the rate of disinvestment and ultimate stagnation. The issues and problems identified in this section are not necessarily the root cause of the decay. Instead, almost without fail, they are pervasive long term factors which create a “closed for business” mentality in these distressed areas.

The following is an overview of the problems/ issues inherent in our most distressed urban geographies.

1.    Condition of Private Property

In many distressed areas it is clear privately held properties are only receiving minimum attention in terms of maintenance and reinvestment. This is often due to the economic means of the property holder, and in many cases results in the abandonment of the property. This lack of property maintenance by owners leads to an exponential decrease in property values. Income and investment resources try to exit the market prior to the area losing all value. The result is the abandonment of an area – with some blocks becoming the modern day equivalent of a ghost town. Empty buildings, roadways filled with garbage and weeds, and lot after lot receiving no attention serves as a visible reminder these neighborhoods are no longer places to do business or live. Land is no longer performing in the marketplace and is effectively “locked down”, due in part to the exodus of the private sector and its investment. While this description may seem like hyperbole, it fits significant tracts of land throughout the country.

There are areas where the distress is not as dramatic. An area may enjoy some attention in the form of an increased presence of speculators and entities looking for cheap, undervalued real estate that can meet a specific need with a minimum amount of reinvestment. Individual needs range from generating steady income from those looking for a shelter (business and/or residential) of last resort, to having a location to engage in illicit activity. In these instances, the goal is not to contribute to the surrounding area or to improve the property. The goal becomes to create income with as little investment in time and money as possible.

2.    Condition of Vacant Land Parcels

As an area begins to decline, one of the most noticeable outcomes is the lack of property maintenance. Vacant lots become trash dumps. Speculators and absentee land owners often engage only in coerced property upkeep. If the coercion is not present the maintenance of property likely will not occur. Vehicles parked in open lots, fences of all materials and conditions, and outdoor storage become the norm. In other words, now that those with a vested interest have for the most part exited, almost anything goes in how land is to be treated and maintained.

3.    Condition of Public Improvements

In many of these now distressed areas, not only has the private market departed, so has the attention of many public sector institutions. This is most noticeable in the condition of the streets, curbs, and sidewalks. Street gutters become cluttered with trash, vegetation growth, and dirt. Sidewalks begin to crumble and in many cases disappear altogether.  Alleys become overgrown and excellent candidates for the dumping of trash. Unmaintained street lights make it easier for crime to go unnoticed during evening hours. Public Parks may not be well maintained, or secure, becoming a neighborhood liability instead of an amenity. Most businesses and residents will testify that the hopelessness of these abandoned areas is no more endemic than in those agencies charged with providing oversight and attention to the public domain.

4.    Real Estate Configuration

In many older urban areas, land was zoned and platted for specific uses: industrial, commercial, or residential. In industrial areas many businesses were served by rail lines. Large parcels of land were dedicated to both buildings and outside storage. These areas were rarely regulated for air or ground contamination resulting in numerous brownfield sites. Brownfields have become a liability issue for both the existing user and future users. In many cases this caused the property to become closed to future investment and financing opportunities. Commercial areas designed for smaller “mom and pop” establishments struggle to function as larger retailers gained a competitive advantage and encouraged customers to conduct their business outside the neighborhood. As the smaller storefronts emptied, marginal and poorly capitalized establishments replaced them. Even worse, the storefronts often remained empty.

5.    Shortage of Services and Amenities

Many of our older urban areas are not seen as readily addressing the day-to-day needs of business or residents. Support services are often scattered across a broad geography, if available at all. Clustered convenience retail centers do not exist for the most part. The ability to bank, fill up the car with gas, drop off the dry cleaning, and make a quick run to the grocery is practically non-existent to most living and working within a three-mile radius of downtown. With the exception of the urban core, business and residential services are so scattered it becomes easier to drive five- to ten-miles to find an area where services are more concentrated. Organized sporting activities, walking and jogging trails, dog parks, and affordable entertainment options, while customary in more suburban locations, are spread in a manner that lacks impact and goes unnoticed by the majority of the market. Since many services must be accessed by using a car, parking becomes a significant issue. If parking is available, there is often an associated cost or it is an inconvenient distance for the user. The lack of convenience in executing day-to-day functions, combined with the inability of most urban areas to organize around these needs, creates an unattractive environment for both residents and businesses.

6.    Perception of Crime

Crime is an issue of both perception and reality. The appearance of our more distressed areas creates a sense of danger and lack of control. Coupled with vandalism, property theft, and in some cases violence, this elevates a serious issue into one that alienates investment. More visible distress combined with random criminal incidents exaggerates the danger when compared to a well populated, better maintained area. Overcoming the visual disparity is extremely difficult, let alone confronting whatever the reality of crime might be.

Tags: Brownfields, Disinvestment, Economic Distress, Neighborhood Redevelopment