First, a review of some generally accepted criteria that identify a development as New Urbanism, or, as we prefer to call it, Traditional Neighborhood Development.
From a market and development perspective, the neighborhood is the building block of community, in the same way that the block is the building block of a neighborhood.
A Traditional Neighborhood theoretically encompasses 125 acres to accommodate a five-minute walk to the neighborhood center.
A Traditional Neighborhood includes a variety of residential units, from inexpensive rentals to high-priced detached houses.
A Traditional Neighborhood has a continuous street network with a hierarchy of streets, from high-capacity boulevards to narrow rear lanes or alleys. Neighborhood streets should have relatively narrow cartways, small curb radii, and sidewalks, to accommodate pedestrians and bicyclists as well as motor vehicles..
A Traditional Neighborhood has streets fronted by private or public uses;. Parking lots and garage doors should not face the street. Front doors should.
A Traditional Neighborhood has a Neighborhood Center, which is organized around a civic place, such as a plaza or green, and includes higher-density residential as well as, potentially, a mix of non-residential uses.
If the area is large enough to accommodate more than one neighborhood, a Traditional Neighborhood can even have a Town Center, serving several neighborhoods–with a mix of civic, commercial, retail and residential uses.
There are a number of other criteria that are used by planning firms, but for us, as market analysts, these are the most important criteria from both the market and the development perspectives.
First, the issue of gentrification, particularly considering the track record of most New Urbanist developments to rapidly escalate in value.
In 1998, before dot-com and high-tech companies drove California real estate through the roof, the three least affordable cities in the United States were New York, San Francisco and El Paso, Texas. El Paso was number three, not because its real estate values were so high–they’re not. There are actually new single-family detached houses for sale in El Paso for about $65,000. El Paso was number three because its per capita incomes were so very low, that even with an average sales prices of less than $80,000, only a small percentage of households could qualify to buy a new house.
New York and San Francisco have serious problems with displacement of existing residents caused by gentrification. El Paso does not. Values are so high in New York and San Francisco that low-income neighborhoods are rapidly being gentrified and the existing residents are rapidly being forced out.
The City of Wheeling, West Virginia has so many vacant housing units in and near the downtown that the city is desperate to have affluent households move in and upgrade the housing stock. In Wheeling, displacement is not even an issue.
Gentrification in and of itself is not a malign social development; displacement of existing poor residents as a result of neighborhood gentrification is.
Although one of the principal values of New Urbanism is to provide new housing for all kinds of people, with a wide range of incomes, the reality is that, for the most part, New Urbanist communities provide new housing for middle-to upper-income households.
Why? One of the principal reasons is that there are a variety of impediments–from high land costs, lengthy approvals process, difficulties in obtaining financing–to bringing a new development to market that tend to inflate values beyond the reach of the low end of the market. It is difficult to provide affordable housing, and stay in business, when a builder is facing development costs of more than $75 a square foot. The grim reality of new development, or redevelopment, is that it is nearly impossible to provide "affordable" housing without some form of significant public (meaning government) participation, through a variety of mechanisms, including rent subsidies to low-income renters; grants and low-interest loans to low-income buyers; density bonuses, tax credits, TIFs, and property tax abatements, among other programs, to builders and developers.
A number of states, counties and cities have addressed the issue of affordable housing through what is known as inclusionary zoning policies. These policies take a number of different approaches, but two of the most "successful" in terms of actually getting substantial numbers of affordable housing units built, are in Montgomery County, Maryland and the State of New Jersey.
Montgomery County requires that at least 12 to 15 percent of the dwelling units proposed for a new development of 50 or more units be affordable, which is defined as 60 percent of the area median income.
The State of New Jersey requires that each municipality provides its "fair share" of affordable housing, as determined by COAH, or the Council on Affordable Housing. The individual municipality can achieve its fair share in a variety of ways:
By loans to residents to create accessory apartments that are affordable to low-income households;
By developing and building the required number of units;
By paying "X" amount of dollars per unit, as determined by COAH, to another New Jersey municipality that has a high proportion of residents living in substandard dwelling units; and
By providing those units within new development projects, through density bonuses to the developer.
These are laudable programs. However, the implementation of these policies are a perfect example of the law of unintended consequences.
Here is a townhouse development in Clinton, New Jersey.
Compare the market-rate units with the affordable housing units, which positively shout "affordable, affordable."
How can New Urbanist planning and design techniques have an impact on social equity, or the provision of housing for people with a wide range of incomes, household composition, and lifestyles, and how does it differ from conventional approaches to affordable housing?
The key is the ability of New Urbanist planning and design to provide for a wide variety of housing types within the same development, the same neighborhood, and even the same block.
Example: Wyndcrest, 26-unit Duany Plater-Zyberk designed landplan.
On a larger scale, HUD’s adoption of New Urbanist planning techniques for the revitalization and redevelopment of failed public housing, through its HOPE VI program, provides some of the best and most successful examples of how New Urbanism achieves the integration of not only incomes–the mix of public replacement housing, tax credit, and market-rate–but housing types–including rental and for-sale apartments, townhouses and duplexes, and a wide range of single-family detached houses.
Urban example is the First Ward, in Charlotte, North Carolina, planned by Urban Design Associates.
In addition to public housing rentals, and family self-sufficiency units, the First Ward contains market-rate rentals, and for-sale units, ranging from condominiums priced under $150,000, townhouses priced between $150,000 and $200,000, and single-family detached houses priced up to $300,000.
Suburban example is Park du Valle, in Louisville, Kentucky, also planned by Urban Design Associates, which, from a market perspective, is one of the most successful and fully realized Hope VI redevelopments.
All of the rental units, both market-rate and public housing, are fully leased, and the developer has a waiting list of more than 4,000 applications.
Prices for the single-family houses range from $75,000 and $240,000, a price range comparable to conventional subdivisions in Louisville. The houses on Algonquin Parkway (a boulevard designed by Frederick Law Olmsted) ranged in price from $150,000 to $400,000.
What makes a New Urbanist-designed neighborhood work?
by Laurie Volk, 2001
The neighborhood must have the appropriate balance. Too many low-income units, particularly in the first phase, and the neighborhood runs the risk of retaining the stigma of a "project." Too many market-rate units and the neighborhood runs the risk of being accused of gentrification at the expense of residents who already live there.
Successful implementation rests on several critical development principles that are common to the establishment of all healthy neighborhoods, and are intrinsic to New Urbanism:
Buildings must be designed to enhance the public realm, facing well-defined, walkable streets, to provide the "eyes on the street" that will ensure public safety.
To achieve the goal of a truly mixed-income, mixed-tenure neighborhood, the rental and for-sale units should be interspersed throughout the community, rather than located in single-use "pods."
Logical relationships between densities and tenures must be established, from both the market perspective and the property management perspective. In the case of Park duValle in Louisville, Kentucky, this was achieved through a progression of density on a given street, moving from a six-unit apartment building on the corner to a rental duplex or triplex building to for-sale single-family detached houses in mid-block.
The occupants’ income level or tenure must not be discernible from the street. All units should have the same quality of materials and design, inside and out.
A neighborhood that has enduring value must be a place of rich diversity, not only of incomes and housing tenures, but also of options and opportunities for all residents.
Link to article
Thursday, April 30, 2009
Wednesday, April 29, 2009
Making a Case for Mixed-Use, Mixed-Income Communities to Address America’s Affordable Housing Needs
By Renée Lewis Glover
Chief Executive Officer, Atlanta Housing Authority
Presentation to
Center for American Progress
October 12, 2005
The purpose of this document is to provide insight on the 10-year process of revitalizing 13
communities in Atlanta; the impact this revitalization has had on the affected families; and the
benefits of the revitalization enjoyed by the city. In Atlanta we have learned very compelling
lessons—lessons which provide an answer to the vexing question:
“How do we save large urban centers and, more importantly, honor the covenant our
government has with its citizens?”
In Atlanta, we have been engaged in an across-the-board physical and social transformation.
We have:
1. Razed more than 5,000 dilapidated apartments throughout the city and in their place, with
our private sector development partners, developed 13 mixed-use and mixed-income
communities. As of today, AHA is serving more families than in 1994 and in substantially
better living conditions; and
2. In partnership with our private sector partners, AHA has leveraged approximately $250
million of federal grants to approximately $3 billion of new investment and development in
Atlanta, with a combination of private investment, local government investment and related
economic activity.
Still, many Atlanta communities and families are suffering from the terrible effects of
concentrated poverty. These communities must be revitalized as well. This can be
accomplished through national housing policies that support mixed-income community
development program and that make use of reasonable market principles. By authorizing and
appropriating funding for such a program, the nation would:
• Provide eligible low-income American citizens with access to decent, affordable housing
(rental and ownership) in healthy mixed-income communities, with great schools and
quality of life amenities;
• Maximize private developer involvement and private investment;
• Leverage federal investment; and
• Break the cycle of poverty and hopelessness
Page 2 of 6
Let me add one caveat, however. Federal dollars should only be expended to achieve positive
outcomes for America’s citizens. Congress should not authorize or appropriate a program based
on failed policies or programs. For the past 10 years, our neighborhood revitalization program
has been making the most of federal dollars (primarily through the HOPE VI demonstration
program) to attend to problems created by bad public policies of the past – some of which were
created in Atlanta and some of which were created in Washington.
BACKGROUND
Commission for Severely Distressed Public Housing
More than a decade ago, the George H.W. Bush Administration and Congress saw a need for
new ideas to address the severe housing and social problems facing Atlanta and other large
urban centers when it created the Commission for Severely Distressed Public Housing. The
Commission’s final report called for new thinking around the issue of providing affordable
housing in American cities. Ultimately, through the Urban Revitalization Demonstration program
(later to be known as HOPE VI), cities and communities were called on to create locally derived
approaches that would be funded with federal dollars.
Until the flexibility afforded under this demonstration program, federal law:
1. Barred housing agencies from demolishing public housing without replacing it with
another so-called ‘hard unit.’ No matter how obsolete a structure was or how bad the
sociology of the community, demolishing public housing was prohibited; and
2. Stipulated that any housing project subsidized with federal funds (Section 9 public
housing program) must be wholly owned by a local housing agency. In effect, this
excluded public/private partnership.
These public policy restrictions made it impossible to address the troubles plaguing Atlanta and
other large urban cities. Later under the Clinton Administration, Secretary Henry Cisneros
initiated fundamental policy changes that supported this sea change, namely:
• The elimination of one-for-one replacement;
• Enabled private sector involvement in the ownership and management of assisted
apartments;
• Apartments set aside for low-income families could be subsidized with federal funds
(Section 9 public housing program) even if their ownership rested with someone other
than the local housing authority; and
• A private management company could establish and manage a site-based waiting list,
conduct screening and could establish standards for the community.
Building on these changes and by leveraging private sector know-how, the legal, regulatory and
financial model for public/private ownership and leveraging public dollars with private funds was
developed. AHA and its private sector development partner, The Integral Partnership of Atlanta,
worked with HUD during a 12-month period to create the legal, regulatory and financial model to
develop the first mixed-use, mixed-income community in the nation, Centennial Place.
The financial closing for the development of Phase I of Centennial Place in March 1996 gave
birth to the nation’s first master-planned, mixed-use, mixed-income development with a public
housing component. This model was promoted and endorsed by HUD and became the national model for development of mixed-income, mixed-finance communities under the HOPE VI
Program. This model has been successfully utilized throughout the United States.
Because of the flexibility and the political willingness to confront the hard issues, the HOPE VI
demonstration program has been the most important urban revitalization effort that America has
undertaken in the last 40 years. In Atlanta’s neighborhoods it has:
1. Brought communities and neighborhoods back to life;
2. Helped to address broken neighborhood schools;
3. Restored civility to large sections of the city; and
4. Provided a bridge to mainstream America for families who have been institutionalized in
warehouses of poverty, hopelessness and despair and who have consequently become
marginalized by the rest of society.
If executed properly and with a policy and outcome driven focus, the success we’ve
experienced in Atlanta can be replicated in city after city, including those along the Gulf Coast.
MAKING CHANGE
In Atlanta, we developed a two-step process for making change happen:
1. The Right Problem – We prepared ourselves and our city for an open and honest
assessment of the right problem, not necessarily the most visible crisis.
All our efforts have not been enough to break the grip of the downward spiral of social decay
that plagues these warehouses of poverty. That is, despite:
• Privatizing the property management;
• Strictly enforcing the lease; and
• Improving the physical living conditions to their highest possible standard,
each of the communities that have not yet been redeveloped is experiencing atrocious
circumstances. Without a comprehensive physical and social revitalization, these horrible
conditions repeat themselves.
In the large public housing family communities you’ll find:
Extreme, multi-generational poverty—average incomes of approximately $7,300 per
year;
Exceedingly high rates of unemployment— 85 percent of the able-bodied population
is unemployed;
A captive elementary school performing at severely substandard levels, typically at
the lowest rungs on uniform tests; high levels of illiteracy or functional illiteracy at
graduation; and high truancy rates
High crime rates;
No new private investment to speak of for decades; and
High levels of disinvestment in the surrounding neighborhoods.
2. Expect the Best – We had to maintain high expectations, propose an achievable solution to
the problem, and stop implementing policies that yield harmful outcomes. In the fall of 1994
Page 4 of 6
we adopted a policy to stop warehousing poor families in concentrated poverty. With the
revitalization of Techwood/Clark Howell, Atlanta sought:
• To create a healthy mixed-income community;
• To cease the concentration of poverty;
• To end the stigma of the public housing program;
• To leverage federal grant funds; and
• To mainstream the families into the larger community.
DEFINING A MIXED-INCOME COMMUNITY
The Atlanta model for a mixed-income community is a market rate community owned by a
public/private partnership, with a seamless affordable component.
The long-term success of mixed-income communities must be driven by the same market
factors that drive the success of every other real estate development. Daily competition to
attract market rate renters and the need to meet debt service and achieve specified returns on
investment require that the properties are managed and operated at a superlative level. We
have learned to optimize success. A successful business model includes the following:
1. The public housing component should be no greater than 40 percent;
2. Market rate principles must dictate the mix of amenities and the quality, management, and
sustainability of the property. Investors have financial expectations and high standards and
covenants that must be met;
3. Expectations of the families must be high. A three- to five-year investment period must be
made in the human development of families relocated from areas of concentrated poverty to
assure their successful mainstreaming into society; and
4. Community revitalization must be done holistically with focus on high performing
neighborhood schools, great retail and commercial support, great parks and recreational
facilities.
The revitalized communities attract market rate renters and the average occupancy across all
income segments that comprise the mixed-income communities is 95 percent, comparable to
the high-end rental market in Atlanta.
This level of success takes time and effort. Developing mixed-use, mixed-income communities
on a large scale is not simply a matter of letting a contract. It intentionally involves the larger
community and a broad range of investors and stakeholders.
PROPOSED NEXT STEPS
Congress has invested almost $5 billion to see what innovation can accomplish, and, with 10
years of work behind us, it is clear what works and what does not work. Congress should cull
best practices from its $5 billion investment to authorize a program to address the severely
distressed public housing that remains. The problems identified by the Commission for Severely
Distressed Public Housing have not been solved. But they can be if the thoughtful outcome-
focused policies are adopted and strategic investments are made for America’s citizens and
communities.
Public housing funds alone are not sufficient to create the wholesale transformations that are
needed. Congress should write, authorize and fund an effort that is driven at the local level by
Page 5 of 6
existing market conditions, housing and community needs, and local resource availability; e.g.,
low-income housing tax credit cycles, private activity bond volume cap, and absorption of
market rate units in the community.
Administrative oversight of this mixed-income, mixed-finance program cannot be overly
prescriptive, however. Guiding principles should be used to measure outcomes and the
reauthorization should be shaped by three guiding principles:
1. Abandon Federal Policies that Promote Concentrated Poverty
As a threshold matter, we must deconcentrate poverty and eliminate the stigma associated
with public housing. The objective is to create market rate communities owned by
public/private partnerships, with a seamless affordable component.
By de-concentrating poverty in Atlanta, affected residents are realizing increased
opportunities to participate in social and economic upward mobility. In short,
deconcentrating poverty helps return, or sometimes introduce, individuals to the mainstream
of society.
2. Adopt Policies that Use Public Dollars to Leverage Private Investment
Federal funds must come in to communities as seed capital. We must encourage and
promote the assistance of private financial and community stakeholders (non-profits, etc.) in
the neighborhood revitalization efforts. Specifically,
• The cost of relocation, demolition and environmental remediation cannot be financed
using conventional sources, especially if the goal is to reserve a significant
percentage (30 percent) of the housing in the mixed-income community at affordable
rents to very low-income families.
• The dynamic between the public and private sectors must change. Substantive
private involvement introduces a discipline the current public housing program does
not have. The creation of the public/private partnership guarantees a built-in
“accountability” feature because private sector involvement guarantees that the
communities remain sustainable and desirable, and the introduction of private
investment results in higher community performance standards and expectations.
With this built-in accountability, federal government can focus on measuring
outcomes versus managing bureaucratic processes.
3. Enlightened Community Self-Interest
Congress must promote a policy that promotes building communities holistically. It is not just
housing that sustains a community—it is the quality of the neighborhood schools, the quality
of the recreational facilities, green space, retail opportunities and jobs. Specifically,
• Federal officials must find the means to foster and provide cross-departmental or
agency incentives for localities to work together. Coordinating the distribution of
funds for public infrastructure, transportation, and education and strategies that
facilitate and attract future private investment in the surrounding neighborhood must
be encouraged.
It is essential to invest in human development programs to support the integration of
affected families into mainstream America. The results here in Atlanta have been a
tremendously improved sociology, better neighborhood schools, more neighborhood
reinvestment, higher rates of employment among the assisted families, and a crime
rate that has been reduced by more than 90 percent. In total, the change has
resulted in a promising future instead of a certain failure for the affected families.
To illustrate the point, one needs to consider Centennial Place Elementary
school which sits on the former site of the nation’s first public housing project,
Techwood Homes (early HOPE VI recipient). The school serves downtown
neighborhoods, including Centennial Place, a thriving, mixed-income community
where residents work, pay rent, and abide by their rental agreement and the law.
Unlike the concentrated poverty that once occupied the real estate, the
neighborhood is socially and geographically integrated into the broader
community and it’s an environment that is safe. On national standardized tests,
Centennial Place Elementary School students out-perform the national averages.
Several other elementary schools in more recently revitalized communities have
shown substantial improvements as well.
Centennial Place Elementary has several lessons for those of us helping to
shape public policy.
First and foremost, all children can learn if provided with an
environment that is devoid of chaos and hopelessness.
Failure should not be a given track for children living below the
poverty line any more than it should be for a child living in an affluent
setting.
And finally, children develop and grow in a whole environment.
Certainly where they learn matters, but where they live matters, too.
In closing, as the nation considers how it will address the horrible tragedy that struck the Gulf
Coast, we can only hope Congress and the Administration will give full consideration to the
benefits of a Mixed-Use, Mixed-Income strategy.
Link to article
Chief Executive Officer, Atlanta Housing Authority
Presentation to
Center for American Progress
October 12, 2005
The purpose of this document is to provide insight on the 10-year process of revitalizing 13
communities in Atlanta; the impact this revitalization has had on the affected families; and the
benefits of the revitalization enjoyed by the city. In Atlanta we have learned very compelling
lessons—lessons which provide an answer to the vexing question:
“How do we save large urban centers and, more importantly, honor the covenant our
government has with its citizens?”
In Atlanta, we have been engaged in an across-the-board physical and social transformation.
We have:
1. Razed more than 5,000 dilapidated apartments throughout the city and in their place, with
our private sector development partners, developed 13 mixed-use and mixed-income
communities. As of today, AHA is serving more families than in 1994 and in substantially
better living conditions; and
2. In partnership with our private sector partners, AHA has leveraged approximately $250
million of federal grants to approximately $3 billion of new investment and development in
Atlanta, with a combination of private investment, local government investment and related
economic activity.
Still, many Atlanta communities and families are suffering from the terrible effects of
concentrated poverty. These communities must be revitalized as well. This can be
accomplished through national housing policies that support mixed-income community
development program and that make use of reasonable market principles. By authorizing and
appropriating funding for such a program, the nation would:
• Provide eligible low-income American citizens with access to decent, affordable housing
(rental and ownership) in healthy mixed-income communities, with great schools and
quality of life amenities;
• Maximize private developer involvement and private investment;
• Leverage federal investment; and
• Break the cycle of poverty and hopelessness
Page 2 of 6
Let me add one caveat, however. Federal dollars should only be expended to achieve positive
outcomes for America’s citizens. Congress should not authorize or appropriate a program based
on failed policies or programs. For the past 10 years, our neighborhood revitalization program
has been making the most of federal dollars (primarily through the HOPE VI demonstration
program) to attend to problems created by bad public policies of the past – some of which were
created in Atlanta and some of which were created in Washington.
BACKGROUND
Commission for Severely Distressed Public Housing
More than a decade ago, the George H.W. Bush Administration and Congress saw a need for
new ideas to address the severe housing and social problems facing Atlanta and other large
urban centers when it created the Commission for Severely Distressed Public Housing. The
Commission’s final report called for new thinking around the issue of providing affordable
housing in American cities. Ultimately, through the Urban Revitalization Demonstration program
(later to be known as HOPE VI), cities and communities were called on to create locally derived
approaches that would be funded with federal dollars.
Until the flexibility afforded under this demonstration program, federal law:
1. Barred housing agencies from demolishing public housing without replacing it with
another so-called ‘hard unit.’ No matter how obsolete a structure was or how bad the
sociology of the community, demolishing public housing was prohibited; and
2. Stipulated that any housing project subsidized with federal funds (Section 9 public
housing program) must be wholly owned by a local housing agency. In effect, this
excluded public/private partnership.
These public policy restrictions made it impossible to address the troubles plaguing Atlanta and
other large urban cities. Later under the Clinton Administration, Secretary Henry Cisneros
initiated fundamental policy changes that supported this sea change, namely:
• The elimination of one-for-one replacement;
• Enabled private sector involvement in the ownership and management of assisted
apartments;
• Apartments set aside for low-income families could be subsidized with federal funds
(Section 9 public housing program) even if their ownership rested with someone other
than the local housing authority; and
• A private management company could establish and manage a site-based waiting list,
conduct screening and could establish standards for the community.
Building on these changes and by leveraging private sector know-how, the legal, regulatory and
financial model for public/private ownership and leveraging public dollars with private funds was
developed. AHA and its private sector development partner, The Integral Partnership of Atlanta,
worked with HUD during a 12-month period to create the legal, regulatory and financial model to
develop the first mixed-use, mixed-income community in the nation, Centennial Place.
The financial closing for the development of Phase I of Centennial Place in March 1996 gave
birth to the nation’s first master-planned, mixed-use, mixed-income development with a public
housing component. This model was promoted and endorsed by HUD and became the national model for development of mixed-income, mixed-finance communities under the HOPE VI
Program. This model has been successfully utilized throughout the United States.
Because of the flexibility and the political willingness to confront the hard issues, the HOPE VI
demonstration program has been the most important urban revitalization effort that America has
undertaken in the last 40 years. In Atlanta’s neighborhoods it has:
1. Brought communities and neighborhoods back to life;
2. Helped to address broken neighborhood schools;
3. Restored civility to large sections of the city; and
4. Provided a bridge to mainstream America for families who have been institutionalized in
warehouses of poverty, hopelessness and despair and who have consequently become
marginalized by the rest of society.
If executed properly and with a policy and outcome driven focus, the success we’ve
experienced in Atlanta can be replicated in city after city, including those along the Gulf Coast.
MAKING CHANGE
In Atlanta, we developed a two-step process for making change happen:
1. The Right Problem – We prepared ourselves and our city for an open and honest
assessment of the right problem, not necessarily the most visible crisis.
All our efforts have not been enough to break the grip of the downward spiral of social decay
that plagues these warehouses of poverty. That is, despite:
• Privatizing the property management;
• Strictly enforcing the lease; and
• Improving the physical living conditions to their highest possible standard,
each of the communities that have not yet been redeveloped is experiencing atrocious
circumstances. Without a comprehensive physical and social revitalization, these horrible
conditions repeat themselves.
In the large public housing family communities you’ll find:
Extreme, multi-generational poverty—average incomes of approximately $7,300 per
year;
Exceedingly high rates of unemployment— 85 percent of the able-bodied population
is unemployed;
A captive elementary school performing at severely substandard levels, typically at
the lowest rungs on uniform tests; high levels of illiteracy or functional illiteracy at
graduation; and high truancy rates
High crime rates;
No new private investment to speak of for decades; and
High levels of disinvestment in the surrounding neighborhoods.
2. Expect the Best – We had to maintain high expectations, propose an achievable solution to
the problem, and stop implementing policies that yield harmful outcomes. In the fall of 1994
Page 4 of 6
we adopted a policy to stop warehousing poor families in concentrated poverty. With the
revitalization of Techwood/Clark Howell, Atlanta sought:
• To create a healthy mixed-income community;
• To cease the concentration of poverty;
• To end the stigma of the public housing program;
• To leverage federal grant funds; and
• To mainstream the families into the larger community.
DEFINING A MIXED-INCOME COMMUNITY
The Atlanta model for a mixed-income community is a market rate community owned by a
public/private partnership, with a seamless affordable component.
The long-term success of mixed-income communities must be driven by the same market
factors that drive the success of every other real estate development. Daily competition to
attract market rate renters and the need to meet debt service and achieve specified returns on
investment require that the properties are managed and operated at a superlative level. We
have learned to optimize success. A successful business model includes the following:
1. The public housing component should be no greater than 40 percent;
2. Market rate principles must dictate the mix of amenities and the quality, management, and
sustainability of the property. Investors have financial expectations and high standards and
covenants that must be met;
3. Expectations of the families must be high. A three- to five-year investment period must be
made in the human development of families relocated from areas of concentrated poverty to
assure their successful mainstreaming into society; and
4. Community revitalization must be done holistically with focus on high performing
neighborhood schools, great retail and commercial support, great parks and recreational
facilities.
The revitalized communities attract market rate renters and the average occupancy across all
income segments that comprise the mixed-income communities is 95 percent, comparable to
the high-end rental market in Atlanta.
This level of success takes time and effort. Developing mixed-use, mixed-income communities
on a large scale is not simply a matter of letting a contract. It intentionally involves the larger
community and a broad range of investors and stakeholders.
PROPOSED NEXT STEPS
Congress has invested almost $5 billion to see what innovation can accomplish, and, with 10
years of work behind us, it is clear what works and what does not work. Congress should cull
best practices from its $5 billion investment to authorize a program to address the severely
distressed public housing that remains. The problems identified by the Commission for Severely
Distressed Public Housing have not been solved. But they can be if the thoughtful outcome-
focused policies are adopted and strategic investments are made for America’s citizens and
communities.
Public housing funds alone are not sufficient to create the wholesale transformations that are
needed. Congress should write, authorize and fund an effort that is driven at the local level by
Page 5 of 6
existing market conditions, housing and community needs, and local resource availability; e.g.,
low-income housing tax credit cycles, private activity bond volume cap, and absorption of
market rate units in the community.
Administrative oversight of this mixed-income, mixed-finance program cannot be overly
prescriptive, however. Guiding principles should be used to measure outcomes and the
reauthorization should be shaped by three guiding principles:
1. Abandon Federal Policies that Promote Concentrated Poverty
As a threshold matter, we must deconcentrate poverty and eliminate the stigma associated
with public housing. The objective is to create market rate communities owned by
public/private partnerships, with a seamless affordable component.
By de-concentrating poverty in Atlanta, affected residents are realizing increased
opportunities to participate in social and economic upward mobility. In short,
deconcentrating poverty helps return, or sometimes introduce, individuals to the mainstream
of society.
2. Adopt Policies that Use Public Dollars to Leverage Private Investment
Federal funds must come in to communities as seed capital. We must encourage and
promote the assistance of private financial and community stakeholders (non-profits, etc.) in
the neighborhood revitalization efforts. Specifically,
• The cost of relocation, demolition and environmental remediation cannot be financed
using conventional sources, especially if the goal is to reserve a significant
percentage (30 percent) of the housing in the mixed-income community at affordable
rents to very low-income families.
• The dynamic between the public and private sectors must change. Substantive
private involvement introduces a discipline the current public housing program does
not have. The creation of the public/private partnership guarantees a built-in
“accountability” feature because private sector involvement guarantees that the
communities remain sustainable and desirable, and the introduction of private
investment results in higher community performance standards and expectations.
With this built-in accountability, federal government can focus on measuring
outcomes versus managing bureaucratic processes.
3. Enlightened Community Self-Interest
Congress must promote a policy that promotes building communities holistically. It is not just
housing that sustains a community—it is the quality of the neighborhood schools, the quality
of the recreational facilities, green space, retail opportunities and jobs. Specifically,
• Federal officials must find the means to foster and provide cross-departmental or
agency incentives for localities to work together. Coordinating the distribution of
funds for public infrastructure, transportation, and education and strategies that
facilitate and attract future private investment in the surrounding neighborhood must
be encouraged.
It is essential to invest in human development programs to support the integration of
affected families into mainstream America. The results here in Atlanta have been a
tremendously improved sociology, better neighborhood schools, more neighborhood
reinvestment, higher rates of employment among the assisted families, and a crime
rate that has been reduced by more than 90 percent. In total, the change has
resulted in a promising future instead of a certain failure for the affected families.
To illustrate the point, one needs to consider Centennial Place Elementary
school which sits on the former site of the nation’s first public housing project,
Techwood Homes (early HOPE VI recipient). The school serves downtown
neighborhoods, including Centennial Place, a thriving, mixed-income community
where residents work, pay rent, and abide by their rental agreement and the law.
Unlike the concentrated poverty that once occupied the real estate, the
neighborhood is socially and geographically integrated into the broader
community and it’s an environment that is safe. On national standardized tests,
Centennial Place Elementary School students out-perform the national averages.
Several other elementary schools in more recently revitalized communities have
shown substantial improvements as well.
Centennial Place Elementary has several lessons for those of us helping to
shape public policy.
First and foremost, all children can learn if provided with an
environment that is devoid of chaos and hopelessness.
Failure should not be a given track for children living below the
poverty line any more than it should be for a child living in an affluent
setting.
And finally, children develop and grow in a whole environment.
Certainly where they learn matters, but where they live matters, too.
In closing, as the nation considers how it will address the horrible tragedy that struck the Gulf
Coast, we can only hope Congress and the Administration will give full consideration to the
benefits of a Mixed-Use, Mixed-Income strategy.
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