Neighborhood Stabilization: Tailored Tactics Needed

by devteam April 28th, 2011 | Share

FederalrnReserve Governor Elizabeth A Duke told a Community Affairs Research Conferencernon Thursday that, while every community across the country has been affected byrnthe financial crisis, the results look different in each.  The impact of foreclosed, vacant andrnabandoned properties that threaten neighborhoods nationwide and the effortsrnneeded to stabilize those neighborhoods are shaped by the circumstances thatrnprevailed in those neighborhoods before the crisis hit.</p

“Neighborhoodrnstabilization efforts are critical, now more than ever,” she said,rn”as not all communities will be stabilized without intervention.  This is because the market will not correctrnequally in all places.”</p

The 12rnFederal Reserve Banks and the Board of Governors are helping communities byrncombining research with local outreach and bringing together financialrninstitutions, policymakers, and community leaders to facilitate local attemptsrnto repair the damage done by the crisis. rnThe Fed, she said, participates in local collaboration efforts, helpsrnevaluate what is working and what is not, and highlights promising practices </p

Dukernused three videos to illustrate how the financial crisis has hit differentrncities in different ways and how grassroots innovation and collaboration arernleading to promising stabilization efforts in each.  The three “Reportsrnfrom the Field” highlight Phoenix Arizona, Cleveland Ohio, and DetroitrnMichigan; each hard hit by the economic downturn and rampant foreclosures.</p

Therncurrent crisis in Cleveland, Duke pointed out, follows five decades ofrnpopulation loss, outmigration of jobs, and urban sprawl.  Despite this, public and private partners haverndeveloped an innovative stabilization strategy that uses targeted data to helprncommunity leaders focus their scare resources on those neighborhoods that havernthe best chance for success.  Cleveland’srnsuccess is built around both on-the-ground community outreach and datarncollection to identify trends on both the block and community level.  Nonprofits, local foundations, and universitiesrnprovide the tools to analyze that data and steer resources to the places wherernthey can do the most good.  “This ‘tipping point’rnstrategy,” Duke said, “relies on the comprehensive investment ofrnpublic and private resources for sustained stabilization.”</p

Phoenix and the rest of the western states look quite different.  The problem here is in both urban areas andrnthe suburbs and resulted from overbuilding. rnThe vacant homes tend to be newer than in other parts of the country butrnbecause of this the problems are concentrated in communities that have neverrndealt with these issues on a large scale before.  Here the public-private partnerships havernreached out to the real estate community to help connect eligible families withrnaffordable homes.  The issues too arerndifferent in Phoenix than in older industrial cities.  Because the problems are largely shaped byrnoverbuilding and resulting falling home prices, houses and sometimes entirernsubdivisions are being purchased by investors. rnThe challenge to the community is to ensure that qualified homeownersrnand non-profits are able to compete with investors for these now affordablernhomes.</p

While a city like Phoenix can largely grow out of its problems, Detroitrnis faced with the opposite problem, decades of population loss.  The city was build for a population of twornmillion and now has half that.  Thernforeclosure crisis has created a pivotal moment in which the city must reinventrnitself and few easy solutions exist. rnDetroit is partnering with community leaders to bring together thousandsrnof residents to help make the tough choices to shape the city’s future.</p

The Detroit Works Project aims to reimagine the city’s geographicrnfootprint and service range, based on the current smaller population. “Detroit’srnstory reminds us that when ideas are controversial and hard choices must bernmade, community input and buy-in is critical for success,” Duke said. </p

In her role as a Federal Reserve Governor, she said she has traveled to all 12 ReservernBank Districts and saw first-hand what is happening across the country.  The Federal Reserve is learning more each dayrnabout the complex task of stabilizing community and research and analysis ofrnwhat is working is critical.  “Fromrnthese video ‘Reports from the Field,’ we’ve learned that collaborations andrnpartnerships help achieve success; strategic targeting of limited resources mayrnbe necessary; data can help focus a strategy; community input and buy-in arerncritical for long-term planning; and different approaches will work for diversernchallenges and places.”

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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