New models for just development in the housing market

Longstanding structural racism embedded in housing markets has segregated housing, leading to disinvestment and the devaluation of Black-majority neighborhoods. But that’s only half the story.
Mar 3, 2022
Andre Perry
Andre Perry
Senior Fellow
Brookings Metro
Stuart Yasgur
Stuart Yasgur
Economic Architecture

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Structural racism in the housing market also harms Black residents when the long cycles of disinvestment finally end, and those neighborhoods ultimately attract investment, as is happening now in cities across the US.

As investment dollars find their way in, historically Black and mixed neighborhoods are rapidly becoming gentrified, and Black residents are increasingly getting priced out. Just when neighborhood development, appreciation, amenities, and services that they have been denied for decades finally kick in, they are excluded from the benefits.

For example, Black-majority Baltimore is one of the five fastest-gentrifying cities in the U.S., yet it also has historically Black neighborhoods so deeply and chronically devalued and disinvested, that despite explosive development in other parts of the city, they remain full of vacant and dilapidated housing, and get none of the benefits of the investment pouring into other neighborhoods. In many other cities, gentrification is driving up housing prices so rapidly (in Tulsa, Oklahoma, prices rose 34% in 2021 [i], notwithstanding the pandemic) that it’s displacing Black residents at alarming rates.

In an attempt to fight displacement and create more housing density and equity, some cities (Seattle, Portland, and others) are “upzoning” — rezoning neighborhoods with predominantly single-family housing for multi-family housing.  But that raises existing property values and property taxes, which drives up existing homeowners’ costs and tends to force more Black owners in these neighborhoods to sell.

It’s an ironic double bind:  either chronic disinvestment continues to hollow out Black communities from the inside, or else new investment raises housing costs and displaces them. In both cases, Black residents stand to lose not only their homes, but the coherence and social capital of the neighborhoods they call home.

By itself, separated from the long history of housing discrimination, devaluation, and dispossession Black people have experienced, neighborhood development is good, necessary thing. Why can’t we create development that benefits Black residents instead of displacing them? What would it take to achieve what one community development organization calls “gentrification with justice?” How would the housing market have to be restructured in order for more Black residents to become full stakeholders in the successful development of the communities where they live, and share in the benefits as neighborhoods become more attractive and prices rise?

Community land trusts (CLTs) are described in another paper in this series, “Evolution in Community Land Trusts.” They are designed to resist gentrification, preserve affordable, secure housing and fight displacement by separating ownership of a home from the ownership of the land it sits on.  That’s one way to enable development without displacement in neighborhoods under pressure. But it’s not the only way.

New models are emerging that bear comparison with CLTs, but have features and solve problems that CLTs don’t. Like CLTs, they enable community-led development, create affordable housing, fight displacement, and help preserve the character and coherence of Black-majority neighborhoods.  But they leverage the structure of homeownership in different ways than CLTs do.

This paper describes three such models. One renovates and sells whole blocks of housing to groups of homeowners instead of selling single-family housing to individual buyers. Another helps single-family owners develop multi-family housing on their properties.  Another makes renters co-owners of a trust that keeps their rents low, but still enables them to benefit as the neighborhood develops and appreciates, just as homeowners do.

These experiments are small in scale and still in the proof-of-concept stage.  They are potentially scalable, but their impact is less about reaching scale themselves than about the pathways they model for redesigning market structures to enable development without displacement, preserve and enhance Black communities, and give more Black residents an economic stake in their success.

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