Rebuilding a Distressed Community Block by Block

Bree Jones is pioneering a way to bring development without displacement to West Baltimore.
Mar 3, 2022
Stuart Yasgur
Stuart Yasgur
Economic Architecture
Andre Perry
Andre Perry
Senior Fellow
Brookings Metro

She’s the CEO of Parity, an equitable development company proudly headquartered there, and embedded in the community.

Parity’s tagline is, “Where some see ruin, we see beauty.” Beyond West Baltimore’s seemingly intractable problems – disinvestment, devaluation, abandoned and deteriorating buildings, crime, fraying social fabric, a stymied housing market few would buy into — Jones recognizes the underlying value of the neighborhood, and works to demonstrate its potential as a viable market and an attractive, connected community.

“I’m working in one of the most distressed neighborhoods in the whole city,” Jones says. “When you view it through a historical lens, and you really understand the impact of redlining, racial segregation, blockbusting, white flight, predatory lending, eminent domain, urban renewal and so forth, you realize it all creates an economic handicap in historically Black neighborhoods that make development next to impossible.”

“The housing market here is gridlocked because there is a glut of housing stock and supply that’s unlivable, which further fuels vacancy. So my model is to unlock those gridlocked housing markets by leveraging social capital.”
– Bree Jones, CEO, Parity

Parity creates affordable homeownership of newly renovated properties in West Baltimore, taking what Jones calls a “collective economics” approach. The term means leveraging the mutual goals or preferences of a group to secure economic gains for the whole group [iii]. That can change the economics of a market and can lead to structural innovations that go beyond finding greater efficiencies or economies of scale.

Instead of rehabbing one house at a time, Parity’s innovation is to buy and flip whole blocks in distressed areas, and recruit groups of new owners who are already socially connected and willing to buy in as a collective, and to move in at more or less at the same time. They bring their own social capital with them, creating not just blocks of affordable housing, but blocks of connected communities.

Neighborhoods with many vacant or run-down buildings impose heightened risks and costs on nearby homeowners — anything from driving down their property values to spreading pest infestations to them. But by moving into a block as part of a group, each Parity homeowner reduces those risks and costs for the others.

At the same time, by moving in as a group, they kick-start the re-weaving of neighborhood coherence and connectedness which might otherwise take many years to accomplish. Buyers get the full advantages of fee-simple ownership of their individual properties, including stability, equity, and wealth building. But they also get the collective value of neighbors, greenspaces, and a network of community connections in a place they can call home.

“These social groups are friends, families, church congregations, teachers, PTA groups, firefighters from the neighborhood, from the city, and from other areas where displacement has pushed people out” says Jones. “We’re basically utilizing existing social networks and social fabrics. We’re saying to them, hey, let’s all build up this neighborhood together. Then you’ll know your neighbor, you can go next door, knock on the door for a cup of sugar.”

All prospective buyers must undergo a six-month training which Jones designed, to make sure they understand and align with the goals of the program. “We talk a lot about our principles of anti-displacement, intersectionality, and being mindful of people’s different lived experiences, because this program is not just for college-educated folks,” Jones says. “We also talk about what it means to be civically engaged, and how to advocate for yourself and your community, and what to be aware of as a homeowner – even little things like clearing the lint out of your dryer. If you’ve never owned a home before, it can be life changing. So after those six months, our folks come out of the process rooted in equitable community work, plus they get financially and mentally prepared for homeownership.”

A partnership with Neighborhood Housing Services provides homeownership counseling and financial literacy help for prospective buyers. Parity has also built relationships with Bank of America, PNC Bank and other local banks in the neighborhood, so they work with homebuyers to help them qualify for a mortgage and get them preapproved. Once preapproval is given, the buyer puts down $5000 plus escrow, and the renovation begins. Six months later, the mortgage is issued and the new owner moves in, becoming part of a community with the other homeowners in their group.

Parity rehabbed its first block of housing with 25 prospective homebuyers from mostly low- and moderate-income backgrounds between the ages of 25 and 65. It owns nine properties, with another 15 in the pipeline. As developers go, that’s small-scale. But there’s pent-up demand for Parity’s approach. Even with little marketing so far, it already has a long waiting list of people interested in buying and moving to homes in West Baltimore in groups.

“It’s been entirely organic,” says Jones. “It started with me going to neighborhood meetings and speaking at panels, then someone comes up to me afterwards and says, this is awesome, I want to join the movement.

In just 12 or 18 months, we’ve flipped the real estate situation in the neighborhood on its head. Whereas before there was more housing supply than demand, we actually now have more demand for our housing than supply.”

Parity is now very intentional about outreach and sees what Jones calls “storytelling” as essential to the success of the model. “Communities like ours really need a story or the brand that communicates the vision of what they can be, why people would want to live in them,” she says. “People move to hipster neighborhoods for the coffee bars and yoga studios; it’s part of the brand. For our communities, you have to tell the story that makes people want to come and invest. We’re working to do that in an authentic way. We’re doing a ton of content creation, videos, social media.” Parity is hiring a head of storytelling to formally oversee the process.

Jones anticipates that a surge in demand will result. Meeting it will require more capitalization so Parity can acquire and rehab more properties. Its current finances are split between equity, debt, and subsidy, including a $1.5 million term sheet with Prudential Impact Investment, which partnered with the Kresge and Annie E. Casey Foundations to provide loan loss reserves. Parity has another $400,000 line of credit with the corporate social investment organization Reinvestment Fund. Both credit sources are revolving; they get replenished whenever Parity sells a home, and redeployed for the next project. By revolving the lines of credit six or eight times, Parity has enough financing to buy and flip 10 city blocks containing 96 homes.

But keeping them affordable for homeowners depends on subsidies. “That’s the last segment of the financing, and it’s really critical,” says Jones. “There are no federal low-income housing tax credits for homeownership. So subsidies have to come from city and state sources, foundations, or charitable givers.” So far, Parity has received $200,000 from the State of Maryland, several hundred thousand in grants from foundations, and $150,000 from private donors. Those funds subsidize the home prices, enabling Parity to offer newly renovated housing in historic buildings for $5000 down and monthly payments as low as $921.

“But it’s not enough to just create new homeownership and new wealth,” Jones says. “We really need to retain and protect legacy wealth, too. We do community organizing to build bridges between legacy residents and new residents, so that new residents don’t push people out, or assume that their wants take priority over people who have lived there for many years. And we connect legacy residents with displacement prevention services like pro bono legal assistance, life estate plans, family mediation, and homeowners tax credit applications. Last year we raised $85,000 in a mutual aid effort to bail out 56 low-income, disabled, or elderly homeowners from a tax sale, where they ran the risk of losing their homes for unpaid property tax debts as low as $750.”

Scaling up the Parity model will require raising more money for both capital expenditures and operations. Jones hasn’t been able to pay herself a salary yet, though she was selected as an Open Society Institute Fellow and received the Johns Hopkins University Social Innovation Lab Prize funded by Abell Foundation. And she has also been approached by other developers who want to understand and replicate Parity’s success in generating robust demand for West Baltimore housing, which could be a fee-for-service opportunity. Community development organizations are interested in applying Parity’s approach to leveraging the assets of other communities suffering from a lack of investment and development . That could be another non-capital-intensive way for Parity to extend the reach of its model.

But as the approach catches on and housing demand rises in distressed communities like West Baltimore, it could also attract the attention of speculators and raise the danger of gentrification. Jones has witnessed this phenomenon herself, having grown up in the Bronx, a distressed community now getting gentrified. Her goal is to preempt gentrification, and harness development pressures to serve Black residents instead of forcing them out.

“A lot of historically Black communities will stay dormant for 20, 30, 40 years,” she says. “There’s no activity happening, and then suddenly, boom, gentrification. And then it’s too late, and people get displaced. So we work in historically Black neighborhoods that still have zero housing development and develop them preemptively in a way that’s community-led and creates ownership of the process, so we’re actually strengthening the neighborhood against gentrification.”

“Preemptive development” is a smart tactic for heading off gentrification, but it’s also much more than that. It’s a structural innovation, a way of redesigning market structures that have kept Black communities disinvested, devalued, and walled off from development, then eventually opened them up to speculation, gentrification, and displacement. Parity found a hack for these market failures by invoking the power of collective economics, rehabbing whole blocks instead of individual properties, and attracting whole communities of buyers instead of individual owners.

That idea has potential to change housing markets in West Baltimore and elsewhere in far-reaching ways, because it represents a fundamental shift in who buys in (collectives as opposed to atomized individuals) and what they buy (connected neighborhoods as opposed to individual homes).

But it still doesn’t eliminate perverse incentives for speculators to come in and drive prices up once people start moving in. Changing those incentives would require more structural innovations. “Our sweet spot is acquiring land and properties where we’re not going to get into bidding wars with speculative investors,” Jones says. “But ultimately, once we start market activity, I can’t stop them from coming in and trying to find properties and plugins. And so I think a lot about ways to mitigate that danger.”

Besides developing affordable housing block by block and helping existing residents stay in their homes, Parity also fights gentrification through policy advocacy. For example, Jones is working with the community to develop a master plan for development, which will be recognized and adopted by the City. Any large-scale development project in West Baltimore would have to conform to it, and the developer proposing it would have to be approved under the plan. She’s also advocating the abolition of real estate tech sales for owner-occupied housing, because they often take advantage of owners and accelerate transfer of their properties to speculators. And she is thinking about other mechanisms to protect communities against gentrification, like zoning overlay districts.

Jones believes creating new, widespread ownership opportunities while keeping existing owners in the neighborhood can strengthen communities sufficiently to fight off gentrification, enabling them to leverage the benefits of development for themselves.

“Where there’s lack of ownership and lack of housing stability among community members, it’s like soil without trees or grass or roots. It’s really easy for that soil to erode. But when you strengthen ownership and housing stability, residents can put down roots, and the community grows strong.”
– Bree Jones, CEO, Parity

For now, her work is in the proof-of-concept stage, with Parity renovating and selling just a few blocks so far. But small-scale implementation notwithstanding, the concept itself is a powerful lever for bringing community-led investment to vacant or distressed areas, nourishing a community’s roots, and preserving its social capital. It’s a model that could potentially be replicated in many devalued Black neighborhoods.

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