October 02, 2017

Good Bones and Good Policy

Headshot 3.13 cropcompressBy Karen Sternheimer

As I blogged about several years ago, I have a weakness for programs on HGTV. I enjoy watching people house hunt and remodel, even with the knowledge that most of these shows are likely staged. At their core, they are programs about consumption, and advertisers hope their shows inspire viewers like me to want to buy home-related products. For me, and I suspect many other viewers, part of the pleasure of watching is vicarious consumption, watching other people make decisions and choices and perhaps getting ideas for my own purchases.

I recently binged-watched the first season of a new (to me) HGTV show, Good Bones. The show features a mother/daughter-run renovation team who buy mostly abandoned houses from the city, fix them up, and sell them.

What caught my interest in this show was that the stars’ company, Two Chicks and a Hammer, targets homes in their own neighborhood and a nearby neighborhood near downtown Indianapolis, with the goal of revitalizing the once struggling community. “I don’t want to build crappy homes for my neighbors, I just don’t,” says Karen E. Laine, the mother of the duo, during each show’s opening.

The pair emphasize that they want to do more than just make a quick buck making cosmetic fixes, and the show details the unglamorous side of renovation: dealing with termites, foundation and roof repairs, water damage, and the like. It’s not just that they aim to discover homes with good bones to pretty up, but they seem to want to create good bones for future homeowners and the community itself. Their interest runs deeper than just making a profit flipping houses, and by helping to eliminate abandoned or run-down houses in their neighborhood, they are making a bigger difference.

The community they live in, Fountain Square, near downtown Indianapolis, has changed significantly in recent years, thanks in part to artists moving into the area in the mid-2000s when rents were super-low and a cultural trail that was created with funding from the city, private donors, foundations, and the federal government, for pedestrians and cyclists. Shops and restaurants sprang up in the area and property values climbed.

The success of revitalization can have its downside. Indianapolis Monthly recently reported that artists are getting priced out of the area as rents have increased. And as property values increase, so do property taxes, pushing out long-time residents who cannot afford the increased costs. Landlords will raise rents as their properties can draw more affluent tenants, forcing low-income renters out of the area.

This process, often called gentrification, is not just negative. It is hard to argue against the benefits of renovating an abandoned house or building. As a college student I once lived across the street from an abandoned building that was a hotbed for drug sales, drug use, and prostitution. I watched police raid the building, kick out the squatters, and eventually the building was sold and became home to paying tenants as well as shops and restaurants. This improved the neighborhood’s safety and encouraged other businesses to open nearby.

As new businesses and people move in, often others are forced out, but this might be addressed by creating public policies to prevent at least some of the downside of gentrification. Just as public funding might play a role in revitalizing an area (providing tax incentives for businesses to move in, improving infrastructure or creating a new public park or museum), public policy can help alleviate some of the challenges for long-time residents who might otherwise be priced out of their community.

Indianapolis’s city council passed a resolution supporting a tax relief plan that would provide discounts to long-time homeowners whose property assessments increase dramatically. Other cities have similar policies in effect. Philadelphia has instituted the Longtime Owner Occupant Tax Relief Program (LOOP) that caps property taxes for homeowners whose property values have tripled over the past year and who have owned their homes for at least ten years (or five in some cases).

Protecting renters is a bit trickier. In Indianapolis, the artists’ collective that helped revitalize Fountain Square has worked to keep rents down for other artists:

By partnering with Riley Area Development Corporation to purchase the homes, and using grant money from local foundations and nonprofits such as the Indianapolis Neighborhood Housing Partnership, Big Car will subsidize rent for a series of homes on Cruft Street for artists by roughly 50 percent, in return, asking them to contribute 20 hours a month to investing back into the neighborhood with local arts initiatives. It adds up to a $1.5 million bet on building a different type of neighborhood.

But what if you aren’t an artist? Long time renters are the most vulnerable to displacement. The Urban Institute suggest the creation of a new financial product for renters, a form of insurance to protect against rent increases. Rent control and requiring developers who build apartment buildings set aside units for low- or moderate-income renters are some current tactics that cities use with mixed results.

Advocates seeking to prevent displacing long-time residents argue that stable community members matter for a community, and should be rewarded their commitment to the neighborhood before it became desirable.

What public policy suggestions do you have to help minimize displacement in gentrifying communities?

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