Political Physics: Accuse Me of Gentrification if You Like
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a blogumn by Monique King-Viehland
Last week I got into a heated debate with a colleague about whether or not the City of Trenton needed anymore affordable housing. My colleague was arguing that given the high cost of housing in Mercer County (Trenton is located in Mercer County) and the State of New Jersey, the City of Trenton needed more affordable housing. I argued that Trenton had enough affordable housing and that all new housing built in the City should be market rate. My colleague rolled her eyes. I continued by explaining that the average rental rate in the State of New Jersey is $804 and the average housing value is $358,400. The Mercer County numbers are pretty comparable to the State, with an average rental rate of $770 per month and an average housing value is $304,600. But the City of Trenton is much lower with an average rental rate of $544 per month and an average housing value of $120,000. In comparison to Mercer County and the State, the entire City is affordable. Trenton is devalued enough.
My colleague then said that she was disappointed because she could not believe I was advocating for the gentrification of the City.
The Merriam-Webster Dictionary defines gentrification as “the process of renewal and rebuilding accompanying the influx of middle-class or affluent people into deteriorating areas that often displaces poorer residents.”
Gentrification is a dirty word and the mere use of the word can spawn heated arguments with folks on both sides of the issue. There have been hundreds of articles, studies, reports and books on the subject. People point to Harlem in NYC, Park Slope in Brooklyn, Hoboken in New Jersey and Mill Hill right here in the City of Trenton. I do not want to revisit the debate, but I do want to address my colleague’s assertion in light of my stance on housing development in Trenton.
Trenton is the Capital of the State of New Jersey. It is a very small City at 7.5 square miles, but is plagued with many of the issues of urban cities two and three times it’s size. According to the 2005-2007 American Community, the median income for a household in the city is $34,321, and the median income for a family is $40,528. The per capita income for the city was $16,591 and about 20.6% of families and 22.1% of the population are below the poverty line. The unemployment rate is about 9.4%.
But these are not the most important numbers. In terms of understanding the City’s dynamic, you need to know that as the Capital City, the State owns a little more than 50% of the property in the City making that property is non-taxable. The major revenue generator for municipalities is property taxes, so the City’s tax base is significantly impacted. This is a major reason why the City is currently facing a $28 million structural budget deficit.
Building only market rate housing will bring higher income households into the City. More households with higher incomes result in increased real estate values with higher associated rent, home prices, and property taxes. The City’s current annual operating budget is approximately $200 million yet the City only generates about $55 million in property taxes. Potential budget reductions notwithstanding, the current tax base is insufficient and the only way to build that base is by bringing in increasing the number of high value, tax generating properties.
In addition, housing redevelopment that focuses on higher valued housing tends to drive retail and commercial development in the area as well. And new businesses means more jobs available in the City – with a 9.4% unemployment rate Trenton could use those jobs.
Listen, I am not advocating for the displacement of poorer residents in the City, but I recognize that focusing on building only market rate housing could have the unintended consequence of displacement. I acknowledge that yes, the increases in rent and the increase property taxes (due to increased property values) may cause lower income residents to seek less expensive housing options outside of the community. However, for the City of Trenton, this could truly mean the difference between building a fiscally sustainable City or turning the keys over to the State of New Jersey.
So I am going to continue to advocate for all new housing built in the City to be market rate, even though I recognize that this may not be a popular opinion.
If that means I will be accused of gentrification, so be it.
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Wow, I find this so interesting, b/c all of the neighborhoods that I lived in growing up were communities left behind by white flight. I never dreamed that there would be a day when we'd have the opposite problem.
That all said, I think we have to be practical where gentrification is concerned. I feel that the best neighborhoods are ones of mixed-incomes. Take my neighborhood. I love that we can eat a very expensive dinner at Taix or pick up something quick and cheap at the taco stand down the street. We have lower income apartment dwellers, condos, homes, and a couple of straight up modern mansions. I love that.
However, I hate Manhattan right now. Soho is gentrification at it's worse. If no one, but the rich can afford to live in your neighborhood, then that's a bad neighborhood. I consider places like Soho and Beverly Hills "bad neighborhoods," just like I consider places with all low-income housing "bad neighborhoods."
I think ALL communities should strive to be diverse in income and race.
I completely agree with you. The ideal community is a "mixed income," e.g., mixed incomes, diverse races, varying housing types, housing values, etc. That was the goal behind the Federal HOPE VI Housing program that was killed under the Bush Administration. But the issue with Trenton is that it is not diverse. And actually by focusing our efforts solely on marker rate housing, you will actually begin to create diversity of incomes, race, etc. where diversity is currently lacking.
Wow, I find this so interesting, b/c all of the neighborhoods that I lived in growing up were communities left behind by white flight. I never dreamed that there would be a day when we'd have the opposite problem.
That all said, I think we have to be practical where gentrification is concerned. I feel that the best neighborhoods are ones of mixed-incomes. Take my neighborhood. I love that we can eat a very expensive dinner at Taix or pick up something quick and cheap at the taco stand down the street. We have lower income apartment dwellers, condos, homes, and a couple of straight up modern mansions. I love that.
However, I hate Manhattan right now. Soho is gentrification at it's worse. If no one, but the rich can afford to live in your neighborhood, then that's a bad neighborhood. I consider places like Soho and Beverly Hills "bad neighborhoods," just like I consider places with all low-income housing "bad neighborhoods."
I think ALL communities should strive to be diverse in income and race.
I completely agree with you. The ideal community is a "mixed income," e.g., mixed incomes, diverse races, varying housing types, housing values, etc. That was the goal behind the Federal HOPE VI Housing program that was killed under the Bush Administration. But the issue with Trenton is that it is not diverse. And actually by focusing our efforts solely on marker rate housing, you will actually begin to create diversity of incomes, race, etc. where diversity is currently lacking.
I would argue that you should build at market rate until the average price is equal to the county average then build both.
It sounds like the biggest problem is the amount of state owned land. I hope the state gives the city something close to what it would make if the land was privately owned.
I would argue that you should build at market rate until the average price is equal to the county average then build both.
It sounds like the biggest problem is the amount of state owned land. I hope the state gives the city something close to what it would make if the land was privately owned.
I've seen gentrification firsthand in Chicago, in the Bucktown and Wicker Park communities when I lived there in the 80's and 90's. Culturally, it was interesting because artists & musicians moved to areas that were close to the city hubs (read El Stops), but were cheap enough for them to live (they're starving you see). Then the Yuppies would move in because they wanted to be were the artist's where (it's a hipness and cool bar thing). That would bring in developers, renovators and apartment to condo conversions which would drive up the rents and ultimately force the artist's to move to a cheaper part of the city. (in Chicago, they just kept going West to Humboldt Park and further). That is a different form of gentrification than Monique describes, but the result was the same. It seems to wreak of Manifest Destiny for some reason. "You've got something that is cool, but is less expensive than what I have. I WANT IT!, If you can't afford it, tough, move out."
Personally, I like your argument, and think it's a valid one. It happens to be through a different lens than the one I'm used to.
I've seen gentrification firsthand in Chicago, in the Bucktown and Wicker Park communities when I lived there in the 80's and 90's. Culturally, it was interesting because artists & musicians moved to areas that were close to the city hubs (read El Stops), but were cheap enough for them to live (they're starving you see). Then the Yuppies would move in because they wanted to be were the artist's where (it's a hipness and cool bar thing). That would bring in developers, renovators and apartment to condo conversions which would drive up the rents and ultimately force the artist's to move to a cheaper part of the city. (in Chicago, they just kept going West to Humboldt Park and further). That is a different form of gentrification than Monique describes, but the result was the same. It seems to wreak of Manifest Destiny for some reason. "You've got something that is cool, but is less expensive than what I have. I WANT IT!, If you can't afford it, tough, move out."
Personally, I like your argument, and think it's a valid one. It happens to be through a different lens than the one I'm used to.
Your right the biggest problem is the large amount of state owned land. And no, the State is not paying the City anywhere close to what the City could be getting if the land was privately owned. The State pays the City of Trenton about $10M in a PILOT (or Payment in Lieu of Taxes) and about another $30M in something called Capital City Aide (might as well be a PILOT). So that is about $40M a year. However, studies suggest that the City could be getting three times that amount if the land were privately owned.
Your right the biggest problem is the large amount of state owned land. And no, the State is not paying the City anywhere close to what the City could be getting if the land was privately owned. The State pays the City of Trenton about $10M in a PILOT (or Payment in Lieu of Taxes) and about another $30M in something called Capital City Aide (might as well be a PILOT). So that is about $40M a year. However, studies suggest that the City could be getting three times that amount if the land were privately owned.
Thanks. The Chicago example is really interesting and reminds me of the artists who initially settled in places like Harlem and Soho, before it was the thing to do. Now those communities are forever changed. I do not dispute that if my position were adopted there would be some displacement of low income households from certain areas in the City. That is a byproduct of my position, unintended, but a very real byproduct.
It's kind of like what you said about seeing the issue through different lenses. From my vantage point, given the City's situation, there just aren't any other alternatives.
But I'm open to suggestions.
Thanks. The Chicago example is really interesting and reminds me of the artists who initially settled in places like Harlem and Soho, before it was the thing to do. Now those communities are forever changed. I do not dispute that if my position were adopted there would be some displacement of low income households from certain areas in the City. That is a byproduct of my position, unintended, but a very real byproduct.
It's kind of like what you said about seeing the issue through different lenses. From my vantage point, given the City's situation, there just aren't any other alternatives.
But I'm open to suggestions.
I was just talking to ETC about this the other day b/c one of my family members was responsible for a large mixed income development in Pittsburgh that I thought was a brilliant scheme. The idea was to build beautiful new condos/ apartments/ townhomes that were different sizes and different prices. They were staggered throughout the complex, and labeled A, B, C, and D in price. That way, someone who would normally live in project housing with other low income families, would instead live next to a high income family and middle income one too. Their crown moulding might not be real wood, their stove might not be stainless, or it might not be three stories, but they were still in a diverse neighborhood and a nice place. I think more of these developments should happen. Building decent condos is pretty cheap in most states and there is no reason why they can't be more diverse within the structure themselves.
I was just talking to ETC about this the other day b/c one of my family members was responsible for a large mixed income development in Pittsburgh that I thought was a brilliant scheme. The idea was to build beautiful new condos/ apartments/ townhomes that were different sizes and different prices. They were staggered throughout the complex, and labeled A, B, C, and D in price. That way, someone who would normally live in project housing with other low income families, would instead live next to a high income family and middle income one too. Their crown moulding might not be real wood, their stove might not be stainless, or it might not be three stories, but they were still in a diverse neighborhood and a nice place. I think more of these developments should happen. Building decent condos is pretty cheap in most states and there is no reason why they can't be more diverse within the structure themselves.
That sounds a lot like a Hope VI Project and there were a few of those developed in Pittsburgh when I lived there. Mixed income housing is a great idea and I though it as a travesty when the Federal Government did away with that program! The issue with mixed income housing is there are very few programs that subsidize it. Most programs are geared toward stricly affordable. So developers typically do market rate with larger margins or affordable because it is subsidized and helps you make margins (because your actual costs are reduced), but nothing in between. Hope VI was designed to fill that gap.
Why? Because actually building decent housing is actually not cheap at all, even in the economic downturn. yesterdays's prices in NJ were running over $200 a sq ft and today yoy are still paying around $130 – 150. And that is just hard costs.
In some cities like NYC, the local and state government caught on and are funding it themselves. There are some great examples like 1400 at 5th and the Kalahari by a developer called Full Spectrum.
That sounds a lot like a Hope VI Project and there were a few of those developed in Pittsburgh when I lived there. Mixed income housing is a great idea and I though it as a travesty when the Federal Government did away with that program! The issue with mixed income housing is there are very few programs that subsidize it. Most programs are geared toward stricly affordable. So developers typically do market rate with larger margins or affordable because it is subsidized and helps you make margins (because your actual costs are reduced), but nothing in between. Hope VI was designed to fill that gap.
Why? Because actually building decent housing is actually not cheap at all, even in the economic downturn. yesterdays's prices in NJ were running over $200 a sq ft and today yoy are still paying around $130 – 150. And that is just hard costs.
In some cities like NYC, the local and state government caught on and are funding it themselves. There are some great examples like 1400 at 5th and the Kalahari by a developer called Full Spectrum.