Jim White, Senior Program Director of the Local Initiatives Support Corporation of Greater Kansas City (LISC).
“Connecting information and opportunity to make change and to produce stronger leaders and neighborhoods is the context, in part, for the increase in public safely in our city.
“There is a corollary development, maybe a direct one, but clearly an indirect one, that housing values have gone up in our city, and some places they have gone up dramatically. For Kansas City, Missouri they have gone up 5% a year over the last 4-5 years, and if you multiply that by the housing stock in our city, and we are talking about an increase in wealth by $500 million dollars in the past four years. An analogs figure in Kansas City, Kansas is $75 million. One of the key ingredients in neighborhood stabilization is the belief that if you invest in your property, you won’t loose money if you have to leave or sell. In my judgment there is nothing more important than having the ability to have some reasonable equity, greater than the rate of inflation, in housing values of neighborhoods.
“Another corollary to that is that we had a stabilization of the loss of owner occupancy, the erosion of owner occupancy. What has characterized the decline of our cities has been the erosion of owner occupancy, and what I call the “transaction”. When a house goes on the market and is for sale, if it is occupied by a new owner it is a stabilizing transaction for a neighborhood, but if it is occupied by a rental property, that is often the path of disinvestments and decline that ends up in a vacant lot. So the stabilization of owner occupancy is absolutely critical for the stabilization of neighborhoods and the reinvestment in the core city.
“On those levels, we have had good news in Kansas City. There is also some bad news. One of the most important factors for a city is high quality public services. Anne [Pasmanick] was talking about her work in code enforcement, which made me think of the origins of the systematic code enforcement in Kansas City and made me realize that this discussion was started in our community over 33 years ago. In Westport Tomorrow and Urban Community Development Corporation, Westport neighborhood activities and federally assisted code enforcement, emerged as an important issue that you have high quality, effective, code enforcement. And what you notice from the background paper that was developed by Robyne [Turner] is code enforcement today in Kansas City, Missouri is terrible. Thirty-three years later, one of the most fundamental tools we need for neighborhood revitalization is systematic code enforcement. It is terrible in Kansas City, Missouri, and not much better in Kansas City, Kansas.
“This points to a whole pattern of issues around what I think is some of the bad news in Kansas City, and that our weakest partner is the public sector. Many of the opportunities and hope we see in neighborhoods would be so much better served if we had that kind of robust partnership and collaboration between the public, private and community sectors. Systematic code enforcement is a fundamental tool in neighborhood stabilization and still is an unsolved problem in Kansas City.
“There are others that move to the public sector side of the issues that I think are important, especially around the issue of affordable housing. Another huge area of need that we have is when the transaction happens. When the house goes for sale in an area that has experienced disinvestments, if there is a way to incentivize keeping an owner occupied, it is in the vital interest of the community.
“If you look at neighborhood like parts of Grandview and Hickman Mills where there some very serious turnover from single family housing into rental property, we don’t have a strategy that interjects and makes sure that the house remains owner occupied. We have had in the past, Kansas City, Missouri had a home program that did a terrific job in incentivizing keeping houses owner occupied, and first time home buyers in neighborhoods that were teeter tottering.
“You look at the west side of the city in Kansas City, Missouri; one neighborhood that has turned around dramatically in the last 7-8 years is the Volker Neighborhood. And part of what I believe helped the neighborhood which was experiencing a lot of uptake and conversion into rental property was the home program that incentivized keeping homes owner occupied with first time home buyers.
“Some more good news: as well as a general pattern of increased value of neighborhoods in the comprehensive community development programs. One of the best in our city is the Barrio, the old Westside, when you are going north on Southwest Trafficway, you see on your left. Westside is a neighborhood that I think has just about made it; it has come all the way back from a community development standpoint into a regular neighborhood in Kansas City Missouri. And indicators of that are: crime in the Westside in the last five years is below the city average, below the average crime for any city neighborhoods, so on a comparative basis, it is a relatively safe neighborhood. Owner occupancy has increased by 8% within the past 7-8 years, so there is an increase in the owner occupancy in the neighborhoods.
“Westside Housing Organization, one of our stronger community development corporations, has touched 2000 units on the Westside; they have either built new single family houses or sold them on an affordable basis to neighborhood residents, built multi-family housing that is made available on an affordable basis, or done minor home repair or weatherization. So they have touched over half of the houses in the neighborhood. Property values have increased dramatically, and in fact the Westside is the only place, in my judgment, that we need to talk about the issue of gentrification. But the issue is modified that there is a lot of homeownership in that neighborhood, so home ownership has gone up, primarily with Latino residents. So the Westside is a neighborhood which in many ways has come all the way back, and is an important harbinger for us for the possibilities of community development.
“Another tougher neighborhood or set of neighborhoods which I have cut back in a dramatic way are those served by Neighborhood Housing Services in Kansas City, Missouri. This is actually a collection of neighborhoods running from 31st street to 63rd street, from 4 blocks wide to 13 blocks wide, and pulls in a number of neighborhoods. This is another set of neighborhoods that has seen dramatic improvements in the last 4-5 years in terms of the increase in the percentage of owner occupancy. This is fairly dramatic if you are familiar with the geography because they are pretty tough neighborhoods. They have seen a lot of production of new single family housing, it is a tough market to sell that housing, but it continues to sell, and going along with the sale you can see some of the work of the Neighborhood Housing Services in terms of single family new construction. Crime is down and is approaching citywide averages. Housing values are up in the past five years 67%, in that broad neighborhood, and that is a dramatic increase in housing value. This is indicative of something which helps incentivize both homeownership and the ability of people to reinvestment in their properties.
“Two other things that I think are important to the prospects of neighborhood revitalization that are missing factors in our city. The first that I have already mentioned is incentivizing homeownership which I feel is absolutely critical and I don’t think we have paid enough attention to it, and we had a program that was lost in the shuffle that I feel we shouldn’t have. And the second is robust acquisition rehab. A lot of the public investment in core city revitalization has gone into single family construction, and while that is certainly a worthwhile program effort and makes a positive difference, in terms of affordability and neighborhood stabilization, acquisition rehab is more vital in my judgment. This is an area that we have done very little with in Kansas City, Missouri within the last several years.
“An interesting comparison between Kansas City, Missouri and Kansas City, Kansas; Kansas City, Kansas has a lot more, not only on a percentage basis but also on a real basis of numbers of housing being rehabbed, that is because there in an explosion going on in Kansas City, Kansas of housing values. Values in Kansas City, Kansas in the core city and especially south of downtown are up very dramatically and a neighborhood like Rosedale that has been up over 100% over the past 6 years. That incentivizes not only CDC’s but also private market forces to buy houses, and fix them up for homeownership. That is a terrific development in that city that is done on a market basis, there is not a requirement for public subsidizes, or only a minimal requirement of pubic subsidies in the form of supporting the CDC’s which are working in that city.
“But in Kansas City, Missouri, there is still generally a gap between the cost of acquisition rehab and what you can sell it for based on post rehab appraised value on the market. And we do not have program initiatives that are supporting that. We have some organizations like the Kansas City Neighborhood Alliance that does a lot of acquisition rehab, but we do not have a public policy framework that supports and recognizes the importance of that. Another area that we do not have a public policy framework is in the affordable housing arena, in two areas: one that Ken mentioned is in the expiring use of Section 8. We have a lot of affordable housing in our metropolitan region, most of which is in decent shape or fairly high quality, but is loosing value over time. Also the federal government has made their final statement on their interest in housing, which is they are getting out of housing except for Section 8 and public housing. And the inventory of affordable housing spread around our city is in limbo right now and is the kind of issue that is in need of the public/private community partnership to be engaged in looking at strategies to save that, to reinvest in it to keep it affordable and high quality in operating communities.
“The final one which a lot of us recognize is that there are a lot of old, smaller, multifamily buildings in our city. If you drive through Westport you will see the old three story six-plexus all over the place, and another thing you will see about them is that an awful lot of them are in very bad shape. They are very affordable, they rent for $350-450 per month, but the economics of that kind of rental income does not support rebuilding the systems that many of the old six-plexus need to have. So these are challenges that if we had this robust partnership between the public/private/community sector I think we would be taking on in a much more intelligent, disciplined, and convicted way, that we are not. And I will leave those questions for you that we will discuss further later this morning. Thank you.”
