Creating a Communitywide Vision for Housing, Neighborhood Development

Cities that receive federal entitlement dollars must create a "Housing and Community Development Consolidated Plan" every five years, with annual action plans and performance reports to the Department of Housing and Urban Development (HUD).

Such plans often address an affordable housing strategy that is closely scrutinized by housing advocates and local nonprofits. However, traditionally, little input is received from developers, engineers, city planning and design technicians, and builders of both market-rate and affordable housing.

In Louisville, Ky., the recent merger of city and county governments offered an opportunity for planning that was much more expansive—an opportunity to review current and future housing demand metrowide and by specific neighborhoods, to create development strategies that were outcome driven and to overcome any developmental impediments to accomplishments.

Build a Housing Strategy, Not Just an Affordable Housing Strategy

Certainly the merger of the city and county governments demanded a new, more comprehensive look at housing. From the moment voters approved the merger, even before the new government was created, city leaders began to review the strengths and weaknesses of the city. The Brookings Institution was solicited to study the needs and opportunities that the new city faced; and HUD convened, at the new mayor's request, a College of Experts to review systems in place and assess what should be kept and what should be changed.

Going beyond a system review, however, was necessary in order to create a strategy with metro-wide input and investment. Louisville community leaders were well aware that the current model of federal funding was changing dramatically, so much input was needed to determine how to allocate a limited amount of federal dollars. Furthermore, a new vision was needed for promoting choice, ensuring diverse housing prices and styles in all parts of the city.

According to Bruce Traughber, secretary of the Louisville Metro Cabinet for Community Development, "Demographics change, so cities and business must change. The written strategy should become a 'policy North Star' to guide all housing developments."

Create a Process that Works

In June of 2004, Mayor Jerry Abramson of the newly merged city and county, Louisville Metro, invited local leaders to participate in a community-based process to create a new comprehensive housing strategy.

More than 30 people participated on the Housing Policy Advisory Team, including bankers, engineers, city planners, real estate attorneys, market-rate home builders, nonprofit affordable housing developers, zoning and code enforcement agencies.

The vision was to create a strategy for growth. Louisville had been experiencing only modest growth compared with contiguous counties, which were housing former residents of Louisville at a rapidly growing pace. This comprehensive strategy was to ensure growth within the new city and to ensure stabilization of deteriorating neighborhoods-not just areas of poverty, but older suburbs-while creating opportunities for different types of housing at all prices throughout the area.

There were five clear goals, namely:

1. define the emerging regional housing market and identify suitable locations throughout Louisville Metro to support the development of housing that meets market demand;
2. create an atmosphere of learning, openness, partnership and trust among Louisville Metro government, private developers, neighborhoods, concerned citizens and other stakeholders;
3. ensure adequate, equitable and efficient distribution of capacity-opportunities and resources-among housing consumers, private sector housing developers, interest groups and the various geographies of Louisville Metro;
4. administer a transparent, fair and practical regulatory process that encourages developer participation and resident satisfaction; and
5. facilitate access to private and public finance that expands residential production and supports home-ownership opportunities.

Tactical processes included creating subcommittees around each goal and reporting findings to the larger group to create a written, measurable and timely plan.

Deliver a Market-Driven and Data-Driven Plan

To ensure a housing strategy resulting in neighborhoods of choice, Zimmerman/Volk Associates studied the market potential and the interaction of supply and demand that would result if appropriate strategies were put in place.

"It was impressive that the group was prepared to address a broad range of issues that will have strategic influence over the next 10 years," says Laurie Volk of Zimmerman/Volk. "The resulting policies will permit builders and developers to respond more directly to market potential and future demands."

An interesting vision was created by identifying the market in a new way. Formerly, residents were identified as "urban" (the old city) or "suburban," that is, residing in the county. The new vision, however, identified three rings of development: the urbanized area, the suburbanized area and the new developing area. This reinvention of the new city shook people out of old perceptions and development patterns and stimulated discussion relevant to sustaining and guiding infill, rehab and new development.

Identify Barriers

By approaching the challenge from the perspective of both market-rate and affordable housing development, the capacity to grow was enhanced and operational impediments were more readily addressed. A few barriers noted, for example, were:

1. delays in the development review process,
2. a lack of understanding by neighborhood leaders of true mixed-income development and density-related issues,
3. a lack of technical assistance for some urban neighborhoods in the area of finance, land assembly and infrastructure development,
4. existing segments of blight and decay,
5. regulatory barriers to density and innovation, and
6. insufficient access to capital.

Involve Bankers

Bankers live in communities and care about development. Moreover, a bank community development corporation is continually looking for business opportunities and meaningful impact.

"Comprehensive planning helps us make more focused decisions on where strategic investment, loans and grants should be made to optimize opportunity for positive community economic development," says Marita Wills of PNC Bank.

Bankers also say that involvement in this type of planning results in more understanding of the ongoing challenges of the development process.

"Financing successful real estate projects demands knowledge of the business and an awareness of the risks that the community development process sometimes fosters," says David Howard of National City Bank, who participated on the city's housing strategy team. "A seat at this table not only enhances understanding of the process, but gives us focus on where investment can be best targeted," he says.

Recommendations for further financing opportunities included the creation of a local affordable housing trust fund, initiating a new Community Development Fund, providing down-payment assistance to families within 80 percent to 110 percent of the median income, and a renewed rental rehab program.

In the End Game ...

The successful outcome of this process will be based on delivery of actionable and measurable goals and objectives that are evaluated on a regular basis. Such a process gives a thicker patina of legitimacy so that all advocates and stakeholders can refer to "the plan" and stay the course. Perhaps not all communities can accomplish this in such a comprehensive fashion, but it seems all should consider it.

For a copy of the Louisville plan, call (502) 574-2879.