Policy Analysis | March 2015

Public and Nonprofit Organization Initiatives to Rejuvenate Blighted Neighborhoods

Sujit CanagaRetna

Local, state and federal governments have taken different approaches with regard to implementing programs to address the range of issues related to blighted neighborhoods in America’s metropolitan areas. Neighborhood blight, which can negatively affect the health and safety of citizens and lower revenue inflows as a result of declining property values, remain a significant challenge in several American cities. Due to the local nature of these conditions, local or community level organizations typically target blight removal, using federal and state funds channeled through state agencies. Along with assistance either offered or funneled through various government agencies, a number of nonprofit organizations also are actively involved in creating innovative solutions to eradicating blighted neighborhoods.

Initiatives to address this issue emerge from three main groups: federal, state and nonprofit.

Federal Efforts:

Several federal agency programs offer grant funding for use by states to remove blight, including the U.S. Department of Housing and Urban Development (HUD) Neighborhood Stabilization Program, U.S. Environmental Protection Agency Brownfields and Land Revitalization Act, National Park Service Historic Preservation Fund Grants-in-Aid for State, Tribal, and Local Government Programs, U.S. Department of Commerce Economic Development Administration Planning and Local Technical Assistance Program, and the U.S. Department of Commerce Economic Development Administration Public Works and Economic Adjustment Assistance Program. The federal HUD agency also compiles data on vacancy rates and highlights strategies for identifying, targeting, and eliminating urban blight, as well as innovative ways to rejuvenate affected areas and the surrounding communities.

HUD also suggests community gardens, green space, special events, festivals and concert series as ways of creating community value with newly vacant open lots. The temporary nature makes the projects low-cost and low-risk approaches to returning land to productive use and engaging the community in the public space. These ideas all support engagement of the community through the process of identifying areas of need, implementing clean up and restoration, deciding future use, and ultimately giving back to the community in a way that promotes a communal sense of ownership.

State Efforts:

Following the Great Recession, the most severe economic crisis to sweep over the nation since the Great Depression, triggered at least in part by a collapse in the housing sector, the federal government temporarily made additional grant funding available so that states could initiate a range of reforms to mitigate the adverse consequences this collapse. The collapse of the housing sector during the Great Recession did exacerbate the conditions in a number of the blighted neighborhoods in America’s metropolitan areas. As a result, both public and private sector entities, recognized the importance for urgent action to revitalize these affected areas and transform them into safer, thriving and revenue-generating communities.

The lead role taken by states in these initiatives is exemplified by the actions in Ohio and Michigan during and after the Great Recession. Ohio emphasized blight removal – focusing on deconstructing and demolishing blighted units – to make way for safer, more productive property development. In 2010, the Ohio Legislature passed a law to allow any county to form a nonprofit land bank. Two years later, Ohio issued $68 million dollars in grant funding available to all 88 counties in the state for the purpose of removing blighted buildings and properties. The state’s grant period opened April 2012 and the original deadline for the use of the grant was July 2014. During that period, the attorney general’s office reports grant recipients removed 12,000 blighted building units and extended the deadline through September 2014. The Greater Ohio Policy Center created best practices for strategic demolition for the Ohio Finance Agency as a part of the agency’s Neighborhood Initiative Program.

The emphasis on blight removal departs from traditional neighborhood blight removal efforts and is usually paired with neighborhood revitalization initiatives. In Michigan, the Michigan Economic Development Corporation (MEDC), a state-funded marketing , tourism, and economic development corporation, offers grants and loans for community development, as well as guidance and best practices. For instance, some of MEDC’s programs and initiatives include the Michigan Community Revitalization program, Commercial Rehabilitation Act, and the Obsolete Property Rehabilitation Act. The Michigan Community Revitalization Program, established through Public Act 252 of 2011, distributes loans and grants to individuals and small groups for physical site improvements. The Commercial Rehabilitation Act, Public Act 210 of 2005, abates property taxes for local governments to offer to developers rehabilitating a blighted commercial property. The Obsolete Property Rehabilitation Act similarly allows a local government to apply for tax incentives so an owner or developer may build productive commercial or mixed-use developments. Further examples of strategic community development in Michigan are available on the MEDC website.

These states exemplify two distinct approaches toward blight removal that might prove instructive in other states. Outside the allocation of grants and the establishment of blight removal task forces and neighborhood corporations, direct state actions include defining blight and use of appropriate eminent domain provisions. The role played by states in acting as an intermediary among the different groups in the entire process also remains critical.

"I wish this were a...." wall in Lansing, MichiganNonprofit Sector Efforts:

The American Planning Association (APA) notes that creative tools can inform and enhance community development more than traditional public surveys, meetings, public hearings and town halls, by engaging a broader audience and aiming for a deeper understanding of the community.

Tools such as social media can elicit participation from community residents who may not go to a public hearing. These tools can inform several stages of the blight removal and redevelopment process. Detroit launched an app so people could report blight and provide ideas for neighborhood revitalization. Apps such as Neighborland similarly provide a forum for residents to discuss and vote on what they want to see in their city, including areas that might be affected by blight. In Lansing, Michigan, a Michigan State professor had a similar, lower-tech idea, and the city’s Office of Planning and Neighborhood Development painted the side of a blighted commercial building with chalkboard paint, stenciling “I wish this were a...,” so people walking by could make suggestions.

Universities have a major stake in the vibrancy of the neighborhoods in which they are located; universities also possess high levels of human and social capital and an abundant supply of volunteers to engage in different innovative and creative ways to address blight. To this end, the Democracy Collaborative has developed recommendations to maximize community outcomes through university partnerships. In addition, HUD offers grants to historically black colleges and universities for addressing community development needs.

In other areas, Cities of Service, a nonprofit organization, emphasizes local community volunteers in its “Love Your Block” program. The group offers grants and a plan for mayors to tailor to their city’s needs. Volunteers help clean up litter, remove graffiti, and install new use, such as community gardens. Other nonprofit urban revitalization programs with a focus on civic engagement include the Knight Foundation’s Cities Challenge and Habitat for Humanity’s Neighborhood Revitalization. The Aspen Institute offers a guidebook on cultivating such resident engagement and volunteerism. The Urban Institute’s What Works Collaborative outlines policies and strategies for neighborhood revitalization.