By Lisa Sturtevant, PhD
Lisa Sturtevant & Associates
After decades of public housing development that segregated people by race and income and led to pockets of enduring concentrated poverty – housing advocates, government officials and others now promote the development of mixed-income housing to help meet affordable housing needs. With the release by HUD of the affirmatively furthering fair housing (AFFH) rule, there is renewed attention to the feasibility and effectiveness of fostering communities that include households of all incomes. Through the HOPE VI and Choice Neighborhoods programs, the Federal government supports the development of mixed-income housing developments. Outside of these Federal programs, developers have found creative ways to build communities that include housing affordable to a range of incomes. Some neighborhoods have become mixed-income through rapid gentrification and private investment.
Why focus on creating and sustaining mixed-income communities? What approaches can be most successful at creating and sustaining affordable housing opportunities and creating truly integrated neighborhoods?
There is no universally-accepted or legal definition of “mixed-income housing.” But, in general, the term refers to developments that include below-market-price housing units that are affordable to very low- and low-income households along with housing that is market-priced. At a larger geographic scale, mixed-income communities or neighborhoods are distinct geographic areas where there is housing affordable to people with a range of incomes. The goals of mixed-income housing strategies are to reduce poverty among low-income families, facilitate income and racial integration and contribute to urban revitalization.
Conway Center (Rendering courtesy of Wiencek + Associates, Architects + Planners and SOME)
There is a fair amount of research on the benefits of mixed-income communities, including recent compelling research on the importance of neighborhood characteristics on economic mobility. However, there is also debate (see also this piece in the Atlantic) about how well the theoretical benefits of mixed-income housing play out in reality. The specific characteristics of the communities—and the ways in which they have developed—matter a lot.
In a 2011 review of the research on the impacts on low-income families, researchers at the Urban Institute summarize the wide range of positive outcomes associated with living in mixed income communities. Low-income families in mixed-income communities have access to higher-quality services and better schools, and live in safer neighborhoods and better-quality housing compared to other low-income families. There are positive health and education outcomes for families living in mixed-income communities, through the research is inconclusive on the extent of these benefits. Similarly, there is some evidence of improved employment outcomes for families but, overall, the evidence has been mixed on the effect of mixed-income communities on employment and wages.
Research documenting the benefits of mixed-income communities generally has focused on characteristics of the neighborhood, rather than on the benefits that might specifically come from living in a building with a mix of incomes. This issue of mixed-income neighborhood versus mixed-income building is an issue that came to a confrontational head last year over a project in New York City and has also been debated here in Washington DC.
Several things seem to be important if the benefits of mixed-income communities are to be fully realized. First, researchers have found that aside from the characteristics of the community, the attributes of families themselves are often the most important determinant of whether a family benefits from living in a mixed-income community. So, mixed-income housing is not necessarily a universal remedy for problems related to concentrated poverty.
Second, based on the existing research, mixed-income communities haven’t worked as well when there is too much of a difference between the incomes of the highest and lowest income households. Some have stipulated that it is important that communities have a middle income tier between the highest and lowest incomes to promote community stability and to build connections.
Heritage Crossing
Third, the majority of the research on the benefits of mixed-income communities focuses on specific HOPE VI redevelopment projects or on households that move to better neighborhoods through a housing voucher program, and specifically the Moving to Opportunity (MTO) program. But mixed-income communities can develop in a variety of ways. We need more information about how low-income households—indeed, all households—are impacted by living in a place that includes people from diverse incomes and backgrounds.
Across the Washington DC area, there are examples of mixed-income communities that are arising under very different circumstances:
Mixed-Income through Gentrification: There are some neighborhoods in the District of Columbia that seem to be the very picture of mixed-income, containing households with very low incomes, as well as those with very high incomes. For example, Logan Circle, Bloomingdale, U Street, and Mount Vernon Square are some of the most socioeconomically diverse neighborhoods in the city. This mix of incomes at the neighborhood level came about not through public redevelopment efforts but rather through rapid gentrification and private investment. On paper, then, these neighborhoods look like mixed-income communities. But it is not clear that the presumed benefits of mixed-income neighborhoods have been realized by low-income families living in them.
Mixed-Income through Public-Private Partnerships: Throughout the region, private developers have worked with the local housing authority to develop mixed-income housing on publicly-owned land. The City of Alexandria has, perhaps, the most notable examples of this type of mixed-income development. The developer EYA, in particular, has worked extensively with the City of Alexandria Redevelopment and Housing Authority to redevelop public housing buildings into mixed-income communities. (Full disclosure – I live in an EYA development in Alexandria.) The process in Alexandria has not always been smooth, and there has not been a comprehensive study of the impact of these mixed-income communities in in the city. However, this type of public-private partnership and use of publicly-owned land likely represents a way forward locally for the development of mixed-income communities.
Mixed-Income through Inclusionary Policy: A third way that mixed-income communities have been developed in the Washington DC area is through local inclusionary zoning policies. Fairfax County amended its comprehensive plan to define new affordability requirements in Tyson’s Corner. In exchange for increased density, residential developers are required to include in new buildings housing that is affordable to households at various incomes, up to 120 percent of the area median income. Through this policy, Fairfax will be incentivizing the development of truly mixed-income buildings—including individuals and families at the low and high end of the income spectrums—all in a fast-growing, transit-accessible area. It remains to be seen how well the policy works at building truly integrated communities and how low-income families will benefits.
There is no doubt that we cannot return to the day when housing low to very low income families is concentrated in a small number of neighborhoods in the region. Fostering the development of communities that include housing affordable to households all along the income spectrum is important for promoting economic and racial integration across the region and expanding opportunities for low-income individuals and families. However, it is worth giving more critical thought to how we create and sustain mixed-income communities to better understand how everyone can benefit.
Congratulations are in order for AHC, Inc, Dantes Partners and Menkiti Group selected for development projects to foster economic opportunity in the District! Awardees were announced Friday, March 25th at Office of the Deputy Mayor for Planning and Economic Development’s ‘March Madness’ event, an annual effort to create more quality affordable housing, support small and local business, and expand job opportunities for DC residents. At the event, Deputy Mayor for Planning and Economic Development Brian Kenner was joined by Mayor Muriel Bowser to reveal 17 new projects now available to the District’s development community.
Details about the projects AHC, Inc, Dantes Partners and Menkiti Group will work on are listed below.
Waterfront Station II (1000 4th Street SW)
The development team of PN Hoffman, Paramount Development, ER Bacon Development, CityPartners, and AHC, Inc. are selected for Waterfront Station II. Hoffman’s team offered more affordable housing square footage than required by law, including in one bedroom/den and 2 bedroom family sized units that were strongly advocated for by the community. Along the same vein, Hoffman garnered unanimous support from ANC 6D (where the project is located), which noted amongst other things their support for the cultural enhancements (adding to the already existing “incredible cultural resources” in the neighborhood) and the substantial community serving retail. Indeed, Hoffman’s proposal includes a 10,000 square foot “black box” theatre and over 22,000 square feet of retail, including storefronts opening directly onto 4th street, expanding the commercial district further north. In total, the project will provide more than 400 units of housing with 30% of the total units affordable and create hundreds of construction and permanent jobs.
Capitol Vista (2nd and H Street NW)
The development team of Voltron Community Partners (Dantes Partners, Spectrum Management, Menkiti Group, Bailey Real Estate Holdings) was selected for Capitol Vista. The Voltron team will be providing an all-affordable housing project coupled with needed retail in a rapidly growing area of the city. The 100% minority-owned, DC-based partnership has over 40 years of combined experience in multi-family development and affordable housing in the city. Their project includes the most units of any proposal below 60% AMI which is critical to ensuring that people who have lived in rapidly growing neighborhoods can stay as their areas development. In addition, the project includes nearly 3,000 SF of retail. The Voltron team also will be providing new park/plaza space as a part of their proposal, meeting the community’s desire for more park space and recognizing the importance of greenspace in creating family friendly neighborhoods. In total, the project will provide more than 200 construction and permanent jobs and generate $8.3 million in tax revenues.
For more information about other projects announced, click here.
The George Mason University Center for Regional Analysis (CRA) has just published a new report highlighting growth in the Washington Metro Area from July 1, 2014- July 1. 2015. The report includes data concerning the most popular local regions in growth as well possible reasons for the increase in residency. The report is available for download here.
For other recent research by CRA, please visit our Research webpage at: http://cra.gmu.edu/research-reports/
Please contact Jeannette Chapman, Research Associate at CRA, for more information.
Conway Center, Washington, D.C. (Rendering courtesy of Wiencek + Associates, Architects + Planners and SOME)
It’s no surprise that Affordable Housing Finance Magazine recently named Citi as the country’s top affordable housing lender in 2015. The bank’s main affordable housing and community development financing arm, Citi Community Capital (CCC) lent over $4.8 billion to the affordable rental housing industry last year. When combined with their work in education, healthcare and small business lending, CCC lent and invested nearly $7.8 billion across 160 U.S. cities.
Last year, CCC closed what is considered to be one of the most innovative and significant affordable housing transactions in Washington D.C.’s recent history, SOME’s Conway Center. This mixed-use community includes five separate condominium units: family housing, single adult housing, SOME’s administrative offices and training facilities, a healthcare services unit and a retail component. Conway Center will cost approximately $90.1 million.
Putting the “innovative” in innovative financing, CCC created a financing structure for the residential portion of the project. HUD provided an $8.3 million 221(d)4 taxable mortgage in first mortgage position and Citi purchased a short-term escrow backed tax-exempt bond in the same amount. To help generate approximately $20.1 million in LIHTC equity for the transaction, Citi also provided a $17.7 million tax-exempt back-to-back bridge loan to bridge Morgan Stanley’s investment in the LIHTC equity. Proceeds from the tax-exempt bonds and the bridge loan are being used to finance construction of the 182 residential apartments.
Additional investment in Conway Center includes New Market Tax Credits, which are being used to finance the administrative and training facilities, and the Healthy Futures Fund which is financing the property’s healthcare space. Conway Center is one of only five projects nationwide to receive funding through this new program. A partnership between LISC, Morgan Stanley and the Kresge Foundation, the Healthy Futures Fund uses the co-location model and invests in projects that promote primary care access and improve community health. HAND member and Conway Center developer SOME also used an equity investment for the retail space.
Citi is proud of its work with SOME, and other HAND members around the region. A 25th Anniversary and 2016 Annual Meeting & Housing Expo sponsor, Citi has long been a strong partner to those creating sustainable communities. The bank values the education, training and capacity building and network opportunities HAND provides its members and partners throughout the region.
NIMC Team and Residents of Rivertowne Mixed-Income Development (Toronto, Canada)
For most of the past year, the National Initiative on Mixed-Income Communities (NIMC) has been consulting on Washington, D.C.’s New Communities Initiative, a mixed-income transformation initiative for four severely distressed housing communities – Barry Farm, Lincoln Heights/Richardson Dwellings, Northwest One and Park Morton. Along with colleagues at Trusted Space Partners, NIMC has been able to provide strategic consultation to the New Communities Initiative team in the Office of the Deputy Mayor for Planning and Economic Development and its partners – District of Columbia Housing Authority, development teams, resident leaders and other local organizations.
Based at the Case Western Reserve University’s Mandel School of Applied Social Sciences in Cleveland, Ohio, NIMC aims to help reduce urban poverty and promote successful mixed-income communities by conducting high-quality research and making information and evidence easily available to policymakers and practitioners. Along with several research and evaluation studies, the group conducts “state of the field” scans, provides technical assistance and strategic consultation, maintains a mixed-income network among practitioners, policy makers and researchers and manages an online mixed-income development database and library. NIMC has evaluated and consulted with with mixed-income redevelopment in several cities including Chicago, San Francisco, Akron, Boston, Seattle and New Orleans. The recent book, Integrating the Inner City: The Promise and Perils of Mixed-Income Public Housing Transformation, co-authored by Robert Chaskin and NIMC founding director Mark Joseph presents findings and policy implications from three mixed-income case studies in Chicago.
In D.C., NIMC has been able to draw on its research and evaluation findings, broad experiences in several cities and its extensive network of mixed-income practitioners and policymakers to help the District and the Housing Authority. To help promote the local government’s renewed commitment to a successful and inclusive transformation of the public housing developments, NIMC is focused on strategic design, shifting the operating culture and building strong community engagement.
Brand new to HAND, the group is looking forward to sharing its work and learning from the association’s members. By being part of HAND, NIMC also hopes to accelerate its learning curve about the work, experience and insights of the membership.
“We are excited to be plugged into this network and hope to find ways to share and disseminate all that we have learned and continue to learn about promoting successful mixed-income development!” – NIMC
HAND is pleased to spotlight the National Initiative on Mixed-Income Communities as a member who certainly contributes to our organization’s COLLABORATION, INNOVATION and TRANSFORMATION within the metropolitan area!
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