Who can afford to invest in a poor neighborhood?

[cannedairspray]

Apologies if this has already been posted, but I found this an interesting read:

https://www.strongtowns.org/journal/...borhood-part-1

Think about that one block in your city that — if it just got a little bit of love — could turn into something really special. Maybe there are a few boarded up windows, or the streets have a few potholes that need to be filled. The houses are old, the schools nearby aren’t doing so hot, and it takes a little too long for the the fire department to show up when someone calls. Certainly your local government’s not spending a lot of money to help the residents out — either because they don’t have the budget, or because it's mostly going to your city's more affluent neighborhoods. But you recognize that in our communities, poor neighborhoods like these are often some of the most financially productive ones around — and in fact, they’re often providing the revenue that’s propping up the budget of a much nicer-looking rich neighborhood on the edge of town.

What if this walkable, pre-war block with amazing bones and even more amazing residents could be be brought back, just a little bit? What if just a handful of vacant houses could be remade into clean, affordable units for tenants who could make them their homes? And if you have a little bit of money in the bank, you might be asking yourself: what if you bought one of those empty buildings yourself?

Six months ago, that’s exactly what my partner and I decided to do in our hometown of St. Louis, MO. And the reason why it didn’t work out taught me something I never expected about why it’s so damn hard to bring a neighborhood out of decline.

[Pedestrian]

^^The denouement of the St. Louis tale:

answer: a non-profit could take it on. For the B Street building, that's what happened. The CDC has held onto the building since we passed, and they’re going to rent it out through their property management arm. B Street is astonishingly lucky to have an amazing, well-funded community development partner, and their tenants will be better off for it.

https://www.strongtowns.org/journal/...borhood-part-3

Totally different town, totally different perspective, but in a way the same conclusion:

SF residential projects languish as rising costs force developers to cash out
J.K. Dineen Aug. 27, 2018 Updated: Aug. 27, 2018 6 a.m.

. . . The growing number of developers seeking to cash out rather than risk losing money on building is fueling concerns that residential production will start to decline even as the Bay Area’s housing crisis worsens . . . .

In the long run, however, the challenges market rate developers are facing may benefit builders who focus on affordable housing (which can use) a mix of financing tools not available to market-rate builders: affordable housing tax credits, tax-exempt bonds, and other sources of state and city money.

“Really 100 percent affordable is the only type of project that pencils out there with current construction costs" . . . .

https://www.sfchronicle.com/bayarea/...sfc_greatreads

[pdxtex]

Why don't you tell us what happened. Six months and the plan tanked already tanked?? Was your project in chuddsville or closer to a more successful area?

[Centropolis]

Originally Posted by pdxtex

Why don't you tell us what happened. Six months and the plan tanked already tanked?? Was your project in chuddsville or closer to a more successful area?

it looked like a far outer area of the northside near the county, but away from the areas with the most investment potential (in my opinion), i didnt read the whole thing, though. the investment zones on the northside are in the 19th century areas of the northside, near the river, and then near the central west end, and just north of forest park. that architecture looked newer than either of those areas.

[Pedestrian]

Originally Posted by pdxtex

Why don't you tell us what happened. Six months and the plan tanked already tanked?? Was your project in chuddsville or closer to a more successful area?

Follow the links--it's a story in 3 parts but in my post I gave away the ending. Ultimately, the couple authoring the story couldn't afford the building/area they originally chose, mainly because of difficulties getting financing on a building needing a lot of renovation, and moved on so a nonprofit ended up doing the rehab. That's really the answer to the "who can afford?" question: non-profit developers, as in San Francisco.

[the urban politician]

This is the conundrum facing many south and west side neighborhoods in Chicago.

There are many property “flippers” renovating and reselling homes, and of course there are some areas gentrifying. But still, the sheer inventory of properties that are sitting there decaying is vast.

[suburbanite]

I mean this is a pretty good example of why most gentrification is incremental. You don't typically start by driving 5 miles into the rundown area of town and picking the cheapest turn of the century apartment block with character. If it's carried out by enterprising individuals or younger professionals looking for cheaper housing, it's going to be a slow, block-by-block process that starts on the fringe that borders more established neighbourhoods.

That seems like what this couple ultimately ended up doing. She didn't give the specific areas in St. Louis, but they settled for a locale that was already on the road to gentrification and I'm assuming much closer to already prosperous areas. Once that fills out, maybe then this "B Street" starts to make more financial sense to private landlords.

[chris08876]

A good opportunity: https://www.ten-x.com/commercial/lis...me=NA-NA-NA-NA

I think similar properties, if managed right, can build a nice portfolio.

Try getting something like this in NJ... the starting bid would be 4X the amount.

[lio45]

Really interesting read! I've been doing similar stuff for nearly 15 years now and it's doable... you can't use contractors in that type of 'hood, though - that's just way too pricey. Do it yourself for what you can legally do, and use cheap labor whenever legal.

Also, one prerequisite IMO (in my case) is that the neighborhood always needs to be on the path to gentrification.

Several of my Florida houses are in a 'hood that used to be pretty awful when I first explored it (2012), and remained vacant under our ownership for a couple years before the area improved enough to justify rehabbing them, but they were perfect buildings for an absentee owner to hold as vacant - no freezing ever, only one story, no balconies, concrete walls, terrazzo floors. Squatters couldn't even cause meaningful damage if they tried... (ask me how I know; we've had our fair share of them.)

I wouldn't have wanted to do the same thing with St. Louis buildings... (i.e. buy a few B Street ones, and wait until the area gentrifies enough to justify doing something with them.) They'd have degraded in the meantime, probably beyond repair. And with my luck and Murphy's Law, in the winter some homeless people would've set them on fire by accident trying to stay warm in there.

[Pedestrian]

Originally Posted by lio45

Several of my Florida houses are in a 'hood that used to be pretty awful when I first explored it (2012), and remained vacant under our ownership for a couple years before the area improved enough to justify rehabbing them, but they were perfect buildings for an absentee owner to hold as vacant - no freezing ever, only one story, no balconies, concrete walls, terrazzo floors. Squatters couldn't even cause meaningful damage if they tried... (ask me how I know; we've had our fair share of them.)

You didn't get mold? When I lived in Winter Park near Orlando, I went away for a month one time and left the air conditioning turned off and when I got back the shoes in my closet were all covered in green mold.

[Sun Belt]

Originally Posted by Pedestrian

You didn't get mold? When I lived in Winter Park near Orlando, I went away for a month one time and left the air conditioning turned off and when I got back the shoes in my closet were all covered in green mold.

I had to throw out old shoes and a backpack this summer due to white colored mold. The items were in the back of a hallway closet near a bathroom. It was pretty humid July and August this year and I guess some moisture got trapped inside the closet that would have normally dried had it not been so humid.

[lio45]

Originally Posted by Pedestrian

You didn't get mold? When I lived in Winter Park near Orlando, I went away for a month one time and left the air conditioning turned off and when I got back the shoes in my closet were all covered in green mold.

Nope, no such problems... maybe the properties being empty in my case, versus full in yours (plants, etc.) was a factor? Nothing in there that could release moisture or be a source of mold. Also, another factor may be that the material these shoes were made of was a "fertile ground" for mold; conversely, in an empty house with concrete walls and floors, there's no attractive environment for it.

In any case, whatever the explanation, I can vouch for the fact an empty house with a waterproof roof can go through the years without issues.