Recent headlines about the challenges of real estate development revolve around rising costs and supply delays. But if you ask a developer about their biggest project headaches, they’ll probably talk less about costs of construction and more about community opposition.
Some neighbors embody the definition of a NIMBY, someone who doesn’t want any change in their neighborhood. There is little that can be done to appease this crowd. Most people, though, just want a say in what’s going to change about the place where they live. And when out-of-town developers come in with a plan to fundamentally change a neighborhood, for better or worse, that’s going to cause anxiety. Neighbors, even if they aren’t NIMBYs, are going to ask questions and push developers and architects to consider the repercussions of their plans. Most don’t always understand why the choices that are best for their neighborhoods don’t pencil into a redevelopment budget.
So rather than letting real estate companies define what’s going to happen in their neighborhoods, residents are banding together to become landowners and landlords to reinvest in their communities on their own terms.
The concept of community-owned and operated real estate projects isn’t new. Housing co-ops, community development corporations, and community land trusts have roots in the 19th century and were created as a way to give citizens literal ownership of their neighborhood. The concept has grown in popularity since the 2008 market crash that hurt so many cities and towns across the country with foreclosures and abandoned properties. The pandemic has spurred another round of interest in community-led real estate investing from micro-investments supporting brick-and-mortar storefronts to entire streets and neighborhoods being run by community land trusts.
Community land trusts (CLTs) are structured as nonprofit organizations which acquire and own real estate that is then, at least ideally, used in a way that reflects the values, needs, and desires of the associated community. Many community land trusts are formed to buy housing properties, revitalize them, and then sell the homes to qualifying community members, most commonly citizens that earn below the average median income. The trusts maintain ownership of the land via a ground lease so the properties on that land, whether they be for housing or commercial, will continue to serve the purpose of the trust, even after the buildings on that land are sold.
This can be a useful tool in fighting back against the inequities that exist in real estate ownership, especially in neighborhoods that are gentrifying and displacing long-time residents. Homeowners get the benefit of building wealth that they couldn’t necessarily if they were renting or priced out of homeownership. Today, there are more than 225 CLTs in the United States, with a growing number in urban areas.
In New York City, the Interboro Community Land Trust was formed in 2017 to provide permanently affordable housing opportunities across the city, with its first projects in Brooklyn, the South Bronx, and southeast Queens. In April, Mayor Eric Adams announced that the city will build 16 new single-family homes on city-owned, vacant properties in the South Bronx to Passive House, carbon-neutral standard, with the land being transferred to the Interboro CLT to preserve long-term affordability.
The Kensington Corridor Trust in Philadelphia is leveraging a slightly different model, known as a neighborhood trust, to revitalize the business district anchored by Kensington Avenue. This neighborhood was once a manufacturing hub and thriving community in the 1800s, dubbed the “Workshop of the World.” However, industrialization in the post-WWII era left the neighborhood without an economic engine. According to the organization, 58 percent of area residents live below the poverty line, with an average household income of $20,505, approximately half of the citywide average.
Unlike a CLT, the Kensington Corridor Trust owns and maintains all the properties it acquires instead of selling those buildings to community members. The trust handles all the rehab work, then rents storefronts and other spaces to neighborhood businesses, reinvesting any profits made back into the neighborhood. The team behind the Kensington Corridor Trust emphasizes the importance of neighborhood-controlled revitalization with the power remaining in the hands of neighbors, not outsiders.
On a smaller scale in San Diego, neighbors are leading a decade-long redevelopment of the Market Creek Plaza, handling everything from the design and construction to the investment funding of the 20-acre, mixed-use project. It is anchored by a retail center with national grocery and retail chains, plus family-owned restaurants, an open-air amphitheater, and a community green space adorned with art installations that celebrate the unique fabric of the neighborhood. Organized by the Jacobs Center for Neighborhood Innovation, the project’s parameters were defined by community input, from requests for a grocery store to living-wage jobs and investments in local businesses. In fact, 80 percent of the construction budget went to contracts for local, minority, and women-owned businesses. Market Creek Partners, LLC owns the parcel itself, funded by hundreds of community investors.
The small town of West Windsor, Vermont took a similar stand in 2015 after Ascutney Mountain, the local ski area, closed. The closure had a trickle-down effect, hurting the tourist shops, restaurants, and property values in the town. After a record-setting town meeting in terms of attendance, residents voted in favor of purchasing the mountain, in partnership with the state of Vermont and the Trust for Public Land. Today, the ski area is open again, now known as Ascutney Outdoors and run by volunteer town residents rather than a third-party operator. As a result, the population has grown by 20 percent and property values have doubled.
While these community-driven models don’t solve all the inequities that redevelopment and the often-resulting gentrification have, they do put some control back in the hands of neighborhoods that may feel powerless to the changes happening around them. Charles Marohn, author and founder of the Strong Towns movement, has coined these models as a part of a “bottoms-up approach” for creating more resilient communities which should be led by everyday citizens, not just city planners or real estate investors/developers.
These types of community-run development projects will continue to pop up in communities across the country, but will never outnumber traditional developer financed and built projects. They do serve as an important reminder that development isn’t always met with opposition and pushback. But for community conversations about proposed projects to have a more welcoming tone, the dynamic between developers and the community has to fundamentally change.