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Volume 3 Number 9
October 2006
In this Issue
Funding for Recovery in the Hurricanes' Wake, Part I
Neighborhoods in Bloom: Targeted Community Investment Works
Homeownership Voucher Programs: Benefits Are Worth the Challenges
The Maturing of America's Housing Finance System
In the next issue of ResearchWorks
Neighborhoods in Bloom: Targeted Community Investment Works
Like many large cities in the 1990s, Richmond, Virginia faced the challenge of revitalizing economically distressed,
physically deteriorating, and older neighborhoods. It annually allocated federal funds, such as the Community Development Block Grant (CDBG), and relied on Home Investment Partnership (HOME) funds to address the needs of these communities. However, research revealed that distributing funds across many neighborhoods had failed to sufficiently address the needs of any of the participating communities. In 1999, the city developed the Neighborhoods in Bloom (NiB) program, an aggressive and innovative approach to reversing neighborhood decline and stimulating private housing market activity.
The NiB Strategy
Today, Richmond's NiB program focuses most of the city's CDBG and HOME allocations on six neighborhoods.
In addition, the city concentrates on building and environmental code compliance in these neighborhoods,
fast-tracks the historical preservation review of rehabilitated houses, and lists vacant and abandoned
properties as priority dispositions. This strategy, combined with other neighborhood revitalization tools, reverses physical and economic decline in the target communities and encourages the return of private market activity.
Partnerships among the city, community development corporations, financial and educational institutions, and community residents provide much needed financial
and technical resources and facilitate the development of political capital and consensus.
Identifying Target Neighborhoods
Targeting only six neighborhoods means shifting resources from other distressed communities. The city, in collaboration with the Richmond Redevelopment and Housing Authority (RRHA), the Local Initiatives Support Corporation (LISC), local Community Development Corporations (CDCs), and community groups and businesses, engaged in extensive research, data analysis, and consensus-building to identify the six target neighborhoods:
- Blackwell: Located on the south side of Richmond, this is a neighborhood with late 19th-Century architecture and early 20th-Century bungalows.
- Carver-Newtowne West: Located adjacent to the Virginia Commonwealth University campus, this neighborhood consists of frame or brick Italianate style rowhouses, some with storefront buildings located at street corners.
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Before and after photos of a house in Carver-Newtowne West demonstrate how Richmond's Neighborhoods in Bloom program is attracting residents back into urban neighborhoods.
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- Church Hill: East of downtown Richmond, Church Hill was the city's first historic district of restored antebellum homes, ranging from small cottages to large mansions.
- Highland Park: A neighborhood of Queen Anne-style homes, Highland Park is on Richmond's north side.
- Jackson Ward: Once known as the "Harlem of the South" and a center for black commerce and entertainment, this neighborhood includes Georgian Revival, Greek, Queen Anne, and Italianate houses.
- Southern Barton Heights: Located on Richmond's north side, this community includes Queen Anne, Victorian, American foursquare, and bungalow-style homes.
The city channels approximately 80 percent of its federal housing funds and other resources into
6- to 12-block areas within these neighborhoods. At the same time, LISC aligns its grants and loans with the city’s investments. Increased police patrols in each neighborhood and aggressive code enforcement lay the foundation for a block-by-block rebuilding that includes improving existing owner-occupied units, rehabilitating blighted properties, and constructing new housing to create mixed-income homeownership opportunities.
Financial Incentives
RRHA works with neighborhood organizations and residents to advance community revitalization by making available various rehabilitation loans and grants; providing homebuyer education; helping low-income residents find jobs, establish credit, and qualify for mortgages; and assisting homeowners with minor repairs. NiB matches people with the tools they need to achieve homeownership, such as:
- Credit counseling services: Residents can receive one-on-one counseling in credit restoration and homeownership preparation through Neighborhood Housing Services of Richmond and Housing Opportunities Made Equal.
- Downpayment assistance: Qualified applicants can receive forgivable loans of up to $10,000 for downpayment and closing cost assistance through Housing Opportunities Made Equal.
- Real estate tax abatement program: Qualified structures that are rehabilitated or replaced are partially exempted from real estate taxes.
- State and federal historic tax credits: The state tax credit is available to owner-occupied houses and income-producing (rental) properties and
provides an investment tax credit of 25 percent for qualified rehabilitation work on historic properties. The federal tax credit is only available to income-producing properties and covers only 20 percent of qualified rehabilitation expenses.
- Virginia Housing Development Authority: Conventional and flexible homeownership financing options are available to low- and moderate-income families.
Program Outcomes
Between 2000 and 2005, housing prices in the six target communities grew 10 percent faster than the city average, and nearby areas experienced higher than average housing appreciation. Aggregate value for tax assessments in the targeted areas increased between 44 and 63 percent. Nearly 400 new or renovated
houses were sold or are under construction, and more than 130 homes are owner-repaired or rehabilitated. During the first 3 years of the NiB program, crime in the targeted areas decreased by 19 percent (compared with a 6 percent reduction citywide), and the number of building code violations decreased by 64 percent.
A 2006 HUD Secretary's Opportunity and Empowerment Award winner, the NiB program underscores the need for a collaborative effort to tackle the economic distress and physical deterioration of inner-city communities. A concentrated infusion of resources in these Richmond neighborhoods has brought about a visible revitalization and attracted residents into city neighborhoods.
For more information about the NiB program, call 804.646.7000 or visit www.ci.richmond.va.us/departments/CommunityDev/Neighborhoods.
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