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Poor Neighborhoods Make the Best Investments

strongtowns.org

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Re: Poor Neighborhoods Make the Best Investments

#91

Post by twblalock »

jandrese wrote: post #24
hguant wrote: post #13

Earlier quoted context omitted.

No, because the gentrification move would be to buy up those $50,000 dollar houses, renovate them/replace with a condo block and drive out the local residents. Gentrification comes from developers, whereas what he's describing comes from the city itself. Key quotes: "It's wealth that is shared throughout the neighborhood." -- about as anti-gentrification as you can get. "American cities can make low risk, high return…

Either way if you make the neighborhood a nice place to live more people will want to move there. The more people who want to move there the higher prices will go. The higher prices go the higher taxes and rents go. After some time the original residents can no longer afford to live there. That's gentrification. The trick would be to apply the improvements to every poor neighborhood at the same time so you don't crea…

> The trick would be to apply the improvements to every poor neighborhood at the same time so you don't create winners and losers and upset the balance in the housing market, but this is basically impossible.

Even if you could do that, it wouldn't work. It would simply make all of the poor neighborhoods more attractive to gentrifiers at the same time.

I think there is a tipping point where if you help poor neighborhoods too much, they become attractive enough as places to live that the poor residents end up being displaced by increased housing costs. It's an unintended consequence.

Re: Poor Neighborhoods Make the Best Investments

#92

Post by omegaworks »

supernumerary wrote: post #64

Detroit is implementing a program along these lines. They are selling properties in so called 'bad neighborhoods' and mandating that they be rehabbed and renovated within 6 months to code. The average cost of rehabbing a home bought for $1000~$2000 say is $50,000. Have a look at the website: http://www.buildingdetroit.org/ The 'Rehabbed and Ready' ( http://auctions.buildingdetroit.org/RehabbedAndReady ) homes demonst…

From a cursory view I couldn't find information on buildingdetroit.org about incentives to create neighborhoods from these rehabbed properties that would solve this infrastructure debt issue.

Looks like the argument the article is trying to make relates to zoning, traffic design, and density - which I don't think is changeable by people taking advantage of this house flipping program.

Re: Poor Neighborhoods Make the Best Investments

#93

Post by twblalock »

Be aware of unintended consequences of improving neighborhoods.

If poor people can't afford to live in nice neighborhoods, and we transform their surroundings into nice neighborhoods, they won't be able to afford to stay. Richer people will move in and drive up the prices.

These effects are likely to be amplified in towns with high demand for housing and low supply.

Re: Poor Neighborhoods Make the Best Investments

#94

Post by iopq »

The reason why poor neighborhoods are profitable is because the city doesn't spend money on them. If the city spent money on them, they'd be less profitable.

There's no reason to expect that the city spending more money on a neighborhood increases any tax returns.

Re: Poor Neighborhoods Make the Best Investments

#95

Post by walterbell »

hinkley wrote: post #82
walterbell wrote: post #17

Earlier quoted context omitted.

We need to follow the example of Ancient Greece, where citizens got paid time off work to attend the Ecclesia, https://en.wikipedia.org/wiki/Ecclesia_(ancient_Athens) > It had the final say on legislation and the right to call magistrates to account after their year of office. In the 5th century BC its members numbered about 43,000 people. It would have been difficult, however, for non-wealthy people outside of the u…

This is like the opposite of a Federal Holiday. Everybody has the day off except for the government.

I think it rotated. When it was your turn, you attended the Ecclesia and got a token to prove you participated. This was given to your employer, who would then be compensated for your day's wages.

Re: Poor Neighborhoods Make the Best Investments

#96

Post by aangjie »

ryandrake wrote: post #44
Anechoic wrote: post #6

Earlier quoted context omitted.

I really gotta move out of California... It's not a California thing. As part of my job, I spend a lot of time presenting at public meetings and in my spare time I do a fair amount of advocacy (for various causes) which also results in a lot of time in public meetings. I've been in public meetings in small rural villages and large cities across 30 states. And I've observed the same thing - the folks that attend those…

This is exactly why national US voting is held mid-day on a Tuesday. Sure you have mail-in ballots now, but the default in-person voting time/date is surely deliberately designed to favor a particular demographic.

That's odd. As in not the choice of the day, but that it is not an off day/holiday. Here in India, all voting days are mandatory holidays. It still may not help the unregistered manual labourers, but most office workers are free.

Re: Poor Neighborhoods Make the Best Investments

#97

Post by baron816 »

Many economists argue for taxing every equal sized plot of land the same (vs. taxing based on assessed value). There are a lot of benefits to doing it this way, but the main one is that it encourages efficient land use. If a 40 story high rise with 200 apartments in it is taxed the same way as a lot with 6 ranch style homes, then you're going to incentivize building up.

Re: Poor Neighborhoods Make the Best Investments

#98

Post by galago »

ryandrake wrote: post #44
Anechoic wrote: post #6

Earlier quoted context omitted.

I really gotta move out of California... It's not a California thing. As part of my job, I spend a lot of time presenting at public meetings and in my spare time I do a fair amount of advocacy (for various causes) which also results in a lot of time in public meetings. I've been in public meetings in small rural villages and large cities across 30 states. And I've observed the same thing - the folks that attend those…

This is exactly why national US voting is held mid-day on a Tuesday. Sure you have mail-in ballots now, but the default in-person voting time/date is surely deliberately designed to favor a particular demographic.

This why I loved vote-by-mail when I lived in Oregon. You can take your ballot to the office on election day if you want, or you can mail it in. Anything else now feels like voter suppression to me. In my current state, I vote absentee, which is allowed for "religious reasons". I don't plan to ever visit a polling place ever again, and I vote in every single election.

Re: Poor Neighborhoods Make the Best Investments

#99

Post by exclusiv »

azernik wrote: post #78
exclusiv wrote: post #61

Earlier quoted context omitted.

That's what it sounded like to me. He said they'd take a block of 50k houses to turn into 55k houses which will pay more taxes (and since the area is poor it requires less funds to service). So it's a better investment than affluent areas from a direct profitability metric. Of course, the bump in those home's property tax revenue wouldn't drive other revenue like investing in making a downtown more upscale would: mor…

For background, I read his article [1] on why density, so he argues, doesn't matter. Instead, he proposes a different metric - the ratio of private (i.e. productive, main property) investment to public (infrastructure/supporting) investment, which should be high; 20:1 or ideally much higher. However, most arguments for dense development are EXTREMELY relevant to this ratio - the idea being that dense development is c…

Perhaps his ratio makes sense but density is why that poor block example has a higher appraised land value than the single taco joint in the affluent area which is mostly parking.

So his argument doesn't stand up in that case. Sure the poor block has a higher assessment and more property taxes unless those businesses got tax rebates for operating there. But that's just one revenue metric for the block.

Re: Poor Neighborhoods Make the Best Investments

#100

Post by yabatopia »

supernumerary wrote: post #64

Detroit is implementing a program along these lines. They are selling properties in so called 'bad neighborhoods' and mandating that they be rehabbed and renovated within 6 months to code. The average cost of rehabbing a home bought for $1000~$2000 say is $50,000. Have a look at the website: http://www.buildingdetroit.org/ The 'Rehabbed and Ready' ( http://auctions.buildingdetroit.org/RehabbedAndReady ) homes demonst…

These conditions are crazy. Requiring in investment of ten thousands of dollars in a home in a high risk neighbourhood within six months after purchase is borderline preying on the gullible.

A street in Detroit can go in a downward spiral within months. All it takes is one bad apple (home) that gets boarded up or goes down in flames near your investment and your purchase becomes a super high risk gamble, most probably with a very unhappy ending.

Add the high property taxes, completely out of touch with the current values of the properties in such neighbourhoods. And don't forget the back taxes from previous owners that you're often required to pay.

You lure people with a limited income, attracted by the low auction prices, force them to invest a significant sum to renovate a property to code within a limited time frame, saddle them with a mortgage and then you slap them with high taxes.

I'm not saying investing in such properties in Detroit is a bad move, you can make a lot of money with it, but it's not for the inexperienced or someone without a buffer to overcome setbacks!

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