Scattered Site Rental Toolkit:

Business Planning for Development & Management










III.B. Neighborhood Selection: Contributing to Stabilization and Revitalization

In working toward the overall goals of community revitalization, SSR development is just one of several tools in the toolbox. The effectiveness of SSR development as a strategy varies with each neighborhood type and project situation. Below are some descriptions of different neighborhood types and discussion about SSR development as a strategy within each type of neighborhood.


Healthy neighborhoods: Healthy neighborhoods are neighborhoods where the market is largely sustaining occupancy and real estate transactions. Homes in these neighborhoods are generally well-maintained and vacancy rates are low. However, in the present economic climate, even healthy neighborhoods are in some distress. Job loss and loss of market value has resulted in some foreclosure activity.

In this type of neighborhood, market forces generally resolve vacancy and abandonment issues. Though in distress now these neighborhoods will likely be the first to rebound when the economy improves. Loss of property values will typically be less than in the other neighborhood types. Any blighted properties will be more likely to be purchased by speculators or adjoining property owners and cleaned up. For these reasons, SSR development generally only makes sense in this type of neighborhood where the goal is to provide housing in low-crime, racially and economically integrated neighborhoods to low and moderate income people. Keep in mind that SSR development on any scale can actually be a disincentive to investment in this type of a neighborhood and could actually lead to neighborhood decline as people move out, causing property values to fall.


Tipping point neighborhoods: In these neighborhoods there has been some marked decline. There are often a significant number of houses for sale and/or rent and a number of vacancies. However, these neighborhoods are still vital. Occupancy is often a mix of owners and renters and the majority of units are occupied, though the vacancies are increasing and the home values are falling. Generally, less than 20 percent of the properties are blighted. For the most part, people still maintain their properties, though the number of properties not maintained is growing.


Like the healthy neighborhoods, these neighborhoods fall into a rather broad range. Therefore the strategies necessary will vary from neighborhood to neighborhood. In general, the goal is to stop the bleeding and to begin to turn these neighborhoods in a positive direction so that market forces will take over. SSR development for the purpose of integration, as described in the section above, could be a viable model for this type of neighborhood, though likely opposition to integration would, of necessity, be a consideration.

SSR development as a strategy for community revitalization may also be effective for this type of neighborhood, when combined with other activities, such as demolition and acquisition/rehabilitation/resale. By strategically purchasing blighted properties and rehabilitating them or demolishing them and rebuilding, the blighting influences of the neighborhood can be removed and hopefully the market and reinvestment can and will, occur.


Revitalization neighborhoods: These neighborhoods have often seen considerable decline over years or even decades. Vacant, boarded up houses are noticeable and there is a mix of occupied and unoccupied units. Often occupancy is primarily renters. Many properties are not well maintained and 20 to 70 percent are blighted. These neighborhoods again fall into a broad range, but are generally unable to become vital in the marketplace again, without substantial outside assistance.

The strategies necessary to revitalize these neighborhoods will vary based upon the needs and specific characteristics of each neighborhood. Often the assistance will include concentrated work in a small targeted area and radiating from there into the surrounding neighborhoods. This work will usually involve multiple activities including rehabilitation, infill development, streetscaping, infrastructure improvements and demolition. SSR development, if done as a stand-alone strategy, is not very likely to be successful in this type of neighborhood. However, if planned as part of a concentrated and targeted strategy for revitalization, it can be a useful tool.


Redevelopment areas: These areas have seen the most decline. Though once vibrant neighborhoods, lost industries and decades of disinvestment have caused these communities to become virtual ghost towns. Abandoned, blighted houses are everywhere, with over 70 percent of the properties blighted. A minority of houses are occupied, usually by renters or illegal occupants. Maintaining basic utilities and city services to these areas usually places a burden on the City.


There are two successful strategies that addressing this type of neighborhood:


         Reinventing the neighborhood: In this strategy, much, or all of a neighborhood will be demolished and the neighborhood will be redeveloped. Sometimes a few of the original properties will be saved and will serve as a design element for the new neighborhood. Other times the entire neighborhood will be razed and redeveloped with a new plan. This strategy will often make sense where a critical mass of properties of character remain in reasonably good condition; where adjacent neighborhoods contain important community anchors that need to be protected; or where adjacent neighborhoods are being revitalized. SSR development will generally not be a workable approach for this type of development, though new construction of mixed-use and mixed income development with rental units included in the mix may be a viable strategy.


         Shrinking toward prosperity: In this strategy whole blocks or neighborhoods are razed and the property turned into vacant land, which may be land banked for future redevelopment or utilized for parks, green space, or urban farmland. This strategy is often used where few of the properties are salvageable and there is an overabundance of housing in the region. Its secondary goals include cutting municipal costs associated with infrastructure and crime prevention, blight removal to stimulate reinvestment and the protection of property values in other neighborhoods through balancing the supply and demand for housing. SSR development would not play a role in this strategy.

Next: III.C. Assessing Regional and Neighborhood Markets