Beaufort News

Making a neighborhood nice -- but not too nice -- is a challenge for cities

New construction continues in the Northwest Quadrant, such as this house on New Castle Street next to a structure that has sign declaring “No trespassing.” Residents and committee members are concerned that redevelopment of the quadrant may force many locals with limited resources out of the neighborhood.
New construction continues in the Northwest Quadrant, such as this house on New Castle Street next to a structure that has sign declaring “No trespassing.” Residents and committee members are concerned that redevelopment of the quadrant may force many locals with limited resources out of the neighborhood.

Louise Mitchell stepped into her new Charleston condominium this spring with some unusual guests in tow -- the mayor and a reporter and photographer from the newspaper.

It was a big deal because Mitchell used to live in a rundown housing project. When the owner tore it down to make way for the new neighborhood, the Shoreview Apartments site became the Longborough development, where single-family homes sell for prices approaching $1 million.

Both Mitchell and Charleston Mayor Joe Riley were beaming because she was able to grab a piece of the new neighborhood through an affordabe housing program. She worked three jobs to buy her home, but it still would not have been possible without the city's help.

The housing was hailed as a new victory in an old battle that communities across America find to be their most vexing.

It's all part of a natural cycle. Something decayed and worn out is replaced by something new and more valuable. It's red-white-and-blue capitalism at its free-market best.

But there's a downside to these neighborhood shifts often called "gentrification." The poor, elderly and vulnerable often get displaced in the process. Social foundations of a community vanish. Diversity disappears.

It's a concern today in Beaufort's Northwest Quadrant as new energy is being poured into fixing up dilapidated homes throughout the historic downtown neighborhood.

The city government, residents, neighborhood associations, churches, nonprofits and civic groups are trying to improve the Quadrant without displacing residents.

But as Dwayne Smalley of Charles Street points out, it doesn't take much fixing and replacing to price a lot of people out of their neighborhood. Smalley, who was named last week to lead the new Northwest Quadrant Neighborhood Association, said that when you get into mortgages of $80,000 and higher, "that's a steep entry price that a lot of people can't reach."

Mitchell's celebration in Charleston is one of several examples of the lengths to which a city government can go to make a difference.

In that case, the developer agreed to build a specific number of affordable condominiums when its new plan was approved. The city agreed to buy them for the low price of $125 per square foot, The (Charleston) Post and Courier reported. Then, the city sold the condos at cost, for $112,500 to $150,000 to first-time homeowners. Former Shoreview residents were offered first crack at the deal, but Mitchell was the only one to move in when the condominiums opened this spring. The city used federal grants to offer buyers a $10,000 forgivable down-payment loan, with resale restrictions enabling a profit but not a windfall so the units can remain affordable.

The city also set income limits for eligibility at 120 percent of the area median income, aimed at helping middle-class workers. Meanwhile, the federal stimulus package came along offering an $8,000 tax credit for first-time home buyers like Mitchell.

'Stay Put Fund'

A different Charleston development took a whack at another common concern: People getting taxed off their land when new development nearby raises property values.

A "Stay Put Fund" was created by the developer of a 216-acre former industrial tract that is supposed to blossom into as many as 4,400 homes and 2.5 million square feet of commercial space. The fund was seeded with $250,000 in private money. It is to pay any additional property taxes for residents in nearby low-income communities resulting from the new development.

Changes in state tax law limited the need for the fund. Taxes for local school operations were switched from property taxes to a sales tax. And increases in property assessments for taxing purposes have been capped at 15 percent.

Other issues cloud the tax question.

Beaufort City Council member Mike Sutton, who has spent a lot of time helping to repair homes in the Northwest Quadrant, said he would hate to see residents driven from their homes by gentrification and the rise in property taxes that usually accompanies it.

However, he said the current tax base of the Quadrant isn't sufficient to pay for the city services it receives. Many longtime residents have homestead exemptions and pay $100 or less in property taxes, while receiving thousands in services each year, Sutton said. That means the city either has to forgo revenue or offset the exemptions by raising taxes on other residents.

"Intuitively, this might not make sense to people, but I'd bet this part of the city might get more services than any other part of the city," Sutton said.

And it has for many years, he added, citing the tenure of Mayor Henry C. Chambers in the 1970s and '80s, when the city poured thousands of dollars into stormwater and sewerage improvements and new sidewalks and curbing.

He also thinks the state cap on property assessments for taxing purposes should help keep people from being taxed off their land.

Best leverage

Charleston found its greatest leverage in land ownership.

The city was able to put teeth in bid requests for a proposed major development downtown on land it owned -- the site of the former Ansonborough Homes housing project.

It required 60 affordable-housing units, with 16 to be sold to people earning up to 150 percent of the area median income and 44 to be rented to people earning up to 60 percent of the area median income. The developer also was required to establish a $1.5 million trust fund to subsidize regime fees for the "affordable" apartments and condos, The Post and Courier reported.

Savannah has been working on gentrification issues since the mid-1970s, but the problem hasn't gone away.

A report of a Gentrification Task Force five years ago said that increased property maintenance and enforcement of city codes targeting property upkeep and appearance can keep property values from falling. Higher property values keeps speculators out.

The Savannah task force concludes: "Effectively addressing the adverse consequences of gentrification requires a strong resolve, effective policies based on a rational assessment of the problem, and multiple programs in the areas of housing, economic development, redevelopment, education, and land-use and zoning."

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