Community Redevelopment and Revitalization

Background

The process in which communities use land to create places to work, shop, and live can decrease land availability, cause population shifts, and adjust community boundaries. If carefully planned, these effects can be positive, leading to sustainable growth. On the other hand, poor planning can lead to negative impacts, such as overcrowding, affordable housing shortages, low property values, and infrastructure declines. Communities may also suffer as a result of poorly thought-out or discriminatory public policies and disaster response plans. Declines in a community’s quality of life often disproportionately affect older residents because they may be unwilling or unable to leave their communities.

Many established communities seek to revitalize their economies and improve housing and quality of life. Effective planning and land use leads to well-planned redevelopment. They help defend against deterioration and declining property values and can ensure that a community meets the needs of residents of all ages, abilities, and incomes. Well-planned redevelopment efforts that prioritize citizen participation provide opportunities to promote mixed-use development, affordable housing, and other elements of sustainable civic design.

However, redevelopment efforts can create adverse effects, including gentrification, which can price out small local businesses and displace long-time residents, including those who are older or who have low incomes. Community involvement, advocacy, and oversight are therefore especially important. Regional cooperation is also crucial to avoiding these adverse redevelopment outcomes. Jurisdictions can work together to promote economic opportunities for all people while limiting negative long-term fiscal and economic outcomes.

State and local governments use a range of policies that help finance and support redevelopment, including allocating funds from federal programs such as Community Development Block Grants (CDBG) and the Choice Neighborhood Initiative. However, promising innovations and solutions may be limited if programs are insufficiently flexible. For example, rural areas have limited access to CDBG funds. Initiatives that serve wide geographical areas and offer significant benefits to residents with low incomes may not qualify to receive federal funding.

Eminent domain—eminent domain is the authority of government to expropriate private property for a public purpose. It is generally the result of direct condemnation or the deliberate taking of property for roads, public buildings, or other projects that will benefit the public. In 2005 the US Supreme Court affirmed in Kelo v. City of New London that the use of eminent domain for economic development was constitutional.

The use of eminent domain can have a profound impact on those who are displaced, even though the Constitution requires “just compensation” for the property. Displacement can be particularly problematic for older adults, who may have long-standing social ties and informal support systems in their community and for whom relocation is frequently physically or economically difficult. Moreover, residents in areas where eminent domain takes place are significantly more likely to be older adults, individuals with low incomes, or members of racial or ethnic groups that have experienced discrimination.

Balancing the public interest with the interests of those who lose their homes and businesses is difficult. The following are important questions that should guide local governments’ decision making process:

  • To what extent will an eminent domain action allow residents to remain in or return to their community?
  • What is the right balance between benefits for the broader community and rights of individual property owners?
  • Does the proposed development reduce or expand the supply of diverse and affordable housing options?
  • How should displaced owners be compensated?
  • Are adequate safeguards in place to ensure consideration of the broader public interest?
  • Have other policy tools been considered before the power of eminent domain is exercised?

To protect the community from the potential abuse of eminent domain powers, legislatures often limit the circumstances in which it can be used. But cities often need to use eminent domain to complete redevelopment projects that help create livable communities for all. The key is finding the right balance between the protection of individual property rights and the need for communities to have the necessary tools to fight decline and promote equitable redevelopment.

Attempts to reform eminent domain and prevent its abuse are often combined with reforms of what is known as regulatory takings. Takings occur when a government regulation (such as one relating to land use) limits the use of private property to the point where the property owners do not retain an economically reasonable value, even though they still retain the title and the government has not seized the property. Reforms in these regulations could affect basic governmental powers such as environmental protection, zoning, and protections of people with disabilities. As such, they should be viewed with caution (see Chapter 2, Budget and the Economy—Budgetary Impact of Limiting Regulatory Authority).

Blight—abandoned and blighted housing is a problem for many urban and suburban neighborhoods across the country. Blighted housing may lead to increased isolation for remaining residents, depressed housing values, and increased criminal activity. Local governments can pursue a variety of strategies to combat blight, including increasing resources for code enforcement officers, supporting residents who are addressing blight in their neighborhood, and creating courts to rule specifically on blight-related cases.

Community Redevelopment and Revitalization: Policy

Revitalization strategies

In this policy: FederalLocalState

Policymakers should ensure that all funds dedicated to redevelopment support AARP’s livable communities principles.

Policymakers should permit sufficient flexibility in redevelopment funds’ eligibility criteria to allow those funds to be applied to multiple community investment opportunities and at the same time minimize displacement of current residents. If displacements occur, policymakers should ensure that those who are displaced receive assistance in securing new housing.

Eminent domain reform

In this policy: FederalLocalState

Measures to reform eminent domain should allow for the exercise of such power in ways that follow AARP’s livable communities principles and should not include elements designed to eliminate the government’s ability to reasonably regulate land use or perform other necessary functions.

Funding revitalization projects

In this policy: LocalState

State and local policymakers should consider a range of incentives and policy options for funding revitalization projects but must consider the long-term and regional economic impacts of their use.

Blight

In this policy: FederalLocalState

Local governments should balance the public interest with individual property rights when labeling properties as “blighted” and when considering the use of eminent domain on blighted properties.

Housing assistance programs that include rehabilitation of properties as an eligible activity should include the rehabilitation of rental properties as well as primary residences.

Congress and the states should ensure that housing assistance programs include options for abandoned properties as part of their strategy for reducing homelessness and overcrowding.

Infrastructure investment

In this policy: FederalLocalState

Policymakers should consider the infrastructure needs affecting all members of communities as part of community development and revitalization, including water, storm and sanitary, sewer, transportation, power, and broadband.

Congress and the states should ensure that funds are available for community development and revitalization initiatives that include a range of community infrastructure investment options.