New Creative Solutions :: Underutilized Property

In 2010, before leaving San Francisco, I made an informal pitch to members of the mayors team at the department of planning. In the project outline, I made the case that, in lieu of letting lots under city ownership remain vacant until such a time as developers would invest in them, that the city reorganize the lots into public allotments, both to beautify neighborhoods, answer an increasing city interest for which there was little infrastructure (allotment gardens), and be able to accure a degree of income from their utility (in annual fees, and pending some of the lots tossed around, actual taxable revenue from wholesale businesses started in larger plots). The plan never saw the light of day -- this was during the first round of the budget woes in California, and the seed money would never materialize, though now the city is revamping and expanding the garden allotment program through now-Mayor David Chu's offices due to increased demand and long waiting lists.

This theme was met again today when I surveyed several properties with a team just outside New York City. The city in question has 13 sites that are underutilized -- and by that they mean they own the properties, but they are no being used in any official capacity, or in capacities where they are not being used to full capability. Whether a gas station, a house, or an old armory, the city is responsible for the property, gains no taxes on them, and typically has to appeal to outside capital to fund projects, especially in this era of budget tightening and lacking access to tax revenues. These properties can range from being in fully functional, well maintained states to falling apart and in need of immediate attention, which can increase the costs of development due to hightened environmental cleanup & construction costs. 

This increased cost plan oftentimes prices out smaller community groups, which in turn leaves the cost and the eventual ownership of the space firmly in the hands of firms with the capital to invest in these places. Short of some very benevolent groups or aggressive community benefit agreements, development of these previous public spaces tend to become highly commercialized, privatized spaces for those with the income to access them (and usually located in geographies that have populations with low income access -- see Emeryville, CA). These properties oftentimes come with multi-year tax abatements, rendering them free of property taxes, on average 10-15 years, nullifying their immediate effect on the communities they occupy; in turn, the jobs created on these sites tend to be part-time, minimum wage, with a tendency for lacking in upward mobility.

The urge for cities to develop properties is a necessary one, and indeed, seeking organizations that can do so is necessary in these times of government austerity. But it's folly to think that capital intensivity is the only way; in cities across the country, we've seen examples of community organizations and others taking part-time use of derelict properties and using them for a portion of proceeds. Little City Farms and Hayes Valley Farm serve as two good examples; so too does the organization 596 Acres in Brooklyn, which doesn't preclude uses other than agriculture for the intended greening of underutilized, city-owned land. All benefit their geographies visually (by clearing blights, potential infestation sites, and beautifying) as well as economically (producing businesses or utilizing local businesses as vendors) and socially (by providing a net community benefit of green spaces and, as Hayes Valley had proven to do, help buffer property values from price drops during the the an overall decline in SF during its tenure in that space). In terms of pure tax revenue, the measures of these organizations is less than might be brought in through larger-scale commercial or real estate development; but in terms of scalability, access, and the non-fungible returns (i.e. greened spaces, expansion of public spaces, community health, removal of blight etc) the attribution of underutilized sites by community-based organizations tend to make for better returns for the city, all while empowering citizens groups to be more engaged in their neighborhoods. Benefits are retained within a community, and indeed, income from the community is reinvested into its own development, rather than being expropriated and returned to a larger commericial mothership.

Make no mistake: I believe in the power of business to improve local communities. But defining business as scalable, effective, responding to community needs, and indeed, local in its ownership and orientation are necessary remedies to the notion that commercial development writ large is of innocuous harm to local communities or economic development. Municipalities need to be creative in the ways they choose to contend with property development, as the unintended consequences of private development have had, in many cases, a seriously deleterious effect on actual communities (and indeed, even the measures used to rectify those conditions, like community benefit agreements, have a questionable return in terms of being effective). It's time for policy to be disruptive in its orientation, looking for alternate solutions, creative solutions, for dealing with the materials and resources cities do have in their toolkits, to better solve and implement concerted, comprehensive policy plans that deal in scalable, real time returns for communities and taxpayers, not simply the perception of better returns for the city as an amorphous concept.