NEIGHBORHOODS MOVING UP: WHAT BALTIMORE CAN LEARN FROM IS OWN IMPROVING NEIGHBORHOODS
Executive Summary
If Baltimore is indeed "Charm City," then its neighborhoods have been the wellsprings of much of that charm. Yet many of these once-thriving social and cultural hubs are today but shells of their earlier grandeur and are solemn symbols of the decline experienced by so many American cities since the 1960s. With so much attention paid to the conspicuous degeneration of its neighborhoods, Baltimoreans have missed a very different, and much more positive, story: the increases in median values during the 1990s in a number of its distressed and precarious neighborhoods. This report focuses on what Baltimore can learn from its own improving neighborhoods by looking through the lens of several widely held theories of neighborhood regeneration.
Theories
Community development analysts and practitioners focus on five main approaches to foster neighborhood improvement: homeownership, physical capital, social capital, community development corporations (CDCs), and comprehensive initiatives. Proponents of the homeownership theory argue that because homeowners have a financial and psychological stake in their homes, and tend to stay in neighborhoods longer than renters, they are more likely to maintain their homes and become involved in their communities. These investments make the area more attractive, causing property values to increase. Other experts stress the importance of physical capital, particularly the quality of a neighborhood's housing stock, in affecting neighborhood improvement. By engaging in demolition and construction of new houses and/or the rehabilitation of existing homes, the outward appearance of houses is improved. This projects a more positive neighborhood image, attracting buyers to the area and driving property values up. Still others believe that developing social capital is the best way to promote neighborhood improvement. Improving the degree of civic engagement, social networks, norms, and social trust in a neighborhood fosters actions that benefit neighborhoods. Another view is that CDCs are in the best position to impact neighborhoods because they transfer authority from government and outside actors to grassroots leaders who are presumably more attuned to a neighborhood's needs. Although most of these neighborhood-based nonprofits specialize in housing development, they are enlarging their scope to include a broader range of development activities and community services. Finally, advocates of comprehensive initiatives contend that the multidimensional problems confronting neighborhoods demand multi-faceted solutions, and argue that an approach comprising some or all of the four preceding theories offers the best path for building healthy neighborhoods. Empirical evidence for each of these five theories, however, remains problematic, and more rigorous research into the effects of these factors on property values is needed.
Methodology
This analysis relies on changes in median sales prices of residential properties between 1990 and 1999 as the primary indicator of neighborhood improvement during the 1990s. Sales prices should theoretically capture the capitalized value of all positive (or negative) features of the neighborhood as well as the quality of the housing stock.
To gain a better understanding of the forces underlying the improvement of traditionally distressed or precarious neighborhoods, we conducted a detailed examination of a sample of five pairs of such neighborhoods. Each pair contains one neighborhood whose median sales prices increased between 1990 and 1999 (the target neighborhood), and a similar, adjacent neighborhood that did not experience an increase in median sales prices between these two years (the comparison neighborhood). These neighborhoods are listed in the figure below.
Target and Comparison Neighborhoods
| Target | Neighborhood Comparison | Neighborhood Significant Features |
|---|---|---|
| Sandtown-Winchester | Harlem Park | Longstanding attention toward Sandtown-Winchester: Both have Empowerment Zone designation. |
| Reservoir Hill (North) | Reservoir Hill (South) | Adjacent to Druid Hill Park: Presence of quality school. |
| East Baltimore | Midway Barclay | No target or comparison designations; both treated as one contiguous area. Presence of active CDCs. |
| Carrollton Ridge | Mill Hill | Aggressive crime-fighting initiative throughout 1990s; experienced crime movement from Carrollton Ridge. |
| Broadway East | Milton-Montford | "Island of stability" surrounding Collington Square Park; presence of strong commercial entities. |
The analysis relies on a combination of quantitative and qualitative data. The objective of each element in the analysis is as follows:
- To contrast each neighborhood's history to pinpoint significant events that could explain any current discrepancies;
- To interview Baltimore neighborhood experts to learn about improvement efforts and local perceptions;
- To analyze census and administrative data to determine correlates of increasing median sales prices in the target and comparison neighborhood; and
- To conduct on-site surveys of each neighborhood to complement quantitative analyses.
Serious data inadequacies and resource constraints made it impossible to attribute causality to the relationships observed. But the analysis does offer a number of plausible hypotheses about the factors that may contribute to improving neighborhoods and what factors are probably not at work. While correlation is not causation, if any of the factors being examined is not correlated (or is negatively correlated) with increasing median sales prices, it is very unlikely the factor would be shown to have a causal effect using more rigorous techniques. Matching target and comparison neighborhoods was based on a range of demographic, socioeconomic, and locational characteristics. The goal was to select neighborhoods sufficiently comparable so that the only difference between them was divergent trends in median sales price trajectories between 1990 and 1999.
Sandtown-Winchester and Harlem Park
Divided by Lafayette Street, these neighborhoods are two of the most historic and distressed in Baltimore. Both are part of the federally-funded Empowerment Zone program. Median sales prices increased by 376 percent in Sandtown-Winchester, the target neighborhood during the 1990s, while adjacent Harlem Park, the comparison neighborhood, experienced a six percent decline.
Physical capital initiatives appear to be a driving force behind rising home sale values in Sandtown-Winchester. Sandtown-Winchester experienced an impressive resurgence of its housing stock during the 1990s because of two major housing initiatives: the Nehemiah Project, and New Song Ministries' Habitat for Humanity Project. The considerable physical capital investment in Sandtown-Winchester is not present in Harlem Park.
The analysis of the role of social capital suggests that social capital may be a necessary but not sufficient condition for neighborhood improvement, and can act as an important supplement to physical development. Sandtown-Winchester has a far larger number of active social organizations and activities than Harlem Park, where the Harlem Park Revitalization Corporation appears to be the key organization.
Interviews and property sales data revealed that CDCs are the catalyst behind much of the physical and social improvement in Sandtown-Winchester. New Song Ministries and the Sandtown-Winchester Community Development Corporation have engaged in homeownership initiatives and a range of social programs throughout the 1990s. In contrast, only one CDC operates in Harlem Park, the Harlem Park Revitalization Corporation.
Both neighborhoods displayed aspects of overarching comprehensive strategies. For over a decade, Sandtown-Winchester has employed a comprehensive strategy to foster revitalization, while Harlem Park has made a comparable effort in the past three years. Furthermore, Sandtown's approach centers on public-private-nonprofit partnerships that incorporate--in order of descending importance--physical capital, CDCs, homeownership, and social capital.
Reservoir Hill North and Reservoir Hill South
Between 1990 and 1999, the northern part of Reservoir Hill (census tract 1301) saw a dramatic increase of 139 percent in median sales prices, compared with a 22 percent increase in the southern part (census tract 1302). The greater relative improvement in the northern section of the neighborhood appears to be related to a combination of simultaneous, though unrelated, physical and social capital improvements. The key improvements involved demolition of abandoned properties, rehabilitation of multifamily and some single-family housing, preservation of historic housing, and the reduction in violent crime. During the time that median residential sales prices increased in north Reservoir Hill, the number of resident-owners as a percent of property sales, our proxy for homeownership, actually decreased, suggesting no increase in the number of new homeowners in the neighborhood that was improving. Thus, contrary to the conventional view, it is likely that neighborhood improvement was associated with increases in renters who moved into the rehabilitated multifamily buildings.
Carrollton Ridge and Mill Hill
Although the adjacent neighborhoods of Carrollton Ridge and Mill Hill in the southwest section of Baltimore City both experienced roughly 50 percent increases in median sales prices in the 1980s, their trends diverged sharply in the 1990s. Carrollton Ridge, the target neighborhood, continued a nearly 50 percent increase in median property sales prices between 1990 and 1999, while in Mill Hill, the comparison neighborhood, the median property sales price declined almost 10 percent. Three of the five key theories on neighborhood improvement appear to be at work in Carrollton Ridge and Mill Hill: homeownership, physical capital, and social capital. Homeownership declined in Mill Hill during the 1980s, and the proportion of homeowners appears to have increased in Carrollton Ridge during the 1990s. The one cautionary note is that some of the increased homeownership in Carrollton Ridge may stem from overly aggressive marketing to low-income residents who do not have the wherewithal to purchase and maintain an owned home. There are also modest differences in physical capital between the two neighborhoods. Mill Hill experienced greater increases in housing vacancy rates and levels of abandonment during the 1990s. Finally, Carrollton Ridge had greater social capital, as measured by a decline in its violent crime rate, and the presence of faith-based institutions and commercial activities. Crime and drug fighting initiatives in Carrollton Ridge in the 1990s appear to have reduced the crime rate, but possibly by displacing crime and drugs to nearby Mill Hill. During the 1980s, Carrollton Ridge experienced a growth in the proportion of residents with at least a high school education, and a decline in the proportion of households with children headed by single women, suggesting that the neighborhood entered the 1990s decade with an improving demographic and socioeconomic profile.
Broadway East and Milton-Montford
The social capital, physical capital, and CDC theories of neighborhood improvement working together as a comprehensive initiative appear to be most closely associated with the larger increase in median property sales price in Broadway East as compared to Milton-Montford. Broadway East, the target neighborhood, experienced a 200 percent increase in median property sales price between 1990 and 1999, in part stemming from initiatives based on these theories. Physical capital is evidenced to a greater extent in Broadway East by more permits for concentrated demolition, renovation and new construction, as well as a moderate concentration of above median sales price properties. Milton-Montford had fewer permits for demolition and renovation, and no concentration of above median sales price properties. A greater level of social capital, reflected primarily in extensive programs established by CDCs and faith-based institutions, is also observed in Broadway East. This neighborhood's multidimensional and collaborative approach toward community development taken by its CDCs appears to be a strong contributing factor to the increased median sales prices. By contrast, the single focus approach, concentrating on homeownership counseling and building rehabilitation taken by the prominent CDC in Milton-Montford, is less collaborative with local churches and other neighborhood organizations.
Also contributing to improvement in Broadway East is the existence of an "island of stability" surrounding Collington Square Park. The "island," a two-square block area encompassing the park, Collington Square Elementary School and several local churches, had no property sales in 1999. On-site observations and interviews with local experts indicated that the area has a larger proportion of well-maintained, decorated houses, and greater evidence of community leadership and involvement. The concentration of most of the above median sales price properties and permits for renovation in a one-square block ring around this stable area suggests a spillover effect in Broadway East. The neighborhood's community organizations are attempting to leverage the attractiveness of this island to attract potential homeowners to the area to extend the spillover effect into additional blocks.
East Baltimore Midway and Barclay
Instead of the target-comparison approach, East Baltimore Midway (EBM) and Barclay are treated as case studies for neighborhood improvement. This approach is taken because Barclay's 1990 median sales price data contain an idiosyncratic blip that reflects the rehabilitation of seven properties by a neighborhood-based organization, the St. Ambrose Housing Aid Center. Since neither neighborhood enjoyed comparably high median sales prices either before or after 1990, this outlier median sales price does not accurately depict Barclay's median sales price trajectory. Without this blip, median sales prices in EBM and Barclay share erratic trends from 1982 to 1995, steadily increasing from 1995 to 1998, and falling from 1998 and 1999. Given these similar median sales price trends in both neighborhoods, the objective here is to evaluate which, if any, of the five theories of neighborhood improvement were at work in each neighborhood during the 1990s.
The evidence suggests that the efforts of CDCs to promote physical and social capital were the driving force behind neighborhood improvement in EBM and Barclay. The East Baltimore Midway Community Development Corporation (EBMCDC), in particular, which operates in both neighborhoods, appeared to have made the largest contribution to neighborhood improvement in both neighborhoods. Unlike EBMCDC, other neighborhood-based organizations focused mainly on housing development and served other neighborhoods in addition to EBM and Barclay. EBMCDC had the additional benefits of strong and stable leadership, adequate funding, and resident support from 1989 to 1997. However, beginning with the loss of a long-term leader in 1997, EBMCDC cycled through directors, lacked organizational cooperation (both internally and externally), and lost its Community Development Block Grant funding as well as the support of many residents. These factors may have contributed to the downturn in median sales prices in 1998 in both neighborhoods, and raises questions about the future of these two areas.
Synopsis and Discussion
The improvement in each of the five target neighborhoods we studied followed its own unique path, suggesting that there is no magic formula that can be generalized to all neighborhoods in this city, or any other. Other findings worthy of note include: (1) the target, improving neighborhoods in this study included some of the most distressed in the city; (2) improving neighborhoods were typically engaged in some combination of both physical and social capital building efforts; (3) physical capital improvements took multiple forms, and even demolition with no rebuilding appears to be associated with increased median sales prices; (4) improvements in physical capital appear to have long-term effects on median sales prices; (5) while never the sole factor, decreasing violent crime rates may have increased the marketability of improved physical assets; (6) homeownership was not a key factor in most neighborhoods' improvement; and (7) even a small island of stability in a beleaguered neighborhood can have a positive spillover on the sales prices of adjacent blocks.
