From Common Ground – A monthly publication from the Community Associations Institute
January/February 2011
By Mike Ramsey
Different backgrounds, different rules, different assessments—the challenges of mixed-income communities.
When Kimberle Winzeler was shopping for a two-bedroom condo near Chicago's notorious Cabrini-Green housing project nearly a decade ago, friends had a similar reaction: Are you nuts?
She was not. The marketing and sales professional was looking for a competitively priced property in a transitional neighborhood with great potential.
"If I couldn't afford to live in some of (the trendier) neighborhoods because the costs were so high, I could afford to live here and help be part of the solution to developing another area of the city," Winzeler says. "It would be a great spot to be if you were willing to work through all the gentrification of the neighborhood."
There was an additional catch. North Town Village—her chosen community of 260 condominiums and townhomes—was one of Chicago's first mixed-income redevelopments being built to replace the city's public-housing towers. Under the ambitious plan, owners like Winzeler would share the streets, sidewalks and, in some cases, the same buildings as Chicago Housing Authority tenants.
Things did not go smoothly when she moved in during the summer of 2002. Some of the carefully screened CHA residents had regular visits from friends and family who still lived at Cabrini-Green. There was loitering, boorish behavior and vandalism. Winzeler, who serves as the secretary of her community association board, says she feared for her safety.
That was then. She credits North Town Village's developer-manager with enforcing rules and evicting residents who didn't follow them. Today, with most of the Cabrini towers razed, her low-rise, red brick complex of young trees and tidy lawns is comparatively quiet.
Maybe too quiet.
"I'm in, and I'm out. I will see you and say 'hi' and keep it moving," says Deneen Pughsley, a former Cabrini resident and mother of five who has rented a partly subsidized four-bedroom unit since 2003. "I speak to everyone, and some (owners) don't speak. So be it."
Therein lies a major criticism: Even the most successful mixed-income developments don't always foster the sense of community found in more traditional neighborhoods. At best, the residents from different backgrounds get along or at least don't create problems for each other. At worst, tensions swirl just below the well-landscaped surface, and gulfs between the classes remain.
"One can't engineer friendships," says Robert Chaskin, a University of Chicago professor who is co-authoring a series of studies on Chicago's mixed-income experiment. "In the context of a safe and well-functioning neighborhood, people may build relationships. ... It's easier to accomplish within a certain degree of homogeneity. As a people, we tend to hang out with and engage with people we perceive to be more like us."
The researcher documented one particularly telling anecdote at Westhaven Park, a newer high-rise on Chicago's West Side. Public housing tenants were regularly socializing in a furnished lobby to the disdain of condominium owners who had different expectations about how the room should be used. The seats were temporarily pulled from the lobby, but the building's developer helped mediate a compromise. Resident groups agreed the room would be used in a more transitory fashion, such as waiting for a ride, but not for camping out.
Conflicts over public spaces can be worked out, Chaskin says. "But not necessarily to everyone's satisfaction."
Mixed Origins
The concept of mixed-income housing gained traction in the early 1990s with a $5 billion federal grant program known as HOPE VI, administered by the U.S. Department of Housing and Urban Development. Atlanta—the birthplace of the country's public housing—led the urban-renewal charge as it prepared to host the 1996 Summer Olympics.
The national policy shift came with the admission that dense public-housing complexes isolated poor people and created environments of crime and cyclical dependence. In that regard, no place had a worse reputation than Chicago, where blighted housing projects like Cabrini-Green marred the city's progress on other fronts.
In theory, anchoring redevelopments with market-rate homeowners was supposed to influence public-housing residents and their children in positive ways. At the same time, home buyers were expected to learn to empathize with people from disadvantaged backgrounds.
"This is an ambitious thing," says Peter Holsten, who developed North Town Village and two other mixed-income projects in Chicago. "We're asking the owners to give a lot of grace to struggling renters. We're asking struggling renters to take their behavior to the next level."
Critics say the overarching goal has been to improve appearances and not to help poor, mostly minority renters. They note that under Chicago's "Plan for Transformation," the CHA is not replacing all of the public housing units it is demolishing; many tenants are simply given vouchers to rent private housing in other areas of the city. As for the renters who qualify for one of the showcase redevelopments—and there are waiting lists to get in—not all are able to keep up with the stringent requirements.
"Sometimes you have to roll with the punches," says Kelvin Cannon, a former Cabrini-Green resident. At Parkside of Old Town—a mid-rise development where Cannon now lives—public housing tenants 18 and older must take annual drug tests, submit to regular apartment inspections and seek employment. A small percentage of Cannon's peers haven't been able to adapt.
"They either could not or would not follow the rules," says Holsten, who developed Parkside, of occasional evictions. "Some of them even said, 'I want to get out of here. It's like living in a prison.' And that's fine. I said, 'Good, let's help you go.' Similarly, you have a handful of homeowners that never should have bought there."
Pughsley, a lifelong public housing resident, has flourished at North Town Village. So have her children, who early on broke the ice with some of the owners by offering to walk their dogs. "The rules and regulations weren't any problem with me," she says.
Rules Applications
That doesn't mean she thinks all of the regulations are applied fairly. Renters can no longer have barbecue grills outside, while owners do what they want on their properties. "One day we received a letter saying that we had to get rid of our grills," Pughsley says.
Holsten says it's always been against the rules to grill outside, given the tight space at North Town. But he concedes it's an issue designers should have taken into account. He said his future developments will have common areas for grilling.
Complaints over the fairness of the rules run the other way at Salishan, a sustainable mixed-income development in Tacoma, Wash., that also was built with HOPE VI seed money. Renters there actually have fewer restrictive rules, says homeowner Todd Branyord, president of the Salishan Community Association. Unlike owners, tenants can wash their cars outside, and they have carte blanche when it comes to the location of their satellite dishes. Some of the dishes have ended up mounted on front lawns.
"When you leave it up to an individual, what one person thinks is good taste, another person doesn't," says Branyord.
The disparity was most likely an oversight when Salishan's charter was drafted, and Branyord says a rewrite is pending.
Like Winzeler, the North Town Village condominium owner, Branyord had pragmatic motivations for buying a three-bedroom home at the Tacoma development. The price was right, monthly dues were low ($75 per month) and the location was near his work. He confesses he wasn't entirely aware of the mixed-income character of Salishan when he moved in four years ago, but he hasn't had significant issues with his neighbors.
"I think everybody rents before buying something," Branyord says. "I don't know that the income levels or any of that really plays so much into it. I think, if anything, maybe you learn to be a little more tolerant."
It's practically impossible to discern the rental units from the homes, or the renters from the owners, in the racially and culturally diverse community, which includes immigrants from Asia and Eastern Europe. The 180-acre site to date has 133 homes, including 20 houses built by Habitat for Humanity, and 600 rental units in duplexes, triplexes and quadplexes.
Given the emphasis on rentals, Salishan also has an unusual governing structure. Of the five-member association board, two trustees are owners and three are representatives of the Tacoma Housing Authority, which manages the site and retains a majority control.
"It is an issue," says Lisa Zahn, CMCA, former manager of Salishan, referring to the three-to-two split. "(Owners) know the THA holds that ground, and so the initial perception is, 'I'm paying dues and my dues are going for what?' And THA controls that. So we are very, very careful with how we talk with our homeowners."
Branyord says the housing authority is sensitive about being inclusive on decision-making. On the positive side, he says, the THA has footed the cost of some repairs to common areas without raising assessments. And when renters break rules—like when some tenants try to store furniture outside their units, for example—managers crack down, Branyord says.
Assessment Structure
The HOPE VI models of Atlanta, Chicago and Tacoma aren't the last word on mixed-income developments—or the conflicts that can arise from them.
Some East Coast developments bypass the rental element and sell homes or condominiums at market and below-market rates, depending on a buyer's income. Grumblings over financial issues have surfaced in associations where lower-income owners pay less in monthly assessments, professionals say.
"It's led to a kind of class conflict—the affordable units versus the non-affordable," says Princeton, N.J., attorney Ron Perl, a member of CAI's College of Community Association Lawyers. He says market-rate buyers in these associations tend to ask, "Why do we have to subsidize those people? They're not paying their fair share."
In New Jersey, a 1970s-era legal ruling known as the "Mount Laurel decision" obligated local governments to encourage construction of affordable housing. Developers were enticed with incentives to sell homes at lower prices to low- and moderate-income people, but their approaches differed. While some builders blended the below-market housing stock with the market-rate, others segregated or isolated the units, creating de facto ghettos. That has led to maintenance problems and aesthetic issues.
Some mixed-income developments also have the potential to mire members of both classes, says Paul Santoriello, president of Taylor Management Co. in Cedar Knolls, N.J. In communities where higher-income owners pay more in fees, the assessment levels can deter market-rate sales, much like high taxes in a town can scare off buyers. Meanwhile, affordable-housing owners by law cannot reap much in the way of equity if they choose to sell their homes to a similarly qualified buyer. That can hinder low-income owners from working their way upstream in the housing market.
"That whole ladder is not made available through this. It tends to be more of a trap than a way up," says Santoriello, CMCA, AMS, PCAM. "The concept's great. The devil's always in the details."
Margi Briggs-Lofton knew about the divergent financial obligations of market-rate and affordable-housing buyers when she and her husband purchased a three-bedroom condominium in Harlem's Kalahari redevelopment at full price. The differences in housing features are virtually undetectable: Affordable units come with gray carpeting instead of bamboo flooring and with a popcorn finish rather than a smooth ceiling surface.
Affordable residents may pay less in assessments, but Lofton says the mixed-income nature of the project spurred sales at a time when other New York developments stalled. She feels she got a good deal on the Manhattan home and enjoys the building's cultural diversity.
If she's heard any concerns as a member of the association board, it's about the 20-year tax abatement that helped prime the pump for the development. Some market-rate owners wonder if affordable-housing residents will pay less in taxes when the rates eventually kick in.
"I don't think people who bought in at market rate feel that they got a bad deal or anything," Lofton says. "I guess people are (asking), 'Will this formula stay in effect forever?' How does that work in perpetuity?"
As for Lofton, she isn't sure.
In Chicago, Winzeler advises potential buyers to go in with their eyes wide open if they are browsing mixed-income developments. If she has any misgivings about purchasing a unit at North Town Village, it's that redevelopment in the broader neighborhood fizzled with the economic downturn.
The evidence can be seen next door, to the north, where a retail complex was supposed to be built. It's just a weeded field for now. "There's a lot on the books ready to go; we're just waiting for things to shake out in the economy," Winzeler says.
Meanwhile, the CHA in January plans to close and begin demolishing the last of the Cabrini-Green towers, which looms to the south of North Town Village.
Still, things at Winzeler's community are relatively stable. And even if residents are not regularly socializing—or socializing at all—neighbors are respectful toward each other.
"They may forget my name, and I may have forgotten theirs," Winzeler says. "But we all are cordial, and if something happened we'd all probably work together to address the issue. I don't think it's intentional, I think people just are living their lives."
Mike Ramsey is a Chicago-based freelance writer.
Another New Kind of Neighbor: Habitat for Humanity
Salishan, a mixed-income housing development in Tacoma, Wash., has an unusual community association that combines a majority of publicly assisted renters and market-rate property owners.
Now, add this to the mix: 20 dues-paying homes sponsored by Habitat for Humanity.
Ten more of the residences are planned. Lisa Zahn, CMCA, former manager of Salishan Community Association, was responsible for easing the transition of the new Habitat homeowners. That involves explaining how the association spends the Habitat owners' monthly assessments of $49, a discounted sum that still can be a lot of money for a low-income family.
"They're a little bit nervous about it," says Zahn, who encourages the owners to get involved in the budgeting process. "It's getting the information out there, so they know what the dues are and how they can be involved to say, 'How about we do this instead of this?' or come up with money-saving ideas."
Most people probably are familiar with the image of Habitat for Humanity volunteers erecting a no-frills home and turning over the keys to the new owners. Actually, these days, Habitat affiliates are building groups of homes and even condominium buildings, especially in urban areas where space is at a premium.
As a result, sponsors are entering the complicated realm of creating community associations for Habitat families.
Habitat for Humanity Portland (Ore.)/Metro East has cultivated six associations, most of them for condominium developments, over the past five years. Matina Kauffman, family services director for the affiliate, spearheads the effort with donated legal expertise. "It's very challenging to do with limited staff," she says.
Joining a community association can seem even more daunting to Habitat owners, who typically have limited education and money. In some cases, they may speak English as a second language.
"People emerge as leaders," Kauffman says, "but then taking that natural talent and ability that you might notice and helping to give them the skills that they actually need to run a condo association is a totally different thing."
The Oregon chapter of CAI initiated a mentoring relationship in early 2010. The local CAI representatives have hosted Kauffman and some of her community association leaders at luncheons and seminars, waiving tuition fees. Topics have ranged from architectural review to conflict resolution.
"It was a perfect opportunity for CAI to give to the community and include people who probably needed help in managing their associations but probably couldn't afford to go down the typical path," says CAI member Jeanne Crouch, director of sustainable growth for Portland's Charter Construction.
The Oregon chapter hopes to assist more of the Habitat association leaders in 2011 by organizing classes that are specially tailored for them. Crouch says the learning has been a two-way street.
"I had no idea Habitat was building condominiums," she says. "I had no idea that the Habitat homeowner was now going to be facing some of the challenges that other homeowners face and that I faced when I first bought a condominium."—M.R.
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