6 Rules for Unlocking the Potential of Mid-Size Cities


This guest post is by Dennis Strait and Abby Kinney of the Gould Evans planning and design firm in Kansas City, MO.


Can your city be great when teachers, fire fighters, and service workers can’t afford to live in its neighborhoods? This is the crucial, challenging question facing major cities across the country, which are struggling to provide long-term solutions to housing affordability. 

High-growth cities like San Francisco, Seattle, and Denver are reacting with wholesale strategies to provide affordable housing, usually through the subsidization of public-housing, or by placing the responsibility on the private-sector, requiring new housing projects to include a percentage of “affordable” units.  Both practices may make the problem worse by inflating the cost of housing, either through the inefficiencies of bureaucratic process or the added expense of mandated subsidies. This makes it even more difficult to provide housing at a low cost, especially for smaller projects. Whether there is a sustainable affordable housing solution for these high-demand, “first-tier” cities is unclear, but what is clear is that none of them is meeting the need for low-cost housing attainable to low-income households.

For mid-sized cities, however, the opportunity exists to avoid the affordability predicaments major cities are facing. With low-cost land and property within a few miles of the city’s most valuable downtown and midtown areas, Kansas City is one of those places. As a result of Kansas City’s historic redline, Troost Avenue, there is a clear dividing line between the east and west sides of the city, where property values decrease dramatically to the east.  This presents an incredible opportunity. While low-cost property is still available, mid-sized cities like ours can secure low-cost housing options to become more culturally, racially, and economically rich.

This availability of low property values is not going to last much longer. The Troost boundary is beginning to blur as a more open-minded younger generation is moving into all types of neighborhoods that offer urban living. Developers are following this trend, as significant investments in new homes and apartment developments are becoming more normal. Speculative investors from other cities are also recognizing the dramatic disparity in real estate costs and buying up these undervalued properties. Concerns about displacement and inequity are growing, and a better future for housing will require a multifaceted approach: we need new policies, focused philanthropy, and a simplified approval process for small-scale development and rehabs. We also need a return to traditional principles of urban design that produce incremental growth that results in lasting wealth.

Many mid-sized cities can relate to these trends, and growing political pressure is causing leaders, advocates, and professionals to reconsider housing policy. Here are a few considerations for how mid-sized cities can enable an incremental approach to supporting low-cost housing and revitalization of neighborhoods:

  1. Build it productively

  2. Consider the cost of transportation, not just housing

  3. Secure already low-cost housing as a source of future affordability

  4. Support adaptive reuse of existing homes before it’s too late

  5. Make housing diversity legal again

  6. Energize your ecosystem of small-scale developers

1. Build it productively.

It is no secret that there is an infrastructure crisis in our country. Most municipalities in the U.S. cannot afford to keep up with the maintenance demands of streets and pipes spread across the landscape. Cities are just now beginning to recognize that the development patterns of the past 75 years are not sustainable, because they don’t produce enough in property value to pay for the cost of maintenance.

Most people tend to track the geography of wealth in their city by looking solely at the market values of individual properties. Market value, however, is a poor measure in terms of infrastructure costs. There is a considerable difference when value is measured per acre, a methodology best illustrated by Joe Minicozzi of Urban3. This measure of wealth is more proportional to the amount of public infrastructure needed to support development.  Neighborhoods with greater value per acre are more productive, meaning they generate more tax revenue in proportion to the cost of infrastructure and public services.

The way we have built cities in the U.S. has enabled major inequities that are not typically discussed. Many disinvested east side neighborhoods in Kansas City’s urban core are more productive per acre than “wealthy”, large-lot neighborhoods that have higher property values, but are less productive on a per acre basis. In many ways, the poorest neighborhoods subsidize the wealthiest ones.

 

Image: Abby Kinney. The 16 square-miles on either side of Troost Avenue contain roughly the same housing stock and block patterns, though the east side is significantly undervalued. Value, when measured per acre, is starkly contrasted between the east and west side of urban neighborhoods.

 

Images: Google. Kansas City’s west and east sides reflect very different investment levels. However, most of these urban neighborhoods reinforce similar patterns of blocks, streets, building frontages, and building types.

Image: Google. Neighborhoods on the east and west sides of Kansas City’s urban area contain many similar characteristics and housing types. These clusters of 4-plexes are virtually identical, though the east-side buildings now sit vacant in a largely disinvested neighborhood.

Image: Abby Kinney. Development patterns play a critical role in how efficiently infrastructure is used. When measuring value per acre, it is not uncommon for many disinvested neighborhoods (right) to be more productive than their suburban counterparts (left).

When you understand your city this way – that is, where the city is most productive – you have a better chance of managing towards a high-performing city. A high performing city generates enough value to support its infrastructure, and has the potential to generate a surplus to support other needs, like affordable housing.

2. Consider the cost of transportation, not just housing.

Car-ownership is the second highest contribution to a person’s cost of living – the cost of owning a car can take up 30% or more of household income. Transit-friendly neighborhoods are inherently more affordable because access to reliable transit can significantly expand the range of what is affordable in terms of housing.

Image: Gould Evans. Big-box shopping center adjacent to the Main Street BRT line in Midtown of Kansas City.

Too much of our urban land, however, is wasted storing cars or mimicking car-oriented development patterns. It’s an inefficient use of the areas where investments in public infrastructure are highest, making it impossible to provide the type of development that can support buses and other forms of efficient transit.

New housing should be focused along transit corridors, or within nearby neighborhoods connected by a walkable block structure. Employment growth should be focused into the pre-1950s city, where existing infrastructure and transit can be used more efficient, and where residential growth can access it.  Off street parking is an inefficient use of valuable urban land that should be discouraged.

3. Secure already low-cost housing as a source of future affordability.

Many people are already living in low-cost housing. As a neighborhood becomes more desirable, however, property taxes tend to increase. Homeowners without mortgages, retired people, disabled people, and renters are the most vulnerable to tax increases. Several strategies can help sustain low-cost housing for long-term or low-income residents, including emergency rental assistance funds, legislation allowing long-term, low-income residents to defer property tax payments until they sell their home, or housing cooperatives.

Resident-controlled housing tools, such as Community Land Trusts and limited-equity housing cooperatives, secure low-cost housing through the acquisition and rehabilitation of dilapidated homes. A Community Land Trust is being piloted in our city, where the trust will acquire, rehab, and sell these homes to low-income people seeking a pathway to homeownership, who are not qualified to participate in the market. The appreciation of the house and its resale value to managed by the local cooperative, though the homeowner is typically guaranteed some equity when the house is sold.

This will not freeze all housing prices in the neighborhood, but could have positive outcomes:

  • Preserve a percentage of low-cost housing for future generations

  • Offer a path for very low-income residents who want to be homeowners to build equity

  • Help produce long-term diversity in housing prices, preventing the concentration of poverty

  • Enable residents of many socioeconomic backgrounds to inhabit a neighborhood

4. Support adaptive reuse of existing homes before it’s too late.

It's better to repurpose abandoned houses in a neighborhood than to let them end up on the demolition list. But this won't happen naturally without momentum. Oftentimes, a blighted $20K house actually costs $120K because it requires significant investment to become livable again.  If it cannot appraise for more than $120K, why would someone invest in this property as a single-family home?

However, if this same house can be repurposed into a duplex or 4-plex, reinvestment becomes more feasible for small-scale developers. Four new housing units beats a blighted, vacant lot any day of the week.

Image: Abby Kinney. Converted single-family house into 4-unit home in Kansas City, Missouri.

Image: Abby Kinney. Although this building appears to be a detached house, it contains multiple units that can be used for guest housing or accommodating additional tenants in North Kansas City, Missouri.

5. Make housing diversity legal again.

Image: Abby Kinney. Housing types for North Kansas City, Missouri’s Form-Based Code.

Our predecessors have left us with a much more diverse set of housing types than what is typically built today. Coined “Missing Middle”, this includes duplexes, small walk-up apartment buildings, rowhouses, and other human-scale housing types. Many of these residential buildings have aged well over time to naturally produce low-cost housing options in many neighborhoods.

Image: Abby Kinney. Kansas City’s Midtown area encompasses our greatest diversity of housing typologies, providing a broader range of prices. The hues of yellow represent a number of different housing types surrounding our mixed-use centers (light red), parks system (green) and civic destinations (blue).

However, many pre-1950s neighborhoods where this diversity of housing exists have been rezoned to exclude the type of variety that creates organic low-cost housing, such as accessory dwelling units, 4-plexes, and walk-up colonnades.  This has often been encouraged by well-meaning people with the intention of protecting their neighborhood from speculators and slumlords, especially if the community has seen historical disinvestment.

While well-intentioned, this type of downzoning is a race to the bottom. It severely limits the reuse of vacant lots and the adaptability of housing to naturally accommodate the needs of people. Neighborhoods of predominately single-family houses only serve a limited housing need, thereby reinforcing the socioeconomic segregation that has been created in most mid-sized American cities. A variety of housing types provides a range of price points, thus serving the diverse needs in a community.

Even in neighborhoods where diverse building types are “allowed”, minimum lot sizes, parking standards, and other regulatory mismatches make the existing, historic building stock illegal.  There are many cases in Kansas City where housing has been demolished to simply fulfill the parking requirements of an adjacent building, and even more cases where the simple duplex has been outlawed by density standards.

These mismatches are not unique to Kansas City, Missouri. In cities all over North America, they make it harder to provide housing for all. Zoning regulations should allow for the type of development that enables neighborhoods to evolve, while supporting traditional, walkable development patterns where they exist.

6. Energize your ecosystem of small-scale developers.

Image: Google. The Little Store in North Kansas City is only the size of a two-car garage, but is a lovable asset to a residential neighborhood. Operating under the right standards, a garage-to-bodega conversion can be a path for an aspiring local entrepreneur.

Many mid-sized cities have a surplus of undervalued land ready for infill development or rehabilitation. There are countless opportunities to make a valuable contribution to an already walkable neighborhood, without disrupting the scale of the surrounding area. But large-scale developers are often uninterested in pursuing these small-scale opportunities. Shifting the focus towards incremental development strategies can help produce localized, neighborhood-centric growth.

Over the past 70 years our real estate industry has largely forgotten how to build incrementally. Large-scale development has become the norm, while smaller projects have become not only outlawed by conventional building and zoning regulations, but difficult to finance and expensive to permit.  

It is likely that your city already has a group of small-scale developers, working diligently within their own networks, and with the immense street smarts necessary for overcoming systematic barriers to their work.  Small-scale developers often don’t get a lot of institutional support. Small projects require a rare type of entrepreneur willing to navigate sometimes difficult local processes, regulations, and politics, while strategically cultivating important relationships. Politicians and media outlets often fail to see the value in the local people responsible for building momentum in urban neighborhoods – one project at a time. 

If you want your urban neighborhoods to revitalize responsibly, it is critical to support an ecosystem of local developers that will incrementally invest in neighborhoods they care about.  Small-scale development projects can be incredibly beneficial to the local economy for a number of reasons. Incremental development:

  • Is done by people who tend to “find their farm” and build interpersonal relationships with neighborhood residents and business owners

  • Requires intimate knowledge of what a neighborhood needs

  • Retains and build wealth in a community by emphasizing locally owned development

  • Provides opportunities for local entrepreneurs to reinvest in their neighborhood

  • Expands housing options to fit the varying needs and price points of many people

  • Builds a resilient tax base through the productive use of abandoned, vacant, and unbuilt property

Local governments can support local developers by changing the rules of the development game, so that not only those with deep pockets and connections have the capacity to develop. They can streamline processes to fix up a run-down house, build on a vacant lot, or add an extra unit to an existing property. Simplifying development processes for small, incremental changes will enable more people to provide low-cost housing solutions and build personal wealth.

A Start for Leveraging the Existing Affordability and Opportunity in Mid-Sized Cities

Our biggest challenge will be the fear of change. We’re naturally inclined to seek stability in our lives, which is part of the reason we’ve boxed cities throughout the country into unchanging and artificial zones of wealth and disparity.

These strategies are not only for Kansas City. If any of these conditions resonate with you, we urge you to revisit your local regulations, invite a local developer or house rehabber for a cup of coffee, or speak with local neighborhood advocates about what is working and what is missing. Moving forward will require frank community discussions about the need for change, the benefits of change, and the costs of maintaining the status quo.

Let’s learn from other cities and avoid their problems. We can leverage the affordability of mid-sized cities to support housing diversity. Let’s seize this opportunity to build vibrant and adaptable places in our mid-sized cities.

(Cover photo via Wikimedia Commons)



About the Authors

Dennis Strait is an architect, landscape architect, and the Managing Principal of the Gould Evans planing and design firm’s Kansas City studio. His experience includes private, civic and educational facilities planning and design. With over 35 years of experience ranging from site to regional scales, Dennis helps clients find results that enhance life and the built environment.


abby kinney.jpg

Abby Kinney (twitter @abbykatkc) is an urban planning and design consultant at Gould Evans in Kansas City. She is an advocate for responsible planning practices, and creative strategies required to support meaningful places in neighborhoods. She is action-oriented and dedicates her abilities to the encouragement of localized strategies to enhance urban life, and views her professional experience as a source of continuous learning.