Older suburbs will need more creative community development strategies

Limited financial growth, especially in property tax revenue will restrict the ability of local municipalities to redevelop declining and blighted neighborhoods.

Historically, many of the urban development and redevelopment activities were seen as the primary responsibility of the local unit of government. The first steps to maintain and improve urban neighborhoods focused on code enforcement and nuisance abatement ordinances. Local units of government had a vested interest in maintaining strong, economically viable neighborhoods. The first of such reasons was that it kept local residents, especially the ones that voted, happy.

Secondly, it ensured some stability and even increased property values that resulted in increased revenue (in most cases) for these communities. Property tax revenue represented the largest source of funding for local general revenue accounts. This was also the least restrictive money with a tremendous amount of discretion for local decision-makers. Unfortunately, the great recession changed everything.

During the recession, property values plummeted with some communities losing more than 50 percent of their total revenue from this funding source. The end result for many communities was less revenue for such development structures such as downtown development authorities (DDAs), tax increment financing districts (TIFAs) and other such special districts dependent on property tax revenue. The challenge is that these special districts were the primary source of redevelopment activities for the districts where they were created. Such districts paid for infrastructure improvements, façade improvements, and other redevelopment activities designed to maintain and enhance designated sections of the communities where they were located.

Other such investments such a HOME funds and Community Development Block Grant Funds created opportunities for new housing and business development opportunities designed to improve blighted, low-income neighborhoods. Unfortunately, many of these funding sources have been reduced as demand has increased. The demands for federal and local funds have significantly outpaced supply. Therefore, new relationships and structures will need to be created to assist communities. Good examples of some of these groups exist in Detroit. Non-profit neighborhood associations, community development corporations, well-funded and well-organized block clubs, community and regional foundations all pay a role in urban neighborhood revitalization. For the first-tier and second-tier communities, the older suburban communities that border Detroit, they now face many of the redevelopment pressures of their larger neighbor. As they have aged and loss revenue, they now find themselves struggling to redevelop failed subdivisions and blighted neighborhoods.

One effective strategy recommended by Michigan State University Extension will be to work with those groups that have the greatest potential to assist in neighborhood revitalization. For small communities, they can be incorporated block clubs with professional staff. If such groups do not exist, then the strategy should be to work to create them. These groups have the potential to tap into a variety of public and private funding sources as well as the ability to acquire and redevelop property. They can expand a community’s redevelopment and revitalization resources. They represent the best opportunity to augment such efforts as they too are made up of individuals committed to the local community.

In a time of declining resources and major staffing reductions, growing and working with homegrown non-profits can be an effective way to leverage limited resources for a common community goal—building and sustaining strong neighborhoods. 

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