Just as U.S. cities have become bastions of disparity, so too are their neighborhoods. Particularly in this era of spatial dispersion, when rich people settle in centrally-located areas and poor people in the suburbs, it isn’t hard to pick out the right and wrong sides of town. Rich urban areas often have denser and better-kept housing, and provide a nicer experience, with ample retail and services within walking distance. Poor ones are often low-density or even hollowed-out, with much less desirable common spaces, such as automobile-dominated strip malls.
The academic literature has already noted the economic benefits of these more proximate areas, with their greater job intensity and land values. But one less-explored disparity are the health outcomes. Not only do the people living in rich or poor areas make vastly different lifestyle choices, but these choices are reinforced by their surroundings.
This is the conclusion, anyway, of a prominent Boston nonprofit called the Conservation Law Foundation (CLF). The organization has studied different neighborhoods and municipalities in the Boston metro area, and found that wealthy central ones have healthier residents than poor outlying ones. In one extreme case, life expectancies of residents in the Back Bay, near downtown, live on average 33 years longer than residents in Roxbury, a mostly black and Hispanic neighborhood several miles south.
And CLF has found—much as I have anecdotally while traveling—that these areas are marked by differing developmental and planning styles. The healthier areas have transit-oriented development (TOD) and robust public amenities; the less healthy ones, with their high crime and lack of grocery stores, have much lower densities.
So CLF has used this observation to form a health impact index that identifies the development styles common in “healthy neighborhoods.” And it recently collaborated with another prominent Boston nonprofit to bring such development into areas where it doesn’t exist. In 2015, CLF joined with the Massachusetts Housing Investment Corporation (MHIC) to form the Healthy Neighborhoods Equity Fund (HNEF). The fund courts different public, private and philanthropic stakeholders to finance projects that will help foster this healthy neighborhood model.
The process begins when a developer building in these areas has trouble attaining financing. The firm will approach HNEF, seeking additional capital to fill the gap. After presenting the project details, CLF determines if it fits this “healthy neighborhood” criteria, using metrics to analyze both the surrounding location and the project itself. If the neighborhood performs poorly on key metrics—by lacking jobs, workable transit or good health outcomes—then it moves onto CLF’s radar. Inversely, if the project itself would improve these outcomes—by adding housing, green space or retail—it becomes even more favorable to CLF. The organization then uses a 100-point scoring system to determine whether the project fits the healthy neighborhood model.
If CLF approves the project, then MHIC steps in as a syndicator to find financing. These projects, after all, come with risks, since TODs built in rough areas have trouble getting full financing. So MHIC must pursue blended capital —or multiple classes of investors—says Peter Sargent, MHIC’s director of capital development. There will usually be a certain percentage of Class A private investors, such as banks or universities, who receive market-rate returns of around eight percent for their investment. But to help the project follow through, Sargent recruits Class B and Class C investors who have a philanthropic mission, believe in the social benefit of TODs, and are thus willing to accept below-market-rate returns of four or five percent. Thus HNEF, writes Kathleen Costanza for Medium.com, “was designed to give investors a new option for doing social good while earning a return on their money—the elusive ‘double bottom line’ investment.”
The money invested by these different parties goes into HNEF’s fund. HNEF then uses the money to underwrite projects, with investors getting paid back via rental revenues.
In July of 2017, HNEF announced that its first phase of funding accrued $22.3 million. Among the private investors were Santander Bank and Citizens Bank, while foundational investors included the Kresge Foundation and the Robert Wood Johnson Foundation. Boston Medical Center added a $500,000 investment into the fund. It is one of several medical institutions, said Sargent, who participate in HNEF, since they view community redevelopment as an integral part of their public health mission.
The buildings that have arisen from this and previous money are, in fact, similar to what can be found in higher-end neighborhoods. According to HNEF’s portfolio, the buildings are medium- to high-density; generally mixed-use; have centralized community areas; and, per the terms established by CLF, are close to transit and parks. One example includes Treadmark, a $45 million, 83-unit project in the Ashmont neighborhood that includes 51 LIHTC units and 5,000 square feet of ground-level retail. Similar projects that have been completed, or are in the pipeline, reside in Roxbury, Braintree and Chelsea.
The question, which has been a longstanding one in urban planning (for health outcomes or anything else), is what role such urban design can have in reversing social problems. Can sticking TODs into blighted neighborhoods really solve pathologies, like drug addiction, violent crime and teenage illegitimacy?
“It’s certainly not a panacea for everything,” said Maggie Church, a senior advisor for CLF. “What we did with the health impact assessment was to really dive in with what kinds of health assessments we could reasonably expect to see some improvement in.”
This will mean addressing different—although no less important—issues. For example, the ailments caused by obesity, such as diabetes or hypertension, might be reduced if neighborhoods had more parks; redesigning roads for people rather than cars might reduce asthma rates and pedestrian fatalities; and a greater number of grocery stores could encourage healthier eating.
Even if TODs can’t accomplish those things, said Church, they would at least bring more jobs into neighborhoods, reducing the psychological stress caused by poverty. For this reason, CLF’s mission is to bring more such developments into Boston’s roughest areas. The organization has invented a metric to determine the merits of these developments, and found, in HNEF, a way to finance them.
[This article was originally published by HousingOnline.com.]
Scott Beyer owns and manages The Market Urbanism Report. He is a roving cross-country journalist who writes regular columns for Forbes, Governing Magazine and HousingOnline.com.
A podcast on Market Urbanism, or the cross between free-market policies and urban issues. We discuss how a liberalized urban approach would lead to more housing, faster transport, improved public services, and better quality of life. Tap to listen.
Market Urbanism Report is sponsored by Panoramic Interests, a progressive developer in San Francisco. Panoramic, which is owned by Patrick Kennedy, specializes in 160 sqft micro-units (called MicroPads) that are built using modular construction materials. Panoramic has long touted these units as a cost-effective way to house San Francisco’s growing homeless population. But Panoramic also builds larger units of between 440-690 sqft. To learn more about Panoramic’s micro-unit model, read MUR’s coverage on the firm in its America’s Progressive Developers series. Or visit Panoramic’s website.
Market Urbanism Report is a media company that advances free-market city policy. We aim for a liberalized approach that produces cheaper housing, faster transport and better quality-of-life.