Before you read: The following is a paper I wrote for an urban policy issues class.  By no means am I kicking Flint while they’re down – there are significant ‘statistical’ barriers facing Flint in the future, but they are just numbers.  Leaders in Flint are doing damn near everything they can – from pretty much inventing the land-banking system, to innovative public-private investment, and a whole bunch of great stuff that hasn’t yet made it into academic literature.  Recognizing this leadership, I proposed another policy that could be tried – it won’t solve the crisis Flint is weathering, it may not have a huge impact in the short-run, but in the long run it could help to revitalize a small portion of the city and be added to the many assets present in Flint and the Genesee area.

Comments are welcome!

By the Numbers:

Flint, MI, was once a powerhouse of industrial production and innovation.  It is the birthplace of General Motors, the United Auto-Workers, and many other notable milestones in manufacturing.  Like many mid-American industrial towns, the 1960s brought the first signs of disinvestment, deindustrialization, depopulation, and urban decay.  In little more than 50 years, Flint lost half its population – nearly 100,000 people – to plant closings, “White Flight”, and many other conspiring factors.

Figure 1: Population change in Flint, MI from 1900 – 2010

With little more than 100,000 people occupying an area built for twice that number, it takes little imagination to understand the severe and peculiar impacts this has on local policy.

Years of Decline:

Flint’s population began to decline sometime between 1960 and 1970.  Once Michigan’s 2^nd-largest city, it is now the seventh.

Substantial literature states that “white flight” was an initial driver of population loss, driving affluent whites and their families into the suburbs.  This is supported by the growth of Genesee County – doubling its population since 1960 while Flint languished.

A Problem Defined: Vacancy and Disappearing Neighborhoods

By many measures, Flint is much different today than it was in the past.  The shrunken population has left many neighborhoods with gaping holes to fill.  A drive through some of the worst-hit areas gives one the feeling of just how tough things really are.  For a city to lose half of its population, and by extension half of its density, it loses the ‘critical mass’ that an urban environment needs to maintain its underlying infrastructure.

Facing an onerous regulatory environment that blocked the razing of many blighted homes in the 1990s, local leaders worked with members of the state legislature on enabling legislation for the Genesee County Land Bank Authority (GCLBA).  This organization has been working tirelessly since 2002 to quickly raze or reclaim foreclosed properties in an attempt to stabilize neighborhood decline.

Vacant properties are a major concern for surrounding neighborhoods.  Prior to the cleanup and reclamation efforts, vacant properties fell victim to arson, trash dumping, and became havens for crime.  Since 2002, over 10,000 properties have gone through the tax foreclosure process in Genesee County, with a jump to 1,200 in 2008, and a spike in 2010 to over 2,300.

These efforts have cut Flint’s vacant residential housing unit rate to just 8.57% – putting it on par with other Midwestern industrial-transition cities.  When compared to cities of 50,000 residents or more, Flint ranks 55^th place, which is well below many of the areas hardest-hit by the credit crisis and recent natural disasters.  This is mostly due to the ongoing effort of the GCLBA.

While the number of empty structures is being addressed, this statistic fails to paint the picture of the urban fabric – parts of which are torn asunder by half-occupied blocks of dilapidated houses intermingled with still-vacant homes waiting for demolition or restoration.  Unlike Galveston or Daytona, many of these homes have been vacant for decades.

The GCLBA maintains over 5,000 parcels within the City of Flint alone.  These vacant parcels – some with structures, some without – pose a severe fiscal burden on the organization.  But without the GCLBA, property maintenance would likely not happen.

Figure 1: Each dot represents a vacant parcel owned by the GCLBA in the City of Flint as of 2011. This map does not include the vacant lots already sold to adjoining property owners, nor the many hundreds of homes restored and sold since 2002.

Figure 2: Neighborhoods appear incomplete as vacant homes are razed.

Figure 3: A closer view shows the open spaces (highlighted in red).

Concentrations of Poverty:

Figure 4: The concentrations of the worst poverty levels – families making less than $5,000 – illustrates the broader issue of systemic poverty.

This wide dispersion of foreclosed properties affects all but the most affluent neighborhoods of Flint.  The following map of census tracts shows the intensity of vacancy concentration – more than 25% in some areas for a total of nearly 4,000 still-vacant units at the time of the Decennial Census through 2010.

Figure 5: Vacant residential property units coincide with concentrations of the worst poverty levels in the area.

Current Policies:

Policymakers at the GCLBA have focused on setting achievable goals for the city and county that allow for function within this new reality.  Current programs of the GCLBA have been very effective at eliminating excess housing and blight, especially given the circumstances.  These policies each address a specific facet of the vacant property dilemma, and are summarized below:

FORECLOSURE PREVENTION: Preventing properties from entering the foreclosure process is a key strategy for stabilizing neighborhoods. Resident homeowners experiencing a significant financial hardship can request a one-year foreclosure postponement. A second year postponement is sometimes granted if the circumstances remain the same and a property owner demonstrates significant progress toward paying the taxes owed.

DEMOLITION: The Land Bank demolishes between 100 and 200 blighted structures on tax-foreclosed and abandoned properties per year. Removing burned out and dilapidated houses helps to slow down the cycle of decline and create opportunities for reinvestment in neighborhoods in Flint and the surrounding area.

SALES: The Land Bank supports home-ownership and investment in tax-foreclosed properties by offering several options to purchase housing. In addition to accepting cash and conventional mortgages, the

Land Bank may sell a property under land contract, often with credit for renovations going towards the purchase price. This ensures that the purchaser will help to stabilize the neighborhood by improving their property.

The Land Bank also provides purchasers with a lease that includes an option to buy, which enables the purchaser to improve their credit before acquisition. The sales team works with the purchaser to negotiate a fair sales price and to help identify additional funding sources for home improvements.

SIDE LOT TRANSFER: Homeowners in the City of Flint with vacant Land Bank property adjacent on either side of their home have the option to purchase that property as a side yard for $1.00, plus the foreclosure year’s tax (if foreclosed in 2003 or before), a $25.00 administration fee, and a $14.00 filing fee. In addition to increasing the value of properties for homeowners, this helps to improve neighborhood character and bring properties back on the tax roll.

HOUSING RENOVATION / RENTAL: The Land Bank renovates housing for sale and rent to stabilize and revitalize neighborhoods, encourage homeownership, and provide affordable housing. The Land Bank renovates and sells or rents between 25 and 50 houses per year. To encourage homeownership, qualified tenants are offered a rent-to-own option. The program also provides residents of tax-reverted properties with the option of purchasing or renting their homes or relocating to another rental unit after foreclosure.

PROPERTY MAINTENANCE: With limited resources and 3,000 abandoned, tax-foreclosed properties, the Land Bank provides emergency maintenance for properties that are considered health and safety hazards. Maintenance activities include mowing, boarding structures, and removing debris from vacant lots and structures.

CLEAN AND GREEN: This program supports neighborhood efforts to convert vacant Land Bank property into gardens and green space. Through partnerships with local organizations and block groups, the Land Bank provides resources for neighborhood residents to clean Land Bank owned property and develop special greening projects to beautify their neighborhoods.

ADOPT-A-LOT: This free program gives individuals, businesses, neighborhood groups, and other organizations in Genesee County the opportunity to control and use Land Bank owned vacant lots near their homes or businesses to beautify / green their neighborhood without the burden of taxes or other financial obligations that come with ownership. In addition to increased safety and property values, when available, adopters can utilize resources such as Land Bank technical assistance with gardening, property maintenance, site design, and planting materials. If desired, those who adopt land from the Land Bank will have special consideration for purchase of the specific adopted vacant lot(s).

BROWNFIELD REDEVELOPMENT: The Land Bank aims to secure state and federal resources to facilitate the cleanup and redevelopment of blighted and contaminated properties. The LBA is currently managing $8.3 million in Brownfield bond funding and grants and loans from the U.S. Environment Protection Agency (EPA) and the Michigan Department of Environmental Quality (MDEQ) to assess, cleanup, and position environmentally contaminated and blighted properties for re-use.

DEVELOPMENT: This program is dedicated to returning Land Bank owned properties to the tax roll using Smart Growth strategies to preserve, sustain, stabilize, and revitalize neighborhoods. Current non-profit housing renovations and development projects include multi-family condominium developments, mixed-use (residential and commercial) renovations, and single-family construction.

Policy Proposal: Send in the Artists

When the Flint Journal’s editorial board suggested the GCLBA “get creative”, Executive Director Doug Weiland issued a stiff rebuttal, saying they are already being creative.  Indeed, the Land Bank itself was an innovation, and the myriad of programs offered have done much to improve the situation.  But Flint has more assets to leverage as part of this broad approach to redevelopment.

In terms of arts and cultural offerings, Flint scores very high according to national benchmarks compiled by the market data firm, Claritas.  The city is home to several museums and cultural centers, employing more than six times the national average in that field.  Genesee County is also home to a budding cluster of independent artists, writers, and performers.  These cultural assets, coupled with easy access to low cost, vacant space, provide an opportunity to attract artists and stabilize a targeted neighborhood by engaging creative entrepreneurs and leveraging existing resources.

This policy proposal is modeled off of similar programs implemented in Paducah, Kentucky, and Rising Sun, Indiana.  These programs attracted artists to a run-down area through incentives and targeted marketing.  Once there, the artist-entrepreneurs set to work restoring or renovating their properties, which served as living, working, and gallery space.  As more artists moved in, the area began to gentrify with increased property values and home-ownership rates.

Lessons Learned:

Analysis of the Paducah and Rising Sun examples point to important distinguishing factors differentiating their situation from Flint – notably in scale and in context.  In these two examples, efforts were targeted to a single, distinct district or neighborhood.  The Paducah Renaissance Alliance began with $46,000 of funds from the city and an additional $100,000 of private and nonprofit seed money to purchase and partially rehabilitate seven dilapidated homes.  Between 2000 and 2010, the program has attracted more than 100 artists and more than $30 million of investment  to the targeted neighborhood.  Quantitative data is not readily available for Rising Sun, but the effort was nonetheless targeted toward a single neighborhood with significant results.

As a matter of scale, the problems experienced by the cities in these two examples are far smaller than Flint’s.  And the context in which they sat – otherwise viable small towns – differs greatly from the crisis-level situation in Flint.  In spite of these differences, a few guiding principles can be drawn from to help construct a program specific to Flint:

1. Concentrate efforts in one single district.  A dense cluster of artists will be far more effective than a diluted scattering.
2. Leverage existing incentives.   Aside from the targeted marketing plan, much of the infrastructure is already in place.
3. Secure regional political support early-on.  Paducah’s advocates learned quickly that broad support is needed to ensure longevity.  An entity with county-wide or regional stature should coordinate the effort, discouraging any incentive to undercut.

With these lessons in mind, the following pages will detail the specifics of implementing an entrepreneur-based cultural economic development initiative in Flint, MI.

The Creative Attraction and Retention Program (CARP)

To attract and retain creative artists and entrepreneurs, Flint-area stakeholders should assemble a set of targeted, individual incentives.  These incentives should be meant to help entrepreneurs make an investment in a combined live/work space closely clustered with other entrepreneurs.

The Genesee County Land Bank Authority, Greater Flint Arts Council, and the Flint City Planning Department should select candidate neighborhoods for the program according to a process that ensures local participation.  The candidate neighborhood or district should have a concentration of Land Bank-owned structures not slated for demolition, have a diverse mix of uses and structures, and should be within proximity to some of the arts, cultural, and educational institutions (see appendix for candidate districts).

Once selected, the neighborhood or district should explore the creation of a tax-increment financing authority (TIFA) district.  A TIFA district freezes property tax levels at the base year – increased tax revenues resulting from new development are instead directed back into district.  TIFA funds can be used to provide low-interest loans for entrepreneurs, fund public works projects within the district, and provide additional resources for other initiatives within the district.  With a low base-year, any property improvements will increase property value and provide funds for the program.

The Land Bank Authority already provides significant assistance to property owners who purchase and renovate properties.  The Greater Flint Arts Council and the local district organization should begin soliciting foundation funds to provide additional incentive to artists and creative entrepreneurs.

Flint is the headquarters of Citizen’s Bank, and has a large presence from several credit unions and smaller banks – these relationships can be leveraged to make low-interest loans available to creative entrepreneurs within the district.

The incentives will do little good if artists are not aware of them.  A plan to target artists and creative entrepreneurs both in Genesee County and outside should be formulated, funded, and executed.

This program requires cooperation between existing entities, and will likely not require any new organization to be formed.  The following are the most important organizations and their possible role in the program:

1. Genesee County Land Bank Authority:  GCLBA will be charged with providing guidance on early planning, commitment to rehabilitating structures within the district, and providing the regular redevelopment incentives available on all land bank-owned properties.
2. Greater Flint Arts Council:  Serve with the local district/neighborhood organization as the arbiter of approving artist and creative entrepreneurial proposals.  This organization has relationships throughout the local arts community that can be leveraged to find candidate artists.  GFAC can also lead the marketing efforts to recruit non-resident artists.
3. Genesee Regional Chamber of Commerce:  Provide small-business support, networking opportunities, and other assistance.  GRCC members should also work to fund raise for the program.
4. City of Flint Planning and Zoning Officials:  Provide guidance in selecting a neighborhood or district, provide technical assistance in the creation of a TIFA district, work to expedite zoning and development approvals, and work to direct available development incentives to the district.
5. Local Neighborhood/District:  Once selected, this organization should lead the local effort for redevelopment and revitalization.  They will be responsible for petitioning to create the TIFA, and should explore formalizing their structure along the lines of the Michigan Main Street Program.
6. Private-Sector stakeholders:  Local banks should be tapped to provide loans; existing businesses should participate in business development workshops and should work to take advantage of the available incentives.  Property owners should be expected to invest in their property, and candidate neighborhoods/districts should be rated on whether their stakeholders are willing and able to do this.
7. Institutional, foundation, and non-profits:  The C.S. Mott Foundation and other philanthropic organizations should be approached early on with requests for sustained assistance of the program.  Higher-Ed institutions such as Kettering, University of Michigan-Flint, Baker College, and Mott Community College should be included on the list of stakeholders who are continually engaged for participation.

Expected Impacts:

A review of cultural economic development literature implies that “bohemian” artists and creative entrepreneurs can be a stabilizing force when they move into an area.  Ideally, this begins an upward cycle of improved socioeconomic status for the area and its residents.  By concentrating on encouraging property-ownership, this program is ensuring that current residents have an opportunity to benefit from improvements in property values.  Concentrated, simultaneous reinvestment by private, public, and non-profit stakeholders will help to ensure each dollar adds value back into the system.

As far as direct quantitative impacts, Paducah’s program successfully attracted 100 property owners and resulted in over $30 million in private investment over 10 years.  Flint is part of a much larger market.  It is not unreasonable to think that the program will surpass that threshold in terms of property sales – but given the significant challenges to the broader real estate market, the expectation of private investment should be much more modest.

Total employment in the “Arts, Culture, and Entertainment” cluster is 1.4 times more in Flint than in Paducah.  The total number of establishments is around 1.6 times greater in Flint.  If Flint’s program achieves the same rate of success as in Paducah, it could conceivably attract 150 new property owners and businesses into a single district.

Because the GCLBA already provides development incentives, and assuming the successful implementation of a TIF district, these possible 150 new residents could bring with them 150 new creative businesses, possibly employing hundreds more.  While these numbers pale in comparison to the broader issues Flint faces, they are positive and achievable.

Conclusion:

It is no question that Flint has a long road ahead – 60 years of disinvestment cannot be reversed overnight.  But policymakers, community leaders, and other stakeholders are trying to do just that.  With numerous innovations, broad coalitions, and coordinated visions, the City and the Genesee County Land Bank are trying everything they can to right-size, reorient, and begin a cycle of reinvestment.

Turning some focus toward creative entrepreneurs will not solve these problems alone, but the externalities that go with having a thriving entrepreneurial arts and cultural district will undoubtedly help drive the overall mission for Flint’s future.  By utilizing existing incentives and organizations, leveraging foundation and philanthropic support, and reaching out to new groups, Flint can implement this policy without diverting limited resources from much-needed initiatives.  Alone, it will not solve any problems, but implemented in conjunction with other coordinated efforts, the program could provide direct and achievable positive outcomes for the city.