Real estate development can be a force against gentrification

I’ve been a community-based real estate developer for nearly 30 years. I focus primarily in struggling “middle” neighborhoods largely ignored by the larger real estate firms. I constantly grapple with the issue of gentrification. I believe it is possible to unlock the potential of all neighborhoods while preventing the negative impacts of large scale gentrification. That’s why I started experimenting with a new approach, eventually leading me to create a new program called JumpStart Germantown.

Let’s define the term “gentrification.” I define it as the displacement of long-time residents in neighborhoods where there have been significant investments. The people displaced include both long-time renters and homeowners. They are forced to move due to sudden and swift increases in the cost of living, rental prices, property taxes, and insurance costs. We should be clear from the start that there is nothing positive about gentrification, although it can be a side effect or byproduct of good things that are happening in a neighborhood.

So how do we invest in neighborhoods and minimize the negative impact of gentrification at the same time? JumpStart provides a mechanism for reducing blight in neighborhoods by empowering people within those communities to play a role in real estate development. It’s a grassroots way to do community development, slow gentrification, and keep wealth local in neighborhoods that desperately need added resources.

It works in three ways: training/mentoring, funding, and networking. Aspiring developers with little or no experience enroll in a free nine-hour, three-week program that teaches them the basics of residential real estate development. At the end of this training, each graduate is paired with an experienced developer to serve as their mentor.  JumpStart Germantown also provides purchase and construction financing to help new developers renovate residential properties. The networking piece, dubbed “Developers’ Network” is an event series that brings together new and experienced developers and real estate professionals to share information and learn from one another.

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In just over 2 years, we’ve graduated 191 new developers and helped develop over 40 projects throughout Germantown and adjacent neighborhoods. We are also changing the face of development. Our graduates are overwhelmingly women and people of color. Jumpstart Germantown works because people in the community are investing in the community, removing blight one house at a time.  Rehabbed vacant properties also go back on the tax roll, helping the beleaguered city budget.

But why is this type of development different from traditional real estate investment, which sometimes leads to gentrification? It encourages scattered site renovation projects instead of large scale “urban renewal” style development. Rather than knocking down and creating massive new developments, scattered site rehabs stabilize whole blocks without pricing people out in a dramatic fashion.

The model created by JumpStart helps create a healthy mix of affordable and market rate housing in neighborhoods that are starved for resources. This is critical for preventing gentrification. Communities with a mixture of different types of housing are more economically diverse and allows for significant development while keeping gentrification at bay.

JumpStart’s model of development embraces slow and steady growth, rejecting the idea that investments should focus on so-called “hot neighborhoods.” These neighborhoods rarely stay “hot” for long, leaving displaced families and foreclosures after the bubble bursts.  JumpStart is a successful alternative to the boom and bust cycle of so much real estate development. The combination of slow growth, scattered site development, and a mix of price points act as a bulkhead against gentrification, encouraging healthy development that sustains and attracts real economic diversity in our communities. I am hopeful that JumpStart Germantown has created a model that will allow more development in struggling neighborhoods without the negative side effects that sometimes accompany these investments.

Ken Weinstein is the founder of JumpStart Germantown and president of Philly Office Retail, a commercial real estate development company based in Northwest Philadelphia.

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