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Aug 13 17O Lr Iar Abstract AN ANALYSIS OF THE LOW-INCOME HOUSING DEVELOPMENT PROCESS SOUL CITY, NORTH CAROLINA by Harvey Bernard Gantt B. Arch. - Clemson University (1965) Submitted in Partial Fulfillment of the Requirements for the Degree of Master of City Planning at the Massachusetts Institute of Technology June, 1970 I- Signature of Author......................--........... w-s-a- Department of Urban Studies and Plannin, May 25 1 70 Certified by n Thesis Supervisor Accepted by. Chairman, Department of Urba Studies and Planting Rotch E NS.INST. TECH AUG 13 17O LR IAR ABSTRACT AN ANALYSTS OF THE LOW-INCOME HOUSING DEVELOPMENT PROCESS, SOUL CITY, N.C. Submitted to the Department of Urban Studies and Planning in partial fulfillment of the requirement for the degree of Master in City Planning. Harvey B. Gantt Planning has often been variously described as a systematized process of formulating goals and objectives, developing alternative plans and methods congruent with those goals, choosing the best plan or method through cost- benefit analysis (or some other method of evaluation), carrying through an effective implementation, assessing or evaluating the results, and re-cycling the whole procedure, if necessary, to maximize the fit between goals and the final result. This thesis studies the process of planning housing development (specifi- cally low-income housing development) in a proposed new town called Soul City to be located in eastern North Carolina. The developers of the town bring a unique perspective to new town planning: (1) they are essentially non-planners, inexperienced in new town development; and (2) their moriva- tions for venturing into development go beyond profit to the level of creating an environment in which specific economic and social goals will advance the cause of disadvantaged, and disenfranchised minority groups. Because of the strong social welfare overtones of the Soul City venture, and the projected large proportion of low-income residents that will live there, this thesis concentrates on the issues surrounding housing develop- ment for this segment of the population, largely because of all income groups in the country, housing has been least responsive to the needs of low-income families. While other income groups have effectively utilized the instruments of government and the working of the marketplace to achieve some degree of responsiveness in housing, low-income groups have largely been left with the left-overs and hand-me-downs of the existing housing stock. The study will show that in the planning of the housing for low- income families, successful implementation of social and physical objectives are peculiarly tied to the prime developer's internalization of the needs of that target market, his own peculiar financial situation during the development process, and his ability to control and use sub-developers (builders of housing) effectively. The study was essentially empirical in format; the author's purpose primarily being to look at the development of housing from the prime developer's perspective, and thus to raise issues, opportunities, or roadblocks that might bear on the projected success or failure of the housing program. The major sources of information came from a series of interviews with the McKissick Enterprises, Inc. staff (prime developers), their consultants, and a group of potential sub-developers of housing in Soul City. The resources of the University of North Carolina School of City and Regional Planning were used for background data on housing in North Carolina. The conclusions drawn from the study are essentially these: (1) A town proposed with a strong motivation to social welfare objectives necessarily will be constrained by the hard-headed requirements of the business and financial community, government bureaucracies, and the idiosyncratic moti- vations of the builders and sub-developers at given periods in the town's growth. (2) In the staging of development, laudable social goals (commu- nity participation, homeownership, etc.) may only come in the late stages of development and are dependent on the prime developer's financial position, his use of sub-developers, his rapport with existing residents, and his judicious deployment of profits in socially beneficial ways. The author's lesson from the study is that the planning process is not a well-Ciefined precise path to problem solution. Goal formulation may occur at the beginning stages of the process, but may also re-occur even at the so-called point of implementation. Plans are valueless, if they tend to restrict key actors, and may be promptly abandoned in any given situation. What is clear is that the planning process involves flexibility, constant re-evaluation, and the willingness on the part of crucial actors to bargain, politick, and exert powers at strategic points in time. Thesis Advisor: William Porter Title: Assistant Professor of Architecture and Planning ACKNOWLEDGEMENTS I should like to thank all of those members of the faculty, students and staff who made my stay here reasonably comfortable and educa- tionally beneficial. Without mentioning names, I am especially grateful to those faculty members who took the time to let me ramble on about this thesis during the stages when I seemingly had no direc- tion. A special thanks to those who secured funds to support my numerous field trips to Soul City. I owe to my advisor, Professor Bill Porter, my utmost gratitude and appreciation, first for his constant constructive guidance and criti- cism, and for his patience. I am indebted to Floyd McKissick and his staff for allowing me to steal valuable time from their hectic work days for interviews. Hopefully, there is something of value in this thesis that might be considered partial repayment. I dedicate this thesis to my wife, Cindy, who was a beautiful and understanding woman in a year that, by all counts, had to be one of her-most difficult. TABLE OF CONTENTS Chapter I. Introduction Page 6 Chapter II. Defining the Program for Housing in Soul City Page 17 Chapter III. Alternative Guidelines for Developing Housing Proposal Page 36 Chapter IV. Controlling the Development Process Page 57 Chapter V. Potential Sub-Developers for Soul City Housing Page 7 Chapter VI. Criteria for Ranking Sub-Developers Page 112 Chapter VII. The Bargaining Process: Sub-Developer vs. Prime Developer Page 121 Chapter VIII. An Analysis of Probable Alternatives for 136 Implementation Page 171 Footnotes, Bibliography, Appendices. Page Tables and Charts Chapter II. II-a. Soul City Organization for Development II-b. Allocation of Family Income to Type of Housing II-c. Housing Type vs. Unit Land Sales Price II-d. Residential Land-Use Allocation II-e. Comparison of Initial and Current Housing Plan II-f. Comparison of Land Sales Proceeds Chapter III. III-a. Federal Income Limits III-b. Combinations of Housing Size w/Family Size and Composition III-c. Sample List of Preferences by Family Size III-d. Maximum Allowable Mortgage Limits III-e. Construction Cost Averages (Chapel Hill-Orange County) III-f. Average Land Cost Per Unit (Chapel Hill-Orange County) III-g. Average Lot Cost Per Unit (Chapel Hill-Orange County) III-h. Projected Cost of Multi-Family Units in Soul City III-i. Projected Cost of Single Family Units in Soul City Chapter VIII. VIII-a. Revenues vs. Expenses - McKissick Enterprises VIII-b. Retained Earnings - McKissick Enterprises VIIl-c. Projected Production Pace VIII-a.(l) Profit (Loss) - Years One Through Seven VIII-b.(l) Retained Earnings - Years One Through Seven VIII-c.(l) Production Pace - Years One Through Seven VIII-a.(2) Profit (Loss) - Years Eight Through Thirteen VIII-b.(2) Retained Earnings - Years Eight Through Thirteen VIII-c.(2) Production Pace - Years Eight Through Thirteen VIII-a.(3) Profit (Loss) - Years Fourteen Through Twenty VIIl-b.(3) Retained Earnings - Years Fourteen Through Twenty VIII-c.(3) Production Pace - Years Fourteen Through Twenty CHAPTER I. INTRODUCTION I. INTRODUCTION: BACKGROUND ON THE SOUL CITY PROJECT The development of new towns in America had never been a dominant strategy for urban growth prior to the 1960's. But, with the increasing sprawl of our existing metropolitan centers and the accompanying problems of over- crowding and blighting "urban sprawl" planners, theorists, major developers, and government have to some extent .begun to seriously consider ways of diverting population away from the major population centers into new "planned communities."1 The recent development of new towns like Reston, Columbia, and Irvine, although built adjacent to major metropolitan centers, has awakened interest in the possibilities of new towns as a way to solve some of the critical social problems in our urban areas. Despite the fact that Restons and Columbias are primarily inhabited by middle-class residents, many futurist planners see new towns as a possible way of dispersing the huge minority populations of the central city to outlying areas, largely to de-fuse the socially pathological environment of the ghettos, but also to increase the accessibility of the poor to manufacturing jobs that have been vacating the central city for the suburbs.2 Albert Mayer sees new town growth as a way to encourage growth in previously depressed areas of the country, thus developing new "nodal" points around which new industry and population 3 could grow. Other strategists see "black" new towns as a viable urban 4 growth strategy largely developing on formerly held federal property. Whatever the motivation, all of the new proposals envision
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