ANALYZING THE IMPACT OF REDEVELOPMENT ON URBAN COMMUNITIES: DEVELOPING STRATEGIES FOR SUCCESSFUL INCLUSIVE INTEGRATION Master’s Thesis Connor Reisenbigler Aalto University School of Engineering Real Estate Economics Spring 2020 Aalto University, P.O. BOX 11000, 00076 AALTO www.aalto.fi Abstract of master's thesis Author Connor Reisenbigler Title of thesis Analyzing the Impact of Redevelopment on Urban Communities: Developing Strategies for Successful Inclusive Integration Master programme Real Estate Economics Code ENG24 Thesis supervisor Kirsikka Riekkinen Thesis advisor(s) Kirsikka Riekkinen Date 30.06.2020 Number of pages 82 Language English Abstract: Increasing demand for space in cities driven by factors of migration and economics are placing undue pressure on housing creation. The effect has been a great deterioration to affordable housing in cities worldwide. Redevelopment has thus arisen as a response to decreased land availability, as cities seek to find space for development where possible. The issue is these developments often require great financial investment, and result in gentrification and displacement of existing residents upon completion. The purpose of this study is thus to understand the reasons for redevelopment, its potential for displacement of moderate / low income communities, and strategies which have been successful in retaining the presence of low income residents even with transformative redevelopment. The research is carried out as a mostly quantitative case study, as the influence of redevelopment on pricing and demographic change in New York is analyzed. The research is thus largely a study of sales in areas affected by redevelopment and how they have changed in respect to the control group. Additionally, with inclusive housing acting as the primary tool for affordable housing creation in new developments, the practice is studied and analyzed in great detail as a method of inclusivity. Recommendations are then made on the basis of quantitative changes resulting from redevelopment, and methods for redevelopment considered most inclusive and beneficial to existing communities. Keywords Redevelopment, gentrification, affordable housing TITLE PAGE ABSTRACT TABLE OF CONTENTS 1 INTRODUCTION........................................................................................................1 1.1 Research objectives/questions ..................................................................................4 1.2 Structure of the thesis ...............................................................................................5 2 LITERATURE REVIEW.............................................................................................6 2.1 History of Redevelopment in The United States.......................................................6 2.2 The Urban Development Crisis and Land Scarcity...................................................11 2.3 Government-driven Redevelopment..........................................................................14 2.4 Free Market-driven Redevelopment...........................................................................19 2.5 The Rise of Unaffordability in Contemporary America.............................................23 2.6 Strategies for Addressing Unaffordability..................................................................25 2.7 The 421-a Tax Abatement in New York.....................................................................28 2.8 Literature Review Conclusion.....................................................................................31 3 DATA AND METHODS.................................................................................................31 3.1 Data Sources..................................................................................................................32 3.2 Methods for Examination..............................................................................................32 3.3 Trustworthiness of the study.........................................................................................34 4 FINDINGS AND DISCUSSION.....................................................................................35 4.1 Subject Redevelopment Sites........................................................................................35 4.2 Analysis of Pricing Trends............................................................................................44 4.3 Analyzing 10-year Value Trends...................................................................................68 4.4 Affordable Housing Creation........................................................................................69 4.5 Comparison of 10 Year Fluctuations.............................................................................72 5 CONCLUSION................................................................................................................73 5.1 Research Summary........................................................................................................73 5.2 Recommendations.........................................................................................................74 5.3 Practical implications....................................................................................................79 5.4 Limitations of the study................................................................................................80 5.5 Suggestions for further research...................................................................................81 5.6 Conclusion....................................................................................................................81 REFERENCES...................................................................................................................83 1. Introduction An increasingly impactful trend in the rapidly evolving field of urbanism has been the population expansion of urban areas, resulting in increased pressure on existing spaces and resources, as city planners struggle to accommodate quickly rising demand for space. The impact of this trend has not only been geographic expansion of urban areas, but equally significant, the redevelopment of underused space in a variety of forms (World Bank, 2020). Redevelopment is defined by the World Bank as the shift of an area from low-density to high-density, accompanied by infrastructure improvements (World Bank, 2020). This definition can be expanded to include the types of redevelopment, which as previously mentioned include the reuse of underused space, in the form of upzoning residential space, or the complete change in usage, such as a shift from industrial land, to residential (Keresztely, 2016). Redevelopment can take place in gaps in urban fabric such as a swath of surface parking lots, but can just as likely occur in a space with existing inhabitants, in a space perceived as blighted or under-developed. Though the context changes, the impact does not. Redevelopment has the power to bring long term, meaningful change in a number of ways. The challenge of redevelopment in the modern world is making it work for everyone, instead of altering the fabric of communities through development that caters to a certain class. Thus, the goal of this study will be to analyze past redevelopment projects, as well as some in progress, to assess how they have impacted their areas, and to find ways in which developments have been successful in mitigating their impact and benefitted their communities. Through assessing the traits associated with successful redevelopments we might be able to better plan such projects for the future, with equity in mind. With this idea, the research I have completed was accomplished through analyzing sale prices in areas impacted by large scale redevelopment before and after such projects, and comparing these figures to analogous areas where such changes did not occur. The research went further, to examine the impact on demographics before and after such redevelopments, with studies involving the disbursement of low-income groups as a result of redevelopment. Accordingly, redevelopments which resulted in minimal displacement of existing residents might be considered least impactful to pricing, whereas conversely, projects which have caused a turnover in residents are considered unsuccessful in that respect. Additionally, regarding pricing, projects which had minimal impact on proximate 1 sale prices could be considered successful as they minimize the pressure on existing residents, whereas vast increases in prices are indicative of gentrification, and considered against the interest of existing residents. Thus, with these assumptions, conclusions and recommendations have been made as to how thoughtful, beneficial redevelopment can be accomplished for existing residents. However, because urban redevelopment is complex, it can range from such organized activity such as rezoning, to more grassroots redevelopment organized by communities, with the simple goal of improving an area without large scale change (Keresztely, 2016). However, for the purpose of this analysis, the intentional, government- sponsored redevelopment of areas has been examined, as well as redevelopment instigated by free market motives, with rezoning typically acting as the catalyst for redevelopment. Thus, the capacity of government planning and intervention in orchestrating redevelopment through its lifespan can be holistically examined, and critiqued. The reason for studying redevelopment and its effects