The cappuncino and cool beer theory

It is interesting to make some comparisons between major cities in the USA and UK and to contrast respective approaches to neighbourhood revitalisation (here in Britain called 'renewal') and low demand housing. In Greater Manchester, the fashionable Salford Quays with its new Lowry centre sit amidst concentrated poverty in Ordsall, where I formerly worked, while across the Atlantic in Baltimore, behind the fashionable and successful waterfront, lies a similar picture of deprivation, decline and voids. Problems experienced have centred on over-concentrations of poverty, made worse by migrations of the black and white middle classes to the suburbs, and by Federal policies which have subsidised low income households rather than buildings or community capacity building. This has led to spiralling decline in many neighbourhoods, a reducing tax base and the unplanned growth of suburban sprawl. Despite the success of its harbour front and adjacent business development zone, Baltimore has been left with some 40,000 vacant homes and a number of declining neighbourhoods. The city has lost a third of its population and now increasingly is seeking to harness private funding to augment its shrinking tax base and to attract people back to its down town areas.

Baltimore's mayor, Martin O'Malley, recently joined with mayors from Washington, Philadelphia and Pittsburgh in a round table discussion with the international fellows in urban studies.

Scottish architect Ian Appleton told the conference that the issues needing to be addressed in Baltimore's neighbourhoods remained the same as they had been when he was a fellow 27 years previously: unemployment and poverty; community safety; housing stock condition; drugs (this has got much worse with crack cocaine). William Grigsby, professor of city and regional planning at Pennsylvania University, placed this in the context of policies which can be traced back over 40 years which favoured suburbs. There has only been a recent recognition, he said, that this encouragement of the suburban sprawl and the progressive moving out by middle income people has had a "resultant destabilising effect at the bottom of the stock and has spread blight, where people at the bottom have lots of problems and create lots of problems for other people."

Like our own cities, Baltimore is subject to trends and policies it cannot control. Currently US colleagues lack the opportunity to take the strategic approach to neighbourhoods championed by our Social Exclusion Unit. US Federal Government aid is very much housing focused and through concentrating revenue spending on subsidies to individuals perverse disincentives can be created, since for those on low incomes rent should amount no more than 30 per cent of their income. In some neighbourhoods average household income may be as low as £110 per week. Turnover in public housing projects therefore is high and many people seek mortgages only then to be hit by the instability of the employment market, property repair costs and falling house prices. Consequently older row houses become neglected, are abandoned or sold on to absentee landlords. These factors, combined with rising crime, result in a spiral of decline and it's a hot topic of debate at what stage a neighbourhood becomes 'unsalvageable'. Indeed ratings, based on neighbourhood statistics, are proving controversial, because of their tendency to become self fulfilling prophecies and this is something the Social Exclusion Unit should be mindful of.

In this unstable environment, neighbourhood associations are encouraged to join together to form community development corporations (CDCs) to devise and implement a local strategy. CDCs often become both landlords and property refurbishers and are competing in seeking funds to bring abandoned houses back into use. In some cases, like the 'Habitat for Humanity' projects, faith communities may take the lead. These schemes use significant amounts of volunteer labour and those seeking to purchase a house refurbished in this manner will obtain it at well below market rates through their 'sweat equity'. Costs vary from £30,000 upwards and the mortgage repayments of $300 plus per month are significantly lower than renting a comparable property. Federal policy has sought to widen home ownership but this has sometimes had unintended consequences with people being duped into paying over the odds for houses and taking on unsustainable financial commitments.

Mortgage counselling is now seen as very important in helping to avoid foreclosures and ensure that purchasers properly budget for maintenance. In aiming to consolidate a neighbourhood, typically a CDC or 'homesteaders' group' will work outwards and progressively rehabilitate houses on a block by block basis, thus progressively making a neighbourhood more desirable by building on its strengths through creating a core of residents with a real investment in the area and a growing amount of good quality housing.

Elsewhere in the city, the few remaining high rise dwellings are being replaced by lower density developments where rented properties are sprinkled round the site and mixed with for sale properties. However, in existing middle income communities there has been resistance to the inclusion of affordable housing in new developments.

In US terms high density means 49 units per acre and this is now being reduced to 8 – 12 units per acre. Housing commissioner Pat Payne who is responsible for some 14,000 housing units and individual subsidies for an additional 12,000 tenants, saw the need to assess the market appeal and strength of each neighbourhood and to both offer incentive dollars for the development of local strategies together with 'leverage use of resources' to encourage people to move downtown by offering coach tours of selected districts and cash subsidies to encourage would be purchasers. In this way attempts are being made to spread and emulate the success of certain neighbourhoods which have spawned new businesses, micro-breweries, rapidly rising property prices and gentrification. Interestingly, much higher densities are acceptable in some of the now fashionable Victorian row houses situated adjacent to warehouses and factories, many of which are now being transformed into fashionable lofts or 'funky units' for the new 'infotec dotcom' entrepreneurs – this has been dubbed by 'digital harbour' developer, Bill Struever, as 'the cappuccino and cool beer theory of urban development'.

A feature of both countries is the plethora of different funding mechanisms and their influence on the pattern of activity pursued in our respective cities. Although registered social landlords have complained that the recent Policy Action Team reports feeding into the National Strategy for Neighbourhood Renewal pay insufficient attention to housing, both the American experience and that of Salford indicate that unless you invest in the people who live in the most deprived areas and in future generations, neighbourhood decline is unlikely to be reversed. Empowerment of citizens and stimulus of local creativity is needed, combined with the political will to make sure that agencies work collaboratively with local people in tackling local problems so that local people are enabled to become co-producers of the services they consume. To achieve this, local leadership has to be actively fostered and given scope and resources to work for local solutions, within a city wide strategy.

Local communities need to be given more power over how their communities and services are managed. High profile infra structure schemes and economic development strategies will only succeed in impacting on the lives of those in the most disadvantaged communities if there is accompanying investment in the development of local leadership to encourage creativity and support to enable the achievement of locally determined outcomes.