Building better neighborhoods: How millennials can help revitalize Baltimore
Throughout this week, Urban Institute scholars offer evidence-based ideas for policies that can make a difference for communities in Baltimore and beyond grappling with inequality and injustice. Although this series covers a lot of issues, we by no means address all the challenges that matter.
In the wake of this spring’s Baltimore unrest, will it be business as usual: distress, abandonment, and segregation? Most people would probably say yes. We have short memories. Besides, the desire to just restock the shelves and get back to the daily routines is pretty normal.
But this time, we may have an opportunity to reach a new normal. At least one factor—housing demand—makes it possible to imagine that efforts to revitalize West Baltimore will bear out more powerfully between now and 2030 than the initiatives of past decades.
In the 1980s and 1990s, the last of the Baby Boomers were moving out of their rented homes and apartments and into owner-occupied houses, mostly in the suburbs. As the number of households fell, income and activity declined and land values suffered.
Expectations about housing price appreciation were still high enough, however, to make West Baltimore prime territory for predatory lenders. By 2000, the city was gripped by foreclosures.
The housing market now is in a very different place. Already millennials are helping revive rents and occupancy rates in some Baltimore neighborhoods, a trend that will accelerate as more millennials reach their late 20s, the economy recovers, and pent-up demand for household formation gets unleashed. Rents are likely to rise throughout the Baltimore market, and more renters will consider neighborhoods they never would have thought about 10 years ago.
Millennials born in the early 1980s will want to buy a house soon if they haven’t already. For those who love Baltimore, buying a rowhouse could beat moving to the suburbs. The same may be true of other lagging cities along the Northeast Corridor like Philadelphia, Newark, and New Haven. If this trend catches on in big cities, maybe it will even touch small distressed cities like Camden and Chester.
The next 15 years, then, will be crucial for building a sustained revival of residential neighborhoods in Baltimore and other Northeast Corridor cities that have stayed distressed even as Washington and New York have prospered. We need to start now with efforts to reinforce the availability and affordability of rental housing so that young people of all incomes can live in these cities without sacrificing their health and education, build good credit records by paying their rent on time, and save enough for down payments.
We need the cities to work with residents and private property owners so that these neighborhoods have a healthy mix of renters, owners, businesses, services, and amenities.
And anticipating stronger housing markets, city governments should consider programs like shared equity homeownership and inclusionary zoning so that established residents don’t get forced out just when things are getting better.
Federal and state housing and community development policy can help. We still need mortgage finance reform that reduces taxpayer risk, encourages safe lending to a broad range of creditworthy borrowers, eases regulatory burdens, and returns stability to markets. At least one bill considered last year—Johnson-Crapo—included all these elements as well as provisions to improve rental housing finance. Many of these provisions should be retained and reinforced in new legislation.
Sometime this year, too, the federal government will issue new rules on affirmatively furthering fair housing. These rules will oblige HUD, states, and local governments to reduce exclusionary suburban regulations that restrict renters’ choices. But they will also support concerted actions to make West Baltimore and other segregated, high-poverty neighborhoods great choices for people who want to stay there or move there.
Decades of experience have shown us that housing isn’t enough by itself to rebuild distressed neighborhoods and cities. Lower crime, better schools, and access to decent and stable employment also have to be part of the solution. But momentum for all these may build more easily with the millennials’ transition into the housing market.
Illustration by Adrienne Hapanowicz, Urban Institute