Charlotte's Decaying Suburbs

[Justadude]

Today's Charlotte Observer has an article detailing the unusually fast decline of early-2000s suburban neighborhoods. There are a lot of factors at play -- shady lending practices, the ensuing credit crunch, disproportionately large concentrations of starter homes, rises in gang activity, immigration issues, lax zoning ordinances, and the shoddy design of homes and neighborhoods in the suburbs -- but the bottom line is that many newly-built neighborhoods have had a 5-year turnaround from "Pleasantville" to sprawling ghetto. This is especially pronounced in the north, east and southwest, where the largest concentrations of starter homes are located.

This is an issue for everyone in the community -- longtime Charlotteans who have witnessed the decline of whole sections of the city, new transplants who unwittingly buy into declining neighborhoods, and the underclass who inevitably get caught up in the gangs and drug networks that move into the neighborhoods like vultures once foreclosures begin to set in.

It seems that city planners and public safety officials are especially distressed at this turn of events. The worst-affected neighborhoods are those that lack the fundamental infrastructure (bus routes, sidewalks, police patrols) and human capital (established families, religious leaders, political representation) to hold off decay. The result is that the center city's old problem of blight has moved into the city's fringes, where there are fewer resources to address the problem.

Any ideas what can be done to reverse this process? This will probably be one of Charlotte's large-scale problems for the next generation. Ideas and action are sorely needed before our suburbs become permanently blighted.

[atlrvr]

I actually planned to cover this trend as my Master's Thesis about 4 years ago, though my theory was that it would take 20-25 years for the phenomenon to occur. The hot housing cycle and subsequent forclosure crises has rapidly sped the process. I can't say that I'm that hopeful that this will be an easy trend to reverse, and we may see something along the lines of Paris (albeit at a much more suburban version) where the suburbs become a haven for the poor, and essentially become isolated from the city. This scenario is even more likely in Charlotte, due to the lack of physical or social infrastructure in place here.

The core problem is, why would anyone ever re-invest in these neighborhoods until all property closer to town becomes prohibitively more expensive, and the further out sprawl become prohibitely far from jobs/family/other factors determining desirability.

The houses are low quality, architectually bland, in high-traffic congestion areas, have HOA's that don't add value, and archaic zoning that isolates these communities. Additionally, the city will never be able to provide adequate infrastructure to these areas due to their distance from the core, low-density, and horrendous street network. Further, the political will to improve these areas will be much lower than for improving an area such as, say, Optimist Park, due to the much lower return for the $$$.

The only way to improve the situation in my opinion is through the use of the most dreaded word in the Charlotte planning lexicon.....MORATORIUM!!!! And for it to be truely effective, surrounding counties have to agree.

Beyond that, the city will need to take several other dramatic steps.....I'll continue later.

[tozmervo]

This is a pattern in cities that I think most urban planners saw coming, but speed of decay is very surprising. The cheap, badly built housing of the 50s turned into the drug infested bullet ridden ghettos of the 80s and 90s. These were the inner ring neighborhoods that anyone with money avoided by moving out just a little further. A combination of gentrification and rising energy prices has shifted those poorer neighborhoods into the suburbs of the 80s and 90s (just drive down South Blvd to experience this cross-section). As the slide continues and energy climbs further still, anyone who possibly can is going to pull closer to the city core, pushing the poor out further yet into the mushroom burbs of the late 90s and 00s. And as history has shown us time and again, this means the poorest people in our society will be pushed into the worst possible situation. They will be the ones forced to deal directly with spiraling gas prices, the shoddy quality of the houses, and decaying infrastructure as cities realize how insanely expensive maintaining that much road is.

People laud the tremendous development in Center City, Southend and so on (I know I do), but for every dollar coming into those areas it means a dollar coming out of other areas. That's just how it works.

I would hope to see cities redouble the effort to get developers to provide low income housing that's not cheap housing. And I also hope that cities see the tragic error that is unmixed neighborhoods. Stop building sprawling subdivisions of low income, or high income, or whatever income. Build with a broad range of prices on the same street.

[monsoon]

There are a lot of people sitting in their McMansions in SE Charlotte who got rich building and selling these kinds of places. If you want to fix the problem, it has to start there.

[voyager12]

Every few months The O manages to write a compelling story and I think this one qualifies. On a societal level the video clip from the article was depressing and really gave the neighborhoods profiled a primordial dark wasteland atmosphere that rang quite true. You have to feel for that young kid living in a half abandoned boarded up neighborhood. I don't see any solution. The few solvent homeowners left in these subdivisions are going to have to tough it out until the market goes back up. They are completely trapped in those houses and can't get out of them for anything close to a reasonable price. Sad.

[UPTOWNGIRL]

we sold our family home in University area approx 2 years ago, right off Prosperity Church Rd, because of what we perceived to be a huge dambreak waiting to happen. My oh my, has it begun or what?! I looked at our old subdivision on the newspaper's interactive map and I counted seventeen foreclosed homes in just our neighborhood. wow.

here's what is conspicuously missing from the article: there was little mention of all of the section eight housing vouchers being issued in that area.... that was the bellwether in our minds. once we saw how many homes even on our cul-de-sac were becoming sec 8 rentals, we knew it was time to sell.

this is a sad situation that is going to continue to plague our city.............

[peaceloveunderstanding]

So what's the solution? Force the poor into apartments, and only let the upper-middle class have homes? A moratorium would cause housing prices to explode and force people to the surrounding counties and out of Charlotte altogether.

[atlrvr]

Raising the property values is exactly what needs to happen....and the flight to the suburbs IS what would happen IF they didn't enact a moratorium as well.

Higher property values would allow people who live there to refinance to mortgages that aren't constantly adjusting upwards. It would also the slow the rate of people scooping up dirt cheap propertys and renting them for dirt cheap. Additionally, the constrained supply would keep people from moving from their homes, as there wouldn't be logical alternatives. This would force people to take responsibility for their neighborhoods.

Additional steps the city should take:

Dissolve the HOA's in neighborhoods that have > 15% foreclosure rates. The city should foot the bill for the premium to have a private company manage the distressed neighborhoods. The private property managers would actively place leins on deliquent properties, properties that don't meet a defined level of upkeep, with a stricter set of guidelines in place for rental properties.

Additionally, architectual codes would be relaxed for these new neighorhoods to make it easier for owners to make property renovations, and add architectual diversity.

The city should be willing to designate certain neighborhoods as "at risk", and defer a portion of property taxes for owner-occupied households who make renovations to improve their property taxes. Again, the city will balk at this, because its a short-term hurt, but the long term costs are much greater.

Zoning for a greater variety of uses should be put in place along the thoroughfares adjacent to ALL new single family neighborhoods. While home-owners have the mindset that anything but single-family homes are bad, the vibrancy that commercial (or higher-density residential) uses could bring would give the areas a great sense of vitality, instead of an isolated ghetto....the first example of this is Grier Heights (from the 1950s), that despite its great location, hasn't improved despite its adjaceny to many desirable neighborhoods. The reason is its isolated.

Other measures that would be much more costly would be adding police, expanding road/transit infrastrucutre, city subsidized business parks, etc.....all of which become necessary, but if I was a city policy maker, I'd start with my relatively cheap, but labor intensive suggestions.

[Raintree21]

It will be just a drop in the bucket, but the city/county is partnering up with HUD and trying to entice emergency workers and teachers to buy into the foreclosed homes. They are offering us half off of what the unpaid mortgage is if we will take it over. This brings some very cheap purchase prices but quite a few of the houses are in undesirable neighborhoods. The hope is that we will bring established incomes and decent lifestyles into the neighborhood and create a foundation that the neighborhood can grow on.

[e2ksj3]

A moratorium on these starter homes is a good start or least reducing the number that are approved on the regional level. Then maybe require new subdivisions to be setup like villages with multiple price range of homes, townhomes, and condos, etc and multiple builders. This will kind of help keep property values stable, versus having an all "starter home" community where most of the prices of the homes are at the low end of the spectrum, and also gives it more of sense of place, well for a cookie cutter subdivision. I see a lot of this done in the DC exurbs with the Broadlands in Loudoun County and Ladysmith Village in Caroline County.

As for the current stock of older tract homes, could the city maybe give new developers incentives to buyout these "at risk" homes, and bull-doze the whole subdivision? I know this wouldn't work in all places, but maybe one's that are closer in. I believe it was one developer that tried to do this one time with some old ranch homes in South Park.

[tozmervo]

A moratorium on these starter homes is a good start or least reducing the number that are approved on the regional level. Then maybe require new subdivisions to be setup like villages with multiple price range of homes, townhomes, and condos, etc and multiple builders. This will kind of help keep property values stable, versus having an all "starter home" community where most of the prices of the homes are at the low end of the spectrum, and also gives it more of sense of place, well for a cookie cutter subdivision. I see a lot of this done in the DC exurbs.

As for the current stock of older tract homes, could the city maybe give new developers incentives to buyout these "at risk" homes, and bull-doze the whole subdivision? I know this wouldn't work in all places, but maybe one's that are closer in. I believe it was one developer that tried to do this one time with some old ranch homes in South Park.

[e2ksj3]

Aren't those two paragraphs contradictory? Those old ranch homes in SP offer some of the diversity that you describe in the first paragraph. I will grant you that they aren't exactly super-diverse but at least they aren't bloated mansions in gated communities.

[tozmervo]

I'm not talking about specific areas, but I was referring to something that happened. I believe a developer was trying to buy up a whole subdivision from the homeowners and build a new more dense development. I was suggesting maybe they should do that with some of the older starter home subdivisions that are at risk or have a high vacancy rate.

[rockhilljames]

Over the long haul it won't matter. These houses are of such poor quality that they won't be worth owning in twenty years, regardless of the property values around them. It's not like Wilmore or other close-in neighborhoods that went through a down-turn. The housing stock there is still good enough to entice turnarounds. Especially with a little work.

The only solution, and one Charlotte won't take, is to bulldoze the neighborhoods and enact stricter zoning laws on building standards.

Best of luck with that one.

[monsoon]

It's a tough problem to solve.

First you have the national builders who build these kind of neighborhoods with the idea of maximizing profits as much as possible by pushing all the rules to the limits. This includes meeting the absolute minimums in building standards while at the same time pushing very marginal people to buy these places with loans, handled by their own financing companies, that qualify people for home ownership that really have no idea what they are getting into. The days of local builders constructing communities are unfortunately long gone.

Second, you also have the expectation of people that they must have a detached home with a yard. In addition the house should have as much sq/ft as possible. This means that on the low end, a great deal of the cost of a housing unit is eaten up by the land costs and given the thing about quantity over quality, we get some pretty dismal looking neighborhoods being constructed.

Third, are municipal governments that only pay lip service to good planning. All too often they are more than willing to rubber stamp these kinds of developments even when they don't even meet the scant planning guidelines they have for an area. Charlotte has a long history of this unfortunately but it has gotten so bad in the last few years that apparently it is exploding in the city's face. Unfortunately the city's approach to housing and development in much of the city is very similar to Walmart in selling goods.

Finally, there has been too much easy money. Credit and credit qualifications have been very very low over the last 10 years and this has made the above possible. The problem will eventually self correct itself, but it's going to leave a lot of carnage in the wake. As I said above, a lot of people have been qualified for homes that never should have been and this is one of the reason for so many foreclosures.

The reason this is a tough problem to solve as there are too many people in this city from the banks, real estate and development community and others that are making a lot of money off of this kind of construction. And they are very willing to use all of the tools at their disposal to keep the status quo in it's place including using the courts to sue over property rights. It's going to take a very dedicated city council and planning department, who are willing to take on this crowd, before real change will happen. As mentioned in the article there has been way too much focus in developing the center city with much of the rest of the city neglected. (from the map we could be talking about upwards of 100 square miles)

[Spartan]

While its not surprising to see whats happening, I'm wondering what role does the subprime lending crisis play in all of this? Surely the developers aren't all to blame here?

I think that in the long run, developers will be redeveloping these crappy subdivisions into more substantial, and well built mixed-use developments. This epidemic is too large for the government to solve on its own. What's really ironic is that some developers were and are opposed to higher quality standards, and we're all stuck with their mistakes.

[Justadude]

It will be just a drop in the bucket, but the city/county is partnering up with HUD and trying to entice emergency workers and teachers to buy into the foreclosed homes. They are offering us half off of what the unpaid mortgage is if we will take it over. This brings some very cheap purchase prices but quite a few of the houses are in undesirable neighborhoods. The hope is that we will bring established incomes and decent lifestyles into the neighborhood and create a foundation that the neighborhood can grow on.

[suburban george3]

The houses are low quality, architectually bland, in high-traffic congestion areas, have HOA's that don't add value, and archaic zoning that isolates these communities.

[monsoon]

.....

I think that in the long run, developers will be redeveloping these crappy subdivisions into more substantial, and well built mixed-use developments. This epidemic is too large for the government to solve on its own. What's really ironic is that some developers were and are opposed to higher quality standards, and we're all stuck with their mistakes.

[atlrvr]

I agree 100% with everything that Monsoon has stated as the root causes of this epidemic.

As far as my previously mentioned ideas to fix the problem, I'm not naive enough to believe the city would really have the guts to enact something along the lines of my suggestions. A hand slapping from the Charlotte Chamber was enough to get them to back off of their proposed rule for shorter block lengths, so I can't possibly see them taking a revolutionary approach to the problem. What we'll end up with is higher taxes to compensate for the rise in crime, and lower tax base in these neighborhoods that the city has been all to willing to annex.

Wholesale buyouts for redevelopment has about 0.00001% chance of occuring on any sort of meaningful scale. The NC state constitution won't allow the city to do it, and no private developer is going to go through that sort of agony of assemblage just to own land in what has essentially become a slum.

At this point, the best I can hope for is for the city planners/building standards to seriously overhaul curret zoning codes and building codes. The proposed GDPs are a step in the right direction, but are too weak, and don't address the root causes.

Building codes, including materials, aesthetics, and durability need to be strengthened greatly. The entire zoning code needs to be overhauled, with R-3, R-4, R-5, and R-8 completely taken off the books in greenfield areas. The current MX-2, & 3 should REQUIRE a mixture of commercial, single-family, and multi-family uses based on some sort of ratio that makes economic and social sense. Private streets should not be allowed.

And finally, IMPACT fees should be enacted based on real estimated impacts. Infill housing would have lower fees, if the street-network is adequate. Fees for schools would be required if in a school district that is already at capacity, etc.

The side affect of all of this, is yes, the cost of housing would increase, and that's ok....people should get over their entitlement to a big yard, and big house. The societal damages it causes aren't worth it.

[Justadude]

The side affect of all of this, is yes, the cost of housing would increase, and that's ok....people should get over their entitlement to a big yard, and big house. The societal damages it causes aren't worth it.

[stadtguy]

This is a great topic. I hate to use the cliche "perfect storm" but it's apt in this situation. Housing policy has evolved from a large public sector role in the provision of housing to market-oriented policies promoting an "ownership" society. The sentiment is good: home ownership is a great way to promote wealth accumulation and superior to creating dependency upon large federal housing outlays. Throughout the 1990s, banks experimented with new underwriting criteria and home ownership programs to spark ownership opportunities for lower-income households. The prime barrier during that time that fueled mortgage loan decline was "credit history" (see the Home Mortgage Disclosure Act literature). Community groups complained about racism in the lending industry while banks started exploring new niches in lower and moderate-income communities. The result was extending credit to too many people who simply could not afford a house. The government was complicit in this by loosely (if that) monitoring the proliferation of sub-prime lenders. The whole thing was a house of cards and now everyone must pay.

All the while, in Charlotte, the transformation of uptown and the inner-ring suburbs (and HOPE VI) dislocated and continues to dislocate low-income residents who were lured to places like University City by townhomes and houses "starting in the 100s." If you want to see the future 1970s styled low-income apartments, go to Hyde Park in University City. It's shiny and bright now, but it will lose that luster over the next 10 years--nothing but townhomes with no retail, commercial or walkability. The speculators have bought up lots of property in U City and will take advantage of federal programs like Section 8 if they cannot find market-rate renters. The property values in other parts of town keep this from occurring.

University city is a prime example of poor vision from a planning perspective. Too much development was approved without thinking about the big picture (how will this look and feel in 20 years). Rational homeowners will react by moving. It's not racism, per se. Rather, they have invested lots of money into a community that is not appreciating, leading to a cycle of class-flight.

I don't think the HOA's are to blame. I don't like them particularly, but they can be part of the solution. One, they need to get organized and more stringent in terms of demanding better outcomes from the city and within their individual neighborhoods. Unfortunately, the turnover is so fast in parts of U City that forming strong, committed groups is difficult.

[monsoon]

The HOAs in these communities are often powerless to do anything about it. These are created by the developer in the starter home communities in the first place and usually do not resemble anything like an HOA such as what you would see in a downtown condo. Often there is no requirement to belong to it, the dues are very low and non-existent, and after a few years dis-interest causes them to pretty much cease operation. Since these HOAs also exist due to deed restrictions, they are almost impossible to change after the fact.

One fascinating example that I am familiar with, is Wexford which is found off Hwy 49 near Blockbuster pavilion. It is interesting as it is a classic study of everything that can go wrong in a neighborhood in 20 years. Wexford was opened in 1984 or so and was one of the very first planned neighborhoods in the University area where multiple builders were building different sections based on specs and price. While this is a common practice now, it was a new concept at the time. It was also the classic cul-de-sac community of detached homes, two car garages, and a swim club. Because there was no housing in UC at the time and a lot of people working in the area due to IBM, Phillip Morris and others bringing tens of thousands of jobs to the area, demand in Wexford was very very high. There was a lottery for people simply to get into line to buy these places and these homes sold for a premium for the time. As a result, Wexford started as a middle to upper middle class neighborhood but one doomed right on the onset.

What happened to Wexford.? The answer was cheap money and a profit motivated development community. When Wexford first opened the average Mortgage rate was floating around 10%-13% which greatly reduced the amount of home that one could buy even with a very good income. So as a result the homes were fairly modest compared today's standards. Some of the builders took shortcuts such as putting 7ft ceilings in some of the lower end homes. Furthermore later phases of the development and surrounding development kept the same spec levels even though money got cheaper, people starting making more and could afford bigger homes. This resulted in Middle America moving out and Wexford changed practically overnight once that began.

The problem was compounded by the fact that in the early 80s the city developed an urban development plan for UC that it did not follow. This including an advisory council that consisted of members of the Wexford HOA and several other similar neighborhoods that had been constructed by the mid-80s. Unfortunately these HOAs were fairly weak and the city did not pay them much attention anyway. In the late 80s, the city pretty much scrapped its plans for UC and approved the huge sprawling strip malls that line Harris Blvd, Hwy 49 and Hwy 29. While this was going on, several of the HOAs that I am familiar with were trying to do something about it, but they really didn't have any legal legs to force change.

Today Wexford, is a fairly undesirable place to live with houses that are boarded up and rotting. Last time I was over there, the pool had been closed down and is no longer used. (maybe falling apart too). All and all it represents the shattered dreams of a lot of people who once invested in the place. Sadly this is repeated over and over in Charlotte except that for now, it doesn't take 20 years for it to happen. I am firmly convinced that without strict government controls the market, (development community) is completely unable to do anything about it. These same national builders and real estate people are happy to sell new homes to Middle America which continues to flee these areas. It's an endless cycle that pure capitalism isn't going to break.

[Justadude]

Thinking about this topic for a couple of days now, what really hits home to me is how difficult it will be to reverse blight in these neighborhoods. Stopping the spread of blight is one thing -- and I'm not sure Charlotte is up to it -- but even if it stopped cold-turkey tomorrow, we'd still have to deal with huge stretches of suburban wasteland that are already built and in full decline.

The problem I'm starting to see is that typical revitalization strategies won't work in these areas. In the inner city, with a certain amount of financial and political backing, you can turn around even the most run-down neighborhood. A combination of tax breaks, transit connections, infrastructure upgrades, commercial ventures, and maybe an entertainment complex or two can turn places like Second Ward and Belmont into thriving urban districts.

But those strategies just won't work in University City. The city would have to almost completely tear down and rebuild the infrastructure there in order to encourage significant connectivity. Commercial presence might be increased to a certain extent by tax incentives, but I don't see the day ever arriving when subdivisions have true neighborhood retail -- meaning any commercial progress will be confined to shopping centers and drive-up restaurants. Transit might also make certain improvements, but realistically speaking if you live in a Charlotte suburb you have to drive a car to function. I don't see any possibility for truly integrating these neighborhoods into the fabric of the city, because they are fundamentally designed to provide separation and independence. That's a pretty scary thought -- in a century or more, it's entirely possible that there will only be aesthetic changes in these places.

[atlrvr]

^ Exactly

Again, I think I gave a pretty good rundown in my 1st 2 posts on what SHOULD be done, but in reality, the city will never take those drastic steps. They are isolated by design, and now that very fact will cause them to sit disconnected without future investment.

About HOA's....in general I despise them, but especially in these communities, they have done more harm than good. If the sole purpose is to maintain aesthetic blandness (for a fee), then it is doomed. This is the reason that I suggest that the city take authority of the HOAs. I'm not sure it is legal as the laws are written today, but I don't think it would be as difficult as the city taking actual properties. Again, if the city were sub out this function to private property management groups, then they could be effective.

Question for anyone....can a HOA place a lein on a property if has gone through the foreclosure process and is owned by the bank and the bank doesn't pay the dues?