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 Post subject: Blight
PostPosted: Tue Aug 17, 2010 9:05 PM 
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So I'm looking into a couple of properties...very nice old places, big and grand. They are listed with the National Register of Historic Places.

And they're also very CHEAP.

Being on the Register, you can see that previous owners have worked to restore the original appearance of the buildings, and that they've done a good job.

(But still, they're for sale.)

The problem comes with the neighborhoods they're in. These are what they call "blighted neighborhoods". There are homeless in the area. Some of the homes on the street have boarded up windows or doors. Poverty is common.

The thing is, these properties are on the edge of an area that is seeing major rejuvenation ($300 million worth so far and counting). You have young professionals moving in and paying big bucks for rent, not to mention fantastic restaurants and businesses, pretty close to here.

Dealing with this "blight" is a gamble. I don't want to sink ton of money in a neighborhood that isn't turning itself around. And I also don't want to live in the risk of a higher crime area (although there have been no violent crimes around here).

But these properties are just gorgeous, and could be restored to what they used to be. And I do see a few houses nearby that are being fixed up- but the majority are still decrepit looking.

Is blight a problem that ever goes away? Can you turn a problem neighborhood into one that people would feel safe to raise their families in?


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 Post subject: Re: Blight
PostPosted: Tue Aug 17, 2010 10:30 PM 
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If you are not ready to lose the money you don't gamble with it.


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 Post subject: Re: Blight
PostPosted: Tue Aug 17, 2010 11:30 PM 
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I've heard (and seen) plenty of stories about nice places turning into shitty places. I haven't heard (or seen) much the other way. Neighborhoods usually get worse, not better.


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 Post subject: Re: Blight
PostPosted: Wed Aug 18, 2010 5:20 AM 
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Yes, sometimes neighborhoods change from blight. Go take a look at the evolution of Harlem in New York over the last 20 years.

I thought I would point out that often if a home is on historical registers there are many restrictions on how you fix them up. Sometimes it can make owning one very expensive.


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 Post subject: Re: Blight
PostPosted: Wed Aug 18, 2010 8:22 AM 
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Heh, well I was joking with my friends that we should all buy the houses in that area so we don't have to worry about the neighbors. ;)

It's an interesting location though. It's really at a crossroads, where I think it could go either way. People are already working on renovating homes in this neighborhood- but I wonder if it's too little too late.

Fin is right that it's a gamble. The property is cheap here, and the potential to increase its value could be large.

And what I've read about working with these historic buildings is that it's not as restrictive as you might think. But I think there's different classifications that are more and less restrictive.


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 Post subject: Re: Blight
PostPosted: Wed Aug 18, 2010 9:15 AM 
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I would contact the area neighborhood association or historic society and see how active it is. Really active and younger makes it a better bet while more interested in gossip, get-togethers, and older makes it worse.

Also look at businesses in the area and see if the 'new people' factor is growing fast enough that local businessmen are taking that same gamble.

Another thing you might consider is whether the local government has skin in the game. Most historic districts are downtown areas and it is easier to revitalize if the local government still has offices etc. there rather than having fled to the outskirts.

Talk to the police about crime in the area and how they handle it; in one place I lived for example the police literally went street by street and targeted each street of the historic district consecutively to push the unwanted elements out.

I will say this from personal experience, if the area successfully revitalizes itself, even in down real estate markets, these areas tend to hold value.


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 Post subject: Re: Blight
PostPosted: Wed Aug 18, 2010 10:35 AM 
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This structure must be built on blight.


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 Post subject: Re: Blight
PostPosted: Thu Aug 19, 2010 7:26 AM 
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Urban gentrification is a fairly common occurrence. Assuming that particular area will experience a drastic upswing in a relatively short period of time seems like a risky bet though.


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 Post subject: Re: Blight
PostPosted: Thu Aug 19, 2010 8:13 AM 
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Looks like there's some interest in the neighborhood in redeveloping the area.

Quote:
Plans are underway to redevelop another area of midtown Omaha. The Park Avenue neighborhood has projects underway to better the area. The public is invited to attend an open meeting from 4:30 to 6:30 Thursday afternoon.


Notes from someone who went:

Quote:
I was able to attend the first 2/3 of this session. The audience was primarily potential developers and investors, politicians, real estate persons, Destination Midtown (DM) boosters, and the local homeowners/renters - a large and energetic group, too.

Quote:
The leaders of the session primarily highlighted the housing achievements and plans for the area which are apartments and condos. A mix of market-rate and affordable housing is being presented - which is good, because we need that mix.

Here are the opportunities for Park Ave - Leavenworth communities as presented by the session leaders and myself:

1. People need to acquire properties. At this session investors were offered the chance to see what the area might offer. Another approach is to form an organization in the area which can acquire property, such as a community development corporation (CDC). The CDC approach was first suggested back in 2003 when the DM plan was being developed, but nobody has followed through on this advice.

Further, the development project hopes to offer more commercial opportunities at Park/Woolworth, Park/Leavenworth, and St.Mary's/Leavenworth. It would be great if we could offer more rehabilitation assistance to owners of older commercial properties. This could invite new investment.

2. People need to see VISIBLE progress in the area prior to making their investment. True, but here the large project was emphasized by the session leaders.

Cities grow organically, bit-by-bit, property-by-property, and person-by-person. Small is beautiful, too. The artist studio, colorful planting, interesting business signage, clean and crisp property frontage, sandwich stand, cop walking the beat, historic marker, Arbor Day tree tour, and entrepreneur kickoff can all be VISIBLE.

Sometimes in Omaha we are looking too hard for the big magic bullet - one development - that will change the whole neighborhood. This only leaves room for the big developer, and the neighborhood guy receives little encouragement.

3. Park Avenue is a pedestrian area which needs better connections to downtown, the rest of Midtown, and the new Midtown Crossing.

First, we hope to see a streetcar line running on Farnam and/or Harney in the next three years. With the dense residential Park Ave. district only several blocks away from the line, the streetcar amenity would be a drawing card for local residents.

Secondly, the Midtown Crossing (MC) project offers an opportunity to develop a Midtown shuttle transportation option. MC is seeking Leadership in Energy and Environmental Design (LEED) certification for its project. One recommendation from LEED for a mixed-use project like MC is to offer shuttle services to nearby large employers and local destinations. If this shuttle service could be extended a bit to the Park Ave. area, another transportation amenity is available. And, I hear that there will be a shuttle service between MC and the Med Center.

Finally, the City and bike/walk enthusiasts need to work together to provide good connections via Park, 31st, and Turner Blvd. from the district to MC.

4. How do we create a positive, unique image for the Park Avenue district?

At the meeting I visited briefly with a real estate agent who was working with the Jamison Condos - a rehab project in the district. He extolled the kitchen, bath, and flooring in the redone areas, and it sounded great, maybe I would want to reside there. Then, I asked him how he presented the Park Avenue area to his potential buyers. He said, "Now, that is our problem."

So, let's work on the problem. Session leaders emphasized the history and "grandeur' of the neighborhood - so, we must accent that.

When you walk out of that condo, you need something interesting to see, to walk to, to take care of your daily need for exercise, to meet an errand need, to complete one-day or two-day food needs. to be educated, and to meet your friends/co-workers.

The commercial corners mentioned above offer us an opportunity to create that "main street" feel. WE NEED MORE THAN JUST HOUSING IN THE NEIGHBORHOOD.


This was from a meeting last year- haven't heard much since then. But it sounds like I'm not alone in looking at this area turning around.

Next step might be to start forming a CDC to buy up the properties for development. Never heard of that, but it's an interesting idea.


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 Post subject: Re: Blight
PostPosted: Thu Aug 19, 2010 12:08 PM 
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You need to research the Historic residence restrictions as for what you can and can not do for rebuilding. With my old company we took over a Historic building that was built in 1908. Dealing with the Historic Commission added a good third to the cost and time to completing the building. Not only did we have to get the standard building inspectors but we had to have the Historic Commission to inspect what we were doing. They had say in nearly everything we did to the exterior of the building as well as the common areas.

I do not know what your area requires or how strict they are, but you need to do your due diligence in that area as well.


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 Post subject: Re: Blight
PostPosted: Thu Aug 19, 2010 3:45 PM 
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The funny thing is that any attempt to fix a blighted neighborhood will generally be met with protests.


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 Post subject: Re: Blight
PostPosted: Thu Aug 19, 2010 5:08 PM 
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Orme, a Singing Bard wrote:
The funny thing is that any attempt to fix a blighted neighborhood will generally be met with protests.

Why would anyone want poverty and people living on the streets eating out of trash cans?


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 Post subject: Re: Blight
PostPosted: Thu Aug 19, 2010 5:24 PM 
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because those people may not be able to afford to live in that neighborhood anymore and be forced to live on the street and eat out of trashcans elsewhere, maybe?

revitalized neighborhood usually means "shit gets more expensive" along with "new businesses move in who don't want that element around" and "cops actually patrol here and enforce vagrancy laws"

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 Post subject: Re: Blight
PostPosted: Thu Aug 19, 2010 11:56 PM 
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Try to figure out if any of the new residents doing owner-occupied renovations are gay yuppies. If so, you've just found yourself a potential gold mine.

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 Post subject: Re: Blight
PostPosted: Fri Aug 20, 2010 8:31 AM 
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bearne wrote:
Try to figure out if any of the new residents doing owner-occupied renovations are gay yuppies. If so, you've just found yourself a potential gold mine.


Very good advice!


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 Post subject: Re: Blight
PostPosted: Fri Aug 20, 2010 3:41 PM 
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Cuchulainn SC2K wrote:
Orme, a Singing Bard wrote:
The funny thing is that any attempt to fix a blighted neighborhood will generally be met with protests.

Why would anyone want poverty and people living on the streets eating out of trash cans?


This happens often in my business. Neighborhood committees aren't opposed to the idea of improving their area, but they often times disagree with each other on how to allow that to happen. Is replacing a burned out shell of a home with a brand new 10 unit apartment house a positive or negative for the community? Is turning an abandoned corner that has frequent drug trafficking into a convenience store a plus or minus?

These may seem like no brainers, but there are legitimate arguments to be made by both sides. A convenience store may add parking issues and will certainly increase the volume of trash discarded on the street. The immediate neighbors will have to deal with legal noise potentially 24/7. Both of these are better than a drug trading corner, but what if people want to hold out and try and get a mom and pop style restaurant instead? The neighbors conclude that is what they want to best improve the block so they dismiss the petition for zoning for a convenience store (even though the 7-11 would be better than it currently is). Then the reality sets in that no ones wants to fund a build what the neighborhood wants (because it is not deemed highest and best use by developers) and the neighborhood again is split on how to proceed.

In the apartment example you could raise a legitimate concern that you are going to increase the transient percentage of the population or the effect added units without enough added property tax may affect the local school system. Again, the 10 unit building is probably better than a burned out shell, but not as attractive to the community as a new single family residence. Again, the only way the project makes sense financially is multi family though, so the property sits in perpetual zoning conflict.

These are just 2 examples off the top of my head. It is possible to overcome them, but I hope this illustrates why it isn’t a simple process to fix a blighted area, even with willing financial participants. On the bright side, if you do buy into such a neighborhood and it takes a turn for the better it can be very rewarding. It’s a risk though, so consider what you could lose if everything went wrong, double that number, and then if you can still afford taking the chance it’s worth considering. The high amount of risk is why the rewards are so great when it does work out. In any case, before you jump in, do some due diligence in the area besides talking to friends/co-workers. Check the local municipality (where permits are issued) and see if they are busy, walk around at night, visit the local school during the day etc.

Good luck.


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 Post subject: Re: Blight
PostPosted: Fri Aug 20, 2010 11:07 PM 
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Don't breath the blight man, you'll turn into a rotter!


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 Post subject: Re: Blight
PostPosted: Wed Aug 25, 2010 12:50 PM 
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To clean up the neighborhood you need to grab up all the property's in the area, may require thugs to bully some of the older and stubborn people to sell there cheap properties.

Then use the thugs to evict all the poor, homeless and other undesirable types from the neighborhood.

Then your investment will pay off.

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 Post subject: Re: Blight
PostPosted: Wed Aug 25, 2010 1:04 PM 
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Miramicha at Work wrote:
To clean up the neighborhood you need to grab up all the property's in the area, may require thugs to bully some of the older and stubborn people to sell there cheap properties.

Then use the thugs to evict all the poor, homeless and other undesirable types from the neighborhood.

Then your investment will pay off.

Wasn't that the plot to the movie "Romeo Must Die"?


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 Post subject: Re: Blight
PostPosted: Wed Aug 25, 2010 4:11 PM 
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Cuchulainn SC2K wrote:
Miramicha at Work wrote:
To clean up the neighborhood you need to grab up all the property's in the area, may require thugs to bully some of the older and stubborn people to sell there cheap properties.

Then use the thugs to evict all the poor, homeless and other undesirable types from the neighborhood.

Then your investment will pay off.

Wasn't that the plot to the movie "Romeo Must Die"?


Yes, you are correct.


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 Post subject: Re: Blight
PostPosted: Wed Aug 25, 2010 7:09 PM 
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bearne wrote:
Try to figure out if any of the new residents doing owner-occupied renovations are gay yuppies. If so, you've just found yourself a potential gold mine.

QFT, if Oakland's any example.


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