Investing in Communities

Investing in a community is challenging for most states and governments because, over the years, it has become more challenging to determine what makes a good investment in a community. Over the years, there have been discussions about whether governments should spend money helping people or helping to develop places where disadvantaged people live. According to Glaeser (2007), in his famous article "Can Buffalo Ever Come Back," he emphasizes government spending on the Buffalo cities, which has gained no fruit. He argued that federal spending no Buffalo city to revive the city would prove ineffective. Federal policies and spending should focus on the citizens of Buffalo instead of the city. Glaeser (2008) further recorded in his article titled "The Economics of Place-Making Policies" that the existence of "agglomeration externalities" is not a sufficient condition that indicates which place should be subsidized. Glaeser (2008) added that without a proper understanding of nonlinearities in externalities, government spatial is as likely to reduce as to increase welfare.

Home Values within Residential Community Associations

According to Groves (2008), Residential Community Association (RCA) is an association of homeowners who own homes within a given residential development and manage common areas. RCA is critical to urban renewal and the provision of a public good because it allows homeowners to separate by influencing the rules of the governing and services provided by RCA (Groves, 2008).

In order to determine the relationships between RCA membership and home prices, the research team used data that included single-family homes sold in Saint Louis County, Missouri, between 1992 and 2001 (Groves, 2008). To determine the location of the homes, the author uses individual Covenants and Conditions and Restrictions (CC&Rs) of all subdivisions containing at least ten units (Groves, 2008). Using the non-RCA homes as a control group, the findings show a $36,000 difference in sales prices between RCA and non-RCA homes, further showing that living in an RCA increases the value of a home.

Gardens, Parks, and Open Spaces

The impact of parks on property values is a critical concern and has been considered by urban developers over the years. Crompton (2005) reviewed over 30 studies to look at the empirical evidence on whether parks and open places contribute to increasing property value, the level of effect of parks on property values, and how distance affects the proximate principle. Evidence from the review shows that people want to pay more for houses close to parks than houses far from parks and other social amenities (Crompton, 2005). According to Crompton (2005), reviewed studies show that the distance between the property and the park and the park's size also affects people's preference for houses.

The article "Capitalization of Open Space in Housing Value and the Residential Property Tax Revenue Impacts of Agricultural Easement Programs" by Jaqueline Geoghegan, Lori Lynch, and Shawn Bucholz is a critical study that looks at the extent to which open space adds to the value of housing. The article uses 10,135 transactions from 1993 to 1996 in three Maryland counties with highly conserved farmland (Geoghegan, 2003). The study looks at two key variables "permanent" versus "developable" open spaces. The study hypothesizes that open space not only boosts property value but that increase in property value will be higher in areas with permanent open space than the developable open space (Geoghegan, 2003). The findings presented in the article show mixed results in relation to the hypothesis. In one of the counties where the study was conducted, the coefficient for an ample permanent open space was statistically significant. In another county that participated in the study, both small and large permanent open spaces were statistically significant (Geoghegan, 2003).

The Spatial Difference-in-Differences approach in studying the effects of greening vacant land on property values conducted by Heckert (2015) provides an idea of how making greening open space affects property values. The author looks at Philadelphia vacant lots and property values between 1999, 2006, and 2010. The study looked at property values based on the closeness to vacant lots (Heckert, 2015). The author used data on lots treated as part of the PLC program, vacant lots in Philadelphia in 2010, and residential real estate sales valued at no more than $1,000 between 1999 and 2007. The author also used data on boundaries for neighborhood planning districts. Using the different-in-indifference, the author compared the treatment and control groups using the GWR model that helps calculate separate regression for the treatment and control groups. The studies show that property value surrounding greened lots increases compared to the property not surrounded by greened lots.

Over the years, studies were conducted on home price trends close to Atlanta Beltline. Among the studies is the one published by Immergluck, D., and Balan, T. (2017), which focuses on home trends along the beltline before the 2007-2010 housing crisis. The study by Immergluck, D. and Balan, T. (2017) looks at the construction region in the heart of Atlanta, which was a railroad and is now transformed into a walking space. The author further identifies the sale prices for a home in the area from 2011 to 2015 (Immergluck, D. & Balan, T, 2017).

The impact of gardens on neighborhood property values has gathered attention over the years. An article by Voicu, I. & Been, V. (2008) discusses the effect that gardens and small parks have on property values in a given community in New York City. The study used 636 garden data from the Council on the Environment between 1977 and 2000. The study used a difference- in-difference regression model in which property sales prices within 1000 feet of a garden were compared with those of similar properties outside the 1000 feet radius but in the same neighborhood. The findings from the study showed that gardens have a positive effect on neighborhoods and that extensive gardens have a more positive effect than small gardens.

The effect of historic Districts' location is critical to home values. The study by Coffin (1989) looks at the designation of historic districts through city regulation as a way of neighborhood revitalization that increases demand for housing in the targeted district and thus increases home value. The study focuses on two cities in the western Chicago suburbs. The city used as a treatment group (Aurora City) established an ordinance governing the land, and the other city used for control (Elgin city) did not establish any ordinance. The author referred to creating a historic district as having a positive effect and value to potential buyers by making it more desirable and stimulating neighborhood revitalization (Coffin, 1989).

Targeting investment for neighborhood revitalization is critical to helping the neighborhood grow. For instance, the Neighborhood in Bloom (NiB) was implemented by the city of Richmond, Virginia, and a Local Initiative Support Coalition ( LISC). In enhancing the process, the city channeled Community Development Partnership (MIP) to a few blocks in seven targeted neighborhoods (Galster, Tatian, & Accordino, John, 2006). The seven neighborhoods identified for the study were selected after evaluating 49 neighborhoods. After selecting the neighborhoods, the intervention program was implemented in two levels: affected neighborhoods, which were smaller and collected CDBG and HOME funds, and affected neighborhoods, which were more prominent, received priority for some city services (Galster, Tatian, & Accordino, John, 2006). However, the study used an adjusted interrupted time series to compare disruptions in time trends between several sets of geographical areas and adjusts for changes in the city trends corresponding with the intervention neighborhood. The author used all Richmond census tracts as the control group for the study (Galster, Tatian, & Accordino, John, 2006). The study found no statistically significant differences in the city-wide home value between 1993 and 1997.

Neighborhood Change

Gentrification as a social concept started in 1963 by a British Sociologist (Maciag, 2015). According to Herriges (2019), gentrification is a process through which cities change, and it helps to know who benefits from the changes that cities go through. Gentrification deals with home, community, and painful race and class divide within cities (Herriges,2019). In his article "Untangling Gentrification and Displacement," Herriges further mentions that a study conducted in New York City shows a high level of families and children moving that resulted in high gentrification of a neighborhood like Crown Heights.

Over time, dramatic changes have happened in most of urban America. As a result of the changes in urban neighborhoods, more affluent residents are moving into once-underinvested and predominately poor neighborhoods (Maciag, 2015). In order to know the extent to which gentrification has reformed urban communities, Maciag ( 2015) examines findings from Governing analysis Census tract data for the nations. The key findings from the neighborhood show that, generally, gentrification is on the increase in low-income neighborhoods. Nearly 20% of neighborhoods with lower income and home value have experienced some form of gentrification (Maciag, 2015).

Findings have shown that neighborhoods with gentrified records have a population increase and have more white. On the other hand, neighborhoods that do not go through gentrification have more low-income populations and gradually losing populations (Maciag, 2015).

Neighborhood Change Through Tax Credits

According to Tatian, Kingsley, Parilla & Pendal ( 2012), policymakers have been trying since the 1980s to improve distressed urban neighborhoods, and many debates have arisen about how to address the issues with poor neighborhoods. Pastor and Turner (2010) added that addressing the issue of poverty in the neighborhood requires more than an "inward-looking approach or passive departure" of people. Pastor and Turner (2010) emphasize that using a "broader portfolio of place-conscious strategies" that helps improve neighborhood conditions is a reliable way of neighborhood change because low-income neighborhood change is a change that affects the well-being of families and children that live within the affected neighborhood.

Over the years, the government of the United States has used the Low Income Housing Tax Credit (LIHTC) to create affordable housing. The HUD made LIHTC available to the public in 1997, and the data sets have information on 47,511 projects and 3,13 million housing units between 1987 and 2017.

The NMTC program helps economically distressed communities to influence private investment capital. The NMTC program provides investors with federal tax credits after meeting statutory qualifications. NMTC investment programs are expected to be implemented in a low-income neighborhoods.