From Fear And Anger To Standing Ovations: There's No Shortcut For Community Engagement On New Developments

As attendees filed into Bisnow's Emerging Neighborhoods event at an office redevelopment in Chicago's Pilsen neighborhood in December 2018, they came face to face with the growing challenge of developing in residential areas with perceived gentrification risk.

Protesters representing neighborhood group Pilsen Alliance lined the doorway to Condor Partners' Mural Park project, railing against what they saw as an invading force of real estate speculators.

Condor partner Michael McLean watched with embarrassment as an increasingly common dynamic in commercial real estate played out in an uncommonly dramatic form: Residents and representatives of changing neighborhoods are fighting back harder than ever when they feel excluded or ignored by the real estate companies leading that change.

“[The protesters] basically read it as, ‘Hey, for $99, come to Pilsen and learn how to gentrify neighborhoods,’” McLean said. “So the wording was very insensitive in the group’s mind.”

Two more protesters later interrupted a panel discussion at the event before being escorted off the premises by police.

To McLean, the tragic irony of the protest was that the site of the event was the culmination of a years-long process of soliciting and integrating public input. Every facet of Mural Park, all the way down to the building’s basic usage of office rather than multifamily, was the product of feedback from local discussions, McLean said. Condor even gained the support of Pilsen Alliance leadership, which McLean said was not involved with the protest.

Mural Park is now up and running, and McLean said because it houses jobs and not new residents, it has been warmly received by local residents and business owners that now have a larger lunch crowd to serve. But the hair-trigger sensitivity of what McLean called the “most radical members” of the Pilsen Alliance is just one iteration of a story that has played out in some form in every urban market.

Now more than ever, pushback from residents can mean a project’s success or failure, and in some cases, whether it can launch at all. In response, developers around the U.S. are retooling how they communicate and work with communities.

American cities continue to fill with people, stuffing residential neighborhoods with housing demand that often turns into development of a scale that often unnerves longtime residents — a dynamic that has intensified over the course of the past 10 years. As the homeownership market failed to grow at the same rate as the overall economy in the wake of the 2008 housing crisis, the resultant explosion of demand in the urban multifamily market sent hundreds of urban neighborhoods on growth patterns not seen in decades.

Though recent data from the Federal Reserve Bank of Philadelphia contests the notion that gentrification leads to displacement, the anxiety that residents feel as they see new developments spring up around them is real, and can only be alleviated through communication with the developers responsible for that change.

“A lot of times, people say that we just like [to keep the neighborhood] like it was, which is derogatory,” said Albert Littlepage, president of Philadelphia’s Point Breeze Community Development Coalition, which represents one of the fastest-gentrifying neighborhoods in the U.S. “We do want an active and thriving business and community, but we just want some input.”

Inflaming tension in Point Breeze is the high percentage of longtime residents that are African American. Philadelphia, like so many American cities, has a long history of discriminatory housing policies, and developers who have the zoning rights in hand to build their preferred project have not shown much willingness to start a dialogue with those neighbors, Littlepage said.

“African Americans are more engaged now because there’s a divide between that community and the newer neighbors,” Littlepage said. “Developers do just what they do; they develop ... There have also been some who made promises they didn’t keep.”

Neighborhoods have become more politically active than ever since the election of President Donald Trump, McLean said, because many urban residents feel left behind by the federal government and respond by trying to exert more control over their immediate surroundings.

“You have severely polarizing political elements in this country, so people who otherwise would remain quietly resentful are now standing up and saying, ‘Enough is enough,’” McLean said.

Some companies welcome that level of participation and use it to inform their projects, like Condor did by making Mural Park into office space, rather than the multifamily building that most developers who looked at the site envisioned. The leadership of Vero Beach, Florida, faced with the prospect of developing a 38-acre lot of city-owned land centered around a decommissioned power plant, decided to take community engagement to the next level before even selecting a developer.

Vero Beach brought in urban planning firm DPZ CoDesign and one of its founding partners, Andrés Duany, to lead a charrette — an intensive design process carried out in a series of public hearings and discussions, originated by French architects in the 19th century — to determine the future of the plot known as Three Corners.

From November to the end of January, residents could work with Duany, a founding member of the New Urbanism movement, and not just critique his team's ideas but present ideas of their own. DPZ also created a website called Speak Up Vero Beach as a central posting board for resident input and public documents related to the planning process.

“In this community, there was a lot of fear and anger over what could be there due to misinformation,” said Irina Woelfle, who is running PR and communications for Speak Up Vero Beach. “And now people have really gotten involved in productive engagement.”

DPZ incorporated online and in-person discussions into a final set of renderings and plans, which it then presented to the Vero Beach City Council and the Three Corners Steering Committee on Jan. 31. The plans, which still need to be largely approved by citizen referendum before any concrete steps can be taken, were met with a standing ovation, TCPalm reports.

Even (or maybe especially) for a town with a permanent population of less than 17,000, such overwhelming support for a project of that size is virtually unprecedented, Vero Beach Vice Mayor Laura Moss told Bisnow.

“I just got out of a meeting this morning and it was again about land use; the issue has to do with one tiny parcel of land and it has been going on since last summer,” Moss said. “It's a single lot in a residential area and the applicant wishes to turn it into a parking lot, and the people who live on the block are up in arms.”

Impact-focused developer Shift Capital operates primarily in Philly's Kensington neighborhood, and CEO Brian Murray said its development pipeline is part of an ongoing dialogue with the community.

“Our offices are in the neighborhood, we’re on the streets, we talk to community leaders on a regular basis and follow through on those discussions,” Murray said. “Longevity is a big part — if I’ve brought one impact-based development to a neighborhood but I'm not there anymore, then it’s hard to build that trust.”

The plans Duany and his team presented for Three Corners would preserve a hefty portion of the acreage as public space, whether for outdoor parks and recreation or arts centers and event space. Shift Capital has bought dilapidated rowhouses and former industrial buildings in Kensington and kept rents as low as it could. Time will tell how much public, private or nonprofit funding Three Corners will bring in, but Murray and McLean agreed that letting a neighborhood determine the direction of a development makes one thing far more difficult: getting financing.

By and large, banks have been reluctant to give significant construction loans for any project that isn't in a safe, predictable asset class like urban multifamily. They also desire a degree of certainty in what shape the project will take in order to bet on it. Neither of those conditions match up with best community engagement practices.

“We end up being very heavy on equity up front and wind up proving [ourselves],” McLean said. “We had to spend $12M of our own money before we got a construction loan for Mural Park ... but most apartments are pretty easy to get approved by a bank nowadays.”

The lack of certainty when it comes to financing is what drives many developers to take what first appears to be the path of least resistance. But trying to push through an unpopular development without at least making residents feel heard can lead to drawn-out legal battles that can be a drain on a property owner's cash reserves.

“There are developers in Pilsen that [had] already spent money on architecture, site plans, engineering, all the beautiful renderings, and they showed up and the residents hated them,” McLean said. “Now they’re in lawsuits and they’re carrying the property, and their equity is ticking away.”

Even if a developer is constrained in what type of project it can build, doing the work of listening to neighbors' concerns and making oneself present and available at the community level is always appreciated, neighborhood representative Littlepage and municipal leader Moss agreed.

“People are smart enough and jaded enough today that they understand a developer has his or her own agenda; they’ve already factored that in,” Moss said. “But if you can place that within a context that explains what will benefit them and what may inconvenience them, but put it in such a way that they can understand and appreciate it, you’ll still build credibility.”

The average neighborhood resident is more educated and passionate than ever before, everyone interviewed for this article agreed. The simplest way to confront that reality is to embrace it. There may not be a shortcut for community engagement, but to make development work in changing neighborhoods, it sure beats the alternative.

“What’s most important is showing up for the community meetings and being authentic,” Murray said. “If you say something, make sure it’s not bullshit. Communities are onto that.”

CORRECTION, FEB. 12, 11:22 A.M. ET: An earlier version of this story misstated the name of Speak Up Vero Beach. It has been corrected.