Justice through home equity
The Little Rock City Board of Directors took big steps in passing a resolution dedicating millions of dollars to neighborhoods that have been long under-served. I applaud them for thinking of ways to reconcile the years of neglect that followed destructive policies at the federal, state and city government level.
The well-documented damage caused by redlining is no secret. Many neighborhoods across Little Rock were the focus of redlining, and communities of color were restricted from obtaining loans, insurance, and basic city services for years. These practices decimated the financial health of many predominantly minority neighborhoods.
Our neighborhood, Pettaway, is one such tract that the government deemed “hazardous.” That designation was based in part on the residents being people of color, and undoubtedly is partly to blame for so many homes being demolished by owner/ landlord neglect or the city’s “helping” hand.
Over time, this designation contributed to the loss of generational wealth for many of the families here who owned homes.
I’m excited to see that Little Rock is focusing on helping to create equity in neighborhoods affected by these policies. And I’m optimistic that our city can raise revenue or find savings in the current budget to fund this resolution.
But there are things the city and each of us can do now that we don’t have to wait on funding for.
Twenty years of work by newcomers and existing residents to stabilize the community brought about a new market desirability in Pettaway. With the influx of new construction and renovations, value is returning, giving legacy home owners an opportunity to use the value of equity in their property to finance and make repairs.
Just last year the home formerly owned by Dr. Charles D. Pettaway (The African American physician our neighborhood is named after) had a new roof put on it. Many other long-time neighbors are taking the opportunity to fix their homes up as well. Previously abandoned homes are being fixed up by their owners, who then move into them. Two Black-owned commercial buildings have been repaired over the past year, and new businesses are planning to move there soon.
It would likely be difficult for developers to go into struggling neighborhoods with low values of homes, such as those south of Interstate 30. When home builders obtain funding for construction they plan to sell to the market, banks typically lend around 80 percent of appraisal value.
The same rules apply in making renovations. The cost to build the home or make repairs would likely be much higher than what 80 percent of appraisal values would allow.
The City of Little Rock can stabilize the market in these struggling neighborhoods the way they did in Pettaway some 20 years ago. With no costs to the city or strain to the current budget, the city can use grant funding through the Department of Housing and Urban Development to incentivize the construction of new homes on vacant land in struggling communities and subsidize the prices of the houses.
This would increase the opportunity of home ownership for households of color as well as increasing the value of those communities. Stabilizing comparable sales at a realistic market value will give existing long-time homeowners access to low-interest financing to make repairs to their homes. The city already owns dozens of empty lots in target neighborhoods, which could be used as a springboard to equity.
Neighborhoods like Pettaway pack the biggest punch in producing tax revenue for the city on a per-acre basis. Studies have shown historic neighborhoods produce far more revenue for the city than post-World War II suburban developments. The city can protect neighborhoods from becoming subsidizers for newer developments that are in the long term not viable by offering the Tax Increment Financing program to neighborhoods in need of economic revitalization. This would allow the increase of tax revenue created in these communities to stay there.
Each of us can help; we can choose to take our value as a home buyer or renter and invest it in a struggling community and raise its value. You’ll be rewarded with a much lower cost of living as well as neighbors you’ll come to consider more as family.
I hope that urban leaders across Arkansas would consider similar strategies in helping struggling communities in their cities. This is not a popular scripture, but it’s one we shouldn’t ignore. Isaiah 10:1 in the Old Testament of the Bible states, “Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights and withhold justice from the oppressed of my people. What will you do on the day of reckoning?”
It is a fact: Specific neighborhoods were negatively affected by policies put in place by those in leadership at the time. Are we going to stand by and withhold justice from the oppressed?
Seeing change and action at the local level is empowering. I love that our city leaders are not waiting on D.C. to reconcile the injustices of the past. If you’re frustrated with gridlock in Washington, please join our community in looking for ways we can be positive change agents on tough issues at the most local of levels.
I can’t change the mistreatment of women in distant countries, but I can help sculpt a more just and equitable neighborhood for my wife and me to raise our daughter in. And you can too.