Match Strategic Approaches to Neighborhood Market Types
Research shows that foreclosures are impacting different neighborhoods in different ways. The most rational approach to stabilization involves developing an understanding of the patterns of foreclosures and market conditions in each neighborhood through data research. With that understanding, community developers can begin tailoring strategies and making decisions accordingly.
As community developers begin researching the patterns of foreclosures and market conditions in their neighborhoods and communities, they must tailor their efforts on both regional market dynamics and neighborhood, or sub-market dynamics. A set of strategies that work well in one neighborhood may be different than a set of strategies that work for a different neighborhood in the same city.
- In order to be most effective, strategies need to be grounded in market realities - to what extent can the neighborhood market attract demand for reclaimed property?
- Strategies must focus on building stronger markets – drawing consumer choice.
There are several frameworks that can be used to understand your community’s regional market and neighborhood markets.
- In many localities efforts have been underway for several years to collect and analyze market data. Several communities have created robust, high-quality, parcel-level data systems that have provided the ability to aggregate the data to see regional and neighborhood market patterns.
- The National Neighborhood Indicators Partnership (NNIP) is a collaborative effort by the Urban Institute and local partners to further the development and use of neighborhood-level information systems in local policymaking and community building. Some of the best examples for robust, parcel-level datasets exist in NNIP cities.
- Data such as that collected in NNIP cities is now being used by communities to help organize neighborhoods into similar types of conditions as a way of beginning to tailor broad approaches to stabilization. These typologies include such factors as:
- Risk and incidence of foreclosure
- Regional and neighborhood market histories and market potential
- Vacancy rates, building conditions and land use
- Transportation and employment linkages
- Two case studies of this kind of data-rich framework are presented here: Memphis and Cleveland
- In places without a rich set of data on neighborhoods, there are a couple of simplified, intuitive frameworks that can be used to sort neighborhoods by market type and match them with an appropriate strategic approach.
- There are two simplified frameworks presented here: Alan Mallach's Three Market Types, and The Center for Housing Policy's Market Approach Grid.