NJ city: surprising leader in affordable housing

Construction or rehabilitation was slated to begin on more than 300 homes throughout the neighborhood soon after 1997, but ambition soon met reality. Delays and property-buying problems mounted, and the timeline for action was extended by years. It's a pattern reflected in many of the 11 Homeownership Zone projects, from Baltimore to Sacramento. Transforming a neighborhood, project administrators realized, was going to take far longer than anyone had anticipated.

"It's incremental change," says Algernon Ward, a member of the Canal Banks Advisory Board, a committee of citizens who keep tabs on government efforts in the area. "It's clearly getting better, but we've still got a ways to go, and we still suffer from the same problems many working-class neighborhoods suffer from, though some of the eyesores have disappeared. ... And the property in some areas has stabilized. My [wish] is to have this finished."

Efforts to finally complete the project, though, are now mired in a struggling economy. Where 1 in 5 applicants used to qualify to buy homes in the area, that number is now down to 1 in 15. The original plan called for everything to be done by the end of 2008, but planners have tacked on another year to the estimate.

For those currently living in the Canal Banks area, which is just minutes from New Jersey's golden-domed capitol, incomes are up and crime is down, but sustained growth has been elusive.

"If we [had chosen] a neighborhood that wasn't mostly bombed out and had started from there instead, we'd be ahead of the game," says Bill Valocchi, supervising planner for the city. "Our approach was to connect the dots to create projects throughout the area and we hoped the dots would connect over time.... We chose a neighborhood in pretty dire need."

In Indianapolis, the HOZ effort has been more obviously successful, turning a neighborhood formerly known as Dodge City for its rampant violence into a thriving adjunct to downtown. But this required the project to focus on moving upmarket as much as possible, says Stephen Goldsmith, the former mayor of Indianapolis, who is now a professor at Harvard's Kennedy School of Government.

In Baltimore, planners focused more on basic affordable housing issues in a part of the city far from areas experiencing growth, creating a problem of "new buildings and the same people and the same problems," says Clint Tearnan, Baltimore's Homeownership Zone coordinator.

The difficulty in finding the right balance of location, housing mix, and economic hope for blighted parts of a city makes it unclear if big homeownership-oriented, affordable-housing thinking will return, says William Rohe, director of the Center for Urban and Regional Studies at the University of North Carolina at Chapel Hill.

"There is no question about it, home ownership is still a part of the American dream and still something most renters aspire to," Dr. Rohe says. "But there is the larger issue of 'Is the area ... one where you ought to be encouraging people with low incomes to buy homes?' "

For Willie Mitchell, a former restaurant owner who's lived in Canal Banks for the past 65 years, the efforts to turn the area around have worked wonders. But he's under no illusions about what it will take to finish the job. "It's improved a little bit these past eight or nine years because I don't see as much drug activity," he says. "[The neighborhood] didn't go bad in [only] five or six years. It's going to take the same amount of time to bring it back."

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