Ohio is home to hundreds of neighborhoods that have the potential of breathing new life into their communities but are held back by the lack adequate credit, capital, and capacity to strategically and effectively utilize capital.
To systematically understand the challenges and solutions that these types of “opportunity neighborhoods” face, GOPC utilized an innovative methodology to identify 52 opportunity neighborhoods in eight of Ohio’s largest cities. These neighborhoods are representative of other neighborhoods throughout the state with similar characteristics and conditions.
GOPC defines “opportunity neighborhoods” as:
- Not facing a precipitous decline relative to the rest of their city
- Having room for improvement
- Showing signs of stability or some improvement
GOPC investigated the main barriers and challenges to revitalization in these neighborhoods. Broadly speaking, the challenges break down into four areas:
- The main challenge in these neighborhoods is access to financial resources and lenders with capacity to provide a sufficient flow of capital
- Capacity challenges: these neighborhoods need borrowers with enhanced capacity to do “on the ground” work
- The suboptimal condition of the housing market and the commercial sector in opportunity neighborhoods is a continuing obstacle
- The public, private, and non-profit sectors need to align if realistic strategies for revitalization are to be developed and effectively implemented
Access to capital and the capacity to absorb it has profound implications for the development of these opportunity neighborhoods. GOPC’s analysis determined that understanding the specific tools needed to improve these neighborhoods can help frame practical solutions.
To bring about revitalization, opportunity neighborhoods need to:
- Increase stable homeownership
- Remove blight by reusing vacant properties and upgrading substandard properties
- Maintain a stable rental sector
- Foster business growth
Through its analysis, GOPC concluded that Community Development Financial Institutions (CDFIs) can play an indispensable role in supporting and advancing solutions and tools for regrowth. While CDFIs play a particularly vital role in addressing credit challenges, the role of conventional lenders in providing capital in these neighborhoods remains critically important along with the activities of other local organizations and funding sources.
This report is an interim analysis as part of an on-going Project analyzing these issues. Additional research and analysis of Ohio’s opportunity neighborhoods will occur through 2016 with a final report scheduled for late 2016.