Made in the South Bronx: The Role of Nonprofit Developers in Neighborhood Revitalization

Abstract

In 1976, a former New York City Housing Commissioner suggested that New York pursue a policy of “Planned Shrinkage” and thereby forsake the South Bronx neighborhood. Yet during the subsequent two decades, the South Bronx experienced revitalization as the City committed approximately $1.2 billion in housing investment to the area. Recent empirical research has demonstrated the connection between this municipal investment and the neighborhood’s improvement. Even though authors have repeatedly asserted the connection between the City’s use of local nonprofit developers and the neighborhood impacts of this municipal investment, none of them has analyzed the relationship. This paper analyses the City’s use of local nonprofit developers in the redevelopment of the South Bronx area. It explains how the composition of the cityowned housing stock and the availability of the Low-Income Housing Tax Credit led municipal policy-makers to implement the City’s housing investment through these local nonprofit groups despite concerns about their capacity. It demonstrates how the structure of federal housing funds as well as the attitude of municipal policy-makers during the 1970s fostered the creation of local development capacity in the area. Moreover, it describes how innovations in the way that the City structured its partnerships with these local groups enabled it to leverage this local capacity even more efficiently. Lastly, it discusses the ways in which these partnerships contributed to the lasting effect of the City’s housing investment in the South Bronx area by indirectly helping to address the social ills that accompanied the neighborhood’s physical decay. This paper concludes with several lessons from New York’s experience using local nonprofits in the South Bronx redevelopment that could inform policy decisions in other cities facing the prospect of “Planned Shrinkage.”