This article is part of the Bass Center for Transformative Placemaking’s “Placemaking Postcards” blog series, which invites practitioners and placemakers to highlight promising placemaking practices across the U.S. and abroad, with a particular focus on practices that foster inclusive economic growth and development.
Cities are engines of economic opportunity, but at the neighborhood level, this opportunity is often inequitably distributed. Stark neighborhood disparities have become a tragic norm in American cities, as demonstrated through the research of economist Raj Chetty and on-the-ground in places such as Kansas City, Mo., where the city’s wealthiest ZIP code sits alongside its most incarcerated and murder-stricken one.
Legacies of racial discrimination and public and private disinvestment have long denied residents in many centrally located urban neighborhoods access to adequate resources, services, and opportunities. In recent years, as demand for walkable urban neighborhoods rises, long-sought-after investments are finally flowing into these places. However, with new investments, existing residents—predominantly low-income renters of color—are vulnerable to rising rents while being excluded from the community wealth that could be generated from rising property values. These neighborhoods are missing a critical tool to preserve place-based affordability for those renters.
A new approach to preserving affordability while enhancing opportunity
Over the past several decades, public, private, and nonprofit sector leaders have piloted promising solutions to help low-income communities access economic mobility through homeownership, shared equity programs, or moving to higher-opportunity neighborhoods. These include models like community land trusts (CLTs), which preserve affordable homeownership for residents, and shared equity programs like the Community Investment Trust (CIT), which give individuals an opportunity to invest small dollar amounts into community real estate projects. Raj Chetty’s Moving to Opportunity experiment, on the other hand, uses a voucher program to relocate residents to higher-opportunity neighborhoods.
Despite these interventions, many U.S. neighborhoods lack adequate tools for harnessing new neighborhood investment to benefit existing renters, who might not want to leave their neighborhood due to social capital, personal attachment, and familiarity.
Through our time working in community development and alongside local leaders, our team at Trust Neighborhoods established the Mixed-Income Neighborhood Trust (MINT) model to provide that missing tool for leveraging neighborhood investment for community benefit. Developed in 2019, the MINT model provides existing neighborhood groups with a mechanism to add new, high-quality, and mixed-income housing and retail investments within their community, while preserving affordable rents and community control.
The Mixed-Income Neighborhood Trust model
The MINT model functions as a neighborhood’s ownership vehicle for communities at risk for gentrification and displacement. The model’s key features include:
- The MINT must be led and implemented by an existing neighborhood group.
- The MINT uses equity and debt financed at the neighborhood—not building—scale, with voting shares held in a perpetual purpose trust, directed by community stakeholders with an explicit responsibility to maintain affordability.
- The MINT places units into the trust by buying and renovating naturally occurring affordable units (residential rental properties that are affordable but unsubsidized by any federal program) and building new infill.
- The majority of rental units are stabilized at current rents, growing only with inflation, and the MINT floats rental rates on a minority of units at market levels to cross-subsidize the full portfolio and help preserve rents at scale in perpetuity.
- Equity returns are split between funders and the neighborhood, becoming a long-term source of community wealth.
This mixed-income portfolio allows neighborhoods with high displacement risks to harness growth pressure into the opportunity to become mixed-income neighborhoods with a strong sense of security in place, long-term belonging, and upward economic mobility.
Lessons from the Kansas City pilot
Trust Neighborhoods is helping scale the MINT model across the country, starting with two pilots: one in Kansas City and the other in Tulsa, Okla.
In 2020, we began supporting the Lykins Neighborhood Association in Kansas City to incorporate their own MINT. The Lykins neighborhood is an old streetcar suburb near the revitalized downtown that faces economic challenges and fears of displacement. Its residents earn less than the city average, with a median income of approximately $26,000. They are mostly Latino or Hispanic, with a sizeable population of refugees from Southeast Asian and East African countries. A little over half are renters.
In 2018, with the support of the Local Initiatives Support Corporation (LISC) and others, the Lykins Neighborhood Association spearheaded a community planning effort, which revealed that residents prioritize economic revitalization while simultaneously expressing worries about displacement. While the neighborhood could draw on plenty of existing tools to execute resident priorities—from rehabilitating vacant housing to securing donations for a new community center—they were missing a tool to preserve affordability for renters and businesses ahead of rising values.
After early conversations with Trust Neighborhoods, Lykins neighborhood leadership and residents were eager to test a MINT pilot. In spring 2020, we helped them set up a resident task force; finalize the necessary underwriting and legal work; establish partnerships for acquisition, renovation, and property management; and, in late fall, secure the equity funding to start acquiring properties to make the neighborhood’s MINT a reality.
Over the past year, we have learned quite a few lessons from this pilot, including:
- Neighborhoods don’t want more plans; they want tools to immediately start executing community priorities. A key upside to the MINT model is that it can execute existing strategic plans and doesn’t require a whole new planning process. In the case of Lykins, neighborhood leaders were able to implement the model using the community planning process they initiated in 2018.
- While the model is focused on affordable rents, it can accomplish additional neighborhood priorities. In Lykins, residents were energized by the opportunity to force out predatory landlords; there was deep-seated resentment toward out-of-state LLCs that preyed on foreign-born residents. The MINT could not just keep rents affordable, but actually buy affordable housing from bad landlords and replace them with an accountable ownership entity.
- Residents are eager to engage with new models of community wealth building. Through our engagement with the neighborhood task force, we’ve been impressed with how quickly residents grasp the model and go beyond providing input to co-lead this effort—including writing the legal documents that will govern the MINT.
- There is value in safeguarding residents who want to stay in their neighborhoods. Residents want affordable rent, but they also want to be close to the community social infrastructure that offers them a sense of belonging, schools where people speak their language, grocery stores that carry Burmese ingredients, and support networks. As their neighborhood starts to deliver higher economic and social opportunity, a MINT ensures that long-discriminated-against residents have a secure place in the community they call home.
Scaling the MINT model across the country
These are still early days for the MINT model, but the Kansas City and Tulsa pilots are ramping up, and over 50 other neighborhood groups have expressed interest in putting this tool into place in their own communities. The goal is to validate the model through these pilots, and scale from there.
The eventual hope is that these places can become mixed-income, walkable neighborhoods at scale, shaped by the unique knowledge and priorities of each community. Someday soon, they may be some of the best neighborhoods in America.