Public Land to Private Hands: The Smoketown HOPEBOX Development

If you’re that sorry that you just follow the money, then you got a problem…It’s not about the community, it’s about how much money [you] can make.” - Shirley Mae Beard [1]



In this story map, we examine a development plan between the Louisville Metro Housing Authority (LMHA) and a host of nonprofit developers in Louisville’s Smoketown neighborhood. Very little scholarship exists about how nonprofit housing developers exploit subsidies and their role in the commodification of public land for Black dispossession. The East Breckinridge St development provides a clear example of how neoliberal economic policies of transferring public assets to the private market, use public subsidies and philanthropic investment to produce and protect private speculative capital in urban redevelopment. These Smoketown development patterns take place in the aftermath of a HOPE VI project, which demolished and redeveloped the Sheppard Square public housing site into a “mixed-use and mixed-income development.”



LMHA stated that they planned to use the $22 million grant for HOPE VI Revitalization funds to redevelop the 326-unit public housing development and demolish all existing buildings on the site and rebuild a mixed-income community on the footprint of Sheppard Square. LMHA stated that “affordable homeownership units may also be constructed on or near the site. Additional replacement housing units will be built and/or acquired off-site in order to achieve LMHA’s goal of one-for-one replacement.”[2] Following the redevelopment of Sheppard Square, LMHA purchased numerous parcels of land throughout the Smoketown neighborhood to meet their affordable housing requirements. Many of these properties were located in and around East Breckinridge St, including the former Duvall Liquors building (536 & 538), which LHMA acquired in 2008 for $133,000.


Beginning in 2014, the idea for the Smoketown HOPEBOX was created from a collaboration between YouthBuild Louisville (YBL), IDEAS xLab, the University of Louisville (UofL) and other partners out of a $250,000 grant from ArtPlace America. The HOPEBOX is described as “re-imagining an old liquor store as a ‘community center’ with digitally-connected cultural spaces, sustainable designs and business models, where Smoketown residents can fight poverty and improve health in a way that honors the culture and heritage of place.“[3] LMHA sold YBL the properties at 536 and 538 East Breckinridge St in October 2016 for $500, with a development agreement stipulating that YBL “will construct improvements on the properties” within 18 months, otherwise the properties will be returned to LMHA. YBL began planning for a laundromat facility and residential units at this location. *photo credit to IdeasXlab, Darnell Farris architectural rendering.


In late 2017, LHMA approached Vital Sites about redeveloping three vacant shotgun houses on the 600 block of East Breckinridge St in Smoketown. Vital Sites, formerly the Louisville Preservation Fund, is a nonprofit developer who recently redeveloped a row of five shotgun houses on East Broadway. These houses were promised to be “affordable” at the beginning of the redevelopment process, however, the first one, a 1,275 square foot shotgun, hit the market in 2018 at a listed price of $250,000. Although Vital Sites Director Charles Cash, told Louisville Metro Council in a written statement that the nonprofit would pursue funding that would “include an affordability component," he later recanted that statement, saying that Vital Sites did not need public subsidies for the redevelopment of these houses, since they were acquired through donations. “It was our original intention to target these more affordable, but that would require some form of subsidy,” Cash said. “I will also say, we are not trying to be an affordable housing expert or provider. There are plenty of places in town that do a good job in that. … Our mission really is about preserving our historic fabric and neighborhoods. We are not trying to be New Directions.”[4] *photo credit of Vital Sites' East Broadway development at https://www.vitalsites.org


In the summer of 2018, LMHA released an RFP for the three shotgun houses on East Breckinridge St, plus an additional vacant house and six empty lots across the 500 and 600 blocks of East Breckinridge. Vital Sites joined in a partnership with YBL, Habitat for Humanity, the Housing Partnership, Inc. (HPI), River City Housing, New Directions Housing Corporation, Bates Memorial Baptist Church, and Bates Community Development to submit a proposal to the RFP. As part of the RFP process Vital Sites created the Breckinridge Master Plan, with no community input or public engagement.[5] Their proposal included a two-phase development plan that transferred four LMHA owned-properties on Coke Street to Vital Sites for $500 each, to create an “interior facing, small-lot residential court.”


As the only applicant, in March of 2019, YBL and partners were awarded this RFP from LHMA and signed a development agreement for 14 properties in August for a total of sale price of $5,004. YBL then transferred all but 2 of these properties to various partners. Given that Vital Sites was clear about their intention to develop market rate homes in the urban core by the time of the RFP award, questions remain about why LMHA approached them to redevelop the East Breckinridge properties, unless market rate housing is, in fact, their goal. The LHMA development agreement stipulated that all the properties must be redeveloped within four years, otherwise LMHA would regain ownership. There were no requirements for affordability and or resale restrictions in the agreement. Many of these properties were previously purchased by LHMA at much higher prices. For instance:

  • LMHA purchased 625 East Breckinridge (River City Housing) from Bates Memorial Baptist Church in 2002 for $10,500

  • LMHA purchased 624 East Breckinridge (New Directions) in 2017 for $20,500

  • LMHA purchased 630 East Breckinridge (Habitat for Humanity) in 2016 for $25,000

The total value of the properties transferred to these developers on East Breckinridge St is $325,660, according to the 2019 property value assessment. They were sold to these developers for a total of $5,504.


Also, during the summer of 2019, Louisville Metro Government awarded an RFP to begin the Smoketown Neighborhood Planning process, which was later paused and reclaimed to center residents by the Smoketown Neighborhood Association (SNA) due to accountability issues on the part of Louisville Metro and LHMA. Prior to the pandemic, Smoketown residents and allies were engaged in accountability meetings and research in direct response to the power imbalances within the neighborhood planning process, led by the city and in collaboration with developers (both for- and non-profit). By February 2020, Smoketown residents and allies discovered and publicly identified that YBL was in violation of its 2016 development agreement with LMHA for the properties at 536 & 538 East Breckinridge, having failed to make any improvements to the property, which demonstrated a clear pattern that YBL was not being held to the same standards of law as Smoketown residents. It also raised questions about why LMHA would reward YBL with more subsidized properties in 2019, after YBL already failed to abide by their original development agreement.


On March 4, 2020, YBL hosted a community meeting on a zoning change for 536 & 538 East Breckinridge. When asked about failing to meet the original development agreement stipulations, YBL Director Lynn Rippy explained that YBL signed a waiver with LHMA granting them an extension. However, when residents requested a copy of the waiver on multiple occasions, LMHA denied having any record of said waiver. In response to an open records request to LHMA on May 12, 2020, LHMA stated that “An agreement is in the works but has not been finalized.”


The private market is responding to this redistribution and commodification of public land as expected. There is currently a property at 629 East Breckinridge that was purchased by private developer Travis Provencher in March 2020 for $60,000 and is currenlty on sale for $279,000 after being rehabbed. Provencher moved to Louisville from Nashville, where he worked for nonproft developers doing affordable housing and HOPE VI Projects. “We’d go into target neighborhoods like Smoketown or Portland, and buy up properties and rehab them using low income tax credits, HOPE VI money, or Community Development Block Grants,” he told the Broken Sidewalk blog in 2016. Provencher has purchased multiples properties in Smoketown, including two on East Breckinridge Street. Provencher explains how the removal of poor people for profit through HOPE VI created the current development potential in Smoketown, “You’re paying a premium in Germantown, you’re paying a premium in Schnitzelburg. And now Shelby Park has jumped up. Where’s the last undeveloped part of town on the east side? It’s Smoketown. There’s no hurdle any more. It used to be there was the housing project that was the real drawback, but with the Hope VI redevelopment, now that hurdle’s gone.”


Sam Heine is a Licensed Real Estate Agent with Family Realty in Louisville and Host of the 'Street Talk' interview series. In February 2021, he made a Facebook post about the “Smoketown Renaissance.”


“There are almost 20 houses/lots between the 500 and 700 blocks of Smoketown alone that have plans in place to be redeveloped/restored over the next 18 months. Over the last 12 months, Smoketown property values have seen a 20%-30% residential spike – combine that positive momentum with the upcoming redevelopment mentioned above – combined with the upcoming redevelopment of the Ice Tower on Logan St, and the flood and growth/investment see within neighboring Paristown Pointe, Shelby Park, Phoenix Hill and Germantown – this stretch of urban Louisville is reinvigorating right before our eyes and becoming very much an extension of Shelby Park and Paristown Pointe. Convenient location, lots to do closeby, beautifully remodeled home, and the potential for high caliber equity building over the short term. Huge potential for the right buyer!”


It’s important to include this flyer because, in the words of a Smoketown resident, "this stretch of urban Louisville is quickly becoming an extension of more affluent/recently gentrified neighborhoods.” The resident went on to say that this “erasure or absorbing of Smoketown into more affluent adjacent areas” are effectively “giving the clear stance that affluence has an inherent right to expansion.”


*Click on the map to get information about the East Breckinridge St development properties and Smoketown evictions. There may be multiple evictions at the same location.


Between 2015 and November of 2020, there were over 65 LMHA eviction filings and 38 eviction judgements on the East Breckinridge St blocks within the development area. LMHA housing sites throughout Smoketown are places of extreme housing precarity but the East Breckinridge area has a particularly high concentration of evictions, even for LHMA. As we’ve noted in prior work, a 2012 study found that a $100 increase in median rent is associated with a 15% increase in homelessness in urban areas.[6] This transfer of public land at extremely reduced costs to developers will drastically increase investor activity and speculation, which in turn increases rents, resulting in even more land being purchased by investment firms. In this way, publicly led unhousing through wealth extraction and gentrification becomes more rapid and harmful, particularly to those making below $25,000/year.


Along with violating the terms of their development agreement, the HOPEBOX developers have failed to maintain these properties after their acquisition in 2016 and 2019, and receiving preferential treatment. Since the transfer of the properties at 536 & 538, there have been 20 code enforcement cases, with no violations. This suggests that either residents are reporting code violations about the properties, or that code inspectors are citing the property, but Louisville Metro is refusing to issue fines or citations to YBL. There were 15 additional code enforcement cases on the HOPEBOX properties after the 2019 land transfer with no violations or fines issued. It is important to compare the rule of law and accountability in this process with that of the Louisville Landbank Authority meetings in January and February 2021, where Black residents were repeatedly criminalized in their attempts to purchase land. When Steven Edwards, a Black resident of Russell, tried to purchase a lot from the Landbank in February, Landbank Board Chairman Bill Shrek questioned his “alleged” motives to create a garden on the plot, along with his ability to maintain the lot, even though Steven currently maintains the lot. At the same meeting, California neighborhood resident Mary Hall purchased a plot that once belonged to her family, but only after an dispute with the Landbank Authority and Develop Louisville. Chairman Shrek voted against her receiving the property on the grounds that her retaining ownership did not meet the purpose of the Landbank Authority since it was not considered “an improvement.”


These racialized differences regarding the rule of law in property transfers are how racial capitalism protects and rewards whiteness as property rights. Scholar Anaya Roy describes the rights of citizenship in the U.S. as “propertied citizenship,” where those without property are criminalized. Roy notes that “subsidized and public housing continue to be key sites of racialized policing in spatial exclusion. What is at work are conjoined structures and interconnected geographies of racial banishment embedded in a national legal regime.”[7] Understanding these concepts are critical to exposing how nonprofit developers serve as conduits to redistribute public land and wealth back into the speculative, private real estate market. Black residents who do not own property are erased and banished from the neoliberal landscape. Since they cannot afford to exist within the racialized logic of capital, their existence is criminalized. Ananya Roy describes racial banishment as different from displacement in that the displaced "have some place to go. Banishment is where there is no place to go, except jail or death." The nonprofit developers who benefitted from the land subsidies in Smoketown are under no contractual affordability requirements or are prohibited from selling these properties to private investors at an exorbitant profit. They aren’t even accountable for the contractual agreements they did make. Meanwhile, Black residents are continually denied the ability to access public land and dispossessed of their private land through hyper-criminalization, code enforcement and nuisance violations.

LMHA should immediately make themselves accountable to the Smoketown residents by publicly explaining the decision making process that led up to these developments. They should likewise enter into a Community Benefits Agreement with the neighborhood that allows residents to have input into public land transfers. RCRC supports Community Land Trusts (CLT) that give residents control over their assets and future. CLTs can build greater housing stability for low- and fixed-income residents (both homeowners and renters), who are most vulnerable to dispossession and banishment due to gentrification.




Sources:

[1]Street Talk Ep. 11: The Ripple Effect of the Smoketown Renaissance, w/ Shirley Mae Beard

[2]https://www.hud.gov/sites/documents/LMHA_AMENDMENTS-1.DOC

[3]https://www.ideasxlab.com/HOPEBOX

[4]https://louisvilleinsight.com/archived-news/first-rehabilitated-broadway-row-house-hits-the-market-heres-the-listing-price/

[5]https://vitalsites.org/site/smoketown/

[6]Munley, E., Fargo, J., Montgomery, A., & Culhane, D. (2012). New Perspectives on Community Level Determinants of Homelessness. Journal of Urban Affairs

[7]Roy, A., Graziani, T., & Stephens, P. (2020). Unhousing the Poor: Interlocking Regimes of Racialized Policing. The Square One Project, 1-22.

Data Sources: Jefferson County Office of the Courts and Jefferson County PVA at https://jeffersonpva.ky.gov

Glossary:

Subsidies - A subsidy is a benefit, such as land, tax breaks or money, to a person, business, or institution granted by a public entity. It is usually associated with some form of public good or societal improvement.

Commodification - the process of something being put into market production to gain economic value that usually replaces other social value.

Dispossession (Definition from Oxford Languages) - the action of depriving someone of land, property, or other possessions.

Neoliberal economic policies - Neoliberalism is a political philosophy that encourages the transfer of all public assets into private markets and is heavily supported by both U.S. political parties. It is most closely associated with cutting government spending on social programs while shifting funding to economic development and policing.

Speculative Capital - In real estate, speculative capital implies investments that have serious risk of losing value but also hold the expectation of significant gain. Speculative capital is harmful in low-income areas because of the amount of public subsidies devoted to protecting private investment and also because the increases in median rental prices quickly outpace incomes, forcing displacement.

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