Are landlords the key to transforming struggling neighborhoods?
Growing up in Sacramento, Al Williamson explored the city on his bike. He’d ride as far as his legs would take him, but he never went through certain neighborhoods. Some were just too dangerous, like Oak Park, southeast of midtown.
For decades, Oak Park has been known as the city’s poor, black neighborhood. (It also happens to be where Sacramento mayor and former NBA player Kevin Johnson grew up.) The low-income area has suffered from high rates of crime, including drug trafficking and prostitution. But the past 5–10 years have brought change. Just ask the developers, new residents, coffee shop owners, and real estate agents who are helping create Oak Park’s new reputation.
Since 2000, Al has worked alongside these folks — not as an activist or government official — but as a landlord. He owns two properties in Oak Park: an 8-unit building and a single-family home next door (which he’s under contract to sell). Al lives with his wife and 2 daughters in Rancho Cordova, 12 miles away.
Even though he works full-time as a civil engineer, Al’s experiences managing these properties inspired him to become a part-time civil evangelist. He self-published a book for landlords called “Building Wealth with Inner City Rentals,” and many of the posts he writes for his blog and Landlordology tackle topics related to landlording in blighted urban areas.
“Someone needed to do it,” he says about his mission to educate landlords about urban renewal. “It’s not that people haven’t done this kind of work [in neighborhoods] before, but when I went to look, there was a huge void of information.”
A troubled place
Al bought his first investment property after talking to an older gentleman at a church picnic, who suggested buying a duplex. Al was newly married, and he wanted to start creating a nest egg. Buying an investment property seemed like a good idea.
So Al secured a FHA loan for first-time homebuyers and scraped together a down payment; he took out a loan on his Honda and borrowed money from family. Then he bought a 3-plex in midtown Sacramento. The year was 1996.
When he and his wife moved into the 3-plex that year, a locally-owned coffee shop was about to go in down the street. Al remembers an “electric” feeling in the neighborhood. Things were about to change.
By the time he sold the 3-plex in 2005, the property had quadrupled in value. Even though the sale price didn’t seem completely logical, Al realized the potential. “Let’s do that again,” he thought. “Let’s get in on the ground floor.”
In 2000, Oak Park was a volatile and troubled place, but Al had his own electric feeling. He started thinking about some common-sense ways he could help make the neighborhood more livable. The time he put into changing Oak Park would be a long-term investment in his properties.
The effects of change
Oak Park feels different today, says Randy Stannard. He bought a house in Oak Park in 2010 and now he’s the executive director of Oak Park Sol, a local nonprofit that helps communities transform underutilized spaces into everything from community gardens to pocket parks.
Today, the neighborhood association organizes events and posts safety notices, and a monthly street-fair brings residents together for live music, food, and beer. Oak Park has a brewery, a coffee shop, an organic cafe, and an upscale taqueria.
As crime has gone down, and property values up, many low-income renters are being displaced because they can’t afford rising rental rates. Or the places where they live are being sold. Randy says the influx of professionals committed to being part of a community helps Oak Park Sol thrive, but he worries about homogeneity.
“You want the improvement, less drugs and all the good stuff,” Randy says. “But you also want the people who live here, and want to stay, to have that opportunity. We want income and and ethnic diversity.”
In an editorial for The Sacramento Bee, journalist Erika D. Smith wrote about how some residents of Oak Park are angry about gentrification, which comes with big real estate deals that have been years in the making.
Al acknowledges that people are being displaced. “There are people in pain, and the pain is true, but there’s something they can do about it,” he says. He suggests residents can continue to live in Oak Park if they find jobs and partner with each other to buy the homes where they live.
At his annual summit in Oak Park, Al talks about how to use creative real estate financing techniques to buy properties, after becoming financially disciplined.
He also directs people to NeighborWorks Sacramento, an organization that can assist people with their finances so they can learn how to purchase the rental where they live. And he spreads news of job opportunities so current residents can participate in Oak Park’s economic redevelopment.
In the meantime, Al continues to follow the principles he set out in his book, in the hopes his 8-plex will continue to increase in value. “I don’t like the word nonprofit,” he says. “I like fixing things for profit. It’s more sustainable.”
Based on his experiences, Al gives these tips to landlords in struggling neighborhoods:
Nail the timing
Act according to what’s happening in the neighborhood, from buying a property to organizing a block party. If residents are scared to go outside because of drive-by shootings, you don’t want to encourage a cafe to have outdoor seating, he says.
Make safety a top priority
Doing simple things, like making sure streetlights aren’t burned out, make a big difference. “A lot of renters might see streetlight that’s out and think ‘that’s someone else’s issue.’ But I see it, and say to myself, ‘I’m a leader and this is my neighborhood, the place where my business is located.’”
Safety can’t happen without good communication. Get organized. Make phone and email lists of people who live in the neighborhood. Encourage residents to use the video feature on their phones to record suspicious activity.
Improve how things look. Pick up litter. Keep lawns mowed. Remove graffiti as quickly as possible. “Criminals will know something’s going on,” Al says. “They’ll think, ‘It’s easier to do business down the street.’”
Engage with the community
Hire kids from down the street to do odd jobs. “It’s a tiny, easy little thing, but there’s so much attached to it. People will notice. They’ll thank you.” Make an effort to talk to people in the neighborhood. Find things to collaborate on, like organizing block parties. Building good relationships is a long-term investment.
Give donations
“Find whatever’s closest to your rental that’s doing good and contribute to it,” Al says. For example, put money on a gas card for the local boys and girls club, so they can keep driving their van. Make donations to the neighborhood association, so they can offer refreshments at their meetings, which will attract first-time attendees.
“Fund the good things,” he says. “Buy Thanksgiving dinner for a struggling family in the neighborhood.”
Be a leader
“The tiniest bit of leadership is the best investment you can make,” Al says.
While most people assume a landlord who lives outside the neighborhood has less power and sway than one who lives there, Al discovered the opposite. It’s easier to be a leader if you live outside the neighborhood, he says.
Politicians and the police unfairly assume you’re more educated and connected than inner city residents, he explains, and the people who live in the neighborhood assume you’ll be less afraid of drug dealers. “You can do what residents are too afraid to do,” he says.
Invest your time
“Don’t put a lot of time into it, just keep at it,” Al says. “Be consistent. Do what you can, and have a long-term perspective. Otherwise you’re leaving the neighborhood to chance.”
Originally published at cozy.co.
