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Lisa D. Thompson, Executive Vice President and Chief Strategy Officer, New Directions Housing Corp.
Challenge: The great recession hit New Albany’s Midtown hard, emptying 15 percent of the 900 homes in this Hoosier neighborhood. By late 2010, Midtown scored 9 of 10, or “high risk,” on the HUD Risk Assessment Matrix. Many homes—both rented and owned—showed signs of neglect.
This is the story of a tipping point—one that tipped in the right direction after a crisis. New Albany, Indiana is only 10 minutes away from the metropolis of Louisville, and the local park is recognized as a gem. It also is treasured for its historic architecture. Although the city’s fortunes first began to decline in the 20th century, officials resisted the “urban renewal” craze, preserving downtown buildings.
And then came the housing crisis. By Sept. 30, 2010, the average sales price for a house had dropped to $37,000 and the rate of owner occupancy had dropped to 40 percent. New Albany had reached a crossroad—either suffers continuing disinvestment or fight back and reverse the slide. The community chose the latter.
The first accomplishment came when the city secured one of the states’ largest Neighborhood Stabilization Program grants, injecting $6.7 million of stimulus funding into Midtown. New Directions Housing Corp. was tapped to lead implementation of the Midtown Renaissance project.
However, it was good news/bad news at the time. We were awarded the grant, but by the time we got it, the deadline was just six months away. Within that timeframe, we had to identify and acquire properties and sign a contract for completion of the required renovations. So, we created a “bidder’s list.” As soon as we bought a property we’d fire off an RFP to the list. It was a struggle, but by the time the deadline arrived, New Directions had acquired 31 single-family homes and the Cardinal Ritter Birthplace. The latter will serve as a museum honoring Cardinal Joseph Elmer Ritter, a Catholic clergyman who desegregated the Saint Louis Archdiocesan schools during the late 1940s. The Cardinal Ritter Birthplace Foundation is working in partnership with New Directions to complete this project and will administer the facility--including a new community center in the back of the museum.
Guided by a “healthy neighborhood” approach to revitalization, New Directions worked with residents to rebrand the neighborhood to attract investments by homebuyers and businesses. It did this in part by placing “coming soon’ signs on each of the 31 properties targeted by New Directions for redevelopment and resale, while preserving the neighborhood’s historic character. The cheery signs signaled to existing homeowners that their stake in their neighborhood was being “doubled down.” It was so successful it won a coveted Rosemary Prentice Award from Indiana Landmarks.
Financial assistance to accelerate construction was secured from Fifth Third Bank. The institution became the project’s lead bank—providing more than half of the mortgage lending needed by homebuyers. Other local institutions soon followed suit.
Overall, we turned around 31 highly blighted sites, built and sold 35 homes, developed a neighborhood center and community garden, and repaired or rehabilitated 46 homes, helping existing owners remain in the neighborhood they love. Other investors are now following the pace set by New Directions lead in Midtown.Vacancy is unusual now, and stakeholders are part of something special—a strong neighborhood.
One such stakeholder is Rebecca Futter. She grew up in New Albany. Creative and energetic, Rebecca didn’t think homeownership was possible for her, until the Midtown Renaissance project. “This program was a good opportunity for someone who is financially responsible, but who isn’t making insane amounts of money, to actually own a home,” she told us.
Futter’s historic home is a restored American foursquare overlooking the S. Ellen Jones Elementary School and Ritter Park. New Directions intentionally redeveloped 11 properties that border the park, which has become the heart of the neighborhood.
The Midtown renaissance is well underway. Visit some time and enjoy a local wine or beer, walk the quiet streets and think about owning a home or business on what New Albanians call “The Sunny Side of Louisville.”
