OLR Research Report

August 15, 2001





By: John G. Rappa, Principal Analyst

You wanted to know how neighborhood residents could collectively address problems undermining their quality of life. You also wanted to know how the town could help more people buy homes in the neighborhood, including middle-income families from other areas.


A neighborhood's residents can work together to address common problems by forming a neighborhood association. Associations are generally more effective at getting local officials to help them solve problems than individual residents acting on their own. Residents with little or no experience in collective action first need to develop interpersonal and organizational skills. Some cities provide funds and technical assistance needed to help residents form associations.

Some cities, including Long Beach and Modesto, make neighborhoods the centerpiece of their community development efforts, customizing their housing, code enforcement, capital improvement, and crime prevention programs to address each neighborhood's unique needs. These cities generally recognize that neighborhood problems are interrelated and try to coordinate the actions of different city departments to bear directly on these problems.

Connecticut offers two tools that can help neighborhood residents and property owners take collective action. The Neighborhood Revitalization Zone (NRZ) program provides a process through which residents and city officials can jointly develop comprehensive neighborhood plans. Towns can also create special services districts where locally elected boards raise their own taxes to fund public improvement and municipal services.

Cities like Ithaca, New York have used different tools to boost homeownership in specific neighborhoods. Some rely on neighborhood-based organizations to package, market, and apply those tools. Other cities, including Philadelphia, have used homeownership programs as a way to diversify racially and ethnically segregated neighborhoods.

Connecticut offers many statewide programs intended to encourage middle-income people to buy homes in targeted areas. These include downpayment assistance, low-interest mortgages, and combination mortgage and rehabilitation loans.



Neighborhood residents in many cities have organized themselves into neighborhood associations to work with other groups and government agencies on common problems, such as crime and blighted buildings. Many cities help residents form associations and use them to plan and implement programs, such as capital improvements, block watches, and code enforcement. Many associations also sponsor festivals and other social events as a way to develop and strengthen ties among the residents.

Residents in affluent and distressed neighborhoods have formed associations on their own or with the help of municipal or nonprofit community development agencies. Southport, Connecticut, residents formed the Sasquanaug Association in 1897 as a village improvement society. Today, it works with other local groups to preserve Southport's harbor village character. Recently, the association rallied with other groups to defeat a proposed new office building near the train station by raising over $6 million to outbid the developer for the land (New York Times, June 3, 2001).

Problems Facing Associations

Residents forming neighborhood associations in run-down areas often face several hurdles. They may form an association to work with police on preventing burglaries and muggings, for example, only to find that these problems are related to a lack of jobs or other factors block watches do not address. They must also learn to collaborate with many different people and agree upon an organization structure to govern their efforts:

No single model will work in every neighborhood, so the sponsoring foundations often leave communities to figure out how to handle the delicate issue of sharing power, encouraging participation, determining representation, and executing projects. The relationship between the lead organization and the governance of the initiative has to straddle the fine line between leadership and control (Pitcoff, “Comprehensive Community Initiatives,” Shelterforce Online, January/February 1998).



NRZ Program. Connecticut law allows neighborhood residents and property owners to establish an association with the town's approval to plan the neighborhood's revitalization. Neighborhood groups in at least 14 towns have used this law to designate NRZs and establish planning committees. The planning process requires them to collaborate with each other and public and nonprofit agencies on identifying neighborhood problems and ways to address them. The towns must approve the plans and work with the NRZ committees to implement them (CGS Sec. 7-600 et seq.).

The nonprofit Local Initiatives Support Corporation has helped residents in these towns to form NRZs and work collaboratively with city agencies and nonprofit community development corporations.

The law authorizes the Office of Policy and Management secretary to grant funds, within available appropriations, to NRZs for a range of activities, including developing neighborhood-based organizations, economic development, and property management. It also requires him to develop guidelines on how other state agencies can provide technical assistance to the NRZs.

NRZs have no powers to implement the plans other than asking state and local agencies to waive excessive code requirements that could increase a project's development costs significantly. But towns can take property by eminent domain in the zones and establish rent receivers to correct code violations and other nuisances.

Special Services Districts. Connecticut law also gives neighborhood groups and towns another option to address a neighborhood's problems. It allows towns to create special services districts to provide extra public services to a designated area. The districts are government entities governed by an elected board. They can levy property taxes, fund capital improvements, and provide any noneducation-related service the town lets them provide (CGS 7-339m to Sec. 7-339t). The districts mostly encompass commercial areas, but the law does not exclude residential ones. New Haven and Stamford are two of the towns that have established districts.

Cities in Other States

Cities in other states help residents to form neighborhood associations and involve them in planning and implementing community development programs. Hickory, North Carolina's Neighborhood Focus program helps residents get through the process of designating the neighborhood and forming the association and assigns a liaison to help them “work through their concerns in the most effective manner by providing a single point of contact with the city and its programs and services” (

Bloomington, Indiana's Department of Housing and Neighborhood Development provides technical support and capital improvement grants to neighborhood associations and helps them negotiate services from other city departments. It also runs an eight-week Citizens' Academy that teaches residents about city programs and services (

Long Beach, California's Department of Planning and Buildings assigns a community planner to each of the city's community planning areas to work with neighborhood organizations, community improvement associations, and other groups on addressing nuisances and similar problems ( The city's Neighborhood Leadership Program provides community development training to neighborhood residents, some of whom go on to serve on the boards of nonprofit organizations (

Las Vegas' Neighborhood Partners Fund provides up to $5,000 in matching funds to city-recognized neighborhood, homeowner, and business associations for capital improvements, cultural events, education and recreation programs, and block watches. Other organizations can apply for these funds through a recognized association. A board comprising city officials and neighborhood residents awards the funds (


While many cities help neighborhood associations gain better access to citywide programs, others run their programs to address each neighborhood's distinct needs.

Long Beach, California

Historically, this city provided the same level of services to all its neighborhoods. But under the Neighborhood Improvement Strategy, the city tailors municipal services to meet specific neighborhood problems, coordinates the services to maximize their impact, and works with residents to identify problems and develop solutions.

The city has formed partnerships with several neighborhoods to establish neighborhood-based community police centers, which promote crime prevention activities and provide information and other resources to the community. Full-time neighborhood volunteers and police officers assigned on a part-time basis run the centers. The city's Neighborhood Services Bureau pays the rent and provides bilingual workers.

The city also enforces its building, housing, and health codes as part of each neighborhood's improvement strategy. Its nuisance abatement program conducts workshops for residents on nuisance laws, property maintenance, documenting nuisance problems, mediating disputes, and filing actions in small claims courts (

Modesto, California

Launched in 1978, Modesto's Neighborhood Improvement Program designates target areas and requires their residents to participate in neighborhood improvement activities. The city must inspect every property and the owners must correct all code violations. These requirements encourage other property owners to improve their properties:

A common response for someone considering a substantial investment in their (sic) home and neighborhood is “why should I spend the money if the dumpy place across the street is not going to be fixed? My investment alone will not improve this neighborhood and property values.”…With the mandatory program, the City can assure all potential borrowers that every home will be repaired and that, therefore, individual investments will be protected (“City of Modesto: Neighborhood Improvement Program,” Alliance for Redesigning Government,

The city offers low-interest loans to finance the repairs. It also allows target area residents to borrow home and yard tools from a rental company without charge, gives rebates for painting homes and making them energy efficient, and provides unlimited trash and garbage pick ups.


Cities and towns in other states boost homeownership in distressed neighborhoods by offering many incentives that are available in Connecticut. But some, like Ithaca, New York, rely on neighborhood-based organizations to help residents and others access them. Others take advantage of federally funded programs designed to spur homeownership in distressed, inner city neighborhoods.

Ithaca: Comprehensive Services

The Ithaca Neighborhood Housing Services, Inc. (INHIS) promotes homeownership in targeted neighborhoods as part of a comprehensive neighborhood revitalization program. Neighborhood residents, local lenders, and city officials formed INHIS with funding and technical assistance from different organizations, including the Neighborhood Reinvestment Corporation, which helps groups throughout the nation, including groups in Bridgeport, Hartford, New Britain, New Haven, and Waterbury.

INHIS helps first-time homebuyers afford bank loans by offering flexible low-interest loans to cover downpayment and closing costs, two of the biggest hurdles facing families that otherwise have enough income to cover monthly mortgage payments. INHIS also offers courses to first-time homebuyers on buying and owning a home. (Connecticut's Downpayment Assistance Program is administered statewide by the Connecticut Housing Finance Authority (CHFA).)

Many homes in older neighborhoods require extensive repairs, conditions that could discourage potential buyers from buying these homes. For this reason, INHIS offers loans to repair newly purchased homes. It inspects each home, estimates the repair costs, helps the buyer choose a contractor, and monitors the work. CHFA's Urban Rehabilitation Homeownership Program offers similar loans in designated areas to people who work in those areas and want to buy homes there.

Blighted and abandoned properties discourage people living next door from improving their properties and others from moving into the neighborhood. INHIS buys and totally renovates these properties and offers them for sale to first-time homebuyers. Connecticut's Department of Economic and Community Development Urban Homesteading Program provides funds to local agencies to help families acquire and renovate abandoned, tax-delinquent properties.


Neighborhood Redevelopment

The federal Homeownership Zone Program allows cities to use federal money to develop mixed income housing in severely blighted areas. Most federal programs target low- and moderate-income people. Philadelphia took advantage of this program to create almost 300 new and rehabilitated homeownership units in a neighborhood where there were many vacant lots and abandoned buildings. These conditions, coupled with a population that dropped from 13,000 in 1960 to 3,700 in 1990, allowed the city to reduce the density and change the neighborhood's physical and social character (Planning, March 1998).

The Cecil B. Moore project mixed rehabilitated old row houses with newly constructed units at half the previous density. The Homeownership Zone Program allowed Philadelphia to sell up to 20% of the units to middle-income people.

Regulatory Relief

Philadelphia recently launched several initiatives to reverse years of population losses that began to mount when middle-income families moved to the suburbs. The initiatives make it easier for developers to build middle-income housing.

Zoning enforcement officers and building inspectors have begun updating their codes and making them easier to read. “Virtually incomprehensible in sections, the code is also antiquated, having been first written in the 1930s. There has been no comprehensive update since 1962, leaving Philadelphia with an industrial-era zoning code while the city is trying to survive in the computer age, [City Planning Commission executive director Maxine] Griffith said” (The Inquirer, May 28, 2001).

The revised plumbing code would, for example, allow builders to use plastic pipes, which cost less to purchase and install than traditional cast iron or clay pipes. This change could reduce development costs by up to $2,500 per unit, the city's license and inspector commissioner estimated.

The city is also always considering ways to streamline its development programs by consolidating the three agencies that run them.

Connecticut Homebuyer Financial Assistance Programs

Several Connecticut programs offer financial assistance to first-time homebuyers. In doing so, they could also help diversify neighborhoods where most of the residents belong to racial and ethnic minority groups. This could also help elementary schools comply with state racial and ethnic diversity laws.

The programs are available statewide, but some also make it easier for anyone to buy homes in designated areas. Many are administered through participating lenders, but neighborhood-based housing agencies can use the programs to market properties in their neighborhoods.

Homebuyer Mortgage Assistance Program. This CHFA program provides 30-year, below-market, fixed-rate mortgages to income eligible first-time homebuyers for homes selling below specified sales limits. But people who are not eligible still qualify for mortgages if the home is in a designated census tract where the maximum sale price limits are above the specified limits (Attachment 1,

Downpayment Assistance Program. This program provides low-interest second mortgages to income eligible first-time homebuyers who do not have enough cash on hand to cover downpayment and closing costs.

CHFA also offers 5.75%-interest rate mortgages to state and local police officers in designated towns and teachers working in priority or transitional school districts or who teach a subject for which there is a shortage of teachers. Both must meet income and sales price limits (Attachments 2 and 3, and, respectively).

Rehabilitation Mortgage Programs. CHFA also offers loans to purchase or refinance and rehabilitate homes to people who meet the homebuyer assistance program's criteria. It also offers a special program to people who work in 16 designated towns and want to purchase and rehabilitate homes there. These people qualify regardless of income and prior homeownership status (Attachments 4 and 5, and, respectively).

Employer-Sponsored Programs. Seven Bridgeport employers, including the city hall, are encouraging their employees to buy homes in the city through People's Bank Central Cities Homeownership Program, which offers reduced closing costs (Connecticut Town and City, October-November 2000).