Homelessness and Downtown Revitalization in Houston

Dallas, Texas, like Berkeley, is struggling to revitalize its downtown district while dealing with a large homeless population. A recent study looks at the impact of homelessness on downtown revitalization and concludes that an effective strategy to reduce homelessness will lead to further enhancement of the arts district, Main Street retail, and downtown office and residential properties.[1]

The business community in Dallas has recognized that solving the homelessness problem is critical to downtown revitalization efforts.[2] In 2000, the Central Citizens Association commissioned the Center for Economic Development and Research at the University of North Texas to examine the economic and fiscal costs of homelessness.[3] The study found a large disparity in property values in the northern and southern sectors of the downtown district. Property values rose almost 100 percent in the northern half between 1995 and 200, and only 70 percent in the southern half where most of the city’s homeless are concentrated.[4] The cost in terms of foregone potential property tax receipts was several million dollars.[5]

A follow-up study in 2004 looked at Miami’s successful strategy to reduce homelessness and its positive impact on downtown revitalization. Miami built two homeless shelters and developed a comprehensive assistance program that provides outreach, assessment, placement, information, referral, and transportation services.[6] As of 2003, there were only 941 homeless persons in Miami, 350 of whom were in the downtown area.[7] Local private and public business development organizations, including the Downtown Miami Partnership, the Downtown Development Authority, and the Miami Community Redevelopment Agency, all agree on the importance of addressing homelessness as an important ingredient in downtown revitalization. [8] The city’s business and political leaders attribute the downtown’s building boom and retail growth to a decrease in the number of homelessness, a significant reduction in crime, and improved parking facilities.[9]

The follow-up study then surveyed business owners in Dallas’s downtown district to measure the impact of homeless persons on business activity.[10] The survey revealed that homeless individuals have a large impact on downtown businesses. Forty-five percent of respondents reported that they incurred additional business expenses due to the presence of homeless persons.[11] Of these businesses, 41% estimated their additional costs to be between $1,000 and $3,000 per month, and 35% estimated their costs to be $5,000 or more per month.[12] These expenses were attributed to additional cleaning, security, or both.[13]

Further, 56.6% of business owners said sales were affected by the presence of homeless persons, and 76.3% had considered relocating out of the downtown district because of the presence of homeless persons.[14]

The study also re-examined the impact of homelessness on property values in the downtown district.[15] The 2000 study had found that the average real property value for improvements in the southern sector was only $59.84 per square foot, compared with $78.75 per square foot in the northern sector in 2000.[16] While property values fell overall in the ensuing years, the disparity between sectors remained in 2003. The average real property values came to $47.23 per square foot in southern sector, compared with $63.30 in north [17] The City of Dallas, Dallas County, and the Dallas Independent School District are losing $2.4 million per year dear to valuation disparities from lack of development in southern half of the downtown district.[18]

The report concludes that the “overwhelming” presence of homeless persons on the streets of the downtown district has negative economic impacts on individual business, the prospects for redevelopment, and the city’s tax revenues.[19]

[1] Bernard L. Weinstein and Terry L. Clower, Improving Services to Dallas’ Homeless: A Key to Downtown Revitalization 3 (Center for Economic Development and Research 2004).
[2] Id. at 1-2.
[3] Id. at 2.
[4] Id.
[5] Id.
[6] Id. at 13.
[7] Id.
[8] Id. at 14.
[9] Id.
[10] Id. at 15.
[11] Id. at 16.
[12] Id. at 17.
[13] Id.
[14] Id.
[15] Id. at 19.
[16] Id.
[17] Id.
[18] Id. at 19-20.
[19] Id. at 22.