UBPL 716 May 7, 2015

MEMO

From: Hao Li

To: Kirk McClure

Date: May 7, 2015

RE: Memo of Lawrence Community Development and Revitalization of Neighborhoods

The Housing Market of Lawrence KS is overall stable and soft. However, as time goes, this

little city appears some deteriorating neighborhoods that needs revitalization idea in order to

get back on track. Neighborhoods’ health condition can be measured by using census data,

mathematical analysis. The result is central of Lawrence has the suffering the unhealthy

neighborhoods. Oread neighborhood, Old west Lawrence & Hillcrest neighborhoods, and

University Place neighborhood are three most at risk areas that need help in revitalization.

Further, tracts in Mid-Lawrence are more vulnerable and declining, when compare to West

and East of Lawrence. Therefore, policy recommendations are provided to the unhealthy

neighborhoods in central in order to guide Lawrence development, and revitalize the

unhealthy neighborhoods back to healthy and stable stage.

Introduction

This memorandum is designed to understand Lawrence neighborhoods and communities’

health status by using statistical data, mathematical analysis, and GIS maps over time from

2000 to 2013. It is to examine current situation of Lawrence community development and

neighborhood revitalization, to track down the dynamic impacts of 2008 Housing bubble, and

diagnose Lawrence neighborhood healthy condition. Further, based on the findings, this

memorandum will provide recommendations and theories on guiding community

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development and urban revitalization.

Methodology

This Memorandum can be split into two parts. Firstly is to analyze socioeconomic

Matrices/Variables that can reflect census tracts health condition, and to provide tables and

maps.

Secondly is to find out the potential and existing at risk census tracts by using variables

Z-scores summation to generate a general index and give out recommendations to improve or

revitalize these unhealthy tracts.

This report calculated data of census tracts within whole Douglas County, but it will

mainly focus on Lawrence City. Douglas County census tracts were divided into two subsets

which are Lawrence City and Rest of Douglas County. Among Lawrence City, using Kasold

Street and Massachusetts Street as feature network boundaries, Lawrence was divided into

three special districts which are West-Lawrence, Mid-Lawrence, and East-Lawrence (Table 1

& Map 1). Special notion is that the census tract—4.00 is the University of Kansas, within

which residents are mainly low-income student renters. Therefore, this KU census tract will

not be included in calculation in order to increase accuracy of Lawrence statues.

Table 1. Douglas County Spatial Division –Census Tracts

West-Lawrence Mid-Lawrence East-Lawrence Rest of Douglas CO6.03 3.00 1.00 12.017.97 5.01 2.00 12.028.01 5.02 10.01 12.036.00 6.04 10.02 14.00

7.02 15.008.029.019.02

Census Tract 4.00—the University of Kansas census tract is excluded.

Socioeconomic data includes 2000 decennial census, 2009 and 2013 5-year American

Community Survey in census tract level in order the measure the detailed dynamic changing

over time span in each small tract.

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Map 1. Lawrence Spatial Division Map 2. Households Change from 2000 to 2013

Matrixes Analysis

1. Residents and Households Population

From 2000 to 2013, the trends of resident population and household movement, generally

concluding is that population and households were moving out from the central Lawrence

into West and East Lawrence where new constructed Housing units locate. Father, the West-

Lawrence statistically significant gained population and household during this 14 years

period, when comparing with Mid and East of Lawrence. Mid-Lawrence are losing its

population and household number, especially in the recovery period after house bubble, and it

lost over two and a half thousands of resident population and a thousand households from

2009 to 2013. The main losing population areas are Oread neighborhood, University Place

neighborhood, and census tract 8.02 which locates in the south of the University of Kansas

(Map 2).

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Table 2. Population and Household in Lawrence, Kansas

　 Year Number Change

　 2000 2009 2013 　 2000-2009

2009-2013

2000-2013

Population 74,569 84,454 84,685 9,885 231 10,116 West-Lawrence 16,493 23,067 25,947 6,574 2,880 *9,454 Mid-Lawrence 40,991 43,694 41,141 2,703 -2,553 150 East-Lawrence 17,085 17,693 17,597 608 -96 512

0Households 30721 34433 34,395 3,712 -38 3,674 West-Lawrence 6,608 9,373 10,327 2,765 954 *3,719 Mid-Lawrence 17298 17932 16850 634 -1,082 -448 East-Lawrence 6815 7128 7218 313 90 403　 　 　 　 　 　 　 　*. The mean difference is significant at the 0.05 level.

Source: U.S Census Bureau: 2000 Census, 2009 and 2013 5-year-American Community Survey

2. Tenure

From 2000 to 2013, comprehensively summarizing, Lawrence has a share of 52.7% to

59.2% of households do not own homes and are renters, which is higher than national

distribution of households by tenure. Looking into spatial division, West and East

Lawrence both have renter percentage rates around forty percentages, while Mid-

Lawrence has a higher renter percentage 64.5% in 2013 which indicates the large share of

residents are renters in Mid-Lawrence. In addition, the renter percentage of three spatial

divisions did not change obviously and just increase a little from 2000 to 2013. The

census tracts where concentrate more than 60 percent of renters are Oread neighborhood,

University Place neighborhood, Old west Lawrence & Hillcrest neighborhood, census

tract 7.02 locates in north of the University of Kansas, and census tract 8.01 in South-

West corner of Lawrence (Map 3).

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Table 3. Renter Tenure

　 Year Number Change

　 2000 2009 2013 　 2000-2009

2009-2013

2000-2013

Lawrence Renter households

16,197

17,794

18,361

Percentage 52.7% 51.7% 59.2% -1.0% 7.6% 6.5%

West-Lawrence 2,756 3,683 4,460Renter Percentage 41.7% 39.3% 43.2% -2.4% 3.9% 1.5%

Mid-Lawrence10,61

911,36

610,86

6Renter Percentage 61.4% 63.4% 64.5% 2.0% 1.1% 3.1%

East-Lawrence 2,822 2,745 3,035Renter Percentage 41.4% 38.5% 42.0% -2.9% 3.5% 0.6%　 　 　 　 　 　 　 　

Source: U.S Census Bureau: 2000 Census, 2009 and 2013 5-year-American Community Survey

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Map 3. Percentage of Renter 2013 Map 4. Percentage of Poverty 2013

3. Poverty

In 2000, 2009, and 2013, Lawrence has an average poverty rates of 18%, 25%, and 19%,

which shows that the poverty increased to 25% because of the impact of 2008 housing

bubble, but recovered and backed to the 19 % like before. However, the poverty rate in

central Lawrence is statically significant higher than the West and East in 2013, which

suggests that Mid-Lawrence, especially within Oread neighborhood and University place

neighborhood, concentrated large number of the poor population. As Galster 2005 threshold

theory, sixty percent of poverty concentration will bring a substantial negative impact to these

neighborhoods, and the damages were done and hardly can be converted. Further, during the

housing bubble thriving and breaking period from 2000 to 2009, the Mid-Lawrence has

obvious 12 percentage point increased poverty rate.

Table 4. Poverty Status

　 Year Number Change　 2000 2009 2013 　 2000- 2009- 2000-

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2009 2013 2013 Lawrence Total Poverty 18% 25% 19% 7% -6% 1% West-Lawrence 11% 14% 9% 4% -6% -2% Mid-Lawrence 23% 35% *29% 12% -6% 6% East-Lawrence 12% 14% 12% 3% -3% 0%　 　 　 　 　 　 　 　*. The mean difference is significant at the 0.05 level.

Source: U.S Census Bureau: 2000 Census, 2009 and 2013 5-year-American Community Survey

4. Aggregate Income and Housing Value Ratio & Average Property Value

In 2013, the average aggregate income and property value ratio of Lawrence 2.15 which

pretty much parallels with the national ration 2.3, which represents that Lawrence Housing

Marking are generally affordable, and is not a hot market. The higher ratio census tracts

appeal in the north central of Lawrence. In 2009, housing bubble caused the ratio go up.

From 2009 to 2013, the ratio went down to 2.15 which increase about 22 percent from 2000.

During bubble thriving and breaking period (2000-2009), housing price raised notably

that Lawrence average value went up about 48 percent of the 2000 value. What’s more,

within Lawrence, West-Lawrence housing value is statistical significant higher than Mid and

East of Lawrence. West-Lawrence mainly locates new constructed large size housing stock,

with new infrastructures and well amenities in big lots, so that the price are higher than the

Mid and East old neighborhoods.

Table 4. Aggregate Income & Value Ration and Average Value

　 Year Number Change

　 2000 2009 2013 　 2000-2009

2009-2013

2000-2013

AggregateIncome&Value Ratio West-Lawrence 1.94 2.40 2.18 24% -9% 15% Mid-Lawrence 1.74 2.25 2.15 30% -5% 25% East-Lawrence 1.70 2.28 2.14 34% -7% 28%Average Property Value

West-Lawrence 185,970262,40

3*262,61

3 41% 0% 41%

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Mid-Lawrence 118,561179,33

3 172,492 51% -4% 47%

East-Lawrence 88,691136,34

2 139,476 54% 2% 56%*. The mean difference is significant at the 0.05 level.

Source: U.S Census Bureau: 2000 Census, 2009 and 2013 5-year-American Community Survey

5. Total Jobs and Low income Jobs

Total Jobs statistically significant locate in East Lawrence, especially in the northeast

corner. Although population and households’ movement pattern were going to west and east

where are the new housing stock, jobs did not follow the moving pattern and still stay in East

Lawrence. In addition, high percentages of low-income jobs locate in the center and North

West corner of Lawrence (Map).

Map 5. Percentage of Low-income Job 2013 Map 6. Vacancy Rate 2013

6. Vacancy Rate

Using vacancy rate can exam the housing stock consumption situation and measure the

occupancy status in Lawrence. Overall speaking, Lawrence has average vacancy rate 2.7% in

renter and 1.2% in owner in 2013, which indicates that Lawrence has a tight housing market

and effective growth management. The vacancy map combined owner and renter into one

vacancy rate, and shows that in Universtiy place and census tract 8.02 have high vacant

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occupied units. Specifically, University place has just 6.5% vacancy rate in rental side, and

tract 8.02 has 6.7% in rental and 7.7% in owner-occupied.

Index for measuring the general health condition in Lawrence Neighborhood

To gain an general index for reflect neighborhood health, it calculated the Z score of five

variables which are Poverty rate, Cost burden, Vacancy rate, Low-income jobs (under $1250)

rate, College graduate rate of each census tract of Lawrence, then summed up these Z scores

except College graduate rate which is subtracted because high Z score of graduation rate

represents positive thing. After summing up Z scores of five variables, this is the index to tell

the story of current Lawrence. Higher Z score indicates unhealthier the tract was, while low

score stands for healthy tract.

Categorizing and Identifying Stages (Downs 1981, Chapter 5)

Stage 1 (Health): With a negative Z score, it will be the healthy Tracts.

Stage 2 (minor declining): Tracts with Z score above zero but under 2 standard deviation are

minor decline.

Stage 3 (Vulnerable): Tracts with Z score above 2 standard deviation but under 4 standard

deviation are clearly and significantly declining.

Stage 4 (At risk): Tracts with Z score above 4 standard deviation are suffering heavily

deteriorating and declining.

Stage 5 (Distressed): Lawrence does not have stage 5 which is totally abandoned and never

come back (There is no tract has zero loan originated and 100 percent loan denial rate, which

mean there are activities in each tracts of Lawrence and no stage 5 abandon neighborhood).

As summing up Z score, there are three stage 4 at risk tracts showed in Map 2013 in red, one

stage 3 vulnerable tract in orange, and three stage 2 slight declining tracts in yellow. The rest

of tracts are in stage 1 in healthy condition (Map 7).

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Map 7. Lawrence Neighborhood Health

Following are four census tracts with unhealthy neighborhood problem.

Oread Neighborhood— is a at risk stage 4 neighborhood within which there is high

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percentage of renter and poverty population concentrated. Also, the housing burden is

notable here with high percentage of low-income jobs. Population and Households kept

moving out of this neighborhood since 2000. In conclusion, Oread neighborhood has a

extremely high index score above 9, and should be placed at the top priority of receiving

help and revitalization.

Old West Lawrence Neighborhood & Hillcrest Neighborhood—is a at risk stage 4

neighborhood has a 4.41 index score adjacent to Oread. Old west Lawrence has relatively

high aggregate income and value ratio of 2.59 in 2013, 2.89 in 2009, and high average

property price that is less affordable housing sub-market. Further, high percentage of

Low-income jobs within this neighborhood indicates income from these low-income jobs

may cause housing paying burdens. These two neighborhoods has about 4.3 percentage

vacancy rate on rental side.

University Place Neighborhood—is a at risk stage 4 neighborhood has a 4.62 index

score. This neighborhood has high 79 percentage renters and notable 30 percentage

poverty, with 6.5 percent rental vacancy rate. Population and household moved out this

neighborhood since 2000, and now majority of the housing units are leased to KU

students. Very few jobs exist in this neighborhood, moreover, about 56 percentage of

total jobs are low-income jobs.

Census Tract 8.02—is a vulnerable stage 3 tracts includes several neighborhoods with

3.78 index score. This tract over time was one of the most losing its resident population

and households area from 2000-2013. The most catching attention issue here is high

vacancy rate in both rental and owner-occupied sides, 6.7 percent in rental and 7.7

percent in owner-occupied. In addition, 51 percentage of jobs here are low-income jobs.

When looking into average value, except the one vulnerable tract 8.02, the rest of tracts

of Lawrence acted the same that average value increased from 2000 to 2009, but reduced

after the bubble burst (Chart). On renter concentration consideration, the most three at risk

tracts keep increasing the share of renters in their neighborhoods. Besides the at risk tracts,

the vulnerable and minor declining tracts are still have about 50% share of renters in their

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neighborhood. The healthy tracts reduced their renter proportion from 45% to 25% from 2009

to 2013.

Chart 1. Average Property Value Trend 2000, 2009, 2013

2000 2009 2013 $100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

$260,000

$133,632

$205,777 $199,478

$114,700

$154,472 $164,813

$182,235

$255,035 $240,798

$125,684

$187,828 $181,953

Average Property Value 2000, 2009, 2013

At Risk TractsVulnerable TractMinor Decling TractsHealthy Tracts

Chart 2. Renter Percentage Trend 2000, 2009, 2013

2000 2009 20130.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

76.94% 80.01% 80.40%

47.83%54.15%

50.29%

45.31% 48.61% 48.88%

41.39%45.30%

24.47%

Renter Percentage 2000, 2009, 2013

At Risk TractsVulnerable TractMinor Decling TractsHealthy Tracts

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Policy Recommendations

Implementing policy is for guiding community development and neighborhood

revitalization. The recommendations will give advises mainly focus on the neighborhood

existing problems which are poverty and renter concentration, notable vacancy rate,

insufficient employment, cost burden, population and household losing and other factors that

will make neighborhood unsustainable and decline in quick pace.

Goal

For Lawrence neighborhood health, the general goal is for keeping the healthy neighborhoods

thriving, maintaining the stable but with slight declining neighborhoods in good shape,

helping the vulnerable and at risk neighborhoods revitalize and returning them back to

healthier stage earlier before situation is getting worst and costly.

General Recommendations

Smart Growth Management—Lawrence has normal housing market which is different

from the hot markets as the big cities along the West and East coast. Thus, Lawrence

should have an effective growth management in order to lead neighborhood development

in conscious sense. Especially, Lawrence should not allow over build stock exceed the

true demand, and over built will only filter out the deteriorated units, increase vacant

units, and do harm to the average housing value. Further, Lawrence should be aware,

lead and control development happen, for example, should be control the new

development happened in west and east of Lawrence that results into attracting

population out of the central city and leaving central neighborhood behind deteriorating.

Poverty and Renter Deconcentration—As poverty and renter concentrated over some

threshold percentage, it will trigger severer negative impact to the neighborhood, because

of Poverty and it impact follows non-liner pattern (Galster 2005). Further, the starting

harming threshold is above 10-15% poverty, and upper threshold is about 40%. The

central Lawrence neighborhoods are most significant with a high poverty and renter rate

which will bring negative impact to neighborhood such as high crime rate, insufficient

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public service. Moreover, high poverty and renter concentration in central Lawrence also

bring burden and cost to government. Therefore, policies should consider on how to

deconcentrate poverty and renter population for them to seek better opportunity and

services.

Employment—Lawrence should consider the central and West Lawrence where are

lacking of employments (or good income employments). The main jobs locate in East of

Lawrence, which represent a uneven allocation of sources. Further, the transit system

does not cover the at risk neighborhood where locate the poor with high percentage low-

income jobs, so that the poor do not have good employment and also the accessibility to

good opportunity. Therefore, Lawrence should bring and encourage employment into the

at risk neighborhood, improve the transit system make the central dose not leave behind.

Resources and Efforts—Lawrence should build up an efficient inspection standard, and

strong administrative mechanism, which can monitor end detect the problems or

deterioration in neighborhoods earlier and maintain the neighborhoods condition in

earlier stage. In addition, Lawrence should help neighborhood by using Federal, State, or

local programs, raise substantial resources to do real thing for revitalizing the unhealthy

neighborhoods, such as Moving to Opportunity Voucher, CDBD, HOME, and etc.

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