REGIONAL SPOTLIGHT
BIRMINGHAM
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of local entities are taking promising steps toward at least mapping out new futures through a combination of civic, legislative, and citizen-led approaches. The city recently completed its first comprehensive plan since 1961, iden- tifying a new vision and strategies for improving virtually every aspect of the city’s infrastructure and environment [see sidebar]. Among other things, the plan calls for an array of strategies to expand community renewal, including
a coordinated system for attacking and redeveloping blighted areas, conduct- ing a city-wide block-by-block real estate market study, and strategically focusing redevelopment activity on the city’s many walkable urban villages such as Avondale. Also in the plan: a recommendation to utilize a municipal land bank to accelerate neighborhood renewal activities. Since the debut of the comprehensive plan in 2012, the city’s housing inventory has declined steadily
while home values have risen at a sim- ilar staid pace. Although overall home values have certainly not skyrocketed and, in some areas, have been a bit vola- tile, the overall trend has been good.
BIRMINGHAM: AT A GLANCE
Madison County Real Estate Investors Association (MCREIA) http://madisoncountyreia.com/ Associated Investors of Alabama (AIA) http://www.aiaclub.com/ Alabama Real Estate Investors Association (ALAREIA) http://www.alareia.com/ Birmingham Area Real Estate Investors (BAREI) Owners and Landlords Association (ARPOLA) http://arpola.org/ Greater Birmingham Chambers of Commerce https://www. greaterbirminghamchambers.com/ Birmingham-Jefferson Convention Complex (BJCC) https://www.bjcc.org/about-the-bjcc.php Greater Birmingham Convention & Visitors Bureau http://birminghamal.org/ ATTOM Data Solutions www.attomdata.com (800) 550-4802 Trulia www.trulia.com U.S. Census – Quick Facts on Birmingham https://www.census.gov/quickfacts/ map/IPE120213/0107000 Zillow www.zillow.com https://www.meetup.com/ Birmingham-Real-Estate- Investors/ American Rental Property
BANKING ON THE LAND BANK AUTHORITY
In accordance with that comprehen- sive plan, the city created the Birming- ham Land Bank Authority (BLBA) in 2014. The BLBA can acquire tax deeds to properties that are five or more years delinquent in tax payments, clear the property’s title, and then resell. According to the Federal Reserve, Birmingham’s land bank has “the unique statu- tory ability to combine an unlim- ited number of properties into a single case, which should create efficiencies and economies of scale with the courts, the Department of Revenue, and title insurance com- panies.” According to the City of Birmingham Comprehensive Plan, 10 percent of all lots in the city are tax-delinquent (and 84 percent of those are residential properties). Although BLBA officials originally had believed that the land bank would cater largely to individual investors ready to put serious “sweat equity” into properties with clouded titles and other blight-related issues, they found that many of the properties were purchased by local individuals and groups of citizens dedicated to ending blight in their local commu- nities. They have effectively done so in many instances; John Colon, director of the city’s department of community development, claimed this past February that “in some communities, property values have increased 20 percent.” He added, “In other communities, they are increasing even more,” and cited
FINE PRINT: BIRMINGHAM’S COMPREHENSIVE PLAN
C omprehensive plans are important tools that influence a range of issues such as land use, parks, greenspace, housing, and more. Plans typically include a detailed assessment of existing conditions in the city, maps, and strate- gies for future improvement. Birmingham’s recent Comprehensive Plan is the city’s first effort since 1961. The Plan is intended to serve as a twenty-year blueprint, and was produced with lots of public involvement - it was developed with input from more than 2,300 people as well as events and public meetings. As a result, the Plan includes a collective vision for the city, where Birmingham “leads the South as a community of choice and opportunity: diverse, prosperous, sustainable, and beautiful.” A number of strategies target housing and neighborhood renewal: • The Plan recommends focusing “a defined portion of public investments, incentives, and programs on neighbor- hoods with potential ‘urban villages’ at their core.” This would focus better infra- structure and economic incentives on the
numerous walkable commercial districts around the city, particularly those that have not experienced revitalization yet. • To apply the Comprehensive Plan to target areas, the Plan recommends that the City develop a series of “framework plans” that translates broad strategies to specific issues and properties within each community. So far, framework plans have been created for five areas, with two more in progress. • Understanding the city’s neighbor- hoods is a priority, with a focus on understanding markets. A detailed city-wide real estate study was rec- ommended, and market reports were completed for five areas. • Blight removal is addressed in several ways, including the creation of a land bank authority, which took place in 2014. The Comprehensive Plan is available to the public at https://www.birming- hamal.gov/work/birmingham-compre- hensive-plan/.
“Norwood, Pratt, and Avondale” as prime examples. Colon’s numbers may be slightly overzealous, but it is unde- niable that these neighborhoods are “on the rise.” Whether you opt to purchase deals though the land bank or just in ar- eas where local communities have used it effectively, the entity serves investors as a market stabilizer and growth generator. In addition to the governmental mea- sures, citizens and business groups are pushing for change. REV Birmingham, a local economic development organiza- tion led by local corporate and commu- nity leaders, has supported downtown and neighborhood renewal efforts as well as economic development. A mix of activities supports the goal, including small business advisement, develop- ment partnerships, and tactical urban- ism projects like pop-up markets and public murals.
for being one of the “most improving” markets in the country, projected ap- preciation of a steady 2.5-to-3 percent, and rising rental rates in both single- and multifamily rentals, Birmingham, Alabama, certainly appears to be far from running out of “magic.” While the city’s real estate market is unlikely to light a fire in your rental portfolio, an abundance of unique opportunities and an intensely motivated group of city planners and officials have created an environment rife with predictability. Birmingham may never boil over, but market shifts tend to come with plenty of warning, and the renting popula- tion in particular is ideally suited for investors seeking long-term cash-flow- ing, turnkey rentals. The magic is just waiting to happen. •
Ryan VanSickle is an urban enthusiast and transit planner. His interests in- clude city planning, urban development, transportation, and history.
MORE MAGIC TO COME With a recent nod from Freddie Mac
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