Housing Market Analysis and Neighborhood Revitalization Strategy Review

Overview 1. Housing Market Analysis • How healthy is the Jamestown housing market and its sub-markets? • How well has it performed recently? • How does it compare to surrounding markets? 2. Strategy Performance Analysis • At this early stage, what can be discerned about the market influence of JRC’s neighborhood revitalization strategies – particularly the Renaissance Block Challenge? 3. Going Forward • What do current conditions and strategy impacts tell us about how best to move forward? © 2017 – czb. LLC – Unauthorized Distribution Prohibited 2

1. Housing Market Analysis • Data Collected • Comprehensive field survey of residential structures • Assessment records • Ten years of sales transactions from multiple listing service © 2017 – czb. LLC – Unauthorized Distribution Prohibited 3

Fairmou nt d 2 n st Ea North Main Field Survey Scores by Parcel Willard Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited This map displays the score provided to each residential structure (and its associated tax parcel) in Jamestown from a windshield survey conducted in October 2016. Scorers rated each property on the following 1 -6 scale: 1 = Excellent condition 2 = Good condition 3 = Average condition – neither distressed nor showing signs of obvious pride and investment 4 = Disinvestment becoming apparent; moderate distress 5 -6 = Significant disinvestment apparent 4

Field Survey Scores Averages by Block nt Fairmou d 2 n st Ea North Main This map averages the scores displayed on the previous map at the Census block level. The pattern is familiar: the highest levels of distress (red and orange) are near downtown and in flat lowlying areas where relatively inexpensive housing was built in close proximity to industrial land uses. Willard Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited Areas where average conditions predominate (yellow) cover large areas and give way to areas where conditions are generally healthy (greens) near the city limits. 5

nt Fairmou st 2 n d This map shows average sale prices of residential properties for the period 2011 -2016 and is based on nearly 1, 200 valid transactions. Ea North Main Average Sale Price Range by Block Group, 2011 -2016 Willard Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited Price patterns reflect, to a large degree, the condition patterns revealed by the 2016 field survey. Where conditions are weaker, prices are noticeably lower. Conversely, areas with larger, well -maintained homes – near Lake View Cemetery, Allen Park, and south of the oak tree canopy on West Third Street – average prices are the highest in the city. 6

nt Fairmou d 2 n st Ea North Main Average Sale Price by Block Group – Relative to Citywide Mean Willard This map shows average sale prices of residential properties for the period 2011 -2016 – but relative to the citywide average sale price of $58, 000. Areas shaded pale yellow are at the average price point. The darkest shade of green is more than two standard deviations above average. Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited 7

Change in Average Sale Price, 2011/13 – 2014/16 nt Fairmou d 2 n st Ea North Main This map breaks the 2011 -2016 period into halves to show change in average sale price between the 2011 -13 period and the 2014 -16 period. Willard Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited Average sale prices actually dipped by between $5, 000 and $15, 000 in the northeast and southwest corners of the city – areas where prices and conditions are better than average. Prices appreciated, however, in the Allen Park area, Park West, and near Bush School – areas that are also generally above average in price and condition. Some areas near downtown with the steepest appreciation have much lower -than average prices and conditions – potentially indicating a bottoming-out in those areas. In other words, they have nowhere to go but up. 8

nt Fairmou d 2 n st Ea North Main Leverage Value by Block Group Willard Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited This map reveals the differences in assessed value in 2016 between residential properties that received a score of 2 (“Good”) and those that received a score of 3 (“Average”). The bigger the difference, the more incentive there is for an owner to invest in their home because the investment is likely to pay off when the time comes to sell. In areas shaded dark blue, the premium for a 2 property vs. a 3 property averages at least $15, 000. In dark red areas, there is essentially nothing to be gained, in terms of value, from improving your 3 to a 2. 9

Altogether, what do these indicators of market health and activity tell us about housing sub-markets in Jamestown? Five sub-market types with particular characteristics become apparent. © 2017 – czb. LLC – Unauthorized Distribution Prohibited 10

Jamestown’s market can be broken into five general types: • Strong: Properties are generally in excellent/good condition; prices are trending upward; strong leverage value exists between “ 2 s” and “ 3 s” • Healthy but Stuck: Properties are generally in excellent/good condition; strong leverage value exists; prices are above average but are stagnant or declining • Improving Middle: Properties are in average condition, with the number of good properties offsetting distressed ones by a comfortable margin; prices are trending upward; strong leverage value exists between “ 3 s” and “ 2 s” • Soft and Getting Softer: Properties are in average condition overall, but distressed properties are beginning to offset good ones; prices are stagnant or declining; leverage value is relatively small • Very weak: Distressed property conditions predominate, with very few properties in good condition; prices are much lower than citywide median and may be close to bottoming out if they haven’t already; leverage value generally weak; market deeply dysfunctional and not generally responsive to the carrots and sticks of traditional housing policy © 2017 – czb. LLC – Unauthorized Distribution Prohibited 11

d 2 n st Ea North Main nt Fairmou Willard This map shows how Jamestown’s five market types are distributed at the Census block group level. It is a composite of the prior indicators of market health – condition, price trajectory, and leverage value. Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited 12

How has the city’s housing market performed in comparison to surrounding markets in southeastern

Average Sale Price, 2011 -2016 City Sub-markets Average Sale Price, 2011 -2016 # of Sales Jamestown $58, 608 1, 165 Lakewood $135, 814 172 Busti $150, 860 216 Carroll $83, 923 124 Celoron $63, 797 35 Falconer $70, 284 87 Ellicott $112, 197 244 Kiantone $130, 213 69 Place Strong Healthy but Stagnant Improving Middle Soft and Getting Softer Very Weak $71, 576 $79, 014 $50, 082 $50, 846 $29, 993 Average sale prices from 2011 -2016 were much lower in Jamestown than surrounding communities, although similar to the villages of Celoron and Falconer. The sub-markets in Jamestown with the highest average prices were still well below the likes of Lakewood, Busti, Ellicott, and Kiantone. © 2017 – czb. LLC – Unauthorized Distribution Prohibited 14

Change in Average Sale Price 2011 -2013 Average Sale Price 2014 -2016 Change % Change Jamestown $59, 837 $57, 320 -$2, 516 -4. 2% Lakewood $146, 240 $125, 388 -$20, 852 -14. 3% Busti $152, 102 $149, 829 -$2, 273 -1. 5% Carroll $82, 238 $85, 180 $2, 943 3. 6% Celoron $71, 339 $58, 768 -$12, 571 -17. 6% Falconer $71, 023 $69, 625 -$1, 398 -2. 0% Ellicott $107, 020 $116, 966 $9, 946 9. 3% Kiantone $147, 380 $115, 366 -$32, 013 -21. 7% Place Average sale prices citywide fell slightly (-4. 2%) between the period 2011 -13 and 2014 -16, faring much better than prices in Lakewood, Celoron, and Kiantone. Only Carroll and Ellicott experienced a positive change in average price. © 2017 – czb. LLC – Unauthorized Distribution Prohibited 15

Change in Average Sale Price, by Specific Property Types Square Footage 1, 000 to 1, 499 Bedrooms 2 Baths (Full) 1 Baths (Half) 0 Place # of Sales Average Sale Price (2011 -2016) 2011 -2016 Jamestown 66 $51, 511 Lakewood 12 $88, 909 Busti Carroll 10 8 $97, 030 $58, 463 Celoron 3 $33, 833 Falconer 4 $63, 275 21 $80, 493 1 $92, 000 Ellicott Kiantone © 2017 – czb. LLC – Unauthorized Distribution Prohibited In the category of smaller homes with 2 bedrooms and 1 bathroom, average prices in Jamestown were well below all surrounding communities with the exception of Celoron. Lot sizes (which are generally larger outside of Jamestown) and lake frontage undoubtedly influence price differences to some degree – but not to a level that would account for all or even most of the difference between city and suburban pricing. 16

Change in Average Sale Price, by Specific Property Types Square Footage 1, 000 to 1, 499 Bedrooms 3 Baths (Full) (Half) 2 0 Place # of Sales Average Sale Price (2011 -2016) 2011 -2016 Jamestown 45 $62, 815 Lakewood 8 $111, 438 Busti 9 $121, 400 13 $104, 723 4 $75, 975 17 $115, 951 5 $129, 200 Carroll Falconer Ellicott Kiantone © 2017 – czb. LLC – Unauthorized Distribution Prohibited In the category of slightly larger homes with 3 bedrooms and 2 full bathrooms, prices in Jamestown were well below those of surrounding communities – and almost 50% below prices in Ellicott, Busti, and Lakewood. 17

Change in Average Sale Price, by Specific Property Types Square Footage Bedrooms Baths (Full) Baths (Half) 2, 000+ 3 2 0 -1 2, 000+ 4 2+ 0 -3 Place Jamestown Lakewood Busti Carroll Celoron Falconer Ellicott Kiantone Jamestown Lakewood Busti Carroll Falconer Ellicott Kiantone # of Sales Average Sale Price (2011 -2016) 2011 -2016 12 $106, 082 11 $221, 586 20 $194, 135 3 $170, 600 1 $172, 000 4 $120, 750 14 $193, 393 3 $230, 667 40 $120, 314 21 $214, 557 19 $271, 065 4 $124, 125 4 $146, 955 6 $289, 417 6 $171, 850 © 2017 – czb. LLC – Unauthorized Distribution Prohibited Average prices cracked the $100, 000 mark in Jamestown in the category of homes with more than 2, 000 square feet – but city prices were still much lower than surrounding communities. 18

1. Housing Market Analysis • Summary observations • The distribution of the five market types reveals a city with pockets of momentum and swaths of general stability – more strength, overall, than the average Jamestown homeowner probably assumes. But these areas are in close proximity to zones of considerable weakness and instability. Where confidence exists, it is likely fragile and highly sensitive to proximate signals of distress and disorder. • Concerns about the direction of the city’s market and sub-markets – interwoven with perceptions about crime, schools, taxes, and return on investment – are clearly reflected in regional pricing patterns. Buyer preferences for urban/rural/lake aside, people are paying more for areas outside of the city that seem to be safer bets in a stagnant regional market. © 2017 – czb. LLC – Unauthorized Distribution Prohibited 19

2. Strategy Performance Analysis The 2010 Neighborhood Revitalization Plan included a series of recommendations centered around two objectives: 1. Using policy levers to install a firm floor in the market – with a particular focus on the regulation and improvement of rental property conditions. The JRC has supported this work through research and advocacy 2. Promoting reinvestment and instilling pride, especially in areas where incentives and encouragement are most likely to leverage a strong level of investment by property owners. The JRC has been the primary driver behind this objective © 2017 – czb. LLC – Unauthorized Distribution Prohibited 20

• The JRC has utilized foundation and county funding to pursue many of the 2010 plan’s market-oriented strategies • Maintenance of a neighborhood program coordinator to execute projects and build neighborhood leadership capacity • Renaissance Block Challenge – using $375, 000 in small matching grants to leverage $900, 000 in home improvements across 30 clusters with 300+ participants. • GROW Jamestown gardening/landscaping promotion • Most recently, leading the nomination of the Lakeview Avenue State/National Historic District © 2017 – czb. LLC – Unauthorized Distribution Prohibited 21

Have the outputs of the Renaissance Block Challenge – the JRC’s single largest effort

nt Fairmou d 2 n st Ea North Main This map shows the locations of areas that participated in the Renaissance Block Challenge between 2011 and 2015 (labeled as “intervention areas”). Willard Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited It also shows, in pink, the areas that were identified in the 2010 Neighborhood Revitalization Plan as being most suitable for marketoriented interventions – based on indicators of market health and stability, including price trajectory and leverage value. To a large extent, the Renaissance Block intervention areas have corresponded with the areas identified in the plan as most suitable for small matching grants and capacity-building. 23

Fairmou nt d 2 n st Ea North Main This map also shows Renaissance Block areas between 2011 and 2015. Willard Newland © 2017 – czb. LLC – Unauthorized Distribution Prohibited Participating parcels are shaded in dark purple and are surrounded by boxes that correspond with Census blocks. These boxes represent units of analysis – recognizing that the Renaissance Block Challenge has a wider influence than just the participating parcels. These units of analysis have been split into two groups. One group represents areas of intensive intervention, where multiple rounds of the program have been clustered into a fairly tight geography. Intervention in the second group has occurred at a more limited scale. 24

Historic District Renaissance Block –multiple rounds Land Bank/City demo Land Bank – zombie sale City street reconstruction Community garden (x 2) © 2017 – czb. LLC – Unauthorized Distribution Prohibited 25

Assessing RBC’s market influence By design, the Renaissance Block Challenge has been largely deployed in areas of comparative stability and health. To gauge it’s impact, areas of RBC intervention have been compared to non-intervention areas with comparable characteristics. Therefore, analysis has been centered around three area types: • The control group: Areas identified in the 2010 plan as suitable for market-oriented intervention, but have not been touched by the Renaissance Block Challenge. • Comparison 1: Renaissance Block areas of intensive intervention • Comparison 2: Renaissance Block areas of less intensive intervention All three areas were examined across three variables: • Field survey trends • Average sale price trends • Assessed value trends © 2017 – czb. LLC – Unauthorized Distribution Prohibited 26

This chart shows the results of the 2016 field survey in the three areas of analysis, where 1 indicates an excellent property and 5/6 indicates severe distress. Conditions today Breakdown of Field Survey Scores (2016) by Area 100% 90% 80% 70% 4% 6% 12% 17% 33% 35% 31% 60% 50% 40% 30% 45% 36% 45% 10% 5% 20% 10% 0% 15% Intensive Intervention Lesser Intervention 1 2 3 4 5 Control Group 6 © 2017 – czb. LLC – Unauthorized Distribution Prohibited The survey shows that scores across these three areas were roughly similar, with between 46% and 60% of properties in excellent or good condition, and a relatively low share of properties in moderate or severe distress. Conditions in the control group were slightly worse than areas of intensive intervention and slightly better, overall, than the areas of lesser intervention – although the control group had the fewest “ 1 s” of any group. This is the snapshot from 2016. How have things changed since a field survey was conducted in 2009 for the neighborhood 27 revitalization plan?

Influence on conditions since 2009 Intensive Intervention Lesser Intervention Control Group 2016 Average Field Survey Score Relative to Average Score of Average Field Strongest Market Survey Score Types Relative to Average Score of Strongest Market Types 2. 30 0. 39 2. 35 0. 10 2. 50 2. 24 0. 58 0. 33 2. 74 2. 61 0. 49 0. 36 Note: A relative measure of 0. 00 would indicate that the average field survey score in the analyzed area is equal to the average score found within the city’s two strongest market types (slides 11 -12). The relative measure is provided to account for the different scorers used in 2009 and 2016. © 2017 – czb. LLC – Unauthorized Distribution Prohibited Among the three areas analyzed, the control group had the lowest average score (and, therefore, the best conditions) from the field survey of property conditions conducted in 2009. That average score (2. 24 on the 1 -6 scale) compared to slightly worse average scores of 2. 30 in areas of intensive intervention and 2. 50 in areas of lesser intervention. All three areas had worse scores than the average score found in the healthiest two market types identified on slides 11 -12. In 2016, areas of intensive intervention had better average scores than either the control group or the areas of lesser intervention. And while the areas of both intensive and lesser intervention improved in relation to the average scores of the strongest market types between 2009 and 2016, the control group actually got worse. 28

This chart show price trends for the three areas of analysis in three different periods. Influence on price Average Sale Price of Single-family Homes by Area $75, 000 $71, 850 $70, 416 $70, 000 $65, 000 $60, 000 $55, 000 $67, 044 $60, 745 $61, 819 $61, 783 $53, 444 $50, 000 $48, 851 $45, 000 $46, 359 $40, 000 2007 -2010 Intensive Intervention 2011 -2013 Lesser Intervention 2014 -2016 Control Group © 2017 – czb. LLC – Unauthorized Distribution Prohibited Between 2007 -2010, the areas of higher intervention had a higher average price ($67, 044) than the control group. The areas of lesser intervention had an average price quite a bit lower than the control group. Between the 2007 -10 period and the 2014 -16 period, average prices in the three areas changed at the following rates: Intensive Intervention: Up 5. 0% Control Group: Up 1. 7% Lesser Intervention: Down 13. 2% Notably, too, average prices in all three areas of analysis fell between the periods 2011 -13 and 2014 -16 29

Influence on taxable value Average Assessed Value of Single-family Homes by Area $65, 000 $60, 000 $61, 303 $60, 972 $60, 410 $58, 820 $58, 095 $58, 616 $55, 000 $50, 000 $48, 793 $47, 705 $48, 360 $45, 000 This chart shows assessed valuation trends for the three areas of analysis in three different periods. Assessed values often lag real market trends and are less useful as a gauge of activity than average sales price. Nonetheless, this indicator shows a gradual decline in the 1. 2% to 2. 2% range across all three areas. $40, 000 2008 Intensive Intervention 2011 Lesser Intervention 2016 Control Group © 2017 – czb. LLC – Unauthorized Distribution Prohibited 30

Assessing RBC’s market influence • Summary observations 1. Between the 2009 and 2016 field surveys, there was a small improvement in the condition of areas of intervention (especially the areas of intensive intervention) relative to both the control group and to average conditions in the strongest market types. 2. Prices in the areas of intensive intervention outperformed the control group between the periods 2007 -10 and 2014 -16. Nonetheless, there was a dip in those areas between 2011 -13 and 2014 -16. 3. Areas of lesser intervention, which had worse conditions and lower prices than the other areas of analysis to begin with, experienced a significant and continuous drop in average sale price – an indication that a more sustained level of intervention may have been needed. © 2017 – czb. LLC – Unauthorized Distribution Prohibited 31

3. Going Forward Hypothesis, Part A Jamestown homeowners and local homebuyers generally underestimate the levels of strength that still exist in the city’s housing market because strong areas and weak areas are so proximate. Strong areas do not feel insulated from distress and disorder. This level of uncertainty may be best reflected in the characteristics of the “healthy but stuck” market type. At a time when there is a “city premium” being realized in strong urban submarkets around the country, no such premium exists in Jamestown. Rather, the opposite is true: prices in surrounding communities are close to reflecting a true market equilibrium, while homes in Jamestown’s strong and stable sub-markets are substantially undervalued. © 2017 – czb. LLC – Unauthorized Distribution Prohibited 32

3. Going Forward Hypothesis, Part B To overcome the uncertainties that stem from the proximity of strong and weak areas, the outcomes of market-oriented interventions that leverage private investment need to be tangible. They need to be seen and felt in ways that instill confidence. This requires a concentrated focus of resources, over a sufficient period of time, in visible areas, and with highly visible improvements to actually transform market perceptions and generate a “city premium” (however limited at first) in the regional marketplace. This hasn’t happened yet in Jamestown, and is unlikely to happen without a more focused and coordinated approach. © 2017 – czb. LLC – Unauthorized Distribution Prohibited 33

• Principles to guide strategy and action • Focused (operate in well-defined, concentrated areas) • Patient (stay in a focused area for a while so that resources can be marshaled and leadership capacity builds; predictability pays dividends) • Visible (invest, whenever possible, in visible signals of improvement) • Assertive (carrots can make things happen, but be prepared to step in and push things forward) • Coordinated (multiple partners with multiple tools)

Focus areas for Renaissance Block and Healthy Neighborhood approach Destabilizing nodes or corridors for targeted blight removal and beautification Northside/Lakeview Focus Area Destabilizing node/corridor: North Main Street Assets: Lakeview Historic District and several highperforming Renaissance Blocks Western Gateway Focus Area Destabilizing node/corridor: Fairmount/Hall/Livingston Assets: Several high-performing Renaissance Blocks; high visibility western gateway Hazeltine/Forest Focus Area Destabilizing node/corridor: Forest Avenue Assets: Bergman Park/Persell School; a few highperforming Renaissance Blocks; critical buffer to areas south of Cole Avenue Allen Park/Hospital Focus Area Destabilizing node/corridor: Foote Avenue Assets: Allen Park; UPMC Hospital

In each focus area… • A five year commitment that entails the following: • Small matching grants for residential property owners, including landlords (Renaissance Block 2. 0) • Aggressive abatement or removal of blighted properties • Prioritized street maintenance and tree planting • Leadership capacity building • Community selection and support for catalytic beautification projects • Prioritized intervention by Land Bank at tax foreclosed or bank foreclosed properties • Targeted code enforcement

In non-focus areas • Strong and healthy but stuck markets have 16 properties rated 5/6 (3% of citywide total) • These are priorities for acquisition, demolition, rehab, or proactive code enforcement • Improving middle markets have 50 properties rated 5/6 • These are second-order priorities for acquisition, demolition, rehab, or proactive code enforcement • Very weak and soft markets have 456 properties rated 5/6 – an almost $10 m demolition bill • Acquire, secure, and hold properties in these markets (outside of focus areas) as they become available through tax foreclosure. Demolish IF they are located on high visibility corridors, near community assets, or if they are safety emergencies. Otherwise, secure and hold.