DECISION SCIENCE FOR HOUSING AND COMMUNITY DEVELOPMENT Wiley Series in Operations Research and Management Science A complete list of the titles in this series appears at the end of this volume DECISION SCIENCE FOR HOUSING AND COMMUNITY DEVELOPMENT Localized and Evidence-Based Responses to Distressed Housing and Blighted Communities MICHAEL P JOHNSON, PhD University of Massachusetts Boston JEFFREY M KEISLER, PhD University of Massachusetts Boston SENAY SOLAK, PhD University of Massachusetts Amherst DAVID A TURCOTTE, ScD University of Massachusetts Lowell ARMAGAN BAYRAM, PhD University of Michigan-Dearborn RACHEL BOGARDUS DREW, PhD Copyright © 2016 by John Wiley & Sons, Inc All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as 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and blighted communities / Michael P Johnson, Jeffrey Keisler, Senay Solak, David Turcotte, Armagan Bayram, Rachel Bogardus Drew pages cm Includes bibliographical references and index ISBN 978-1-118-97499-5 (cloth) Community development–United States–Decision making Urban renewal–United States–Decision making Housing rehabilitation–United States–Decision making I Title HN90.C6J64 2016 307.1′ 40973–dc23 2015014609 Cover image courtesy of Nancy Brammer/Getty and Dorann Weber/Getty Typeset in 11/13pt TimesLTStd by SPi Global, Chennai, India Printed in the United States of America 10 1 2016 CONTENTS PREFACE xiii FOREWORD xvii ACKNOWLEDGMENTS xxiii AUTHOR BIOGRAPHIES xxv LIST OF FIGURES xxix LIST OF TABLES xxxv Introduction: Community-Based Organizations, Neighborhood-Level Development, and Decision Modeling 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Challenges and Opportunities for Housing and Community Development in the US, Community Development in the United States, Big Data, Analytics and Community Development, The Foreclosure Crisis: Problem, Impacts, and Responses, 11 Community-Based Operations Research: A Novel Approach to Support Local Development, 13 Why This Book Now?, 19 Book Description, 21 Conclusion, 24 vi CONTENTS SECTION POLICY AND PRACTICE IN FORECLOSED HOUSING AND COMMUNITY DEVELOPMENT Foreclosed Housing Crisis and Policy and Planning Responses 2.1 2.2 2.3 2.4 2.5 3.3 3.4 3.5 3.6 29 Roots of the Foreclosed Housing Crisis, 29 Impacts of the Crisis, 32 2.2.1 Foreclosure Rates, 33 2.2.2 Home Equity and Wealth, 34 2.2.3 Health, Education, and Household Mobility, 36 2.2.4 Disamenities and Spillover Effects, 37 2.2.5 Market-Level Consequences, 38 Responses to the Crisis, 39 Effectiveness of Foreclosure Responses, 41 Opportunities for Decision Modeling Responses to the Foreclosed Housing Crisis, 43 Community Partners and Neighborhood Characteristics 3.1 3.2 27 45 Introduction, 45 Methodology, 46 3.2.1 Data Gathering Summary, 46 3.2.2 Triangulation, 47 3.2.3 Analysis, 48 Selection of Cases, 49 Case 1: The Neighborhood Developers, 50 3.4.1 Organization Type and Mission, 50 3.4.2 Organization Service Area and Population, 55 3.4.3 Organization Engagement with Foreclosure Crisis, 55 3.4.4 Organization Technical Capacity and Familiarity with Project’s Analytic Methods, 58 Case 2: Coalition for a Better Acre, 59 3.5.1 Organization Type and Mission, 59 3.5.2 Organization Service Area and Population Demographics, 59 3.5.3 Organization Engagement with Foreclosure Crisis, 61 3.5.4 Organization Technical Capacity and Familiarity with Project’s Analytic Methods, 62 Case 3: Codman Square Neighborhood Development Corporation, 63 3.6.1 Organization Type and Mission, 63 vii CONTENTS 3.6.2 3.7 3.8 3.9 Organization Service Area and Population Demographics, 63 3.6.3 Organization Engagement with Foreclosure Crisis, 64 3.6.4 Organization Technical Capacity and Familiarity with Project’s Analytic Methods, 67 Case 4: Twin Cities Community Development Corporation, 67 3.7.1 Organization Type and Mission, 67 3.7.2 Organization Service Area and Population Demographics, 68 3.7.3 Organization Engagement with Foreclosure Crisis, 68 3.7.4 Organization Technical Capacity and Familiarity with Project’s Analytic Methods, 70 Case Contrast and Discussion, 71 3.8.1 Role of Community Partners, 71 3.8.2 Adaptation of Case Study Theory for Our Project, 73 Conclusion, 74 Analytic Approaches to Foreclosure Decision Modeling 4.1 4.2 4.3 4.4 4.5 4.6 Introduction, 75 Analysis of Community Partners and their Service Areas, 81 Localized Foreclosure Response, 94 Opportunities for Research-Based Analytic Responses to Foreclosures, 97 Solution Design for Community Development using Community-Based Operations Research, 102 Where Do We Go From Here?, 104 SECTION VALUES, METRICS AND IMPACTS FOR DECISION MODELING Value-Focused Thinking: Defining, Structuring and Using CDC Objectives in Decision Making 5.1 75 Introduction, 109 5.1.1 Overview, 109 5.1.2 Values and Objectives in Decisions, 109 5.1.3 Values and Objectives in Community-Based Organization/CDC Decisions, 110 5.1.4 Utility Functions and Decision Making, 111 5.1.5 Multiattribute Utility Functions, 112 5.1.6 Value-Focused Thinking, 114 107 109 viii CONTENTS 5.2 5.3 5.4 5.5 Characteristics of Acquisition Opportunities: Strategic Value 6.1 6.2 6.3 6.4 6.5 6.6 5.1.7 VFT as Soft OR and Problem Structuring Method, 115 5.1.8 The Resource Allocation Decision Frame, 115 5.1.9 Plan, 118 Methods, 118 5.2.1 Linear Additive Assumption, 118 5.2.2 Defining the Mathematical Model as a Set of Linear Equations, 119 5.2.3 Structuring, 120 5.2.4 Obtaining Inputs, 122 Cases, 123 5.3.1 Simulated CDC, 123 5.3.2 Codman Square Neighborhood Development Corporation, 130 5.3.3 Twin Cities Community Development Corporation, 138 Common and Contingent Objectives for CDCs, 143 Lessons for Applying VFT to CBOs, 151 Introduction, 153 Problem Description, 155 6.2.1 Policy Motivation, 155 6.2.2 Theoretical Foundations, 157 Model Development, 159 6.3.1 Sets and Indexes, 159 6.3.2 Parameters and Functions, 160 6.3.3 Individual Resident Frame, 160 6.3.4 CDC Frame, 161 Case Study: The Neighborhood Developers, 162 6.4.1 Site Description, 162 6.4.2 Model Computations, 166 Discussion, 170 6.5.1 Policy Analysis, 170 6.5.2 Implications for Modeling and Practice, 171 Conclusion, 172 Characteristics of Acquisition Opportunities: Property Value 7.1 7.2 7.3 153 Introduction, 175 Property Value Changes as a Social Impact of Foreclosed Housing, 176 A Model of PVI for Foreclosed Housing, 178 175