Holliday Development lucked out when it set its sights on a 30-acre parcel of land in Oakland, Calif., five years ago. Despite the environmental concerns posed by the trash-filled lot, the spot was an otherwise vacant space in a neighborhood that welcomed new development—the right kind, at least.

“There was a lot of concern that the new development would displace people,” says Rick Holliday, CEO of the locally based company. “[But] the more we were able to talk to the community  the more we understood that people in say, public housing—their units weren’t at risk.”

Rather, the overriding concern, Holliday discovered, was that the neighborhood yearned for more services and retail but had failed to receive proposals for them because it was underpopulated. A new, mixed-use space, however, would attract both additional residents and retailers.

Holliday’s plan for Central Station, a mixed-use development, eventually went to the city council and won an unusual 8 to 0 vote in favor, thanks to the company’s compelling argument that it would add value to the community, not detract from it, such as by allotting 10 percent of its units as affordable housing. It would no doubt attract more retail, as well.

Connecting With Residents
Developing in an emerging neighborhood like Central Station can be tricky. Careless developers risk faux pas such as overcharging for rent and contributing to gentrification. But it’s a risk that many find worth taking—if they can approach and manage the community the right way.

Greenbelt, Md.–based Bozzuto Group has succeeded in developing undervalued sections of Washington, D.C., one of the many faces of transitioning neighborhoods throughout the country.

“We work with a lot of properties that are in emerging neighborhoods, and those neighborhoods have a lot to offer,” says Julie Smith, president of Bozzuto ­Management.

With a third of its residents relocating from outside the region, Bozzuto has fashioned its D.C. properties into social hubs for transplanted city dwellers. For that reason, the firm’s leasing agents and property managers become Bozzuto’s most important assets when developing in an emerging neighborhood.

“[New residents] have no clue where they are,” Smith says. “So that’s where our job comes in—to show them where they live.”

Connecting with a community’s existing residents and businesses is a top priority as well, Smith adds. In urban markets, especially, it’s essential to support local businesses so they see new residents as a source of income, helping to build cohesive relationships for both parties.

“It’s important to take the time to get to know the neighbors,” Holliday says. “It sounds simple, but in west Oakland, for example, I went to the barbershop for two weeks and just talked to residents and listened to them.”

Some of Holliday Development’s plans in Oakland took some time as the firm carved out opportunities to listen to community members firsthand. If a developer isn’t patient enough to get to know the locals, the company will likely fail to understand the fabric of the neighborhood, thus setting the stage for an “us versus them” mentality.

“And when the project comes up for project approval, those [residents] are there for a project they helped plan,” Holliday says.

Holliday says finding out how previous developments were proposed, and why they might have failed, is equally as important and can be uncovered by spending time in the neighborhood. It’s about being an anonymous neighbor and really absorbing the information.

“In order to maintain the fabric of the community, you need to have the city involved,” adds Steven Figari, managing director at New York–based Silverstone Property Group. They might be hesitant of new development from a social standpoint, but welcome the potential investment. “Undoubtedly, there’s going to be investment when the neighborhood is undervalued and under appreciated.”

Maintaining sound relationships with the municipality allows developers to learn, and address, its vital needs as they present their proposal to a new community.

Comforts and Safety of Home
For developers moving into an emerging urban infill area, especially, ensuring residents’ safety and instilling a feeling of familiarity should be top priorities. At his developments, Holliday says the most important thing (depending on location, of course) is providing a secure parking garage.

Offering a safe environment can be challenging when you’re trying to blend the new development in with the old and not isolate the community. At the Emeryville Warehouse, Holliday Development used a glass and metal entry to discourage trespassing, and the project was originally set up to have an entry gate on the sidewalk to control access to both the main courtyard, and the entry. The courtyard remained open, however, once the building was complete and the neighborhood became more established.

Alloy Development fosters a sense of familiarity by being present at all stages of its developments. In so doing, the Brooklyn, N.Y.–based condo development company company tries to be candid and friendly throughout its condo-selling process.

“We decided we wanted to be very transparent,” says AJ Pires, Alloy’s executive vice president. The company has solidified its footprint in DUMBO, Brooklyn, a formerly nonresidential area that was originally full of warehouses and empty space.

Its success is in part due to the fact that some of Alloy’s salespeople can personally vouch for the company’s new projects as residents themselves. The presence of Alloy employees as neighbors has helped reinforce the feeling that the company is truly part of the community.

“We’ve decided that our MO would be, ‘Let’s not hide behind an LLC,’” Pires says. “’Let’s be candid about what we’re doing.’ It’s been very rewarding. Now, we have a wait list of people getting into our next project.”

Just a few miles away, in Bushwick, Silverstone Management successfully transformed a derelict building into dozens of lofts, now known as 885 Park Ave. Thanks to the huge demand in nearby Williamsburg pushing renters into Bushwick, Figari says the company was able to offer high-quality residences at an affordable price. And Silverstone curtailed safety concerns by hiring concierge-like security to staff the lobby.

In the end, developers walk a fine line when they attempt to change an undervalued neighborhood. Pushback is almost guaranteed from existing multifamily residents, but the good news is, developers can alleviate much of the resistance by helping with tenant displacement and showing how they genuinely plan to improve the neighborhood so that such displacement doesn’t occur in the first place.

“There’s pushback when you renovate without soliciting community input or having a concise plan about what’s important,” Figari says. “It’s a good thing when buildings are invested in and improved, but [the developer to has think about more than] just, ‘Can we get more rent?’”