INSIGHT BRIEF SERIES

How Can Housing Policy Help Build Generational Wealth?
Lessons from Newark and Richmond’s community-led approaches.

By Franklin Alvarez, JD

Table of Contents

Access to affordable housing and economic prosperity are two sides of the same coin – providing stable homes goes hand in hand with creating pathways for residents to increase their assets and incomes.

Housing affordability and stability have surfaced as pressing crises in the United States, garnering considerable scholarly and media attention—often centered on large coastal cities like New York, Los Angeles, and San Francisco. Yet this focus tends to exclude the experiences of Small and Midsized Cities (SMCs), defined here as municipalities with populations of 50,000 to 500,000.

While SMCs may lack the large tax base, fiscal resources, and infrastructure of their more populous counterparts, they possess streamlined processes and strong community cohesion, which allow them to actively ideate, implement, and scale economic development initiatives in direct collaboration with the community. SMCs’ close-knit civic ecosystems and lean administrative processes foster a culture of experimentation—enabling them to prototype context-specific interventions, iterate rapidly based on resident feedback, and scale solutions that align tightly with local priorities.

Newark and Richmond are two SMCs that have both faced historical challenges, and in response, each city’s leadership has pursued bold policy interventions to ensure that economic gains are broadly shared and locally anchored. By examining the approaches implemented in Newark and Richmond, this report highlights how intentional housing policies can foster generational wealth. The significance of these approaches lies not only in producing affordable units but in empowering residents—as tenants, homeowners, business owners, and decision-makers—to participate in and benefit from urban development. These case studies provide insight into actionable strategies that SMC leaders can adapt to build long-term prosperity for their communities.

Case Study: Newark, New Jersey

Newark, New Jersey, historically celebrated for its industrial significance, is undergoing a transformative renaissance by adopting innovative strategies in urban development. Through the integration of inclusionary zoning, adaptive reuse of historic structures, and robust community engagement, the city is not only addressing the affordable housing shortage but also establishing avenues for residents to build generational wealth. Newark Makerhoods and the Gant-Gilbert Arts Collective are two flagship initiatives where these policies can be seen in action. 

Newark’s Approach to Embedding Affordability in Market-Rate Housing

Adopted as part of a broader strategy to ensure equitable growth, the Newark Inclusionary Zoning Ordinance mandates that a significant percentage of new residential and mixed‐use developments be set aside for low‐ and moderate-income households, in line with the Mount Laurel doctrine—a judicial principle established in New Jersey that requires municipalities to use their zoning powers to provide a realistic opportunity for affordable housing.

In Newark, new residential developments or substantial rehabilitations that include 15 or more units are required to designate 20% of their units as affordable. This percentage is stratified into three income tiers:

  • 5% for households earning up to 40% of the Area Median Income (AMI),

  • 5% for those earning up to 60% of AMI, and

  • 10% for households earning up to 80% of AMI.

This tiered design ensures that affordable housing is distributed across a wide spectrum of income levels, preventing the spatial concentration of poverty and promoting mixed-income communities. Recognizing that the inclusion of affordable units may impact developers’ profit margins, Newark’s policy offers developers two key financial mechanisms:

  • Density Bonuses: Compliant developers receive up to a 15% bonus in residential density, enabling them to construct additional market-rate units to offset the economic impact of the affordable set-aside.

  • Payment-in-Lieu Option: Developers who cannot or choose not to build affordable units on-site may opt to pay a fee (around $180,000 per unit), which is then directed into Newark’s Affordable Housing Trust Fund.

Together, these measures help align private investment with public policy goals, ensuring that affordable housing projects remain financially viable while expanding the stock of low-income housing.

Newark Makerhoods: A Model for Inclusionary Zoning and Community-based Entrepreneurship  

The Newark Makerhoods project is a mixed-use development that reimagines the historic Krueger-Scott Mansion as a live/work center for micro-entrepreneurs and artisans. Built in 1888 by brewery magnate Gottfried Krueger and later owned by Louise Scott, New Jersey’s first African American female millionaire, the mansion's rich history aligns with its modern mission. Inclusionary zoning and adaptive reuse policies allow the development to include 66 mixed-income apartments, 16 dedicated maker spaces, a greenhouse, a demonstration space, a commercial kitchen, and retail areas. By integrating affordable housing with entrepreneurial spaces, Makerhoods provides a pathway for residents to achieve economic stability and contribute to the local economy through job creation and innovation.

Key components of Makerhoods include:

  • Mixed-Income Residential Units: Affordable apartments enable entrepreneurs to live on-site, eliminating commuting costs and time.

  • Subsidized Commercial Spaces: Maker shops and live/work units are offered at reduced rates, providing small business owners with access to high-quality commercial space without prohibitive rent.

  • Integrated Business Support: Makerhoods also offers tailored business development services, including access to capital, mentoring, technical assistance, and networking opportunities—addressing the challenges of entrepreneurship and promoting sustainable growth.

“The Makerhoods model lowers overhead costs, accelerates revenue growth, and enables residents to build generational wealth. The zero-commute aspect reduces expenses associated with transportation and childcare. By integrating affordable housing with entrepreneurial spaces, Makerhoods provides a pathway for residents to achieve economic stability and contribute to the local economy through job creation and innovation. ”
— Franklin Alverez

Fostering Cultural Vitality through Adaptive Reuse with Newark’s Gant-Gilbert Arts Collective

The Gant-Gilbert Arts Collective is another exemplary project where Newark utilizes adaptive reuse alongside inclusionary zoning to foster community wealth and cultural vitality. Located in Newark’s Clinton Hill neighborhood, this project transformed a long-vacant bank building into a multifunctional cultural hub. The development includes 27 affordable apartments interwoven with market-rate units, dedicated work studios, a café, and a performance space. These facilities provide local artists and creative entrepreneurs with affordable spaces to pursue their work, host events, and engage in community programming.

The Arts Collective demonstrates how adaptive reuse can reinvigorate a neighborhood by preserving a vital piece of its identity and creating a dynamic platform for cultural expression and community engagement.

Active community engagement is the cornerstone of the success of these projects. Makerhoods employed dynamic, iterative engagement processes that empowered area residents to co-create developments. Through informational sessions, site tours, business workshops, and collaborative design sessions, community members influenced project programming. For instance, the need for wellness-related services—highlighted through community input—directly shaped Makerhoods' curation of its cohort of small businesses. The application process for potential residents includes submitting a video detailing their business vision and how living there would positively impact both their enterprise and the community.

Similarly, the Gant-Gilbert Arts Collective emerged from extensive community consultations. Local artists, residents, and business owners were involved in the planning process, ensuring the project addressed the unique needs of Newark’s Clinton Hill neighborhood. The Collective’s programming—ranging from art exhibits to educational workshops—fosters cultural exchange, enhances local skills, and empowers residents economically.

Case Study: Richmond, VA

Richmond, Virginia, has grappled with discriminatory practices, such as redlining and “urban renewal,” which have limited access to affordable housing and generational wealth for Black communities. In response, two complementary initiatives have emerged: the Maggie Walker Community Land Trust (MWCLT), which creates permanently affordable homeownership opportunities through a combined community land trust (CLT) and land bank approach, and the Richmond Resident Advisory Board (RAB) and the Regional Housing Framework, that ensure redevelopment projects remain responsive to local needs. Together, these programs exemplify how integrated affordable housing models and direct community engagement can drive long‑term, equitable neighborhood revitalization.

Advancing Efficient Permanent Homeownership through MWCLT’s Community Land Trusts and Land Banks Dual Model

Richmond has been exemplary in its implementation of CLTs. The Maggie Walker Community Land Trust (MWCLT) was established in 2016 in Richmond, Virginia, as a traditional CLT. In 2018, Richmond City Council officially designated MWCLT as the city’s land bank entity, making it the first organization in the United States to function simultaneously as a community land trust and a land bank. This dual designation was made possible by the Virginia General Assembly's 2016 Land Bank Entities Act, which allowed localities to create land banks or designate existing nonprofits for this role. MWCLT’s dual role empowers it to assist the city in addressing vacant, abandoned, and deteriorated properties by converting them into community-owned assets, primarily focusing on creating permanently affordable housing.

  • Land banks are public or quasi-public entities established by local governments to acquire, manage, and repurpose vacant, abandoned, or tax-delinquent properties. Their primary goal is to return these properties to productive use in alignment with community needs and priorities. ​ 

    Functions and Powers: 

    • Property Acquisition: Land banks can acquire properties through various means, notably via tax foreclosure processes. ​ 

    • Title Clearing: They have the ability to extinguish delinquent taxes and clear titles, making properties more attractive for redevelopment. ​ 

    • Property Maintenance: Land banks are responsible for stabilizing and maintaining properties to prevent further decline. ​ 

    • Property Disposition: They can transfer properties to new owners, often prioritizing uses that benefit the community, such as affordable housing or green spaces. ​ 

    • Duration of Ownership: Typically, land banks hold properties temporarily, maintaining them until a suitable redevelopment plan is in place.  

  • CLTs are nonprofit organizations governed by a board comprising community members, residents, and public representatives. Their mission is to ensure community control over land and to provide permanently affordable housing and other community assets. ​  

    Functions and Mechanisms: 

    • Land Ownership: CLTs retain ownership of land to remove it from the speculative market and ensure long-term community benefits. ​ 

    • Leasing Land: They lease the land to individuals or organizations through long-term, renewable ground leases, typically lasting 99 years. ​  

    • Affordable Housing: CLTs sell homes located on their land at affordable prices to income-qualified buyers, with resale restrictions to maintain affordability for future generations. ​ 

    •  Duration of Ownership: CLTs maintain ownership of the land indefinitely, ensuring perpetual affordability and community stewardship. 

The integration of community land trust and land bank functions within MWCLT represents an innovative model because it unifies property acquisition, development, and long-term stewardship under a single, community-driven mission. The efficiency of the land bank in property acquisition and disposition is combined with the long-term land stewardship ideals of the CLT to keep properties out of speculative markets. CLTs can ensure long-term affordability while combating gentrification and displacement once the land bank clears title and transfers property to the CLT. Lastly, comprehensive community involvement throughout the property development lifecycle—through the CLT board—ensures that community voices are integral to decision-making processes, promoting developments that reflect local needs and priorities.

To formalize these practices and support accountable governance, MWCLT utilizes Memorandums of Agreement (MOAs), which outline how land bank assets are transferred, how community input is incorporated into key decisions, and performance benchmarks to deploy land bank assets toward affordable housing targets and mitigate gentrification and displacement. MWCLT is required to present an annual plan to the city that outlines future goals and objectives, as well as updated criteria for selecting communities to prioritize for development, ensuring transparency and adjustments to strategies based on evolving community needs and housing market conditions.

A nine-member Citizens’ Advisory Panel (CAP) guides MWCLT’s property disposition in priority neighborhoods. Appointed by the MWCLT Board, City Council, the Mayor, and the city’s Chief Administrative Officer (CAO), CAP members review proposals from developers based on affordable housing commitments, organizational capacity, community impact, and alignment with the Annual Plan.

The CAP holds significant authority over the disposition or transfer of land bank properties. Its decisions can only be overridden by a two-thirds majority vote of the MWCLT Board, ensuring that the panel's recommendations carry substantial weight in property-related matters.

Financially, MWCLT has experienced robust growth since its inception in 2016. Revenues have risen to approximately $5.8 million in 2023 and include an asset base of $13.1 million. To date, MWCLT has successfully sold over 100 homes to low-income residents and continues to expand its pipeline with over 120 additional properties. In 2022, the average MWCLT home sold for $169,000, which is approximately 45% below Richmond’s average home price, making homeownership more accessible to low- and moderate-income families. This model not only lowers housing costs in targeted neighborhoods but also preserves community ownership, effectively counteracting decades of financial exclusion and speculative market pressures.

Empowering Resident Leadership Through the Resident Advisory Structures (RAB) and Regional Housing Framework 

Richmond’s commitment to housing is reinforced by robust resident-led advisory structures that ensure community voices remain central in redevelopment decisions. The city’s approach features two distinct yet complementary bodies: the Resident Advisory Board (RAB) and the Resident Council, each playing a vital role in shaping housing policies and neighborhood revitalization.

The RAB is composed of individuals directly impacted by housing policies—typically residents from public housing communities and participants in the Housing Choice Voucher Program. It serves as a conduit for resident engagement and feedback and provides targeted recommendations on The Richmond Redevelopment & Housing Authority’s (RRHA) five-year and annual plans. Although its recommendations are advisory, the RRHA is committed to a transparent process by reporting on how resident input is addressed in its policy decisions. The RAB is supported by dedicated funding from HUD and RRHA operating funds, which bolster its outreach and capacity to engage effectively with residents.

“[The RAB’s] regular town hall meetings, workshops, and feedback sessions... empower residents by building their skills in policy analysis and advocacy but also ensure that their collective feedback is communicated to city officials, thereby fostering responsive and accountable governance. ”
— Franklin Alverez

Complementing the RAB, the Resident Council operates at the development level, offering a broader forum for community engagement. Through regular town hall meetings, workshops, and feedback sessions, the Resident Council educates residents on upcoming affordable housing opportunities and gathers insights on issues such as rent affordability, neighborhood improvements, and public amenities. These sessions not only empower residents by building their skills in policy analysis and advocacy but also ensure that their collective feedback is communicated to city officials, thereby fostering responsive and accountable governance.

Together, these advisory structures demonstrate a commitment to embedding resident oversight into the housing redevelopment process. By institutionalizing direct community input, Richmond provides a model in which policies and projects are closely aligned with local needs, ensuring that affordable housing initiatives promote long-term stability and equitable development.

One example of successful resident engagement is the Richmond Resident Housing Framework (RRHF), which was designed to tackle housing affordability challenges in Richmond. Central to its development was a robust community and stakeholder engagement process, ensuring that the framework reflects the diverse needs and aspirations of the community. Key components of this process included:

Community Meetings and Presentations: Between 2020 and 2022, the Partnership for Housing Affordability (PHA) conducted 98 presentations, engaging over 2,283 community members. These sessions provided platforms for residents to voice their concerns, share experiences, and contribute to the framework's development.

Identification of Core Community Values and Challenges: Through these engagements, several core values and challenges were identified:

  • Core Values: Affordability, equity, community pride, and inclusiveness.

  • Challenges: Stigma and resistance to housing initiatives, difficulties in aging in place, substandard housing quality, high maintenance costs, and barriers to financing due to credit history.

Collaborative Development of Goals and Solutions: Insights from the community informed the framework's goals, which include:

  • Increasing the supply of affordable rental housing.

  • Supporting racially inclusive wealth creation through homeownership opportunities.

  • Ensuring safe and affordable housing for seniors.

  • Improving housing quality and resident health and safety.

  • Preventing displacement and expanding housing choices for low- and moderate-income households.

Ongoing Engagement and Mobilization: The RRHF emphasizes continuous engagement, aiming to reflect community voices in its solutions. Dedicated advocates are mobilizing residents around pertinent issues and connecting them with resources to transform proposed ideas into actionable solutions.

 The implementation of the RRHF's goals is primarily overseen by PHA), in collaboration with local governments and housing stakeholders across the Richmond region, including Chesterfield, Richmond, Henrico, Hanover, and the Town of Ashland. The framework serves as a blueprint to implement solutions that will increase housing opportunities across the region. To monitor progress, the framework includes accountability metrics to track completed and in-progress solutions. As of January 2022, six solutions had been fully completed, and 18 were underway, including zoning modifications to expand the region's housing stock, significant investments of federal funding into affordable housing, and the creation of the Housing Resource Line, the region's only coordinated access point for housing needs outside of homelessness.

6 Lessons from Newark and Richmond for Leaders in Small and Midsized Cities (SMCs)

  1. SMC leaders can collaborate with housing authorities and land banks to convert rental vouchers into mortgage assistance and rehabilitate vacant multifamily homes for qualified residents. This approach simultaneously creates both new homeowners and landlords, while also addressing blight and bridging the wealth gap in historically excluded communities. SMCs can unlock generational wealth by turning renters into owners through innovative programs.

  2. SMCs can adopt or strengthen inclusionary zoning, density bonuses, or developer incentives so that any surge in development comes with built-in affordable housing. Equitable growth requires policies that ensure new investment benefits existing residents. Tying the receipt of tax abatements to community benefits (like affordable set-asides or contributions to housing trust funds) can ensure revitalization is inclusive rather than displacement-driven.

  3. SMC leaders can adopt shared-equity models for permanent affordability. Long-term affordability can go hand-in-hand with wealth building for residents. SMC leaders can partner with or create community land trusts, cooperative housing, and other shared-equity programs. By separating landownership from homeownership or capping resale prices, cities ensure housing remains affordable across generations. At the same time, homeowners still gain a portion of equity growth, fostering inclusive wealth creation rather than speculation.

  4. City leaders can inventory underutilized properties and incentivize their conversion into affordable housing, mixed-income developments, or community facilities. Tools like historic tax credits, low-income housing tax credits, and streamlined zoning for adaptive reuse can help turn yesterday’s liabilities into today’s assets. This not only creates affordable homes but also preserves local heritage and renews neighborhood vitality without requiring extensive new development.

  5. SMC leaders can design housing programs to generate local jobs, support local businesses, and build local capacity. Equitable housing strategy isn’t just about units produced—it’s also about who benefits from their production. This can mean minority and small business contracting on housing construction, job training or apprenticeships tied to development projects, or supporting social enterprises to lead housing rehabilitation projects. By channeling investment through local workers and businesses, housing dollars circulate in the community, multiplying the economic impact and garnering broader public support for affordable housing efforts.

  6. Institutionalize Community-Led Governance and Planning. SMCs can embed co-governance structures in their housing and development work—for example, establishing resident advisory boards for redevelopment projects, supporting community land trusts/cooperatives with governance roles, or negotiating formal community benefits agreements. By sharing power and decision-making with residents, cities can ensure that housing strategies align with local needs, build public trust, and sustain momentum across political cycles. Community-led governance makes policies more resilient and equitable, as those who have the most at stake help steer the course.

Conclusion

Both Newark and Richmond illustrate how housing policy can be a platform for generational wealth-building when it deliberately centers affordability, inclusion, and community ownership.

From these case studies, several broader takeaways emerge for leaders of small and midsized cities. First, an innovative mix of strategies is often necessary. The successes in Newark and Richmond were achieved by layering solutions—policy mandates, adaptive reuse, and community-driven strategy—each addressing a piece of the puzzle.

Finally, these stories offer a forward-looking vision for how cities can build generational wealth through housing. In practical terms, this means creating conditions for residents to not only live affordably but also to own, participate, and prosper. Cities can encourage homeownership and financial equity-sharing models that allow families to accrue wealth securely over time. They can invest in adaptive reuse and infill development that revitalizes neighborhoods without displacing people, turning neglected properties into community assets. And critically, cities can embrace community-led governance, recognizing that lasting change happens when the people who have endured disinvestment are positioned as co-authors of a new, inclusive chapter of growth.