How do we address the challenge of affordability for artists in our growing cities? What are some innovative strategies that can be implemented to create or preserve affordable real estate for artists? How can the real estate industry play a positive role in addressing these issues? Are communities still welcoming artists with open arms, or are fears of gentrification hindering these relationships?

This was the nature of questions fielded by the esteemed panel at last Tuesday’s ULI New York program, Creating Spaces for Creative People: Strategies for Developing Real Estate for Artists program, presented by the Women’s Leadership Initiative. This event was held at El Barrio’s Artspace PS 109, an arts facility in a converted school with 89 units of affordable live/work housing for a range of artists – including photographers, dancers, painters, among others – and their families.

The event began with a networking session, followed by an engaging panel that was moderated by Barbara Koz Paley (CEO, Art Assets) and brought together Melodie Bahan (Vice President – Communications, Artspace), Tom Finkelpearl (Commissioner, NYC Department of Cultural Affairs), and Paul Parkhill (Executive Director, Spaceworks) to discuss strategies for developing real estate for artists.

The panelists gave attendees a look into a variety of topics related to finding live/work space solutions for artists, ranging from capital sources, to government processes, to bringing a project like El Barrio’s Artspace PS 109 to life. It comes as no surprise to New Yorkers and anyone familiar with New York’s real estate market that there’s an overall affordability issue throughout the region – and while this does not just affect artists – they are a group that has historically been impacted by this lack of affordable housing and workspace. The speakers outlined some of the strategies their respective organizations use to fund or find funding for projects that provide spaces tailored for artists.

In regards to Artspace’s work in El Barrio, Ms. Bahan spoke about the partnerships that brought the Minnesota-based non-profit, Artspace, to East Harlem. In this instance, the Andy Warhol Foundation for the Visual Arts invited her organization to New York to see if the model they’ve used in communities throughout the country could work here. “We only go where we are invited,” said Bahan. After settling on a site with potential – the decommissioned PS 109 in El Barrio, Artspace worked tirelessly to gain community trust and build relationships. Putting together funding for their particular model takes years, but as emphasized, community involvement and relationship building is key to a project’s success.

Questions regarding what the capital stack looks like for this type of project were brought up throughout the program. Each panelist spoke briefly about the key components of their individual project funding models. While each project’s funding model is unique, the resounding consensus was that projects require a permutation of inexpensive real estate, public funds, grants, private donations and finally traditional financing – and more often than not, all of the aforementioned capital sources are needed. These complicated structures are frequently cited as a driving factor in lengthy development timelines.

Aside from the discussions about finance, development costs and governmental involvement, a dialogue stemmed about the receptivity of communities to an influx of artists. As has perpetually occurred in many New York neighborhoods when artists move in, an area increases its profile as a ‘hot spot’, and then prices begin to rise. This not only causes artists to be priced out, but it also affects locals in the neighborhood even before the artists moved in.

This is a growing concern in some communities across America that developers and municipalities see neighborhoods with a ripe for gentrification. Some of those who already live in the areas resist cultural facilities for fear that they may too soon be priced out of their own homes. The panel discussed the need for community engagement and an understanding that projects need to be developed for a sustainable future that has a “very, very long term vision”.

As is often the case, the discussion illuminated the positive and negative implications a community experiences. The relationship that the real estate industry must cultivate with governing bodies, not-for-profit organizations and the artistic community was always going to be multi-faceted.   I don’t think any one of the speakers was there to profess that they have an answer, yet they were there to help facilitate the discussion, as they were all passionate about the necessity to find solutions that meet the needs of the community as a whole.

Following the formal program, four artist residents of El Barrio’s Artspace PS 109, graciously opened their live/work units for ULI guests to tour. The program was attended by nearly 70 ULI members and nonmembers, showcasing a wide interest in the topic of finding solutions to house artists, especially in cities with costly housing markets.