This paper provides a framework for considering approaches to the preservation of older neighborhoods. Particular attention is paid to the role of financial institutions in the dynamics of neighborhood change and to public/private collaborative efforts to stem decline. In general, public policie to preserve neighborhoods must be comprehensive in nature and require a variety of tools to take into account the unique aspects of a neighborhood's environment. To create or maintain a stable neighborhood environment, however, there are no alternatives to an overall approach which embodies local governments, the private sector, and private citizens. Any other approach may provide short‐run gains that will not create the dynamics necessary for long‐term stabil