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I have an idea for a sandbox campaign about the downtime between runs, I just don't know what to do with it. Specifically, carving out a niche and building up the PCs' neighborhood.

Balancing freedom and security (with opportunities to lower one without increasing the other like the TSA does), doing mini-runs to take care of utilities or people trying to move in, the place getting too livable drawing the interest of developers, making it obvious there isn't a power vacuum that would invite trouble without drawing attention to yourself, the heat that can follow you when you're a runner, etc. There are a lot of stories that can be told, and it feels like it could be an interesting game.

I want the players to feel like their decisions matter, I'm just not sure how you would track improvements made. Making a deal with a neighboring gang to stay out in exchange for mutual protection would make the neighborhood safer and more secure (a zero zone is secure, but not safe), but what other effects would that have? How do I show changes to the neighborhood to illustrate the impact they have?
I've done this a couple times with ganger campaigns. I like these games a lot. The ideas are the same as what you're describing, namely to make the location as much of a character as any of the PCs or NPCs.

I like that you mention "the place getting too livable" as a potential issue. In one of my ganger campaigns, the most insidious issue - the enemy the PCs didn't defeat - was gentrification.

I would recommend a map, which helps things feel more real. It can be abstract and not-to-scale, but it provides a shared understanding of who (and what) is where. This was especially important for turf considerations in my ganger games. It can also help provide continuity. Once you have an established cast of characters, not all conflicts have to be physical. You can introduce political machinations that shift and play out over time, independent of what the PCs are up to.

Depending on the nature of your group, I might also recommend a wiki that the team can use for easy reference, in case they don't always remember which NPC is which and who hates who. It can also act as a reference for other descriptives, like the demographics of the neighborhood, its security rating, and so on. The wiki format is nice because then the players themselves can add to it as they learn more, which helps take some pressure off the GM.

As for the mechanics, that's harder and something I don't have a solid solution for yet. 3E's Corporate Download has some rules about how to do some rolling to determine how the the asset ratings of megacorps evolve over time. There are 14 asset categories, and the corps have 9 different attributes of their own, so there are plenty of numbers flying around. I've thought about looking at that system and trying to downscale it for a neighborhood setting but I've never sat down to hammer out the details.
This is one of my favorite things in SR campaigns. Having a living, breathing neighborhood, with plenty of character, memorable NPCs, hooks for drama and adventures...

You could have a complicated mechanism to handle this with scores to keep track of, but I'd rather handle it "manually". Show the changes in the description of the neighborhood, in the discussions they have with the local NPCs, in the situations that come up, etc.

As for making a deal with a neighboring gang, there's a lot to consider:
- The gang will only accept it if they need the protection from the PC. Which means either that it's being threatened or that it will expand so as to get to a point where this additional firepower becomes necessary.
- If the gang has rivals, the PC will become rivals of these gangs. If these are gangs from neighboring neighborhoods, runners will have to face them regularly when the enter/exit their own neighborhood.
- Criminal syndicates and gangs the PC meet during their runs might use this as a bargaining chip against the PC: "Sure, our clan has information that would be useful for your investigation. But I'm afraid the boss won't let us give it to you if you keep on insisting that your neighborhood is out of our area of influence"
Yeah, i have been in a game like that still under SR3.
Basically, we were horrible monsters who delighted in killing and maiming any who stood in our way.
And we made sure everybody in our hood knew that.
We did not ask for anything from anybody like ever.
Just to not cross us in any kind of way.
We want a nice, peacefull hood around our homes.
Basically, like the mafia and vory protection rackets.
Just, our protection money was them being nice.
And when outsiders came into our little broken home?
They died screaming for mercy in pain on camera.
We hung the flayed and burned corpses out on the streets all around what little bit of turf we had claimed for ourselves.
And gradually, it became a quiet and peacefull home.
Untill somebody new tried to move in despite warnings.
Granted, we never warned anybody about what happened.
We left that to word of mouth propagation by others.
We made deals with some gangs.
We made deals with some organized crime syndicates.
And those few that did not want to play nice with us and we could not deal with by ourselves because of manpower?
We ratted out to all other gangs and syndicates and the star with everything we could gather on them or fabricate.
Our GM who had the Ganger low power idea in the first place had not anticipated our ability to actually make our
special kind of body horror into something that the people looked at as "well, they had it coming!".
He named us the Nightlords, even though we barely ever did anything by night. All out in broad daylight to be seen.
I was playing a stealth combat troll with athletics secondary . . I went by the name of Konrad for actually completely unrelated reasons.
I was not the boss either. I was just the dumb muscle. Who ripped out limbs of people who had offended us and did beer and soda can Origami.
It has been a long time since we had such a fun time trying to squick each other and the GM out with our deeds ^^
Can you adapt the Kingdom Maker rules for Shadowrun?
It's been a long, hot week. I was exhausted. So, after finishing work yesterday, I sat down to relax and got called back in for another 7.5 hours. Being on call is great.

I had some down time during that, and also nothing else to entertain myself.

Here are the ideas that made sense in the middle of the night, hopefully some will be useful:
[ Spoiler ]

I was also thinking about the players deciding how the neighborhood had gotten bad, to give more ideas. Perhaps also the attitudes/politics of the people living there (or who they want to live there), because deciding on a morality always gives the GM something to work against.
Something that can be interesting is to work on the "High-Tech/Low-Life" angle. This is a staple of cyberpunk ("the street find its own use to things") that's not used enough in Shadowrun. Basically, it's about subverting existing tech to adapt to the living conditions. For example why filter the water when you have a genetically engineered disease that allow people to filter the toxic stuff in the water that you can spread for free and that's transmitted from the parents to the children?

This will help get a more cyberpunk feeling to the neighborhood, and give it a distinct culture/feel.
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