Issue #15, Winter 2010

The Next War on Poverty

Conventional wisdom aside, some ’60s-era inner-city programs have been a success. Now it’s time for Obama to launch phase two.

One evening in early 1966, Senator Robert F. Kennedy met with leaders in New York’s predominantly African American neighborhood of Bedford-Stuyvesant. The mood was one of urgency. The Watts area of Los Angeles had erupted in violence the previous summer and dozens had died. Those in attendance were worried about what would happen if nothing was done to reduce the high levels of joblessness and poverty in their own community. They challenged Kennedy to help them.

Just a few weeks earlier, in January, Kennedy had given three speeches laying out his suggestions for responding to the civil unrest in Watts and elsewhere. He had spoken out strongly right after the riots, but now he wanted to follow up with specific proposals. He had denounced the violence, but he also believed the poverty in America’s inner cities raised profound questions of economic injustice–as the major civil rights challenge facing the nation after the historic steps to dismantle American apartheid. I was one of his legislative assistants, and I helped draft the three speeches.

The trilogy of speeches had two major themes: how to accomplish racial and economic desegregation throughout metropolitan areas and how to revitalize neighborhoods of concentrated poverty in inner cities. As to the latter, Kennedy laid out an idea that had been recommended to him by my colleague Adam Walinsky. Outside funding and investment, both public and private, would support economic development and upgrading housing and community facilities. But the visionary thought was that jobs could be created by engaging local people in improving their own housing and other amenities, hiring them to help reconstruct their own community.

That evening in Brooklyn, Kennedy saw an opportunity to put his idea to the test. He outlined the plan and, getting a positive reaction from his audience and others with whom he spoke subsequently, he decided to proceed. In the following months he flew to New York two or even three times a month to work on bringing the project to life. There was extensive community wrangling as people pushed to get a piece of the action, and there were protracted negotiations with Mayor John Lindsay, Governor Nelson Rockefeller, and key business and financial leaders over what outside actors should do to help.

When the dust finally settled, the result was the Bedford-Stuyvesant Restoration Corporation. Led by Franklin Thomas, who later headed the Ford Foundation, it did not feature Walinsky’s idealistic image of sweat equity rebuilding the neighborhood, but it nonetheless reflected a most ambitious idea: an inside-outside partnership that would revitalize a deeply troubled place. Equally important, Kennedy and his senior colleague from the state, Republican Senator Jacob Javits, succeeded in amending the Economic Opportunity Act–the War on Poverty legislation–to authorize federal funding for initiatives like Bed-Stuy. These funds, distinctive in that they could be used flexibly for a multiplicity of purposes in a revitalizing neighborhood, seeded dozens of similar endeavors around the country during the decade or so that they were available.

With the addition of significant funding from the Ford Foundation and other sources, the result today is more than 2,000 community development corporations, or CDCs, as well as numerous other inner-city development organizations and outside entities that help finance their activities. Organizations like the Local Initiatives Support Corporation, the Enterprise Foundation, NeighborWorks America, and their many individual local counterparts have made a tangible and important difference in building and rehabilitating housing for low-income people and doing some economic development in low-income neighborhoods as well.

The problem, though, is that the sum of all this is not nearly enough. Kennedy and his colleagues never intended these to be panaceas; rather, they were to be cogs in a larger social-policy apparatus that would revitalize the inner city. And yet not long after Kennedy’s death, the nation began a long turning away from the sort of promising, nascent social policy initiatives he championed. He would be shocked to see how little meaningful attention we have paid to the inner city.

We have learned a lot since Bed-Stuy was formed, but the vexing question of concentrated urban poverty is still with us; if anything it’s much worse. It is past time to make progress in unraveling the tangle of problems that enmeshes the people of the inner cities. These are the quintessential places where race and poverty intersect, with terrible results. Forty-two percent of African American poor lived in inner cities in 1990, and half of those who live in these impacted neighborhoods are African American. (Another quarter are Latino.) These are places of unmitigated human tragedy: streets turned into battlefields, staggering AIDS rates, astonishingly few youth graduating from high school, prisons filled with the young men of the area, large numbers of women raising children by themselves–the list goes on. But somehow we do not add it all together. It is an astounding moral catastrophe.

In the meantime, the realities of the inner city have changed. Since Kennedy’s time, we have seen the massive loss of higher-paying jobs that hurt all lower-income people badly and inner-city residents catastrophically, the flight of higher-income people from the inner city, and the conservative drift in our politics, the further decline in inner-city educational quality, the arrival of gentrification, crack cocaine, and the AIDS epidemic. Some of these facts are the behavioral consequences of the resulting concentrated poverty. Some reflect failures of strategy and policy in the design and implementation of the efforts that have been undertaken.

We now have a president who has worked on these issues, and it is reasonable to hope for change. What’s needed, then, is an assessment of what went wrong and what looks promising today. Only in that way can we figure out what to do next (assuming we can muster the political will). As Kennedy was wont to say, we can do better.

Neighborhood Revitalization Strategies: A Brief History

The racial segregation of the inner city did not occur by accident. Pervasive discrimination constrained the housing choices of new arrivals from the South, and the ghettoization process was reinforced by urban renewal policies and public housing location decisions. Unemployment, always higher for African Americans, rose further with the return of veterans reclaiming their position in the labor market. The civil unrest of the 1960s and the enactment of the Fair Housing Act of 1968 sent many in the growing black middle class to the suburbs, intensifying the concentrated poverty of the inner city. The 1970s brought an acceleration in the national process of deindustrialization, hurting all lower-income workers but hitting the inner city the hardest. When we did consider the inner city in the 1970s and 1980s, we did so punitively, beginning our national spree of incarceration and intensifying the rising backlash against welfare.

Thus the promising Bed-Stuy program came of age at a time when national attitudes were not exactly conducive to such efforts, and when the magnified effects in the inner city of the problems in the national economy made the task far harder and perhaps insuperable. There were also issues with the CDC movement itself. It encompassed some strange bedfellows with very differing motives. Many of the neighborhood people who joined to form CDCs were enthralled with the black-power and community-control ideas that had swept through their community. They were happy to accept outside resources and get outside employers to locate plants and stores in the neighborhood, but they believed that, thereby empowered, they could create what would essentially be a self-contained economy and polity within the four corners of their immediate environs. Their economy would contain its own engines and, living together in a same-race community, they would be a cohesive and effective force in municipal politics.

The idea that enough jobs could be attracted to the inner city or close-by locations was unrealistic. A centerpiece of the Bed-Stuy strategy was an IBM plant located there by RFK’s friend Tom Watson, the company’s CEO. The ease with which IBM’s cooperation was obtained led to an assumption that others of similar magnitude would follow. They did not. Yet the notion that an economic revival could be accomplished within the borders of the neighborhood continued to hold sway. (I do not mean to ignore the importance of efforts in some places to attract retailers that sell goods at nationally advertised prices, along with other successful neighborhood-based economic development strategies.)

Few neighborhood revitalization initiatives responded to the reality that in most cities the jobs were increasingly located in the suburbs, largely inaccessible to inner-city residents in the absence of specific initiatives to get them there. The mismatch was not merely spatial. Would-be workers also needed to be better educated and trained, and antidiscrimination laws needed to be rigorously enforced. These shortfalls, coupled with negative attitudes toward “the man,” diminished employment outcomes in places only a bus or subway ride away.

The lethal cocktail of a national economy unkind to all of those with incomes below the national median, the consequent intensification of inner-city poverty, and the weak or counterproductive public policy responses to both problems meant that neighborhood revitalization efforts, flawed as they may have been, also operated, in effect, with both hands tied behind their backs. The 25-plus years from the election of Richard Nixon until the mid-1990s constituted a perfect storm for inner-city residents and those who tried to improve the neighborhoods in which they lived.

A Modest Parting of the Clouds

The last decade and a half, however, has complicated the story, as well as opened up an opportunity for new approaches. The main reason is the economy. A hot economy is still the most powerful anti-poverty weapon around, and the second half of the 1990s saw real income growth for those in the bottom half for the first time in over two decades. The 2000 Census revealed a decrease in the number of urban census tracts with poverty rates of more than 40 percent, although most of the areas that dropped out of the 40 percent-plus category still had poverty populations above 30 percent. (The 2010 Census will almost surely reflect a reversal of the trend.)

But growth wasn’t the only positive development. New thinking about remedies for concentrated urban poverty began to affect public policy and civic action. Fueled by federal funding to deconcentrate public housing, a new generation of developers produced mixed-income housing in low-income neighborhoods. The Harlem Children’s Zone and other innovative school ventures offered significant new educational opportunities in such areas. And new schemes were undertaken to help inner-city residents get and keep jobs in the regional economy.

That some good, or arguable good, has happened in inner cities sets the present apart from the decades of the perfect storm. Some inner-city neighborhoods do look different, even as their lower-income residents or former residents are still stuck at the socioeconomic bottom. Four key trends frame the policy challenges of the present moment: Gentrification, public housing deconcentration, education reform, and a focus on jobs in the regional economy.

Gentrification One key trend in the recent urban history, with major exceptions like Detroit, is that people have rediscovered the central city as an attractive place to live. Young singles and couples, especially before their children are of school age, and baby boomers with empty nests, have voted with their feet (at least until the current recession set in) to settle in or return to central-city locations.

This is desirable, but things get more complicated when those moving in come to neighborhoods that are predominantly poor, which has happened in many cities. Mainly in low-income neighborhoods that are easily accessible to downtown, have a sound housing stock, and are adjacent to higher-income areas, radical change has occurred almost overnight. Too often, this has occurred at the expense of the existing residents, who have found themselves pushed out by skyrocketing rents and property taxes. In other words, gentrification is neither an unalloyed good or bad, but rather an urban reality that policymakers have a responsibility to manage so as to minimize displacement and preserve existing social fabrics.

Housing: The HOPE VI Experience A related trend is the demolition of inner-city public housing that has occurred in many cities, and the accompanying dispersal of its residents. This has occurred under HOPE VI, the Homeownership and Opportunities for People Everywhere Act, enacted in 1992. In the field of public housing HOPE VI has had a major impact, significantly denting the national inventory of public housing and forcefully relocating tenants in large numbers (although in most localities it has not had much of an effect on the overall level of inner-city poverty). The federal Department of Housing and Urban Development (HUD) made a cumulative total of 246 public-housing revitalization grants under HOPE VI through the end of 2008, resulting in the demolition of 96,226 public housing units and the relocation of 70,000-plus households. A total of 111,059 new and rehabilitated units were developed, including 52,951 units of public housing. The total public-housing stock decreased by a net of 165,000 between 1995 and 2008, or 12 percent of the beginning total of 1.33 million units. On the other hand, there are some four million poor people living in high-poverty urban neighborhoods, and something like 250,000 people have been relocated (assuming all of the demolished public housing was in high-poverty neighborhoods), so the relocation affects only a little more than 6 percent of the inner-city poor.

How should we think about HOPE VI? Opinions are divided, even on the left. Bruce Katz, a former senior HUD official and highly respected housing and urban policy expert, says, “HOPE VI is one of the most successful urban redevelopment initiatives of the past half-century.” On the other hand, Sheila Crowley, the president and CEO of the National Low-Income Housing Coalition, calls it “a case study in how badly a government program can run amok.”

Issue #15, Winter 2010

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