Reviving Community Development

Despite the array of programs developed since the 1960s to help the inner city, federal policy has largely failed to devise a strategy that both helps poor people and poor places. Urban renewal in the 1950s "revived" slum neighborhoods with bulldozers, transforming them into upscale apartment complexes. Likewise in the 1980s, shopping centers like Boston's Quincy Market and the Gallery in Philadelphia may have created a downtown retail renaissance -- but not an economic revival of poor neighborhoods for the people who live in them.

Not surprisingly, one response to this failure has been to abandon the idea of rehabilitating inner cities. In a New York Times Magazine cover story, "The Myth of Community Development," published last January, Nicholas Lemann, author of The Promised Land, suggested that rather than attempting yet again to uplift ghetto neighborhoods, risking another cycle of failure and public cynicism, government should concentrate on improving the standard of living of the poor."Attempts at economic revitalization often take the place of other efforts that would do much more good," Lemann wrote. Instead, he said, government should "simply to provide for poor people's material needs, through cash grants, vouchers like food stamps and services like Medicaid." (See "Lemann Aid," page 84.)

Must we really give up on poor communities in order to help poor people? Is it realistic to urge, as Lemann does, that we "simply provide for poor people's material needs?" If there is one policy less popular with middle class voters than urban economic development, it is a policy of handouts.

We cannot simply write off poor communities, and we shouldn't when there are reasons for cautious optimism. Despite a climate of fiscal scarcity, the Clinton administration's brand of community development could actually succeed where past efforts failed.

The context for Lemann's critique was the Clinton administration's urban initiative, known as Empowerment Zones. While its funding is anemic, the approach is encouraging, for the program could at last bring coherence to policies of economic uplift for inner-city neighborhoods.

Community redevelopment as it now exists is a bureaucratic nightmare. Federal agencies administering programs for the poor work in near-total isolation from one another. The Department of Housing and Urban Development (HUD) sponsors such programs as the Community Development Block Grant (CDBG), housing subsidies, and aid to the homeless. Three other cabinet agencies -- the departments of Labor, Education, and Health and Human Services -- help poor people enter the labor market by training them, educating their children, and strengthening their families. The Small Business Administration and targeted minority business programs run by the Commerce Department -- marginalized during the Reagan/Bush years -- have yet to make a real comeback under Clinton.

Because these agencies rarely work together, their programs cannot reinforce one another. Some residents receive fragmented subsidies, but the ghetto remains a ghetto: beset by dilapidated housing, high crime, and a population unprepared for the jobs in today's labor market that would pay a living wage.


A Philadelphia Story

I speak from personal experience. From 1987 to 1992, as Philadelphia's director of Housing and Community Development, I administered the Community Development Block Grant and the various housing programs associated with it. During this period, our office oversaw the rehabilitation of roughly 4,000 homes and apartments for the poor, mostly in inner-city neighborhoods. These projects attracted more than $95 million in financing that represented the biggest infusion of private capital in these neighborhoods from any source.

But since funds from the federal government for job training were routed through the state government to the Philadelphia Private Industry Council (PIC), and most social service funds went directly to private non-profit agencies, coordination was impossible. Nor was it possible to integrate even the limited business services provided by the Commerce Department under the Bush administration into community development initiatives that we supported with block grants. Even our efforts simply to inform citizens about other programs were frustrated: when we started providing information about job training, the Inspector General from HUD chastised us for creating a "duplication of services."

Instead of leading to consolidation and coherence, scarcity of funds paradoxically has created more duplication. When the federal government scaled back its poverty programs in the Reagan era, local agencies began poaching on each other's turf. For example, as city agencies working to promote industrial and commercial development saw their funds dry up, they sought out the next available resource: the community development block grants that community development corporations and housing agencies like mine relied on. The sad result of this was constant conflict among agencies purportedly working toward the same general goal.

The result has been lost opportunity in every direction. Consider the following situation that developed between Philadelphia's Office of Housing and Community Development (OHCD) and our Private Industry Council over the past year. A major goal of the city's housing programs has been to encourage contractors to hire local residents in neighborhood rehabilitation projects. In response, the contractors complain that they can't find qualified people to do the work. So last year, OHCD made $300,000 available to the PIC to establish a special training program to produce a pool of qualified neighborhood workers.

One year later, the funds remained unused. The PIC had so many problems in managing its primary programs under the Job Training Partnership Act and the Family Assistance Act that it could muster neither the time nor the energy to fashion a new initiative built around an entirely different set of federal guidelines. OHCD has now retrieved its $300,000 and is fashioning a training program of its own. Situations like this are the rule, not the exception. There are few cities in the entire country where the Community Development and Job Training offices even talk to one another, let alone work together. Since there is little coordination among diverse agencies in Washington, there is almost no relationship between them at the local level.


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Some private demonstrations give a sense, in miniature, of what might be accomplished if government were serious about targeting and coordination. For example, in 1991 a local foundation, the William Penn Foundation, committed $26 million to the improvement of 25-square blocks in North Philadelphia, where over 40 percent of the population lives in poverty. The foundation created a subsidiary, the Beech Corporation, which promotes commercial development, job training, and education. It has revived a local business association, and new retail stores are now occupying formerly vacant storefronts. Our office committed funds to rehabilitate more than sixty buildings. The neighborhood elementary school, the Meade School, used Beech funds to create an infant and toddler day-care center. Beech is working with Lincoln University, a local mainly African-American college, to create a job training center for the area. More than 50 local community-based organizations have participated in these efforts, and there is the sense of a unified strategy. There is the palpable feeling that the neighborhood is "coming back." Still, the net job creation to date has been only modest and a great deal more is needed to create employment and decent housing.


Zones of Hope

The Clinton administration originally embarked upon an ambitious plan to enact a comprehensive self-sufficiency agenda for the inner city. This included urban enterprise zones for business development, targeted community development funds and banks for neighborhood revitalization, expanded job training for welfare recipients and the unemployed, as well as "empowerment through education" for their children. But given the fiscal constraints, the slender majority in Congress, and the deep-seated skepticism echoed in Lemann's essay, the administration has had to settle for a pilot demonstration through what it now calls "empowerment zones."

Under the billion dollar pilot program outlined by the president, 65 urban and 35 rural "enterprise communities" will intially receive roughly $1 million apiece to revitalize relatively small neighborhoods. Of these communities, the administration will choose six cities and three rural areas as empowerment zone demonstration projects for more intensive support.

In the selection of enterprise communities, effective coordination at the local level will be a key consideration. Empowerment zones combine physical revitalization and business development with education, training, and human services within a limited geographic area. Just as significantly, the Clinton administration asked cities to focus the attention of community organizations, business leaders, and social agencies on the economic potential of the Empowerment Zones, as opposed to the physical condition of its housing and infrastructure.

This new focus for community development offers the best chance in years to develop a federal strategy for the inner city that helps both the places and the people directly. At this writing, the federal government is reviewing empowerment zone proposals from cities nationwide. To enter this competition, a city had to carve out up to three non-contiguous areas with average poverty rates of at least 20 percent. In addition, half of these census tracts had to have at least 35 percent of residents with incomes below the poverty line. The city also needed to create a planning process for these areas that asked residents, public officials, business leaders, and social service agencies to develop "a common vision of the kind of economy and job opportunities that each community's future should hold."

The winners will be announced by the end of September. Each empowerment zone then will receive additional funds from the federal government: financial incentives for business development, a tax credit for zone companies that hire local residents equal to 15 percent of each employee's salary (up to $20,000 a year), and $100 million in Title 20 funds from under the Human Services Administration. Because Title 20 funds are flexible, these are the resources that cities can use for basic education, job training, day care -- whatever is needed to help residents succeed in today's labor market. The Clinton administration has also issued an open-ended commitment to give empowerment zones priority for additional funding from other federal agencies during the life of the program.

This is consistent with the broad recommendation of Vice President Gore's report on reinventing government, which urged Congress to allow states and localities to "consolidate separate grant programs from the bottom up."

The promise of federal largesse of this magnitude does a great deal to spring local communities into action -- especially since the administration insisted that plans had to reflect extensive participation from the residents and businesses. As an example, Philadelphia and Camden, New Jersey (across the Delaware River) have teamed up to become a "two-city/two-state" empowerment zone.

From January through May, hundreds of people from the poorest neighborhoods in each city attended as many as two meetings a week to define their "vision" for this empowerment zone and their strategies to achieve it. Having been on the front lines of community development in this region for over two decades, I can safely say that never have so many produced so much in so little time. The empowerment zone planning process itself deserves much of the credit.


Will this approach work?

Of course, the funding remains meager relative to the need. And although the application process will encourage long-overdue local coordination, many of the good proposals identified in the planning process will necessarily remain unfunded, And many cities will be left out of the process, at least in its first phase. A further problem is that while the Clinton administration hopes that empowerment zones will show cities how to coordinate federal programs for the poor, the Labor Department is streamlining operations by consolidating job placement at the regional level, thus distancing them even further from the inner-city neighborhoods where the poorest people live.

The long-range challenge facing the administration is whether it will reorganize the various bureaucracies that now serve the poor to achieve the integration between housing rehabilitation, education, and job training that the empowerment zones are supposed to demonstrate. HUD, at least, is trying. Its new programs aimed at the homeless emphasize a "continuum of care," including "job training, counselling, drug, alcohol, and mental health treatment, and other services." A consolidated planning process proposed for community development funding applies the same principle on a broader scale.

Similarly, the Department of Education is building a support system of its own to help local communities achieve eight national education goals established by Congress last March under the Educate America Act. By the year 2000, according to this legislation, the country's high school graduation rate is supposed to increase to 90 percent and "every adult American will be literate and will possess the knowledge and skills necessary to compete in a global economy." To help inner-city neighborhoods meet this objective, however, the administration needs to fight for more money for inner-city schools, just as HUD's consolidated planning process is tied to enlarged federal appropriations for community development.

While the funding is far too low, the Clinton administration has learned from past mistakes and identified a promising approach. It is simply wrong to write these cities and neighborhoods off. Many have viable local economies that are struggling to become stronger. Targeting resources, insisting on a coordinated planning process, and integrating physical development with community education and training can make a difference. Counseling the poor to go somewhere else is misleading, for there will always be concentrations of poor people. The reality of the inner city is harsh enough without dismissing community development as a myth.


Lemann Aid

In his book, The Promised Land, Nicholas Lemann argued that the War on Poverty was lost largely because "its main program, community action, was a conceptual failure in the sense that it raised expectations about the revival of the ghettos that couldn't be met, and presumed a link between political empowerment and individual economic advancement that doesn't exist." In his New York Times Magazine article, Lemann said Clinton's new initiative merely perpetuated what he characterized as "the myth of community development" -- namely, "the idea that the way to cure the special ills of the slums is to generate a lot of home-grown business activity there."

Empowerment Zones, Lemann insisted, will merely provide a new recipe for what used to be known as "social uplift'' -- encompassing "education, counseling, improvement of the housing stock, [and] crime control." The business activity would "give poor people jobs, and therefore money," as well as instill "a whole new spirit of self-reliance." Advocates of "social uplift," he maintained, have deluded themselves into believing that through neighborhood economic development, the poor "would be able to build independent communities that control their own resources and destiny."

Such a strategy, Lemann said, was bound to fail. "On the whole, urban slums have never been home to many businesses," he concluded, "except for sweatshops and minor neighborhood provisioners. The slums are usually near downtown, and the residents, when they can find work, have usually found it downtown. . . . The standard model of progress for poor people living in urban slums, repeated millions of times over the decades, is to get a good job outside the neighborhood and then decamp for a nicer part of town."

In this one brief passage, representing the crux of his argument, Lemann simultaneously misrepresented both the economy of the inner-city and the broad strategies proposed under the Empowerment Zone program to deal with it. For example, the area that the Rendell administration has crafted for Philadelphia's zone encompasses much of what remains of the city's unionized manufacturing base, as well as Temple University, Episcopal Hospital, and a broad array of social service agencies -- along with the admittedly "minor neighborhood provisioners" that one would expect from an area with a poverty rate of over 50 percent. Lemann ignores that these are functioning, albeit depressed, local economies. The various financial incentives built into Empowerment Zones attempt to help these businesses expand and to entice new enterprises to join them. Given that over one-third of the residents of this area work within a 15 minute radius of their homes, according to the 1990 census, it is wrong to insist that their only economic hope is to find jobs elsewhere.

Lemann equally ignores those aspects of the Empowerment Zone program that do aim at helping individual poor people achieve opportunity. The point of providing $100 million in Title 20 funds to each zone is precisely to support training, education, and family services that will assist residents in finding jobs locally or throughout the metropolitan area. Lemann does acknowledge that the Clinton administration wanted its employee tax credit to extend to residents wherever they found jobs -- not just to businesses in the zones -- but that Congress did not go along.

Presumably, the poor will always be with us, so we should just rally 'round the welfare system. Lemann's alternative to Empowerment Zones -- "to simply provide for poor people's material needs, through cash grants, vouchers like food stamps and services like Medicaid" -- offers neither self sufficiency nor political realism.

Had he not been so intent on debunking the potential pitfalls of Empowerment Zones, Lemann might have seen a kindred spirit.

Consider the following: "The government should be trying to break the hold on individuals of those aspects of the ghetto culture that work against upward mobility, by providing a constant, powerful force that encourages the people of the ghettos to consider themselves part of the social structure of the country as a whole." As a first step, we need to replace "the rather casual official attitude toward street crime" in the inner-city with plans to "put police officers back on the streets and [have] criminals quickly punished." Welfare should "become a temporary program leading to a job." Housing projects should "begin screening tenants again, and kicking out the bad ones." In education, we should "try to improve the chances that every ghetto child is born healthy, learns to read and write in elementary school, graduates from high school, gets trained for the job market as it now exists, puts off parenthood until he or she can manage a family, and has a job waiting at the end of the process."

I am not quoting from Bill Clinton's collected speeches. The passage is from The Promised Land. If you and I can see the remarkable similarity between this program and the president's, why can't Nick Lemann?

- E.S.

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