Perspectives on Community and Economic Development in a Global Economy
Perspectives on Community and Economic Development in a Global Economy john a. powellDirector, Kirwan Institute for the Study of Race and EthnicityWilliams Chair in Civil Rights & Civil Liberties, Moritz College of LawAffordable Housing and Community Development Law ConferenceOctober 9, 2009Newport, RI
Changes, Challenges and Opportunities Facing our Society• Our world today is more complex and interconnected –Global labor market –Global financial market –Global credit market –Global climate change 2
Globalization • Where does your stuff come from? • Under what conditions?
• Different communities are situated differently with regards to institutions• Institutions mediate opportunity• Structural Inequality – Example: a Bird in a cage. Examining one wire cannot explain why a bird cannot fly. But multiple wires, arranged in specific ways, reinforce each other and trap the bird.
Communities have different resources, and these result in differential outcomes…• Example: Universal healthcare? – One community has no health insurance, but a hospital down the street. – Another community has no health insurance and no hospital.
Structural Racialization Context: The Dominant Consensus on Race White privilege National values Contemporary culture Current Manifestations: Social and Institutional Dynamics Racialized public policies and institutional Processes that maintain racial hierarchies practices Outcomes: Racial Disparities Racial inequalities in current levels of Capacity for individual and community well-being improvement is undermined Ongoing Racial Inequalities 6Adapted from the Aspen Roundtable on Community Change. “Structural Racism and Community Building.” June 2004
System Interactions 7Source: Barbara Reskin. http://faculty.uwashington.edu/reskin/
The Global to Local connection: Dual Credit Delivery System• A powerful example• The link between Race, Neighborhood location, and (in)accessibility to prime or sustainable loans 9
FromRedlining to Reverse Redlining A Geography of Credit…
“Race or Risk” ? …what about fair creditSource: United for a Fair Economy
Effects of a Dual Credit Delivery System • Credit-starved • Loss of wealth communities from decades of red-lining Predatory Foreclosure Loans Further disinvestment Further •Entrenched by Prime Neighborhood marginalization in Financial Destabilization housing and credit Institutions • Lost Tax markets Revenue •Other Implications? • Higher Demand •Higher- Education for Services loans? •Business Development?
Global financial systems operate outside the scope of US regulations and they are increasingly complex… Pre Depression: The Two Party Housing Market Party Party 1 2 Seller Homebuyer (and/or) Lending Institution The Post Depression FHA Era: The Three Party Mortgage Market Party Party Party 1 2 Lending 3 Government Homebuyer Sponsored Institution Institution purchases, insures or underwrites loan 13Based on research by Chris Peterson, University of Utah Law School
…From Two Party Transactions to Mortgage Securitization at a Global Scale Today: The web of actors and institutions involved in the sub prime lending and mortgage securitization market 14Created by Chris Peterson, University of Utah Law
Reassess our Assumptions Are unfettered markets good? Is government action inherently bad? Who wins and who loses?Source: United for a Fair Economy
• Our global economy requires affirmative, deliberate collective action, across multiple domains, and at a regional level • How can we affirmatively incorporate ourMore than ‘thinking marginalized communitiesglobally’ and ‘actinglocally’ into the mainstream economy?
Opportunity Structures• We all live in opportunity structures called neighborhoods, nations• Even where we have universal goals, we have different paths.• Different strokes for different folks
A New Paradigm: “Globalizing” Community and Economic Development• Traditional model is highly localized and irrelevant for our global economy• Fragmented and incremental strategies ignore the complexity of multiple systems of disadvantage (cumulative causation)Remember the bird cage?
Two types of Strategies Example: Dual Credit Systems Transactional TransformationalLocate solutions within the Fix the System, get rid of the individual or community DUAL systemFinancial literacy programs Link to broader Housing andPayday lending restrictions Credit Markets But it’s a systemic deficiency; Empowers communitiescommunities are still vulnerable against future risks
A New Paradigm contd.• A Systems Approach: the “snowball effect”• Personalized remedies: every community has its own arrangement of institutions that produce disparate outcomes• Continuous monitoring of the system – Changing factors in a system can alter conditions ‘on the ground’ quickly – Example: Declining housing markets decrease private market development and decrease effectiveness of Inclusionary Zoning policies
Potential Alternatives • Federal – Fannie and Freddie to “affirmatively further fair housing”? – Role for financial institutions that received federal bailout funds? – HUD initiatives: Sustainable Communities • Local? Regional! – What about foreclosures in non-segregated neighborhoods for affordable housing? – What about strategic reuse of abandoned properties in distressed neighborhoods?Different communities will have different structural needs
Appendix How can practitioners embrace an opportunity- based model of development? 22
Communities of Opportunity– Everyone should have fair access to the critical opportunity structures needed to succeed in life– Affirmatively connecting people to opportunity creates positive, transformative change in communities– More than just de- concentration! Narrowly focused strategies: mobility-based OR in-place– Transformational strategies include BOTH 23
An Opportunity- Based Model of Community and Economic Development• A systems approach – Understanding relationships that suppress access to opportunity – Identifying critical leverage points to produce pathways to opportunity• Involving collaboration and engagement in multiple domains – Education; housing; finance etc.• Opening up pathways to opportunity through engagement on critical intervention points – People, Places and Linkages 24
Expanded Geography of Action• Collective and deliberate action• Horizontal collaborations: regional collaborations, public/private/nonprofit partnerships• Vertical collaborations: local, state, and federal policy reforms
Focus explicitly • Evaluations. Do proposedon racial andsocial justice projects: – Perpetuate residential segregation? – Exacerbate jobs-mismatch? – Perpetuate environmental injustice? • Without addressing the social, racial and interregional inequities facing the region, our future is compromised
Connecting Multiple Domains: e.g. Housing and Schools: How can we reverse this pattern? Low Opportunity High Opportunity 27
LIHTC and Segregated Schools• Currently, LIHTC development is conflicting with efforts to desegregate schools.• Nearly ¾’s of African American and Hispanic LIHTC residents are located in segregated schools. Figure 8: Percentage of LIHTC Population within Proximity to Segregated Schools: Population in > 90% 50 to 100% Students of household by White Color household race: American Indian 16.8% 18.7% Asian 6.9% 71.3% Black 6.0% 69.6% Hispanic 8.4% 74.3% Other Race 33.5% 23.2% White 32.5% 17.0% 28
Housing is an opportunityanchor and key leverage point Health Employment Childcare Housing Effective Education Participation Transportation 29
Example: Opportunity- Based Housing• Rethink fair housing…• Not just integration but integration into opportunity• Inclusive fair housing means access to good schools, jobs, doctors, child care, transportation, parks, and the civic fabric 30
Example: Opportunity Mapping • Opportunity is spatially Neighborhood Opportunity Analysis Frederick Baltimore City distributed throughout our Washington DC-Baltimore Region Jefferson Howard Baltimore metropolitan regions (varying by community)Clarke Loudoun Montgomery • Opportunity mapping is a tool to Anne Arundel help guide policy and advocacy, providing a quantitative assessment of where Falls Church Fairfax City District of Columbia Arlington opportunities are and where they Alexandria Prince Georges are deficient – Guiding responses Manassas Park Fairfax Manassas • Understanding what resourcesLegend Fauquier Water Features County Areas Prince William need to be developed inNeighborhoodOpportunity Ranking communities • Understanding how to connect Calvert Very Low Opportunity Low Opportunity Moderate Opportunity Charles marginalized residents to areas ofCulpeper High Opportunity Stafford Prepared by: The Kirwan Institute for the Study of Race & Ethnicity, March 1, 2007 St. Marys opportunity throughout the region Very High Opportunity Source: U.S. Census Bureau and Opportunity Analysis by Kirwan Institute 31
Putting it All Together: Neighborhood Revitalization– A systems response • Where are your key leverage points? • What are the critical intervention points?– Equity focused • Creating a community for all– Emphasis on strategic collaborationFor more information, see our report “Pathways to Opportunity: Partnership and 33Collaboration for Revitalizing the Rosemont-Walbrook Neighborhood” available at
Questions or Comments: www.kirwaninstitute.org 34