Perspectives on Community and Economic Development in a Global

Economy

Affordable Housing and Community Development Law ConferenceOctober 9, 2009Newport, RI

Director, Kirwan Institute for the Study of Race and EthnicityWilliams Chair in Civil Rights & Civil Liberties, Moritz College of Law

john a. powell

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

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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

6Adapted from the Aspen Roundtable on Community Change. “Structural Racism and Community Building.” June 2004

System Interactions

Source: Barbara Reskin. http://faculty.uwashington.edu/reskin/7

Dual Delivery SystemsCredit, Housing, Education, Labor

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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

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From Redlining to

Reverse Redlining

A Geography of Credit…

“Race or Risk” ?

Source: United for a Fair Economy

…what about fair credit

Effects of a Dual Credit Delivery System

• Credit-starved communities from decades of red-lining

• Loss of wealth

• Lost Tax Revenue• Higher Demand

for Services

• Entrenched marginalization in housing and credit markets

• Other Implications?• Higher- Education

loans?• Business

Development?

Predatory Loans Foreclosure

Further Neighborhood Destabilization

Further disinvestment by Prime

Financial Institutions

Global financial systems operate outside the scope of US regulations and they are increasingly complex…

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The Post Depression FHA Era: The Three Party Mortgage Market

Pre Depression: The Two Party Housing Market

Homebuyer

Party 1

Seller (and/or)

Lending Institution Party 2

Homebuyer

Party 1

LendingInstitution

Party 2

Government Sponsored Institution

purchases, insures or underwrites loan Pa

rty 3

Based on research by Chris Peterson, University of Utah Law School

…From Two Party Transactions to Mortgage Securitization at a Global Scale

14Created by Chris Peterson, University of Utah Law School

Today: The web of actors and institutions involved in the

sub prime lending and mortgage securitization

market

Reassess our Assumptions

Are unfettered markets good?Is government action inherently bad?Who wins and who loses?

Source: United for a Fair Economy

More than ‘thinking globally’ and ‘acting locally’

• Our global economy requires affirmative, deliberate collective action, across multiple domains, and at a regional level

• How can we affirmatively incorporate our marginalized communities 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 StrategiesExample:

Dual Credit SystemsTransactional

Locate solutions within the individual or community

Financial literacy programsPayday lending restrictions

Transformational

Fix the System, get rid of the DUAL system

Link to broader Housing and Credit MarketsBut it’s a systemic deficiency;

communities are still vulnerableEmpowers communities

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

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How can practitioners embrace an opportunity-

based model of development?

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

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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

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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 on racial and social justice

• Evaluations. Do proposed 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

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High OpportunityLow Opportunity

Connecting Multiple Domains: e.g. Housing and Schools:

How can we reverse this pattern?

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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 household by household race:

> 90% White

50 to 100% Students of Color

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%

Housing

ChildcareEmployment

Education

Health

Transportation

Effective Participation

Housing is an opportunity anchor and key leverage point

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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

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Example: Opportunity Mapping

• Opportunity is spatially distributed throughout our metropolitan regions (varying by community)

• Opportunity mapping is a tool to help guide policy and advocacy, providing a quantitative assessment of where opportunities are and where they are deficient– Guiding responses

• Understanding what resources need to be developed in communities

• Understanding how to connect marginalized residents to areas of opportunity throughout the region

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Charles

Loudoun

Fauquier

Fairfax

Montgomery

Prince George's

Anne Arundel

Calvert

Howard

Prince William

StaffordCulpeper

Jefferson

Frederick

St. Mary's

Clarke

District of Columbia

BaltimoreBaltimore City

Arlington

Alexandria

Manassas

Fairfax City

Falls Church

Manassas Park

Prepared by: The Kirwan Institute for the Study of Race & Ethnicity, March 1, 2007Source: U.S. Census Bureau and Opportunity Analysis by Kirwan Institute

Legend

Water Features

County Areas

Neighborhood

Opportunity Ranking

Very Low Opportunity

Low Opportunity

Moderate Opportunity

High Opportunity

Very High Opportunity

Neighborhood Opportunity AnalysisWashington DC-Baltimore Region

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Putting it All Together: Neighborhood Revitalization

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– 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 collaboration

Neighborhood

Revitalization

Housing Stock

Public Investme

nt

Geography (Local;

Regional)

Larger Market Forces

Neighborhood

Leadership

Institutional

Partners

Anchor Institutio

ns

For more information, see our report “Pathways to Opportunity: Partnership and Collaboration for Revitalizing the Rosemont-Walbrook Neighborhood” available at www.kirwaninstitute.org

Questions or Comments: www.kirwaninstitute.org34