This document summarizes John Powell's perspective on community and economic development in a global economy. It discusses how globalization has increased interconnection between labor markets, financial markets, and credit markets. It also discusses how structural inequality and institutional racism have created differential outcomes for communities. Specifically, it provides the example of how redlining and reverse redlining have created a dual credit system that has marginalized some communities and concentrated wealth in others. It advocates moving beyond just local strategies to adopt a more transformational and systemic approach that connects communities to opportunity in multiple domains like housing, education, employment through regional collaboration.
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Perspectives on Community and Economic Development in a Global Economy
1. Perspectives on Community
and Economic Development in
a Global Economy
john a. powell
Director, Kirwan Institute for the Study of Race and Ethnicity
Williams Chair in Civil Rights & Civil Liberties, Moritz College of Law
Affordable Housing and Community Development Law Conference
October 9, 2009
Newport, RI
2. 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
3. Globalization
• Where does your stuff
come from?
• Under what conditions?
4. • 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.
5. 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.
6. 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
6
Adapted from the Aspen Roundtable on Community Change. “Structural Racism and Community Building.” June 2004
7. System Interactions
7
Source: Barbara Reskin. http://faculty.uwashington.edu/reskin/
9. 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
11. “Race or Risk” ?
…what about fair credit
Source: United for a Fair Economy
12. 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?
13. 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
13
Based on research by Chris Peterson, University of Utah Law School
14. …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
14
Created by Chris Peterson, University of Utah Law
15. Reassess our Assumptions
Are unfettered markets good?
Is government action inherently bad?
Who wins and who loses?
Source: United for a Fair Economy
16. • Our global economy
requires
affirmative, deliberate
collective action, across
multiple domains, and at a
regional level
• How can we affirmatively
incorporate our
More than ‘thinking marginalized communities
globally’ and ‘acting
locally’ into the mainstream
economy?
17. 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
18. 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?
19. Two types of Strategies
Example:
Dual Credit Systems
Transactional Transformational
Locate solutions within the Fix the System, get rid of the
individual or community DUAL system
Financial literacy programs Link to broader Housing and
Payday lending restrictions Credit Markets
But it’s a systemic deficiency; Empowers communities
communities are still vulnerable against future risks
20. 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
21. 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
22. Appendix
How can practitioners
embrace an opportunity-
based model of
development?
22
23. 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
24. 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
25. Expanded Geography of Action
• Collective and deliberate action
• Horizontal collaborations: regional
collaborations, public/private/nonprofit
partnerships
• Vertical collaborations: local, state, and federal
policy reforms
26. Focus explicitly • Evaluations. Do proposed
on racial and
social 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
27. Connecting Multiple Domains: e.g.
Housing and Schools:
How can we reverse this pattern?
Low Opportunity High Opportunity
27
28. 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
29. Housing is an opportunity
anchor and key leverage point
Health
Employment
Childcare
Housing
Effective Education
Participation
Transportation
29
30. 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
31. 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 George's are deficient
– Guiding responses
Manassas Park
Fairfax
Manassas
• Understanding what resources
Legend
Fauquier
Water Features
County Areas
Prince William
need to be developed in
Neighborhood
Opportunity Ranking
communities
• Understanding how to connect
Calvert
Very Low Opportunity
Low Opportunity
Moderate Opportunity
Charles
marginalized residents to areas of
Culpeper
High Opportunity
Stafford
Prepared by: The Kirwan Institute for the Study of Race & Ethnicity, March 1, 2007 St. Mary's
opportunity throughout the region
Very High Opportunity Source: U.S. Census Bureau and Opportunity Analysis by Kirwan Institute
31
33. 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
collaboration
For more information, see our report “Pathways to Opportunity: Partnership and 33
Collaboration for Revitalizing the Rosemont-Walbrook Neighborhood” available at