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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
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

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




                                                                 7
Source: Barbara Reskin. http://faculty.uwashington.edu/reskin/
Dual Delivery Systems
Credit, Housing, Education, Labor




                                    8
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
From
Redlining to
  Reverse
 Redlining




               A Geography of Credit…
“Race or Risk” ?


                                    …what about fair credit




Source: 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




                                                                                                                              13
Based 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




                                                                    14
Created 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 our
More than ‘thinking       marginalized communities
globally’ and ‘acting
locally’                  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                    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
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 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
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 opportunity
anchor 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 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
32
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
Questions or Comments: www.kirwaninstitute.org
                                          34

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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/
  • 8. Dual Delivery Systems Credit, Housing, Education, Labor 8
  • 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
  • 10. From Redlining to Reverse Redlining A Geography of Credit…
  • 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
  • 32. 32
  • 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
  • 34. Questions or Comments: www.kirwaninstitute.org 34