Communities born again
It was the early 1980s, the dawn of the public-private partnership era and the twilight of Mayor Kevin White’s administration in Boston. After a terrible decline, the city’s inner-city neighborhoods were in dire need of help. Houses were abandoned and burned, and crime was rampant.
Paul Grogan, the young deputy director of the city’s Neighborhood Development and Employment Agency, had just been placed in charge of the department and a novel program for developing low-income housing. Grogan’s boss had abruptly resigned, but not before coming up with the idea of working with corporations and community development organizations to fight poverty and rebuild troubled neighborhoods. The program, called the Boston Housing Partnership, was designed in part to compensate for Ronald Reagan’s drastic cutbacks in federal social programs.
Agency under fire
Unfortunately, however, the Neighborhood Development and Employment Agency was in trouble. The residents of Boston’s neighborhoods did not trust the agency — it had a reputation of being ineffective, political, or both — and the U.S. Department of Housing and Urban Development (HUD) was investigating the agency’s administration of federal funds. And, to top it all off, Grogan, the agency’s neophyte director, knew nothing about nonprofit community development, the heart of the new partnership.
Grogan was not alone in his ignorance of nonprofit community development; the concept was unknown to most Americans in the early 1980s. Yet in the next 20 years, it would produce a revolution in urban revitalization, converting the most infamous neighborhoods in the country into healthy communities.
Led by small nonprofit groups, often known as community development corporations (CDCs), the broad-based movement has developed new homes and retail businesses, and instituted job training classes, day care programs, health care centers and anti-crime efforts. Unlike the federal urban renewal program of the 1950s and 1960s that was run for downtown business interests, community development takes a bottom-up approach, with the local nonprofit CDCs setting the agenda and carrying out the efforts.
Today the results of the community development movement can be found all over the United States. From Newark, N.J., to San Francisco, empty buildings have been rebuilt, and real estate developers are constructing new homes and stores. Crime rates have fallen to levels not seen in 40 years. The fire engine houses are quiet where arson fires once burned almost incessantly.
People used to worry that inner-city neighborhoods might never be saved. Now, in many places, they worry whether those same neighborhoods will have room for families of modest means.
As effective as grass-roots CDCs have been, they would not have gone far on their own. Fortunately, governmental agencies and private institutions stepped forward to assist the small groups at the forefront of the community development movement. Philanthropies and nonprofit financial institutions — including such national powerhouses as the New York City-based Local Initiatives Support Corp., the Washington, D.C.-based Neighborhood Reinvestment Corp. and the Columbia, Md.-based Enterprise Foundation — proffered loans and grants and technical advice.
No group has been more essential to the revitalization revolution than local government. Local elected officials, department heads, and rank-and-file staff helped bring back inner-city neighborhoods in countless ways — by donating land or supplying funds for housing development, clearing projects through regulatory hurdles and sending policemen to shut down the haunts of criminals. In many states and cities, local governments disbursed the monies for federal programs, such as community development block grants, that allowed community development organizations to operate.
The revitalization efforts of local governments ranged in size from the mammoth — the largest by far was the $5 billion, 10-Year Plan created by Mayor Ed Koch to redevelop tens of thousands of housing units in New York City — to the modest cooperation of the local inspection or zoning departments.
Boston creates model
In Boston, for example, the city government — the Neighborhood Development and Employment Agency and its novice director Grogan — created a new model for urban revitalization efforts when it led the Boston Housing Partnership in the 1980s.
The basic idea of the Boston Housing Partnership was that the city government and the corporate sector would assist local CDCs to identify, acquire and redevelop the deteriorated and abandoned apartment buildings that were blighting the city.
The Partnership was headed by William Edgerly, CEO of Boston’s State Street Bank, who enlisted representatives of banks, insurance companies and state government departments, such as the Massachusetts Housing Finance Agency, to serve on the board of directors. Yet when he called the first meeting of the Partnership in 1983, Edgerly had no money or staff to plan, let alone develop, housing. At the start, the private sector partners looked to local government to launch the new program.
Thus it fell to Grogan, who found himself at the helm of the unpopular agency beset by corruption charges, to send city funds to the CDCs. It was not that Grogan particularly believed in the CDCs or even knew anything about them. It was more that he needed to buy some time to solve the agency’s problems and hoped that supporting the local CDCs might win back some of the trust of neighborhood residents.
First, Grogan had to make sure that no hint of interference would further damage the reputation of his agency. He convinced Mayor White to keep political operatives out of the housing program, threatening at one point to resign.
Then, Grogan learned that his agency was not corrupt, but merely woefully inefficient, having failed to carry out a number of programs for which it had received funds. With a windfall of close to $50 million, almost double his yearly budget, Grogan got the Boston Housing Partnership rolling.
Under the first Boston Housing Partnership program, 10 CDCs developed 700 dwelling units in 69 derelict buildings throughout Boston at a cost of $40 million. The experimental program had its trying moments but in the end demonstrated how local government could collaborate with nonprofit CDCs and corporate leaders to rebuild the city.
A few years later, with Grogan now enjoying the support of Mayor Raymond Flynn, the Boston Housing Partnership carried out a second program, in which CDCs restored almost 1,000 units in 51 apartment buildings that had become the most dangerous slums in the city.
Those community development projects transformed the image of inner-city Boston and paved the way for still more innovative programs either spearheaded by or done in close cooperation with the city government.
Chicago’s direct approach
Like local administrations around the country, Chicago’s city government supports CDCs in a number of ways. Under Mayor Richard M. Daley, Chicago has taken a distinctive approach to community development by building and improving its public facilities to encourage neighborhood revitalization.
For example, the city decided to bolster redevelopment on the South Side, the city’s historic African-American district, by replacing an infamous motel — mocked by locals as the “ho hotel” — with a new central police department headquarters. The state-of-the-art, high-tech building was completed in 2000 at a cost of about $65 million. By counteracting the neighborhood’s unsafe reputation, the presence of the police command center improved the marketability of nearby real estate in what had been a severely depressed market.
It also had another positive effect. Officials of the Illinois Institute of Technology, one of the most important private institutions in the area, had been debating whether to close their central campus in the middle of the South Side and move it to the suburbs. But once the city agreed to build the police headquarters, as well as a new entrance to a nearby elevated train station, the college officials changed their minds, upgraded the campus, and for the first time, constructed student dormitories. The city, in turn, rebuilt and landscaped the public streets that ran through the campus.
Chicago also has been in the forefront of the effort to rebuild its public housing projects, which, until demolition began, included the largest concentration of public housing in the country, a four-mile wall of high-rise buildings along South State Street.
For the infamous Cabrini-Green project near the city’s Gold Coast, Mayor Daley pushed through a $1 billion development project that included demolition of the old buildings, construction of a new school and development of hundreds of new homes. In February 2000, the mayor, HUD and the Chicago Housing Authority (CHA) signed a five-year, $1.5 billion plan that called for CHA to develop or rehabilitate more than 25,000 public housing units and destroy 51 high-rises containing more than 18,000 apartments. The program provides all residents of the high-rises with either a low-rise home in new mixed-income developments on the same site or a housing voucher to use for private housing elsewhere. The demolition and placement of public housing residents is well underway, and Chicago’s sense of the potential for future-growth in its neighborhoods has transformed.
L.A. takes care of business
Los Angeles is another city that supports community development by many methods, but its economic development program has a particular West Coast flair that has put Los Angeles in the forefront of a national movement to help inner-city businesses multiply and grow.
In the wake of the violence sparked by the verdicts in the Rodney King trial, leaders in the private and public sector launched a massive effort to “Rebuild L.A.” Only after the crusade was drastically scaled back, however, did a few perceptive leaders realize that, contrary to its notorious image, South Central Los Angeles was a powerful economic generator. Looking beyond the image, the area contained an astounding array of food processors, clothing makers, toy distribution companies, furniture builders, metalworking and plastics manufacturers, as well as lucrative biomedical, entertainment and electronics firms that operated in and around the district. The community development leaders devised an innovative strategy of assisting mom-and-pop manufacturers to benefit the area’s low-income workers.
Inspired by that innovative work, Los Angeles began to emphasize inner-city economic development. Mayor Richard Riordan and Rocky Delgadillo, a lawyer and deputy mayor for economic development, created Genesis L.A. to assist communities where low-to-moderate income households predominate or where unemployment rates are higher than average.
Genesis L.A. combined the government’s resources with funds from large banks; its five-member board included the CEO of Washington Mutual and retired basketball star and entrepreneur, “Magic” Johnson. Its first order of business was to redevelop 15 — later the number rose to 22 — large blighted industrial and commercial sites.
Besides the usual business of trying to lure companies, the city’s economic development office, under Delgadillo, also sponsored trade associations for the small manufacturers and helped start roundtables, including one for new entertainment media. Today, the city continues to place inner-city, small-scale manufacturing at the center of its economic development policy. And this spring, the Genesis L.A. Economic Growth Corp. created a real estate fund to develop approximately 3,000 homes and apartments.
Those are just a few cases of local governments pushing community development forward. All across the country, state and local government officials have supported and led community development efforts and contributed to one of the greatest domestic policy triumphs in recent American history: the revival of the inner-city.
Alexander von Hoffman is a senior research fellow at the Joint Center for Housing Studies at Harvard University and teaches at Harvard’s Graduate School of Design. His new book, “House by House, Block by Block: The Rebirth of America’s Urban Neighborhoods,” was published by Oxford University Press.