Urban Thoughts

• CDCs are very vulnerable to the lure of real estate development. According to standard CDC press releases, CDCs don't just put up buildings, they build communities. But real estate has a narcotic effect on the ego. Groundbreakings and grand openings get more press attention than service programs do. As a CDC accumulates property, it becomes a more important player in the local political scene. CDC leaders, despite their community roots, are not exempt from human instinct; a real-estate oriented CDC thus needs to ask itself whether its clients truly benefit from its development activity, or would they ultimately be better off if the CDC directed its resources toward a more person-oriented approach.

• Thus, the CDC should obtain its service and administrative facilities on a functional basis at the minimal practical cost. This may mean leasing, which is often cheaper and more flexible for a CDC than building or rehabing its own facility. Again, this means resisting the empire-building instinct that influences many CDC leaders (and often precludes the most efficient solution).

• Once a CDC gets out of the real estate game, it will be able to reduce the amount of time and effort it expends on local politics. It can then refocus those resources on its intended goal of releasing people from the clutches of poverty. Thus it should put maximum emphasis on human outreach and workforce development programs, which assist in the assimilation process. Advocacy and civil rights will also regain their former importance.

INTEGRATED HUMAN DEVELOPMENT, THE PATH TO ASSIMILATION

• The "new CDC" will promote the traditional elements of assimilation, i.e. family stability, employment, and education; and at the same time help to lower the social and economic barriers that stand between the inner-city and the suburban mainstream. An integrated human development effort is needed to achieve this. Such a spectrum of effort would include family assessment, case management, substance abuse therapy, parenting skills, economic literacy, job preparation, basic skills training, job development and placement, transportation assistance, daycare, academic enhancement programs for youth, homeownership counseling, etc.

• As part of this integrated approach, CDCs should broadly advocate for inner-city residents. E.g., the CDC can challenge the frequent requirement that a new employee have a totally clean police record. In some instances, such a requirement may be justified, but in other cases, it may be a veiled form of prejudice against black and Hispanic members of the urban culture. Other forms of advocacy could focus on suburban acceptance of inner-city employees, fair housing opportunities for families moving out of the inner city, etc.

CAN "ECONOMICS" BE DEVELOPED BY CDCs?

• As to economic development: the theory behind CDC-sponsored economic ventures was that with partial subsidy (grants, low-interest loans, tax abatements, etc.), a CDC could set up a profitable business in the ghetto and create new jobs, because the CDC would garner the neighborhood support that an outside-based corporation or venture capitalist would not, e.g. less crime, less vandalism, and a better attitude on the part of the local workforce.

• Unfortunately, the operational experience of urban CDCs has shown this presumption to be false. As discussed above, CDCs today are tolerated but not always embraced by the inner-city community. Much of the inner-city labor pool is not ready for the modern service economy, and even the more comprehensive training programs have a hard time overcoming the effects of the sub-culture. Therefore, direct economic development should be de-emphasized, except in certain instances where obvious community needs and assimilation goals will be served (e.g., a supermarket, microenterprise assistance, individual development accounts -- so long as these are integrated into an overall assimilation strategy).

MIDDLE CLASS HELP ON THE ROAD TO ASSIMILATION

• The "new CDC" should also involve the black and Hispanic middle class in the assimilation process of ghetto residents. CDCs already do so, in an informal way, as many black and Hispanic management staff members live in the suburbs. The black / Hispanic middle class can help lower resistance on the part of ghetto residents to assimilation, by showing that suburban life need not extinguish racial and ethnic pride, just as it never extinguished Jewish pride, Chinese pride, Italian pride, etc. Assimilation in America has never meant becoming a brainwashed zombie; it has basically meant striking a balance between nationhood and individuality through achievement.

• As to those who refuse assimilation and stay in the ghetto: they will face increasing poverty and deprivation, and will become increasingly hard to serve. A CDC that serves them will have to take a "Mother Teresa" approach, emphasizing maintenance of dignity in lieu of economic / social re-empowerment. It will frequently have to suspend judgement about a client's ongoing involvement in criminal activities.

HDCs: DO FEWER THINGS, BUT DO THEM WELL

• Leaders of the "new CDC" (should it be called an "HDC" -- Human Development Corporation?) must learn to emphasize operational efficiency, even at the cost of slowing up new development and impeding community identity; due to the contraction of public support for urban poverty relief, new CDCs will need to emphasize efficiency to stay in business, until public confidence can be regained.

PLACE-BASED VERSUS PERSON-BASED

• The CDC's of today are inherently "place-based". However, experience shows that a different type of vehicle is needed, one that can tread the road of cultural assimilation & resettlement, the road that historically leads away from poverty. As Harvard economics professor E. Glaeser pointed out in the Aug. 12, 1999 Wall Street Journal, "The problem with place-based programs is that they create incentives to keep the poor in the ghetto ... Place-based programs also suffer from the fact that their benefits go disproportionately to property owners in the targeted areas -- and not to the intended beneficiaries."

• The non-place-based CDC of the future will act as a bridge between the inner city sub-culture and the mainstream culture. It will teach "IQ" to its constituents (Herrnstein and Murray be damned), teach the parenting styles of the mainstream, emphasize education, delayed consumption, human and economic investment, and all the other stuff that works in the modern economy. It will help to overcome the "myth" within the inner city sub-culture that the powerful white mainstream culture won't ever let minority inner-city residents get a slice of the "economic pie". This myth has some factual grounding, but the growth of the black and Hispanic middle class belies it (hopefully). The new CDC will help inner city residents to gain access to jobs, housing, schools, and overall acceptance from the American mainstream. But it will also seek to preserve the good things from the inner city, e.g. the interpersonal and spiritual values, the art and music, and the history of struggle and endurance. Urban CDC's may be able to evolve into such person-based organizations; indeed, they will need to, if they hope to avoid contraction from the public's waning enthusiasm for inner city support. But if not, perhaps a whole new breed of organizational animal will be necessary.

CONCLUSIONS:

1.) The present inner-city sub-culture and its behavioral patterns generally do not support, and in some ways impede, the attainment of skills necessary for achievement in the modern-day economy. (The surrounding suburban culture is also not very sharing of its success). As Davis Landes states in The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor, "If we have learned anything from the history of economic development, it is that culture makes all the difference".

2.) In theory, resettlement out of the ghetto would be the best thing economically for today's inner city residents -- that has historically been the case in America (the Gautreaux case, and HUD's Moving To Opportunity project, affirm that it is still relevant for today's low-income urban families). Practically speaking, though, resettlement assistance is not a panacea. It is part of an answer, but is not THE answer.

3.) Many modern inner-city residents don't want to move out, although many others are doing it.

4.) The suburbs don't really want to take them either, given the new race consciousness. But it still is happening, although slower than it should.

5.) Today there isn't a strong "economic bridge" to help inner city residents with low skill levels to make such a move, as there once was for past ghetto dwellers via factory jobs and unions. Instead, there is a "digital divide" between the demand in the modern economy for technologically educated workers and the level of scholastic achievement typical of today's inner city children.

6.) Therefore, social intervention is needed to address items 3, 4 and 5. Resettlement efforts like HUD's MTO project are one approach (if taken in a humanistic, long-run context). A complementary approach is to promote educational opportunities and technology use within the inner city.

7.) Urban Community Development Corporations could facilitate such interventions, if they would accept a change of philosophy. They need to end their traditional focus on real estate development and social services, and re-direct their energies to creatively address the growing "digital divide" in our economy.

8.) Urban CDC's need to stop ignoring the technology / education / employability crisis and stop acting as if they can circumvent it through "organizing efforts" or "alternate economic institutions". I.e., many CDCs have started their own little businesses to create subsidized make-work jobs or manufacturing employment. Along with organizing, these approaches belong to the 1960s; CDCs have a terrible track record in running businesses. Swimming against the tide of the American economy is like building sand castles in a storm.

9.) As a starting point, CDC's should follow the lead of business by intelligently integrating information systems into their own operations, so that the culture of technology will become available in the inner city. They also need to support educational improvement efforts in their territory and help to create a culture of education amidst their constituency.

10.) The urban CDC's should also stop ignoring or opposing Gautreaux and MTO, and support resettlement efforts so long as they are humanistic and focused upon the long-run. Education, acclimation to business technology, and resettlement opportunities should be seen as the rungs of an overall "economic ladder" which impoverished inner-city families can climb over time.

11.)The urban CDC's must make the effort to face the 21st Century, because otherwise they are going to die off, given the new race consciousness and increasing lack of public sympathy for the urban ghetto.

AFTERTHOUGHTS . . .

• In 1999, Rapoza Associates came out with a P.R. brochure on CDCs. It gave summaries on 17 different CDCs, telling of all the great things that CDCs do. The interesting thing is that only 5 of the featured CDCs are urban; the rest are rural. Less than one-third were urban. You would think the opposite, given that the CDC movement originated in the cities. This says two things. First, CDC's are not exclusively urban creatures. But more interesting is the implication that CDC's have been more successful outside of the inner-city.

• These rural CDCs are usually regional operations in Alaska, New Mexico, Kentucky, Maine, Mississippi, Vermot and Wisconsin. It's hard to say that they are place-based, certainly not neighborhood-based. They concentrate on economic development and have many successes. They get involved with a mixed-bag of different enterprises, including factories, service groups, day care centers, fishing fleets, etc. These enterprises are scattered over a wide area. In effect, these CDCs are doing what a governmental economic development agency should be doing. They serve "economically depressed" areas that have many low-income families, but do not have the dense concentration of impoverished residents that inner cities do. E.g., the sociology and economics of the southern tier of New York State or the Mahoning Valley are a good bit different than in Harlem or northeast Cleveland.

• CBOs and urban CDCs need to focus on operational excellence; not just for survival, but as a mission! Their own witness to operational excellence is the most effective thing they could do to break the cycle of poverty. Modern urban poverty is a very tough thing to attack, and we still really don't know what works, because nothing really has worked. But we do know that at the core of the cycle of poverty is a behavioral bias toward short-run action and a "getting by" attitude. In focusing on fundraising and PR/advocacy, CBO/CDCs similarly keep themselves alive and manage to "shake down" the mainstream economy; but they set up sloppy operations, which the community sees (clients, workers, etc.). And this reinforces the notion that "getting by" is OK. To the degree that a CBO/CDC is successful, like New Community in Newark, it witnesses that a vigorous "hustle" can make you wealthy, or at least set you above the rest economically; e.g., like a drug-dealer or a store-front preacher gone bad.

• A tight operation would be a counter-witness, sort of like a boot camp in the armed services (which has always been recognized as a way out of poverty for many young men). It would have to be rigorously fair and offer significant salary increases as incentives for performance advancement. It would quickly respond to good performance as well as to bad performance. It would make intelligent use of technology in its daily operations, and train its resident employees to use it (such that they would be hireable by any top corporation). It might then truly make a difference to the life of the inner city.

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