suburban poverty

Five Lessons from Leading Innovators on Confronting Suburban Poverty

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Cross-posted on Brookings’ Metro Blog, The Avenue

Elizabeth Kneebone and Alan Berube

In September we reported that suburbs in our nation’s largest metro areas had seen their poor population grow by 66 percent since 2000, making them home to the largest and fastest growing poor population in the country.

However, the past year also offered important lessons about effective approaches to the new geography of poverty. Through a series of briefs, practitioners from across the country shared their firsthand perspectives on the innovative models they helped to launch to confront the rise of suburban poverty in their regions. In some ways, each of the four models described in these briefs is unique. They come from different parts of the country and tackle different facets of the complex issues suburbs face in the context of growing poverty:
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In Suburban Atlanta, New Models Build Capacity to Address the Housing Crisis

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Barbara Ray

When the Atlanta Neighborhood Development Partnership (ANDP) was formed in the early 1990s, its focus was on building affordable housing in disadvantaged neighborhoods in Atlanta proper—part of a national trend among community developers in the United States to aid urban dwellers.

Then in the late 2000s, the foreclosure crisis hit, leaving roughly two-thirds of Atlanta homeowners underwater on their mortgage and thousands more losing homes to foreclosure.

However, the housing crisis was not confined to the city. The vast majority of foreclosures in the region occurred in Atlanta’s suburbs, and contributed to rising poverty rates there. Today, more than 80 percent of the region’s poor individuals live in the suburbs.

It was this spreading crisis that led ANDP to begin to rethink its focus, John O’Callaghan, president and CEO of ANDP, told me. In the suburbs, the demands were different. They couldn’t simply replicate the models they’d used in the city.

“Strategies are different in the suburbs,” O’Callaghan said. For starters, ANDP would have to work at a much wider scale, geographically, than in the city.

Many Atlanta neighborhoods had citywide expertise and nonprofit organizations on the ground to help residents navigate the crisis. The situation in the suburbs was a stark contrast. “These municipalities had never managed a federal housing program like the Neighborhood Stabilization Program,” one of the main federal initiatives targeting foreclosures, O’Callaghan said. “They lacked the capacity and were looking for strong nonprofit partners.”

Another strategy change was ANDP’s shift from building new affordable housing to rehabbing existing housing. Where in the city they might build affordable townhomes to counteract gentrification, in the suburbs, that kind of concentrated, single-project approach wasn’t the right tool to bolster neighborhood-wide property values.

“A scattered approach [in housing and community development] over a larger geography is more effective than it is in inner-city neighborhoods,” O’Callaghan said.

Developers at ANDP focused their efforts on lower-middle-class, African American, suburban-style neighborhoods (including some in the City of Atlanta) that had been targeted by subprime lenders. They assumed that if they could slow the neighborhoods’ decline and stabilize the area, other factors such as school performance and declining property tax revenue would rebound.

ANDP started with a six-home rental pilot, but quickly saw the value of using their model for homeownership. In some neighborhoods or subdivisions where ANDP had a small cluster of three to four homes, the value of each climbed even amid a stagnant housing market. After initial declines in value, the properties began to turn around.

Developers at ANDP also examined the property values systemically. It was becoming apparent that throughout the region there were problems with property value assessments. As the housing market tumbled, valuations weren’t keeping pace, and property taxes were no longer aligned with the market value of the home. Many residents were paying overly high property taxes—which is often the final straw for vulnerable homeowners.

But not everyone was overpaying, says O’Callaghan. “Research revealed that if a person lived in a low-income neighborhood in the metro area, the appraised value of his or her home was often higher than market value, whereas in higher-income neighborhoods, it was below market value.”

Indeed, as research commissioned by ANDP was beginning to show, in the ZIP codes where foreclosures were concentrated, residents overpaid by significant amounts.

As real home values and tax valuations were increasing, ANDP and others took another step. They advocated for, and received, an increase in the local Homestead Exemption, which helped keep lower-income families in their homes.

But it wasn’t enough. Nine months into the foreclosure crisis, ANDP knew the problem was greater than they alone could address, and larger than the foreclosure crisis. Poverty in the suburbs was exposing systemic issues that needed to be addressed. Addressing these growing problems would require greater collaboration with other organizations and interests to keep families in their homes and neighborhoods strong.

Therefore, ANDP helped create a collaboration of for-profit, nonprofit, and government agencies to focus on solutions. ANDP took on the much-needed quarterback role.

“We wanted to be sure that locally and regionally focused businesses were changing their game plan to respond to the quickening foreclosure crisis,” said O’Callaghan.

“Housing groups could better coordinate getting the word out on resources. Local governments, which didn’t always have a great track record with federal housing programs, got together with the metropolitan planning commission to share best practices and plan together and support one another,” he said.

The result of all of these efforts, O’Callaghan says, is incremental change at a regional level rather than targeted neighborhood change. That said, incremental change is nothing to sniff at.

“ANDP has purchased and rehabbed homes in about one-quarter of Douglas County neighborhoods,” said O’Callaghan.  “The sale of our homes in these neighborhoods has significantly lifted market values, in some cases by as much as $15,000 or more per property.”

Most recently, ANDP has joined with The Reinvestment Fund (TRF), a national community investment group that works across the mid-Atlantic region. TRF will provide needed back-office expertise so ANDP’s community development financial institution (CDFI) loan fund can continue to grow. “A year ago, we had little capital to lend and we couldn’t invest in our own growth,” said O’Callaghan. “TRF has all the skill sets we need and the systems in place.” In turn, ANDP can help TRF and its lending resources get to critical community development projects.

“TRF has a tremendous track record in serving at-risk families and their communities,” said O’Callaghan, “and that’s going to help us be better in every way.”

Nearly six years and 440 rescued homes later, ANDP has learned some key lessons about how to most effectively tackle systemic problems in the suburbs. It’s not an easy feat, given the scale of the problem, the lack of capacity, and inexperience in this new field of suburban poverty. Ultimately, however, it took an experienced organization with roots in the city—with a little help from its friends—to create tailored suburban solutions.

Suburban Poverty: A Year of Lessons

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Elizabeth Kneebone and Alan Berube

Today marks one year since the release of our book Confronting Suburban Poverty in America. Over the course of the last year, we’ve traveled to dozens of communities across the country to talk about the rapid rise of suburban poverty, a trend experienced by almost every major metro area in recent years, and what it means for residents, communities, policymakers, and practitioners grappling with the shifting geography of poverty. Here are our top five reflections from those travels:

1. Numbers are powerful, but only if they are known.

Local leaders and residents often don’t know the extent to which poverty has grown in their communities, or fully understand the complex challenges facing new arrivals and long-time suburban residents who make up the growing poor population. Fortunately, we have seen communities make significant strides by bringing together diverse stakeholders for conversations grounded in data and evidence. In November, Elizabeth participated in a Homeless Education Network summit that highlighted the increase in student homelessness in Pittsburgh’s suburbs. Media coverage of the event led a local YMCA to reach out to the suburban Penn Hills school district to explore ways they could work together to target services to the poor and homeless families in that community. Efforts like Navigating the New Normal in Minnesota are similarly helping to bridge the divide between research, perceptions, and on-the-ground realities.

2. Forget the cookie cutter.

The vocabulary we use to tell a national story—for instance, the word, “suburb”—often falls short of capturing the nuance of local identity and experience. In Houston or Phoenix, the landscape looks suburban well before you pass the city limits, and nearby communities may feel more like rural areas than suburbs. In contrast, a region like Boston may need a more nuanced framework to understand and guide policy decisions across older, densely populated small cities and towns that make up the metro area. This diversity within and across places carries a wider lesson for national practitioners, who succeed most when they partner with local and regional actors who understand the histories, identities, and varying levels of capacity that exist on the ground.

3. Small amounts of capital help build critical capacity.

In their new brief, Robin Snyderman and Beth Dever point to the importance of early investments from local philanthropy that allowed Chicago’s suburban collaboratives to boost their capacity by hiring dedicated coordinators. That staff capacity was critical to attracting and implementing federal funds. Whether it’s multi-jurisdictional collaboration, collective impact models around education (like the Road Map Project in Seattle) or community development (like Great Neighborhoods in Greater Boston), or expanding high-performing nonprofits into suburbs (like Mary’s Center in the National Capital region), local philanthropy is consistently critical for building capacity to confront the challenges of poverty in suburbs. As Robin and Beth point out, however, traditional government funding streams will be needed to sustain these models in the long run.

4. Growing jobs and fighting poverty are not separate initiatives.

While there is still a lot of work to be done to update perceptions, conversations shouldn’t just focus on the problem. Framing the discussion in terms of economic opportunity and regional competitiveness can help engage more partners—particularly the private sector—in efforts to improve outcomes for low-income people and places. In our recent visit to South King County, Washington, we learned about several promising initiatives underway to help communities struggling with rising poverty. Those conversations also revealed an appetite to leverage the sub-region’s assets to grow better jobs, and more strategically coordinate efforts to help prepare local populations for those opportunities.

5. Recovery did not hit the reset button.

The severity of the Great Recession caused policymakers and practitioners in many parts of the country to think differently about how to address shared challenges with limited resources. A few years into the recovery, the crisis has abated, but need remains high and resources haven’t rebounded. Some places are still experiencing rapid increases in their low-income population—like suburban Williamson County, Texas where more than 200 civic and nonprofit leaders recently gathered for a summit on the swift demographic and economic changes underway there. But for many other communities across the country, they are trying to adjust to a “new normal” and the reality that poverty in suburbia is here to stay. Without the urgency of a crisis, however, it can be harder to spur partners across sectors and jurisdictions to do things differently. To help communities catalyze and sustain action that improves outcomes for low-income residents over the long term, it is important as ever to align public and private funding to support more regional, cross-cutting anti-poverty strategies.

Updating Anti-Poverty Policy for the Suburban Age

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Alan Berube

This year, 2014, is rife with 50-year retrospectives of the War on Poverty. More than just a round-number anniversary, the topic is attracting a lot of attention thanks to growing rates of poverty and inequality in America, as well as a nostalgia for a time when the federal government did “big things,” like establishing Medicare and the Food Stamp program. In today’s gridlocked Washington (and notwithstanding the Affordable Care Act), that seems like ancient history.

Courtesy of Maureen SillAs we’ve noted previously, many of the retrospectives are simply an occasion for arguing about whether we “won” or “lost” the war. For all the economic struggles that millions of American families continue to face today, evidence clearly demonstrates that many of the anti-poverty policies and programs we’ve adopted over the past five decades have significantly materially improved the lives of lower-income people.

Yet the evidence seems more mixed when it comes to poor places. More than one in five big-city residents is poor. And of those poor residents, nearly one in four lives in a neighborhood of “extreme poverty,” where the poverty rate exceeds 40 percent. When community poverty rises to that level, it multiplies the negative consequences of individual poverty, and can mute the effectiveness of programs intended to help the poor.

This was the stark backdrop against which a collection of researchers (including me) and practitioners came together at the University of Southern California last month, to discuss “Innovating to End Urban Poverty.”

Yet as we know by now, poor people are not confined to urban areas. Neither are high levels of community poverty exclusively urban. The latest Census Bureau data indicate that fully one-quarter of poor individuals who live in extremely poor neighborhoods in the nation’s 100 largest metro areas are in suburbs. And suburbs account for four in ten poor individuals in those regions who live in areas of high poverty—a neighborhood poverty rate exceeding 20 percent. (We’ll be releasing a more detailed analysis of the latest data in the coming weeks.)

True to the name of the conference, however, the presenting researchers and practitioners advanced ideas and spoke about innovations that, for the most part, were rooted in poor city neighborhoods. To be sure, they advanced many cutting-edge practices, including helping parents navigate school choice options, re-engaging the previously incarcerated, expanding community-based health care, and using community organizing to give voice to politically under-represented groups. Yet these solutions are largely built on the infrastructure, expertise, and lessons borne of decades of work in low-income urban neighborhoods. School choice, for instance, isn’t really an option in most struggling suburbs. Political organizing is nascent at best.

Courtesy of FutureAtlas.comOnly one panel at the conference focused on “place” as a context for addressing poverty. A short paper I wrote for that panel argues that contemporary anti-poverty strategies must recognize the different needs of poor families in both cities and suburbs. The suburbs, for example, often lack the density to deliver services in a distinct area. Poor families often spread over greater distances in the suburbs, and they face different barriers (transportation, for example) than city dwellers do.

Moreover, as poverty spreads to the suburbs, it becomes less a neighborhood problem and more of a regional or sub-regional problem—affecting the south sides and suburbs of Atlanta, Chicago, and Seattle, or the east sides and suburbs of Cleveland, Pittsburgh, and Washington, D.C.

Investing our existing resources in organizations and strategies that are less tied to one particular place, and more collaborative in their execution, represents one important way forward. In Confronting Suburban Poverty in America, Elizabeth and I propose a Metropolitan Opportunity Challenge. The Challenge would reward regional and sub-regional strategies via competitive funding, create new forms of partnerships, and, above all, create more comprehensive networks to achieve scale and spread the most highly effective programs.

Angela Blanchard, CEO of Neighborhood Centers, Inc., represented this approach on the panel I participated in. That organization’s work throughout the Greater Houston area also captures well what Marge Turner, another panelist, termed in her paper “place-conscious” anti-poverty strategies—those that grapple with the important context that place creates in addressing the needs of low-income families, but are not circumscribed by the boundaries of those locales.

There’s no question that in an era of flat resources and growing needs, we simply must innovate to address the enduring challenge of urban poverty. But we should strive to innovate in ways that ensure 50 years from now, we won’t need to hold a conference on innovating to end suburban poverty, too.

Photos courtesy of Maureen Sill and FutureAtlas.com, respectively.

Resources

Learn about suburban poverty in your community, how innovators around the country are addressing it, and what you can do locally and nationally to take action.