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No. 85 Summer 2014

Special Reinventing Older Communities Issue
PUBLISHED BY THE
COMMUNITY DEVELOPMENT
STUDIES & EDUCATION
DEPARTMENT OF THE
FEDERAL RESERVE BANK
OF PHILADELPHIA

INSIDE:
2—

3—

6—
9—

Message from the
Community Affairs
Officer
Mapping Our
Community — Third
Federal Reserve
District
Reversing the
Cycle of Poverty
CDCs: What Does
Success Look Like?

12 — Moments Captured
from the Reinventing
Conference
14 — The Housing Market
and Its Influences
16 — Data Visualization
as a Community
Development Tool
19 — Ohio Funders
Promote
Collaboration
on Economic
Development and
Opportunity

A C O M M U N I T Y D E V E LO P M E N T P U B L I C AT I O N

CASCADE
Reinventing Older Communities:
Bridging Growth & Opportunity*
By Keith L. Rolland, Community Development Advisor
How can economic growth create better
job, education, and housing opportunities
for low-income people and communities? The sixth biennial Reinventing Older
Communities conference probed strategies
to create opportunities in education, employment, revitalization, and other areas.
Recurring themes were the importance of
collaboration and partnership with different sectors and of ongoing data collection
and analysis to identify issues and measure progress in addressing them.
The conference was organized by the
Federal Reserve Bank of Philadelphia and

11 cosponsors and was attended by 465
practitioners and researchers from 25 states
and the District of Columbia.
Intergenerational Mobility
The U.S. is “a collection of societies, some
of which are ‘lands of opportunity,’ with
high rates of mobility across generations,
and others in which few children escape
poverty,” Raj Chetty, Bloomberg Professor
of Economics at Harvard University, and
coauthors said in a National Bureau of
Economic Research working paper issued
in January 2014,1 which provided the basis
for Chetty’s keynote speech.
...continued on page 22

* The views expressed here are those of the author and do not necessarily represent the views of the Federal
Reserve Bank of Philadelphia or the Federal Reserve System.
1
See www.nber.org/papers/w19843 and http://ow.ly/ywzkf.

Angela Glover Blackwell, Founder and CEO, PolicyLink; Manuel Pastor, Professor of Sociology and
American Studies & Ethnicity, University of Southern California; and Raj Chetty, Bloomberg
Professor of Economics, Harvard University
www.philadelphiafed.org

1

CASCADE

No. 85
Summer 2014

Cascade is published three times a year by
the Federal Reserve Bank of Philadelphia’s
Community Development Studies and
Education Department and is available at www.
philadelphiafed.org. Material may be reprinted
or abstracted provided Cascade is credited.
The views expressed in Cascade are not
necessarily those of the Federal Reserve Bank
of Philadelphia or the Federal Reserve System.
Send comments to Keith L. Rolland at 215-5746569 or keith.rolland@phil.frb.org. To subscribe,
go to www.philadelphiafed.org/publications/.
COMMUNITY DEVELOPMENT STUDIES
AND EDUCATION DEPARTMENT
Kenyatta Burney
Senior Administrative and Budget Assistant
215-574-6037
kenyatta.burney@phil.frb.org
Jeri Cohen-Bauman
Lead Administrative Assistant
215-574-6458
jeri.cohen-bauman@phil.frb.org
Lei Ding, Ph.D.
Community Development Economic Advisor
215-574-3819
lei.ding@phil.frb.org
Eileen Divringi
Community Development Research Analyst
215-574-6461
eileen.divringi@phil.frb.org
Andrew T. Hill, Ph.D.
Economic Education Advisor and Team Leader
215-574-4392
andrew.hill@phil.frb.org
Erin Mierzwa
Department Manager
215-574-6641
erin.mierzwa@phil.frb.org
Naakorkoi Pappoe
Community Development Research Analyst
215-574-3492
naa.pappoe@phil.frb.org
Keith L. Rolland
Community Development Advisor
215-574-6569
keith.rolland@phil.frb.org
Theresa Y. Singleton, Ph.D.
Vice President and Community Affairs Officer
215-574-6482
theresa.singleton@phil.frb.org
Marvin M. Smith, Ph.D.
Senior Community Development Economic
Advisor
215-574-6393
marty.smith@phil.frb.org
Keith Wardrip
Community Development Research Manager
215-574-3810
keith.wardrip@phil.frb.org
Todd Zartman
Economic Education Specialist
215-574-6457
todd.zartman@phil.frb.org

2

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

Message from the
Community Affairs Officer
As many sectors of the economy have
begun to improve, important questions
about the future of economic growth
and who benefits from that growth
have emerged. The questions include:
•

•

•

Can economic growth be encouraged
in an equitable way that provides
opportunities for a broad range of
residents and communities?
Will historically underserved communities continue to be disconnected from the resources needed
to achieve greater prosperity?
How can equitable growth strategies best be integrated into regional
economic development plans in a
way that benefits low- and moderate-income people and places?

From May 12–14, 2014, the Federal
Reserve Bank of Philadelphia and
its cosponsors hosted more than 460
participants at the biennial Reinventing Older Communities conference to
discuss these very questions. Attendees from 25 states and the District of
Columbia traveled to Philadelphia to
engage with thought leaders on the
topics of equitable development and
intergenerational mobility. The conference was designed to encourage
discussion of how these issues impact
older industrial communities and,
more important, identify the resources
that are needed to transform these
communities in the future.
This issue of Cascade contains some
highlights from the conference, with
a specific focus on some of the key
themes. Articles that delve into the
topics of intergenerational mobility and
equitable growth include discussions
that examine strategies to achieve and

Theresa Y. Singleton, Ph.D.

Vice President and Community Affairs Officer

measure equity. “Mapping Our Community” illustrates intergenerational
mobility across the Third District.
Other articles highlight the role of
community development corporations,
the future of housing, and community
development strategies focusing on
people and places.
We are extraordinarily grateful to
our 11 conference cosponsors and 68
conference supporters who helped
to make the 2014 Reinventing Older
Communities: Bridging Growth & Opportunity conference successful. We’re
particularly excited to work with
several partners to continue our efforts
in our District. Over the next year,
the Philadelphia Fed will collaborate
with the Cleveland Fed and the Fund
for Our Economic Future to identify
District partners who are interested
in pursuing inclusive development
strategies.

Mapping Our Community — Third Federal Reserve District*
By Keith Wardrip, Community Development Research Manager

Connecting Growth
and Opportunity
The ability to improve one’s economic status within an unequal
society is part of the American
ethos. Whether achieved through
hard work and determination, an
advanced education, entrepreneurism, skills improvement in the
workplace, networking, or some
combination thereof, the notion
of intergenerational mobility is an
important underpinning of a free
market economy, and it’s part and
parcel of the American dream.
Measuring
Intergenerational Mobility
The concept of social mobility is the
focus of recent research analyzing
socioeconomic outcomes for children
born in the early 1980s. Researchers compare the income of these
children’s parents in the 1980s to the
children’s household income today
(as young adults) and find that social
mobility in the U.S. is far from uniform throughout the country. Children who grow up in less-segregated
communities with greater income
equality, better K–12 schools, higher
levels of social capital, and more
stable families appear to be more
upwardly mobile than children who
grow up in communities without
these characteristics.1

Figure 1: Likelihood of a Child Born to Parents in the Bottom Fifth of the
Income Distribution Rising to the Top Fifth as a Young Adult

Sources:
Data: Online Data Table 6: Quintile-Quintile Transition Matrices
by Commuting Zone from Raj Chetty, Nathaniel Hendren,
Patrick Kline, and Emmanuel Saez, “Where Is the Land of
Opportunity? The Geography of Intergenerational Mobility
in the United States,” The Equality of Opportunity
Project, 2014.
GIS boundaries: U.S. Census Bureau; ESRI, derived from Tele Atlas
Commuting zone-to-county crosswalk: USDA Economic Research Service

In a society with perfect social
mobility, every child, regardless of
parental or hometown characteristics, would have a 20 percent chance
of occupying the top (or any) fifth of
the income distribution as a young
adult. Using data produced by this
study for “commuting zones”2 in the
Third District, Figure 1 shows the
likelihood of a child born to parents
in the bottom fifth of the income

distribution rising to the top fifth as
a young adult.
In the majority of regions in the
Third District, this likelihood falls
between 8 percent and 12 percent,
with higher rates in Elk and Cameron counties on the western edge
of the District and in Ocean and
Monmouth counties in New Jersey.3
At the other end of the spectrum,

* The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
1
Raj Chetty, Nathaniel Hendren, Patrick Kline, and Emmanuel Saez, “Where Is the Land of Opportunity? The Geography of Intergenerational
Mobility in the United States,” Executive Summary, The Equality of Opportunity Project, January 2014. The authors note that these factors are
associated with higher levels of social mobility but are not necessarily causal in nature. Reports and downloadable data are available at The Equality
of Opportunity Project; www.equality-of-opportunity.org/.
2
Commuting zones are similar to metropolitan statistical areas but have the advantage of being geographically comprehensive because they include
nonmetropolitan counties. Some of the counties in the Third District are included in commuting zones that lie primarily outside of the Third District.
These commuting zone definitions are based on 1990 decennial census data.
3
Although Monmouth County, New Jersey, is not included in the Third District, it is part of Ocean County’s commuting zone.

3

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

the study suggests that children born
into low-income families in south–
central Pennsylvania, the Philadelphia region (including South Jersey),
and Delaware have less than an 8
percent chance of attaining upperincome status.
The likelihood illustrated for the District in Figure 1 ranges from 4.4 percent to 12.9 percent for the 50 largest
commuting zones in the U.S. Philadelphia falls roughly in the middle of the
pack (24th) at 7.4 percent. The table below shows Philadelphia’s rank among
these 50 commuting zones on a handful of the measures included in this
recent research that are shown to be
correlated with social mobility (either
positively or negatively). Philadelphia
ranks highly on some characteristics
associated with lower levels of social

mobility (e.g., percent of households
headed by a single mother) and places
anywhere from 17th to 34th on some
of the measures associated with higher
rates of mobility.
Measuring Economic Growth
Most would agree that, regardless
of one’s hometown or family income
when growing up, a household is
much more likely to be economically self-sufficient when its working
members have access to a resilient,
diversified, and growing job market.
Ready access to job openings that
match a wide array of educational
levels, skills, and interests can provide a community’s residents with
the opportunity to secure affordable
housing, build wealth, and create a
stable platform for their children’s
future. At the municipal level, a

vibrant economy can also form the
backbone of a stable tax base, providing local governments with the
fiscal capacity to create a quality of
life that current residents enjoy and
prospective residents seek.
A community’s economic strength, as
well as its change over time, can be
measured in a variety of ways. One
common measurement is job growth.
Figure 2 illustrates the percentage
change in the number of jobs for
commuting zones in the Third District between the first quarter of 2010
and the second quarter of 2013.4
As Figure 2 indicates, a number of
regions in the Third District have exhibited relatively strong job growth
since the economic recovery began
in 2010. On a percentage basis, the

Table: Philadelphia’s Rank Among the 50 Most Populous Commuting Zones on Some Measures Correlated with
Intergenerational Upward Mobility
MEASURE

ASSOCIATION WITH MOBILITYa

RANK

Percent of population that is black or Africian American

Negative

11

Of households with children, percent headed by a single female

Negative

13

Social Capital indexb

Positive

17

Percent of workers with a commute less than 15 minutes

Positive

26

Test scores for grades 3 through 8 (controlling for income)

Positive

29

Percent of parents in middle class

Positive

34

In this column, “negative” indicates that higher levels of the measure are associated with lower levels of intergenerational upward mobility.
Higher levels of “positive” measures are associated with higher levels of upward mobility.
b
This index captures voter turnout, census form completion, and participation in community organizations.
Sources: Author’s calculations using data from Online Data Table 8: Commuting Zone Characteristics from Raj Chetty, Nathaniel Hendren,
Patrick Kline, and Emmanuel Saez, “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States,”
Executive Summary, The Equality of Opportunity Project, January 2014.
a

The first quarter of 2010 is used as the starting point because it represents the quarter that the number of jobs in the United States reached its
postrecession low, according to an analysis of Moody’s Analytics employment data provided in the Brookings Institution’s “Metro Monitor — April
2014,” by Alec Friedhoff and Siddharth Kulkarni. The current version of this report is available at http://ow.ly/zgSSz. This author’s analysis of
Quarterly Census of Employment and Wages data from the Bureau of Labor Statistics reaches the same conclusion.
4

4

Lehigh Valley — as indicated on the
map by Allentown and Bethlehem
— has led the way with employment
growth of nearly 9 percent. In absolute terms, however, the Philadelphia
region is the real story, accounting
for 128,000 new jobs, or 53 percent of
all job growth in Third District counties over the period. It is noteworthy
that areas such as the Philadelphia
region and Delaware, identified in
Figure 1 as having relatively low
rates of social mobility, demonstrate
relatively strong levels of employment growth in Figure 2.
A recent study analyzing metropolitan-level economic growth
over the past two decades — using measures such as employment,
gross metropolitan product, worker
productivity, and income — finds
that places with a low cost of doing
business and high levels of education, innovation, self-employment,
and entrepreneurship exhibited
stronger economic growth than
their counterparts.5 The same report
also finds that “economic polarization,” as measured by factors such
as income inequality, poverty, and
crime, is positively associated with
employment growth but negatively
associated with income growth. In
other words, economically polarized places are at an advantage in
terms of job growth, but this success
has not led to income gains for their
residents. An emerging and exploratory body of research suggests that
over the long term, economic growth
may not be as strong where income
inequality is high because some
segments of the population lack the
resources to make human capital
investments — in education or other

Figure 2: Job Growth, 2010Q1 to 2013Q2

Sources:
Data: U.S. Census Bureau. Quarterly Workforce Indicators. Longitudinal
Employer-Household Dynamics Program, 2010Q1 and 2013Q2. 		
Estimates reflect beginning-of-quarter employment counts
and were downloaded using the U.S. Census Bureau’s
LED Extraction Tool.
GIS boundaries: U.S. Census Bureau; ESRI, derived from Tele Atlas
Commuting zone-to-county crosswalk: USDA Economic Research Service

skills-building efforts — that could
otherwise strengthen the economy.6
Making the Connection
The economic opportunities provided
by a robust and growing job market
are critical for both individual and
communitywide financial success and
stability, but they do not guarantee
either one. Moving forward, the community and economic development
fields must tackle a number of questions head-on, such as:
• What are the best ways to create
stronger connections between
local jobs and local job seekers
in order to fully capture both the
short- and long-term benefits of
economic growth?
• Can traditional economic development strategies that prioritize job
growth also incorporate equity as

•

•

a parallel objective? Or do equity
and inclusion require a different
economic development paradigm?
Do community characteristics
such as income inequality influence the magnitude or duration
of economic growth? If so, what
are the mechanisms, and how
large is the effect?
How can educational systems
best prepare students to fully take
advantage of the economic opportunities that await them as adults?

These questions are as challenging to
answer as they are important, which
is why the department’s recent
Reinventing Older Communities
conference was dedicated to bridging growth and opportunity and
why this issue of Cascade continues
the conversation.

Emily Garr Pacetti, “What Matters to Metros: Foundational Indicators for Economic Competitiveness,” Cleveland: Fund for Our Economic Future, 2013.
See the literature reviewed in Emily Garr Pacetti’s “Growth and Opportunity: A Framework for Stronger, More Equitable Local and Regional
Economies,” Cleveland: Fund for Our Economic Future, 2014.
5
6

5

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

Reversing the Cycle of Poverty*
By Daniel Hochberg, Community Development Senior Research Assistant
Poverty can be viewed from both
people and place perspectives, and
each was explored at the Reinventing Older Communities conference.
Speakers considered barriers to selfsufficiency in high-poverty neighborhoods and discussed programs to
assist high-risk youth and connect
hard-to-serve populations with jobs.
Why Neighborhoods Matter
Discussions on poverty often focus
on family income, but according to
Paul Jargowsky, professor of public
policy at Rutgers University–Camden and author of Concentration of
Poverty in the New Millennium,1 the
economic and social characteristics
of neighborhoods are equally important. Because high-poverty neighborhoods2 generally have higher
unemployment rates, lower-quality
schools, and higher levels of crime,
drug activity, and violence compared
with their low-poverty counterparts,
it is reasonable to assume that a family living in a high-poverty neighborhood will be worse off than if that
same family lived in a low-poverty
community. Therefore, the “spatial
context of poverty” must be considered in order to fully understand the
impact of poverty on an individual’s
life chances and opportunities.
Jargowsky investigates the individual
and spatial components of poverty
jointly by looking at the concentration
of poverty, which is defined as the percentage of poor persons living in high-

Suburban Sprawl and Central City Decline in the Third Federal
Reserve District — 1970 to 1990

Source: Paul Jargowsky, professor of public policy and director of the Center for Urban
Research and Education, Rutgers University–Camden.

poverty neighborhoods. Historically,
rapid suburbanization compounded
by exclusionary zoning has been a major cause of concentrated poverty, as
affluent families moved to the suburbs
and poor residents were left behind.
This led to disinvestment and depopulation in many central city neighborhoods. Although a strong economy
and changes to U.S. housing policy
in the 1990s temporarily reduced the
concentration of poverty, Jargowsky’s
most recent research shows that the
gains of the 1990s have all but disappeared,3 and, in absolute terms, more
people now live in high-poverty
neighborhoods than ever before.

Programs designed to assist people
living in high-poverty neighborhoods
are vital, and several were examined
at the Reinventing conference.
Educating and Mentoring
At-Risk Youth
When at-risk young people are sent
to juvenile detention centers instead
of back to school, their chances of
gainful employment in the future
are weakened and the likelihood
that they will commit crimes grows,
says Jimmie Edwards, juvenile
court judge in St. Louis, MO. Edwards established the Innovative
Concept Academy (ICA) in 2009 to

* The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
1
The full report is available at http://ow.ly/yFhjB.
2
For the purposes of this article, a high-poverty neighborhood is defined as a census tract with a poverty rate of 40 percent or higher.
3
The overall concentration of poverty in the U.S. in 2012 was 13.6 percent, up from 10.3 percent in 2000. The concentration of poverty was 15.1 percent
in 1990. The data are based on U.S. Census Bureau decennial census and American Community Survey data files.

6

give young people who have been
expelled from school or who have
recently been released from juvenile
correction facilities a second chance.

Comcast Corporation, and PECO.
Nearly 3,000 children in southeastern Pennsylvania were mentored in
BBBS programs in 2013.

The ICA’s curriculum consists of
traditional coursework in addition to
mandatory activities such as training
dogs, which teaches students to love
and to be loved, and playing chess,
which encourages kids to think three
to four moves ahead rather than act
impulsively. This unique approach to
education has been successful thus
far; only 7 percent of the 3,000 students who have attended the school
have reentered the criminal justice
system. The approximate cost of one
year of schooling at the ICA is $5,000,
one-quarter the cost of housing a
child in a juvenile detention facility
for the same period.4

A national study has shown that
children who participate in BBBS
programs are 46 percent less likely
to begin using illegal drugs and 52
percent less likely to skip school.5
The approximate cost of mentoring a
child through BBBS is $1,500.

BBBS matches adult volunteers with
children between the ages of six and
18 to build meaningful relationships
that help young people achieve
educational success and avoid risky
behaviors. Most mentoring is schooland community-based, but BBBS
also matches children with adults
at companies such as BNY Mellon,

4
5

The training, which lasts up to four
and a half months, teaches adults
traditional career and life skills such
as interviewing, presenting, and goalsetting, in addition to more abstract
skills such as conflict resolution. To
provide trainees with an avenue with
which to further develop these skills,
participants are also employed by one
of the program’s affiliated businesses
during this period. Following completion of the program, Cara graduates are placed into private-sector jobs
where they earn, on average, $10.50
per hour, $2.25 more than minimum
wage in Illinois. Roughly half the jobs
have benefits.
Photo credit: Erwin Delfin

The ICA provides an attractive model for those looking to improve the
educational outcomes of children affected by the juvenile justice system,
but the majority of children living in
high-poverty neighborhoods do not
require such an intensive approach.
According to Marcus Allen, CEO of
Big Brothers Big Sisters Southeastern
Pennsylvania (BBBS), something as
simple as a strong adult presence can
also have “a direct and lasting effect
on the lives of young people.”

Connecting Hard-to-Serve
Populations with Jobs
For adults living in high-poverty
communities, workforce development programs can provide them
with skills to support themselves and
their families. The Cara Program, a
Chicago-area workforce and leadership development training program
for adults affected by homelessness and poverty, offers individuals

intensive training and transitional
jobs and internships to prepare them
for placement into the private sector.
Forty-four percent of the participants
have been affected by the criminal
justice system.

Computer skills are part of intensive short-term job readiness provided to low-income residents
by The Cara Program in Chicago. Participants are provided access to temporary positions with
Cara-affiliated companies and ultimately to permanent jobs.

Edwards indicated during the session that the approximate cost of housing a juvenile in a detention facility for one year is $22,000.
The full study is available at http://ow.ly/yEHvW.

7

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

The Cara Program places graduates into nearly 600 transitional and
permanent jobs each year, and 70
percent go on to celebrate their oneyear work anniversary.6 According to
Maria Kim, the program’s chief operating officer, The Cara Program also
generates a 574 percent social return
on investment based on annualized
contributions and savings to society.7
A different approach to helping
ex-offenders is to reach out to them
before they reenter society. Marilyn
Brown, county commissioner of
Franklin County, Ohio, and chair of
the Franklin County Reentry Coali-

tion, hands out business cards to
inmates and invites them to call
her office for a range of assistance,
including obtaining employment.
Through area partnerships with
companies, Brown helps place recently incarcerated workers into jobs
with benefits. Brown said, “Never
assume you know what ex-offenders
need; ask them.” The recidivism rate
of ex-offenders who contact Brown’s
office is only 3 percent compared
with 29 percent in Ohio and 43 percent nationally. A coalition website
lists resources that ex-offenders can
use to address housing, job training,
and other needs.8

An Eye Toward the Future
Speakers at the Reinventing conference saw a continued need for
programs to help children and adults
living in high-poverty neighborhoods, but Jargowsky also believes
that we must nonetheless change the
development paradigm that creates
high-poverty neighborhoods in the
first place. An estimated 30 million
new housing units are needed by
2050 to accommodate population
growth, and this presents an opportunity for future housing development that does not come at the
expense of urban communities.

For more information about job placement, read The Cara Program’s FY2014 Performance Update, available at http://ow.ly/yEJMG.
Annualized contributions include payments for income taxes, Social Security taxes, and sales taxes. Savings to society include the costs of
incarceration, food stamps, health care, housing, etc.
8
See http://www.franklincountyohio.gov/reentry/.
6
7

HOMEOWNERSHIP COUNSELING
REPORT RELEASED
The effecTive ness

A special report
on a longitudinal
study that evaluates
the effectiveness
of pre-purchase
homeownership
and financial
management skills
hiP
ners
eow
hom
se
counseling has
s of Pre-Purcha
enT skills
The effecTivenes
financial managem
counseling and
been released by
the Community
Development Studies
and Education Department. To review the
report, see www.philadelphiafed.org/HOC/.

of Pre-Purc hase
homeown ershiP
enT skills
financia l managem
counseli ng and

s
Devel opmen t Studie
by the Comm unity
tment
A Speci al Repor t
and Educa tion Depar

8

CALL FOR PAPERS:
ECONOMIC MOBILITY
Paper submissions are invited for the
ninth biennial Federal Reserve System
Community Development Research
Conference, which will focus on economic
mobility. Abstracts of 500 words, along
with optional attachments, are due
September 8, 2014.
The conference will be held April 2–3,
2015, in Washington, D.C. For information
on the conference or paper guidelines,
go to www.stlouisfed.org/community_
development/economic-mobilityconference-2015/.

CDCs: What Does Success Look Like?*
By Miriam Axel-Lute, Editor, Shelterforce
Photo credit: APM

Community development corporations (CDCs) understand that they
have differing roles in differing
contexts, depending on whether they
are working with a high-vacancy,
seriously depressed area where many
residents and businesses do not want
to stay; a rapidly gentrifying neighborhood; or a traditionally exclusionary suburb. The roles that CDCs play
were explored in two sessions at the
Reinventing Older Communities conference: The Future of CDCs: Three
Compelling Visions and Measuring
the Impact of CDCs.
CDCs as Catalysts
Both sessions made it clear that many,
if not most, CDCs focus on more complicated, multidimensional challenges
than just developing affordable housing. “CDCs are part of an ecosystem,”
noted Joe Kriesberg, president and
CEO of the Massachusetts Association
of Community Development Corporations (MACDC). According to Kriesberg, CDCs are not the entirety of the
system, and they don’t and can’t operate in isolation. He said, “If you are going to have place-based revitalization,
you will need something that looks
like a CDC and sounds like a CDC and
acts like a CDC, so you might as well
have a CDC.”
CDCs frequently have to wrestle with
larger policy and funding environments that are not set up to accommodate or support the comprehensive
and context-specific work that they
do. Housing and Neighborhood
Development Services, Inc. (HANDS)
in Orange, NJ, identified a cata-

Paseo Verde is a $48 million 206,000-square-foot transit-oriented project developed
by the nonprofit Asociación Puertorriqueños en Marcha (APM) and for-profit
Jonathan Rose Companies in 2012–2013. The development, located adjacent to
the SEPTA regional rail station at Temple University, includes 120 rental housing
units and 30,000 square feet of retail and office space, including a primary care
facility, pharmacy, and supportive services. It is the first Leadership in Energy and
Environmental Design for Neighborhood Development project in the country that
received a platinum rating.

* The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.

9

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

Photo credit: HANDS, Inc.

of Community Development
Corporations (SCACDC) focuses on
community economic development
to emphasize the breadth of its work
and to enlist the support of political
leaders and environmentalists. As a
result, it enjoys significant support.
Bernie Mazyck, SCACDC’s president
and CEO, observed that he relies
on partners to make the case for
SCACDC’s work in influential circles
within the state.

BEFORE

AFTER

HANDS, Inc. in Orange, NJ, worked with other community developers to
change state housing program regulations to provide subsidies for affordable
homeownership rehabilitation. Before-and-after photos of one property rehabilitated
by HANDS are shown.
lytic role for itself in turning around
high-profile problem properties in
order to spark a feeling of optimism
necessary for further change, according to Patrick Morrissy, founder and
executive director of HANDS.
HANDS has been very successful
with this strategy, but HANDS first
had to overcome policy and funding obstacles. HANDS developed
a model and asked for a subsidy
appropriation for a demonstration
project to purchase mortgages on
vacant properties and ultimately to
rehabilitate and sell the properties
to homeowners. The new system
worked well and resulted in revisions to regulations of the New
Jersey Department of Community
Affairs and the New Jersey Housing
and Mortgage Finance Agency, said
Morrissy. The revisions were supported by the Housing and Community Development Network of
New Jersey, the principal CDC trade
association in New Jersey.
10

Kriesberg said that the affordable
housing sector, especially at the
federal level, is not set up to support
healthy neighborhoods and the mix
of housing and other infrastructure
that is needed but is more focused
on unit volume and supporting the
affordable housing development
industry (which is much larger than
CDCs and includes both for-profit
and nonprofit developers).
As a result of the availability of
funding from the Low Income
Housing Tax Credit program, 95
percent of the housing that CDCs
develop in Massachusetts consists
of rental properties for households
making $40,000 to $55,000 a year,
according to Kriesberg. A healthy,
inclusive neighborhood would have
a mix of housing types for a range
of incomes as well as nonhousing
development, Kriesberg said.
In a different part of the country,
the South Carolina Association

The speakers at the Reinventing
conference agreed on the crucial
importance of supporting statelevel CDC networks and organizing
broad coalitions to build momentum
for neighborhood change. Within
its state, MACDC built long-term
relationships with labor, business,
education, and law enforcement
sectors, and their support was key
to the passage of a state community
development tax credit that was
considered to be a long shot.
Measuring the Impact of CDCs
Thinking clearly and critically about
what success looks like is also crucial
for evaluating the work of CDCs.
Numerous data exist on neighborhoods and regions, and although it
takes work and resources to collect
these statistics, there are tools and
protocols such as Success Measures
for collecting organization- and program-level data. Margaret Grieve,
vice president of NeighborWorks
America’s Success Measures project,
said that the key factors are determining what’s important to measure
and how to interpret the data.
Grieve drew a distinction between
full-fledged academic research and
the kind of evaluation that Success
Measures supports. Evaluation
provides CDCs with a real look at
outcomes and how conditions for

both people and place are changing
over time. Success Measures can also
provide feedback that can shape and
improve a program’s design. For
example, some groups that provide
financial counseling had thought that
credit card debt was their clients’
major issue; however, evaluation
revealed that the real problem was
student and medical loans.
Impact measurement can help CDCs
pursue appropriate strategies and
show funders a strong return on investment, said Rick Sauer, executive
director of the Philadelphia Association of Community Development
Corporations. Impact measurement
must include the views of residents,
a process that can increase resident
involvement in community rebuilding. However, CDCs often do not
have adequate resources for impact
measurement.

neighborhoods as these communities
change. This research could provide powerful insight into equitable
development questions but would be
expensive to carry out.
However, evaluation is not a full
research study with controls and
generalizable findings. According to
Grieve, once organizations get good
at data collection, they are poised
to be great partners for academic
researchers who are engaged in a
larger study.
Community developers and partners
are increasingly working together
to increase their collective impact
in low- and moderate-income communities. However, funders need to
be realistic about how long it takes to
achieve measurable change in communities that have experienced longterm disinvestment, observed Sauer.

Looking to the future, Kriesberg said,
“The whole CDC field has been about
changing the future — seeing a trajectory you don’t like and changing it.
What is the future we want, and how
do we build it? What is it we want?
Let’s go get it, not just wait.”
For more information, contact Miriam
Axel-Lute at 518-431-8392 or miriam@
nhi.org; www.shelterforce.org/.
Note: Readers will be interested
in the Winter 2012–2013 issue of
Shelterforce, which focuses on “Time
to Rethink CDCs?”; this issue is
available at www.shelterforce.org/
archive/issues/172/. Another useful
resource is the Federal Reserve Bank
of San Francisco’s Spring 2014 issue
of Community Investments, which
discusses “Collective Action for
Community Development” and is
available at http://ow.ly/yXCV9.

Photo credit: HANDS, Inc.

It would be very helpful to CDCs
if different funders would agree to
a consistent core set of measures,
Sauer said. At present, CDCs must
provide similar data in widely differing forms to each funder, a timeconsuming process, he added.
A crucial challenge in the community
development world is figuring out
how to measure equitable development, said Sauer.1 Some measures
such as rising property values could
be positive or negative, for example,
depending on the context, on a CDC’s
goals and concerns, and on the pace
at which the values increase.
In a Q&A session, one participant
said that enough data are now available to get a more nuanced look
at how people move in and out of

1

BEFORE

AFTER

HANDS, Inc., a nonprofit in Orange, NJ, responded to the problem of vacant properties
by acquiring the properties and rehabilitating them for sale to first-time homeowners.
Before-and-after photos of one such property are shown.

“Beyond Gentrification, Toward Equitable Neighborhoods” is the focus of PACDC’s 2014 magazine, available at pacdc.org/pacdcs-2014-magazine.

11
11

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

Moments Captured from the Reinventing Conference
Edward G. Rendell, Former
Governor of Pennsylvania,
and Jeffrey Brown, Founder,
President, and CEO, Brown’s
Super Stores, Inc.

M. Night Shyamalan,
Filmmaker and Author
of I Got Schooled

Theresa Singleton, Vice President
and Community Affairs Officer,
Federal Reserve Bank of
Philadelphia

Dana L. Redd, Mayor,
City of Camden, NJ

William Hite Jr., Superintendent, School
District of Philadelphia; Jack Martin,
Emergency Manager, Detroit Public
Schools; and Romules Durant, CEO and
Superintendent, Toledo Public Schools
12

Keith Wardrip (center), Community
Development Studies and Education, led
the “Rocky Run” through Center City to
the Philadelphia Museum of Art.

Charles I. Plosser,
President and CEO,
Federal Reserve Bank
of Philadelphia

Mark Zandi, Chief Economist,
Moody’s Analytics, and Susan
Wachter, Albert Sussman Professor
of Real Estate, Wharton School of
the University of Pennsylvania

A Reinventing Older Communities
conference plenary session in the
ballroom of the Loews Philadelphia Hotel

13

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

The Housing Market and Its Influences*
By Marvin M. Smith, Ph.D., Senior Community Development Economic Advisor
The housing market influences our
economic and social well-being. It
serves as a prime mover of overall
economic activity,1 the foundation for
wealth creation, and the basis for the
landscape of our neighborhoods as
well as the dynamic relationship between cities (particularly older ones)
and suburbs. The recent downturn in
the housing market generated changes in its aforementioned influences.
It also fostered changes in the regulatory environment in the mortgage
market. These topics were discussed
at the 2014 Reinventing Older Communities conference.
Population Shifts and Housing
The housing market influences and
is influenced by changes in our cities
and transformations in our neighborhoods. Between 1950 and 1980, our
largest cities experienced a decline
in population, when many people
moved to the suburbs. More recently,
the cities are enjoying resurgence.
The decline and rebirth has had a
marked impact on the housing market. During the exodus, the reliance
on the car coupled with highway
investment made the suburbs readily
accessible. As people left the cities,
property values declined, spurring
more people to exit. The revitalization
of cities has had an opposite influence on the housing market. Richard
Voith, senior vice president and
principal of Econsult Corporation,
pointed out that there has been a shift
in demand for smaller units, preferably near transit and with close access
to amenities. Also, there has been an
increase in rental demand. The crisis

in the housing market was thought
to release a large number of units to
the rental market, which would have
improved those conditions. However,
the anticipated improvement didn’t
materialize initially. According to
Raphael Bostic, the Judith and John
Bedrosian Chair in Governance and
the Public Enterprise at the University of Southern California, in many
markets, those who lost their homes
to foreclosure became competitors
for the fixed set of rental properties
— thus driving up prices. In addition, to further complicate matters, in
some markets, renter incomes have
fallen, while rents have increased.
Consequently, cities have been faced
with the challenge of providing more
affordable housing.
Changes in Neighborhoods
and Gentrification
Over the course of cities’ decline and
resurgence, their neighborhoods have
also experienced periods of deterioration and upgrading. A popular
topic associated with neighborhood
change is gentrification. John Landis,
Crossways Professor of City and
Regional Planning, department chair,
and Urban Spatial Analytics director,
University of Pennsylvania School
of Design, has studied the issue and
devised a method to measure changes
in neighborhoods and gentrification
based on changes in income. According to his studies, he notes that
although gentrification is in the news,
only 3 percent of the population in
the 70 largest metropolitan areas in
1990 lived in neighborhoods that
would gentrify between 1990 and

2010, while 20 percent of the population in 1990 lived in neighborhoods
that would continue to decline during
the next 20 years. Thus, contrary to
popular reports about gentrification
being the dominant phenomenon
between 1990 and 2010, neighborhood
income decline continued to be a more
noteworthy problem. Nonetheless,
gentrification remains a hot-button
issue that commands attention. Landis
offers some advice regarding a policy
prescription, namely, that the focus of
local gentrification policy should not
be to stop it but to safeguard long-time
residents from rapidly rising home
prices and rents and, where possible,
to make sure that some of the increases
in local tax revenues are directed back
to the neighborhoods where those
increases were generated.
House Price Changes
House prices not only serve an
equilibrium function in the housing
market, but they also are the basis
for home equity, which is a source
of wealth building. This has been
a particularly important wealthcreation mechanism for low-income
households. The recent crisis in the
housing market resulted in a free fall
in housing prices, which has had a
deleterious effect on those who relied
on their home’s wealth generation.
Although prices are no longer falling,
Bostic noted that tens of thousands of
families lost all of their equity (and,
thus, some of their wealth). They
continue to experience negative equity
and are at risk of default. As far as the
recovery of house prices is concerned,
Bostic observed that it reveals two

* The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
1
See the figure on page 15.

14

National Economic Dynamics: Housing as a Driver

FHFA House
Price Index
(1990=100)

1

1-0

1-0

199

1

1-0

5-0

199

1

1-0

9-0

199

1

1-0

3-0

200

1

1-0

7-0

200

1

1-0

1-0

201

Source: Raphael Bostic, University of Southern California

realities. In the middle of the country,
the housing recovery as represented
by changes in the house price index
showed a slow and steady improvement. The housing market in the
coastal areas and mountain states
experienced more dynamic ups and
downs. He cautioned that when
thinking about housing and possible
policy prescriptions, we must be
mindful that changes in the housing market have varied across the
country. Moreover, in some areas of
the country (coastal markets), there
is a shortage of housing units, which
becomes a barrier to the smooth
functioning of the housing market.
However, in other areas (such as the
Midwest), housing might not be the
panacea, but other measures should
be undertaken, such as improving
incomes and generating more jobs.
In these areas, improving housing
might be a catalyst to help other efforts move forward.

Regulatory Changes in
the Mortgage Market
The recent crisis in the housing market stemmed in part from a number
of mortgage loans that were made
by lenders who failed to ensure that
the borrowers had the ability to
repay the loans. The lenders were
able to do this because they sold the
mortgages in the secondary market
and thus had no “skin in the game.”
The mortgages were packaged into
mortgage-backed securities and sold
to investors. Kenneth Benton, senior
consumer regulations specialist at the
Federal Reserve Bank of Philadelphia,
pointed out that Congress passed
the Dodd-Frank Act to address this
issue. A provision in the law requires
residential mortgage originators to
verify that borrowers have the ability
to repay the loan. During the legislative hearings, lenders became nervous
in anticipation of such a requirement,
since they could be sued if a loan

went into default. In the final legislation, Congress responded with a
compromise that if originators offered
a safe mortgage product known as
a qualified mortgage (QM), which
has certain characteristics including verification of repayment ability,
they would receive legal protection.
As a result, lenders have two options
when offering a residential mortgage
loan. They can provide a QM and
receive certain legal protection or a
non-QM without legal protection.
With a non-QM, lenders must verify
eight underwriting factors.2 Benton
mentioned that four different types
of QMs are available with different
requirements, including two QMs for
small creditors.3 In addition, Congress
imposed a related requirement on
lenders who originate mortgages and
sell them in the secondary market.
To ensure these lenders have skin in
the game, they must retain 5 percent of their originations — unless
the mortgages meet the definition
of a qualified residential mortgage
(QRM), which is exempt from the risk
retention requirement. Six federal
agencies issued a proposed definition
of QRM in April 2011, which included
down payment and loan-to-value
requirements. However, in response
to feedback the agencies received during the public comment period, they
revised the proposal in August 2013.
In the revised proposal, a mortgage
that meets the requirement of a QM
would also satisfy the requirements
of a QRM. As of this date, the agencies have not yet issued a final rule.
For more information, contact Marvin
M. Smith, Ph.D., at 215-574-6393 or
marty.smith@phil.frb.org.

These include current or reasonably expected income or assets; employment status; monthly payment on this loan; monthly payment on
“simultaneous loans”; monthly payment for “mortgage-related obligations”; current debt obligations; monthly debt-to-income ratio, or residual
income; and credit history.
3
They are a general QM; a temporary government-sponsored enterprise/federal agency QM; a small creditor balloon QM; and a small creditor QM.
2

15

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

Data Visualization as a Community Development Tool*
By Emily Antoszyk, Community Development Studies and Education Intern

Data visualization is becoming an
increasingly important planning tool
because it shows the connections
and relationships that exist between
people and places at the neighborhood, city, and regional levels. Urban
developers use the tool as they try
to keep pace with changing desires
for mixed-use, holistically designed
spaces near transit lines, retailers,
and workplaces.
Data visualization can be applied
in a variety of ways to tackle the
challenges facing low- and moderate-income (LMI) communities
nationwide. Geographic information
systems (GIS) facilitate data display
on maps for conceptual purposes
and data analysis. Generally, the process of creating a map involves connecting data to a map file formatted
for the GIS software. Applications
include using pure visualization of
data in a graphic or spatial format
or applying statistical techniques to
explore spatial phenomena, such as
“clustering” in a data set.
Informing Infrastructure
Development
Recent trends show that well-educated workers with high wages live
in cities with comparable wages, and
less educated, lower wage workers
live on the outskirts of high-wage
cities or in lower-wage cities.1 These
shifts raise questions of equity,

as LMI individuals are marginalized and transportation challenges
emerge between home and the
workplace.
The Pratt Institute (Pratt) in Brooklyn, NY, uses data visualization
techniques to support the claim that
LMI residents have “the longest
commutes, the fewest transit options
as housing close to subway lines
becomes less affordable, and the
least access to jobs.”2 Maps compiled
by Pratt show the concentration of
New York City residents earning less
than $35,000 per year with commutes
longer than one hour, the type of employment by residence, population
change between 1990 and 2010, and
the configuration of racial groups
and income delineations across the
boroughs. Data depicted in these
maps of the region were then analyzed spatially, informing potential
routes for Select Bus Service (SBS)
lines that connect low-wage workers
directly with job centers (Figure 1).
To date, seven of the proposed SBS
lines have been implemented by
the New York City Department of
Transportation in conjunction with
the Metropolitan Transit Authority.
Pratt’s use of GIS to inform these
two entities has been instrumental in
developing transit lines in the region,
as Pratt’s proposals have helped
bridge the gap between community

interests and agencies. Further, new
proposals by Pratt are currently being integrated into the next generation of routes, thus demonstrating
the importance of shared goals conveyed through data visualization.
Transportation analyses and other
types of site selection require deeper
investigation into demographic and
spatial data beyond visual analysis
and are based on available data and
end-user preferences. For Pratt, this
process provided a tool for connecting residents to job centers and
amenities.
Understanding and Connecting
Neighborhood Assets
As many cities revitalize, there are
challenges in connecting regional
resources and neighborhood resources. Data visualization has
secured a place in New Orleans as
leaders consider strategies to redevelop neighborhoods post-Katrina.3
The approach to revitalization in
New Orleans has largely been on a
neighborhood-by-neighborhood basis, and one of the major redevelopment projects has been in the urban
core of the city where six historic
neighborhoods intersect. Because
these neighborhoods are historic and
high tourist traffic areas, it was especially important to take an integrated
approach to redevelopment. Data
visualization has been an important

* The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
1
Rebecca Diamond, “U.S. Workers’ Diverging Locations: Causes and Inequality Consequences,” presentation at the 2014 Reinventing Older
Communities conference, May 14, 2014, available at www.philadelphiafed.org/ROC-Diamond/.
2
Joan Byron, “Mobility and Equity for New York’s Transit-Starved Neighborhoods: Evolving Bus Rapid Transit,” presentation at the 2014 Reinventing
Older Communities conference, May 12, 2014, available at www.philadelphiafed.org/ROC-Byron/.
3
Andy Kopplin, “Local Governments Do More with Less,” presentation at the 2014 Reinventing Older Communities conference, May 13, 2014,
available at www.philadelphiafed.org/ROC-Kopplin/.

16

Figure 1: Connecting Low-Income Workers with Job Centers in New York City

centers, and retailers with the aforementioned amenities and the city at
large through the Lafitte Greenway
project, bike lanes, and a proposed
streetcar line.
New arrivals and long-time residents alike seek communities in
which they can live, work, and play.
Creating neighborhoods that are
walkable, bikeable, and connected
by public transit to retailers, job
centers, and amenities is of the utmost importance in creating livable,
self-sustaining communities. Simple
visualizations can make a strong
statement to the public about the
efforts surrounding the connection of
places on any scale.

Source: 2004 Census Transportation Planning package

This image shows major New York City employment centers in conjunction with implemented
and proposed transit routes to connect low-wage workers to job centers. This analysis
enabled the Pratt Center for Community Development to propose new Bus Rapid Transit
(BRT) routes; tier 1 and tier 2 BRT lines have yet to be implemented. Tier 1 proposals are in
areas most physically suited to designated BRT lanes; tier 2 proposals are those that have
some physical constraints.

addition to the planning process because it allows for a full appreciation
of the assets in a neighborhood.
Maps enable developers and leaders to visualize not only institutions
and neighborhood assets but also
the connections between these entities. Accordingly, redevelopment

efforts have included the reopening
of Armstrong Park, the renovation
of the Oscar Medrano Health Clinic,
investment in the VA/UMC Hospitals and Iberville public housing
units, and the restoration of the
Saenger Theatre. Maps also enable
stakeholders to visualize connections
between area schools, recreation

Fostering Partnerships and
Community Buy-In
Data visualization can also be used
as an engagement tool to attract
funders and stakeholders. A rendering of a proposed space laid over an
existing infrastructure is a creative
way to show how a place can be
created from an existing landscape.
Renderings provide the opportunity to not only conceptualize a
new space but also comment on the
layout, allowing for cross-sector collaboration in the planning process.
The New Kensington Community
Development Corporation (NKCDC)
in Philadelphia has been particularly
successful in fostering partnerships
and connections through the use
of such a rendering (Figure 2). The
Big Green Block project is among
the major revitalization efforts of
the organization and was aimed at
transforming a 20-acre site into a
community space that includes a
LEED-certified4 high school and con-

Leadership in Energy and Environmental Design (LEED) is a green building certification program that rates structures based on environmentally
friendly design principles.
4

17

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

Figure 2: The Big Green Block Project
Kensington Creative and
Performing Arts High School
(LEED Certified)

3
ler
Shiss tion
a
Recrenter
Ce

1

1

1
2

1

2

2

2

2

1

Improved Recreational Facilities

2

Stormwater Infrastructure

3

New Access to Nearby Public Transportation

Note: Trees, educational signage, sidewalks, and curbs in the area were additions to the Big Green Block project.

nections with public transit. Project
partners included the Philadelphia
Water Department, Philadelphia
Parks & Recreation, the Pennsylvania
Horticultural Society, Sustainable
19125, and the Mural Arts Program.5
In the first phase of development,
NKCDC partnered with organizations to level and secure the ground.
In the second phase, NKCDC
convened community meetings in
which stakeholders from the broader
neighborhood talked about how they
wanted to structure the space and
diagrammed potential layouts on the
map. Neighborhood stakeholders determined a need for a space that was
a model of green infrastructure that
provided safe passageways within
the neighborhood, and as a result,
the school, once separated by a fence,
is now connected with the Shissler

Recreation Center. The recreation
center and surrounding grounds
have been outfitted with educational
murals as well as improved sidewalks, landscaping, parking, sports
field and play areas, and a dog park.
Infrastructure to mitigate stormwater overflows was also integrated,
reducing runoff and burdens on the
sewer system during storm events.
The Big Green Block now serves as a
springboard for community members to engage in growing revitalization efforts from this central point in
the neighborhood.6
The efforts of the NKCDC have
engaged stakeholders in a way that
benefits the mission of each, gaining funding and support for the Big
Green Block through strategic partnerships. Data visualization allows
simple conveyance of goals and ideas

and proved a major asset in solidifying partnerships for the NKCDC.
Traditionally used in the environmental and transportation planning fields,
data visualization to depict trends by
geographic location is now spreading to health, policy, and community
development. This tool allows developers to be efficient, accounting for
more opinions and integrating more
varied data in the planning process
than ever before. Alternatively, these
tools aid stakeholders in articulating
their desires and, overall, connect
planning to place. Arming people
with spatial knowledge to make decisions allows for greater consideration
of how individual entities contribute
to the function of the neighborhood,
city, and region and provides for
more cohesive development efforts
when employed.

U.S.–Brazil Joint Initiative on Urban Sustainability, “Big Green Block,” available at www.epa.gov/jius/projects/philadelphia/big_green_block.html.
Sandy Salzman, “The Big Green Block,” presentation at the 2014 Reinventing Older Communities conference, May 13, 2014, available at www.
philadelphiafed.org/ROC-Salzman/.
5
6

18

Ohio Funders Promote Collaboration on Economic
Development and Opportunity*
By Keith L. Rolland, Community Development Advisor
The Fund for Our Economic Future
(the Fund), which was formed in
2004 by 28 community and private
foundations to address the long-term
economic decline in northeast Ohio,1
has promoted economic growth
and equitable access to opportunity largely by providing multiyear
grants to regional economic development intermediaries and initiatives.2

northeast Ohio. Since 2010, Fund investments have directly or indirectly
leveraged more than $170 million in
additional federal, state, and national
philanthropic grants to the region.

The Fund has been bringing together
people from the “growth camp” (i.e.,
economic development agencies and
chambers of commerce) and the “opportunity camp” (i.e., private, community, and corporate foundations;
health-care systems; colleges and
universities; social service providers;
and nonprofits). Previously, there
was little organized contact between
the two “camps,” which are exploring closer alignment in a regional
economic competitiveness strategy.

Collaboration is key to addressing
systemic issues. How can leaders
in midsize metropolitan areas start
and continue the collaborative process in an effective manner?

The Fund has 50 member organizations, including private, community,
and corporate foundations, higher
education institutions, health-care
systems, corporations, and individuals. Working in three-year phases,
the Fund has raised nearly $100
million to improve regional economic competitiveness by pooling
grantmaking, conducting research,
and convening events. According
to the Fund, its efforts have helped
retain and create nearly 15,000 jobs,
$550 million in business payrolls,
and nearly $3 billion in capital in

In a recent interview, Fund President Brad Whitehead shared several
insights on regional collaboration
based on the Fund’s experience.

Whitehead: The collaborative process
is greatly dependent on the level of
trust among the stakeholders. Leaders from different sectors often don’t
know each other well enough, nor
do they have enough familiarity with
the issue — in our case, regional
economic competitiveness — to feel a
high degree of trust. We believe a key
to starting and sustaining an effective
collaboration is to create an opportunity for leaders to jointly learn about
and grapple with issues and develop
a shared understanding of the fundamental challenges being faced, the
root causes, the potential solutions,
and the tangible steps that need to be
taken to reach those solutions.
While this journey may sound obvious, we are continually struck by
how radically perspectives, terminology, and metrics vary across (and

even within) sectors. It is not enough
for leaders to read a report or a set of
recommendations; they must hash
out the foundational issues with each
other. As leaders learn together, they
get to know each other, appreciate
each other’s distinct perspectives,
and begin to see the value of working together.
The convening role can be found
in any number of sectors: public,
private, or philanthropic. While
philanthropy predominantly played
this role in the early days in northeast Ohio, the business and higher
education sectors are now taking on
the role of convener.
The Fund uses research to build
consensus among Fund partners on
common priorities and approaches.
What kinds of research are useful
for different sectors that are beginning to work together?
Whitehead: In the Fund’s experience, economic research is critical
in order to create and maintain a
shared understanding among partners of both the long-term challenges and opportunities. Research that
is done well offers reliable, unbiased
information to ensure that partners
are engaged in constructive and forward-thinking dialogue about what
the merits of different approaches to
economic development are, where
strengths and weaknesses lie, and
what alternative scenarios look like.

* The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
1
The region has a population of more than 4 million people and includes the metropolitan areas of Akron, Canton, Cleveland, and Youngstown, OH.
2
For more information, see the Fund’s 2013 annual report and other materials at www.thefundneo.org.

19

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

also strived to ensure our programmatic work reaches traditionally
disadvantaged minorities no matter
where they are located.

Fund President Brad Whitehead

It is a first step in galvanizing support around shared priorities.
Over the past 10 years, in-depth
research has informed — and continues to inform — where and how the
Fund allocates its resources. A unique
aspect of the Fund’s research is that
rather than simply keeping tabs on
how the region is performing on selfselected indicators, it has leveraged
its partnerships with the Federal Reserve Bank of Cleveland and Cleveland State University to statistically
identify what makes a difference to
the northeast Ohio economy.
The series, What Matters to Metros
(formerly known as The Dashboard of
Economic Indicators),3 points to factors
associated with economic growth
(such as income, gross metropolitan
product, output, and productivity)
in more than 100 similarly sized metropolitan areas across the country.
In the past decade, our research has
led to a strategic focus on business
growth, talent development, and
government collaboration. We have
3

See http://www.thefundneo.org/what-matters.

20

The latest iteration of our research,
published in 2013, brought to light
the fact that job growth in many
places did not coincide with income
growth and that entire neighborhoods are increasingly cut off from
the broader economic growth. This
knowledge informs our support for
strategies that help residents of economically distressed neighborhoods
— many but not all of whom are also
minorities — build and strengthen
connections to the regional economy.
Another critical role that research
plays for the Fund is in identifying common goals. Trend research
allows the Fund to set realistic and
achievable goals for the region, track
the Fund’s progress in meeting the
goals, and evaluate outcomes. When
looking forward five and 10 years,
research helps to ensure that goals
around jobs or income are translatable to different geographies and
sectors so that various stakeholders
can see their role as contributors to a
regional vision.
Research continues to evolve as more
and better data become available at
the local level. An important role of
the Fund moving forward will be to
ensure that local and regional partners are using these data to inform
and align their strategies.
Foundations and businesses have
different goals and ways of working. What has the Fund learned
about the potential and limitations
of foundations and businesses
working together?

Whitehead: We work with business
leaders who have chosen to participate in the civic arena, and there
really is a great deal of alignment
between our goals. For example, our
business partners share our desire to
advance a growing economy where
all people of northeast Ohio have
equitable access to the opportunities
being created.
While our goals are more closely
aligned than we may have initially
thought, the ways in which we work
are significantly different. The Fund
is a collaboration across a large, diverse economic region. Most business-led civic organizations are designed to serve narrower geographic
interests. Also, business leaders are
accustomed to having control over
their business enterprises. When
it comes to a civic enterprise — especially something as complex as
regional economic competitiveness
— no one is in control.
Because of this, we have found that
business leaders often prefer working on discrete, achievable projects,
rather than on long-term systems
changes that are necessary for transformation. However, the more time
we are able to engage business leaders in learning with us about what it
truly takes to transform our economy, the more we have found them
to be willing to develop a common
agenda and address the priorities
that will help us achieve our goals.
Likewise, we have learned to make
changes in the way we operate to
accommodate their way of working. Since its founding, the Fund
has operated under a one-member,
one-vote philosophy, meaning that
each member has an equal say in our

An evaluation of the Fund said,
“The Fund has concentrated its efforts overwhelmingly on business
growth, the part of the agenda with
the most consistent approach across
funders, but has achieved less progress advancing other core priorities, including talent development,
racial and economic inclusion, and
government collaboration and efficiency.”4 What challenges did the
Fund experience as it worked on the
other core priorities?
Whitehead: The commitment to each
of these areas must be long term.
While philanthropy is structurally positioned to take the long view, foundations are notorious for wanting to
see results quickly and moving on to
the next thing. It’s human nature, but
we must resist that impulse. We must
be impatient for change but realistic

in knowing what transformational
change really entails. “Impatient
persistence” is perhaps the best way
to describe what is needed.

Credit: BioEnterprise

decision-making process. For a business leader, having 50-plus board
members is a nightmare scenario;
business leaders were reluctant to
engage with such a large body. When
we developed the Regional Competitiveness Council to strengthen our
partnership with the business community, we agreed that only a handful (not the full Fund body) would
represent our organization at the
council table. This created discomfort for some of our members who
had worked together for nearly a decade. But we knew we had to adapt
and evolve, just as we were asking
the business community to do.

Through talent development, we’ve
learned that funding is often focused
on one part of the work but is not
well connected across the continuum
of the work. We need to be more
strategic in our allocation of resources and understand how that funding
fits in to the broader stream of work
around the issue.
In our racial and economic inclusion work, we have strived to focus
on what the data say, and we’ve
learned that economic growth won’t
necessarily be shared by all. We’ve
reached a place where our business
partners are prioritizing this issue,
but that was a challenge when we
were just striving to create jobs.
In our government collaboration and
efficiency work, we’ve also faced
challenges in reaching scale. We’ve
found it to be effective to stimulate
this work through initiatives such as
EfficientGovNow, which focused on
giving birth to innovative ideas and
action that could spur collaboration
and efficiency. Its work helped influence the state of Ohio to develop a
Local Government Innovation Fund
(LGIF), which offers communities
financial support to create more efficient and effective service delivery.
In 2012–2013, the state authorized
$45 million for the LGIF.

BioEnterprise, an economic development
intermediary and grantee of the Fund for
Our Economic Future, assists biomedical
businesses in management and business
development. BioEnterprise has worked
with staff from a medical device company,
Arteriocyte Medical Systems, shown here.

The Fund and its partners are
pursuing a Growth & Opportunity
Initiative that emphasizes crosssector partnerships and the interconnections between job creation, job
preparation, and job access as core
components to a successful economic
development strategy.
For more information about the Fund
for Our Economic Future, contact Fund
President Brad Whitehead at 216-4569801 or bwhitehead@thefundneo.org;
www.thefundneo.org.

See Catalyzing Regional Economic Transformation: Lessons from Funder Collaboration in Northeast Ohio at www.knightfoundation.org/publications/
catalyzing-regional-economic-transformation.
4

Visit www.philadelphiafed.org/ROC2014/ for presentations, audio recordings,
and videos of the 2014 Reinventing Older Communities conference.
21

REINVENTING OLDER COMMUNITIES: BRIDGING GROWTH & OPPORTUNITY

Reinventing Older Communities: Bridging Growth & Opportunity
...continued from page 1

The probability that a child of parents who are in the bottom fifth of
the income distribution can reach the
top fifth of the income distribution
varies from 4.4 percent in Charlotte,
NC, to 10.8 percent in Salt Lake City,
UT, to 12.9 percent in San Jose, CA,
according to the paper. Chetty and
other researchers used anonymous
federal income tax records that
provide data on the incomes of over
40 million children and their parents
between 1996 and 2012.
Areas with high upward mobility
have less residential segregation, less
income inequality, better primary
schools, greater social capital (such as
involvement in church and civic organizations), and greater family stability, the paper said. Upward mobility is
significantly lower in areas that have
larger African American populations,
even for whites who live there.
Chetty said in a keynote presentation
at the Reinventing conference that
upward economic mobility has been
low in the U.S. relative to other developed countries for the past several
decades and that increased mobility
could contribute to economic growth
and reduce transfer payments.
He said that differences in upward
mobility result from factors that
affect children while they are growing up, rather than after they enter
the labor market, and concluded
that “local policies and community

structures matter a great deal for life
opportunities for all.”
Speakers throughout the conference
highlighted challenges with intergenerational mobility. Manuel Pastor,
professor of sociology and American
Studies & Ethnicity at the University
of Southern California, said that education is a “leveler,” but there are persistent economic gaps for members of
racial and ethnic minorities. Angela
Glover Blackwell, founder and CEO
of PolicyLink, observed, “Where you
live is a proxy for opportunity.”
Equitable Growth
A major area of focus at the Reinventing conference was on how economic
growth can become more “equitable”
and include all people and communities. An inclusive, equitable model
for growth recognizes growing racial
and ethnic diversity in the U.S.2 Some
international economists believe that
an equitable approach can extend
periods of economic growth.3
Equitable growth strategies typically involve building connections
with different sectors and different parts of a region. Collaborative
discussions might bring together
community-based organizations,
businesses, foundations, developers, city and regional leaders, and
planners, among others. Equitable
growth strategies often promote
transit-oriented development and
environmental sustainability, connect

workers to high-growth job sectors,
encourage anchor institutions to
implement local procurement and
local hiring policies, strengthen local
and minority-owned businesses,
and maximize job creation through
public investments.
For example, the Partnership for
Southern Equity in Atlanta held forums, conducted research to support
opportunities for equitable development, and helped develop the Metro
Atlanta Equity Atlas.4
Equitable growth initiatives combine
an inclusive vision and a community
organizing process, noted Pastor, who
has developed regional equity profiles
as a first step in building consensus on
growth and opportunity issues.5
Data collection and measurement
are critically important in equitable
growth strategies to understand
community needs, build agreement,
evaluate progress, and adjust future
plans. The speakers agreed that data
must be made accessible to the community as well as to researchers.
Bridging Through Education
In a view echoed by several speakers, Mark Zandi, chief economist at
Moody’s Analytics, said that the path
to intergenerational mobility is raising skills and educational attainment.
Chetty told the Reinventing audience
that improvements in education have

See www.policylink.org/focus-areas/equitable-economy.
See Jonathan D. Ostry, Andrew Berg, and Charalambos G. Tsangarides, “Redistribution, Inequality, and Growth,” International Monetary Fund, 2014,
available at http://ow.ly/ywzXv.
4
See http://atlantaequityatlas.com/about-maea/.
5
See regional equity profiles on Kansas City and other regions, available at http://ow.ly/z40ye, and see the Metro Atlanta Equity Atlas, available at
www.atlantaequityatlas.com. Pastor has written several book chapters on equitable growth and is the coauthor of a forthcoming book on the subject.
2
3

22

the clearest causal effects on upward
mobility and that teacher quality
matters in all grades, not just in early
ages, and may be more important
than class size. Better teachers, as
measured by teachers’ impacts on
children’s test scores, substantially
increase students’ earnings and college attendance rates, according to a
2013 study by Chetty and coauthors
that tracked over 1 million children
from childhood to early adulthood.6
Public school leaders in Toledo, OH;
Philadelphia; Milwaukee, WI; and
Detroit had the following suggestions on strengthening public school
systems: The most talented teachers should teach students with the
greatest needs; businesses and educators need a shared understanding
of the competencies required for
employment; homeowner and rental
housing assistance programs might
help attract teachers; and different
sectors must be united in working
for school success.
Research conducted by the family
foundation of M. Night Shyamalan,
director, filmmaker, and author of
I Got Schooled, found that in highly
successful schools the entire school
staff promotes and reinforces
student achievement and success;
the best teachers are identified and
retained; evidence-tested teaching
methods are used; school principals
spend much of their time coaching
teachers; and the school day and
school year are extended.

The importance of cross-sectional
support for early childhood education and other issues was also
emphasized. For example, the San
Antonio Chamber of Commerce in
Texas joined political leaders and equity advocates in backing a sales tax
to fund pre-K education for disadvantaged children, an action consistent with the chamber’s workforce
development goals.
Bridging Through Employment
A high priority of equitable growth
initiatives is providing access to jobs
in expanding employment sectors.
Workers need long-term preparation
so that they can secure jobs when
they become available. Many organizations are involved in workforce
development, and one speaker questioned which entity is best suited to
link residents to jobs.
The Cara Program, a 23-year-old
nonprofit in Chicago, provides lowincome residents looking for employment with intensive short-term
orientation, temporary employment
through a Cara affiliate, and access to
permanent jobs through a network of
area employers. Cara Program staff
works with residents for up to two
years following permanent employment on budgeting and other needs.
Charles I. Plosser, president and CEO
of the Federal Reserve Bank of Philadelphia, said that business leaders he
has met with repeatedly say that they
have difficulty finding qualified candidates in the areas of science, technology, engineering, and math (STEM).7

Respondents to the Philadelphia
Fed’s April Business Outlook Survey of
manufacturers identified the availability of skilled labor as the most
important factor influencing their
decisions to remain in the region,
President Plosser said. Manufacturers also ranked the availability of
skilled labor as becoming a more
important factor in recent years.
Bridging Through Revitalization
Equitable revitalization seeks to ensure that low- and moderate-income
residents and businesses benefit
from revitalization and that negative
impacts are minimized. Pastor asked
how improvement in a geographic
area should be measured to determine if redevelopment benefits residents and the region. Data collected
should include areas of interest to
residents, an action that builds trust
with residents.
The East Baltimore Revitalization
Initiative (EBRI) helped develop
economic inclusion agreements for
local and minority hiring, training,
contracting, and business development after plans were announced for
a science and technology office and
laboratory complex and an adjacent
mixed-income community. EBRI staff
worked with residents to advocate for
a school, early learning center, and
park and enhanced assistance for 742
households that were relocated as a
result of the development.8 A broadbased Baltimore Neighborhood
Indicators Alliance compiles data on
“vital signs” and monitors changes in
neighborhood conditions.9

See http://obs.rc.fas.harvard.edu/chetty/w19423.pdf.
STEM employment grew at three times the rate of non-STEM employment in the previous decade and is projected to grow at twice the rate of nonSTEM jobs through 2018, the U.S. Department of Commerce estimates.
8
For information, see www.aecf.org/resources/the-east-baltimore-revitalization-initiative/.
9
See http://bniajfi.org/.
6
7

23

CASCADE

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October 15–17, 2014

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Workforce development and labor market issues have come to the forefront as the nation continues
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