Innovation Needed to Finally Win War on Poverty

Ron Littlefield | July 2, 2014

In 1964, President Lyndon Johnson introduced what would become known as the War on Poverty. At the time, the poverty rate was hovering around a dismal 19 percent and something had to be done. The federal government’s response came in short order with the Economic Opportunity Act, the Food Stamp Act and Medicare and Medicaid. By 1973, poverty rates were barely over 11 percent – it seemed poverty was a war we would win.

But history has told a different story. Exactly 50 years after the first battle cry of the War on Poverty we face many of the same challenges we did back then – albeit with a slightly different spin. While the poverty rate has not yet reached 1960s’ levels – in 2013 we were at 15 percent – what is particularly troubling is the increasing chasm between the haves and the have nots. Income inequality in the U.S. is now the highest it has ever been since 1928 with the wealthiest 5 percent of Americans possessing 24 times the wealth of the average household. Increasingly, cities are segregated by rich and poor as middle class neighborhoods disappear. Hard times and homelessness hit entire families. In New York City, 50,000 people are in homeless shelters – and 21,000 of them are children. Nationwide, nearly one out of six Americans rely on food stamps.
 
Mayors and other city leaders know that urban areas are hit particularly hard by poverty – in 2012, 54 cities had at least a quarter of their population living under the federal poverty level, according to the U.S. Census Bureau. This disappearance of the vital middle class has not gone unnoticed – it’s a frequent foundation of many political platforms and President Obama declared it the “defining challenge of our time.”
 
While poverty is not a new problem and it’s tempting to ignore, trend lines indicate current approaches to addressing these issues may be necessary but they are not sufficient. We must also remember that poverty does not occur in a vacuum, nor is it just about an individual’s pocketbook. Poverty is a pervasive problem, with impacts that spread throughout society. Poverty and poor health are inextricably linked – a recent study by the Robert Wood Johnson Foundation found that the least healthy U.S. counties have twice as many children living in poverty and twice the mortality rate of healthier counties. Additionally, high poverty rates are correlated with an increase of crime and low high school graduation rates. It’s a depressing cycle and a difficult one from which to break free for low-income individuals. 
 
While these challenges are well known, as of yet we do not have a solution, at least not on a national scale. There are suggested approaches ranging from the plan promoted by Sen. Marco Rubio to place anti-poverty funding under one agency, which would dole out money to states to devise their own plans to combat the issue, to President Obama’s Promise Zone Initiative, which is aimed initially at 20 selected communities and incorporates some elements of local choice, but with greater federal participation.
 
As I think about this defining challenge of our time and some of the solutions proposed, I am taken back to a meeting I had over 30 years ago. Sitting across the table from James Rouse, I listened as he outlined his plan for The Enterprise Foundation. Rouse had already made a name for himself – first as a developer of shopping malls, then as the builder of the new town of Columbia, Md. Ultimately he became somewhat famous as the restorer and revitalizer of faded urban areas such as Baltimore’s Inner Harbor and Boston’s Faneuil Hall through the development of something new: the festival marketplace.
 
Rouse said that by taking the successful model of the festival marketplace to other cities, he planned to generate funds to support a non-profit program to provide safe and livable owner-occupied housing to those who could not otherwise afford it. People living in poverty cannot be expected to save and invest, Rouse noted, but everyone needs a place to live. By making it possible for low-income renters to become homeowners, he reasoned, they would then have an asset that would increase in value. Later they could borrow against their equity and educate their children or start a business – thereby pulling their family out of poverty and interrupting the cycle.
 
Thus, Rouse’s Enterprise Foundation was much more than a housing program – it was an anti-poverty program and a foothold into the middle class. It was a truly innovative plan – simple, creative and elegant. James Rouse died in 1996, but his innovation lives on as Enterprise Community Partners, which has been responsible for creating more than 240,000 affordable homes.
 
I mention this example to showcase that what is needed to solve these ever-challenging issues is true innovation and application of dramatic ideas.
 
The City Accelerator offers an opportunity for new thinking that could not come at a better time.  Six cities – Albuquerque, Denver, Louisville, Nashville, Philadelphia and San Jose – have stepped up with fresh takes on this intractable problem. Have your say on the importance of their proposals for improving the lives of low-income residents by reviewing and rating all six at governing.com/cityaccelerator.
 
 Or you can begin rating the city pitches from this page:
Denver

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