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6 Ways Cities Can Create Economic Opportunity for All

We don't need more policy initiatives. We need to rethink our processes.

LBJ Fair Housing
President Lyndon Johnson signed the Fair Housing Act on April 11, 1968.
(Lyndon B. Johnson Library)
Reflecting on the 50th anniversary of the passage of the Fair Housing Act this year, it is impossible to not consider Dr. Martin Luther King, Jr., whose assassination while crusading for economic equality connects him, posthumously, to this historic piece of legislation.

Everyone knows the economic benefits of home ownership. In the 1950s and '60s, many Americans had become homeowners through policies such as the GI Bill, which is largely seen as responsible for the rise of the American middle class after World War II. But inequitable administration of this policy left many families of color without the same prospects for new wealth development. In the aftermath of de jure segregation, the Fair Housing Act of 1968 was designed to eradicate the remnants of Jim Crow by connecting an entire generation of people of color to this new economic opportunity. 

But it's not just good for the homeowners: Higher home-ownership rates help spur increased business development. Many homeowners in the mid-20th century began using the equity in their homes to start and finance small businesses, a practice which continues to this day. However, ongoing barriers to business financing for minority firms (including private sector discrimination) lead this to being critical component of building, and scaling of minority-owned firms.

Fifty years later, stagnant home ownership by the same groups the Fair Housing Act was designed to ameliorate leave many struggling to consider this policy a successful one.

No one would blame you, then, for not considering also how the housing instability impacts business growth. The 2008 recession not only robbed families of their residences, but also many businesses of their financial lifeline. In metro Atlanta, where I was raised, subprime mortgages crippled entire black neighborhoods and blighted minority business districts, robbing many minority families of the opportunity to create new wealth.

While our economy today, by some metrics, is as strong as it has ever been, gentrification of historic urban centers continues to redefine communities of color through displacement. Absent economic opportunity, systemic disenfranchisement continues, with the fruit of disinvestment, poor health; disparate education; higher crime; substance abuse; juvenile delinquency; and limited economic advancement, continuing. 

On the eve of his assassination, Dr. King gave an impassioned speech against unequal economics, where he exclaimed of the black experience in America, “We are poor people, individually, we are poor when you compare us with white society in America. We are poor.”

During that speech in early April, King called for the “strengthening of black institutions" and economic empowerment for people of color, and it remains true that the most consistent path to economic growth in America remains home ownership and the opportunities it affords. The Fair Housing Act, passed less than two weeks after King’s assassination, was seen by many as a policy-driven response to the very thing he was crusading for: equal economic opportunity and the right to equity through economic empowerment.  

These two concepts walk hand in hand, home ownership and economic development, home equity and economic empowerment. Limiting opportunities for one creates barriers to the other, and a minority business without this opportunity represents one more family closer to foreclosure, or one more individual with dimmer prospects for a better future. 

The Fair Housing Act offers us a cautionary tale of how well-intended policy can fail to meet its intended impact, and the ways this failure can impact quality of life even in what may appear to be an unrelated area. Economics impacts everything. 

Governments, through policy, created systemic inequity, and have not effectively used policy to rectify it. We focus our efforts instead on development of new programs based on bad policies. These initiatives are often built on a bad foundation, either failing to consider the community they are designed to serve, not engaging advocates and stakeholders to guide us through process improvement or failing to effectively link proposed solutions to practical problems. When we build alone, we carry the burden alone. In an environment where every dime counts, governments can no longer afford to work without collaboration. 

How then do policymakers achieve that most important connection, linking policies to meet the needs of the communities they intend to impact?

Minority business programs are especially susceptible to this issue, often by being short-circuited by process, from the service and its desired impact (production), to the end user (practitioners and communities). Knowing this problem exists, governments can close this gap by using both introspection and community engagement to look at internal policies and processes to identify where the process is short circuiting. Instead of being prescriptive, it is more impactful to work side by side with our communities, engaging them where they are most comfortable, scheduling around their conflicts, avoiding being intrusive, and providing them direct benefits for engagement. 

Cities have a tremendous opportunity to expand economic opportunity by going back to the drawing board and reevaluating how minority business programs can be more impactful and equitable. This practice is being adopted throughout the country, including the City Accelerator, where Charlotte, Chicago, Los Angeles, Memphis and Milwaukee city governments are focusing on detailed process re-engineering to increase the effectiveness of their current MBE programs. The cities in the City Accelerator program, and initiative led by Living Cities and supported by Citi Foundation, are not only focusing on engagement with the community, but deconstructing internal processes by asking the right questions, retraining personnel, identifying gaps, applying best practices and gathering information from not only the people we aim to impact, but from the community around them. As noted by Brion Oaks, Chief Equity Officer from the city of Austin, Texas, addressing the cohort, “The people closest to the problem often have the best solutions.” 

In seeking to increase the effectiveness of municipal programs, cities need to rethink programmatic processes in the following ways:

1. Government often shoulders the load of diversity and inclusion alone, but there are partners in every community who are willing to work alongside you. When creating new policy, or seeking feedback about current ones, break down barriers and realize that while the city is the leader, they should work collaboratively with the surrounding community. Others are looking to you for guidance. Where you go, others will follow. Start the conversation between your stakeholders in both the public, private, and NFP sectors. They will bring you more resources to strengthen your cause. 

2. Evaluate yourself. Take a strategic look at internal processes and policies to identify ways where municipal operation is not equitable or creates unnecessary barriers. Go back to the drawing board to identify what is necessary to improve forgotten or inefficient initiatives and use your stakeholders to understand, from their perspectives, where your process is challenging for them.

3. Before writing new legislation, analyze the boundaries of current policies to determine what opportunities for process improvement may already exist. Often what you will find is the program is operating inefficiently due to poor oversight, little enforcement, or a lack of proper personnel.

4. Human error often plays a huge role in program inefficiency and the discrepancy between written policy and effective implementation is often well-trained staff. While personnel costs often comprise the largest portion of municipal expenses, training is often the last thing on the agenda. With government budgets often under siege, administrators at the local level are left trying to stretch available resources, resulting in overworked, underpaid and under-developed employees. Invest in training and professional development to expose your employees to new knowledge and explore different responsibilities. This creates a more agile workplace, fosters positive morale, and builds a process for storing institutional knowledge, which helps formalize processes and make your workplace more efficient. 

5. Create platforms to solicit feedback, from your employees or your community. Don’t be afraid of the criticisms but be proactive in solving the problems. The people who both administer, or use your programs, can probably quickly diagnose the problems, and solutions.

6. Lastly, keep in mind that policy takes time, and process improvements can be difficult to measure. Resist the desire to redirect when you feel the program is not getting quick results. Begin with the end in mind by determining the data you need to solve a problem, establish clear baselines, metrics for collection, and collect longitudinal data to demonstrate the impact of your policy and create the business case to continue it. 

Reversing the damage done to cities and communities by the remnants of systemic racism has not been easy, but city governments are best positioned to provide the leadership necessary to accomplish this goal.

By breaking down the barriers between communities built through segregation, discrimination and bureaucracy, we become more agile, more responsive, and more effective. When we avoid paternalistic prescriptions, choosing instead to partner with our community, we move closer to truly realizing Dr. King’s dream for the economic empowerment for all people. 

Zach Patton -- Executive Editor. Zach joined GOVERNING as a staff writer in 2004. He received the 2011 Jesse H. Neal Award for Outstanding Journalism
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