There Goes the Neighbourhood

Bruce Katz
Bruce Katz Founding Director of the Nowak Metro Finance Lab - Drexel University

July 14, 2004

Casual visitors to America’s great cities are often struck by the vast areas of deprivation that abut vibrant downtowns and once-grand commercial corridors. These communities seem strangely out of place in such a prosperous country—a grim reminder of the racial, ethnic, and class divisions that persist beneath celebrations of the American dream.

Since the 1960s, such rundown neighbourhoods have held a fascination. They have been the laboratories for a plethora of experiments, government demonstrations and federal policies and programmes. And yet, the impact of these efforts—amounting to tens of billions of dollars over decades—remains mixed.

Some neighbourhoods can point to real improvements. But many initiatives have failed to alleviate, and in some cases have exacerbated, the deteriorating economic and social conditions in inner cities.

My thesis is simple: a true rebirth of distressed areas will only occur if we make these places neighbourhoods of choice for individuals and families with a broad range of incomes, and neighbourhoods of connection that are linked to metropolitan opportunities.

For Britain and America, this challenges neighbourhood policies, which, under the guise of “revitalising communities,” reinforce patterns of concentrated poverty—a root cause of neighbourhood distress. It demands that neighbourhoods operate within the broader metropolitan “geography of opportunity”, rather than the insular, fixed borders of deprived areas.

At first sight, American neighbourhood experience and policy appear far removed from the realities of Britain. Neighbourhoods in the US seem harsher and more racially driven. The American “safety net” has frayed, leaving working families incapable of meeting basic needs such as healthcare and childcare. American metropolitan economies are dispersed, leaving inner-city neighbourhoods remote from the locus of economic activity. Central government leaves most to fend for themselves.

Yet Britain has much to learn from America, in part because US neighbourhood policies are working out the answers to questions about deprived areas. The most advanced are trying to do what Joseph Rowntree intended for his foundations: to ” … search out the underlying causes of weakness or evil in the community, rather than … [remedy] their most superficial manifestations … “

The US, for example, has undertaken a 10-year effort to demolish the worst public housing blocks and replace them with housing that is economically integrated, less dense, better designed and integrated into the fabric of local neighbourhoods and city economies. This strategy includes resources to smooth low-income residents’ access to opportunity through housing mobility and work support services.

One lesson is local governance. Local authorities in the US have powerful responsibilities—education, law enforcement, land regulation—and the ability to raise local funds (within limitations) to carry them out. This has created an entrepreneurial culture and has led to a natural system for using the fiscal benefits of, say, city centre revival to subsidise revitalisation in a broader set of urban areas. Many local governments leverage the federal effort to redevelop public housing by investing their resources in neighbourhood parks, schools and streets.

In Britain, the tax benefits of city centre revival accrue to the national, rather than local, government, making this local cross-subsidisation difficult to execute. Devolving more powers—including the power to tax—to local entities appears necessary.

Another key lesson is the value of immigration. In the US, immigration is a key component of neighbourhood transformation and a necessity for future economic, fiscal and social health.

Of course, the US, in rhetoric and reality, is a nation of immigrants, and the liberalising of immigration rules has met with broad cultural receptivity. In Britain, the broader legitimacy and acceptance of immigration remains a matter of debate. It is difficult to imagine that neighbourhood strategies around enhancing demographic diversity in Britain will be a solution until that debate is resolved.

Most important, neighbourhood policies need to grapple with the negative social and economic implications of concentrated poverty. In the end, concentrated poverty is the “underlying cause of weakness or evil in the community” that Rowntree was so concerned about a century ago. By contrast, the focus of most neighbourhood efforts—dilapidated housing, deteriorating town centres, poor educational performance—remain “superficial manifestations” of these urban settlement patterns.

It is this basic understanding that needs to energise the neighbourhood policies of both our countries. And that can drive a new, sustainable commitment to “neighbourhoods of choice and connection” and to true opportunity for people and places now left behind.