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On the Record

Keynote Address

There are many aspects of tonight’s lecture and the invitation to present it that represent a profound honor for me. I have always respected the work of tonight’s hosts-the Fannie Mae Foundation, the Brookings Institution, and the Enterprise Foundation. Thank you sincerely for this honor. But the highest honor for all of us associated with this night is simply the fact that it is named the James Rouse Lecture and we are all honored by the presence of Patti Rouse here tonight.

When President Clinton presented the Presidential Medal of Freedom to Jim Rouse in 1995, I was so happy and proud for him. It is human nature I suppose that as I reflected on the ceremony, I allowed myself to see the major phases of Jim’s work through the prism of my own experiences with him.

As an urban planning student in the late 1960s I studied the development of new towns; it was at his new town, Columbia, that I first met Jim, because Elliot Richardson, then Secretary of HEW, for whom I worked as a White House Fellow, wanted to explore with Jim his ideas about human services.

As Mayor of San Antonio, I walked with Jim along the streets of our city and along our Riverwalk, as he considered a major festival marketplace to link the River with HemisFair Park. He asked questions, pointed out possibilities, commented on buildings, on details of architecture, on sidewalk materials; he didn’t miss a thing, excited and energetic. We eventually decided that the project would be ahead of its time, but soon after he invited me to go on the board of the Enterprise Foundation. San Antonio got a lot more than a festival marketplace from the encounter; we got exposure to his ideas about housing and in time a very successful Enterprise office. And from our conversations on the front stoops of homes in cities such as Chattanooga and Baltimore came a conversation he had with President-elect Clinton at the Little Rock Economic Summit in December of 1992. He told the President-elect that I should be Secretary of HUD. From his lips to the President’s ears. As Secretary, I saw Jim’s street-level, people-centered view of the nation’s inner-city conditions.

In the last year, as I have thought about what I want to do usefully that combines what I care about with what I need to do in business, I have often reflected on Jim’s memorial service in 1996. I recall marveling then that he was busy in his office, working on building homes for families, until past his 80th year. It is in part that recollection of how a person should spend one’s life which prompted me to form American CityVista, a joint venture with Kaufman and Broad to build homes in the central areas of our nation’s cities. What a magnificent life he lived. What a noble man.

Jim was many things. But at core he was an irrepressible optimist. He was an optimist about people, about our cities, about our country. He believed in using, in sharing the prosperity of our country.

He would be very excited about what is happening in so many urban areas today. To be sure-his eyes would take in, his mind would absorb-the work that remains to be done. But he would rejoice at the possibilities created by this special time.


America’s economy today is the strongest it has been in our nation’s history. A checklist of the indicators of our current economic strength is stunningly impressive:

  • The longest expansion on record
  • Interest rates that encourage record levels of capital investment
  • The highest homeownership rate in the nation’s history
  • Record levels of business formations
  • Rapid job growth
  • The lowest unemployment rates in thirty years
  • The lowest levels of minority poverty in thirty years
  • And in parallel trajectories, positive movements in social indicators from education performance scores to health statistics.

And the momentum is touching cities of every kind.
It has very clearly touched the city-states that are America’s world-class cities-those centers of global commerce and trade which are among the most important cities in the world.

The most prominent of the American city-states is of course New York City. New York is experiencing a level of economic strength which is driven by its role as a world financial center; its traditional role in communications buttressed by its success as a new-media center; and, as we saw in the recent United Nations Millennium Conference, its place on the world diplomatic stage. New York City today is a stronger, better city than it was a decade ago. A strong economy, a strong mayor, and a strong civic sector have strengthened a city that is safer, cleaner, and more livable for its residents.

The West Coast city-state, Los Angeles, is evolving beyond its role as the world’s film, television and music production center to become a magnet for content-driven Internet enterprises. But even those exciting developments are only the surface of a deep and broad urban economy which near the top in thirteen of the nation’s twenty most important industry clusters. No other city in the country ranks as highly in the diversity of its economic strength. Minority entrepreneurs are building businesses in the San Fernando Valley, USC is helping strengthen South Central, and immigrant neighborhoods are reviving shopping districts in East Los Angeles, Huntington Park, and Monterey Park.

San Francisco, Miami, and Chicago-among America’s world cities-are enjoying new strength attributable to the national economy and charting their own urban destinies of diversified business, of multicultural styles, and of revitalized neighborhoods and communities.

Similar momentum is at work in America’s regional capitals. Boston in the Northeast, Minneapolis in the Northern Plains, Seattle in the Northwest, Denver in the Rocky Mountains, Dallas in the Central Southwest, and Atlanta in the Southeast-each boasts a strong economy as well as creative non-profit housing producers, investments in people-centered amenities, and new life in central neighborhoods.

Among the American cities which are the headquarters of powerful industrial sectors, Detroit is enjoying a visible renaissance in jobs, downtown projects, and subdivisions within the city as new firms, careers, and training programs flow from the regional expansion of automotive research, design, and computer-driven engineering activities.

Charlotte has designed new neighborhoods near downtown driven by the demand, the leadership, and the prosperity attendant to its emergence as the second most important banking center in the United States.

In Washington, the governmental and association complex has long spurred the Maryland and Virginia suburbs, which are now undergirded by a diversified base of technology companies and the Baltimore-Washington biomedical corridor, and now the region’s economy is reflected in notable revitalization in the District of Columbia itself.

Even the cities which have been thought of as the poorest performers-the most cited examples of the urban crisis over the last several decades-are showing signs of economic progress; cities such as New Orleans and Newark, Toledo and Philadelphia, Memphis and St. Louis, Buffalo and Akron.

And Cleveland, where Mayor White has been tireless in reclaiming land that is now neighborhoods of suburban-style homes for the middle-class workers of the nearby Cleveland Clinic. And Pittsburgh where incubator parks filled with technology businesses cover sites that were recently rusting steel mills and where new life has infused the downtown and inner neighborhoods.

America’s cities are doing better. But the real point is that the national economy has created a moment in which it is realistically possible to envision a much stronger future for America’s cities. It is a moment such as that described by Jim Rouse in a speech to a Newark Conference on the American City in 1959. He said then:

    “For the first time in the history of the American city, the people who live in it have available to them powers, facilities, the potential for organization and leadership to make their city into what they want it to be. There have been great dreams about the city and at times, there have been bold plans. Also, there have been conferences which have produced vigorous programs. But the fact is that these dreams and plans and programs for the most part could become nothing because there simply did not exist within the city the power to make them real. This is not so now. Whatever excuses others may have had for conditions in their cities-we have none. We begin this conference knowing that the powers and the tools exist. It is a matter now for us to be wise enough, vigorous enough, determined enough to put them to work in programs that are truly in scale with the problems our cities face.”

Hearing Jim’s words in 1959, I suppose a skeptic could say that such moments are illusory; that they pass and the cities always get worse. But it would be wiser and more productive to understand precisely what our cities have lived through and how the power and tools, the lessons and experiences, which emanate from this moment can be used to go forward. It is worthwhile spending a few moments on the progression of the urban crisis of the last forty years because the phenomenon that we have called the urban crisis has actually been a profound American economic transformation. The way it unfolded in America’s cities proceeded through a progression which has brought us to the present moment.

America’s successful cities emerged as the focal points of specialized economic functions. In the early years of this century and through the 1950s and 60s, the strongest American cities were manufacturing centers. Even such southwestern cities as Dallas and Los Angeles registered substantial percentages of their total jobs from manufacturing. Manufacturing was the underpinning of the urban economy. The high point for America’s cities by the traditional measures of population, jobs, and metropolitan power occurred in the late 1950s and early 1960s. That was also the high point for the nation’s manufacturing economy.

But as the global economy changed and America’s manufacturing performance deteriorated, so did the economic role of cities. In some instances cities became obsolete locations for industries that moved to the suburbs, to green field sites on beltways. In other cases entire industries moved offshore and were lost to the metropolitan areas and to the nation.

As these processes occurred, those urban residents who could followed the jobs to suburban areas and were encouraged by Federal policies which funded the building of highways and freeways in the suburbs-the new “main streets” for the Levittown clones, the enclosed malls, the industrial and office parks-and by Federal policies which made possible suburban homeownership on a mass scale. But many minority Americans were blocked from moving to the suburbs, blocked by overt discrimination such as the FHA-insured mortgages which were tied to race-restricted houses, or blocked by the fact that the jobs they had held did not provide them the wherewithal to buy homes in the new areas So a generation of manufacturing workers, whose skills poorly matched the financial, marketing, legal, and office-related jobs which remained in the cores of the central business districts, were left behind. The 1960s and 1970s in many American cities were decades in which the intensification of poverty was exceeded only by the physical decline of industrial sites and of neighborhoods.

Robert Fishman, in his analysis for the Fannie Mae Foundation concerning the most profound urban influences of the past fifty years, states it succinctly:

    “The hardest-hit industrial cities-such as Buffalo, Detroit, and Philadelphia-lost nearly three-quarters of their manufacturing jobs. This radical de-industrialization of what had been America’s industrial heartland devastated urban economies and municipal budgets. De-industrialization also destabilized urban neighborhoods that were based on a close relationship between work and residence. Perhaps most important, the de-industrialization of central cities meant that the millions of southern African-Americans migrating north did not find the abundance of entry-level manufacturing jobs that earlier immigrants from Europe had found. Instead, most black migrants were trapped in a declining urban industrial economy where good factory jobs were rapidly disappearing.”

Simply stated, the economy went metropolitan and global and those things about the cities which were locked in place-their land and their least mobile people-were left without economic juice. Many other factors contributed to the spiral-urban renewal programs that leveled vital ethnic neighborhoods, superblocks of public housing that created hyper-segregation, civil unrest and crime which accelerated white flight and the exodus of business. By the 1970s, the nation saw the dismay on the faces of the Presidential candidates as they made the obligatory tours of the ruins of the South Bronx and the scale of the urban loss was evident.

Over the last twenty years we see what is has meant that many people refused to give up on the cities-residents, city leaders, community development activists, government officials, entrepreneurs, bankers, church congregations. Now, as the national economy sustains its strength, cities of every category reflect new potentials. I have no illusions about how much remains to be done in our cities: I have personally witnessed-and so have many of you-too many sad circumstances to believe that the climb-back is accomplished or that the task which remains is easy.

I have seen public housing developments taken over by drug-related gangs and talked to residents who live in terror of the escalating lawlessness.

I have seen the fading neighborhoods of the tired elderly who have no means, no strength, and no recourse.

I have seen the homeless-some with AIDS, some physically disabled, some with mental illnesses, some heartbroken-all vulnerable and suffering.

I have seen children in chaotic and unsafe schools, who are cheated of the opportunities which are their birthright in our society and I have seen schools so ineffective that they alone constitute the reasons why families choose not to live in the cities.

I have seen the senseless murders, the crime, and the degradation of the human spirit which characterizes neighborhoods under siege and have seen fear melt away the glue of local civic life.

These are spirit killing, energy-sapping, heartbreaking realities and they may yet overwhelm us.

But you and I have also seen the good and the hopeful, the creative, the uncompromising will to make progress. And we know that we do have much with which to work. I want to spell out eight forces which are making it possible to build on the current economic strength and to build up our cities and our neighborhoods.

First, this is an economy which is not only strong but is also new. And it is an economy that has many elements which are city-centered. New-media, telecommunications, medical services, information technologies, and business and financial services are creating new jobs on city sites that offer what other sites cannot: proximity to other firms, a social environment, homes for young professionals, university ties, telecommunications sophistication, and new configurations of office space. Some cities, like New York, offer technologically adapted space in SoHo; others like Austin make it possible for computer firms to build new headquarters for 3000 knowledge workers downtown. The new economy, though it has been primarily suburban, is lifting the cities.

Second, the emergence of the new economy and the economic clusters that created it are tying cities together with the larger metropolitan and regional economies. Cities and their suburbs increasingly share a prosperity by virtue of the shared offices or plants of large companies, the transportation systems that move central city workers to metropolitan jobs, the massive public facilities such as city-run airports that often give the region its most important business asset, downtown headquarters, sports facilities, hotels, and amenities and symbols that are the heart of the metropolitan identity. Even the most strapped central cities can ride the wave of the economic specialization that carries a metropolitan economy.

A third dynamic is the recognition that the central cities are important markets, estimated by Chicago’s Emerging Markets Initiative to be worth $920 billion in untapped opportunity. Professor Michael Porter refers to underserved neighborhoods as “emerging markets.” And the lens through which an emerging market such as Chicago’s Little Village neighborhood is viewed can make all the difference in what is seen. The Initiative’s view reveals, for example, that:

  • “The McDonalds in Chicago’s Little Village is the second-highest revenue generating McDonalds in Chicago.”
  • “Little Village Allstate agent’s account is twice the state’s average.”
  • “A telecommunications store in Little Village is the fastest-growing Ameritech distributor in the region.”

The rediscovery of such central city markets is converting corporate intentions that once would have been about goodwill and philanthropy into productive conversations about business. A national policy which has helped in this refocusing has been the Community Reinvestment Act.

Fourth is the growth of a minority middle class, which in many cities is approaching a critical mass of entrepreneurial know-how and business ownership. This is the result in part of several decades of national policies which have created wider opportunities for minorities in the form of access to college educations, as well as the contracting and procurement policies which have created minority-owned small businesses. That critical mass of talents and energies, the personal stakes and life commitments of people who know the central city, are familiar with its nuances and are sober about its difficulties but determined to succeed is helping build back many neighborhoods, downtowns, and cities.

Fifth is entrepreneurial public leadership, including many mayors, who have forged collaborative and business-like styles of city government. They are joined in effective coalitions with nonprofit groups and private leaders who give substantial time to public projects. At the neighborhood level, non-profit community development corporations such as the New Communities Corporation in Newark have helped establish supermarkets, shopping centers, and housing that has transformed declining neighborhoods.

A sixth factor is the employment generators that have stayed in the cities and have become the building blocks of the new city economies. Higher education institutions, such as Johns Hopkins University and the University of Maryland Medical School in downtown Baltimore, which anchored the city’s empowerment zone, are generators of jobs, large scale purchasers of business services, and attractors of crowds of people. Trinity College has made an impressive commitment to its neighborhood in Hartford as has Marquette University in Milwaukee. They are examples of anchoring institutions, which in other cities include state government agencies, civic centers, museums, medical centers, sports complexes, visitor attractions, traditional corporate headquarters, and cultural performance centers.

Seventh is the new housing in many central cities. The record homeownership rate of recent years has spurred national non-profit organizations such as the Enterprise Foundation, LISC, Habitat for Humanity, and hundreds of local non-profits to build homes in areas where no homes have been built in a generation. These successes, buttressed by the dramatic results of massive HOPE VI investments in public housing, have enhanced neighborhoods that were once thought of as dangerous and to be avoided but are now viewed as magnets for redevelopment, thanks to the attraction of hundreds of families to new or rehabilitated homes.

A final factor is changing demographics, including the increase in immigrants, who have created bustling enclaves. Forty percent of New Yorkers today are foreign-born-the highest percentage of the city’s population to be foreign-born since 1910. Entire areas of New York City and many other cities can attribute their heightened levels of vitality and entrepreneurship to the community-building energies of Dominican, Israeli, Russian, Indian, Philippino, Persian, Chinese, Mexican, and Salvadoran immigrants-a roll call of national origins that is almost as long as the membership of the United Nations.

This is a checklist of some of the forces which we know have much to do with the urban progress we are witnessing. They are powerful and real. They give us-the city advocates, the mayors, the non-profit institutions, the business and corporate executives-more tools with which to work. They create the moment to seize. They also instruct us on what works. We must accept the challenge of using these exciting urban dynamics to fill in the gaps that remain.

We know that our hopes for our cities require that we keep the macro-national economy strong. Its strength creates the fundamental precondition in which urban progress can occur. Not only are jobs created but the growing economy provides the fiscal resources and creates the political opening to provide assistance to the working poor. Our basic strategy must be a “one-two” punch: One punch is that urban advocates must act upon the political decisions we as a nation must make in fiscal and monetary terms to keep the national economy growing. With the second punch, we must fight for the kinds of policies which support working families and prepare people to be self-reliant. That means support for transportation assistance to workers to provide mobility to jobs, no-nonsense training programs in close-up partnership with employers, healthcare reforms to prevent catastrophic setbacks for families, and expanded housing assistance in the face of rising unaffordability.

City leaders on their own turf must pragmatically work the metropolitan industry networks which are the engines of regional growth. In most cases it is clear that the central city will not itself be the dominant force for the region’s economy, so it becomes even more important to understand what economic sectors are in fact pulling the larger metropolitan economy forward. City leaders must act realistically, as Mayor Archer is doing in Detroit, to pull together metropolitan employers in complementary and mutually advantageous efforts to train workers, to distribute plants and offices, to share responsibility for area-wide amenities and attractions, to transport essential workers to jobs, to develop metropolitan affordable housing and voucher strategies, to include the needs of the older, inner-ring suburbs in the metropolitan agenda, to address such area-wide common issues as traffic congestion and air quality, to market the region’s and the inner-city’s business assets, and to provide a unified, recognizable, and prestigious leadership face to the larger world. City leaders must understand the nuances of specialized metropolitan industries and tie into the private-sector decisions and investments which fuel regional economic momentum.

Smart growth initiatives designed to reduce suburban traffic congestion, to preserve ex-urban land and the environment, and to more efficiently utilize the massive infrastructure investments already made in older areas have been approved or are being considered in a wide range of states. A diverse array of political coalitions-in some states led by Republican governors, in others by Democratic governors, of city leaders and suburban county officials, of urban activists and suburban environmentalists-suggest that the damaging legacy of uncontrolled growth must sooner than later percolate up as pressure to restructure Federal programs. We must press the case that smart growth means that Federal transportation spending should work to relieve congestion and promote more balanced growth patterns, that tax policies should boost homeownership in areas where homeownership is low, and that it should be possible to assemble, reclaim, and clean up urban land for homes and communities in timeframes that are workable.

No urban economic strategy can succeed without dramatic improvements in city schools. Simply stated, upwardly mobile families will not live in cities where they cannot send their children to school with confidence that they will be safe and that they will learn. Businesses cannot hire local residents who do not have basic skills. In many cities, the schools end up being the critical factor in any strategy of urban revitalization. Creating safe conditions in schools and modernizing the physical facilities are basic first steps-we cannot afford to compromise on these essential conditions if we want a chance to revive our inner neighborhoods. Then smaller class sizes, training principals as site managers, pedagogical instruction for teachers, accountability reforms, technology access, magnet schools and honors programs, restructuring of broad governance, innovations to promote competition and choice such as Mayor Norquist has pushed in Milwaukee. Together they constitute elements of a package of reforms for our urban schools. It is a hopeful sign to see forward-movement on reforms in Chicago, San Diego, Houston, and other public school systems.

A related human capital issue is the integration of immigrants into American society and the tapping of their community-building energies. They can be a huge creative force in urban economies if they are prepared to participate fully in American society or they can be an angry and alienated underclass-undereducated and underemployed-if we fail to start them on the ladder up. There are insufficient places in our cities to integrate immigrants into the American civic system in the way the settlement houses of New York and Chicago did earlier in the century. These are people who have already voted with their feet for the American way of life. They are ambitious and in pursuit of the American dream. City leaders must invest in concerted strategies for integrating them, for teaching them what it means to be an American, about our schools, our business practices, our laws, and our civics. They should be a huge source of new energy for the cities.

So too can the inner-city markets of local businesses generate immense energies. Cities must not only encourage the small businesses which are creating new exports from their inner city bases but we must also support the process which Jane Jacobs described as “earning” entrepreneurial skills at the local level. It is an earning of personal experiences through competition and continuous adaptation which requires patience and cannot be cut short, yet it is the essential building block of a durable entrepreneurial base in the city economy. Developing the enterprise, skills, the entrepreneurial culture, and the support resources for small and minority businesses is a vastly overlooked and under-invested approach for laying a solid floor under the urban economy. At the national level we must organize he kind of secondary market for small business loans that has so successfully fueled the capital markets for housing mortgages.

And now is the time for city advocates to accelerate efforts to rebuild the housing stock in central cities. That means mayors must pursue explicit goals to build “affordable” and reasonably-priced housing for ownership and rental in central areas, it means Federal support for homeownership zones on a larger scale than traditional infill, and it means organizing locally for the relentless pursuit of efforts to build homes despite the sometimes ponderous, slow process it is to build home-by-home, block-by-block. City revitalizations strategies have too often meant only industrial attractions or retail development and have not stressed adding homes or building communities. There is unerring logic in repopulating neighborhoods by building homes and thereby attracting the consumers who will constitute the markets for central city economies.

In terms of national housing policy, our cities need more vouchers. Federal housing vouchers today serve 1.7 million families, but in this time of an unaffordability crisis, more are needed to shelter families and give them choices. And providing more flexibility in the use of CDBG, HOME, public housing, FHA, and other Federal housing programs is the most direct way to unleash the creative energies of thousands of non-profits and city partnerships to build affordable rental housing and to qualify families for homeownership.

What I have tried to describe is a moment which can be extended for the work ahead. An economy in reformation has fueled an economic expansion which in turn creates the precondition for urban progress. But only the precondition; the aggressive local strategies and the wise national policies we forge must take us the next steps.

It is safe to say that never again will our central cities have the percentages of metropolitan jobs which they had in the 1960’s. And we acknowledge that our central cities will never again boast their 1960’s percentages of metropolitan populations. But our cities will continue to be the defining and symbolic centers of our metropolitan areas. They are the centers of our local governments and host to the leadership core of the metropolitan area. They are a vital-if not the vital-economic engine for our metropolitan economies. Our cities are for minorities the first step on the ladder of upper-mobility and for immigrants the crucibles of instruction about what it means to be an American. We must see our cities as capable of holding their own; not as a drag, not as a burden, not as an embarrassment; but as the heart of the region-the vibrant, diverse, colorful, fun, educational and uplifting gathering place for its people and the take-off point for their ambitions.

Our cities began the last century as places where dreams were made. Too often in recent decades they have been seen as images of despair and dysfunction, perceived as repositories of malice and malevolence. In the new century let us make our cities once again the gleaming cathedrals of our civic faith, the golden towers of our most ardent ambitions, and the verdant common ground of our most sacred hopes for our nation and for our people.

Let us go forward with the spirit of Jim Rouse in our hearts-Jim Rouse who in 1993 ended an evening recounting his experiences about Baltimore with these words:

    “Go home tonight full of hope and full of prayers for this work. For many years I have lived and worked with the conviction that what ought to be can be, with the will to make it so. May we raise up in this country an army of thinking that this job ought to be done, can be done, will be done.”

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