Victory in the CDC regatta?

April 11, 1999|By Neal R. Peirce

EVERYONE likes the spunky generation of community development corporations -- CDCs -- that have dared, like little sailboats on stormy waters, to buck the head winds of urban poverty and bring fresh life to America's imperiled inner-city neighborhoods.

But have they made a difference? Could lightly funded community development groups, realistically, have been expected to succeed against the frightening riptides of our times?

Grim reality says the American sprawl machine's been sewering our cornfields, sucking development outward. Race has fueled city abandonment. Since the '70s we've seen a cataclysmic decline in urban factory jobs and the decent wages they once paid.


But a fresh survey of CDCs across the country suggests remarkable progress. In just four years (1994-1997) their numbers expanded from 2,000 to 3,600, reports the National Congress for Community Economic Development. They generated 247,000 new affordable homes and apartments -- 45 percent of their total production since the 1960s.

And not just housing. The CDCs' aggregate development of stores and offices, business incubators, child care centers and health clinics has zoomed to 71 million square feet. Financing has been provided to more than 59,000 small businesses.

So is it time for a celebratory regatta? No way, writes David Rusk, former Albuquerque mayor and urban expert, in his new book, "Inside Game/Outside Game" (Brookings Institution, Washington).

We haven't, Mr. Rusk argues, addressed the societal undertows of systemic racial prejudice and sprawling physical development that drowned many inner cities in the first place.

His evidence: concentrations of desperately poor urban ghettos and barrios -- even worse off in 1990 than they'd been in 1980 -- and decades of outward flow of jobs and investment.

So what about CDCs? Mr. Rusk thinks they're nice, sometimes courageous. But he believes they're too marginal to swim against the big negative tides engulfing inner cities across the country. Indeed, he cites population and housing loss, unemployment and poverty rates that appear to show CDC neighborhoods haven't fared appreciably better than areas without CDCs.

"CDCs," he writes, "are expected to help a crowd of poor people run up a down escalator, an escalator that is engineered to come down faster and faster than most people can run up."

In fact, says Mr. Rusk, it's all too easy for corporations, banks, foundations and governments to pour token aid into CDCs rather than "rewire the escalator" by adopting regional growth strategies, sharing taxes among poorer cities and their suburbs, or giving inner city families places in suburban neighborhoods and schools.

Taking a dramatically different view is Paul Grogan, who recently stepped down as CEO of the Local Initiatives Support Corp., which gives more than a billion dollars to CDCs.

You know CDCs are making a critical difference, says Mr. Grogan, "when you go to Roxbury in Boston or Hough in Cleveland, or any of these once utterly desolated communities, and see how the graffiti has dissolved, supermarkets are reappearing, enterprises like Magic Johnson theaters springing up."

His prime example is the South Bronx: "In 1979 it was rubble, the dustbin of history. Today, it's still poor. But housing is booming, crime is down and you see the start of economic revival."

Critical difference

The critical difference between Mr. Rusk and Mr. Grogan is where we head and what we expect now. It's unconscionable, Mr. Rusk believes, that the United States, a rich and confident world leader, still tolerates deep pockets of urban poverty. He would turn to corrective state and federal programs, forcing regions to do the right thing.

Mr. Grogan focuses, by contrast, on CDCs as a powerful ground force for renewal. They're growing rapidly in numbers, as the new survey suggests. They've attracted mainline corporate support.

What's indisputable is the radically altered economy of the late '90s. Fifty major cities now have unemployment rates under 5 percent. Welfare's been reformed, crime has plummeted. The stock market has hit 10,000 and minority unemployment is at its lowest point since the government started measurement in 1972.

With the most favorable economic winds since their birth in the '60s, CDCs are starting to spot new opportunities. With their contacts to corporations, banks, local governments and foundations, they can be anchor institutions linking troubled inner city communities to growing regional economies.

CDC job banks are channeling residents into region-wide openings. There is a gathering wave of new inner city retail and office investments.

There'll surely be squalls ahead. But on a clear day, active CDC neighborhoods can even glimpse the other shore.

Neal R. Peirce writes a syndicated column.

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