"Investing in Chicago Neighborhoods," Remarks by Jonathan Fanton, City Club of Chicago
May 23, 2007 | Speech | Housing

Thank you for that generous introduction.  I am delighted to be here today to talk about the future of cities and their neighborhoods.  Yesterday Mayor Daley joined me and Andy Mooney, Director of LISC Chicago, in announcing a $26-million grant to the New Communities Program, the most ambitious neighborhood revitalization initiative in America.  This is part of a $150-million, ten-year investment MacArthur is making in Chicago neighborhoods which are opening opportunity for their residents and fueling economic growth in the Chicago region.

I want to talk with you for a few minutes about good things happening in cities all across America and how Chicago is leading the way in a new era of urban renewal.  Then we will have time for lots of questions – about Chicago, about U.S. domestic policy, and about MacArthur’s work world-wide.

But first a few words about MacArthur.  We are best known for the MacArthur Fellowships – the “genius awards” – and our support for public radio and television.  But that is only 5 percent of what we do.  Next year, we will make grants of $250 million in 65 countries where we work.  We have offices in Mexico, Nigeria, India, Russia and, soon, China.

But more than any other foundation of our size and international profile, MacArthur is deeply rooted in its home city. 

We spent nearly $40 million in Chicago last year.  We support 180 arts and cultural institutions, from the world-class treasures in the Museum Campus to neighborhood groups like Red Moon Theater, Experimental Sound Studio, the Neighborhood Writing Alliance, the Albany Park Theater Project, Muntu Dance Theatre, and the Jump Rhythm Jazz Project.  We have taken a great interest in helping the transformation of Chicago’s troubled public housing system into new mixed-income neighborhoods of opportunity.  All our national programs, such as juvenile justice reform and affordable housing preservation, find robust expression here.

We think we are a better foundation in everything we do around the world because of our deep and long-term engagement with the people, communities, and institutions of Chicago.  We see how complex problems are, appreciate the wisdom of local knowledge, understand that grand theories take real people willing to challenge and adapt them if they are to work in practice.  And we are more humble about what a foundation can do directly, more respectful of our grantees who are on the front-lines doing the work, taking the risks.  We have come to value enduring partnerships with our grantees.

No partnership has been more rewarding than our work with LISC Chicago under Andy Mooney’s superb leadership.  The New Communities Program is a bold initiative to show that America’s inner cities have untapped human, organizational, and physical assets that, when unleashed, can contribute to the economic vitality and social cohesion so essential for successful competition in today’s global economy.  NCP is a strong commitment to the promise of America to provide opportunity to all.

And while MacArthur’s investments are deepest in Chicago, our ambition is for Chicago to show the way for cities everywhere, which are undergoing profound change.  The world’s population is urbanizing at an increasingly rapid rate—19 million people live in and around Lagos, 13 million in Mumbai, 11 million in São Paulo, and the numbers are swelling.  From Beijing to Shanghai, from Bangalore to Hyderabad, vast new economic corridors are emerging between cities.  And here in the U.S. we know that cities are now vital hubs for complex regions where suburbs are taking on urban features.

Growth and change within and around cities pose a challenge to the role cities have played over time in stimulating innovation, nourishing the arts, and forging a common culture.

I am reminded of the questions posed by Lewis Mumford in his major work, The City in History.  He asked:

“Will the city disappear or will the whole planet turn into a vast urban hive?—which would be another mode of disappearance.  Can the needs and desires that have impelled men to live in cities recover, at a still high level, all that Jerusalem, Athens, or Florence once seemed to promise?  Is there still a living choice between Necropolis and Utopia: the possibility of building a new kind of city that will, freed of inner contradictions, positively enrich and further human development?”

MacArthur’s answer to that question is a firm “yes.”  We have choices about the future of our cities and we see the possibility of making cities once again the source of what is best and most hopeful in our shared humanity.
For decades, talk about cities has been dominated by the perception of urban decay, the flight of people and jobs to the suburbs, and skepticism about the possibilities for progress.  But the current reality – evident here in our own hometown – paints a far more interesting and hopeful picture of urban opportunity.  In the past decade, the population of the nation’s 50 largest cities has grown by nearly 10 percent.  This was accompanied by a rise in city incomes that was almost double the national average, and by an increase in housing units, homeownership, and mortgage lending.  In the same period, concentrated poverty declined 24 percent and urban crime saw a marked decrease. 

These trends give cities their best chance in decades to compete for business, workers, and residents.  The advantages of well-established educational and health institutions and distinctive downtowns, neighborhoods, and amenities look better than ever.

So we are in the midst of an urban resurgence, albeit one that is incomplete and uneven.  Cities are finding an important new niche as the economy increasingly rewards knowledge, innovation, and entrepreneurship together with a cosmopolitan perspective.  But cities – including Chicago – still face a troubling legacy of persistent poverty and racial separation

That is why so many of us here today have dedicated ourselves and our resources to addressing such challenges as alleviating poverty, reducing racial and ethnic disparities, revitalizing low-income neighborhoods, and promoting balanced growth. 

We are at a moment in history where the hopeful trends I cited a moment ago embolden us to make a determined effort to confront these challenges.

That is what the New Communities Program is all about.  It starts with a profoundly simple assumption: sustainable neighborhood improvement requires long-term investment in all the issues – schools, housing, health, economic development, safety, community cohesion, and more – that must improve together in a virtuous reinforcing circle.

And it affirms the belief that the capacity to make a difference resides in community organizations and the people who live and work in neighborhoods.  That is why lead community groups in each of the 16 neighborhoods have crafted a concrete plan of action calling for both public and private investment.

MacArthur’s first grant of $21 million enabled LISC and its community partners to attract $225 million of additional investment in these neighborhoods.

And so, yesterday, we followed on with a $26-million grant to the New Communities Program, one of the largest in MacArthur’s 30-year history.  This renewed commitment acknowledges the vision, the energy, the creativity, and yes, the hard, hard work of neighborhood leaders who are producing results across 16 Chicago communities.  Many of them are here today.  Let me pause for a minute – and ask all of you who are involved with the New Communities Program to stand and be recognized.

We are on the move.  Your plans have been crafted through a cumulative process that has involved 4,000 Chicagoans.  The Mayor and his Commissioners have embraced the plans and committed staff and money to implement them.  And LISC predicts that our new grant will trigger a further half billion in new private and public investment.

Before renewing our commitment, MacArthur asked an independent team of experts to take a hard look at NCP, to ask probing questions, assemble tangible evidence of progress, tell us where it was falling short of its aspirations.  This report concluded that “while not perfect and still evolving, NCP has worked remarkably well.”

I have seen evidence of this progress – first-hand, as I visit three or four of the 16 neighborhoods every quarter.  Recently, I spent the morning with one of our Trustees in the Near West Side, Pilsen, and Logan Square.   A lot has happened since my first visit four years ago.  I saw buildings that were on the verge of being abandoned now repaired and housing low- and moderate-income families; an old convent, now closed, being converted to a student dormitory. 

I visited the North Lawndale Employment Network, which helps ex-offenders get their lives back on track with job training and counseling.  The results are impressive: people in this program are three times more likely to rebuild their lives and avoid re-incarceration than the city-wide average.

I went to several of the 13 Centers for Working Families – a signature program of NCP – and watched people being trained in job skills and financial literacy.  I went to neighborhood schools and watched their parent mentoring programs in action.

Let me give you two examples from other neighborhoods of how NCP works – examples that show how local organizations can leverage modest investments.

• When tenants of the Lorington Apartments found out that their landlord was going to end his Section 8 contract and redevelop their 54 units as condominiums, the Logan Square Neighborhood Association responded.  The Association organized the tenants and identified a nonprofit developer to purchase the building and maintain it as affordable rental housing – a top priority in the Logan Square quality-of-life plan.  LISC’s $32,500 in grants from MacArthur funds and $484,000 in loans triggered a $10.5 million deal.  As a result, 54 families were able to stay in a fast-gentrifying community. 

• One more: a new community organization, Quad Community Development Corporation, is working to establish a vibrant commercial district on the city’s mid-south side.  A market study funded by MacArthur and completed by the research firm MetroEdge found that local residents spent $450 million a year in other neighborhoods because of the lack of local price-competitive retailers.  Armed with that data, LISC and Quad Community reached out to shopping center developers, grocers, and other merchants.  They attracted two new out-of-town developers, who will build the Shops & Residences at 47, a 170-unit mixed-use development with 60,000 square feet of retail space, at 47th and Cottage Grove.

While these concrete early successes give us hope, we know the path to sustainable, healthy communities is long and winding.  You might be saying to yourself, “Those examples are great, but what do they add up to?”  Fair enough.  We agree that the success of NCP needs to be measured against specific goals like more good jobs in the neighborhood; a variety of shops and stores where people live; stable, affordable rental housing and rising home ownership; lower crime; venues for the arts and other leisure-time activities; test scores and high school graduation rates up; and so forth.

So MacArthur has funded Metro Chicago Information Center to track indicators of progress in these neighborhoods.  It is too early to have clear results or to claim cause and effect.  But there are some signs of positive progress:  Against a composite set of indicators, the Community Vitality Index, half the neighborhoods have improved while the city as a whole has declined; home prices have increased in all neighborhoods, with most clustering in the 15 to 18 percent range; school achievement is up in about a third of the communities; and graduation rates are up in two thirds of the neighborhoods—indeed, in four communities, graduation rates are up two or three times the citywide average of 7 percent improvement.  Especially worth noting is the fact that the rate of business growth was up between 2½ and 3 percent in all of the NCP neighborhoods, against a citywide decrease of about half a percent per year.

But numbers do not tell the whole story.  Every neighborhood is different – some will succeed, some may not.  If NCP is to be useful as a model for other cities, we must document what works and why.

So MacArthur and LISC have engaged a respected national research organization, MDRC, to take a deep analytical look at NCP.

Among the questions we are asking:

• What improvements have occurred in neighborhoods as a result of NCP?

• What neighborhood changes are most important to engaging long-term commitment of residents and institutional stakeholders?

• What strategies work best in particular kinds of communities?

• What factors set neighborhoods on upward or downward trajectories?

• How does progress in NCP neighborhoods spread to adjacent neighborhoods?

I imagine some in the audience may be asking: “Why is MacArthur putting so much emphasis on documentation and evaluation?”

The answer goes to the nature of how a foundation works.  We take on vast problems – improving human rights in Russia, reducing maternal mortality in India, protecting biodiversity in the Eastern Himalayas and, of course, improving American cities.

We do not have enough money to solve any of these problems directly.  But we can provide funds for demonstration projects.  If they work – and can be independently verified and defined – we believe public and private investment will follow.

The New Communities Program is such a demonstration project.  It is important that it be accurately defined and described.  Our work can be diminished – even undone – if the model is misunderstood and misapplied.

We have stepped up our evaluation of NCP because of the extraordinary – dare I say frightening – interest in “the Chicago model,” as NCP is now known.  The country is eager – perhaps desperate – for an approach to community development that works.  We are the “new, new thing.”

Hundreds of visitors have come to Chicago to learn about NCP.  National funders are seeking out NCP as a framework for investment; and, perhaps prematurely, the NCP model of comprehensive community development is spreading to 10 other cities through the LISC national network, from our neighbors in Milwaukee, to the Bay Area, Indianapolis, and our nation’s capital.

This interest has two implications: we need to know how well we are doing and to be able to tell others what the essential ingredients of the “Chicago model” are.

And we need to invest sufficient energy, imagination and resources in making the approach work.  We are in the national spotlight, with a tremendous opportunity to show that Chicago can lead.

Here comes a mild pitch.

I want to draw your attention to the Community Investment Portfolio booklets at your seats.  The Portfolio is made up of 14 carefully crafted projects, each with the potential to catalyze substantial improvement in Chicago neighborhoods.  Some of the projects call for substantial residential and commercial redevelopment; others are more modest in dollar amounts, but heavy on civic spirit.  Some examples:

• In Auburn Gresham, a vacant building will be turned into a community center that uses green technology for efficiency and affordability;

• A partnership in East Garfield Park aims to populate retail streets with places to stop and shop, eat and greet – the Madison Street ROADMAP, where the benefits of commercial development along a corridor are likely to spill over to several communities;

• In Little Village, a campaign to demolish an empty and dilapidated school building that blights two city blocks and build a city park and recreation center where young people can exercise and take part in constructive activities;

These and other projects represent concrete investment opportunities.  If we can go forth from this meeting fired with enthusiasm to invest and recruit others then we will contribute to the momentum of NCP.  It is within our shared capacity to realize what Mumford called the “potentialities” of cities to “develop our deepest humanity.”   These tangible signs of commitment and caring will come together to ensure the full realization of the vision of the New Communities Program: to create communities that offer both social and economic security and opportunity to all of their residents.  And that is a real return on investment.

Some of us in this room came of age during the Great Society, an era of optimism that poverty could be diminished and inner cities made healthy again. In the intervening forty years, progress has been slower than we had imagined, as federal programs came and went, political will waxed and waned, and buoyant optimism turned to a passive acceptance of conditions not worthy of the richest society in all human history.

But a lot has been learned since Lyndon Johnson declared war on poverty.  That learning is captured in the New Communities Program.  We now know that the energy must come from the neighborhoods, not Washington; that strong community organizations are the critical drivers; that public programs must stimulate private investment; that substantial and stable resources are necessary; that single issue campaigns don’t work: we must address health, jobs, housing, education, crime, economic development, and more all at once.  Most of all, we have learned that neighborhoods once described as “blighted” are sources of untapped physical and human potential, ready to respond to trusted opportunity.

I had high hopes in New Haven in the 1960’s and in New York in the 1980’s.  But I have informed optimism in Chicago in the 21st Century.  The New Communities Program is going to show America that central cities are back, engines that will drive the global competitiveness of whole regions.  Together we can realize our nation’s highest aspirations of a just and humane society where everyone has an opportunity for a secure and decent life.  I say “together” because MacArthur is only one actor.  We hope our grant to LISC will inspire others to invest – we welcome partners.  Chicago, I believe, can lead America to Mumford’s dream, building a renewed city that is a “true commonwealth of communities…aiming bravely at the good life.”

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