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OpEdNews Op Eds    H3'ed 11/22/15

7 Paths to Development That Bring Neighborhoods Wealth, Not Gentrification

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Inclusion lies at the heart of community wealth building, adding a driver lacking in much of economic development. Economic inclusion is the opening up of economic opportunities to previously underserved social groups. It requires creating targets and indicators--as well as participative processes--to ensure that disadvantaged individuals and communities can participate in a meaningful way in the economy.

Consider the seeming success of the innovation economy in Pittsburgh, a former Rust Belt city which in recent decades has enjoyed a resurgence in health care, education, and technology. The City now offers good white-collar jobs and cultural amenities. It's seen as a "turnaround city," William Generett, CEO of Urban Innovation21, told us. "But it's been a very uneven transformation." The poverty rate among working-age African-Americans remains the highest among the nation's 40 largest metropolitan areas. "This population has not connected to the new economic drivers," he said.

To spread the wealth of the technology sector to disadvantaged communities, in 2007 Generett created Urban Innovation21, a consortium of 20 businesses, nonprofits, and government organizations, using business incentives, grants, internships, and training programs. It's the kind of experiment in inclusion that deserves emulation.

Urban Innovation21 has worked with unions and others to launch an employee-owned commercial laundry, still in development. It's a wealth-building strategy that takes inclusion into the realm of asset ownership; as Generett said, it goes "beyond the traditional activities that have been used in low- and moderate-income communities," such as low-income housing and social services.

Inclusion is both a moral imperative and an economic one. Research shows that areas extending greater economic opportunity to people of color enjoy longer periods of growth and shorter downturns. Inclusion is particularly powerful when combined with anchor strategies.

6. Workforce

If worker ownership is a key long-term goal of community wealth building, workforce participation is often a more immediate step toward prosperity. Economic development professionals serving an entire city do not have the luxury of focusing solely on ideal models. They face the tough job of helping those with barriers to employment find good work, and helping low-income workers move up.

Bringing a community wealth frame to workforce development means two things. First, adding a systems approach means linking training to the needs of employers and anchor institutions, and creating support services. Second, it means being intentionally inclusive--deliberately reaching out to communities of color and those with employment barriers.

University Hospitals (UH) in Cleveland, developed the Step Up to UH program to create a pipeline for hiring residents of neighboring low-income African-American communities. The program includes training and wraparound support services to ensure long-term success. A different systems approach to workforce development deploys anchor support for social enterprise. For example, the nonprofit Momentum in Minneapolis operates three social enterprise businesses that provide transitional employment and job training for those facing barriers to employment, such as felony convictions or substance abuse history.

7. System

Beyond time-limited programs, the aim of community wealth building is creating a new system. It does this by building institutions that stand over the long term, creating an ecosystem of support for a thriving local economy. This includes examples like New York City funding the ecosystem supporting cooperative development, Richmond creating a new Office of Community Wealth Building in city government, Cleveland launching a network of worker-owned companies, or North Dakota creating the state-owned Bank of North Dakota (BND). With the support of BND, locally owned banks of small and medium size have been able to extend their lending capacity; 83 percent of all deposits in the state, compared to 29 percent nationwide, are managed by community banks. Community banks, in turn, support local business--lending four times as much to small business as the national average.

These institutions are designed to support communities, not to extract profits from them. They show how--from enterprise ownership up to the banking system--we can design for the outcomes we desire.

The seven drivers of community wealth building work together. Starting with a devotion to a place, this approach builds on local assets of many kinds. At the heart of it all is an inclusive focus on the needs of low-income families, people of color, and those with barriers to employment. The end goal is a new system that helps broadly held community wealth to flourish.

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