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Volume 1, Issue 4, 2001   Federal Reserve Bank of Dallas

The Basis of Economic Development in the Inner City: Why Civic Order Must Come First

Remarks by Robert L. Woodson, Sr., Founder and President, National Center for Neighborhood Enterprise, before the Federal Reserve Bank of Dallas conference "New Roads and E-Roads: Market Innovations in Community Development," Dallas, August 24, 2001

There are those people who specialize in revitalizing low-income neighborhoods by parachuting economic development projects intended to rebuild worn-out physical structures. Business and commercial strips become the object of investment and development in these neighborhoods, based on the assumption that the reason disinvestment occurred in the first place was due to economic factors alone.

Such a top-down development strategy is based on an incorrect assumption, namely, that decline is strictly the result of economic forces. Yet in the years during the Depression, it was clearly demonstrated that even when there was a downturn in the economy, social fabrics, relationships and institutions remained intact.

In days past we understood that there was a clear correlation between the civic and social dynamics and the economic life of a community. Today, in our efforts to revitalize communities, we act as if these social dynamics were not interrelated; thus, we have many repeated failures in the revitalization of low-income neighborhoods. Declines in neighborhoods are due in part to the behavior of the people living there. Some of this behavior is a response to economic forces such as unemployment. When neighborhoods experience high crime, dissolution of families, and disintegration of intermediary institutions that represent the core value structures, these things in turn undermine the economic structures.

Therefore, if a community is to be revitalized, we must first identify the individuals and institutions that can help to transform the human predatory elements responsible for the dysfunction. For example, in many areas of Dallas, Texas, marauding youth gangs created such a climate of fear that people have been afraid to go to school, shop at stores or use the streets. As a consequence, small businesses that operate there have to spend limited capital for security. Insurance, where it is available, is extremely high. Municipal services such as trash pickups, street cleaning, sidewalk repair, lighting and the like are of poor quality. All of this adds to the despair and decline of the neighborhoods.

For improvement to occur, we must begin to support the individuals and organizations that have demonstrated that they can dramatically intervene in the civic life of a community. What I am going to present is a strategy of how that has occurred—how one rebuilds the civic fabric of a community that then permits economic forces to work. It is the opposite of what we have done over the past 40 years in urban renewal, where we expected economic investment to affect the civic order. Urban renewal in fact has had the opposite effect. An example of this can be found by looking at the history of Durham, North Carolina.

The Example of Urban Renewal

Durham during the 1960s was a center of black social and civic commercial life. Called the "Black Wall Street," it was a place of thriving businesses and commerce. In 10 years of the Depression, not a single black-owned business went under. This can be attributed to Durham's strong civic structure. Yet, in just two years of urban renewal in the mid-'60s, social planners, in an effort to "revitalize" black Durham, bulldozed 100 businesses and 600 residential structures and leveled 75 acres of land in the center of black Durham.

The intention was to rebuild these commercial and residential structures elsewhere. Thirty years later, there has been no revitalization of black Durham. The result is that more black businesses and houses were destroyed in two years of urban renewal than during the entire history of the Ku Klux Klan or the White Citizens' Council.

This was repeated throughout the country. So much of the civic dysfunction in these communities occurred as a consequence of the helping hand of government or private enterprise.

What are the strategies and assumptions that will cause communities to be revitalized?

A Transformation in Dallas

Omar Jahwar and his father, Rev. Larry Jefferson, as it will be illustrated here, have transformed a crime-ridden neighborhood in South Dallas into one that is becoming peaceful. Omar founded an organization called Vision/Regeneration in South Dallas. This organization has reached many of the young people who formerly were leading the violence and has convinced them to become ambassadors of peace. Two years ago Vision/Regeneration and a brother organization were able to convince warring Crips and Bloods gang members to come together in a peace pact. With support and technical assistance from the National Center for Neighborhood Enterprise, a violence-free zone has been established in the area. One aspect of the program involves putting some of the now-transformed youth leaders in the local middle and high schools to help maintain peace and to provide counseling to students. The principal of Madison High School has attributed a 93 percent increase in enrollment last year to students not being afraid to come to school.

But if the peace is to be sustained, it has to be recognized that a transformed heart needs busy hands and a full stomach. Creating economic activity and employment becomes the next step. Vision/Regeneration is trying to work with the community and restart small businesses in a commercial strip that gives young people a sense of ownership of their community and provides an economic base for the rest of that community.

Revitalization and transformation have to occur from the bottom up. Omar Jahwar, Rev. Jefferson and the other members of Vision/Regeneration are the only credible force that can make such a transformation possible. When neighborhood organizations like Vision/Regeneration engage the young people and convert predators into ambassadors of peace through their faith-based orientation, they have converted them to become the generators of revitalization.

Addressing the Root Cause of Cultural Disintegration

Today across the nation, people are recognizing that the root causes of our nation's most critical problems are essentially internal and spiritual in nature. In response, there has been a steadily growing interest in the role that faith-based groups play in addressing these problems at their core.

Like the biblical figure, Joseph, who was able to address and avert Egypt's impending doom when the pharaoh's counselors could find no solution, faith-based grassroots leaders in cities across the nation have emerged as modern-day Josephs to address our country's spiritual and moral crises. Most of these "Josephs" have life experiences and qualities of character in common. They refused to let external circumstances control their destinies and, regardless of the odds they faced, they refused to accept the label of victim. Most have undergone a personal, internal transformation, after which they dedicated themselves to helping others in similar circumstances achieve productive, fruitful lives.

Through personal outreach, these community healers address the spiritual and moral atrophy of our civil society at its root. Their impact goes far beyond that of conventional remedies of professional therapy and economic assistance. Many effective grassroots approaches of personal and community revitalization are faith-based. Even those not rooted in a particular religion have a spiritual motivation for their tireless, heartfelt commitment and their unwavering confidence in the potential of every human being.

Faith-based grassroots leaders like Omar Jahwar and Rev. Jefferson have forged solutions to youth violence, even against the greatest odds in inner-city areas where the epidemic of violence has taken its greatest toll. In communities once ridden with violence, drug dealing and desolation, young people whose lives have been reclaimed now function as antibodies against the disease. Incarceration did not change these young people, nor did therapy or any change in their environment. These youths were not disarmed by having their guns taken away. They achieved a state of disarmament when they no longer had the desire to use guns. Their transformation was internal, on the level of heart and spirit.

These young people responded to the sincere, consistent outreach of God-centered men and women in their neighborhoods who had faith in their potential and a conviction in the principles and values that could guide them to fulfill that potential. These "character coaches" and "moral tutors" took on a role that was beyond that of a mentor or a therapist. They engaged in a process of "reparenting" the youths, providing long-term, unwavering commitment that broke down walls of toughness, resentment and distrust, awakened dreams and stirred a revitalization of the spirit. Through this process, young people who were once agents of destruction emerged as ambassadors of peace, ready and willing to take the risks and make the investment to reach back to other youths.

How Grassroots Neighborhood Leaders Benefit Business

Now, perhaps as never before, community leaders who have engendered transformations in their communities offer much of value to the business and corporate arena. Today the landscape has changed dramatically, and the needs of business have shifted. Currently much of our economy is linked to human services, information and communications industries. Businesses need workers who are capable of retraining every seven years and are equipped with both the skills and attitude to perform complex functions. Throughout the past three decades, the poverty industry has had a powerful impact on low-income neighborhoods, where a culture of dependency has undermined the values of responsibility and reliability, which are the backbone of a work force.

Many businesses today confront problems regarding human resources. Employers cannot obtain the quality of people they need in order to operate successfully. The issue isn't training. The problem is getting enough people for entry-level jobs who have work-ready attitudes and values. As a telecommunications company exective wrote in the Wall Street Journal:

"It's not trained people that businesses need: it's dependable, hard workers. Just give me an unskilled but dependable person of character, and I'll take care of the rest. I can train a person to dissemble a phone. I can't train her not to get a bad attitude when she discovers that she's expected to come to work every day when the rest of us are here. I can train a worker to properly handle a PC board. I can't train him to show up sober or respect authority."

Businesses desperately need workers who are loyal, honest, enthusiastic because these attributes directly affect the quality of their services and products. Importantly, these attributes are all characteristics of men and women who have undergone personal transformations through the guidance of a grassroots Joseph. A by-product of reclaiming lives is the creation of a reliable work force.

In addition to identifying prospective employees, neighborhood leaders could also attract customers for businesses. On the foundation of trust and mutual benefit, grassroots organizations could also educate residents of their neighborhoods about the value of products and services provided by various companies, opening a viable but untapped market.

Opening New Markets for Business

Security is another concern for companies that provide services in inner-city districts. For example, the business expenses of Bell Atlantic escalated when a union contract required that they send a security guard with each repair crew going into inner-city areas. If graduates of neighborhood-based programs were hired to repair and wire phones in their communities, they would be their own security force. The respect and reputation that these individuals had established previously on the streets would remain with them when they entered the work force. It is unlikely that their trucks would be vandalized or that they would be robbed while they were performing repair work in their own neighborhoods.

Plans are currently under way to apply this paradigm to meet an inner-city neighborhood's need for taxi service in Washington, D.C.Young men who are participants in a violence-free zone initiative in their community will participate in a "taxicab apprenticeship" program. Youths who receive training and qualify for this program will ride along with cab drivers serving their neighborhood. These young ambassadors for peace will wear distinctive uniforms identifying them with the peace initiative. The program will have multiple benefits. It will give cab drivers an enhanced sense of security and enable them to service underserved areas—to the residents' benefit. In addition, the apprentices will gain on-the-job training from experienced cabbies, preparing them to become taxicab owners.

Many corporations are also stymied when it comes to approaching inner-city communities. For example, in these areas, banks and insurance companies have difficulty making the same kind of character judgments that they make every day in middle- and upper-income areas. They don't know how to determine who should get a loan or who should be insured, and, consequently, they have to make their decisions not on how people live but where they live. Because they established policies on broad generalizations about the residents of low-income areas, they have been charged with redlining. Regulations now require insurance companies to insure in high-risk locations.

With the help of grassroots leaders who have a personal knowledge of their neighborhoods, banks and insurance companies would be able to make reliable character judgments. The Josephs of these neighborhoods could guide them to identify islands of excellence and areas of competence within inner-city communities. The companies then would be able to engage in low-income communities as they do in others.

A Partnership for Progress

In a sense, business leaders of today play the role of modern-day pharaohs. They need not embrace the faith or spiritual orientation of our nation's Josephs in order to appreciate and benefit from the practical impact of their efforts. Today's pharaohs and Josephs should establish partnerships simply because it is good business.

One aspect of such a partnership would be to promote economic development in low-income areas. Through an alliance with grassroots leaders and organizations, business leaders could become involved in profitable efforts to stimulate entrepreneurship and revive once-active but now desolate inner-city business districts.

America's Josephs are healing agents and neighborhood antibodies. If businesses, even if motivated by their own interests, can join forces with them, providing financial support and technical assistance, they have the potential to create an entire immune system that will protect and preserve the health of our society.

The proper relationship between today's pharaohs and Josephs must go beyond the concepts of charity and compassion because both these terms connote a one-way avenue from gift giver to receiver. In truth, the Josephs of today have something to give society that is far more valuable than anything they receive. In an era of spiritual hunger and moral disarray, today's Josephs are a source of both spiritual and economic renewal that will have an impact far beyond the boundaries of their neighborhoods.

Until and unless we invest in the individuals who have demonstrated that they can challenge young people at the level of their values and the level of their faith, we will never achieve success in the economic arena in these troubled neighborhoods. Young people need something beyond the provision of jobs, education and housing. They need strong, healthy social values and the respect for themselves and for others.

It is not often that I quote the Rev. Jesse Jackson, but before he became a partisan politician, he had a very profound message. In 1978 Jackson said, and I quote, "Our children are living in depressed neighborhoods and are on the verge of ethical collapse." He further advised that "morally weak people not only inhibit their own personal growth but finally contribute to the politics of decadence. A generation of people lacking the moral and physical stamina necessary to fight a protracted civilizational crisis is dangerous to itself, its neighbors, and to future generations."

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e-Perspectives, Volume 1, Issue 4, 2001

Federal Reserve Bank of Dallas Off-site page
Community Development Office Send an e-mail
P.O. Box 655906, Dallas, Texas 75265-5906
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Gloria Vasquez Brown Send an e-mail
Vice President
    Nancy C. Vickrey
Assistant Vice President and
Community Development Officer
Jackie Hoyer Send an e-mail
Houston Branch
Senior Community Development Advisor
    Veronica Garza
Community Development Specialist
Toby Cook
Community Development Specialist
    Diana Garza
Community Development Specialist
The views expressed are the authors' and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Articles may be reprinted on the condition that the source is credited and a copy is provided to the Community Development Office.

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