Local Learnings: What happens when we reinvest?

This is a selection from Future Here Now, a newsletter produced by the Wise Economy Workshop/ Wise Fool Press.

For a weekly supply of information that helps you prepare for the Fusion Economy in the place you care about, plus other benefits, subscribe to Future Here Now. You’ll be glad you did.

We have been trying for over 100 years to figure out how to improve the conditions of communities and people that are in need, and we’ve created at least as many unintended consequences as we’ve solved problems. Most of the time, though, we don’t go back and rigorously study the impact of our efforts. And that sets us up to repeat the same mistakes and wonder why it doesn’t work. Over and over again.

This study focuses on a district in Atlanta that had extensive reinvestment leading up to the 1996 Olympics, but it contrasts that case study with a second community in San Diego. In Atlanta, the decades-later result of that reinvestment was a big increase in income levels, employment, home ownership, etc., but also a big change in the racial makeup of the neighborhood. Which means: the original Black residents had moved out, and new people (more of them white) had moved in. The second example in San Diego focused on a neighborhood whose residents had benefitted from a large investment in human services — health care, education, resident services, etc. In that case, the material wealth and social makeup of the neighborhood had changed relatively little over the decades, leading the researchers to hypothesize that the neighborhood had become a “launching pad,” from which residents with new skills were able to leave for someplace else.

So we have:

• A massive real estate and infrastructure investment that resulted in local improvements in several social and economic measures — because that place was no longer an option for the people who lived there before, and new people moved in. Instead of helping the people who had lived in that place, we moved in a different set of people and left the original residents no choice but to go somewhere else. Classic market-driven gentrification.
• A massive social network investment that benefitted people, but those people then chose to live somewhere else, leaving the neighborhood in the same basic condition it was before.

Which one was good? What’s your definition of success? Are you more concerned with the people or the place?

What if the purpose is to improve both?

The author claims that maintaining funding and political committment to a place-based initiative over the long term is the biggest challenge, but I think he’s missing an important point there. We have proven that we can throw a loooot of money at community reinvestment, especially when there are private dollars and market opportunities involved. What we haven’t proven is that we can do so in a manner that raises both the place and the people, together.

I would argue that the only way to do that is to rebuild the tie between the people and the place. For the current residents to benefit, they need to have an ownership stake in the reinvestment — not a “voice” in a town hall meeting, or a community park, but possession of some portion of the place, so that they can both stay and benefit financially from improvements. But since those residents are unlikely to be able to buy into the revitalization with their own resources, like a capitalist model expects you to do, then they need another way. Which we’ve experimented with, through models like Community Land Trusts, but all we’ve done so far is dabble at the edges. Achieving improvement for both place and people is going to require a much larger level of community ownership, and that’s going to require not only money, but stretching our model of how redevelopment is done, and who has a right to benefit from the impacts.

The Fusion Economy will increase our interdependence, because new technologies render old barriers and moats obsolete. In a brain — driven economic future, we need to activate the creativity of everyone — the traditional innovator class and those who have been left out. Check out The Fusion Era Will Impact Your Community: Here’s How to Survive and The Local Economy Revolution Has Arrived: What’s Changed and How You Can Help for more on these impacts. For a practical way to start creating innovation and breaking down those barriers, see Everybody Innovates Here, a guide to building an innovation ecosystem that actually includes everyone.