November 22, 2008

Where Do Small Grants Fit with Big Problems Like Foreclosures, Vacancies, and Neighborhood Stabilization?

I was a guest at last week's meeting of the National Neighborhood Indicators Partnership, a collaborative effort by the Urban Institute and local partners to further the development and use of neighborhood-level information systems in local policymaking and community building.

A major topic of conversation at this meeting was the foreclosure crisis and the neighborhood de-stabilization that foreclosures and accompanying vacancies are having on neighborhoods. Allan Mallach from the Brookings Institute made an excellent presentation about foreclosures and the federal government's Housing and Economic Recovery Act of 2008, which created the Neighborhood Stabilization Program (NSP) under which states, cities, and counties will receive a total of $3.92 billion to acquire, rehabilitate, demolish and develop foreclosed and abandoned residential property. Mallach's presentation was followed by presentations on local perspectives on the foreclosure crisis by Phyllis Betts (University of Memphis) and Michael Rich (Emory University, Atlanta).

In the years that I worked in Memphis, I came to know neighborhoods and the pattern of investment/disinvestment in Memphis neighborhoods well. I also had the privilege of working with Phyllis on two neighborhood initiatives. So when Phyllis took the podium after Mallach's presentation and displayed a GIS map of foreclosures and associated vacancies in Memphis, I was stunned and surprised. Stunned by the numbers. Surprised by "where". The "where" was not the neighborhoods that had been labeled as "troubled" and where public sector community development dollars and philanthropic energy have been focused. They were the next set of neighborhoods - the neighborhoods we (at the community foundation) were beginning to think about from a prevention perspective.

From what I could tell from the discussion, the Memphis pattern is a rather typical pattern. Here is a new set of neighborhoods - to add to the old set of neighborhoods - that are dealing with destabilizing influences that are not of their own making.

Mallach defined a stable neighborhood as a one where residents feel confident that their investment - financial and psychological - is secure. He reminded us that "when it comes to trying to stabilize an area, it is critical to understand that even one vacant, boarded-up property can undermine the vitality of an entire city block. The harm done, whether measured in the impact on property values or the effect on neighbors’ health and safety, does not increase linearly with each additional vacant property – the first few do nearly all of the damage."

He suggested a targeting strategy for the investment of NSP funds - with three possible targets:
  • neighborhoods that are close to market recovery, where it is possible to move the recovery forward by buying and restoring a small number of properties,but where costs or other factors make it impossible for the private sector to do the job;
  • neighborhoods with significant market weakness, but with an intact but frayed physical and social fabric, where it is possible to build a functioning market by eliminating blighting problem properties or by reducing housing supply to reflect realistic levels of demand;
  • severely distressed neighborhoods, where acquiring properties can create potential land assembly,reduce housing supply, or stabilize remaining occupied areas.
So where do small grants fit into the picture of big problems?

The neighborhoods with the "dots" on the Memphis map were, by and large, not neighborhoods with organized block clubs, neighborhood groups, or other citizens groups. They are either too new, too transient, or too insulated from the day to day challenges associated with disinvestment and blight that often brings people together. So here comes a vacant house. There goes a family. Here comes another vacant house. There goes another family. The cycle begins.

We need to remember that when we talk about neighborhoods, we are also talking about people. And people together in challenging times are much stronger than people alone in challenging times. People together in neighborhoods that are being hit hard by the foreclosure crisis can do things to shore up confidence that their investment in their neighborhood - yes, their financial investment, but especially their psychological investment - is secure. They can pull together in a spirit of mutual aid and help manage the fear that can so quickly escalate. They can work on the code issues, neighborhood appearance and neighborhood safety issues that come with vacant property. They can communicate in a way that no one else can that lets house and apartment shoppers know that this is a good neighborhood that got caught in something that didn't have anything to do with neighborhood quality of life.

So funders who are engaged in grassroots grantmaking, who believe that small grants can make a big difference, who invest in active citizenship, who approach their work through an asset lens rather than a deficit lens: Here's a golden opportunity to expand your work into neighborhoods in your community where foreclosures have hit hard and where NSP funds will be invested. If you're not already tracking how your community will be using NSP funds and which neighborhoods are being hit hard by the foreclosure crisis, start tracking. And if you're not already investing in these neighborhoods, now is the time to do the groundwork that will bring your grassroots grantmaking experience to the neighborhood stabilization picture in your community and invest in the bottom-up community building that is needed to complement the more top-down NSP strategies if neighborhood stabilization is going to be a reality.

If you're already there, are already making plans to be there - or want to thing more about what you can do - I would love to hear from you. This is truly the moment to do some big thinking about small grants.

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