The Direct Approach: Combining People- and Place-based Strategies to Address Long-standing Inequities

Introduction

Atlanta is one of the fastest-growing regions in the country, and also one where racial inequities are starkest, especially around wealth and upward economic mobility. To respond to these inequities, LISC Atlanta has expanded on its traditional, place-based community development strategies in the Old Fourth Ward to support a guaranteed income initiative supporting Black women living near Dr. Martin Luther King’s birthplace. Before, LISC Atlanta had invested in affordable housing, mixed-use development, a Financial Opportunity Center, and provided capital to small business owners in the area. But with the addition of the guaranteed income initiative, residents had a chance to plan and direct a new kind of program benefiting legacy residents, and this combination of people- and place-based approaches provides some lessons for the community development field. Below, we lay out the context and strategy employed by the Georgia Resilience and Opportunity Fund (GRO Fund) – one of many guaranteed income pilots occurring around the country – and then describe how traditional place-based efforts can be enhanced by a focus on income supports.

The Georgia Resilience and Opportunity (GRO) Fund’s place-based guaranteed income pilot directly addresses the root cause of financial insecurity. At scale and with grants at the right levels, a guaranteed income would directly provide financial security to those who most need it and could virtually eliminate poverty in the U.S. by guaranteeing every individual an income above the federally-defined poverty line. Photo courtesy of the GRO Fund.

Atlanta’s is a tale of two cities.

Atlanta’s Old Fourth Ward neighborhood is the birthplace of Dr. Martin Luther King, where he pastored the historic Ebenezer Baptist Church and where today he and Coretta Scott King are buried. Just blocks away is the largest concentration of Section 8 housing in the southeast US, juxtaposed with million dollar newly constructed homes, luxury shopping centers, and one of the largest developments in Atlanta over the past decade – the Atlanta BeltLine. Though this neighborhood generates wealth for the entire city, its prosperity is not shared among equally longtime residents. The development has been at the expense of rather than a benefit to the once thriving working-class Black community in the Old Fourth Ward. Nearly every neighborhood in Atlanta shares this same story. 

In Atlanta, there are clear and persistent racial disparities across measures of financial stability and wealth building. Compared to white households, it is harder for households of color to weather financial shocks, save for the future, build wealth, and get ahead in Atlanta (Figure 1).

Figure 1: Black city of Atlanta residents are more likely to have negative outcomes related to financial stability and wealth relative to white city of Atlanta residents. Sources: Prosperity Now Scorecard, National Equity Atlas, Racial Discrimination in Atlanta’s Housing Market. Mortgage loan denial data is not available for the city of Atlanta and not available for people of color.

Consider:

• Over half of the Black and Latinx families in Atlanta are liquid asset poor. They do not have enough savings to cover basic expenses for three months if they experience a financial crisis (job loss, medical emergency etc.).
• Over a third of the Black and Latinx families in Atlanta have zero or negative net worth, a common measure of wealth.
• The median annual household income for Black households in the city of Atlanta is $36,110, compared to $106,197 for white households.
• A child born in the bottom 10% of the income distribution in metro Atlanta has only a 33% chance of making a living wage (at least $73,500 in metro Atlanta) as an adult.

Racial disparities in income and wealth are a product of historic and ongoing policy bias that continues to systematically undermine economic opportunities for people of color. 

Race, neighborhoods, and upward mobility are inextricably linked

People of color are four times as likely as white people to live Atlanta neighborhoods that have been excluded from investments and resources, and where people work for low wages and live in poverty. Discrimination persists overtly and covertly in public policies from the regressive tax code to housing policy, sparking racial segregation.

Neighborhoods shape opportunity, which suggests it is important to focus on places to improve the conditions that result in economic mobility.

Children who grow up in disinvested neighborhoods are less likely to build wealth and achieve economic mobility. For example, a recent Brandeis study found that a child born in the historic Black Pittsburgh neighborhood went on to make about $14,000 in adulthood had a 3% chance of making an income in the top 20%. A child from a family of similar means living in majority-white Buckhead went on to make over twice as much in adulthood and had a 17% chance of making an income in the top 20%.

Neighborhoods are where inequity has been concentrated and exacerbated in self-reinforcing ways. For example, equity achieved through homeownership represents a significant portion of net worth for white and Black families. While homeownership allows families to build wealth, the benefits of homeownership are less pronounced for Black households relative to white households partly because of segregation. This is due to a legacy of redlining and current inequities in housing appraisal, lending, and foreclosures, which limits rates of Black homeownership and home values, thus limiting the effectiveness of homeownership counseling (a person-based strategy) as a wealth building tool for Black families. In Atlanta, Black families have a homeownership rate of 33% but have an average home value $223,665, lower than the city average. Despite comprising 44% of the city’s total households, Black families cumulatively own just 17% of the city’s housing wealth.

Resources within neighborhoods are predictors of children’s life outcomes. Yet opportunity and resources are not evenly distributed. For this reason, place-based community development strategies seek to ensure all neighborhoods have the ability to support economic mobility.

Place-based community development strategies may inadvertently exacerbate inequality in Atlanta

Place-based community development strategies tackle the interconnected issues a community faces in tandem, investing in physical assets like housing, commercial investments, schools, and parks to expand access to opportunity. But too often, place-based strategies focus on place and not people, accelerating market forces and displacing residents.

Atlanta’s East Lake neighborhood was among the first to undergo place-based community development, experiencing $600 million in investments in affordable housing redevelopment, education, and community wellness support since 1995. A recent evaluation of the initiative found a 21% increase in the share of residents with college degrees and 18% decrease in poverty, and increases in both average incomes and home values.

On the surface, it may seem that revitalization efforts in East Lake were a resounding success. But the same evaluation emphasized that changes in East Lake’s racial composition suggest that these numbers come from changes “of people, not for people,”—in other words, from new, higher-income residents moving in—and that a minority of original residents actually benefited from these investments.

These changes may have been a factor of how redevelopment occurred, including East Lake Meadows itself, a 650 unit public housing complex which became a mix of market-rate and public housing, but where very few original residents were able to return.

The City of Atlanta’s 2021 Neighborhood Change Report confirms that this trend occurs city-wide, suggesting that public investments to improve neighborhoods in Atlanta often do not benefit low-income residents of those neighborhoods. Between 2010 and 2018, neighborhoods that grew in population and those that displaced low-income residents had more public investment, indicating “a likelihood that public investment is related to the economic expansion of neighborhoods, and at times that expansion includes a loss of low-income residents.” The report concludes noting that Black residents are increasingly concentrated in neighborhoods in economic decline whereas white residents are increasingly concentrated in neighborhoods undergoing economic expansion.

The GRO Fund offers a different place-based strategy, focusing direct resources toward those most susceptible to harm from place-based community development investments: Black women

The GRO Fund’s flagship program, In Her Hands, is a guaranteed income program developed by and for residents of the Old Fourth Ward. Like much of Atlanta, the Old Fourth Ward has experienced an influx in wealthy, white residents since the development of the Atlanta BeltLine, Ponce City Market, and attendant increase in luxury housing and specialty retail shops. Since then, the neighborhood’s median household income and educational attainment measures have risen, but the Black poverty rate has remained stagnant. This combination of facts suggests that the Old Fourth Ward has seen changes in who lives there, and that Black residents have not universally shared in the neighborhood’s economic prosperity.

The GRO Fund, which was born out of a community task force, began engaging Black residents about their hopes and ambitions for their community and what would help residents who were left out of the gains in their community. Alongside the community process, GRO conducted extensive research on promising paths to address the racial income and wealth gap.

The GRO Fund found that existing programs—from government programs like Supplemental Nutrition Assistance Program (SNAP) and subsidized housing, to nonprofit programs—neither met the scale nor the kind of support residents needed, and often left residents feeling trapped with no way to be financially secure. Furthermore, these programs are often complicated and difficult to navigate, rendering them out of reach to families experiencing poverty or significant economic insecurity. It seemed the best approach was the most simple and direct – provide residents with what they needed most: cash, no strings attached.

The guaranteed income program will provide support for the people in the community and help to address the lack of shared prosperity across the neighborhood. Instead of addressing childcare, transportation, education, housing, and healthcare as separate problems, it recognized that these are all issues driven by one common factor: economic insecurity maintained by systemic racism. Here, community development meant investing in the people of the community who made the historic Old Fourth Ward the neighborhood it is today.

In May 2022, In Her Hands launched, providing 215 Black women in the Old Fourth Ward a two-year guaranteed income averaging $850/month. While $850/month is not enough to escape poverty in the Old Fourth Ward, it can provide financial security in a way that is direct, flexible, and dignified.

Place-based work should be bold and people-focused

The community development field’s focus on place-based strategies is important and ought to continue, given that neighborhood-level policies and conditions drive inequality.

However, too often community development’s approach is piecemeal and fails to meaningfully engage the insights from communities closest to the problem or promising research. Not only does this result in solutions that are overly complex or fail to address root cause issues, but can exacerbate inequalities.

Neighborhoods are complex and face interconnected factors that converge to limit opportunity. But place-based strategies often assume that solutions must also be complex and interconnected involving multiple institutions, programs, and policies. The Urban Institute’s Brett Theodos summarizes the issue: “In trying to accomplish everything, or at least many things, place-based work can fail to articulate a clear theory of change. This means that local activities do not logically lead to near-term outcomes, which in turn do not lead to the intended intermediate and long-term outcomes.”

For example, consider the large scale community and economic development programs in Atlanta from 2010-2020 (Figure 2). Despite these investments, the Black-white income gap was maintained during this period as white households continued to make nearly 3 times as much as their Black neighbors. (Not all of these strategies were aimed directly at the Black-white income gap. The magnitude of past and current inequities require much deeper investment in order to move the needle on the racial income and wealth gap.)

Figure 2: The Black-white income gap has not changed significantly over the past decade. Sources: Invest Atlanta 2016 Annual Report, Invest Atlanta Impact Insights

The GRO Fund’s place-based guaranteed income pilot directly addresses the root cause of financial insecurity. At scale and with grants at the right levels, a guaranteed income would directly provide financial security to those who most need it and could virtually eliminate poverty in the U.S. by guaranteeing every individual an income above the federally-defined poverty line.

Racial wealth and income gaps are vast and continue to grow. We need bold policies and programs to close them. Guaranteed income programs like GRO’s In Her Hands program offers lessons as we build programs and policies that target the root of systemic inequity.

1. Be Place Based and People Focused – In Atlanta, community development investments too often do not directly benefit legacy residents - those who have maintained the fabric of their neighborhoods despite decades of divestment. These communities are most susceptible to being harmed instead of helped by traditional community development. In Atlanta, these are almost entirely Black communities. Place-based work that does not simultaneously support legacy residents limits their ability to take part in community improvements at best. At worst, it contributes to their displacement, exacerbates existing inequalities, and inadvertently directs wealth towards communities who have it most. Data continues to show that Black communities face some of the harshest impacts of economic insecurity as a result of centuries of divestment and exploitation and that these disparities are maintained by current policies. Yet, our solutions do not always directly prioritize Black neighborhoods. If we want a change in outcomes, we must explicitly focus resources on communities who bear the brunt of anti-Black policies.
2. Keep it Direct and Simple - Place-based investments may be hard to obtain, have eligibility criteria that cut against goals, may contribute to resident displacement if not well-managed, or take so long to come to fruition that original residents are no longer in the neighborhood. Too often, place-based work too does not directly benefit legacy residents, who are most impacted by neighborhood level policy failure. Simple and direct investments ensure program and impact reach the intended community members. The solution is to invest directly in legacy residents and consider investments that have a broad impact on a variety of outcomes - such as cash transfer programs, workforce efforts such as Financial Opportunity Centers that reach deeply into neighborhoods to connect with those who do not always benefit from services offered elsewhere, or anti-eviction or anti-foreclosure initiatives that help residents stay in place . Investments should have a clear, tangible impact on legacy residents and be simple to access.
3. Trust Impacted Communities - From program co-design to developing solutions that ensure individuals and communities most impacted by racial inequity have the resources to self-determine, programs must trust impacted communities and avoid paternalistic programs that assume deficits within the community we are seeking to support. A 2011 White House report highlighting community development best practices validates this approach, stating: “revitalization efforts that involve, and in some cases that are led by, community members create a sense of ownership of the challenges among residents and help ensure that the path forward is relevant, accountable, and sustainable.”
4. Be Bold - Over the past 30 years, the racial wealth gap has grown nationally despite increased attention and investment in place-based initiatives. We need solutions that meet the scale of the problem and address the root causes. Bold does not necessarily mean big and can start small and local. Boldness is an approach that grasps at the root causes of systemic inequality and challenges paradigms that perpetuate racial inequity. 

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