Evidence Matters: Meeting the Challenges of Suburban Poverty

Meeting the Challenges of Suburban Poverty

Highlights

• Poverty in the suburbs expanded rapidly in the past decade, but most providers of social safety-net services remain concentrated in central cities.
• In Chicago’s south suburbs, a community foundation forged new partnerships to craft a regional response to the foreclosure crisis.
• In Chester, Pennsylvania, cross-sector collaboration has been key to revitalization efforts.

Poverty in the United States has long been concentrated in inner cities, particularly since the mid-twentieth century expansion of suburbia. Until 2000, most of the metropolitan poor lived in cities; as a result, the infrastructure to provide social services to the poor is more established in central city neighborhoods. Over the past decade, however, poverty grew almost five times faster in the suburbs than in urban areas. Although cities still contend with higher poverty rates — twice those of the suburbs, on average — in absolute numbers poor people in the suburbs now outnumber their urban counterparts by 1.5 million.1

The first decade of the twenty-first century also saw substantial growth of extreme-poverty neighborhoods in suburban areas. This increase is seen in newer suburbs as well as in older inner-ring suburbs that developed during the housing boom after World War II and have since been subject to the long-term effects of deindustrialization, demographic shifts, and high poverty levels.2 Like their urban counterparts, suburban communities have to provide the fundamentals that counter poverty — safety net services, affordable housing, and strategies for economic development that create jobs.

The rise in suburban poverty has resulted in an overwhelming increase in demand for social services. In 2010, Scott Allard and Benjamin Roth found that 73 percent of the suburban nonprofits surveyed in 3 major metropolitan areas reported seeing more first-time users of safety-net programs than in the previous year. A large number of nonprofits saw an increase in requests for help with food needs (78.4%), utility bills (64.9%), and mortgage or rent payments (57.3%). Eighty percent of nonprofits saw an increase in clients evicted from their homes as a result of foreclosure.3

Many suburban communities, especially those that are older and suffering from disinvestment, likely lack the capacity to keep up with the increasing demand for social services. Even before the economic downturn of the past few years, services in high-poverty suburbs lagged behind those in cities. Allard observed that between 1990 and 2000, suburbs with significant increases in poverty rates had far fewer service providers than did central city areas facing similar growth in poverty rates.4 The suburban providers are also scattered over large areas and are not easily accessible by public transportation. In addition, individuals in need of assistance, particularly first-time clients, may not be aware of available services.

A Regional Approach

Food pantries in suburban areas are facing large increases in demand for assistance. Capital Area Food Bank of Texas

Although philanthropic support has been particularly valuable for filling the gaps in services to the poor and increasing service providers’ capacity to provide a social safety net, most philanthropic efforts have been concentrated in cities. Sarah Reckhow and Margaret Weir note that high-poverty suburbs receive fewer grant dollars per poor person than do central cities and suburbs with lower poverty levels.5 Unlike dense central cities, which typically fall under the jurisdiction of a single local government, suburban areas commonly consist of many jurisdictions that provide varying levels of social services. These smaller governmental entities may lack the resources to support their nonprofit service providers as well as the capacity to compete for federal funds. Suburban governments can find it difficult to coordinate programs and services across jurisdictions, leading to redundancy as already stretched municipalities attempt to recreate similar services.6

As nonprofits, philanthropies, and local governments face the dual challenges of growing need and limited resources, these groups are using regional and cross-sector collaborations to meet this rising demand. Reckhow and Weir identify four strategies that philanthropies typically invoke to meet the challenges of suburban poverty: support existing regional organizations, create new regional organizations, foster regional collaborations and networks, and establish new suburban community foundations.7 The diverse and flexible role philanthropies play in supporting and facilitating these partnerships makes them particularly important. Philanthropies with a large regional network can galvanize action and, in some cases, directly support the program costs of the response. Allard and Roth underscore this point by describing the regional influence of locally based community foundations, which “have significant convening power and are able to bring together a diverse group of community leaders.”8 Allard and Roth also observe that sharing resources by forming partnerships with other social service providers allows suburban nonprofits to improve service delivery and the local economy. Edward W. Hill and others point to the important role of public-private partnerships in promoting economic development efforts that expand the tax base and increase employment opportunities in declining communities.9

Residents of the Village of Olympia Fields, a south suburb of Chicago, participate in an interactive workshop organized as part of Homes for a Changing Region, an initiative led by the Metropolitan Mayors Caucus and Chicago Metropolitan Agency for Planning.

The following examples illustrate some of these strategies in action in two regions with severely distressed suburbs: the Chicago and Philadelphia metropolitan areas. Local governments, nonprofits, philanthropic foundations, and businesses in these areas are adopting regionwide responses and forging cross-sector collaborations to address the foreclosure crisis, the affordable housing needs of the low-income population, and general economic redevelopment.

A Community Foundation as Catalyst

In the Chicago metropolitan region, a community foundation has served as a catalyst for a concerted response to the growth of suburban poverty and the recent economic downturn. The most visible sign of the economic strain experienced in the Chicago suburbs is continued, alarming growth in foreclosure filings. By 2010, foreclosure filings, at more than 37 per 1,000 mortgaged properties, surpassed the national average of 22 per 1,000 mortgaged properties. Foreclosure filings were also rising faster in the suburbs than in the city; that same year, South Cook County had more than 50 filings per 1,000 mortgaged properties.10

The geographic concentration of foreclosures leads to serious long-term problems. Concentrations of foreclosures negatively affect a neighborhood’s property values, and vacant or blighted houses lead to neighborhood disinvestment and increased vulnerability to crime. As families abandon their homes, local jurisdictions are faced with the repercussions; housing vacancies and blight strain municipal resources and destabilize local economies.11 In Cook County, foreclosures caused housing values to decline by an estimated $13 billion, and municipalities stood to lose as much as $34,000 per foreclosure because of maintenance costs and loss of tax revenue.12

The foreclosure crisis in this region came at the end of a decade that saw a significant rise in suburban poverty rates. Between 2000 and 2008, the number of poor people in Cook County, which includes Chicago, increased by 7.4 percent. Although the city’s numbers remained basically flat, some suburbs saw their low-income populations increase by more than 50 percent.13 Population gains, in tandem with accelerated poverty rates, greatly intensified the demand for a housing and economic overhaul, but the area lacked a mechanism for coordinating the effort. “Unlike a major city like Chicago, where the entire department of housing has expertise, suburban communities sometimes have a part-time mayor, a part-time city council, and a small staff,” says Ngoan Le, vice president of program at the Chicago Community Trust, a regional community foundation. “The capacity to address the foreclosure crisis is limited.”14

The Trust, with its in-depth knowledge of the region, close community ties, and significant financial resources, was well positioned to coordinate a regional response to the foreclosure crisis. In 2008, the Trust collaborated with the nonprofit Neighborhood Housing Services of Chicago and the Federal Reserve Bank of Chicago to form the Regional Home Ownership Preservation Initiative (“Regional Preservation Initiative”).

The Regional Preservation Initiative’s key concerns are counseling and legal aid, refinancing and financial products, foreclosed and vacant property, and related research. The initiative is a regional extension of the city of Chicago’s Home Ownership Preservation Initiative (“Preservation Initiative”), which has assisted troubled urban borrowers since 2003. Michael Berry of the Federal Reserve Bank of Chicago explained that the Preservation Initiative “offered many valuable lessons and best practices, but…was not able to fully address what had become a broad-based, metropolitan problem requiring cross-jurisdictional cooperation.”15

The Regional Preservation Initiative’s priorities were aligned with those of the Making Homes Affordable program and the American Recovery and Reinvestment Act, two federal responses to the housing and economic crisis. Seeing an opportunity to leverage more resources and partners to resolve foreclosure issues, the Regional Preservation Initiative set out to maximize the resources provided by these programs, initiating an “unprecedented partnership of governmental, nonprofit, and private sector organizations.”16 The Regional Preservation Initiative is a coalition of more than 100 individuals at 70 organizations that deal with foreclosures. These stakeholders convene to share information and strategies for assisting homeowners. The individual organizations (some of which receive funding from the Trust) manage initiatives consistent with the Regional Preservation Initiative’s objectives, in partnership with dozens of other participating community groups, nonprofits, and businesses.17 The Trust fills funding gaps where needed and helps facilitate collaboration. To fight the foreclosure crisis on multiple fronts, the Trust contributes to a county fund that sends outreach workers door to door to encourage distressed homeowners to participate in the foreclosure mediation program.18 The Trust also underwrites research on program outcomes, and other partners in the Regional Preservation Initiative provide counseling and legal assistance to distressed homeowners.19 The Trust not only financially assists nonprofits battling the foreclosure crisis on the ground but also has matched private contributions for direct services to those affected by foreclosures. The Trust helped call attention to and coordinate regional responses to the housing crisis and develop regional plans for economic development in an effort to promote job creation and more directly counter the effects of suburban poverty.

Because individual local governments have only a limited ability to forestall the effects of poverty triggered by the foreclosure crisis, the Trust initiated an interjurisdictional collaboration among the area’s suburbs.20 The southern suburbs, the areas of Illinois hardest hit by the foreclosure crisis, cover a large area with 42 municipalities. The foreclosure crisis triggered a significant decline in property values in this area, with some municipalities seeing drops of up to 30 percent in the past year. In a 2008 effort spearheaded by the intergovernmental agency South Suburban Mayors and Managers Association (“Mayors and Managers Association”), many of the suburbs decided that, with their small staffs and limited resources, few of them could compete for — or effectively invest — federal funding on their own. “It’s kind of counterintuitive as an elected official to put time into proposals you may not get dollars out of this time,” says Robin Snyderman, vice president of community development for the Metropolitan Planning Council, a lead Regional Preservation Initiative partner that, along with the Metropolitan Mayors Caucus, worked with the municipalities to build consensus for collaboration.21 Later, 19 suburbs from the Mayors and Managers Association formed the Chicago Southland Housing and Community Development Collaborative (“Collaborative”) to apply for federal funds as a group instead of competing with one another for resources.

The Trust provided funding for the Collaborative to hire a housing director to apply for grants and work on behalf of the member suburbs. Eleven Southland communities were awarded $8.9 million in Neighborhood Stabilization Program funds.22 Awards ranged from $80,000 to $1.7 million per community and funded the rehabilitation and redevelopment of foreclosed properties.23

The relationships that have resulted from collaboration, facilitated by the Trust and other groups, paved the way for additional collective efforts. Members of the Collaborative are combining redevelopment efforts around existing 19 South Chicago suburbs formed a Collaborative to apply for federal funds as a group instead of competing with one another for resources. 19 rail lines to connect housing to mass transit and jobs. The Southland communities obtained a grant to implement an initiative called Green TIME Zone, which promotes job creation to circumvent suburban poverty. The first phase of the initiative will prepare 60 acres of land for redevelopment, creating 720 new or rehabilitated energy-efficient units of workforce housing over 5 years. The communities are also standardizing ordinances to make it easier for developers to operate in the region.24 The Trust’s early support of the Collaborative helped build the capacity to execute these ambitious redevelopment plans. And “without the Regional Preservation Initiative, we’re not sure that the south suburbs would have been able to leverage as much federal, state, or philanthropic support to develop a coordinated plan,” says Le.25

 
Before and after photos of the Wellington Heights development in Chester, Pennsylvania illustrate improvements in a distressed neighborhood that now offers affordable homes
for first-time buyers.

Cross-Sector Partnerships

While the older suburbs of Chicago are using regional, interjurisdictional solutions to address growing poverty levels, Chester, Pennsylvania seeks strategies that will work for a small, distressed city of 33,972. Chester is located in a region with a relatively strong economy.26 The city is challenged to capitalize on the potential of its local advantages, recent economic development projects, and institutional assets to address the difficulties facing the city and its residents. Its efforts illustrate the role that public-private, cross-sector partnerships can play in revitalizing older, distressed inner-ring suburbs through job creation and mixed-income housing development.

The city of Chester worked with the nonprofit Boys and Girls Club to open a new recreation center to expand opportunities for young people.

Located approximately 13 miles southwest of Philadelphia along the Delaware River, Chester was one of Philadelphia’s first suburbs. In the 1950s Chester began losing its once thriving shipbuilding and automobile manufacturing industries. This economic shock triggered a downward spiral of long-term population decline, disinvestment, concentrated poverty, and a decreasing tax base, which together compromised the city’s ability to combat any one of these issues.27 Today, Chester struggles with a poverty rate of 36 percent, nearly 3 times the national rate, exacerbated by an unemployment rate that has nearly tripled between 1970 (5.2%) and 2008–2010 (15.1%).28 The severe nature of Chester’s economic distress was a major reason it was chosen as one of the Obama administration’s Strong Cities, Strong Communities initiative pilot cities — the only noncentral city selected. Contrasting demographic and socioeconomic trends in Philadelphia from 1970 to 2000, Nancey Green Leigh and Sugie Lee found that inner-ring suburbs in the Philadelphia metropolitan region were at the wrong end of a widening gap in economic prosperity. Income disparities stemmed from gentrification of the downtown and inner-city area and the economic and residential growth of outer-ring suburbs. At the same time, the inner suburbs experienced stagnating and declining population growth, deteriorating housing, and a rising proportion of minority and low-income households.29 Chester’s experience was consistent with the Leigh and Lee study: a 40 percent population loss occurred between 1970 and 2010; most of the housing stock began to deteriorate, as 65 percent of total housing units were constructed before the 1950s; and the city’s minority population grew from 68 percent in 1990 to 84 percent in 2009.30

By 1995, Chester’s future seemed grim. Having been identified by the state as a distressed municipality, Chester’s public schools were in receivership, its Community Development Block Grant (CDBG) program funds were impounded for five years, its redevelopment agency had been dissolved, and its public housing management was troubled.31 The city responded by creating a quasigovernmental agency, the Chester Economic Development Authority (“Authority”), to administer economic development, housing, and community development services. This action retained valuable leadership, secured effective management, and created some protection from politics while still being under city control.32 This restructuring appears to have paid off; Chester has attracted $1.64 billion in public and private investment in the past 15 years, with the Authority playing an important role in the community’s redevelopment.33

Cross-sector partnerships between the local government, local anchor institutions, nonprofits, and other businesses have been key to Chester’s revitalization efforts. Two HOPE VI projects that were initiated in 1996 mark the turning point in the city’s efforts to address long-term community decline. HOPE VI brought investment, public-private partnerships, mixed-income housing, and neighborhood improvement. The city took advantage of the momentum and the change in public perception caused by the housing projects to combat disinvestment.34 Today, the Authority is working to stabilize the population by advancing homeownership for low- and middle-income residents while redeveloping blighted neighborhoods. In addition to renovating the older housing stock, the Authority uses HOME Investment Partnerships program (HOME) funding to subsidize new developments to meet the existing demands of potential first-time homebuyers. But because of the city’s depressed housing market, the cost of building a new home is substantially higher than its sales price.35 “We make up the difference in price so [homebuyers] can build equity and break the cycle of poverty,” said Lisa Gaffney, housing director for the Authority.36

CDBG entitlement grants and HOME funds allow the city to plan for the long term and attract other sources of funding. Wellington Heights, a multiphase housing development that began 10 years ago, provides an example of how the city improved the quality of public housing stock while creating new opportunities for potential homebuyers. Wellington Heights replaced 122 parcels in a distressed neighborhood with 92 new affordable houses for first-time homebuyers. CDBG funds totaling $1.4 million over the first few years leveraged additional funding for later phases from state and local governments, philanthropic organizations, and the private sector.37

Public and Nonprofit Sector Collaboration

The Authority also collaborates with the Chester Community Improvement Project (“Improvement Project”), a nonprofit community-based organization that leveraged HOME funds with philanthropic dollars to revitalize a neighborhood on the east side of Chester. The neighborhood — reborn as the East Gateway Triangle — had been in decline since the mid-1990s.38 In 2005, the Improvement Project received an $89,500 planning grant from the Wachovia Foundation to develop a comprehensive revitalization plan for the neighborhood. The Improvement Project gathered residents, community groups, and local businesses to work on the plan, and a 5-year, $750,000 grant from the foundation followed in 2007.39

With housing as the platform, the Improvement Project provides low-income residents with access to needed services — from mortgage counseling to adult education programs — previously unavailable in east-side neighborhoods. Grants from a group of philanthropic organizations added services that could improve poor residents’ economic well- being.40 To complement the new services with neighborhood improvements, the Authority funds the Improvement Project with HOME money to buy groups of houses in particularly distressed blocks, gut-renovate them, and sell them to low-income, first-time homebuyers. Since 2000, five such properties in East Gateway Triangle have been renovated and sold, and four more are currently in progress.41

Partnering With Anchor Institutions

Many older suburbs are home to postsecondary schools and medical facilities, institutions that are deeply rooted in the community and major employers of skilled, knowledgeable workers. Finding themselves surrounded by blight and deterioration, many such “anchor institutions” invest in revitalizing their neighborhoods.42 The city of Chester partners with two such anchor institutions in the community, Crozer-Chester Medical Center and Widener University, through the Institute for Economic Development (“Institute”), a corporate-driven nonprofit. Since 2010 some of the Institute businesses, including Widener and Crozer-Chester, have helped their employees purchase homes through the Walk to Work Program. Homebuyers receive $5,000 from their employers and are eligible for an additional $10,000 from the city for downpayment and closing costs; workers who remain with their employers for 5 years keep the money.43 “Having employees [live] locally makes them more reliable because they don’t have long distances to travel,” says David Sciocchetti, executive director of the Authority. “Conversely, it supports the city by having people with good jobs buying homes in neighborhoods.” Over the past 18 months, workers have purchased 17 homes through the program.44

Conclusion

The ongoing economic crisis is expected to increase suburban poverty in U.S. metropolitan areas as resources grow more scarce.45 With fewer service providers available, nonprofits and philanthropies are struggling to adapt, and many suburban municipalities lack the capacity to implement solutions. Stakeholders are seeking and testing strategies to address the demand for safety net services in the suburbs and to connect low-income suburban populations to services, jobs, and housing opportunities. Regional and cross-sector collaboration is a strategy being tested widely on the ground — as in the Chicago suburbs and in Chester, Pennsylvania — that has the potential to address the challenges of a changing geography of poverty. As this type of experience in collective problem solving accrues, communities build more capacity to weather these stresses.

Related Information:

Why Anchor Institutions Matter

1. Scott W. Allard and Benjamin Roth. 2010. “Strained Suburbs: The Social Service Challenges of Rising Suburban Poverty,” Brookings Institution; Sarah Reckhow and Margaret Weir. 2011. “Building a Stronger Regional Safety Net: Philanthropy’s Role,” Brookings Institution; Emily Garr and Elizabeth Kneebone. 2010. “The Suburbanization of Poverty: Trends in Metropolitan America, 2000 to 2008,” Brookings Institution.
2. Elizabeth Kneebone, Carey Nadeau, and Alan Berube. 2011. “The Re-Emergence of Concentrated Poverty: Metropolitan Trends in the 2000s,” Brookings Institution, 8–10.
3. Allard and Roth,13.
4. Scott Allard. 2004. “Access to Social Services: The Changing Urban Geography of Poverty and Service Provision,” 1; Allard and Roth, 16; Laurie E. Felland, Johanna R. Lauer, and Peter J. Cunningham. 2009. “Suburban Poverty and the Health Care Safety Net,” Center for Studying Health System Change, 6.
5. Reckhow and Weir, 9.
6. Allard and Roth, 7–8.
7. Reckhow and Weir, 14–5.
8. Allard and Roth, 23.
9. Edward W. Hill, Kathryn W. Hexter, Brian A. Mikelbank, Benjamin Y. Clark, and Charles Post. 2011. “Revitalizing Distressed Older Suburbs,” What Works Collaborative, 21.
10. Chicago Community Trust, Federal Reserve Bank of Chicago, and Neighborhood Housing Services of Chicago. 2009. “Regional Home Ownership Preservation Initiative Action Plan: Addressing the Foreclosure Crisis in the Chicago Metro Area,” 15; Internal document provided by the Metropolitan Planning Office.
11. G. Thomas Kingsley, Robin Smith, and David Price. 2009. “The Impacts of Foreclosures on Families and Communities: A Primer,” Urban Institute.
12. Ibid., 16.
13. Brookings Institutution. 2010. “Factsheet: Suburban Chicago.”
14. Interview with Ngoan Le, September 2011.
15. Michael Berry. 2009. “RHOPI Perspectives: The Federal Reserve Bank of Chicago,” Profitwise News and Views, 3.
16. Roberto Requejo. 2009. “RHOPI Perspectives: The Chicago Community Trust,” Profitwise News and Views, 5.
17. Ibid.
18. Interview with Ngoan Le, October 2011.
19. Circuit Court of Cook County, Illinois. 2011. "Mortgage Foreclosure Mediation Program: Report and Update,” 23.
20. Chicago Community Trust, Federal Reserve Bank of Chicago, and Neighborhood Housing Services of Chicago.
21. Interview with Robin Snyderman, October 2011.
22. Interview with Ed Paesel, executive director of the Chicago Southland Housing and Community Development Collaborative, October 2011; interview with Janice Morrissey, director of housing initiatives for the Collaborative, October 2011.
23. Internal document provided by the Chicago Southland Housing and Community Development Collaborative.
24. Internal PowerPoint slides provided by the Chicago Southland Housing and Community Development Collaborative.
25. Interview with Ngoan Le.
26. Hill et al.
27. Correspondence with Lisa Gaffney, October 2011; Interview with Lisa Gaffney, October 2011.
28. U.S. Census Bureau. 2008–2010 American Community Survey, 3-Year Estimates; HUD USER. State of the Cities Data Systems Census Data, 1970.
29. Nancey Green Leigh and Sugie Lee. 2005. “Philadelphia’s Space In Between: Inner-Ring Suburb Evolution,” Opolis: An International Journal of Suburban and Metropolitan Studies, 1:1, 13–32.
30. Kathryn W. Hexter. 2011. “Revitalizing Older Suburbs: Public Policy Options for America’s Older Low-Capacity Suburbs,” presented at the Suburbs and the 2010 Census Conference, George Mason University; U.S. Census Bureau. State and County QuickFacts, Chester City, Pennsylvania; U.S. Census Bureau. 1990 Decennial Census, Summary Files 1,3.
31. Abt Associates. 2003. “Exploring the Impacts of the HOPE VI Program on Surrounding Neighborhoods,” 14. A public housing authority with a Public Housing Management Assessment Program score of less than 60 percent has problems in major areas of management operations and is designated as troubled; Chester’s score was 35.
32. Hill et al.
33. City of Chester, Pennsylvania (www.chestercity.com). Accessed 25 October 2011.
34. Abt Associates, 28.
35. “Homebuyer Assistance Program.” Chester Economic Development Authority (http://www.ceda.cc/what_do/housing/hap.php). Accessed 23 October 2011. HOME funds are awarded annually as formula grants to participating jurisdictions. HUD establishes HOME Investment Trust Funds for each grantee, providing a line of credit that the jurisdiction may draw on as needed. The program’s flexibility allows states and local governments to use HOME funds for grants, direct loans, loan guarantees or other forms of credit enhancement, rental assistance, or security deposits.
36. Interview with Gaffney.
37. Ibid.
38. Internal document provided by the Chester Community Improvement Project.
39. Interview with Annette Pyatt, executive director of the Chester Community Improvement Project, October 2011.
40. “About Us.” College Access Center of Delaware County (www.collegeaccessdelco.org/about_us.htm). Accessed 26 October 2011.
41. Interview with Pyatt.
42. Radhika K. Fox and Sarah Treuhaft. 2006. “Shared Prosperity, Stronger Regions: An Agenda for Rebuilding America’s Older Cities,” PolicyLink and Community Development Partnerships’ Network, 67–77.
43. Interview with David Sciocchetti, October 2011; Interview with Gaffney.
44. Interview with Sciocchetti.
45. Kneebone et al, 19.