Ben Bernanke praises Tom Cousins, East Lake, Purpose Built Communities

By Maria Saporta

One can add Ben Bernanke, president of the Federal Reserve Bank, to the list of people in admiration of Tom Cousins.

Although most people in Atlanta know Tom Cousins as a real estate leader and developer who founded Cousins Properties, Cousins has gained national notoriety for his philanthropic efforts in the redevelopment of the East Lake Community.

At the Federal Reserve System’s Community Affairs Research Conference in Washington, D.C. on April 12, Bernanke’s speech showcased Cousins and his foundation’s redevelopment of East Lake as a national model of  lifting a community in a holistic way.

The theme of the conference was “Resilience and Rebuilding” given that lower income communities were especially hard hit during the Great Recession. Bernanke said that an analysis by the Federal Reserve revealed “that long-vacant housing units tend to be concentrated in a small number of neighborhoods that also tend to have high unemployment rates, low educational levels, and low median incomes.2While some of these neighborhoods are in the inner cities, others are in suburbs.”

What the research has reinforced is the “close interconnections of housing conditions, educational levels, and unemployment experiences within neighborhoods.” And poverty is no longer concentrated in cities but has spread to suburbs where there are limited services.

“The implications of these trends for community development are profound,” Bernanke said. “Successful strategies to rebuild communities cannot focus narrowly on a single problem, such as the physical deterioration of neighborhoods that suffered high rates of foreclosure. Rather, progress will require multipronged approaches that address housing, education, jobs, and quality-of-life issues in a coherent, mutually consistent way.”

After well-intentioned by misguided policies of urban renewal in the 1950s and 1960s, Bernanke said that “community development practitioners” have come to embrace that in addition to decent housing, neighborhoods require an “array of amenities that support the social fabric of the community” and enhance the capabilities of its residents.

“The holistic approach has the power to transform neighborhoods, and as a result, the lives of their lower-income residents,” Bernanke said.

And that’s when Bernanke launched into a whole-hearted endorsement of what Cousins has been able to accomplish at East Lake. Bernanke joins a host of national business and political leaders who have become admirers of Cousins, including billionaire Warren Buffett, who has invested in Cousins’ social investment enterprise.

Here is what Bernanke said in his talk last week (his speech is in italics):

Let me give another example, drawn from the experience of the East Lake neighborhood in Atlanta, a neighborhood that exemplified the effects of concentrated poverty. In the early 1990s, East Lake had a crime rate 18 times higher than the national average. Nearly 60 percent of adults received public assistance, and only 5 percent of fifth grade children were able to meet state academic performance standards. A local philanthropist, Tom Cousins, wanted to improve the quality of life in this neighborhood by de-concentrating its poverty.6But he understood that East Lake’s problems were interconnected: Replacing substandard housing would do little to attract families to the neighborhood if it lacked good schools, but schools couldn’t perform well if students feared for their safety, arrived hungry, and were otherwise unprepared or unable to learn. High dropout rates in turn fueled the neighborhood’s high rates of unemployment and crime.

To deal with the interconnectedness of the neighborhood’s problems, Cousins determined to attack them simultaneously. He created the East Lake Foundation to facilitate transformative change. The foundation partnered with the Atlanta Housing Authority to replace the neighborhood’s low-income housing project with mixed-income housing that accommodated former tenants and other very low-income residents as well as attracting new, higher-income families. An independently operated public charter school for grades kindergarten through 12, named the Drew Charter School, and an early learning center serving 135 children were built. A new YMCA health and fitness center began to provide wellness programs and to serve as a neighborhood gathering place. Finally, the foundation worked to attract commercial investments in the neighborhood, including a grocery store, a bank branch, and restaurants.

Creating this plan and navigating the complex array of interests and resources of the community, the local government, and the private sector took 10 years of effort. But the character of the neighborhood was fundamentally changed. Today crime in East Lake is down by 73 percent, and violent crime is down by 90 percent. The percentage of low-income adults employed has increased from 13 percent to 70 percent, and Drew Charter School moved from last place in performance among 69 Atlanta public schools after its first year of operation to fourth place. With 74 percent of its students receiving free and reduced-price lunches, Drew performs at the same level as public schools in far more affluent areas.7The educational outcomes alone argue for the wisdom of the holistic approach to community development.

The success in East Lake raises the question of whether a similar approach can work in other communities. In 2009, Cousins launched a community development organization, Purpose Built Communities, to try to attain the same good outcomes that were achieved in Atlanta in other cities around the country. Experience so far suggests that, while the framework can be replicated, it requires certain neighborhood conditions to succeed. These conditions include (1) housing developments of concentrated poverty, which can feasibly be replaced by good-quality mixed-income housing at sufficient scale to change the housing and income characteristics of the neighborhood; (2) the opportunity to create one or more schools accountable to parents and the community; and (3) civic and business leadership that is prepared to create and support an organization charged with coordinating the necessary partnerships and seeing through the long-term plans.

As those involved in this effort note, the Purpose Built strategy is quite different from that of most other bodies whose decisions affect community development.8For example, city governments rarely organize around neighborhoods. School boards, housing authorities, and transit systems all make decisions critical to the health of neighborhoods, but they generally act independently of city government. Moreover, the goals of such bodies are not typically measured in terms of the health of neighborhoods in any holistic sense.

This mindset may be changing, however.

Bernanke went on to mention how several other communities in the United States are beginning to experiment with multi-faceted approaches toward community development — seeking to address the issues of housing, education, health and quality of life simultaneously.

“In sum, community development is a complicated enterprise,” Bernanke said. “Neighborhood and communities are complex organisms that will be resilient only if they are health along a number of interrelated dimensions, much as a human body cannot be healthy without adequate air, water, rest and food.

“But substantial coordination and dedication are needed to break through silos to simultaneously improve housing, connect residents to jobs, and help ensure access to adequate nutrition, healthcare, education and day care,” Bernanke concluded. “Moreover, each community has its own particular set of needs, which depend on local conditions and resources. Accordingly, local leadership, together with a vision of what each community can be, is essential.”

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