Growing the Economy — Inclusively
The nature of capitalism is competition — but not everyone begins at the same starting line. A focus on neighborhoods and community revitalization can provide solutions for economic growth.
Maggie Parker and Christie Myers have worked extensively on economically developing communities across Dallas. Parker is managing partner and founder of Innovan Neighborhoods, a for-profit organization that works with real estate partners to stabilize Dallas neighborhoods. She previously served as director of The Real Estate Council Community Fund in Dallas, which provides access to capital and technical assistance for real estate projects serving low-to-moderate income neighborhoods. Myers serves as executive director of Education Corridor Health in Dallas, and previously was managing director of Opportunity Dallas and general manager of former Dallas Mayor Mike Rawlings’ Neighbor Up organization.
The Catalyst spoke with Myers and Parker as it explores the barriers that stand in the way of more Americans enjoying a life of economic and social mobility. They share with Catalyst Editor William McKenzie and Bush Institute-SMU Economic Growth Initiative Director Cullum Clark their views on such issues as inclusive economic growth, community-oriented development, and education’s role in creating access to good-paying jobs and investment capital.
Each of you has been involved in community revitalization. What solutions make an impact on economically-challenged neighborhoods, where people may feel the capitalist system doesn’t offer them much?
Myers: We need to be less divisive in finding solutions for economic growth. I have been involved in identifying people who may have not been seen in a board room. For example, we have tried to open the doors of board rooms to gang members as well as people who were once incarcerated. As that happens, they open the doors to us so we can see the barriers to more people getting ahead.
We don’t spend enough time understanding other people’s value. Instead, we try to catch them up with us and our value.
What are the common barriers to moving ahead?
Myers: We hear more and more that there isn’t access to after-school care, access to great transportation to get to a job, or access to getting into a good school. Not because you lack a good education but because you don’t know how to apply. That included me, too. Some people are simply coping to survive.
Parker: As I think about how people can benefit from capitalism, I think about how someone can have a shot at winning. Capitalism is about competition, but not everyone is beginning from the same starting line.
They may start at a different point because of historical prejudices that stop them from moving ahead. They may start from a different place because of limitations at home, such as a child’s parents have a disability that keeps them from working or helping with homework. They may not come from the “right neighborhood” or they may not know about getting into college. These starting points form innate, unwarranted barriers.
Going back to solutions, Maggie, you wrote recently that “We must consider how we use our power to work with neighborhoods on solutions that revive communities.” How can institutions — banks, nonprofits, or city governments — work with communities so the solutions are shared?
Parker: The “with” aspect is key. It is about building relationships so you can have a conversation. You need to bring someone into a conference room and let them introduce themselves and their ideas. That is part of finding solutions “with” people, and not just doing “for” them.
"You need to bring someone into a conference room and let them introduce themselves and their ideas. That is part of finding solutions 'with' people, and not just doing 'for' them."
Myers: Nonprofits, banks, and other institutions may arrive in a community with all the solutions and want the community to tell them, What a great idea. We forget to ask them how to come up with a solution, or tell their story.
Let me give you an example. An organization I worked with had a plan to construct three buildings for health care in southern Dallas. A community member ripped it up and said: “Build one facility and do it here.” She thought the three buildings stigmatized people who were being treated for different kinds of health needs. There is only building one now, which means four walls and not 12 walls. And that has saved several million dollars in capital costs.
We need to pay people for their solutions, too, just as many of us get paid for our work.
"Nonprofits, banks, and other institutions may arrive in a community with all the solutions and want the community to tell them, What a great idea. We forget to ask them how to come up with a solution, or tell their story."
What are you all learning as you put these beliefs into action?
Parker: To move projects forward, you have to overcome the innate distrust people may have with organizations that have discriminated against them in the past – banks, developers, local governments, and philanthropic organizations. You also need to stop planning, and just do something. I’ll be honest, I have been involved in making community plans myself, but sometimes people, including profit-making institutions, need to take a risk in a community.
I am now focusing on developing real estate projects in underserved communities. People may think of developing workforce housing as a charitable venture, but I am doing this for profit, as are many others across the country.
There will always be a need for workforce housing, but it is not a quick dollar. You need funding and partners who see the vision for the long term. For example, I am partnering with a Dallas-based developer to do community-oriented development. We also will focus on providing amenities like access to day care and jobs in underserved neighborhoods. I am bringing my training and relationships in community development, and the developer brings their 30-year track record in executing quality real estate projects.
Myers: I have high regard for Maggie. We are in a housing crisis, and she is taking a huge risk.
Are you focusing on housing because that creates stable neighborhoods and those in turn attract jobs?
Parker: There are many solutions, but, to me, real estate changes neighborhoods.
Is your next-door neighbor a doctor, a teacher, or someone unemployed? That determines what you might dream of becoming. Where you live determines whether you have access to a job or have access to transportation. Where you live can also determine your educational pathways. Neighborhoods are how people perceive opportunity and influence the access we have to opportunities.
"Where you live determines whether you have access to a job or have access to transportation. Where you live can also determine your educational pathways. Neighborhoods are how people perceive opportunity and influence the access we have to opportunities."
What other strategies give people access to capital?
Parker: Access to education is key, so I will point out the University of North Texas at Dallas. The school came about as civic leaders put a “crazy idea” out there to open a university campus that would serve students in the economically-challenged neighborhoods of southern Dallas. These leaders had a long-term vision, and now there are partnerships with local high schools and civic organizations to make the campus a reality.
Students at UNT Dallas may never have been recruited by a "good" university, but now they see they have a great campus in their community and numerous employers are interested in them. It gives students a different outlook on what is possible.
Myers: We have to invest in people like Daron Babcock, who runs Bonton Farms in southern Dallas. He runs a farm that sells produce, provides housing for those who live on the farm, and works with people in rehabilitation. That is holistic development. It is putting community members at the table, and giving them a leadership role. We had people who invested in us, so we need to invest in people and take a risk with them.
What stands in the way of new business creation by potential entrepreneurs in disadvantaged communities?
Myers: This is about being thoughtful in new development. We need communities to be active, vocal participants in the development.
For example, one predominantly black Dallas community is looking at how to transform itself from a largely single-family, aging community. Why not put up a space for the many entrepreneurs in that community to live, work, and play there? Why should people have to get on a bus to go someplace else?
Parker: My perspective on this comes from my work at a Community Development Financial Institution (CDFI), providing loans and technical assistance to small business and real estate projects that served low-and-moderate income communities.
What is a CDFI?
Parker: CDFIs are nonprofit and for-profit organizations that invest in low-to- moderate income communities, and are certified by the U.S. Department of the Treasury. Many CDFIs work with small businesses led by people of color or first-time entrepreneurs who are not in the typical networks to access capital to grow their business.
On the one hand, access to capital is a problem, but, on the other, many people are not financially ready for a loan. They may have a poor credit score, which sometimes may be out of their control. That could stop even a CDFI from investing in them.
So could institutions, especially CDFIs, be more lenient in their underwriting? For example, some CDFIs have provided $500 loans to borrowers with poor credit to help them get over a hump and improve their credit score. Once they develop a track record with a small-dollar loan, they are in a better position to secure a larger loan in the future.
Also, in thinking about solutions, the term “small business” has a broad definition and can include businesses that make $10 million in annual revenue, depending upon the industry. We need to make sure that funds designated to help small businesses actually go into communities that really need it.
We have to get microscopic, be in communities, and talk to people to understand their business model and the marketplace. You need lenders who are willing to listen and invest. A person seeking only $50,000 will have a hard time competing for a lender’s attention compared to another small business needing $500,000. Can we find a way to work with local, small businesses, and take our solutions to the neighborhood level?
Where do you all seeing progress made?
Myers: I am encouraged by cities like Seattle and Minneapolis that are being aggressive in creating housing. Some are adopting bonds for only affordable housing or housing trust funds. Neighborhoods then become more of an investment magnet.
"I am encouraged by cities like Seattle and Minneapolis that are being aggressive in creating housing. Some are adopting bonds for only affordable housing or housing trust funds. Neighborhoods then become more of an investment magnet."
Parker: Beyond housing, I would go back to our conversation about education. Dallas County Promise is an effort that involves local school districts, colleges, universities, employers, and communities. They work together to help students get a free associate’s degree.
For students to be free from student debt, and thinking ahead about their future from an early age, really makes a difference. We can’t underestimate the impact of student debt on people’s ability to participate in the capitalist system. Student debt, at such an early age, impacts decisions to move, buy houses and cars, and invest in ways that older generations have seen as “normal.” An associate’s degree jumpstarts so many opportunities. Dallas County Promise helps students limit their debt, get into jobs, and experience capitalism in a different way.