DEVELOPER JAMES W. Rouse anticipated and shaped the landscape of American life. Hailed as a visionary and a prophet, he had one final message for America before he died: The slums can turn a profit and be brought back to life.
Was he right?
Rouse had always been ahead of his time -- building the first enclosed shopping "mall," coining the term "urban renewal," helping to launch the planned community concept with his new suburbia town of Columbia and then returning to the city with so-called festival marketplaces like Harborplace in Baltimore, the South Street Seaport in New York and Faneuil Hall in Boston. In the final months before his death last week, Rouse was talking about the urban ghetto -- and insisting there is hope.
This may seem a curious, if ironic, endeavor for a man who built his fortune off the very suburban exodus that helped bring on the urban decay. But it is precisely this -- Rouse's unconcealed fascination with profit -- that made his efforts to revive the slums so different from all the others. It is what made him so much more believable.
Rouse was not alone. Gradually, a new urban thinking is beginning to emerge that argues against employing altruism as the primary tool to fix our slums. Better, these innovators say, to focus on pure self-interest, on economics. Otherwise, the forces of the marketplace will eventually come back and strike down even the best-intended plans.
From Capitol Hill to the South Bronx to the Harvard Business School, this heightened talk of urban renewal has a distinctly capitalistic tone. Its basic premise is simple. The country is already spending billions of dollars on cities that don't work; on massive criminal justice systems to control rampant crime; on the social fallout from drug abuse and domestic violence; on an educational system that produces dismal results; on welfare and Medicaid for people who can't or aren't supporting themselves.
Of course, whether we've viewed it this way or not, fixing the plight of the poor has always made economic sense from the larger societal perspective. What's changed is that it's starting to make sense for the entrepreneurs whose businesses would bring economic development to the inner city and jobs to the people who live there.
In effect, central cities have the advantage captured in the old real estate adage: "Location. Location. Location." They generally have a high population density that translates into a spending power per acre often equal to or greater than the suburbs. Although in the aggregate there is usually more money in the suburbs, there is also more competition, and a constant struggle to find low-wage workers.
As a result, long underserved inner city areas such as Harlem have begun to see an influx of supermarkets and drugstores by chains looking for a new frontier beyond the saturated suburban markets. Other businesses are beginning to realize that they might be able to beat their competitors by locating in disadvantaged neighborhoods that have proximity to, but lower rents than, downtown financial and commercial districts.
As the drive to rejuvenate the inner city takes on new life, it is also finding new support from some rather unlikely places. Many rural and suburban anti-development activists -- pejoratively known as the NIMBYs (Not In My Back Yarders) -- are beginning to argue the cities' case, recognizing that if homes stand boarded up in the city core, more development is likely to end up in their neighborhoods. If nothing else, they're willing to throw their political support to efforts that will encourage commercial development in the city rather than somewhere else.
The tangible evidence that this new, market-driven, thinking is producing results is still limited, but its disciples are growing in number -- and in prestige. Harvard business professor Michael Porter, celebrated for his work on business competition, is one of the leading advocates of an inner-city development strategy based on economic rather than social considerations. Porter argues that many of the socially driven efforts in the last four decades to revitalize the inner city have failed dismally because they sought to redistribute wealth by taking from the rich and giving to the poor rather than create wealth by building businesses. The inner city has clear competitive advantages for business, he says. Echoing Rouse's argument but from a somewhat different perspective, Porter says slums have a future.
Barbara Paige, executive director of Porter's Boston-based Initiative for a Competitive Inner City, said urban areas represent "an inherent economic opportunity" -- somewhat on the order of new markets in Eastern Europe.
"Whether or not they come back is based on whether businesses recognize that opportunity," Paige said. "I think that the problem has more to do with perception than anything else \. \. \. . There's a strong benefit to the broader business community to get involved in this. It certainly is a direct way to build the economy in which they are operating." The initiative is setting up development banks in Baltimore and other cities to provide capital for business start-ups in ghetto neighborhoods.
Making money in the slums is not necessarily the same thing as helping ghetto residents themselves. But Paige and others insist that, if improving the plight of the poor is the goal, then bringing economic development to where they live must be a central element. And always, the investment should be viewed in economic terms, both to society and to the individual businesses.
Rouse focused most of his efforts on Sandtown, a devastated neighborhood in West Baltimore that represents the worst of America. His Enterprise Foundation, working with Baltimore city officials and neighborhood residents, laid out a vision for an all-out attack on Sandtown's brokenness, arguing that fixing a neighborhood's failing systems would cost less than government and private entities currently spend on piecemeal, often after-the-fact, efforts.
The idea was to push beyond the strictly socially driven programs of the past, isolate one neighborhood as much as possible and show an economic equation that saves money. Rouse and his cohorts at the Enterprise Foundation crunched the numbers and estimated that federal, state and local governments spend $60 million every year in Sandtown's 72 square blocks -- an incredible public investment considering this slum is one of thousands across the country. A 1995 report by the New York-based Committee for Economic Development estimated damage to urban economies at $50 billion annually from crime and noted that the federal government spends an additional $75 billion annually on inner cities.
Rouse argued that transforming Sandtown would save a total of $23.5 million by the year 2005 and $111 million by the year 2015. The alternative of simply slashing funding, Rouse said, would lead to further societal breakdown and, eventually, more costly problems.
Rouse too believed it was critical to encourage Sandtown residents to become entrepreneurs themselves. Past efforts at inner-city development have too often benefited business owners who lived elsewhere or prompted gentrification rather than a change in the fortunes of poor residents.
Just before Rouse's memorial service on Friday, a groundbreaking ceremony was held for the Avenue Market, which advocates say will provide opportunities for new businesses owned by community residents -- essentially retaining wealth within the community rather than allowing shopping dollars to go elsewhere.
What also distinguished Rouse's plan from other efforts was the sheer ambition of its goal -- to take one neighborhood and address, all at once, as many elements of urban and social decay as possible. But if his vision was comprehensive, his funding was only piecemeal. That's hard to avoid when donors are private rather than public and can pick and choose their efforts. Bart Harvey, who succeeded Rouse as chairman of the Enterprise Foundation and hopes to see the Sandtown vision through, says the foundation is now working with government officials to re-direct current public spending in Sandtown. It is still about $6 million short of its $17-million private fund-raising goal.
Diana Spencer, a spokeswoman for Community Building in Partnership, the neighborhood-based organization most directly involved in the Sandtown effort, said corporate donors are more willing to support some programs than others. One foundation might be interested in pre-school education, while another might want to support prenatal care. It's hard to find sponsors, however, for drug-addicted men in their thirties and forties who need job training. For the effort to be truly comprehensive, community residents say they need residential substance abuse treatment during which drug addicts would have six months to a year to get their lives together before reentering the work force. A cocaine or heroin addict, even one that wants to get help, needs weeks of detoxification. "The plan, as originally written, assumed that all the people and resources were in place," Spencer said. "They weren't."
But even with partial funding, the neighborhood has had its successes. All pregnant women now receive prenatal care, a service that has dramatically reduced Sandtown's high rate of infant mortality and low birth weight. ("Each low birth weight baby costs the federal government roughly $100,000," according to Harvey's calculations. "You can see the economics of having something that works versus something that doesn't work.")
A clinic has been set up in each of three elementary schools to provide preventive health care, since most Sandtown residents now use the emergency room as their doctor. All students get free breakfasts and lunches, a practice that has raised costs for school meals slightly but reduced the costs of paperwork even more since most children qualified anyway. The neighborhood schools also have greater autonomy and have established a more intensive curriculum. Parents say their children are bringing home more schoolwork. There is a new senior center and a youth program.
Some 600 vacant houses have been targeted for renovations by various housing groups, although 300 more have become vacant since the program started. There are 19 community gardens and a tree nursery. Neighborhood cleanups have gotten rid of trash in vacant lots that was once used by drug dealers to hide their stash. A new nursing home has opened, providing about 100 jobs, including about 50 to Sandtown residents.
Among residents in Sandtown, there is a tangible sense of hope. "Homeowners aren't going to stand for drug distribution on their corner," said Valerie Simon, a 38-year-old Sandtown resident who has lived there all her life.
Clearly, it is far too early to tell whether Sandtown will ultimately work, much less whether its efforts will be replicated elsewhere. Rouse was, after all, attempting to reverse the forces of history. Suburbia was fueled largely by massive federal investment in highways, mortgage deductions that favored suburban buyers and the interminable issue of race. Even stronger forces will be needed to reverse the city's fortunes. The ultimate test will most likely be an economic one.
"We've gotta show over time that it is cost-effective to do what we're doing," said Harvey, a former investment banker who joined Rouse's crusade more than a decade ago. "Whether we can do it and have the will to do it are big questions \. \. \. . It's rational. It makes sense. It's up to us to try and get there, but it is daunting."
Rouse wanted his plan for the slums to be as widely copied as his other, more commercial ventures. And, no doubt, some would question whether Rouse's visions should be duplicated at all -- his malls, suburbs and festival marketplaces have been widely criticized for their sanitized sameness.
Even if it does work, there's another problem. Slums are kind of like grass in the cracks of sidewalks. Obliterate them in one locale and they'll pop up in another. On the other hand, if this new breed of capitalist do-gooders is right, then every blighted neighborhood represents the potential for profit. Rouse was prophetic about everything else. Perhaps he got this one right too. Anna Borgman writes about Howard County for The Washington Post.