Lasting Community Renewal

In the wake of the Los Angeles riots, both Republican and Democratic leaders are calling for a renewed commitment to the urban poor, with emphasis on "empowerment," "enterprise," and above all, "ownership." The political rhetoric is encouraging, but as yet there is too little evidence that policy-makers on either side of the aisle have learned the lessons which experience has taught progressive community developers.

Ownership certainly lies at the root of the problems of many low-income communities, urban and rural alike. Poverty has less to do with inadequate income than with high absentee ownership patterns and the credit barriers that keep low-income people from changing them. Most of what flows in flows right back out in rents paid to absentee landlords and profits to businesses and banks with distant headquarters and even more distant shareholders.

It is appropriate, and long overdue, to extend the essential benefits of ownership--security, equity, and a legacy for the next generation--to low-income people. But the political discussion has focused much more on creating opportunities for individuals than protecting the long-term security of their communities. Communities must have sufficient control over property transfers to democratize access and ensure that property remains affordable over time without requiring an endless succession of charitable subsidies.

Social welfare programs are typically criticized as being both paternalistic and too expensive. But turning the poor into conventional homeowners and entrepreneurs won't solve this problem.

The cost of a serious attack on urban poverty will inevitably be very great. If homes and businesses can be freely resold in speculative markets, the value of public subsidies will all too soon be lost, and the units will be vulnerable to recapture by absentee interests. As a result, the new stock of affordable housing and ownership opportunities will diminish--or government will be required to refinance them over and over again. Hundreds of thousands of units of publicly subsidized, privately owned rental housing are already at risk because of similar short-sightedness in existing programs.

THE PROBLEM IS THAT conventional thinking about ownership is polarized into "public" and "private" property; the challenge is to blend the best elements of both and to fairly balance the legitimate interests of individuals and communities. Progressive community developers are addressing this challenge with innovative models such as community land trusts, limited-equity cooperatives, and mutual housing associations, which can offer the essential benefits of individual ownership while ensuring permanent affordability.

Such models recognize that property is a genuine "public/private partnership," because property value in fact comes from both the investment of the individual and the contributions of the community. The personal and economic interests of both partners must be respected if programs are to be socially effective and fiscally prudent.

Real solutions for South Central LA and so many other communities will require a new social compact and new economic relationships, new concepts of property rights and new models of ownership. These, in turn, will require creativity, commitment, and political courage. For ultimately, the problems of low-income communities are not theirs alone, and the changes required are systemic, not situational.

Innovations such as community land trusts and community development loan funds may offer a third path between the paternalism of public ownership and the privilege of private markets--but they will not finally succeed if their applications are restricted and they become a kind of second-class ownership for the poor. We cannot ask the poor to acknowledge the "social mortgage on property" if the wealthy continue to treat the social appreciation in value as personal gains.

It is not poverty alone that produces unrest, but the contrast between poverty and wealth. And if looting seems to be as much an orgy of consumption as a coherent political protest, it is a reflection of a commercial society in which the natural and traditional relationships between labor, production, compensation, and consumption are increasingly breaking down.

So let us hope that progressive activists, community developers, and spiritual leaders can use the example of recent events, and the long process of rebuilding, to stimulate an inclusive dialogue about values--moral values and property values--and to generate support for economic experimentation and economic reform.

The question is not simply whether ownership shall be available to those who have been disenfranchised, but what conversions will take place among property owners, investors, and others who have been the beneficiaries, however unwitting, of inequity. Among them are many churches and people of faith.

Chuck Matthei, the former director of the Institute for Community Economics, and was undertaking a new project called Equity Trust, which dealt with issues of land, labor, and capital, when this article appeared.