Strong communities are an essential part of America, but where we live, how we live, and how we interact with each other is changing. The ability to buy everything online, have our groceries delivered straight to our door, and work remotely instead of from an office creates a very different picture of Main Street.
What do people today want in their communities? How are America’s communities and the face of Main Street changing? Is a loss of personal connection through digitization impacting communities? And who plays a role in fixing communities that may be on the decline?
During a period of urban renewal in the 1950s, manufacturing businesses moved away from the Lower Manhattan industrial district known as SoHo. The lofts the businesses left vacant were attractive to artists as studios and residences, and they were cheap. The only problem was zoning laws, which declared the buildings as non-residential. The SoHo Artists Association worked hard to change the zoning laws: in 1971 the code was amended for artist residency and again in 1986 for open residency (NY Post).
Today, the SoHo Artists Association’s successor, the SoHo Alliance, continues to work with elected officials and city agencies to control development and preserve the historic district. For 2019, the group, along with the Department of City Planning and other neighborhood stakeholders, plans to rework outdated zoning laws to benefit independent retailers and boutiques.
SoHo created the template for “reinventing a faded industrial neighborhood for residents and artists,” and community activists and organizations such as the SoHo Alliance aim to keep it that way (NY Times). In 2016, the SoHo Alliance helped form a group of local activists, residents, independent realtors, and small business advocates in an all-volunteer, nonprofit called Clean Up SoHo after residents became fed up with litter and overflowing waste on sidewalks. Clean Up SoHo works with the Department of Sanitation, fosters partnerships with community leaders, educates landlords and businesses about their responsibilities under NYC law, and provides options for community outreach (Curbed).
Coral Dawson, a member of Clean Up SoHo and founder of Green Below 14, says, “It’s our responsibility as residents who care about our community to raise our valid concerns” (The Villager). Members agree that cooperation and awareness are essential to making a difference and ensuring the community thrives.
Why It Matters
Happiness and Well-being
A community’s well-being is related to that of its residents. A 2018 Harvard study found that, “people who are more socially connected to family, to friends, to community are happier, they’re physically healthier and they live longer than people who are less well connected.”
Numbers and Trends
Across the United States, there are approximately 46 million rural counties, 175 million suburban counties, and 98 million urban core counties. The population of adults 65 and older has increased the most in the suburbs, immigrants tend to flock to metropolitan and urban areas, and 30 percent of rural counties have concentrated poverty where at least 20 percent of the population is poor. Rural counties also tend to have the smallest share of prime-age workers (Pew).
Today, the suburbs in particular have exploded. Millennials have recently started leading the charge in this so-called “Suburbanization of America.” According to the Census Bureau, young Americans ages 25 -29 are 25 percent more likely to move from the city to the suburbs than the suburbs to the city, and older Millennials are twice as likely to do so. This is mainly because suburbs are more affordable than cities, where rent tends to be high.
People make many decisions in their lives based on where they can afford to live and what amenities are available in their communities. Since the 2008 recession, many consider the United States to be stuck in an affordable housing crisis. The housing market has rebounded in the decade since the crisis, but housing starts (new home construction) are affected by labor shortages and the increasing cost of construction materials. Home prices are rising at twice the rate of wages, and property taxes rose an average of 4 percent across the U.S. in 2018, bringing the average to almost $3500 (CBS). For more on property taxes, check out the Policy Circle’s Tax Brief.
Putting it in Context
During the 19th and 20th centuries, booming industries and the Industrial Revolution drew workers to cities. During World War II, African Americans and racial minorities migrated north for economic opportunities, further expanding the urban middle and working classes in industrial cities. The result was “middle neighborhoods,” which were “blocks of single-family homes connected by busy arterial streets, with businesses, houses of worship, public schools, and distinct ethnic or racial identities that sustained a social fabric” (The Lincoln Institute, Harvard).
As these houses aged, weak demand and low property values made rebuilding and repopulating the neighborhoods difficult, contributing to “white flight” during the 1960s and 1970s. These urban middle neighborhoods became the focus of President Lyndon B. Johnson’s War on Poverty and an important component of the civil rights movement. A series of violent events in big cities including New York, Los Angeles, Chicago, and Detroit during the 1960s was met with government community development programs to help create national institutions and financial intermediaries which “provided loans and grants to local organizations” (Harvard). For more on the role of the Federal Government in America’s housing market, see the Policy Circle’s Housing Brief.
Efforts to revitalize struggling communities in the 1980s and 1990s had mixed results, and many families began migrating to the suburbs during the 2000s. Industrialization originally brought workers and workplaces together; the neighborhood was where people lived in order to work. However, as industrialization brought opportunities for physical mobility through cars and trains, many workers aspired to live “beyond the shadow of the smokestack.” These areas became the suburbs, “living places where one worked to live” and could spend the benefits of work. Soon enough, families flocked to the suburbs as the ability to move away from city centers became a symbol of social and economic success (Northwestern University).
The year 2008 marked another economic downturn when subprime lending led to a foreclosure crisis. The subsequent global economic collapse eroded homeownership and property values, making it unprofitable to build new homes and neighborhoods. Although home values have since rebounded, construction has been slow to follow. Many people are having trouble finding neighborhoods in which they can afford to live due to this lack of supply: even a six-figure household income is frequently not enough to purchase a home in the suburbs, leaving many people to live beyond the suburbs, further from central locations with jobs and amenities (NPR).
The Role of Government
The federal government played an increasingly important role in neighborhoods during the Great Depression through the New Deal’s community development programs. After World War II, however, urban areas in particular drew the government’s attention. The Housing Act of 1949 authorized the government to seize “blighted and slum areas” by eminent domain, demolish the buildings present, and give them to private developers to revitalize.
These government measures drew criticism from activists such as Martin Anderson, who claimed in his book The Federal Bulldozer, “any plan to combat urban ills should involve, or better yet be written by, the people who were the objects of that initiative” so as to have “‘maximum feasible participation’ of the poor in the design and implementation of the government programs that would affect them” (Harvard).
Government revitalization efforts continued throughout the 1950s, 1960s, and 1970s, particularly with President Johnson’s War on Poverty and the Economic Opportunity Act of 1964. As part of an amendment to the act called the Special Impact Program, Senator Robert F. Kennedy set up the first Community Development Corporation (CDC) to revitalize communities by providing education, job training, healthcare, commercial development, and affordable housing. In the 1970s, the Federal Home Loan Bank joined the Department of Housing and Urban Development to create Neighborhood Housing Services of America (now called NeighborWorks America) National Community Development System.
Today, larger, more organized CDCs can target federal funding for community development projects in poor urban areas. NeighborWorks America does so by supporting a network of over 240 community development organizations across the country, and frequently works with, reports to, and does research for the Department of Housing and Urban Development (HUD). HUD also supports state and local governments in community development through the Office of Block Grant Assistance. Block Grant programs allow local governments “to address locally identified community development needs” and support activities related to infrastructure, economic development, public facilities, and homeowners and business owner assistance.
Involving the Private Sector
Agricultural enterprises were the primary forms of small business in the 19th century, but as cities assumed greater economic importance in the 20th century, businesses multiplied. Mom-and-Pop shops opened on Main Street, and many small businesses expanded their scale to fit demand and became large corporations (ThoughtCo). Senator Robert F. Kennedy was a proponent of “tapping the power and wealth of corporate America for social betterment” as an alternative to big government programs that often failed to involve local community members. Large companies like GE and IBM helped run government programs in a kind of public/private partnership (Harvard).
Today, AT&T’s Believe Chicago effort, Quicken Loans’ Neighbor to Neighbor Initiative, and Emerson’s Ferguson Forward program are three examples of this ongoing role for the private sector. The new, government-led Opportunity Zones tax incentive program is a timely example of government incentivizing the private sector to invest in distressed communities. For more on Opportunity Zones, take a look at the Policy Circle’s Creating Career Pathways Brief.
Local governments include county governments, municipalities, townships, school districts, and even water or sewage authorities. According to the most recent data, which are from 2016, 31 percent of state and local government expenditures went to elementary, secondary, and higher education, 22 percent to public welfare programs such as Medicaid, and 10 percent on public health and hospitals (Urban Institute). Property taxes tend to be localities’ largest single source of revenue, amounting to almost ⅓ of revenue in 2016. Additional revenue sources include business taxes, sales taxes, and state government transfers (Tax Policy Center).
Local government regulations have considerable influence on communities. Zoning, for example, is a “legislative process for dividing land into zones for different uses.” Individual counties, cities, and townships have their own sets of zoning regulations, called ordinances. Even though developers often determine what to build, where they are allowed to build is controlled by local zoning laws, and the “city council is the final decision-maker on all zoning applications” (Property Metrics). Essentially, the city council’s decisions on zoning set the rules on everything from the structure of Main Street to whether you can run a business in your house. See more below on zoning.
Despite the importance of local government and the budgets they oversee, hundreds of local government races across the United States “feature incumbents running without competition” (Daily Progress). A 2016 study by the Center for Local Elections in American Politics found that in small towns, the 79 percent of elections were uncontested. In bigger cities, 15 percent of elections were uncontested, but only 25 percent of New York City’s registered voters and only 20 percent of Los Angeles’ registered voters participated in mayoral races in 2017 (Daily Progress, NY Times).
What's Changing in Neighborhoods
Businesses of less than 500 employees are classified as small businesses. Small community businesses have been the lifeblood of neighborhoods since the Industrial Revolution, and communities that create a friendly environment for entrepreneurs open up new ventures, add diversity to the community, and put money back into the local economy. The U.S. Senate Committee on Small Business & Entrepreneurship says small businesses create almost two-thirds of new jobs and employ almost half of the country’s private workforce. According to American Express’ 2018 Small Business Economic Impact Study, every dollar spent at a small business contributes an additional fifty cents in local business activity. The Federal Reserve Bank of Atlanta additionally found small, locally-owned businesses were positively associated with county income, employment growth, and poverty reduction.
At the turn of the century, around 600,000 new businesses opened every year; since the Great Recession from 2007-2009, that number has been cut down to about 400,000 (Time). Retail vacancy is a growing issue, affecting “streetscapes just about everywhere – from north to south, from sea to sea, from urban centers to small towns.” And business owners agree that less competition is not a good thing: more vacancies often result in less overall foot traffic in the area. The New York Times captured how the combination of soaring rents and online shopping has “forced out many beloved mom-and-pop shops.”
Seeing small businesses close is upsetting for many communities, but small business owner Gene Marks argues that “taxes, subsidies and other support programs” may not be the answer, and that instead “more should be invested in infrastructure and services that will support our future generations of entrepreneurs.” These are the kinds of resources that can connect entrepreneurs to the community. A study by the Chicago Federal Reserve supports this idea: the study found the “success of small businesses in any neighborhood is linked…to the extent to which businesses are connected to their regional economies” and recommends investing in areas such as education or labor-force preparedness to assist and better integrate small businesses into neighborhoods, particularly in lower-income areas.
Small Business Saturday is one popular effort to bring attention to entrepreneurs. Started by American Express in 2010, Small Business Saturday takes place on the Saturday after Thanksgiving, between Black Friday and Cyber Monday. It focuses on “business associations, state and local chambers of commerce, small businesses, and other community organizers” and seeks to “encourage Americans to shop at local retailers.”
See the U.S. Small Business Administration’s 2018 Small Business Profile here.
Contrary to what you might expect, some reports show that many small business owners are not fazed by technology and shifts to online retail. According to a Wells Fargo/Gallup Small Business Index, almost ⅔ of the 604 small business owners surveyed say their companies have the necessary technology to be competitive in their industries. In fact, most small business owners capitalize on technology and Internet connections. As early as 2012, the Global Entrepreneurship Monitor Report found over half of U.S. businesses start and operate at home. Entrepreneurs who operate from home are not all “solopreneurs” either; seventy-five percent of home-based businesses have employees, but work is done virtually rather than in a physical workspace.
Larger businesses are even turning to the digital world for extra opportunities by letting shoppers at other retailers pick up and return orders at some of their stores, “a sign of how retailers are partnering in new ways to attract customers as more shopping shifts online.” Kohl’s Corp., for example, is now allowing returns from Amazon at many of its locations (WSJ).
Community Technology and News Deserts
Not everyone has such a positive view of technology and its impact on our neighborhoods: Jonathan Rose, developer and author of The Well-Tempered City, says “being online can expand our neighborhood, but the physical place itself still deeply matters to who we are and to our health and well-being.” Many neighborhood apps combine the physical with digital. Nextdoor is an app that markets itself as “the world’s largest social network for the neighborhood,” and Amazon’s Ring Neighbors app “is more than an app, it’s the power of your community coming together to keep you safe and informed.” In fact, such apps have stepped in to fill the void left behind by the loss of local newspapers over the past few decades, which has led to local news deserts: “areas that no longer have reporters to cover goings-on that aren’t on a national scale” (Vox).
Penny Abernathy, chair of journalism and digital media economics at the University of North Carolina Chapel Hill, notes that newspapers “are often the prime, if not the sole source of news and information, especially in small and mid-sized communities.” However, “news deserts” have been on the rise in the last 15 years; 1800 newspapers have disappeared, and those that continue printing have lost more than half of their journalists. In Tennessee, the Tennessean bought the Nashville Banner, but only kept 70 of the Banner’s 180 journalists. This means “large swathes of what was once covered, of courts, of institutions, of major kinds of stories just don’t get covered.”
In recent years, public radio stations have increased focus and spending on local journalism, and some board members of the taxpayer-supported Corporation for Public Broadcasting (CPB) have called for requiring nationwide television and radio networks to spend more on local community reporting. Alternative newspaper business models are another option. One membership model seeks public contributions for journalism; a similar model relies on foundations and philanthropies for funding, although this model has been judged for lack of political neutrality. Local activists and “citizen journalists” have the ability to write about information of interest in communities, but are “no substitute for professional journalism” (Manhattan Institute).
Some analysts also advocate targeting social media, as they believe these outlets further damage the news industry. Currently, many newspaper stories are posted on Google and Facebook, but these companies benefit from advertising revenue, not the newspapers. David Chavern, president of the News Media Alliance, is trying to change an antitrust law “that would give news organizations the right to negotiate collectively with Google, Facebook, and other social media giants for compensation.” The Journalism Competition and Preservation Act introduced in May 2019 could do just that. At the same time, government regulation often has unintended consequences, and the same could easily be true in this case for the news industry.
Tax Incentives: The Amazon Effect
Amazon tends to be the first thought when people discuss the trend of online shopping, as it ushered in “the age of e-commerce and two-day delivery.” Still, some argue Amazon is not “crushing the hopes and dreams of every mom-and-pop shop in America,” but rather is “changing the way small business owners sell their products.” Amazon claims about half of the items it sells are produced by small- and medium-sized businesses (Business News Daily).
Amazon demonstrated its power and influence through the bidding process as it searched for a second headquarters location in 2018. More than 200 North American cities submitted bids, hoping to persuade Amazon with “tax exemptions, abatements, regulatory relief, and taxpayer assistance” (Mercatus). In Arlington, Virginia, where Amazon decided to build a headquarters location, the county board voted unanimously to grant Amazon “an estimated $51 million incentive package that includes $23 million in cash over 15 years as well as a $28 million, 10-year investment for infrastructure and open space” (Engadget).
In New York, where harsh opposition prompted Amazon to back out of building its headquarters in Queens, the company would have received “up to $1.4 billion in tax breaks through the Relocation and Employment Assistance Program,” which would have cost the city an estimated $33 million in lost revenue, as well as $268 million through the Industrial and Commercial Abatement Program, which would have cost the city another $198 million in lost revenue (Politico). Supporters of the plan argued that the 50,000 Amazon workers earning an annual average wage of $150,000 would have brought a large boost of tax revenue, and that “the majority of the tax breaks and grants Amazon would have received were contingent on the company fulfilling its promises regarding hiring and occupying commercial real estate (Market Watch).
For decades, incentive packages have been used “predominantly to attract manufacturers with lots of employees and capital investment” (WSJ). For many economists, tax incentives are
“corporate giveaways that divert money from education, infrastructure and other priorities that ultimately do more for a region’s economy” (NY Times). Economists also note the vast majority of tax incentives go to large, established companies, not to local start-ups or community businesses. Politicians in New Jersey have started to change their state laws by scaling down their ability to make big promises and raising oversight standards for their tax incentive programs. In Michigan, lessons learned from past failed bids, like the Foxconn deal that went to Wisconsin and has since run into timing and delivery challenges, shape the way they are attracting businesses today.
While neighborhoods change, tried and true institutions continue to provide community benefits. A 2016 Pew Research study found over 75 percent of Americans say libraries serve the needs of their community, and an American Time Use Survey found “spending a few hours at church per week had a huge impact on life satisfaction.” Libraries, parks, religious institutions, and other “physical places that allow bonds to develop” are called social infrastructure.
These institutions “provide miniature safety nets, they provide meeting grounds, they provide modeling and mentoring, and they provide meaning and purpose,” without which people risk isolation, alienation, and well-bring (AEI). In fact, sociologists studying a heat wave in Chicago in 1995 noticed the importance of bonds created by social infrastructure: neighborhoods with community organizations, cafes, and walkable areas had lower death rates than neighborhoods with abandoned properties, cracked sidewalks, and few commercial establishments. In those areas with more robust social infrastructure, community members had more connections and knew to check on each other during the time of crisis (99 Percent Invisible). Watch this video for a closer look at the Sociology of the Chicago Heat Wave.
Investment in social infrastructure “is becoming a key part of placemaking and urban policy” and there are many different kinds of policy projects that can invest in social infrastructure. In New York City, an old abandoned piece of transit infrastructure was turned into a park area which is now the High Line, one of the city’s largest tourist attractions (Marketplace). Walls and drainage systems can be infrastructure for climate security, schools and libraries for education, and parks for community engagement and health as long as policymakers and developers focus on inclusivity and providing the opportunity to form human connections. Social infrastructure is “less a thing to maximize than a lens that communities and policymakers should apply to every routine decision about physical investment” (NY Times).
When it comes to building the actual locations of social infrastructure, zoning laws play an important role as they regulate the use of land and structures built upon it. Zoning ordinances, determined by local government, divide cities into districts, such as commercial, residential, or historic districts (Property Metrics).
By controlling what can be built in a particular district, zoning affects where people can live. Not all land can be used for residential purposes, which creates artificial scarcity that increase the cost of land. This gap “between what land would cost if there were no regulations inhibiting development within a city, and what it costs in reality” is called economic rent. Buyers pay this difference. In the 1990s, sale prices were on average 33 percent higher than construction costs; by 2013, they were almost 60 percent higher. In this manner, zoning laws prevent Americans from living close to their work or moving to cities with more jobs. Other concerns include gentrification as rents rise, and economic revitalization in business districts that are limited by zoning (The Atlantic).
A study from the University of Chicago’s Booth School of Business estimated that the U.S. economy as a whole is 14 percent smaller due to constraints like zoning. Cutting back on these regulations, “streamlining permitting processes,” “eliminating parking requirements,” and “changing zoning laws,” could foster conditions that would make it possible for people to find affordable housing where they can find jobs. In Los Angeles, for example, the heavily debated Senate Bill 50 (currently shelved and expected to return to the legislature in January) would relax parking requirements and allow for denser housing in zones that had previously been approved only for single-family homes.
Another common method for cities such as San Francisco, Washington, D.C., and New York City is inclusionary zoning, a “way to produce affordable housing through the private market.” Through inclusionary zoning, private developers are required or incentivized to “designate a certain percentage of the units in a given project as below market rate (BMR)” and make the price of the units based on the area median income. City governments favor this method of maintaining affordability, as little public subsidy is necessary. However, how much cities can demand from private developers is contested, and whether or not these policies can produce a significant number of units to fit the growing need for affordable housing remains to be seen.
What Does This Mean for the Future of Neighborhoods?
History has shown us how neighborhoods have grown, developed, and changed naturally over time through community engagement and government intervention. We need to be thoughtful about our neighborhoods, and consider how local government, businesses, and everyday engagement stitches together the fabric of our communities. Calling on neighbors, planting a community garden, or organizing a local businesses happy hour can have a big impact.
With the influx of new technologies and economic developments, our communities will continue to change. From policymakers at the local, state, and national level, to private business owners and community members, we all play a role in determining the future of our neighborhoods.
There are many way in which citizens can easily step into roles of leadership in their neighborhoods. In New York, for example, the Edgemont Community Council was created to serve as the focal point for the community’s active neighborhood-oriented civic associations, giving residents both a community-wide forum for discussions and a non-partisan representative voice at Town Hall. The Council has representation from ten neighborhood associations and nominates non-partisan School District Board candidates, makes beautification, zoning and permitting decisions, and recognizes annual citizens for their outstanding engagement.
Neighborhood Associations are key to thriving communities. In Nashville, the Whitland Area Neighborhood Association hosts an annual July 4th celebration with canoes filled with ice and refreshments, a local orchestra or band to lead All-American sing-alongs, a children’s bike parade, and a bake-off. In the same area, the Richland-West End Neighborhood Association hosts a Halloween extravaganza that usually attracts 1,500 individual trick-or-treaters in three hours’ time and includes a display of 200 Jack-o-lanterns.
Ways to Get Involved/What Can You Do
First find out what is your passion, and this is where participating in a Policy Circle is key: by expanding your knowledge, understanding the issues, you discover your focus and priorities.
To participate in your neighborhood, we recommend the following:
- Seek what is there – You may be surprised what you find. One place to start is the Community Development office of your town, and you can talk to your local elected representative.
- Find your focus – Depending on your profession and training, you can decide where you can soar on your strengths.
- Get involved – Get to know your elected representatives, the heads of agencies, or other leaders and influences in the area you choose to focus on. Potential areas include Small Business and Economic Development, Entrepreneurship, Workforce Development, Zoning, Parks & Beautification, Public Art & Culture…
Here are some resources to explore. To keep moving forward, set a goal for yourself and your circle. The vibrancy of your neighborhood depends on you, and what you do.
Individual states and municipalities generally have community development resources as well as neighborhood associations. Use the keywords of your state or community with “neighborhood” or “community development” to find out about your local resources.
- Look at your town, community, or municipality’s website
- Challenge yourself to get to know your elected representatives and heads of different agencies in your area
- Talk to your local business owners, entrepreneurs, and the local chamber of Commerce.
- Aspen Institute: Weave, the Social Fabric Initiative to “spread the values of a cultural revolution that replaces hyper-individualism with relationism.”
- Nextdoor, the “World’s largest social network for the neighborhood,” which supports more than 200,000 neighborhoods in the U.S., UK, France, Germany, the Netherlands, Italy, Spain, and Australia. NextDoor depends on NextDoor leaders who act as moderators – this could be a potential role for circle members.
- Empower LA, Los Angeles’ Department of Neighborhood Empowerment through which its neighborhood councils “advocate directly for real change in their communities” and consist of residents, business owners, property owners
Want to dive deeper on the topic. Check out these mini-briefs on related topics.