By Mike Phillips and Julie Bloom
Jazz isn’t just about the music. It’s about the people who make it. It’s about the musicians and the small business owners who support them. It’s about community. And now it’s also about the communities. And in the wake of the housing crisis, people are finally starting to ask what’s happened to the neighborhoods they love.
The housing crisis happened when we tried to make suburban sprawl affordable and thought of the businesses that supported it as neighborhoods. Today we are facing a new crisis: how to keep communities thriving when we have only half the affordable housing we used to and the jobs we need to create to support them.
In the 1970s and 1980s, communities took measures to promote the growth of working and middle class families and to protect affordable housing. There was an even greater focus on thriving neighborhoods, and that began to slow over the last few decades.
Now in this housing crisis we need to ask ourselves: How can we keep communities thriving when we have half the affordable housing we used to and the jobs we need to create to support them?
We know that affordable housing is the foundation for strong and vibrant neighborhoods. Just think about downtown, which relies on this element of strong communities because of how homes in city centers command greater prices than the suburbs. Our communities are more vibrant if we have this element of strong communities built on quality affordable housing.
We don’t believe we can address our affordable housing challenges without addressing our problem with our job market. We need to rebuild cities and encourage jobs in neighborhoods. The long-term issue is what happens when the housing crisis hits the poor, and they lose all hope of getting a job. Some are already impacted. The affordability gap between homeowners and those priced out of the housing market is $15 billion.
While the housing crisis has hit the poor hardest, other sectors like banking are also affected, especially undercapitalized banks. The mortgage crisis spread from their unregulated world and into the real economy; they are getting a smaller share of the pie.
There are real crises in our cities and suburbs, but there is another crisis: our incredible wealth of everyday people who feel stuck in their jobs and unable to lift themselves out of the poverty trap. They are not going to keep their neighborhoods vibrant unless they are able to compete against their counterparts in the suburbs.
Here’s an idea: just ask the CEO of the company making your glasses, the painter designing your interior, the business manager that makes your coffee, and the parent packing your lunch. They are all entrepreneurs, all building businesses and communities in our cities. They want to expand their businesses into those neighborhoods and create more jobs to support their families.
We need to help those entrepreneurs expand and create new good paying jobs in our communities. The Obama administration’s tax reform includes key policies that can support our housing and job crisis. For example, the Affordable Care Act allows small business to reward employees for contributing to a company plan instead of a benefit account to reduce costs and encourage savings.
Young people also need another way to support their families by improving the economic environment and values of neighborhoods and school districts that provide them with good jobs. School districts that strongly support sustainability have a higher graduation rate, a shorter dropout rate, a smaller pool of young people in treatment for opioid addiction, and a smaller pool of incarcerated young people.
We can also invest in urban revitalization. Cities need to be places that encourage home ownership because many families come to them for good jobs and/or affordable housing. In big cities, they also need to be places that create good jobs because we can build cities without suburbs.
It is important to keep our eyes on the horizon. Homeownership rates have never been higher and low-income neighborhoods are not losing their small businesses. The new ownership foreclosures that are only related to the housing crisis are less likely to affect small businesses.
Still, reducing property values doesn’t mean that the neighborhood won’t grow. That has happened in our neighborhoods, and more will happen as we treat our small businesses with some support.
The good news is that there are signs that we are on the cusp of strong solutions. John Taylor, CEO of the National Community Reinvestment Coalition, is working with other financial services groups and policy leaders, and Governor Cuomo in New York to build the foundations for expanded lending to small businesses.
In cities, mayors will play a central role. Let’s use the housing and job crisis to build neighborhoods that create jobs and strengthen the economy.