Do our cities need another War on Poverty? Barack Obama thinks so. Speaking before the U.S. Conference of Mayors this June, the Democratic standard-bearer promised to boost spending on public schools, urban infrastructure, affordable housing, crime prevention, job training, and community organizing. The mayors, joined by many newspaper editorial pages, have echoed Obama in calling for vast new federal spending on cities. All of this has helped rejuvenate the old argument that America’s urban areas are victims of Washington’s neglect and that it’s up to the rest of the country (even though most Americans are now metro-dwellers) to bail them out.

Nothing could be more misguided than to renew this “tin-cup urbanism,” as some have called it. Starting in the late 1960s, mayors in struggling cities extended their palms for hundreds of billions of federal dollars that accomplished little good and often worsened the problems that they sought to fix. Beginning in the early nineties, however, a small group of reform-minded mayors—with New York’s Rudy Giuliani and Milwaukee’s John Norquist in the vanguard—jettisoned tin-cup urbanism and began developing their own bottom-up solutions to city problems. Their innovations made cities safer, put welfare recipients to work, and offered kids in failing school systems new choices, bringing about an incomplete, but very real, urban revival.

Yet this reform movement remains anathema to many liberal politicians, academics, and journalists, who have ignored or tried to downplay its achievements because it conflicts with their left-of-center views. The arrival on the scene of Obama, a former Chicago community activist and the first presidential nominee in recent memory to rise out of urban politics, has given these back-to-the-future voices their best chance in years to advance a liberal War on Poverty–style agenda. As the nation debates its future in the current presidential race, it’s crucial to remember what has worked to revive cities—and what hasn’t.

The original War on Poverty, launched by the Johnson administration in the mid-sixties, was based on the assumption that Washington had to rescue American cities from precipitous—indeed, catastrophic—decline. It’s important to remember that the cities themselves helped propel that decline. Political machines had long run the cities, and they imposed increasingly high taxes and throttling regulations on employers and often entrusted key government agencies, including police departments, to patronage appointees. The cities’ industrial might protected them from serious downturns for a time. But as transportation advances beginning in the 1950s enabled businesses to relocate to less expensive suburbs or newer Sunbelt cities, and did so just as a generation of poor, uneducated blacks from the rural South began migrating to the urban North, the corrupt and inefficient machines proved unable to cope with the resulting economic and demographic shock. Urban poverty worsened (even as poverty was shrinking dramatically elsewhere); crime exploded; public schools, dominated by reform-resistant, inflexible teachers’ unions, became incubators of failure, with staggering dropout rates for minority students; and middle-class city dwellers soon followed businesses out of town. Some industrial cities, scarred further by horrific race riots during the sixties, crumbled into near-ruins.

Yet the War on Poverty’s legislative architects ignored the cities’ own failings and instead embraced the theories of left-wing intellectuals, who argued that the external forces arrayed against the poor, such as racism or globalization, were simply too overwhelming to address on the local level. “Officials and residents in urban communities are losing control of their cities to outside forces,” warned urban planners Edward Kaitz and Herbert Harvey Hyman in their book Urban Planning for Social Welfare. “Cities are relatively powerless.” The answer was federal intervention. Columbia University’s Frances Fox Piven and Richard Cloward gained an influential following among policymakers by arguing that an unjust and racist nation owed massive government aid to the poor and mostly minority residents of struggling cities. Further, to compel those residents to work in exchange for help, or even to make them attend programs that might boost self-reliance, was to violate their civil liberties.

The War on Poverty, motivated by such toxic ideas, transformed welfare from temporary assistance into a lifelong stipend with few strings attached. As everyone knows, welfare rolls then skyrocketed, increasing 125 percent from 1965 to 1970 alone, and an entrenched generational underclass of poor families emerged. Typically, they lived in dysfunctional public housing projects—many of them built as another battle in the War—that radiated blight to surrounding neighborhoods. The federal government created a series of huge initiatives, from Medicaid and Head Start to food stamps and school lunch programs, that spent billions of dollars trying to fight urban poverty. And then, to attack the “root causes” of poverty (whatever they were), the feds spent billions more on local social-services agencies, which ran ill-defined programs with vague goals like “community empowerment” that did nothing to alleviate poverty.

Despite years of effort and gargantuan transfusions of money, the federal government lost its War on Poverty. “In 1968 . . . 13 percent of Americans were poor,” wrote Charles Murray in his unstinting examination of antipoverty programs, Losing Ground. “Over the next 12 years, our expenditures on social welfare quadrupled. And in 1980, the percentage of poor Americans was—13 percent.”

These programs did, however, produce a seismic shift in the way mayors viewed their cities—no longer as sources of dynamism and growth, as they had been for much of the nation’s history, but instead as permanent, sickly wards of the federal government. In fact, as the problems of cities like Cleveland and New York festered and metastasized, mayors blamed the sickness on the federal government’s failure to do even more. Norquist recalled a U.S. Conference of Mayors session held in the aftermath of the 1992 Los Angeles riots. “There was almost a feeling of glee among some mayors who attended: finally the federal government would realize it had to do something for cities.”

Even as tin-cup urbanism prevailed, however, some mayors began arguing for a different approach, based on the belief that cities could master their own futures. The nineties became an era of fruitful urban-policy experimentation. For instance, well before the federal welfare reform of 1996, various cities and counties, most notably Giuliani’s New York and Norquist’s Milwaukee (encouraged strongly by Wisconsin governor Tommy Thompson), not only set limits on welfare eligibility for the programs that they administered for the feds but also pursued a “work-first” policy that got able-bodied welfare recipients back into the workplace as swiftly as possible. Welfare rolls plummeted—in New York City, from 1.1 million in the early nineties to about 465,000 by 2001—and childhood poverty numbers decreased.

State and local legislators, often prodded by inner-city parents, also sought new ways to provide urban minority kids with a decent education. In Milwaukee, a former welfare mother, enraged that her children had no option other than the terrible public schools, helped push a school-voucher bill through the Wisconsin state legislature, letting disadvantaged students use public money to attend private schools. Most states passed laws enabling private groups to set up charter schools unencumbered by many of the union-backed rules found in public school systems, such as restrictions on firing lousy teachers. Today, some 4,300 charter schools, many in big cities, educate 1.2 million kids nationally—and most are performing, studies show, better than nearby public schools.

The era’s most impressive urban reform improved public safety. Under Giuliani and his first police commissioner, William Bratton, New York City famously embraced Broken Windows policing, in which cops enforced long-dormant laws against public disorder, fostering a new climate of respect for the right of all citizens to use public spaces. The nineties’ NYPD also introduced computer technology that tracked and mapped shifting crime patterns, so that police could respond quickly whenever and wherever crime spiked upward, and new accountability measures to ensure that commanders followed through. Crime in New York has plummeted 70 percent since the implementation of these reforms—double the national decline. Other cities that have adopted similar policing methods, from Newark to East Orange, New Jersey, to Raleigh, North Carolina, have had big crime turnarounds, too (see “The NYPD Diaspora,” Summer 2008). As Newark mayor Cory Booker, who tapped an NYPD veteran as police director, noted about crime-fighting: “There are models in America, right in New York City, that show that this is not an issue of can we, but will we.”

Obama may claim to be advancing a twenty-first-century agenda, but his ideas about combating poverty and aiding cities ignore the lessons of the nineties’ reformers and remain firmly mired in the War on Poverty’s vision of cities as victims. Nothing betrays his urban agenda’s retrograde nature more than its Number One spending item: a big hike in funding for the Community Development Block Grant program. The candidate calls this relic of the War on Poverty “an important program that provides housing and creating [sic] jobs for low- and moderate-income people and places.” In fact, the block grants are perhaps the most visible example of the failure of federal urban aid, plagued, as so much other War on Poverty spending was plagued, by vague goals, a failure to demand concrete results from the groups it funds, and a reputation for political patronage. CDBG money, amounting to some $110 billion over its history, has financed many projects that have zilch to do with fighting poverty—an opera house, a zoo, tennis courts, and historical restorations, for instance. A stark example of the program’s failure to achieve its ostensible mission: Buffalo, the city that has received the most community redevelopment funding per capita, is economically worse off today than it was 40 years ago.

Nevertheless, CDBG spending is often invoked as evidence that the federal government is “doing something” about urban problems. This was the case in 1993, when the Clinton administration authorized a massive $430 million block grant to establish a loan fund to help Los Angeles recover from the previous year’s devastating riots, as well as millions more to ameliorate “the underlying causes of the unrest.” Within two years, though, a third of the companies that the loan money had financed had gone belly-up or fallen behind in payments, while two-thirds hadn’t fulfilled their obligations to create new jobs in the city. As for the money aimed at “underlying causes,” local officials merely spent it on yet more ineffective community groups.

Obama doubtless will claim that he can fix this kind of urban aid to make it more accountable, but the obstacles are great. The Bush administration, for instance, sought to junk most of the program and focus what remained on narrow projects with specific, measurable antipoverty goals. But congressional CDBG backers on both sides of the aisle, who insert millions of dollars in earmarks into it each year, derailed the reform.

Though Obama has supported some education reforms, such as charter schools, his plan for fixing urban schools by showering more federal money on them is another attempt to revive tin-cup largesse. In his signature education speech, Obama described visiting a high school outside Chicago that “couldn’t afford to keep teachers for a full day, so school let out at 1:30 every afternoon,” adding that “stories like this can be found across America.” Later, he said: “We cannot ask our teachers to perform the impossible, to teach poorly prepared children with inadequate resources.”

In fact, the U.S. has made vast investments in its public schools. According to a study by Manhattan Institute scholar Jay Greene, per-student spending on K–12 public education in the U.S. rocketed from $2,345 in the mid-1950s to $8,745 in 2002 (both figures in 2002 dollars). Per-pupil spending in many cities is lavish. In New York, huge funding increases dating to the late 1990s have pushed per-pupil spending to $19,000; across the river in Newark, state and federal aid has boosted per-pupil expenditures to above $20,000; and Washington, D.C., now spends more than $22,000 a year per student. Yet these urban school systems have shown little or no improvement. “Schools are not inadequately funded—they would not perform substantially better if they had more money,” Greene observes. An Organisation for Economic Co-operation and Development study found that most European countries spend between 55 percent and 70 percent of what the U.S. does per student, yet produce better educational outcomes. If some urban school systems are failing children, money has nothing to do with it.

Matthias Kulka/zefa/corbis

Obama also promises to invest heavily in the human capital of cities, seeking to forge a smarter, better-trained urban workforce. Yet here, too, his solutions look backward. His key proposal to help the chronically unemployable find work is simply to reauthorize the Workforce Investment Act of 1998. But politically connected insiders run many of the WIA’s job-training initiatives, and waste is widespread. One Government Accountability Office study found that only about 40 percent of the $2.4 billion that the WIA designates for retraining dislocated workers actually went to the workers themselves; administrative costs gobbled up the rest. Even the money that reaches workers does little obvious good. In congressional testimony last year, a GAO official said, “We have little information at a national level about what the workforce investment system under WIA achieves.”

Another big-ticket, War on Poverty–style item on Obama’s agenda is to give cities more federal money to build “affordable” housing. Yet even as mayors warn about a critical shortage of housing for the poor and the middle class, many simultaneously claim that they are hemorrhaging population because of competition from suburbs—and that should be lowering housing costs. Further, with foreclosures rising rapidly in some cities, cheap housing should be plentiful.

What explains this conundrum are the local policies that have helped make housing unaffordable. In a study called “The Planning Penalty,” economist Randal O’Toole points out that half a century ago, when many cities were still gaining population, almost all of them boasted a healthy stock of affordable housing. Yet starting in the 1970s, cities began aggressively limiting and directing housing growth, enacting rules for minimum lot sizes and population density that produced significant cost increases for builders, who passed them on to consumers. In Trenton, New Jersey, O’Toole estimates that the city-imposed planning penalty adds $49,000, or 17 percent, to the median cost of a home in a city where the population has shrunk from 130,000 in the 1950s to 85,000 today. In nearby Newark, a city pockmarked with empty lots that has lost some 170,000 residents, the planning penalty is $154,000, adding 41 percent to median home value. In New York, where Mayor Michael Bloomberg has committed $7.5 billion to build 165,000 units of affordable housing over ten years, the additional costs heaped on by government planning reach a whopping $311,000 per home. There’s zero evidence that Obama understands the planning penalty at the heart of the affordable-housing shortage in many cities.

Obama and the U.S. Conference of Mayors also call for an increase in HOPE VI funding as a way of getting welfare families to stop thinking of public housing as a permanent entitlement. The HOPE VI program, launched in the early nineties, got cities to replace large projects with smaller communities where the subsidized poor would live among those who could afford market-rate housing. The hope was that the bourgeois values of those earning their way in life would somehow rub off on the recipients of housing subsidies, and that they would then move up and out. But because the program imposed no actual requirements on the poor, the effort failed. Research has shown that in cities like Memphis, where the poor have been dispersed to middle-class neighborhoods, crime is rising.

Judging by these and other Obama initiatives, an urban-reform agenda based on the bottom-up successes of the 1990s still awaits its national advocate. It would start from the notion that cities can indeed be masters of their own futures. It would encourage city self-empowerment, not victimhood. Above all, it would urge municipalities to build on the stunning urban-policy successes of the 1990s.

The feds could still, however, play a useful role in several areas. One would be to help cities attack the chronic unemployment and lack of achievement among the urban poor, especially men recently released from prison with neither the schooling nor the workplace experience to find jobs. Nationwide, some 700,000 prisoners finish their sentences every year. Lots go back to their home cities, where, aimless and unemployed, they reconnect with their old partners in crime, resume lawbreaking, and wind up back behind bars. Getting these former prisoners working not only might keep some from returning to crime; it could create a panoply of other benefits, including allowing the many who are absentee fathers to begin supporting the children they left behind when they went to jail.

Around the nation, one can find pockets of innovation on “prisoner reentry,” often based on the same responsibility-building principles as welfare reform. Some of the most successful programs endorse a “work-first” philosophy that gets ex-cons back into the workplace under heavy supervision and mentoring, rather than simply offering them job training. Promising demonstration projects have used local churches and community groups to run job-placement services, provide mentors to former prisoners, and then help them discover community resources. Federal funds could help expand such programs. And Washington could bring the most successful ones to the federal prison system itself, since starting prisoners on the right path before they get back on the streets clearly cuts recidivism.

The feds should also tie funds to local governments’ willingness to reform their own institutions for reintegrating ex-cons. For instance, in many cities, former offenders trying to find work face a forbiddingly complex municipal bureaucracy. But some places, like Newark, are trying to sweep away the red tape and create one-stop reentry centers for ex-prisoners, similar to those that New York created to help former welfare recipients find and keep employment.

Given the spectacular crime declines in New York and other cities that have followed its policing example, one might think that public safety is an area that requires no further federal role. But even as crime has begun rising again over the last few years, many police departments have shunned the new policing. Too many police officials and politicians continue to argue instead that factors beyond their control—from economic deprivation to cultural changes to bad federal policy—are to blame for crime. Governing magazine reports, for example, that Cleveland mayor Frank Jackson remains “skeptical about the ability of the police to solve the problem of crime, which he sees as deeply rooted in economic deprivation.” Jackson told the magazine that “we look to the law, to the police, almost like an army that keeps everyone in check. That’s a dangerous proposition.” But a recent series of stories in the magazine Cleveland Scene with titles like “The Killing Fields” reveals the consequences of such an attitude: a city under siege, with murders rising 56 percent from 2005 through 2007.

The federal government can help advance performance-based police work by aiding departments in implementing NYPD-style policing, including purchasing the necessary technology for crime mapping. The city of East Orange, for instance, used state grants and criminal forfeiture money to pay for its $1.5 million technology upgrade. Federal grants would be contingent on departments’ demonstrating that they are practicing active—not reactive—policing, using the same measurements that innovative departments now use to judge their officers’ productivity, such as the number of directed patrols aimed at preventing crimes, suspicious-activity stops, and field interrogations per officer.

The deplorable state of many city school systems puts education reform high on the list of any twenty-first-century urban-reform agenda. Here, the federal government would provide incentives for states and municipalities to increase the education choices offered to students. Because many locales offer no public funding for building charter schools, for example, the feds might usefully help out. And Washington could tie federal education funding to requirements that states treat charter schools more equitably: in many states, charters get only a small portion of the per-pupil funding that regular schools receive. Federal education aid could also encourage states to lift their charter school caps. Today, roughly half the states limit the number of charter schools that they will authorize, one reason that about 365,000 students around the country remain on those schools’ waiting lists.

The feds could also encourage schools to use curricula that work, especially to teach reading, since failing to learn to read in the early grades condemns many inner-city schoolchildren to fall permanently behind. The Bush administration admirably tried to prod school districts to adopt traditional, phonics-based programs, which are especially effective at educating minority students, the National Reading Panel concluded in 2000. But progressive educators who design curricula in local districts have continued to resist, favoring the ineffective but trendy “whole language” instruction touted by education schools (see “A Marshall Plan for Reading,” Summer 2008).

As for increasing the amount of affordable housing, Washington could tie any housing aid to regulatory reforms that diminish or eliminate the construction caps and complex zoning requirements that drive up home prices. As Harvard economist Edward Glaeser has shown (“Houston, New York Has a Problem,” Summer 2008), Houston and several other cities impose so few government costs on housing—a planning penalty of $0, O’Toole finds—that quality housing gets built and sold at far lower prices than in more heavily regulated cities. Though Houston’s economy boomed and its population grew by nearly 1 million during the 1990s, the price of housing there has increased at only slightly more than the rate of inflation.

At the same time, the federal government should transform its policies on housing for the poor by employing the same philosophy that drove welfare reform, placing limits on tenure in public housing and requiring residents to work toward lifting themselves out of poverty. A few cities are, in fact, transforming public housing by ending the idea that everyone has a right to it and by imposing strict requirements on tenants. In the mid-nineties, Atlanta began demolishing its giant projects, which once housed some 50,000 poor residents, and replaced them with smaller mixed-income, mixed-use projects built with both federal money and large contributions from private developers, who own and manage the housing. What attracted the private money was the promise from Atlanta’s housing authority that these projects would be different: to live in them, all tenants between 18 and 65 had to have jobs or be in school so that eventually they could graduate out of public housing entirely. Whereas in the mid-1990s, less than 20 percent of the residents in Atlanta public housing were working, today it’s about 70 percent. Federal housing authorities could adopt this model and urge other cities to follow it.

Finally, everyone agrees that the nation’s transportation infrastructure, including that of its cities, is woefully inadequate for the twenty-first century. Both Obama and the U.S. Conference of Mayors—surprise!—blame the federal government for underinvesting in transportation infrastructure. But cities and states are equally at fault. Some have used past federal infrastructure grants simply to replace their own transportation money, which they’ve shifted to other, more politically popular uses. And cities have employed the tax-free municipal financing allowed by the federal tax code not to fund necessary improvements in transportation but to fund nonessential projects favored by politicians, like sports arenas and convention centers. Even when cities use this financing on transportation, it tends to be for big, expensive projects that rarely live up to ridership projections, like the massive $45 billion high-speed rail service that California pols have promoted to link Los Angeles and San Francisco—a service whose proponents, according to a Reason Foundation report, “wildly” overestimate potential ridership to justify the cost.

Boosting federal funding for such wasteful initiatives would only squander money. The federal government needs to reform its transportation priorities and push states and cities to do so, too, if we’re to upgrade the nation’s transportation infrastructure. That means rejecting dubious big-ticket projects and fashionable new modes of transportation, like light-rail systems, and spending federal funds on more sensible changes—helping cities to expand existing bus services, say, or to upgrade to cleaner vehicles. The federal government could also give cities incentives to build express toll roads that charge a premium for usage, alleviating congestion on free roads. And the feds should encourage local governments to use private contractors and private capital to build more of our public infrastructure, as countries ranging from France to the United Kingdom to China are now doing (see “The New Privatization,” Summer 2007).

Obama’s rise has put urban issues back into the presidential campaign for the first time in decades. But so far, the discussion that his candidacy has sparked is taking place largely among politicians, commentators, and interest groups whose view of cities hasn’t moved on much from the War on Poverty. Implementing their policy ideas would simply expand the tin-cup urbanism that has kept so many cities in despair for so long. That’s change we can do without.

Top Photo: Ultima_Gaina/iStock


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