Austin for everyone: Building an inclusive, diverse city begins in every neighborhood

[The following remarks were delivered before the Austin chapter of the American Institute of Architects on June 21, 2016.]

I intend to challenge and to speak directly to you today about issues of race, class and inequality in Austin. I feel like I can speak freely and bluntly to you because I work every day with architects and planners on these issues, both in creating affordable housing and through innovating and challenging public policies and practices that perpetuate inequality. I have long admired the power that architects and planners have to shape not just physical structures but to compel their clients to confront the impact of what and how they build in their community.

I’m sure that like me, you have been thinking a great deal about how Austin’s rapid growth is impacting our city.

Many of us, even those of us who are prospering in this boom, are worried we are losing the dynamic, vibrant, unique city that we love.

As Austin becomes less affordable, it becomes less diverse. Low income people and especially low income people of color are being pushed out of our city and excluded from the opportunities here. But it is not just poor, black and Hispanic families who suffer. Austin cannot remain a great city – a city of culture, opportunity and intellectual vibrance – if it is not inclusive and diverse and if income inequality is extreme.

I have been asking myself: Can Austin remain a progressive city while becoming nationally known as one of the most racially and economically segregated American cities? Who will be attracted to live in such a place?

• Austin-Round Rock is the most economically segregated metropolitan area in the country according to the Martin Prosperity Institute.
• For low income boys, Travis County ranks in the bottom 8 percent nationally for the chance of getting out of poverty.
• Travis County ranks in the bottom 13 percent nationally in income mobility for low income children according to Harvard economist Raj Chetty’s research.

The Chetty study, released last year, shows how strongly children’s futures are shaped by where they grow up. Spending a childhood in a neighborhood that’s racially segregated and economically impoverished reduces a low income family’s total lifetime earnings by, on average, $198,000. Growing up in a segregated neighborhood, in other words, makes it likely you’ll stay poor.

Obviously, residential development patterns and zoning practices are the key factors in segregation. Austin has a problem in how we mange development if our development practices are producing these levels of segregation. In response, there are thoughtful people who say the solution is simply to build more housing, which they claim will increase affordability and overcome segregation. I think that is a part of the solution but in itself will not fix the problem. Past housing construction booms in our city’s history did nothing to reduce segregation.

We have never committed ourselves to integrating Austin; we have done quite the opposite. Until we acknowledge the importance of economic and racial diversity in making Austin Austin, and agree to spend resources to achieve integration, we are going to continue developing segregation and exclusion. If I had more time today I’d love to review the historical public policies and development practices that got us into the mess that we find ourselves in today. But we don’t have the time, so let’s just cut to the chase.

What should we do?

It comes down to creating policies and spending public resources to give low income families and especially low income people of color four rights in our city:

1) The right to choose where to live,
2) The right to stay in a neighborhood and not be pushed out by taxes or gentrification,
3) The right to enjoy fair and equal access to public infrastructure and services in every neighborhood, and,
4) The right to have a say in the policies implementing these rights and other public policies that impact people’s neighborhoods and homes.

Let’s explore why these four rights are important.

The real estate development industry has treated first Clarksville and now East Austin as an asset to be expropriated for the economic benefit of the real estate and development industries and white migrants. There has been an historic transfer of African-American and Hispanic land and wealth from poor people of color to mostly white privileged people in this city. Today it’s happening at a historic pace.

Here are the consequences:

• As Austin’s population grew 20.4 percent from 2000 to 2010, our African-American population declined 5.4 percent.
• In contrast, the population of African-Americans increased for the greater Austin metropolitan region, doubling in Williamson County.
• Between 2000 and 2010, Austin was unique — it was the only major city in the United States to experience a double-digit rate of general population growth coincident with African-American population decline.
• You can see this decline in African-American population most dramatically in East Austin. Austin is the eighth most gentrifying city according to a Governing magazine study.

Let’s look at the evolution of racial and ethnic segregation in Austin:

Pflugerville, Hutto, Leander, Round Rock, Bartlett, Buda, Cedar Park and other suburbs have absorbed a large exodus of Austin’s African-American and Hispanic population. It is becoming disturbingly apparent that the racial and ethnic demographic shifts in Austin today are reproducing in suburban cities a level of residential segregation similar to that which city policies produced in the 1920s, when Austin government policy set out to deliberately create a black ghetto in East Austin.

We have noted that this type of segregation hurts Austin by narrowing and homogenizing our culture, and diminishes us in the eyes of others as one of America’s most segregated cities. But what it does to the people we are driving out of Austin is far worse. While some of us prosper from the historic transfer of wealth through the redevelopment of East Austin and other formerly affordable neighborhoods, we are contributing massively to economic inequality. One person’s loss is truly another person’s gain. And in Austin today it is too often true that one black or Hispanic person’s loss is a white person’s gain.
_________________________

The key component of economic opportunity is family wealth building. Wealth is more than just a salary. It’s the value of all the property, possessions, and money that someone has.

For most Americans the equity value of their home comprises the greatest share of their wealth. Unfortunately, home equity has not benefited whites, Hispanics and African-Americans equally.

Over generations, government policies and private real estate practices have often worked to frustrate black and Hispanic families’ efforts to create community, achieve family stability and build wealth with their homes. Only a relatively small percentage of people of color succeed in leveraging housing to their financial advantage to the degree the average white household does.

Black- and Hispanic-owned land and neighborhoods are frequently exploited by people with greater economic resources.

What do I mean by exploited?

• People of color pay higher initial purchase prices,
• They largely get only subprime loans,
• They are subject to financial products that strip equity,
• They pay regressive property taxes that destabilize homeowners,
• They endure substandard or withheld public services in minority neighborhoods that depress property values, and,
• In the process of gentrification, people of color participate only infrequently in real estate redevelopment because of a lack of access to financial capital and thus they miss out on the financial windfall from redevelopment.

These practices produce and sustain massive wealth inequity between whites and people of color.

One of the leading scholars in this area is Brandeis University’s Thomas M. Shapiro, the author of “The Hidden Cost of Being African American: How Wealth Perpetuates Inequality.”

I’m going to liberally paraphrase some of Shapiro’s research findings:

The typical black family earns $0.60 in income for every one dollar of income that a white family earns. Surprisingly, this ratio has remained virtually constant since 1960. This income gap is bad news, but when we examine the racial wealth gap the news gets far worse.

Today, median white family net wealth is $111,000. Black family median net wealth is about $6,000. Hispanic families have a median net wealth of about $7,000. There is less than six cents in black wealth and seven cents in Hispanic wealth for every dollar of median white family wealth.

We’d like to believe that everyone starts their life from the same starting line in terms of economic opportunity. Many believe that we succeed solely based on our individual skills and initiative. But that isn’t true.

We don’t all start from the same starting line because inherited family wealth is critical to intergenerational economic mobility:

• Inheritances and other family assistance frequently amounts to a huge individual advantage. The capacity of unearned, inherited wealth to lift a family economically and socially beyond where their own achievements, jobs, and earnings would place them is huge. These assets set up different starting lines and perpetuate inequality.
• The way families use head-start assets to transform their own lives has racial and class consequences for the homes they buy, the communities they live in and the quality of schools their children attend.

Let’s explore how family wealth is created.

For middle income people, homeownership equity represents approximately two-thirds of their wealth. But, the equity we have in our homes is determined by how we buy houses, the terms of the loans we secure to finance them, the neighborhood where they’re located and residential segregation that constrains the value of housing.

We have noted that a major component of wealth is inheritance. Not just inheritance upon death but income transfers from family members during life for education, down payments, medical costs, etc. For example, few young Americans purchase a new home today without assistance from a relative.

A head start on building wealth from home equity is cumulatively transferred across generations.

But what about government subsidies for low income housing, you may ask?

Each year the United States government invests $200 billion in homeownership. The bulk of this government subsidy goes to those with the top 20 percent of incomes through the home mortgage interest deduction. In contrast, the total government spending for subsidized rental housing is only $35 billion. In other words, only 6 percent of the total tax outlay for housing goes to the poor.

Thus, there are only enough public funds to subsidize a few of the eligible low income families. And what’s worse, almost all of that subsidized housing is located in racially segregated neighborhoods with high concentrations of poverty, failed schools and high crime – the very places that Professor Chetty’s research says condemns children to remain in poverty when they grow to be adults.

Professor Shapiro’s research finds that, in 1984, the racial wealth gap, measured at the median, was $85,000 in 2011 dollars. By 2011, for the same set of families, the racial wealth gap is $234,000. In other words, the racial wealth gap has more than tripled in 27 years.

Homeownership counts for the greatest share, about 27 percent, of the growth in the racial wealth gap during that period of time.

The different characteristics of the housing markets for white homebuyers and homebuyers of color strongly affect home equity.

The largest contributor to the disparity of home equity is, as they say in the real estate industry, location, location, location.

This means who lives in the neighborhood and who goes to the local school. For African-Americans and Hispanics, residential segregation artificially lowers demand, placing a ceiling on home equity for families who own homes in non-white neighborhoods.

On the other hand, residential segregation privileges white homeowners by increasing the value of their homes.

There are several other components of wealth. None of them have the impact of home equity.

• Income explains 20 percent of the difference in the growth in the racial wealth gap.
• Unemployment accounts for 10 percent of the difference.
• College explains another 5 percent.
• Inheritances account for between 5 and 12 percent.

All of these factors return benefits unequally for whites and people of color. But in the end, housing accounts for the greatest difference between the wealth of blacks and whites, considerably more than even a college education.

In summary, if we want to make a big difference in the racial wealth gap, we need to focus on ensuring that housing returns the same benefits for blacks and Hispanics as it does for whites. In order to do this we have to overcome residential racial segregation.

So what do families impacted perceive as a solution?

Over the course of the past few years, we have been working with a group of low income African-American and Hispanic neighborhood leaders in Houston who have come up with a clear and understandable public policy prescription, something that had eluded me for decades.

These are the four rights I mentioned before:

• The right to choose,
• The right to stay,
• The right to equal treatment, and,
• The right to have a say.

These rights should arguably already be guaranteed everyone under the Fair Housing Act and 50-year-old civil rights laws.

The right to choose is the promise of mobility, integration and choice of where to live for people of color.

The right to stay guarantees against the involuntary displacement of low income people of color from existing neighborhoods. Gentrification diminishes access of displaced families to the improved neighborhoods, strips their home equity and frustrates economic and racial integration.

The right to equal treatment demands that public services and facilities, along with certain regulated private services like access to credit, are provided equitably in low income neighborhoods of color, at the same levels they are provided to privileged neighborhoods of whites.

The right to have a say is a demand that government permit low income people of color meaningful democratic participation in the decisions that affect their families and neighborhoods.

These rights arise from long-standing and well-founded grievances about development practices, inequities in public services between white and non-white neighborhoods and the way fair housing laws have gone unenforced.

Guaranteeing these rights requires specific policy changes and public initiatives like the following:

• Continued good stewardship and expansion of Austin’s housing bonds. The bonds are providing essential gap funding for some very good affordable housing development. We should all be extremely proud that Austin voters support this modest but extremely important initiative.
• Build new subsidized housing and improve the ease of housing voucher usage in high opportunity White neighborhoods where housing choices for low income persons of color do not exist.
• Invest in subsidized and affordable housing as a pro-integrative strategy in neighborhoods on the cusp of, or undergoing, gentrification to stabilize them as economically and racially integrated neighborhoods offering high opportunities to residents.
• Maintain and upgrade existing housing in distressed neighborhoods but be very circumspect about adding additional subsidized housing there. Where existing subsidized housing in these neighborhoods is distressed and subject to environmental and social blight, it should be relocated or remediated.
• Offer public help in improving and maintaining homes of lower income elderly homeowners.
• Provide circuit breakers to prevent property tax increases from forcing homeowners from their homes and neighborhoods.
• Restore well functioning real estate and credit services in distressed neighborhoods.
• Provide missing or upgrade substandard public services to attract residents with a range of incomes and promote increased economic diversity.

But – and this is where architects and planners come in – I also believe that achieving the kind of housing and community justice that the community leaders have identified requires each of us to take a close look at our own neighborhoods and ask: What am I doing to help build an inclusive community?

What do we ask from our neighborhood? A lot of it is surely location. But it’s also neighbors, culture and diversity. That’s what drew me to buy my home 37 years ago on the periphery of Clarksville, and I think that’s something a lot of people are looking for in Austin, even as we’re losing diversity. In those places where people want to act to reverse the trend, we need to give them the tools to take action.

Austin is currently considering new development standards through its CodeNext process. There are some good ideas being discussed, but CodeNext has no silver bullets.

One thing that I think Austin should not do is designate certain areas, such as higher density areas along transit corridors, as affordable housing districts. This would ghettoize affordable housing into City-designated districts. This runs counter to the four rights by limiting the freedom to choose. Instead Austin must promote, as a public policy, economic and racial diversity across all neighborhoods.

The extent of Austin’s segregation and gentrification compel us to think big. I have a big idea for you to consider: We need to say to neighborhood associations, “You need to find some room in your neighborhood for affordable housing.”

If a neighborhood association wants to take the responsibility for creating affordable housing, the City will give them the financial resources and the development tools to produce it. We should say to existing homeowners, “Under appropriate guidelines you can design it and you can carry it out as a neighborhood CDC if you want.” Architects and planners would have a critical role in supporting this inclusionary neighborhood affordable housing development.

We would also say to neighborhood associations, if you don’t want to bring affordable housing into you neighborhood or to work with a developer to do it, then we as the City will give those tools to responsible developers, the housing authority, nonprofit housing developers or, with appropriate controls, private developers that will take the initiative to make it happen.

We’re talking sensitive and responsible new development in existing neighborhoods. But we are also talking about a neighborhood-level commitment to expand affordability, end segregation and create diversity.

I know many of you are thinking this is politically naive. Austin neighborhood leaders will never agree. But there are Austin neighborhoods who are voluntarily doing it today.

Fair share neighborhood affordable housing is the signature initiative I advocate, but there is more we need to do to secure the four rights:

• We should more aggressively use density bonuses and require deeper levels of affordability in new multifamily development.
• We need to end racial discrimination in the housing market through aggressive fair housing testing, and work to restore the power the Texas Legislature took away from us at the behest of the apartment association to prohibit landlords from discriminating against families using housing vouchers.
• We need to carefully monitor signs of gentrification and help public officials understand the tools they can employ to empower low income families who choose to remain in neighborhoods undergoing gentrification.
• We need to insist that the City track the comparative quality and condition of public services and infrastructure across neighborhoods, including an analysis of the equity of local zoning and other land use protections, along with an environmental justice assessment comparing harmful environmental exposures and risks between neighborhoods of color and white neighborhoods.
• We must give existing and future residents of subsidized housing a choice in where to live by providing housing options not only in high poverty areas as is the case today, but in high opportunity, low-poverty neighborhoods as well.

All this will not be easy, and it will take time. But if we’re serious about building an inclusive city, we must start crafting the tools.

As architects, when you design buildings, homes and subdivisions, you are creating the stage on which the problems of segregation and inequality will either be maintained or will be overcome. You must speak up for the tools to overcome.

I work with every day with architects and planners who do this type of problem solving, and find it the highest calling of their profession.

My friend Tom Hatch is an architect who dedicates a substantial part of his practice to designing affordable housing through neighborhood-based community development corporations. Tom knows that as a respected architect in this community, his public advocacy for decent homes for poor people, integrated into healthy and diverse communities, is just as important as his housing design work.

As architects you are in a position to inspire, educate and lead. You can lead your clients to face the underlying issues that will decide the success or failure of their project and its impact on our city — issues that perhaps your clients don’t initially perceive.

Challenge your clients: “Are we displacing the poor from a gentrifying neighborhood with this new development? Can’t we mitigate displacement by creating mixed income housing? Let me show you how that can work.

“Are we proposing a subdivision plan that excludes affordable housing. Can we accept city affordability incentives and increases integration and diversity?”

Raising these type of questions, based on your knowledge and expertise, is just as important a professional responsibility as challenging an unsafe design request from a client.

I believe that in order to create a new paradigm of inclusion, architects, designers, development professionals and community residents must work together. Neighborhood associations also.

Neighborhoods that feel threatened by development they don’t want will pick up these tools and use them proactively to shape the future direction of their communities in a manner that works for them and that benefits our city. I have seen this happen in Austin. But neighborhood leaders will need your ideas and skills.

Take a tour of Guadalupe or Blackland and see what is possible.

Let’s ask this question: “What does it mean to be a neighborhood? What does it mean to live in a city of many neighborhoods, many kinds of people, all of whom deserve an equal chance in life?”

More and more in Austin, being involved in a neighborhood means a lot more than regulating what color your neighbors can paint their houses, or making sure everyone cuts their grass. It means thinking hard about how neighbors can make the place they live an inclusive one, and making an honest assessment about what is the responsibility of the people who live in a neighborhood towards people of color or people with less means who need a chance to bring up their kids in a decent place.

When we are a city of people who care enough to build neighborhoods of inclusion and opportunity, Austin will be recognized as a truly exceptional place and we will attract and retain exceptional people of all ethnicities and incomes to live here.

• The right to choose,
• The right to stay,
• The right to equal treatment, and,
• The right to have a say.

If we listen to the advice of the low income community leaders who ask for these four rights, who today pay the high price of segregation and gentrification, we can begin to work to build what Dr. Martin Luther King, Jr. called The Beloved Community: Where families of all races, ethnicities and incomes can afford to live comfortably and safely and with a chance to all enjoy the fruits of Austin’s success.