About This Study:
A Letter from the Community Affairs Officers of the Federal Reserve System
In May of 2006, the Community Affairs Officers from the 12 Reserve Banks and the Board of Governors heard a presentation on concentrated poverty from Alan Berube of the Brookings Institution and Paul Jargowsky of the University of Texas at Dallas. The context for the discussion was the question of how to rebuild New Orleans after Hurricane Katrina, particularly given the devastation of the housing stock in the city’s low-income neighborhoods. Yet, as quickly became apparent during the meeting, underlying the conversation on rebuilding the city was a less tangible and potentially more difficult challenge. The storm revealed that, for individuals who reside in impoverished communities, replacing physical infrastructure alone may not be enough to generate and sustain community development and well-being.
This need for a deeper understanding of the relationship between poverty, people, and place—not only in New Orleans but in communities across the country—struck a chord in us. The Community Affairs offices of the Federal Reserve System have a shared mission to support economic growth objectives by promoting community development and fair and impartial access to credit. Each of the 12 Reserve Banks establishes distinct programs and responds to local needs in its district. But as part of a nationwide entity, the Community Affairs offices also have the ability to collaborate on projects, to share information and resources, and to work together to support community development at regional and national levels. Given this unique structure, we saw an opportunity to study the issue of concentrated poverty in communities across the country—to draw on our local knowledge and, at the same time, pull the local stories together in a way that allowed us to share more broadly the commonalities and differences among places.
In this report, we profile 16 communities of concentrated poverty, in areas as diverse as Cleveland, Ohio, El Paso, Texas, and the Blackfeet Reservation in Montana. We want to state at the outset that it is not the intention of this publication to explain poverty causation. Poor people, and the communities they live in, have been the subject of serious study and debate for decades. Rather, our goal is to add texture to our understanding of where and how concentrated poverty exists, by studying new areas and by interviewing local stakeholders, including residents, community leaders, and government representatives, to understand how concentrated poverty affects both individuals and communities. We believe this report will contribute to the public conversation among policymakers and practitioners about the relationship between people and place, and ultimately to a comprehensive policy discussion on poverty alleviation and community reinvestment.
Most important for us in Community Affairs, conducting this research has helped us identify new ways we can collaborate with our government, nonprofit, and for-profit partners to help address challenges in high-poverty communities. As this report demonstrates, poverty did not appear overnight; it will likely take comprehensive strategies and many years to successfully address it. In the meantime, we will continue to identify and act on opportunities to support and collaborate with communities across our districts in fulfilling our mission to promote economic development along with fair and impartial access to credit.