Introduction

With 13.7 million Americans looking for work, it is not surprising that the February 2011 Community Indicators survey showed that unemployment remained at the top of the list of challenges facing lower-income communities in the Federal Reserve’s 12th District. Forty-four percent of respondents chose unemployment as the greatest challenge facing LMI communities, followed by conditions in the housing market, the public sector budget crises, and the capacity of nonprofit service providers to respond to the crises. (Figure 1) Overall, answers were not significantly different from responses to the September 2010 survey, with the exception of a small drop in the percent of respondents selecting housing market conditions as the key challenge, and a small increase in concerns over access to credit. Notably, as we discuss further below, the qualitative responses in our second survey emphasized the compound nature of the current challenges facing LMI communities, noting the interconnections between unemployment, foreclosures, and access to affordable housing.

Respondents also stressed that the economic environment for LMI communities doesn’t seem to be improving. Indeed, across all the indicators, respondents reported that conditions in LMI communities are getting worse, not better. (Figure 2) This sentiment was expressed most strongly regarding public budgets and funding for nonprofits: the sustained cuts to funding for social services are having a clear impact on the community development field’s ability to respond to greater demand for services such as foreclosure counseling, affordable housing and homeless shelters, and workforce training. Interestingly, although 2010 saw a consistent decline in mortgage delinquencies, respondents still perceived that foreclosures and the volume of abandoned and/or vandalized properties were getting worse. In part, this may be due to the fact that overall levels of delinquencies are still extremely high, and visible improvements at the local level may lag the actual numbers.

Survey responses pointed to another factor that may be influencing the perception that conditions continue to worsen: the length and depth of this recession has affected more families and more communities than ever before, and the effects may simply be “more visible.”  Respondents said  that they encounter these effects on a daily basis, noting “the increase in the scavenging of the recycling bins in neighborhoods on trash pick-up days and selling of items from vehicles or from street corners,”  and indicating that “neighborhoods continue to decline, the garbage piles up and the yards continue to worsen.”

More positively, many of the surveys highlighted local innovations, including programs focused on neighborhood stabilization, technical assistance for small businesses, and efforts to improve educational outcomes among non-English speaking youth. To help communities more fully recover going forward, respondents called attention to the need for more extensive institutional collaboration and improved targeting of interventions to specifically address the needs of different LMI communities.