America’s poor caught up in clash
between cities and nonprofit groups
By Tony Favro, USA Editor

21 June 2006: The City of Rochester, New York (population 220,000) has a generally poor but vibrant Latino population of 30,000. In 2005, a private developer announced plans to build a multi-million dollar enclosed market in the heart of the Latino community. The plan was contingent on the City of Rochester purchasing and demolishing an adjacent building. The building was not in the way of the proposed market, nor was it unattractive. But it contained a nonprofit needle-exchange clinic, where drug addicts could trade their used hypodermic needles and syringes for new ones.

Because the clinic could not find another neighborhood willing to accept it, the building’s owner refused to sell. The City of Rochester then agreed to acquire the building through an expensive and controversial eminent domain process, a legal maneuver, which allows US municipalities to confiscate private property for beneficial public purposes.

During his successful 2003 campaign for mayor of San Francisco (pop. 777,000), Gavin Newsom released a plan to use arts and culture to boost the city’s economy, which had not fully recovered from the collapse of many Internet-related businesses in Silicon Valley. The campaign document called for a “policy to address homelessness and homeless shelters and create a safe and welcoming public realm, making San Francisco friendly to cultural tourists, residents, and businesses.” Upon election, Mayor Newsome quickly signed into law an anti-panhandling ordinance intended to prevent homeless people from asking for money on city streets.

The situations in Rochester and San Francisco are emblematic of what is happening in large and small cities throughout the United States. Cities are dependent on the vital social services that nonprofit agencies deliver, but the needy clientele those agencies attract makes restoring economic vitality to downtowns and urban neighborhoods much more difficult.

The tension between cities and nonprofits has intensified in recent years as federal funds for community development increasingly bypass city governments and go directly to nonprofits. In 1985, there were 35,000 nonprofits involved in human services according to Independent Sector, a US nonprofit advocacy group. In 2005, there were 93,000. That averages out to about eight homeless shelters, legal service providers, food pantries, needle exchanges, and the like setting up shop each day for the past 20 years. This number does not include facilities run by religious organizations which have proliferated since the Bush administration began its Faith-Based and Community Initiative in 2000. Most social service facilities operate in central cities where the poor concentrate by necessity, because, unlike American suburbs, urban neighborhoods typically offer abundant affordable housing and convenient public transportation.

History of a controversy
Perhaps the first major clash between an American city and its nonprofit sector occurred in 1996 in Hartford, Connecticut (pop. 122,000). The Hartford City Council imposed a temporary moratorium on the siting or expansion of all nonprofit service facilities, and then followed it up with zoning changes making it difficult for new social service providers to set up shop.

Hartford, to give one example of the concentration of services, had 32 different drug rehabilitation facilities within its 16-square-mile corporate boundaries.

At public hearings in Hartford, city officials argued that it was difficult to market a neighborhood with food pantries and homeless shelters to restaurants and small businesses – the kinds of street-level activity that healthy cities need. They further argued that nonprofits, which don’t pay property taxes in the US, were taking too much property off the tax rolls to the detriment of all city residents and businesses. More broadly, city officials made the case that the stronger the social service industry becomes, the harder it becomes for any city to wean itself of its need for such services and experience genuine economic recovery.

For their part, social service agencies argued that the city of Hartford was attacking its least powerful constituency, the poor. There were also accusations of child neglect and racism.

Hartford residents, most of whom were poor or working-class, supported the city’s moratorium on nonprofits. They too seemed to believe that efforts to preserve their fragile neighborhoods were undermined by the presence of social service providers.

Hartford was the tip of the proverbial iceberg. In 1997, Portland, Maine (pop. 64,000) outlawed social service facilities on its long main street, the first of many US cities to legislate the location of facilities.

In 1998, Fort Lauderdale, Florida (pop. 152,000) rewrote its zoning code to ensure that residential facilities such as drop-in centers for troubled youth and soup kitchens had at least 500 meters between them. Many American cities have since used zoning to prevent the clustering of service providers.

Beginning in 1994 in Evanston, Illinois (pop. 74,000), and accelerating at an increasing rate in recent years, cities throughout the US, from Atlanta, Georgia (pop. 416,000) to Worchester, Massachusetts (pop. 173,000), have enacted anti-panhandling and anti-loitering laws to keep homeless people off city streets, especially in downtown business, entertainment, and tourist districts. These measures generally have broad public acceptance as legitimate protections of both quality of life and public and private investments.

Other attempts to reconcile the need for economic development with the need for social services are seemingly more benign.

Rochester worked with the local United Way, a major funder of service providers, to open multi-million dollar, one-stop community centers in each quadrant of the city. An array of services is located in each community center, rather than dispersed on city streets.

Cities such as Chattanooga, Tennessee (pop. 156,000) and Portland, Oregon (pop. 529,000) developed new comprehensive master plans by identifying the assets of all city neighborhoods. The cities’ poorest neighborhoods were encouraged to think of themselves not as dens of social pathologies but as potential-filled communities that, if they organized themselves, could build on their assets. Both businesses and human service agencies were then enlisted to help develop the citizen-enunciated assets. Asset-based planning is becoming the norm in the United States.

A relatively recent nonprofit/business hybrid, Community Development Corporations, using entrepreneurial models and working closely with both city governments and social agencies, tout their potential as engines of economic development in poor urban neighborhoods. However, they have produced mixed results at best.

No end in sight
The tension between American cities and their social service agencies is likely to continue, and even intensify. American city governments are too poor to launch full-scale anti-poverty or economic development programs on their own. They find themselves in the unenviable position of having to ask the state and federal governments for more money for services for their poor residents, while erecting barriers to where and how those services can be offered.

Moreover, as nonprofits proliferate they become both a larger presence in the local economy and more influential political players. At the same time, the economic vitality of cities increasingly depends on partnerships with the business community – a sector that has been reluctant to include human service agencies in its real estate development plans.

While no one can crystal ball the future, it seems clear that the prospects of urban America are tied in large measure to the evolving relationships between cities and their nonprofit sectors.

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