Chairman Jeff McKay:

One of the challenges we have in Fairfax is everyone knows this to be a very wealthy, progressive community, but a lot of times we forget that there are parts of the county that feel like and in some ways literally have been, in my opinion, left behind and left out of the equation.

Robert McCartney:

Welcome to Think Regionally, a monthly podcast sponsored by the Metropolitan Washington Council of Governments or COG. I'm your host, Robert McCartney. This is the second of two episodes on Equity in Action. Last month's episode, looked at paths to overcoming inequity in the health sector. Today we're looking at economic development. We're talking about how area governments and other institutions are seeking to lift up neighborhoods that have suffered from chronic poverty, low life expectancy at education levels, and often poor transportation connections and job opportunities.

In addition to Chairman McKay, I'll be talking with senior representatives from private business and philanthropy. We'll hear about major investments in disadvantaged neighborhoods and tools to boost equity through philanthropic efforts related to home ownership, government funded baby bonds, and much more. We'll start by hearing more from McKay, who was raised along the Route 1 Corridor, a less advantaged eastern section of Fairfax County, which he now leads.

Chairman Jeff McKay:

For me, this is personal and I think what we see in some areas of the county, is we see growth patterns in the past that have been done, that pretty much isolate what we call islands of disadvantage, where you have pockets of significant poverty without great access to jobs and opportunity, zoning, things that have been put in place over time that perpetuate what I would consider to be these islands of disadvantage.

Robert McCartney:

So what are the best strategies that you're finding to lift those communities economically?

Chairman Jeff McKay:

We'll use Route 1 as an example first, because that is an area that we've invested the most time in this space. And in that particular case, a strategy is to bring state of the art infrastructure. So we have good infrastructure in place. What we don't have is really good mass transit. And mass transit, of course, is a game changer when you think about land use planning and redevelopment. And so our comprehensive plan calls for bus rapid transit. It's a $1 billion infrastructure investment that is a game changer for the Route 1 Corridor, that will finally help people in that area believe and see firsthand, that the county is willing to spend money in parts of the county that people feel like have been left behind.

The other strategy is we take a look at the root causes that hold areas back. In areas like Route 1, it's a lack of employment opportunities, a lack of workforce development opportunities. And so we've put a lot of money and effort into putting a workforce innovation center right in Hybla Valley. We have the old Mount Vernon High School that we're going to repurpose for job training academy opportunities. We have a dual enrollment program at Mount Vernon High School, to help kids get college credits while they're in high school, so that we're producing a workforce on the highway that can take advantage of higher quality jobs and higher incomes.

Robert McCartney:

Fairfax has been formally committed to promoting equity since 2016 in an initiative called One Fairfax.

 

Let's turn to the one Fairfax program. So what are some examples of how the commitments to consider equity have affected or may affect policy decisions?

Chairman Jeff McKay:

They've been profound. I look at what we did during COVID as exhibit A. We put in place a plan to do equity clinics, to go into communities, to vaccinate people in their communities, to have spokespeople in the community that can be trusted, not just government. We had a huge equity focused COVID response.

One micro example, just so people know the extremes that we're dealing with here and why this is important in every decision, domestic violence in the county happens everywhere. It's not income driven. Yet, we had one domestic violence shelter in the county a few years ago in the western part of the county, which meant if you were a victim of domestic violence in the Route 1 Corridor, Springfield, Mount Vernon, you were pretty much out of luck. You would've to upend your whole life to go to a DV shelter in the western part of the county. We had been fighting for that, me and the Mount Vernon district supervisors for many, many years to get a DV shelter in the Route 1 Corridor. And it's only when we overlaid our one Fairfax lens and we looked to our other eight colleagues and said, "Here's what the data shows. How can we not have a DV shelter in this part of the county?"

Robert McCartney:

McKay noted that overcoming inequity in the region would go a long way to relieve many of what he called the area's biggest headaches.

Chairman Jeff McKay:

It is a regional headache that we are so far behind in affordable housing. It is a regional headache that we have climate issues that need to be addressed through better land use plans. It is a regional headache that we have areas that are economically depressed, that are located in places where that should never be the case. And it is a regional headache that we all have antiquated zoning issues that have to be broken down and dismantled, so that we look at a new way of developing complete communities in the future, where you have higher quality jobs, but you also have higher density housing, walk-ability, retail opportunities that come with those.

Robert McCartney:

Now let's turn to the private sector's role in advancing equity. I spoke with Daniel Okonkwo of JPMorgan Chase. He is the East Region executive for global philanthropy for the banking giant. JPMorgan Chase has pledged to commit $30 billion over five years for a variety of racial equity initiatives, especially for mortgages and small business loans in black and brown communities. Some of that money will be part of a $4.7 billion equity project in the Washington region, backed by JPMorgan Chase and a number of other large area employers grouped in the Greater Washington Partnership. I asked Okonkwo why the business community should make it a priority to promote economic and racial equity.

Daniel Okonkwo:

We have to listen to the communities in which we're working and we have to be invested in the success of those communities. And I think in order to do that, recognizing the different levels of investment, whether it be public or private resources, historically in this region have produced some inequities. And so for us to be successful as a business, and I think for businesses to be successful, we have to kind of even the playing field.

Robert McCartney:

So some of these initiatives obviously are costing some resources of the bank and probably, I would say definitely, not necessarily in the areas where you're going to reap the biggest return. So how do you justify that commitment of resources given the bank's obligation to maximize return for shareholders?

Daniel Okonkwo:

When we look at what we want to be doing in this community, the more businesses that are viable, the more potential business customers we have. If have a more inclusive economy, that can also result in more customers. So I think what we were taking is a long view, that as the region becomes more prosperous, as we bridge this racial wealth divide, that there will be a return on investment.

Robert McCartney:

So what kind of initiatives does JPMorgan Chase have that work toward this effort?

Daniel Okonkwo:

So on the business side, we've done things such as open up community branches. So these are our branches in the area that have a space for the community to gather. Banks typically open 9:00 to 5:00, when they close at 5:00, that's it. What we've done is opened up our space to be open later to allow for nonprofits to gather, for us to run programming out of those locations. They're doing things like financial health programming, so holding classes and seminars on financial health, on home buying, disseminating information and helping to raise the financial literacy of communities.

We also have a Chase Small Business Mentorship Program, where we have individual consultants who will go out and mentor small businesses. One of the other areas that we've done this is in the supplier diversity space. How can we make sure that the folks that are supplying those big institutions include black and brown owned and diverse owned businesses? That program now has a line item in the DC budget.

Robert McCartney:

So let's talk about the obstacles to this effort. It's laudable effort. COG is committed to it. I'm committed to it. So what are the main challenges that businesses face as they work to advance equity and overcome the racial wealth gap? Is it a question of resources? Is it a question of policy? Is it a question of political will? What are the obstacles?

Daniel Okonkwo:

It's kind of a stew of all of those. I would say, first off, I think we have to recognize that as we try and bridge the racial wealth divide, we're not talking about combating something that was built up over the last five years. We are talking about-

Robert McCartney:

Like 500 years!

Daniel Okonkwo:

Exactly. We're talking about big systems and systems that are intertwined with each other, systems that are self-reinforcing. And so systems change, its not quick work, it's not easy work. It takes political will, it takes capital. It takes policies that reflect both of those things. And I think that's what we're trying to do in this region, is not just pump philanthropic dollars into communities. There is a place for that, but we also have to change employer behavior, both on the supplier diversity side, on how we train and up-skill and educate the workforce.

Robert McCartney:

Some philanthropic institutions and others in the nonprofit sector have been ahead of the curve in pressing for action, to overcome structural inequities related to income and race. I spoke to Tonia Wellons, Chief Executive Officer of the Greater Washington Community Foundation. It is the area's largest funder distributing about $70 million in grants every year to a broad range of non-profits. Last year, the foundation formally adopted a strategy committing itself to focus on promoting economic and racial equity.

Tonia Wellons:

So I think it's important that the nonprofit sector focus on increasing economic mobility and closing the racial wealth gap, because it's probably one of the most persistent issues that contribute, to all of the other things that the nonprofit sector is looking to solve for. And I think so much of our focus has been on sort the crisis response, where we're really, really good at responding to these emergency needs, sometimes to the detriment of really having a focus on the broader horizon in the future.

Robert McCartney:

Wellons described two broad policy changes that nonprofits could support to lift historically disadvantaged communities. The first was through changes to make it easier and more affordable to achieve home ownership. The other was raising the income cutoff levels for public benefits. That is to allow recipients to earn more money without losing housing or childcare assistance.

Tonia Wellons:

So I would include home ownership as one of those issue areas or opportunity areas, including some policies around home ownership. I would look at from a policy perspective, I would look at the benefits cliffs. One of the things that is keeping a lot of our lower income families from moving from stability to mobility, is that the moment that they get, whether it's a raise or something that puts them over the income qualification line for certain public benefits, they lose the benefit.

And what many of us would argue is that they need more time, sometimes when it comes to having access to a public benefit, plus the ability to amass some resources, so that they could pay down debt, or accumulate enough to buy a car, or to invest in a home. But one typically shuts down once you reach a certain level and it's counterproductive and it keeps poor families and low income families in a perpetual cycle that's hard to get out of.

Robert McCartney:

Wellons also called for two new government programs to advance equity, guaranteed basic incomes and children's savings accounts, also known as baby bonds. Both have been tested already in small pilot projects around the country and are getting a look from elected leaders in our area. For instance, Maryland's governor elect, Wes Moore has proposed children's savings accounts as a prominent feature of his agenda.

Tonia Wellons:

There are strategies that we implored during the course of the pandemic, that we knew would immediately change the trajectory of whether someone was able to weather the storm or not, right? So there was a lot of investment in cash transfers through... The universal term is guaranteed basic income, and a lot of us did it as pilots, because we knew that people needed money in their hands right now. There wasn't enough, I would say counseling services or other services that could top an immediate infusion of cash, so that people can decide whether they needed to pay the rent, get your car repaired, or pay the cost for your prescriptions.

Cash transfers are one important strategies that philanthropy right now are making big bets on. The other big bet we're looking into are children's savings accounts. So in key element of our strategy, because we've seen the data that one says in a generation, it has the potential to close a racial wealth gaps by about 28%.

And it also shows that when you invest in children's savings accounts, children with trusts’ assigned to them perform better in school than those who do not. And they're four or five times more likely to attend college, than kids who don't have an educational investment that's assigned to them. So we're putting a lot of bets right now on modeling what children's savings accounts could look like with the hope, with the expectation that in –DC already has a baby bonds initiative – But we're looking at how we can motivate our peers in Maryland and in Virginia to consider the same options, particularly for low income families and kids.

Robert McCartney:

Like the Council of Governments and many other institutions, Wellons' Community Foundation is using local geography to target its efforts. It's focusing its work on neighborhoods with lower incomes and high minority populations, also identified by COG as equity emphasis areas. For instance, the foundation is aiming its grants for workforce development at about 20 specific neighborhoods across the region that are most in need.

Tonia Wellons:

Yea, I'm pretty excited that we got a chance through the course of our strategic planning, to really spend time looking at how can we make our philanthropy have the biggest impact? How can we even influence our fund holders to direct their philanthropy in a way that yields the biggest impact? And for us, it was really landing on a “neighborhood's” strategy. We've identified, again, using the equity emphasis mapping tool, using data that we were able to pull through a partnership with Bookings Institution, to look at key indicators like life expectancy, income, home ownership rates, overlay those factors with where density around communities of color, Black, Latinx, other, and really get clear on the areas, the neighborhoods, the zip codes in our region, that should require our greatest attention and philanthropic investment and coordination. And so the COG tool was incredibly helpful in getting us to what those key neighborhoods and areas are.

Robert McCartney:

In conclusion, I share some of my own thoughts. At the local level, public and private institutions are committing themselves to lift poor, historically disadvantaged communities, which in the Washington area have high minority populations. The goal is to end the economic inequities at the root of so many of our social problems. Each sector has a role to play. Government must provide mass transit and other infrastructure to overcome historical isolation and improve job opportunities. It needs to foster livable, walkable, mixed use communities in areas now filled with strip malls and highways.

Business must be sure that financing and other support are available to low income populations for home purchases and business startups. Philanthropy can target its efforts at poorer neighborhoods and advocate for policy changes, such as adjusting benefit cutoffs. All sectors need to guarantee that people can get workforce training and other aid to acquire skills that lead to better jobs.

They all can be sure that minority businesses are getting their fair share of contracts and that marginalized populations don't get overlooked. But if anything, get extra attention when it comes to everything from pandemic relief, to locating a domestic violence shelter. Ultimately to really move the needle on inequity, it will probably be necessary to institute ambitious and frankly expensive social programs, such as guaranteed basic income, or children's savings accounts. We aren't there yet, but there are signs that we’re on the way. All in all, this is a noble, virtuous effort that deserves all of our support.

I hope you've enjoyed this podcast. We welcome your feedback. Please email comments to thinkregionally, one word, @mwcog.org. This podcast is produced by Janele Partman and Lindsey Martin. Look for our next episode next month on fighting homelessness, just in time for winter weather. This is your host Robert McCartney, urging everyone to think regionally.