Bush Needs to Keep Banks in the Grass-Roots Aid Equation

There’s a direct line between the seven neat new homes on the corner of 16th and South Throop streets here and the White House office President Bush opened last month to promote faith-based and community solutions to the most intractable problems of urban America.

Ten years ago, this corner in the mostly Mexican American neighborhood of Pilsen was rubble--a vacant lot strewn with garbage on a street scarred by drug-dealing and decay. But the vacant lot became a canvas for the Resurrection Project, a nonprofit community development corporation founded by six neighborhood Roman Catholic churches.

With the help of federal subsidies, it financed and built these homes; since then, it has built more than 110 other houses throughout the neighborhood, and expanded into new services such as operating a bustling day care center that serves about 200 children. “The whole message we put out is that the challenge is not to move to a healthy community, it’s to build one,” says Raul Raymundo, the group’s executive director.

The broadening network of faith-based charities and nonprofit community development corporations operating in America’s most troubled neighborhoods hasn’t eradicated crime, drugs, family breakdown or joblessness; there still are broken beer bottles glinting in the pale winter sun just across the street from the Resurrection Project’s new homes on Throop.

But with little national attention, these groups are building a bottom-up system for delivering critical services, from the construction of new homes to job training, drug counseling and day care. Now these local efforts have reached a critical mass that has made it plausible for Washington to look to them for solutions. “I don’t think 10 years ago you could have begun this type of initiative,” says John J. DiIulio Jr., the director of the White House office meant to increase government cooperation with religious and secular community groups.

Two distinct sets of organizations have driven the grass-roots revival Bush hopes to accelerate. One are community development corporations--nonprofit, locally based groups that historically have focused most on economic development and building homes in neighborhoods where private developers won’t invest. One recent study found that fully 3,600 CDCs are operating in virtually every major city.

The other principal players have been faith-based charities. Like the CDCs, they have grown into a formidable force: A 1998 survey found that 40% of America’s 353,000 religious congregations said they operate significant programs aimed at social needs such as day care, job training and drug counseling.

Several factors have converged to power the expansion of the CDCs and faith-based charities. One is the sheer accumulation of experience. Both groups enjoyed the luxury of struggling through their learning curves without much public attention to their early failures through the 1970s and 1980s. Now, the activists running these organizations have learned from the experiences of their predecessors.

DiIulio, who studied these groups as a University of Pennsylvania professor before taking the White House job, points to a second factor: the emergence of less-ideological managers who have provided the grass-roots organizations with results-oriented leadership similar to the style employed by pragmatic second-generation African American mayors such as Detroit’s Dennis Archer and Cleveland’s Michael White.

These organizations also have thrived because they are in tune with the basic policy currents of the times. Like many of the last decade’s best social policy programs, they offer decentralized solutions; the small-scale, owner-occupied homes that Resurrection is building stand as a profound generational contrast to the vast and massively troubled Robert Taylor Homes and Cabrini-Green public housing projects just a few miles away.

And the groups fit the times by constructing programs that demand responsibility while offering opportunity. CDCs, for instance, have rigorously screened buyers and renters at the same time that public housing officials have had to grapple with court and congressional decisions that reduce their authority to reject potentially disruptive tenants.

“We spent a lot of time and money building this stuff,” says Raul Hernandez, a steelworker who chairs the Resurrection Project’s board. “And if [prospective buyers or renters] don’t care, we don’t want them to be part of it.”

Finally, the groups have benefited from increased partnership with foundations and the government. Today’s grass-roots groups generally have avoided the confrontations with mayors common among more ideological neighborhood organizations in the 1960s and ‘70s. And over the last decade, they have attracted steadily more sympathetic attention from Washington.

Former President Clinton expanded Washington’s support for these groups down two tracks. Along one, he promoted measures to encourage more bank lending and private investment in urban neighborhoods, most importantly by intensifying enforcement of the Community Reinvestment Act, the law that requires banks to lend in all neighborhoods they serve. Down the second track, Clinton looked for ways to increase government contracting with the groups.

Bush already has signaled that he wants to push further down that second track. DiIulio’s office will provide new grants for innovative grass-roots programs and lobby the major federal departments to contract more heavily with secular and religious local groups.

But it’s less clear whether Bush will maintain Clinton’s efforts to encourage more private lending in urban neighborhoods, which is at least as vital to the grass-roots groups as government contracts. Though administration officials generally have praised the reinvestment act, many activists fear that Bush, in his suspicion of federal regulation, may side with congressional Republicans and banks who believe that the law is too onerous.

They’re right to worry. If Bush dilutes the reinvestment act, he could take away more with one hand than he gives the local groups with his new grants in the other. That would be more a breach, than an act, of faith.

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See current and past Brownstein columns on The Times’ Web site at: https://www.latimes.com/brownstein.