TOPICS > Nation > poverty

Can ‘neighborhoods of last resort’ be lifted out of poverty?

May 9, 2015 at 8:00 AM EDT
Across America, more and more Americans are living in what's known as "concentrated poverty," which can perpetuate the cycle of poverty for generations. The City of Atlanta has long struggled to find solutions for its areas of concentrated poverty. But one neighborhood, East Lake, has become a national model for its approach. NewsHour's Megan Thompson reports.


MEGAN THOMPSON: Jimmy Williams has lived on the south side of Atlanta for most of his 37 years. Even before he was born, white residents of the neighborhoods around here had begun leaving for the suburbs. And later, big employers like a nearby general motors plant shut down. Many areas around here have been struggling for decades.

JIMMY WILLIAMS: When I was growing up, this- Wow. When I was growing up, it’s- some of these streets, you better not walk down. Out of everybody that I grew up with, let’s see, I can count probably about five of ‘em that’s still living and not in prison.

MEGAN THOMPSON: After high school, things went south for Williams, too. His father had died, his mom had cancer and needed help paying medical bills. Williams’ minimum wage job at a grocery store wasn’t cutting it. So Williams says he did the only thing he could see to make enough money to pay the bills. He started dealing cocaine.

MEGAN THOMPSON: Did you see people doing what you did around you when you grew up?

JIMMY WILLIAMS: Yeah, I mean, that- that was the entire neighborhood. That’s what it was. That was the whole neighborhood. That’s how I got into it.

MEGAN THOMPSON: He ended up in prison for seven years. His mother passed away when he was in there.

JIMMY WILLIAMS: And that’s the worst thing that could have ever happened to me. Because I think about that every time I look at somebody selling dope on the street. I’m like, “Don’t you know the people that you love can leave you while you in the midst of your destruction? Don’t you know that?”

MEGAN THOMPSON: Stories like Williams’ are common in many neighborhoods on Atlanta’s south side. Experts say areas like this around the nation suffer from they call, “concentrated poverty.”

ROLF PENDALL: It’s a small number of neighborhoods where you have a large number of America’s lowest income people.

MEGAN THOMPSON: Rolf Pendall of the Urban Institute in Washington, DC, says there’s been a dramatic increase in the number of people living in high-poverty neighborhoods – almost 80% since 2000.

Places where people with money have fled … and companies have disinvested. Much of it compounded by a legacy of racism and segregation, he says.

ROLF PENDALL: And those who are left behind find themselves increasingly isolated in neighborhoods where no one wants to invest, and few people want to come in if they have a choice. The businesses don’t want to come in. Employers don’t want to locate there. So, those are neighborhoods of- of- kind of almost neighborhoods of last resort. It’s extremely difficult for the people who- who remain behind to- to get ahead.

MEGAN THOMPSON: How to turn around areas of concentrated poverty has been a question American cities have long grappled with. But experts like Pendall point to another neighborhood, about six miles away on the east side of Atlanta.

East Lake has become a model for one type of approach, supported by America’s second richest person, investor warren Buffett.

WARREN BUFFETT: The American dream has been very real for millions and millions of people over the years. But there’s been an American nightmare that has accompanied that.

And that’s where people that equally have tried to get educated and worked hard and had good habits have found themselves living a life that’s been on the edge throughout their entire lives and the same for their children. And America can do better than that

MEGAN THOMPSON: In 2009, Buffett, Atlanta real estate developer Tom Cousins and former hedge fund manager Julian Robertson helped fund a new organization called Purpose Built Communities.

The group now advises local non-profits and governments in high-poverty areas in 11 cities … including new Orleans, Columbus and Buffett’s home town of Omaha.

MEGAN THOMPSON: Its strategy is to fight concentrated poverty on multiple fronts all at once. It often starts by tearing down low-income housing projects and replacing them with mixed income units.

But it goes beyond housing. The model also includes building new schools … establishing health and wellness initiatives … there’s even job placement services. All of it coordinated by a local non-profit.

WARREN BUFFETT: You couldn’t do it piecemeal. You really had to have something that was transformative in nature.

MEGAN THOMPSON: Purpose Built Communities’ work is modeled on what began as an experiment on the east side of Atlanta in the 90’s … a time when, across Atlanta and the U.S., many big public housing projects were being torn down and replaced with mixed-income developments.

SHIRLEY FRANKLIN: This was the only community in the city that I would not drive to alone. I was terrified.

MEGAN THOMPSON: You were scared to come here.

SHIRLEY FRANKLIN: I was scared to come here alone.

MEGAN THOMPSON: Shirley Franklin is the former mayor of Atlanta … and now the head of purpose built communities – the group Warren Buffett supports.

MEGAN THOMPSON: So, when we talk about concentrated poverty, this- this was it.

SHIRLEY FRANKLIN: This was one of the worst examples.

MEGAN THOMPSON: The neighborhood was home to a dangerous housing project called east lake meadows… and bordered a once-famous golf course that had also fallen into disrepair. But step by step, tom cousins, the City of Atlanta and other partners tried their experiment.

They knocked down East Lake Meadows, and replaced it with new apartments, half subsidized, half market-rate. They built a new charter school. The wellness part was solved by opening up a YMCA, and the neighborhood’s first grocery store in 40 years.

There were job placement services for residents, too. And the East Lake Foundation was launched to coordinate all the work. Like the other mixed-income developments going up around Atlanta at the time, there were also new rules. You had to have a job to live there. And, a criminal record made it harder to get in. East Lake began to change….and word was getting out.

To people like Marilyn Hack, a mother of three who was anxious to move out of a high-poverty neighborhood.

MARILYN HACK: There’s saying about being a product of your environment and I was just worried about that. That they’ll get caught up and they won’t be ambitious and they won’t- So, that’s why when they came home, it was always, “Wash your hands. Get a snack. Homework.” Always. And I still do it to this day. Always.

MEGAN THOMPSON: But you were afraid that no matter how hard you tried there- it could be that this environment might impact them in ways that you just couldn’t control.

MARILYN HACK: Yeah. That’s why when a neighbor came and told me about this community that had- “Oh, there’s some place accepting applications and we should try it.”

MEGAN THOMPSON: In 2000, hack moved in to East Lake. The single mother who had been making 10,000 a year as a nurse’s assistant…earned two associates degrees and found a new job with the help of the east lake job center.

Today, she makes $60,000 a year as a registered nurse and has her own business teaching CPR. Her oldest two kids went to college – one even got a PhD. And her 18-year-old is going in the fall, with a scholarship from the East Lake Foundation.

MARILYN HACK: My big thing was, we’re gonna get college degrees. We are all gonna get college degrees. Two degree minimum. That was my thought, my goal, my everything.

MEGAN THOMPSON: Supporters say Marilyn’s story illustrates just how east lake has improved the lives of the low-income people who came to live there. There are other measurements, too.

Violent crime there is down by 90%…and student test scores have risen dramatically. A federal program is even now trying an approach similar to East Lake’s. The golf course was also restored, and today hosts the culminating event during the PGA playoff championships.

The club’s proceeds help fund the east lake foundation, which continues the work in the community…the work now being replicated in other cities.

MEGAN THOMPSON: Here at East Lake, you have a very wealthy man who’s made this his personal project. You’ve got a very famous golf course next door that’s generated millions of dollars to help support the work. Those are some really unique circumstances here. How can other cities replicate the model when they might not be so lucky?

SHIRLEY FRANKLIN: Well, every city and every community has some assets. And our model does not require a golf course. And we have found that money is not the hardest part of this The biggest obstacle is committed leadership, who’s willing to work across all sectors, and with all sectors of the community to find a plan that works for them.

MEGAN THOMPSON: The development at East Lake didn’t come without controversies, either. Rising property values mean the surrounding area’s become less affordable. And there are fewer apartments for low-income families than there used to be.

The original project had 650 subsidized units … today there are only 270 – the rest are market-rate. One study found that many of the people forced to leave when housing projects were torn down across Atlanta just ended up in other high-poverty areas.

MEGAN THOMPSON: So, did the project solve the problem of concentrated poverty or were people pushed out? Was it- the problem pushed to other parts of Atlanta?

SHIRLEY FRANKLIN: We- we have a problem, if what we try to do is, in my opinion and in my experience, if we’re not willing to shake the whole thing up. In other words, if we’re not looking- we’re not willing to change the paradigm.

SHIRLEY FRANKLIN: the question is – what might work. We believe that you have to have that mix of income – both to attract the amenities and- and the support, but also to well serve the people who are at the lowest end.

JIMMY WILLIAMS: Things have got to change around here …

MEGAN THOMPSON: Jimmy Williams hopes his neighborhood on the south side of Atlanta will change the way the east side has.

JIMMY WILLIAMS: There’s an apocalypse that’s happening every day, and it’s called poverty.

MEGAN THOMPSON: After prison, he started his own contracting business and is dedicated to improving the impoverished neighborhoods around here – rehabbing abandoned homes and building an urban farm.

Doing what he can to keep kids from falling into the same traps that he did…traps that just don’t seem to go away.

​Chasing the Dream: Poverty and Opportunity in America is a multi-platform public media initiative that provid​es a deeper understanding of the impact of poverty on American society. Major funding for this initiative is provided by The JPB Foundation. Additional funding is provided by Ford Foundation and the Annie E. Casey Foundation.​