By THOMAS G. COUSINS
Wall Street Journal
Sept. 13, 2013 6:42 p.m. ET
America’s greatest untapped resource isn’t hidden in the ground but is sitting in plain sight: the human capital trapped in poor neighborhoods of concentrated poverty. The people living where crime and incarceration are rampant represent trillions of dollars in potential economic activity. Investing in their well-being can be a social and economic game-changer, but only if done in a way that produces results.
For a half-century, charities, nonprofits and local and federal governments have poured billions of dollars into addressing the problems plaguing these Americans. But each issue tends to be treated separately—as if there is no connection between a safe environment and a child’s ability to learn, or high-school dropout rates and crime. This scattershot method hasn’t worked. A better approach is to invest comprehensively in small, geographically defined neighborhoods.
That’s what our East Lake Foundation has discovered, focusing on one corner of southeast Atlanta. Fifteen years ago, East Lake Meadows, a public-housing project with 1,400 residents, was a terrifying place to live. Nine out of 10 residents had been victims of a crime. Today it is a safe community of working, taxpaying families whose children excel in the classroom.
How did this happen to a place that police officers once wouldn’t go without backup? We targeted a single neighborhood in 1993 and worked with community and city leaders on every major issue at the same time: mixed-income housing, a cradle-to-college education program, job readiness, and health and wellness opportunities.
The results are stunning. Violent crime is down more than 90%. Crime overall is down 73%—a level 50% better than the rest of Atlanta. Employment among families on welfare has increased to 70% from 13% in 1995. (The other 30% are elderly, disabled or in job training.)
The income of these publicly assisted families has more than quadrupled. In the surrounding area, home values have risen at 3.8 times the city average (to over $250,000 per home). A Wells Fargo bank, Publix grocery and Wal-Mart have moved in, and restaurants, shops and other services have returned.
The foundation started by focusing on housing. In 1996 and 1997, the Atlanta Housing Authority helped us secure temporary housing for the East Meadow occupants while AHA and the foundation rebuilt the place as Villages of East Lake. With city and federal government approval, we reserved half the units for families on welfare and the rest for those able to pay the market rate. This was key: A mixed-income community ensures that children are around role models—employed adults who take care of property and spend time with their children.
After negotiating with Atlanta Public Schools to secure the city’s first public charter, we built Charles R. Drew School. The K-8 school, which opened in 2000, offered longer school days and an extended school year. It now serves 90% of the children in the East Lake neighborhood. Based on measures by the Georgia Department of Education, Drew is the top performing elementary school in the Atlanta school system.
The foundation also bought up surrounding residential and commercial properties, including the old East Lake golf course, once home to Grand Slam champion Bobby Jones. We restored the golf course, which created 179 jobs. Then came a smaller public course and a golf academy, where young people now learn the caddy trade and golf course agronomy. Today, East Lake Golf Club is the home of the annual PGA Tour Championship and final playoff for the FedExCup.
Thanks to private investors, such as Warren Buffett and Julian Robertson, we created Purpose Built Communities, which helps other neighborhoods adapt the East Lake model. The Meadows Community in Indianapolis and the Bayou District in New Orleans have achieved considerable gains by emulating the method in Atlanta.
Other organizations have slowly begun to adopt our approach. Habitat for Humanity, which once focused on putting up one house at a time, now partners with neighborhood associations, churches, business groups and the like to help lift up entire neighborhoods.
A better house by itself doesn’t make children feel safe. East Lake’s charter school alone doesn’t make children eager to learn. But a decent place to live, a secure environment with adult role models, and a great school with specially trained teachers together produced change. Recently, a young woman whose life began in the old East Lake public housing project, where less than 30% of children graduated from high school, graduated summa cum laude from Georgia Tech. She’s one of more than 300 Drew graduates since 2008 now heading to college.
On the national level, challenges like the ones we faced in southeast Atlanta are widespread and urgently need to be addressed. More than 25% of American children under age 3 live in poverty. Three million children drop out of school every year, rendering them ineligible for 90% of jobs. Only 59% of students graduate from high school in the 50 largest U.S. cities, and dropouts commit 75% of crimes.
These harsh realities make the way we choose to try to change them all the more important. Charities, foundations and government representatives are welcome to visit East Lake to check out this turnaround story. They won’t need to bring backup.
Mr. Cousins is the founder and retired CEO of Cousins Properties Inc., and the founder of Purpose Built Communities.