Our Voice: Kate Wolford: Charting a course in unsettling times
November 18, 2009 - In her keynote speech at Twin Cities Compass' annual meeting in St. Paul, McKnight's president explores the crucial role of data in maximizing the impact of philanthropic resources, especially in turbulent times.
Good morning. I am pleased to join with all of you at the second annual meeting of Twin Cities Compass.
McKnight has collaborated with Wilder since the mid-1970s and we highly value the role it plays statewide through research and in direct service and community development in St. Paul. I would like to acknowledge Tom Kingston and the board of Wilder for their exemplary leadership in these unsettled times.
Gathered today are civic leaders and representatives from the public, private, and nonprofit sectors. We are all here because we care deeply about the future of our region in these unsettled — and unsettling — times.
In philanthropy, we benefit from tremendous freedom about how we deploy our resources. We can incent, leverage, and even cajole (in a "Minnesota-nice" way, of course) through how we deploy our resources. We can take risks. We can commit over a long-term horizon and not feel pressured by the issue or crisis of the day, a characteristic surely envied by the public officials here today. On the other hand, our financial resources are really quite modest for the ambitious goals that most of us set — especially when we are seeking policy and systems change.
So how do we maximize the impact of resources committed for public benefit, especially in turbulent times? How do we chart our course amid continued economic upheaval, major demographic shifts, and glaring disparities in our region?
Good intentions are important, but certainly not sufficient. Neither is reliance on our own experience, which is by its very nature limited and parochial. Data, research, and evidence should guide the strategies and tactics we choose to achieve our goals. And we need to be willing to periodically assess the effectiveness of those strategies. Discipline and rigor become more important, albeit more challenging, in unsettled times.
A quick reference to charting a course in sailing introduces the critical role of data. Sailors make use of lots of data. To chart a course from point A to B, you will look at navigation charts, tidal charts, and data on wind direction and speed. When you sail time and again in the same waters, you can rely on past experience to a greater extent, but you still want to check the weather reports, your gas gauge, and some other basic indicators each time you set out. When you head into unfamiliar waters, however, you better do a thorough review of lots of data, including navigational hazards, currents, and water depth. Otherwise, I can assure you from firsthand experience, you can easily run aground! Data always matters, but data and the ability to analyze it effectively matter even more in unfamiliar and unsettled waters.
Herein lies the value of Twin Cities Compass, providing all of us with easy access to timely and credible data and trends on key indicators in our community, as well as links to more in-depth research. McKnight taps into most of the issue areas in Compass, but today I will use affordable housing to illustrate the theme of "charting a course in unsettled and unsettling times." Subprime lending, massive foreclosures, and neighborhood destabilization, and the Great Recession… Need I say more to signal the magnitude of change and turmoil in the housing field?
Back in the "old normal" a mere two years ago, McKnight established new housing goals and strategies after looking at lots of research and best practices in affordable housing nationwide. We committed to:
Our first stop was the Twin Cities Compass housing benchmarks, which we knew we could rely on as a starting point for establishing a baseline and against which to track our progress. Among the measures we are tracking are the number and location of permanently affordable housing; the percentage of new or renovated affordable housing that meets green criteria; the level of federal, state, and philanthropic support going to produce affordable housing; and the level of gap funding available to get it done. Rich data provided by Housing Link, another valued partner, adds deeper dimension in tracking foreclosures and their impact on minority homeownership opportunity in Minnesota.
The McKnight Foundation plays a key role in helping and incenting the various stakeholders in the field of affordable housing to a collective discipline of analysis and innovation. That discipline dovetails well with Compass’s emphasis on "know" and "do."
In housing, as on many issues today, we can’t build our strategies on the assumption that if we just wait long enough, we will return to what we knew before this economic crisis. The context and the rules have changed. The housing field will look different and function differently than it did going into this crisis.
Speculative practices and predatory lending destabilized neighborhoods in our region. The calculation of risk — which drives available financing — is changing. The availability of credit to many homeowners will not be the same going forward, and this calls into question whether Minnesota’s celebrated high percentage of homeownership is sustainable over time. On the flipside, what will that mean in terms of demand for and acceptance of rental housing in communities across the region?
Moreover the stresses caused by the state’s structural budget deficit will impact how local communities respond to their housing challenges.
Demographic changes in Minnesota will drive the housing field in new directions. The largest growth will be in households without children. Over the next 15 years, Minnesota will add only about 97,000 folks aged 24 to 44 to our active workforce; during the same time frame, however, we expect to add about 450,000 in the 65-plus age group. By 2025, almost a quarter of the state’s housing market will be minority households. (Minnesota State Demographic Center)
As state demographer Tom Gillaspy puts it: "Are we building housing now for the populations that were, or those that will be?" (Civic Caucus discussion, October 2009)
These are profound shifts. With so much in the balance, it is difficult to get beyond the crisis to think out 5 or 10 years. However, in Minnesota we are well positioned with a strong and sophisticated field of non-profit housing partners and leaders, and good collaboration and coordination with state and municipal agencies.
Starting this year, the Family Housing Fund, Minnesota Housing, the Metropolitan Council, the Urban Land Institute/Regional Council of Mayors, LISC, and McKnight have launched a process we call "Rethinking Housing" to spark the very sort of innovation and creativity we need to adjust our strategies. It is a collective commitment to use available data, assets, and resources in new ways to meet the changing housing needs of the future.
From McKnight’s perspective, there are other important reasons to "rethink housing." Housing is a core building block of livable communities. We have long supported a more holistic view of affordable housing in relation to other community assets.
The crisis is, in fact, seeding opportunities to advance a more holistic framework. Under the new federal administration, the Department of Housing and Urban Development (HUD) is developing an entirely new context for housing work at the state and local levels. In July, HUD Secretary Shaun Donovan sat down with Minnesota leaders to discuss the HUD Sustainable Communities Initiative, moving from siloed approaches and funding to place-based solutions that weave together housing, transportation, and environmental outcomes. With HUD’s support and partnership, Minnesota can lead in a dramatically new direction — to achieve multiple outcomes for families and communities.
As many of you know, last year The McKnight Foundation’s board of directors announced a $100 million commitment to accelerate the transition to a low-carbon energy future and avoid catastrophic levels of climate change. Despite the inherently global scope of our goal, we also see a tremendous opportunity to demonstrate local action.
Here is where the Central Corridor Collaborative fits so well. Several local and national funders have formed a collaborative to incent and weave together efficient use of infrastructure and resources to achieve multiple outcomes — including more affordable housing, connections to jobs, reducing carbon emissions, combining housing/transportation/land use, and sustaining vital businesses — all aimed at maximizing the social and equity benefits of a new transit line.
Housing and transportation costs combined make up more than 60% of most low-income budgets. (A Heavy Load: The Combined Housing and Transportation Burdens of Working Families, Center for Housing Policy) Moving forward, placing affordable housing proximate to transit and access to employment is key for providing greater opportunities for low-income families to thrive.
As we explore these connections together, our changing demographics, economic instability, and climate change are shifting basic assumptions we have traditionally used to chart our course.
Since the 1950s the development pattern of the region has been to grow out. The region has worked to "shape and accommodate growth." Our new normal, the basis for our region’s future success, may well be shifting to how well we align public and private investment to "integrate or incorporate growth" to build a more sustainable future.
The implication here is that our region’s primary development focus moving forward should be around the redevelopment and reuse of the existing built environment — not expansion — to create more livable and sustainable communities. We will need a whole new set of tools for new times.
Everyone with a stake in our region’s future has a stake in Twin Cities Compass. To chart effective strategies, our shared efforts need to start with a common, trustworthy base of understanding around critical issues like housing, education, civic engagement and the other issues Compass tracks.
I know that many financial supporters and community partners of TCC are here today. Thank you for your commitment. The exceptional leadership and staff of Twin Cities Compass have created an invaluable resource for citizens, civic leaders, and elected leadership to use in charting a future course that provides for the well-being of all our region’s residents. Thank you.