By Ben Seigel, 21st Century Cities Initiative. Originally published in the Federal Reserve Bank of Philadelphia’s publication Cascade: No. 100, Fall 2018.
April 2015 will forever be viewed as a turning point in Baltimore’s history. That month, a young Baltimorean named Freddie Gray died of spinal injuries while in police custody after being arrested near his West Baltimore home for allegedly possessing an illegal knife. The death was later ruled a homicide. Several weeks of peaceful protests ultimately broke into civil unrest following Gray’s April 27 funeral, further decaying relations between the community and law enforcement and contributing to what is now a sustained spike in homicides — the city has witnessed 340 murders per year in two of the past three years after averaging just over 200 per year from 2011 to 2014.
While the images of unrest after Freddie Gray’s death held the public’s attention, there is another, less publicized event from that same period that captures the city’s challenges just as dramatically. One week after the unrest broke out, Harvard economists Raj Chetty and Nathaniel Hendren released their groundbreaking study on the causal relationship between place and economic mobility. They found that every year a poor boy spends growing up in Baltimore, his earnings as an adult decrease when compared with that same boy growing up in the average place in America. By the time that boy from Baltimore is a 26-year-old man, he can expect to earn 28 percent less than he would have had he grown up in the average city from the study.(1) Indeed, of the 100 largest jurisdictions Chetty and Hendren studied, Baltimore ranked dead last in this measure of economic mobility.
Their research also underscores the relationship between place-based inequality and racial inequality. The jurisdictions that show the highest levels of economic mobility for poor kids tend to have low percentages of black residents, whereas those places with the worst economic mobility rates have among the largest black populations.
Freddie Gray — who died shortly before his 26th birthday, the same age of adulthood Chetty and Hendren focus on in their research — puts a stark face on downward mobility and the struggles to achieve economic success facing poor, young black people in Baltimore. Their research elucidates the root causes of the events that transpired in April 2015. Although the story of downward mobility — and the city’s response to it — has not grabbed as many headlines in post–Freddie Gray Baltimore as murders and violence, it has been the focus of much of the collective efforts of community members, nonprofits, city government, foundations, researchers, and the private sector in Baltimore these past three years.
This essay outlines efforts in Baltimore following the death of Freddie Gray to address the root causes of downward mobility and to ensure that April 2015 was a turning point for the better in Baltimore. It explores programs and policies that are being implemented across three categories: 1) expanding opportunity for young people, 2) promoting economic inclusion, and 3) positively transforming neighborhoods. For each category, the essay reviews some of the lessons learned and outcomes to date, as well as how the efforts align with the four forms of capital used to expand opportunity in communities that will be explored at the Reinventing Our Communities conference: financial, human, physical, and social.
Expanding Opportunity for Young People
The unrest following Freddie Gray’s death shined a national spotlight on Baltimore’s youth. Television images captured young people smashing police cars, setting fires, and looting storefronts. Youth were referred to as “thugs” by some city and national leaders and seen as criminals by many members of the general public. When viewed in the context of the Chetty/Hendren research, encapsulated in the plight of one young person, Freddie Gray, the unrest was viewed by many closer to the ground as a response by Baltimore’s youth to years of poverty and inequality, disconnection from economic opportunity, and mistreatment by institutions, systems, and authorities. In this light, the unrest was viewed as an attempt by young people to release pent-up frustrations and let their voices be heard.
Several research projects following the unrest spoke directly with young people to get a better understanding of their perspectives on the events and of their hometown of Baltimore. In summer 2015, Johns Hopkins sociologist Stefanie DeLuca led a project called Hearing Their Voices that conducted in-depth interviews with 58 young people between the ages of 15 and 24 from some of Baltimore’s most impoverished neighborhoods.(2) The study revealed that Baltimore’s youth felt a strong sense of abandonment by and exclusion from Baltimore. Not one of the 58 youth interviewed expressed a desire to remain in Baltimore. They craved positive experiences at recreation centers, programs oriented toward youth development and careers, and safe public spaces, none of which they claimed to have access to.
Another initiative supported by the Annie E. Casey Foundation enlisted a group of young community leaders in a participatory research project that focused on talking with youth ages 16 to 29.(3) The researchers found young people in Baltimore want to work for a variety of reasons, such as saving for college, paying bills, or gaining professional experience. For some, financial responsibility begins at a young age, and while they understand the long-term benefits of education, they are limited by the immediate need to make money. More than one-third of the youth interviewed were interested in accessing resources to build businesses that benefit their communities and that free them from the discriminatory practices, policies, and workplace cultures that participants reported facing in traditional employment settings.
Expanding Summer Youth Employment
One of the most promising, yet under the radar, stories from the past three years in Baltimore is that the “adults” — civic, government, and business leaders — have shown that they are doing more to listen to young people. The first sign of this newfound focus on youth came in the immediate aftermath of the unrest, when the city made a commitment to expand its summer jobs program. This was a critical step in several ways. First, a growing body of research suggests that summer youth employment programs result in short-term and long-term improvements to human and social capital, including employment success, educational outcomes, and social and emotional development, while also decreasing negative behaviors, such as criminal activity.(4) Second, with the timing of the unrest only a few weeks before summer vacation, city leaders could demonstrate an immediate commitment to the city’s youth.
Historically, the city’s summer youth employment program, YouthWorks, had a capacity to employ only about 5,000 of the more than 8,000 young people who signed up. Working together a wide range of organizations committed funding and subsidized employment slots, resulting in all 8,137 youth who signed up for the program in 2015 being offered summer jobs. The city and its partners have maintained this scale since the 2015 expansion, offering summer jobs to more than 8,000 youth the past three summers.
One Baltimore For Jobs
Another notable jobs initiative focused on building the human capital of young people is a program called One Baltimore For Jobs (1B4J).(5) This initiative was supported by a $5 million demonstration grant from the U.S. Department of Labor as part of the Obama administration’s effort to aid the city’s response to the unrest. 1B4J organized and funded a broad coalition of community-based service organizations to offer young people comprehensive and coordinated workforce development assistance, including occupational skills training, access to industry-recognized credentials, employment and career counseling and job placement, and assistance managing the various barriers youth have expressed facing, such as transportation access and expungement assistance.
1B4J exceeded all targets established by the Department of Labor grant. Over the course of the program, the enrollment goal of 700 was nearly doubled at 1,373. A total of 1,021 young people received occupational skills training, and 745 people were placed into employment at an average hourly wage of $12.45.(6) While the 1B4J grant has now formally ended, many of the program’s approaches and partnerships formed through the program are being integrated into the broader workforce development system across the city.
Baltimore Children and Youth Fund
Following the unrest, Baltimore City Council Chair Bernard C. “Jack” Young proposed the city create the Baltimore Children and Youth Fund to provide targeted resources for reinvigorating youth-centered services and activities across the city.(7) In November 2016, Baltimore City voters overwhelmingly approved a ballot measure, allocating approximately $12 million per year from property tax receipts to finance the fund, making Baltimore one of more than 30 localities nationwide with a dedicated youth fund.(8)
City council formed a task force of community leaders, youth program service providers, city government officials, and other key community representatives to set guidelines for the fund’s governance and operations. The task force presented recommendations that stressed key social capital building blocks, including racial equity and community empowerment as core principles guiding the fund’s design. The fund’s inaugural request for proposals was launched earlier this year, and in August, the first round of grants was announced for a total of $10.8 million to 84 organizations, ranging in individual award amounts from about $17,600 for new groups and up to $300,000 for established, top-tier organizations.(9)
These three examples illustrate that action can occur when local leaders come together with the community with a focused mission and purpose. While these initiatives are all promising success stories in themselves and speak to a broader mobilization effort on behalf of young people in Baltimore following the death of Freddie Gray, there remains much work to be done. The harder part will be to take this same approach of collaboration and intentionality and apply it to improving larger systems aimed at building the human and social capital of youth, such as the local schools and community college systems, as well as the juvenile justice system.
Promoting Economic Inclusion
In looking at the root causes of the events of April 2015 and the Chetty/Hendren data on downward mobility in Baltimore, it is obvious that opportunity is not equally distributed among people and places across the city. Significant disparities have existed for decades in Baltimore across geographic and racial lines. Over the past three years, there has been a major push in Baltimore, especially among the private sector, to expand efforts of economic inclusion by mobilizing and targeting financial capital. Of course, Baltimore is not alone in this push; cities and communities across the country are becoming more aware of the need to focus on economic inclusion and equity.
Anchor Institutions
For a number of years, local anchor institutions, including universities and hospitals, have made concerted efforts to hire local residents from the community and to contract with local small businesses for services. For nearly the past decade, the Baltimore Integration Partnership (BIP) has coordinated these efforts across the Baltimore metro area. BIP currently includes 14 anchors and is believed to be the largest group of hospitals and higher education institutions in the country working on economic inclusion. BIP focuses on three goals: 1) increasing anchor institution purchasing from local, small, and minority- and women-owned firms; 2) ensuring equitable opportunity in connecting low-income residents to jobs in the anchors and anchor-supporting businesses; and 3) making intentional local investments in real estate and small businesses to generate broader community benefit.
HopkinsLocal, BLocal
In the aftermath of Freddie Gray’s death, these types of economic inclusion efforts have received greater attention and resources. Shortly after the unrest, The Johns Hopkins University and Health System launched HopkinsLocal, with similar goals to those outlined by BIP. In 2016, Hopkins teamed up with the utility company Baltimore Gas and Electric to expand the initiative to 25 companies under the umbrella known as BLocal.
What has been unique about HopkinsLocal is a commitment to setting specific targets and then measuring and publicly reporting on performance. Hopkins recently published its performance for year two of HopkinsLocal, headlined by $61.3 million in construction contracts, 332 new hires, and $109.7 million in total local procurement, all exceeding predetermined goals.(10) These figures help quantify the financial capital that can be invested by anchor institutions into businesses and individuals in the community.
Community Benefits Agreements
BIP published a report earlier in 2018 that provides a comprehensive inventory of private sector and local government economic inclusion programs and policies.(11) The report details expanded efforts of anchor institutions, as well as other major efforts such as the $5.5 billion Port Covington development project, anchored by Under Armour’s corporate headquarters.
In September 2016, the City of Baltimore signed legislation that committed $600 million in municipal bonds toward the Port Covington effort. The bonds are being used for tax-increment financing (TIF) to fund infrastructure — physical capital — for the project. In response to advocacy by a coalition of community leaders, Under Armour’s development company, Sagamore Development, signed a memorandum of understanding that guaranteed local hiring, supplier diversity, and other economic inclusion features. The Community Benefits Agreement (CBA) includes a 30 percent local hiring mandate and a commitment that 20 percent of the housing produced will be affordable housing units. The community benefits deal also includes more than $100 million in funding for local organizations and programs.
Small Business and Entrepreneurship Assistance
Small business technical assistance and entrepreneurship programs have been expanded during the last three years in an effort to support Baltimore’s minority-owned small businesses. Identified as a top priority by the community following the unrest, these efforts began with a grant from the U.S. Department of Commerce to the Baltimore Urban League to expand its entrepreneurship center. Since then, a number of new and expanded initiatives have taken off, including the Goldman Sachs 10,000 Small Business Initiative and the Inner City Capital Connection initiative, a program of the Boston-based Initiative for a Competitive Inner City. These initiatives are coordinated with city hall through a newly formed Mayor’s Office of Small, Minority, and Women-Owned Business.
These and other expanded efforts on economic inclusion are promising steps for Baltimore, although much work is still needed. Programs like the HopkinsLocal effort should consider expanding economic inclusion targets beyond traditional minority- and women-owned business industries of construction, moving, and catering to include industries where greater wealth and economic mobility opportunities are concentrated, such as finance and technology. Although the Port Covington CBA is historic on paper, the partners need to remain vigilant and focused that Sagamore meets its targets. Finally, small business and entrepreneurship programs should be connected to a broader effort to increase access to financial capital to Baltimore’s small businesses. As two recent 21st Century Cities Initiative reports illuminate, small business lending has declined in Baltimore during the past decade, and more needs to be done to encourage and support banks and community loan funds to extend working capital to growing businesses.(12)
Positively Transforming Neighborhoods
The Chetty/Hendren research has driven home the point that, all too often, zip code determines destiny. In Baltimore, such zip code determinism is evident in neighborhoods in East and West Baltimore, including where Freddie Gray grew up, where the median household income is less than $20,000. Meanwhile, in neighborhoods in North and South Baltimore — only a few miles away — the median household income exceeds $100,000. There are similar neighborhood disparities in health, educational attainment, and other indicators. For example, neighborhoods in Baltimore just a few miles apart are separated by a 20-year gap in residents’ average life expectancy.(13) Several notable efforts have been ramped up in Baltimore over the past three years to address neighborhood disparities by especially focusing on the physical capital of neighborhoods.
Transform Baltimore
Neighborhood transformation is the type of place-based work that does not happen overnight — or even over three years — but there have been some promising steps in Baltimore since the events of April 2015. One of these steps is the recent rewriting of Baltimore’s zoning code. The new zoning code, Transform Baltimore, went into effect in June 2017. One of the provisions in Transform Baltimore requires repurposing or closing certain alcohol outlets in residential neighborhoods. The policy is, in part, a bold attempt to reduce violent crime based on research showing that murders cluster around alcohol outlets and that nearly half of all homicides are caused by excessive drinking, according to the Centers for Disease Control and Prevention. Under the new zoning provision, 76 nonconforming alcohol outlets are required to stop selling alcohol by June 2019.
Vacants to Value
Tackling vacant housing and creating more affordable housing is a stubborn challenge where Baltimore has made some strides in the past three years. Baltimore’s housing agency has acquired additional financial and technical resources for its nationally renowned Vacants to Value (V2V) program that demolishes and renovates vacant and abandoned properties across the city.(14) In December 2016, Maryland invested $75 million into the program through an initiative called Project C.O.R.E., helping to leverage other public and private dollars.(15) On the technical front, Baltimore’s housing agency has developed a partnership with researchers at Johns Hopkins, who are working with the agency to apply big data analytics and tools to help predict vacant properties and optimize V2V resources.(16)
Baltimore Green Network Plan
Another recent effort is a strategy to better link neighborhoods together and with services and amenities through green space. The Baltimore Green Network plan seeks to transform vacant properties into green community assets and to connect these spaces to schools, homes, retail districts, and other neighborhoods.(17) The plan, which is being adopted in summer 2018, is an interesting example of placelinking,(18) which seeks to strengthen isolated high-poverty neighborhoods by better connecting them with the city.
If adequately resourced and effectively implemented, these place-based initiatives can have a significant impact on Baltimore’s neighborhoods in the coming years. They also come with challenges in implementation. For example, they require a large amount of resources and capital investment. While some new resources are flowing into these projects, additional private and public dollars will need to be leveraged. In addition, the history of many place-based initiatives demonstrates that as neighborhoods improve, longtime residents are often displaced. Sometimes this is by choice, in order to take advantage of rising property values if they are homeowners, but more often, residents are forced out because of higher rents and gentrification’s other effects.
Conclusion
As Baltimore moves forward from the April 2015 unrest, it is worth noting that 2018 marks the 50th anniversary of the Kerner Commission report, which was a response to riots in more than 100 cities in the summer of 1967. That landmark government report placed the blame for rioting on public and private racial discrimination, and it outlined a series of bold steps for improving conditions in disadvantaged neighborhoods and encouraging the racial integration of America.
On the 50th anniversary, there have been calls for the creation of a contemporary Kerner Commission to develop a new blueprint for addressing racial inequality and economic segregation in U.S. cities.(19) While the original Kerner Commission focused on federal policy and action, a contemporary Kerner Commission could be well served by also including efforts that can be directed by local communities, including how cities and counties can best mobilize and invest in financial, human, physical, and social capital to expand opportunity in pursuit of upward mobility.
* The views expressed here do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.
1 Raj Chetty and Nathan Hendren, “The Impacts of Neighborhoods on Intergenerational Mobility: Childhood Exposure Effects and County-Level Estimates,” Harvard University and NBER, May 2015, available at https://scholar.harvard.edu/files/hendren/files/nbhds_paper.pdf. 
2 See “Set-Up City: The Voices of Baltimore Youth After the April 2015 Unrest,” Poverty and Inequality Research Lab at Johns Hopkins University, available at 21cc.jhu.edu/wp-content/uploads/2017/07/setup-city-htv-report.pdf.
3 See “Reshaping Workforce Development in Baltimore: Ensuring Community Voice and Expertise Guide Us,” Annie E. Casey Foundation, available at www.aecf.org/m/resourcedoc/aecf-reshapingworkforcedevelopmentinbaltimore-2017.pdf.
4 Amy Ellen Schwartz and Jacob Leos-Urbel, “Expanding Summer Employment Opportunities for Low-Income Youth,” The Hamilton Project, available at www.brookings.edu/wp-content/uploads/2016/06/summer_employment_disadvantaged_youth_schwartz_leos_urbel.pdf.
5 For more information on 1B4J, see moed.baltimorecity.gov/one-baltimore-jobs. 
6 Data provided by the Mayor’s Office of Employment Development.
7 For more information on the fund, see bcyfund.org/.
8 See Emily Warren, “Dedicated Youth Funds: Local Governments Respond to Inequality through Focused Investments in Children,” 21st Century Cities Initiative, available at 21cc.jhu.edu/wp-content/uploads/2017/11/local-governments-respond-to-inequality-through-focused-investments-in-children.pdf.
9 Ian Duncan, “After 3 years, grants start flowing from Baltimore Youth Fund to nonprofit groups,” The Baltimore Sun, September 5, 2018, available at www.baltimoresun.com/news/maryland/baltimore-city/bs-md-ci-youth-fund-grants-20180904-story.html.
10 See “HopkinsLocal Progress Report: Year Two,” available at hopkinslocal.jhu.edu/progress-report/.
11 Scott Herbert, “Collectively We Rise: The Business Case for Economic Inclusion in Baltimore,” The Baltimore Integration Project, available at baltimorepartnership.org/wp-content/uploads/2018/06/BIP_EconomicInclusion_FullReport_ReducedFileSize_06202018.pdf.
12 See “Financing Baltimore’s Growth: Measuring Small Companies’ Access to Capital,” 21st Century Cities Initiative, available at 21cc.jhu.edu/wp-content/uploads/2017/09/21cc-financing-baltimores-growth-sept-2017.pdf; and “Financing Baltimore’s Growth: Strengthening Lending to Small Businesses” at https://21cc.jhu.edu/wp-content/uploads/2018/07/financing-baltimores-growth-strengthening-lending-to-small-businesses.pdf.
13 Baltimore Neighborhood Indicators Alliance, “Vital Signs 2016,” University of Baltimore Jacob France Institute, available at bniajfi.org/vital_signs/.
14 For more information on Vacants to Value, see www.vacantstovalue.org/About.aspx.
15 For more information on Project C.O.R.E., see dhcd.maryland.gov/ProjectCORE/Pages/Plan.aspx.
16 Linda Poon, “Using Astronomy to Fight Urban Blight,” Citylab, March 6, 2017, available at www.citylab.com/life/2017/03/using-astronomy-to-fight-urban-blight/517911/.
17 For more information on the Baltimore Green Network, see www.baltimoregreennetwork.com/.
18 Ben Seigel, Tena Spencer, and Elizabeth Talbert, “Placelinking: An Emergent Approach to Improving Economic Mobility Outcomes”, 21st Century Cities Initiative, available at 21cc.jhu.edu/wp-content/uploads/2018/07/placelinking.pdf.
19 See Poverty and Race, 21(1) (2018), available at prrac.org/newsletters/janfebmar2018.pdf.