Social Impact Bonds: Are They Too Good to Be True?

By Mildred E. Warner and Allison E. Tse

Imagine a world in which multinational investment firms teamed up with city governments to provide the public goods that we need most—education for our children, housing for the homeless, or a new start for the formerly incarcerated. This is the dream of advocates for a new kind of public financing, social impact bonds (SIBs). While not a bond in the conventional sense, SIBs are a performance-based contract used to secure private investment for important social programs. If the programs deliver on pre-determined goals, then the public sector pays the investor a return.

Social Impact Bonds represent a promise and a risk. The promise is to attract new private investment for social programs that work, expanding services and saving society money in the long run.  The risk is that by monetizing welfare gains, they turn our most vulnerable (children, elderly, homeless, formerly incarcerated) into investment targets for private finance. Our recent article in the Journal of Urban Affairs, The Razor’s Edge: Social Impact Bonds and the Financialization of Early Childhood Services,” highlights the razor-thin margin of societal benefits that SIBs might produce. The requirements of short-term, financial returns to investors and quantifiable outcome metrics can make SIBs narrow, inflexible, and short-sighted. But our research also shows they can be designed to achieve broader impact, if attention is given to long-term, sustainable public funding.

As SIBs proliferate around the world, so too does evidence that questions their effectiveness. A new documentary, The Invisible Heart, attempts to untangle the complicated bundle of risks and rewards that SIBs encompass. The film examines SIBs from design to implementation, through the eyes of clients and service providers, as well as government leaders, venture capitalists, philanthropists, labor leaders, and academics, many of whom question the impact of profit incentives on the delivery of social services.

“As a filmmaker who has spent many years looking at difficult social issues, I am encouraged by the SIB model’s focus on prevention, and its ability to highlight not just the social but also the financial value of early intervention,” says award-winning Director/Producer Nadine Pequeneza. “But my optimism is tempered by the dangers of introducing a profit incentive driven by ‘success’ outcomes.”

Profit incentives may create new ways to pay for social welfare, but they also shift public values toward private ends.  Inviting powerful investors into public services for the most voiceless, vulnerable members of society may mean inviting a Trojan Horse through the front door—a Trojan Horse that only supports profitable social services and narrows our conceptions of what social welfare should mean. This danger should caution SIB designers.  Lessons from SIBs in the early childhood sector, however, demonstrate how strong state actors and coordinated networks of social advocates can work together to scale up policy change and secure broader public investment for the future, especially in politically conservative states.

SIBs must overcome their internal risks to achieve broader social impact. The details of context, contract negotiation, and program design determine on which side of the razor’s edge SIBs fall—whether they use the market to broaden investment or merely to extract resources from an already overburdened public sector. Both the article and the film offer critical insights for providers, policymakers and concerned citizens when considering whether to walk the razor’s edge of financializing social services through SIBs.

The article is available as open access at http://doi.org/10.1080/07352166.2018.1465347

The film is available for educational and community screenings. For more information, visit www.theinvisibleheart.ca

 

Barcelona’s Struggle with Tourism — Possibly Your Hometown’s Struggle Tomorrow?

By Antonio Paolo Russo

‘Overtourism’, ‘antitourism’, ‘tourismophobia’ are everywhere on the media these days and peep up in small talk at any friends and relatives’ gathering. Of course, in the academia we are quite familiar with the concept and evidence of tourism growth changing places and eventually affecting them. And we’ve been reading about residents’ perceptions and discontent with the tourismification of their habitats for ages. Now it gives a certain pleasure to observe that, eventually, even our neighbours, in-laws and political acquaintances got it.  And a certain anguish in the fact that despite all our efforts, presentations, and consultancy works, many communities are acknowledging tourism growth as a big issue when it’s probably too late, too complex, too expensive to do something about it.

Tourism’s negative impacts are not anymore analysed and made sense of only in small aboriginal communities, pristine coastal environment, or a handful of celebrated heritage towns. These were exceptional cases for scientific research, but hardly a matter for concern to laypersons across the (mostly western) world, who would still appreciate a 3% increase in tourism arrivals in their hometown announced by the local media without bothering too much about the associated inconveniences – noise at night in the most touristed areas, difficult parking at leak seasons and local shops closing down to make space for global franchises.

Yet today a far greater amount of places, and especially cities, are pointing the finger at tourism; and a far larger strata of the resident population is ready to voice its discomfort with a phenomenon that has invaded almost any aspect of their daily life. Not just the usual radical grumblers, it’s the white middle classes who discovered tourism as a problem – sometimes forgetting that they have voted for pro-tourism administrations for decades. So what happened?

Well, for one thing, tourists have not stopped growing in numbers and enjoying visiting even the most worn-off attraction sites. Tourism is so enmeshed in global flows of work and sociality that this is hardly surprising. The late John Urry and his followers have written extensively about ‘mobile lives’ and how this is shaking down established concepts of places as fixed entities and of citizenship as geographically bounded. I remember some seven years ago at a seminar, Urry anticipating much of the current debate (as usual in his career) and preparing the ground for next one: a future in which we won’t afford to travel so cheaply, and mobility will become the characterising dimension of social class.

Secondly, as again many authors warn about, tourists (and mobile populations in general) are not just increasingly interested in the everyday, in MacCannell’s backstage, but they actually dwell in it. Houses have become a tourist asset, and established notions of hotels as bubbles offering extraordinary comfort to travellers but also rationally separating and specialising space ‘for tourists’ from residents’ livelihoods have gone bust. The landing on cities of Airbnb and other ‘sharing economy’ platforms, after a first period of fascination around the fairy-tale of the ‘we help you get to the end of the month’, has crashed the housing rental markets for residents in any first- and second-league destination, and has become a fundamental tool for the speculative operations of real estate companies.

These factors explain why today so many people feel directly affected by tourism, and are ready to challenge the almost inevitable status of their city as ‘tourist place’.

Barcelona is one such cases, possibly the one where the conditions for a perfect storm have cooked up for decades: an impoverished middle class after the crisis of the 2000s, a weak society in the most central and ‘tourismified’ historical districts, a promotional model for tourism strongly in the hands of the private sector and a feeble position of the municipal administration as last-resort planner for further growth. In Barcelona, the object of our paper, the change in the public perception on tourism has – as we argue – fed an important shift in the discourse about tourism especially in policy circles, which we see as the key determinant of the political change that led Ada Colau to become Mayor in 2015.

I have lived most of my young life in Venice, one of those places about which books have been written and models have been created to make sense of place disruptions around tourism. And I have lived several years in Barcelona seeing the same beast rising, although no early warning could shake local politicians from the conviction that ‘Barcelona is different’. In our paper, Alessandro Scarnato and I tell the informed tale of Barcelona tourism becoming a place of contestation (of tourism). We take sides – we are both academics and activists – and we try to suggest that the peculiar events that led to a new political agenda on tourism, nuance a change in urban regime which might not remain a unique case. This type of research fights against the news all the time – for instance what we write about the enduring support to Colau’s government measures might not be so certain in the light of the recent political turmoil in Catalonia. Nevertheless, we hope that our analysis and reflections will help to feed further the research agenda on the fate of cities (and citizens) in the age of tourism mobilities.

Antonio Paolo Russo is tenured assistant professor with the Faculty of Tourism and Geography, Universitat Rovira i Virgili, Tarragona. Dr. Russo is author of more than 50 publications in academic journals and books on research topics that range from tourism studies to cultural and urban economics. He has been involved as member of research groups and as an independent advisor in various research projects with local and regional governments, and international institutions such as the EU, the Council of Europe, the BID and UNESCO. His JUA article, “Barcelona in common”: A new urban regime for the 21st-century tourist city?, appears in the current issue and is available with free access for a limited time. 

Environmental Correlates of Urban Dog Bites: A Spatial Analysis

By Laura Reese

ace
Dear Ace, you came into my lobby, crouched behind my door and stared blankly at the wall, shaking. I could see your pain – I fed you, warmed you and you rewarded me by finally looking into my eyes, and for a moment, we shared your pain. I reached for the phone, thinking that I could find you a better life…. Instead I sent you to your death. Please forgive me. You did not die in vain, nor will you be forgotten. This I promise you. Your last but far from only friend. – Mark, Ace Hardware, Detroit, 11-10-11

 

In November of 2011, an emaciated pit bull-type dog was found outside of an Ace Hardware store in Detroit.  A concerned citizen called City of Detroit Animal Control (DAC).  The dog, known as “Ace,” quickly became a media cause célèbre and pleas to “Save Ace” and offers of adoption from individuals and rescue groups flooded in.  Yet, Ace was euthanized within the state-mandated four-day holding period for stray dogs, in violation of a court injunction ordering a hold on euthanasia of pit bulls at DAC, even in the face of publicity that spread around the world.  The incident pitted a host of nonprofit rescue groups and licensed animal shelters against the city bureaucracy.  Media coverage highlighted not only the plight of stray and feral dogs in Detroit but also the policies and practices at DAC, the City’s municipal animal shelter.

For those in the animal welfare community like me, Ace was a galvanizing moment.  While I had been volunteering at my local animal shelter for years, the plight of Ace caused me to start thinking about animal welfare more broadly, particularly its connections to other urban issues and processes.  I’ve spent a career conducting research on local economic development, particularly in extremely distressed cities such as Detroit.  I began to see the connections between the economic distress of Detroit and its residents, and a variety of issues related to animals, particularly dogs, in the city.  Animal welfare issues in Detroit generally are exacerbated by several interconnected factors: economic distress, vacancy and abandonment, stray and feral dogs, high risk of dog bites, and strong connections between these factors and crime, particularly involving dog fighting.  The City has high numbers of stray and feral dogs. The economic misfortunes of residents have resulted in relocations, leaving animals homeless and reducing already limited resources for animal healthcare, particularly for spay and neutering services.  The roaming animal problem in particular is exacerbated by foreclosures, vacancies, and structural abandonment leaving habitats for stray and feral animals to shelter and for illegal activities such as dog fighting to be conducted.  Ace was a very visible symbol of the roaming dog problem in Detroit and the city’s inability to address it and led me to think more broadly about local economic distress and the impact on both human and nonhuman animals.

One implication of a large stray and feral dog population is the potential threat to human health in the form of dog bites.  Dog bites are among the top causes of nonfatal injuries in the United States, leading to what has been described as a “dog bite epidemic.” By age 12, more than half the children in the US have experienced a dog bite which can lead to rabies, infections, psychological trauma, disfigurement, and occasionally death.  There are over 40 zoonotic diseases in the United States that can be passed from dogs and cats to humans, either through bites or proximity, including rabies, leptospirosis, ringworm, giardia and other parasites, and tuberculosis.  The psychological consequences of dog bites can be severe, including fear of recreating outdoors or walking to school, PTSD, and phobias about dogs or other animals.  Obviously dog bites and attacks have a very direct impact on urban health but fear of bites from roaming dogs can also have indirect effects on both mental and physical health as residents (particularly children) limit walking in their neighborhoods due to concerns about bites.

Much of the academic research on the causes and correlates of dog bites comes from the fields of veterinary medicine and public health.  The former studies tend to focus on correlates related to the nature of the dog—breed, size, living conditions, sterilization status, sex.  Some of this work has also explored the impacts of human behavior such as neglect, tethering of dogs outdoors, and the fact that many dogs that bite were provoked.  The latter research focuses on the human victims of dog bites which overwhelmingly tend to be children and/or males.  None of the research on dog bite risk has come from an urban policy perspective, particularly one that considers spatial relationships between markers of economic distress and increased bite risk.  The findings in our article raise important issues of spatial injustice in the health risks associated with dog bites.

Residents in poverty, living in neighborhoods with high levels of vacancy and abandonment, have a higher risk of dog bites.  This is the result of a number of factors including the presence of more roaming dogs, under socialized and unsterilized dogs, and more crime associated the dog fighting.  Research has shown strong patterns of environmental injustice in that poorer residents of color are more likely to live in proximity to contaminated sites.  In the same vein and for many of the same reasons, they are also more likely to reside in neighborhoods where dog bites are more likely to occur.

Extant statistical models predicting health risk from dog bites based solely on traits of the victim have relatively weak predictive power. The impact of using incomplete models is that health disparities are not fully understood and preventative policies that focus on education about individual interactions with dogs will be insufficient to address conditions in the urban environment that lead to increased risks for particular individuals. Our research explores the interplay among risk factors for dog bites and contributes to scientific and policy knowledge in its explicit focus on environmental factors—such as vacant and abandoned land and buildings, crime, blight, and the location of urban features such as schools and bus stops—that are not well examined as correlates of dog bites and how these factors work to create disproportionate risks for racial and ethnic minorities and economically disadvantaged populations.

From a public policy perspective, our research shows that efforts to improve public health by decreasing the risk of dog bites must take a multipronged approach because the factors related to bites are complex.  Police must target breeding and dog fighting operations.  The chaining (and hence under-socialization) of dogs in back yards needs to be limited through more stringent enforcement of animal control ordinances.  Licensing and sterilization of dogs need to be facilitated through humane education programs and support for low cost veterinary care.  Children must be taught how to interact with dogs and must be supervised when doing so.  Abandoned buildings need to be removed and the feral dogs living in them need to be caught and delivered to animal control, shelters, and rescues.  The policies, funding, and capacity of these organizations need to be at a level that necessary animal control services can be provided in an effective and humane manner.

These efforts will both reduce the health risks of dog bites to city residents and improve animal welfare more generally.  And, thus, we come full circle back to Ace.  The complexity of the causes of dog bites illustrates why simplistic solutions such as bans on particular breeds of dogs (such as presumed pit bulls) will not reduce the number of dog bites in a city (and indeed research has shown that such bans are not effective because all types of dogs can and do bite).  Because of the tight connections between human and nonhuman animal welfare the types of policies that are most likely to reduce human health risk from bites are also those that will improve conditions for the city’s animals and help ensure that future “Aces” have a better outcome.

Laura Reese is Professor of Urban and Regional Planning and Political Science, and Director of the Global Urban Studies Program, at Michigan State University.

The full article, Environmental Correlates of Urban Dog Bites: A Spatial Analysis, by Joshua Vertalka, Laura A. Reese, Melinda J. Wilkins & Jesenia M. Pizarro, is published in the current issue of JUA (volume 40, issue 3) and is currently available with free access, for a limited time.

Is it all in the eye of the beholder? Benefits of living in mixed-income neighborhoods in New York and Los Angeles.

Is it all in the eye of the beholder? Benefits of living in mixed-income neighborhoods in New York and Los Angeles, by Elena Vesselinov, Mary Clare Lennon & Renaud Le Goix, appears in Volume 40, Issue 2 of the Jorunal of Urban Affairs and is currently available for free access.

By Elena Vesselinov

I am very enthusiastic about this article, because it is the first published article related to my latest project on organic mixed-income neighborhoods. In this article, we discuss the differences between “design-politics” and “organic” mixed-income neighborhoods. Design-politics neighborhoods are communities influenced by the federal housing policies in integrating former public housing residents with higher income groups. It is believed that such income integration will be beneficial to lower-income groups, where through better housing conditions and role-modeling they will create better lives. The question is do policy intentions correspond to reality, thus the title of the paper, “Is it all in the eye of the beholder?” Is this policy a wishful thinking or a reality?

The research evidence about design-politics communities, most notably established in Robert Chaskin and Mark Joseph’s book “Integrating the Inner City,” is rather controversial, or as the saying goes, the jury is still out on whether or not there is actual neighborhood integration. It seems that impenetrable social boundaries remain around issues both of class and race. Lower-income residents still tend to be more connected to each other, with little to no interactions with higher income group members.

Even though we at least have a growing body of work on outcomes in design-politics neighborhoods, not much is known about benefits of real-life mixed-income communities. In cities such as New York, Los Angeles, Chicago, and many others, we can find hundreds of neighborhoods, where people from diverse economic backgrounds live. What I would like to do is find out more about the naturally occurring mixed-income communities, formed without explicit government intervention. Therefore, these naturally formed communities I called “organic mixed-income neighborhoods.”

In this paper we present evidence of the association between mixed-income communities and the mortgage foreclosure crisis for two metropolitan areas: New York and Los Angeles.  In both cities, mixed-income neighborhoods are characterized by a better socioeconomic context compared not only to lower-income neighborhoods but also to low-middle-income neighborhoods. This is reflected in a range of factors such as higher income, higher house prices, higher homeownership rates, higher educational levels, and lower levels of subprime loans. In addition, controlling for relevant neighborhood contextual factors, mixed-income neighborhoods are less likely to be found in foreclosure spatial clusters compared to lower-income and low-middle-income communities.

In our work, we applied two independently constructed neighborhood typologies, where mixed-income neighborhoods were identified, firstly, as a reflection of the metropolitan income composition and, secondly, based on the entropy score. Regardless of the method used, the selection of mixed-income tracts produced communities that also had a racial/ethnic composition comparable to the overall metropolitan racial/ethnic composition. Therefore, based on our findings as well as on prior research using various selection criteria, income diversity seems, at least to some degree, to correspond to racial/ethnic diversity.

I find that it is important to continue this line of research and study the specific context across metropolitan areas in the United States. If it is found that organic mixed-income communities are consistently associated with benefits and better socio-economic residential conditions, policies could be developed to incentivize already existing communities. It seems plausible to expect that creating incentives tailored to specific social, economic and political contexts should be more effective, efficient and less costly than engineering residential contexts with dubious results.

Elena Vesselinov is an Associate Professor of Sociology at Queens College and The Graduate Center at the City University of New York.

CALL FOR PROPOSALS: Special Issue on “Contributions of Community Psychology to Urban Research and Policy”

Special Issue of Journal of Urban Affairs on “Contributions of Community Psychology to Urban Research and Policy”

The Journal of Urban Affairs invites proposals for articles to be published in a special issue on “Contributions of Community Psychology to Urban Research and Policy,” guest edited by Jennifer Watling Neal (Michigan State University).

The field of community psychology focuses on solving social problems and encouraging wellbeing by examining transactions between individuals and larger social systems including organizations (e.g., schools, workplaces), local neighborhoods, and cities (for example definitions of community psychology, see Dalton et al., 2007; Rappaport, 1977; Seidman, 1988). Given this focus, community psychologists have a long history of contribution to understandings of metropolitan and community problems, urban social change, and urban policy. For example, community psychologists have focused their research on a range of urban topics including (but not limited to) homelessness and housing policy, community organizing, community development, neighborhood risk and protective factors for youth, neighborhood sense of community, neighborhood crime, and the delivery of community-based services. Papers in this special issue will focus on contributions of the field of community psychology to urban research and policy (broadly construed).

The special issue welcomes empirical, theoretical, and review papers as well as a variety of methodological approaches (e.g., quantitative, qualitative, mixed methods).  To qualify for inclusion in the special issue, is not sufficient for research to simply be conducted within an urban area or community. Instead, all papers submitted for the special issue should (1) foreground the role of theory or methods from the field of community psychology in (2) addressing a particular metropolitan or community problem, and (3) should highlight implications for urban social change and/or policy. 

Interested authors should submit a detailed 500-750 word proposal to Jennifer Watling Neal by email (jneal@msu.edu) by April 15, 2018.  Proposals will be screened based on their fit to the special issue and their quality (i.e., potential for impact on the literature, sound methodology, and writing). Authors of selected proposals will be invited to upload their papers to Scholar One for peer review by August 31, 2018. Questions about this special issue or the suitability of a particular manuscript or idea can be directed to Jennifer Watling Neal  at jneal@msu.edu.

References

Dalton, J.H., Elias, M.J., & Wandersman, A. (2007). Community Psychology: Linking individuals and communities. Belmont, CA: Thomson Wadsworth Publishing.

Rappaport, J.  (1977).  Community psychology: Values, research, and action. New York: Holt, Rinehart, & Winston.

Seidman, E.  (1988).  Back to the future, community psychology: Unfolding a theory of social intervention.  American Journal of Community Psychology, 16, 3-24.

 

 

Special Issue: The Citizens in City-regions

Special Issue: The Citizens in City-regions

Guest editors: Anders Lidström and Linze Schaap

For the first time ever, a special collection of papers on the citizens in city-regions has been published in the Journal of Urban Affairs.

It has become increasingly relevant to develop knowledge about citizenship in a city-regional setting as more people all over the world now live in city-regions. Commuting on a daily basis is common in city-regions as places for housing, work, and leisure are usually separated. This tends to weaken the connection to the municipality of residence, and creates patterns of territorial identification and political activism that extend beyond the municipality. This broadens the role of being a citizen and challenges existing—usually fragmented—patterns of governance and democracy in the city-region. The articles in this special issue investigate how patterns of city-regional citizenship vary between individuals and contexts.

Table of Contents (articles are available for free access, for a limited time!)

1. The Citizens in the City-Regions: Patterns and Variations, by Anders Lidström and Linze Schaap.

2. Being metropolitan: the effects of individual and contextual factors on shaping metropolitan identity, by Joan-Josep Vallbé, Jaume Magre, Mariona Tomàs

3. Territorial political orientations in Swedish city-regions, by Anders Lidström

4. How Metropolitan can you go? Citizenship in Polish city-regions, by Marta Lackowska and Łukasz Mikuła

5. Citizenship in the fragmented metropolis: an individual-level analysis from Switzerland, by Daniel Kübler

6. Sharing fairly? Mobility, citizenship and gender relations in two Swedish city-regions, by Christine Hudson

7. Regional or Parochial? Support for Cross-Community Sharing within City-Regions, by Michael Leo Owens and Jane Lawrence Sumner

8. Citizens’ Views on Governance in Two Swedish City-Regions, by Niklas Eklund

9. What About Metropolitan Citizenship? Attitudinal Attachment of Residents to Their City-Region, by Melanie Walter-Rogg

Anders Lidström is a professor in the Department of Political Science at Umeå University.

Linze Schaap is an associate professor in the Department of Politics and Public Administration, and at the Tilburg Center for Regional Law and Governance (TiREG), at Tilburg University.

Book Review Preview: How to Kill a City

By Dennis E. Gale

Peter Moskowitz. How to Kill a City. (New York: Nation Books, 2017)

Journalist Moskowitz pens a provocative book arguing that gentrification — in virtually all of its dimensions — destroys communities. An impassioned writer, he centers his critique on case studies of four U.S. cities: New Orleans, Detroit, San Francisco, and New York. Through a series of interviews, direct observations of local conditions, and citations of various published sources he argues that the forces of gentrification are destroying the social diversity of neighborhood life.

Despite his myriad attacks on gentrification and its impacts on working class people, Moskowitz is quick to acknowledge that, yes, he too is a gentrifier. In his native New York, he and his friends patronize clubs and bars in areas undergoing reinvestment. He acknowledges that some of these establishments have replaced other businesses once catering to the needs of low- and moderate-income families. And shifting demographic patterns have replaced racial and ethnic populations with college-educated elites. He skewers the public and private sectors, both of which, he insists, court wealth, income, and public revenues at the expense of long-term residents.

Moskowitz shows that even Detroit and New Orleans, two cities long challenged by population losses, physical decline, and financial disparities, are nonetheless experiencing moderate levels of public and private reinvestment. In both cases, city leaders have adopted policies catalyzing middle-income housing construction and renovation. At the other extreme, he writes, San Francisco and New York, both metropolises seemingly overwhelmed by the forces of gentrification, demonstrate the extent to which the Weltanschauung of urban life can undergo fundamental changes. Nothing illustrates this better than Moskowitz’s colorful walking tour across Manhattan, in which he reveals his deep nostalgia for the city of his youthful memories.

Readers seeking a balanced treatment of gentrification will probably be disappointed by this book. On the other hand, those dedicated to the proposition that gentrification’s overall costs outweigh its benefits will find plentiful grist for the mill.

The full book review will appear in an upcoming issue of the Journal of Urban Affairs.

Dennis E. Gale
Professor Emeritus, Rutgers University
Lecturer, Stanford University
Dennis.Gale@fulbrightmail.org