by Phyllis Furdell

NLC is exploring innovative approaches that municipal governments can take to promote equity ? social, economic, racial and political. This story summarizes one of 10 city case studies and specific promising practices under way in that city.

Baltimore is showing signs of a comeback.

In the last few years, Baltimore?s real estate market has started to rebound, crime has fallen and the city government budget has run surpluses instead of the deficits that characterized the city through the 1990s.

However, between 1970 and 2003, Baltimore lost more than a quarter of a million residents. Over the same period, median household incomes in both Baltimore and its metropolitan region trailed the national average while the city had a poverty rate that exceeded the average. Added to this were high crime and school dropout rates.

Upon taking office in 1999, Baltimore Mayor Martin O?Malley saw that the city?s traditional approach to fighting the conditions and consequences of poverty ? getting as much federal and state assistance as possible and targeting the communities where need was greatest ? was not working, and that a new strategy was needed.

Today, the approach is a market-based neighborhood investment strategy that addresses its ongoing population loss and bolsters its under-performing housing market.

Focusing on neighborhoods that are ?strong but undervalued,? the city?s Healthy Neighborhoods Inc., formally known as the Healthy Neighborhoods Initiative, has invested in these communities to increase home values and attract new residents. Healthy Neighborhoods provides capital to help residents rehabilitate or purchase their homes, promotes community projects within the neighborhoods and provides marketing and performance measures to neighborhoods. The city contributes by providing capital to acquire and rehabilitate homes, providing key city services, acquiring vacant properties and supporting community partners.

The benefits of this approach accrue both to the city as a whole and to new and longtime homeowners in those neighborhoods, whose faith in the city?s enduring strength long went unrewarded.

?The homeowners in Baltimore?s undervalued neighborhoods may have failed to realize ? that $1 billion in equity [was] due to stagnant housing values during a rapidly rising real estate market,? said Healthy Neighborhoods President Mark Sissman. ?This translates into $24 million in lost city tax revenues annually. Healthy Neighborhoods aims to reclaim those dollars.?

The resulting return on investment to the city is then targeted to the neediest neighborhoods.

Data suggests the initiative has begun to reclaim those dollars. According to the Baltimore Neighborhood Indicators Alliance, Healthy Neighborhoods communities have seen median sales prices increase at a faster rate than sales prices in the city as a whole. The percentage of homeowners making investments in rehabilitation activities is increasing in these neighborhoods each year.

Rather than trying to launch something entirely new, O?Malley and his colleagues in city government worked with a pre-existing group of partners to support Healthy Neighborhoods. The Baltimore Community Foundation started the program, modifying a concept initially tried in Battle Creek, Mich. Other contributing organizations include the Goldseker Foundation and the France-Merrick Foundation. The city?s contributions to Healthy Neighborhoods, which derive largely from bond issues, leverage those of its philanthropic partners.

Today, over 50 partners contribute to the program. By the end of 2005, these partners had created a $38 million loan fund used to offer below-market mortgage and home improvement loans to the targeted neighborhoods.

At the same time, through the CitiStat program, a sophisticated data tracking technology now in place in city hall, Baltimore has made striking progress toward its goals of accountability and transparency.

The CitiStat program, based on the New York City Police Department?s Compstat system, tracks the performance of all city functions and has transformed how Baltimore city agencies operate.

All city departments are required to submit data weekly to the CitiStat team, which then prepares briefs for the mayor and his deputies.

?CitiStat made a difference in the way citizens interact with city government,? said Baltimore Development Corporation President J.M. Brodie. ?CitiStat doesn?t know if, when you call with a problem, you?re black or white or rich or poor or Republican or Democrat. It just knows you?ve got a problem.?

The broad and diverse support for Healthy Neighborhoods and the universal acclaim for the greater efficiency in government services through CitiStat offer a strong foundation for the city to continue its recovery.

Details: The work of NLC?s Municipal Action to Reduce Poverty Project is made possible through support from the W.K. Kellogg Foundation. For more details and links to NLC?s complete Baltimore city study, go to www.nlc.org and click on ?Programs & Services? under the ?Resources for Cities? tab; click on ?Municipal Action to Reduce Poverty Project? and scroll down to ?Baltimore, Maryland: City Story page.?

Promising Practices: Baltimore

Baltimore Neighborhood Indicators Alliance
The Baltimore Neighborhood Indicators Alliance (BNIA) was developed in 2000 as a nonprofit organization consisting of groups committed to promoting, supporting and helping people make better decisions about improving the quality of life in Baltimore neighborhoods through accurate, reliable and accessible data.

During the spring of 2002, BNIA organized a series of focus groups to come up with long-term goals.

Focus group participants were asked what they would like their neighborhoods to become 20 years in the future, and how they would measure progress toward that vision.

BNIA also sought information on what people wanted to know and what indicators should be used to measure whether Baltimore?s neighborhoods were healthy and improving. Information gathered through this community-driven process was used to create Vital Signs indicators.

The Vital Signs are 40 indicators that ?take the pulse? of neighborhoods in Baltimore and monitor long-term changes. Its data is used to shape policy decisions, which lead to funding priorities, community building strategies and neighborhood organizing efforts.

Among other indicators, Vital Signs keep track of the median sales price of homes, the median number of days on the market, the percentage of foreclosures and the percentage of vacant or abandoned properties.

Vital Signs and its parent organization, BNIA, are funded through grants from private foundations. No public money is used.

Vital Signs was named one of the top 30 indicators? projects in the world in the 2004 U.S. Government Accountability Office report, ?Informing Our Nation: Improving How to Understand and Assess the USA?s Position and Progress.? 

A number of officials from other cities ? including Dallas, Atlanta, Memphis, Tenn., and Montreal ? have contacted Baltimore?s Vital Signs program for assistance in starting their own data gathering and tracking programs.