Lance Freeman and Michael A. Nutter on Social Mobility and Economic Development

Lance Freeman is Penn Integrates Knowledge Professor of City and Regional Planning and Sociology and one of the world’s leading scholars on urban poverty, housing, and gentrification. Michael A. Nutter is the former Mayor of Philadelphia, a senior executive fellow in the Department of City and Regional Planning, and the managing director of the Public Policy and Service Initiative (PSPI), an ambitious research initiative to increase economic and social mobility launched in partnership with Penn IUR this spring. Last month, Mayor Nutter welcomed Former Atlanta Mayor Kasim Reed and Former Tulsa Mayor GT Bynum as PSPI’s inaugural Impact Scholars, a new fellowship program for former local public executives. In a wide-ranging conversation on Zoom, they spoke to Weitzman News about gentrification, Philadelphia's comeback, and the reasons to be optimistic (or pessimistic) about social mobility in America today.

Upward Mobility, Defined

Michael A. Nutter: Dr. Freeman, what’s the biggest myth or misunderstanding about social mobility, and in particular among academics or policymakers? Do you feel in your work that people understand or have a definition of what social mobility is?

Lance Freeman: It’s a great question. I think a lot of times people think about social mobility in terms of upward economic mobility, and how that is defined varies. So, the sort of quintessential story, rags to riches, pull yourself up by your bootstraps, your parents or grandparents maybe worked in some menial occupation, and through grit and hard work, they pulled themselves up. Or that’s a dream you may have for your children, even yourself. I think that’s the way it’s commonly used.

Nutter: Is that accurate? I mean, is that the be-all and end-all of that phrase, that terminology, or can it mean other things?

Freeman: I think some people might be focused more on class. When you talk about social mobility, we like to pretend class is not an issue so much in the US. But it is, and I do think people try to climb the social ladder, which is in some ways parallel or adjacent to the economic ladder, but not exactly the same thing. But I do think that that is something people are conscious of, and try to climb as well.

In terms of thinking about how people are able to be upwardly mobile, sometimes we miss the larger context under which people are able to achieve upward mobility, whether it’s economic or strictly social, or a combination of both. I mean, certainly hard work is important, but also the context under which that unfolds. Is this occurring at a time when the economy is growing? Are there increased opportunities for people to take advantage of?

For example, for Black Americans in the 20th century, a lot of that story was moving from the South to other parts of the country where there was more opportunity. And of course, before that, a lot of that story was people migrating from other parts of the world to come here and take advantage of opportunities. And then more recently, people, again, coming from other parts of the world coming here to take advantage of opportunities that they or their children can take advantage of. And so, I think it’s both the hard work of the individual and the family support that they provide. But then also the larger context is also important as well.

Nutter: And when people hear this term social mobility, I mean, I guess it may or may not mean, on the mobility side, that you are moving or not moving. Can you have social mobility and basically stay in the same neighborhood?

Freeman: One of the things that’s really interesting nowadays as cities are transforming is, to what extent are people who were born there, or who were living there, can they take advantage of those opportunities? That’s a question we’re not so certain about. It’s true that Americans used to move a lot more frequently in the past. And so, quite often economic or social mobility also meant physical mobility. You were coming here, you were moving to another part of the country, or you’re moving to a different neighborhood. You had these large-scale migrations, the great migration of Blacks out of the South, the suburban migration, many people leaving central cities, moving to the suburbs and so forth. And that was accompanied, or the impetus for those moves were changes in the landscape.

There were more opportunities outside of the South, there were more opportunities residentially in acquiring affordable housing in the suburbs for some people. And now, you’re starting to see a change where there’s opportunities in cities, and so, to what extent can people become upwardly mobile and stay in place? And I guess it’s just as important to what extent do they want to stay in place.
 

Pro-Business and Pro-Neighborhood

Nutter: It seems like we go through waves of movement. You talked earlier about what some might consider at another time, white flight out of cities to the suburbs, for any number of different reasons, then we see many of the suburban folks who’ve had the big house, had a couple kids or whatever, downsizing. Now they want the two-bedroom condo in Center City [Philadelphia], or in Old City, or in neighborhoods that didn’t even have a name 20 years ago, and are now the new hot place. Young people moving into the city and into neighborhoods where they had not been.

The whole issue of gentrification, which has all kinds of connotations for a variety of people. It seems in academic circles and economic development circles, there’s even a debate, for some, as to whether gentrification can be a good thing or is always a bad thing. Any views on that? Any thoughts on that?

Freeman: Yes, it can be a bad thing and it can be a good thing too. And a lot of it depends on for whom. Who are you talking about? Good for whom? That’s a part of the question too. It could be increasing the tax base, which helps cities stay fiscally solvent and provide other services. It could be raising housing rents that some people can’t afford. It could be people feeling like the character of the neighborhood is changing, and they don’t feel comfortable there. It could be the character of the neighborhood is changing and they like some aspects of that. Maybe they feel like we don’t really need to move somewhere else.I’m a city planner by training, so I always looked at it like, how can we affect this type of neighborhood chain so there’s more of the good or more people can benefit from? And recognizing that there can be harms as well.

Weitzman News: Mayor Nutter, what did your time in office teach you on that question? And has your answer evolved since you left office?

Nutter: One of the things that I would often say is that every piece of ground does not have to have a building on it. And every old building is not historic, it’s just old. And so, how do you manage change. Dr. Freeman was talking about being a city planner, of course, and land use management is critical. I always came at it with the thought and the belief that the most important document, at least at the city local level, of course, is our Home Rule Charter, much like the Constitution for the country. But I also have said many, many times that the second most important document in the city is actually the zoning code. This is a document that I think in the first five, 10 pages, if you are having trouble sleeping, you should pick up the zoning code. It will remedy that very, very quickly. It’s written in language that hardly anyone but Dr. Freeman would understand. Even with updates, it’s archaic.

I think that in the built environment, the built city, how you manage land [is critical.] As real estate people say, “It’s land, nobody’s making anymore.” And so, you have what you have. We were fortunate in Philadelphia. We have William Penn’s grid layout, which in many places is probably the basis for how cities develop and evolve. We could see the patterns on the waterfront—it’s one of the reasons why Philadelphia was, at one point, of course, biggest city in the country, and all the things that went with Philadelphia being Philadelphia.

So, I made this big speech over at the Academy of Natural Sciences, trying to help the development community understand where I was coming from, related to development. That we were trying to diminish, to the greatest extent possible, having to know someone to get stuff done. That our city planning commission had been the preeminent planning commission in the country, and had fallen by the wayside because of political considerations. I wanted people to know: I am pro-business, but I’m also pro-neighborhood, and I don’t think those things are in conflict with each other. You just have to make some tough decisions.

I learned from watching previous mayors, and how they dealt with big issues. And the one that I consistently come back to, and never truly received the credit that is due, is that when you see the Phillies play at night or the Eagles, and you’ve got the blimp up in the air, and they always, of course, show our skyline, and all the great buildings, the two Comcasts, the One Liberty, Two Liberty, the FMC. 45 years ago, that skyline didn’t exist. One person made one critical decision, as a leader, and that was Mayor W. Wilson Goode. In 1984 or 1985, he made the singular decision to allow One Liberty Place to be built, breaking centuries of thought and tradition that no building could be taller than William Penn’s hat. It was not a rule, it was not a law, it was not a statute, it was nothing. It was just the way it was.

There were hearings. There were protests. There were people, I’m sure, in Dr. Freeman’s profession, who were on each side of this issue. This was a huge thing in 1984. (As only Philadelphians can make certain issues outside of what they should be. But we’re traditionalists.) So, I think the government can make decisions and show leadership that the private sector then capitalizes on.

But at the same time, sometimes you do have to say "No." People would bring me these drawings. What do I know about building construction? It looks beautiful. What’s it going to do? What’s it about? How’s it going to affect the neighborhood? You have to worry about things like light and air, casting shadows—will people be able to see after 4:00 or 5:00 in the afternoon?

Every project is not a great project. And so, you have to weigh the impact. We talk about economic development, but we also talk about the human impact, especially in neighborhoods. And Philadelphia is a city of neighborhoods. We have had the second-largest downtown residential population of any major city in the United States of America. People live downtown, they don’t only go to work. It’s a neighborhood, and that has to be considered.

Balancing Growth and Human Impact  

Freeman:  How did you balance the criticisms that you raised that people have about gentrification with the claim that you’re open to business, and you have to worry about the city’s bottom line?

Nutter: We did a number of different things. My first term, ‘08 to ‘12, it was all Great Recession all the time—literally, just trying not to run out of money. Things kind of bottomed out in about ’11 or ’12. We kind of hit rock bottom and then we started to see the growth. There was great interest, in the development community, in housing and tall building construction. I don’t think I ever, after a presentation, called over to the finance office and said, “Hey, should we do this? This project’s going to create 500 construction jobs and 300 permanent jobs after the building goes up.” But the finances can’t drive it. I had to worry about the human impact, traffic, safety, parking. Can the infrastructure handle this kind of growth and development? At some point, some people have kids. So, where are the kids going to school? Does the local school have the capacity to handle another 200 or so families? I wanted to get into those kinds of issues because it’s still a city, it’s about the built environment. It’s not just about the money. And the jobs are certainly a consideration.

I have a very, very strong belief that, even with growth and development, if people want to stay in their neighborhood, they should not get forced out by rising housing values. Traditionally, especially for African Americans and other people of color, and low-income folks, your home was the asset. It’s supposed to appreciate. But at some point, as my grandmother would often say, “You are house rich and cash poor.” If you can’t pay the taxes anymore because of the growth and development, what have we done?  

One of our responses was a senior citizen freeze—freezing their taxes. We said, “If you are a senior at a certain income level, and you own this house, your taxes will not go up as long as you own that house.” I didn’t want people to have to move. There was another program—I don’t name these programs—but it was called LOOP, Longtime Owner Occupant Program. If you had been in your house 20 years, and if the taxes did go up and you weren’t eligible for the senior citizen freeze program, then your taxes could only go up by some small increment, notwithstanding what was going on with your next-door neighbor or the people across the street. And lastly, fixing the assessment system. Talk about broken and corrupt! You could have the same exact house (1100 square feet, classic row house, Philadelphia, 16 to 18 feet wide, four bedrooms, one and a half baths, whatever) and houses on the same block across the street would have a wildly different property assessment because of politics. And who knew who. There wasn’t fairness in the system, and lack of fairness creates distrust. If people can’t trust the government to try to make things fair, I mean, that really does truly undermine democracy.

The fact of the matter is, most people do not have time to pay anywhere near as much attention to us [civic leaders] as we’d like to think they do. What they really want to know is, did you pick up my trash? Are you stealing from me? And is the city moving in the right direction? It’s the fundamentals that people really care about. You pay your taxes, and then we have to steward those funds properly. And so, for me, during my time in office, it was about relationship. It was that social contract that I tried to establish with citizens and that I was looking out for.

Lessons from Recent History

Weitzman News: Are you optimistic or pessimistic about social mobility?

Nutter: Philadelphia, for decades, had the highest poverty rate of the 10 largest cities in the United States of America: over 20% for 40 years. We’ve now dropped to number two. Am I optimistic? No. In this particular regard, two is better than one. Some things you don’t want to be number one in. So, that’s progress, but there’s still a long way to go.

But I’m optimistic because of the work that Dr. Freeman and I and some teammates are doing at the Weitzman School of Design, focused on these kinds of issues: What is economic hardship? And how is economic hardship different than the federal government’s poverty rate? That’s one measure, but economic hardship measures a whole bunch of other things that are critical in people’s lives. The roof caves in, grandmom fell down and now has a hospital bill. Somebody got married, this one had a baby, this one lost their job, so-and-so got a job.

And so, we saw in a pandemic, what do people do? People of means went to their other house, sometimes in the suburbs, the bigger house, and they had space. Low-income folks: everybody came home. So, in a house that generally maybe three or four people are living in, now there’s seven. And they have jobs where they’re customer-facing. Every day they’re going out possibly exposed to COVID-19 and then come home. So we’ve seen in recent times what economic hardship is, and I think that we are still dealing with some of the impacts.

Freeman: I think there’s reason for optimism and some pessimism. I remember the first time I was reading a book by the political philosopher Francis Fukuyama, and he was describing the United States as going through a period of political decay. And at the time, I thought, “What’s he talking about?” This was probably 10, 12 years ago. Now, I can see that. We’re not where we used to be as a nation in terms of being able to get things done. That part makes me somewhat pessimistic. That said, I think our human resources are tremendous. We have a lot of people who are really smart, really innovative. I think places like Penn are a great incubator for those types of folks. Given the opportunity, we can address the challenges confronting us: poverty, as Mayor Nutter described, risk due to climate change, and so forth.

We were able to overcome COVID, although in fits and starts. That gives me some reason for optimism. Looking at cities, I’m old enough to remember the so-called urban crisis, when the future for cities like Philadelphia, older cities, was pretty bleak. I feel like we’ve turned that corner, and what really needs to be done now is making sure the corner is turned for everyone and not just a select few. So, that does give me some reason for optimism. I think the challenge of expanding opportunity in a place that is thriving is easier than expanding opportunity in a place that is on the overall decline. So, that gives me reason for optimism.