1988 Winner; 1987 Finalist
Cleveland, Ohio
Innovations in American Government Program
Innovations in American Government Program
Cleveland, Ohio, has long been considered one of the most racially segregated cities in the United States. These segregated neighborhoods lead to divided schools districts, resulting in the perception of a lower quality education. Racially divided communities are therefore less desirable areas, lowering property values and the projected return on the initial investment. In the past, desegregation approaches included minority housing quotas or school busing, forgoing market incentives and curtailing residents' freedom of choice. Since the 1960s, various Cleveland neighborhood associations have been working to integrate the eastern suburbs of the city through modest, privately funded loans for those who moved into a neighborhood where their race was under-represented. Although theses efforts led to some promising results, by the 1980s, threats of resegregation began to surface throughout the area. 
In the suburb of Shaker Heights, the mayor and the city council responded to this troubling trend by establishing the Fund for the Future of Shaker Heights (FUND), which utilized the basic principles of earlier neighborhood associations to offer incentives for pro-integrative moves, encouraging diverse families to move into the predominantly African-American Shaker Heights. African-Americans attempting to move out of the Heights and into historically white neighborhoods were aided in 1984 with creation of the East Suburban Council for Open Communities (ESCOC) by the jurisdictions of Shaker Heights, Cleveland Heights, University Heights and the Shaker Heights/University Heights City School Districts. Additional support was provided in 1987 to establish the Heights Fund (H-FUND) with the purpose of recreating FUND in the cities of Cleveland Heights and University Heights.
FUND, ESCOC and H-FUND comprise the first cross-jurisdictional effort in the nation to promote and maintain racial integration through affirmative marketing techniques, homeseeker counseling, and monetary incentives. The main activity of the programs is to attract prospective homebuyers and renters into neighborhoods where their races are under-represented through below-market rate loans that may be used for down payment or mortgage payment reduction. In addition to financial incentives, the programs engage in aggressive advertising, employer outreach, neighborhood and school tours, and showing homes for sale and suites for rent in cooperation with real estate agencies and landlords. Neighborhood and community organizations also work in tandem with the programs and several provide substantial monetary support. FUND, H-FUND and ESCOC receive ongoing funding from public, private, and philanthropic sectors and are managed by professional staff who are overseen by publicly appointed advisory boards.
The shifting demographics of participating communities clearly reflect the goals of these programs and result in school integration while maintaining the concept neighborhood schooling. Between May 1986 and March 1988, FUND provided 43 loans, which resulted in 43 new white students in the Shaker Heights school district, and local realtors reported increased interest in the specific neighborhood FUND serves. ESCOS had a dramatic effect in the community of Richmond Heights, where the African-American school population rose from .7 percent in 1980 to 9.6 percent in 1987. Since the programs encourage integration of all races, not just focusing resources on minorities, they have received praise from a wide cross section of the Cleveland population. Local real estate professionals are among the strongest supporters of FUND, H-FUND, and ESCOC because they best understand that recent population drops have led to the need to create increased demand for housing in the greater Cleveland area. Between 1984 and 1986, median sales prices rose by 15 percent in Shaker Heights, indicating greater demand. As of 1987, over three-quarters of the Cleveland Heights residents wanted to continue H-FUND and would even support a tax hike if it was necessary to maintain integration.
Most significantly, these programs have indirectly inspired dialogue about race and a new race-consciousness in Cleveland. FUND, H-FUND and ESCOC have effectively utilized market incentives and joined cities and school districts in the common goal of peaceful racial integration.
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