I have been thinking a lot about Jane Jacobs recently and how her writing informs our thinking about metropolitan finance in general and Opportunity Zones in particular.

One of my favorite chapters in The Death and Life of Great American Cities is chapter 16, where Jacobs spelled out her views on “gradual money and cataclysmic money.”

In Jacobs’ scathing assessment, public and private capital in the 1950s was primarily of the cataclysmic kind. It contributed to the destruction of countless urban neighborhoods both by favoring the suburbanization of population and jobs and by subsidizing large scale “slum clearance” and massive road-building projects. The “death of cities” reflected the absence of public, private and civic capital that financed the “gradual, constant, close-grained changes” that Jacobs argued are the essence of diverse economies, mixed communities and inclusive growth. This absence was clear in communities all across America, from her native Scranton, Pennsylvania to her home in New York City.

Applying Jacob’s insights to Opportunity Zones yields the following thoughts.

First, the devastating effects of 1950s-era “cataclysmic money” are still with us. Many Opportunity Zones, whether in central business districts or low-income neighborhoods, are the products of destructive urban renewal efforts that displaced minority residents, destroyed cohesive neighborhoods, tore down countless historic buildings and rammed highways through the heart of major cities. Even a cursory visit to Louisville, Oklahoma City and South Bend – where I am working with Accelerator for America to create an Investment Prospectus tool – shows the long tail effect of decisions made 60 to 75 years ago.

Cataclysmic money, of course, was not isolated to the 1950s. In many respects, cities are still recovering from the destructive impact of cheap mortgages and shoddy and even fraudulent underwriting that precipitated the Great Recession a decade ago. While Wall Street has moved on and large commercial banks have still further consolidated their market power, millions of people and thousands of neighborhoods are still suffering the after-shocks of a financial sector that has left so much of the country behind.

Cities, in essence, are artifacts of their past. To a large extent, Opportunity Zones represent an opportunity to knit back together the fabric of many cities and accelerate the restoration of the core that is still nascent.

Second, the Opportunity Zones incentive forces us to look at low-income communities – and the health of our community development finance system – anew. It compels us to walk the streets, kick the tires, and engage people where they live and small businesses where they operate. It forces us to assess the real market demand and viability – or lack thereof – in disadvantaged places.

My visits to Opportunity Zones show many communities with empty lots, shuttered mills, disinvested corridors and blocks of dilapidated housing, in desperate need of a new financing model. In these places, it is easy to find the mark of an alphabet soup of public investment; many communities seem like nothing more than the physical manifestation of decades of disparate HUD programs. In these same communities, however, it is hard to find market transactions where conventional financial institutions took serious risk to get deals done. And it is hard to find community development enterprises with the capital and capacity to move markets themselves rather than simply serve as the vehicle for tax credit syndication. And it is harder still to find information about market traction rather than baseline social need.

I don’t want to discount the progress since the publication of Jacobs’ masterpiece to construct an impactful community development finance system. Enactment of the Community Reinvestment Act and Home Mortgage Disclosure Act in the 1970’s helped reverse the redlining that starved many urban neighborhoods. Creation of new federal tax credits and funding for new authorized programs like HOME, HOPE VI and Choice Housing brought public and private capital to communities. And so forth and so on.

But the community development finance system, as currently constructed, is not geared to moving trillions of private dollars off the sidelines into productive use; today a limited amount of public subsidy undergirds a top-down system focused on conventional debt, layered bureaucracy and often maddening technicalities. That is not aligned with or scaled to the challenges we face.

Finally, the enactment of the Opportunity Zone incentive could catalyze the creation of a new finance system that satisfies investors, moves investments, and works for disadvantaged people and places – all by changing the underlying structure of economic decision making at work today.

That requires us at the outset to revisit Jacobs’ definition of the capital that is flowing into our communities. Is capital extractive or generative? Is it stupid or smart? Is it unusually risk averse or appropriately risk accepting? Is it constricted (focused on narrowly drawn projects) rather than holistic (focused on the synergistic value that comes from the mixing of residential, retail, employment and amenities)? Is it managed by institutions that create value and then capture value for local residents rather than distant investors?

All of us are familiar with the TV commercial that asks “What’s in Your Wallet?” Opportunity Zones are asking us to redefine “What’s in Your Capital Stack?” What’s the mix of debt, subsidy and equity capital that can build or preserve affordable housing (across hot and cold markets) or provide seed funding for pre-revenue community businesses (rather than tech startups) or deliver public goods like basic infrastructure? What’s the mix of debt, subsidy and equity capital that is seamlessly available to low-income neighborhoods and people via new or repurposed financial instruments, intermediaries and institutions?

We don’t have a capital problem in the United States. We have an organizing problem.

Opportunity Zones challenge us to reimagine the community development finance system from the bottom up – sparking and then spreading innovations from one city to another, challenging cities to create new institutions at the neighborhood and district level that create a virtuous cycle of value creation and capture, creating consortia of cities that attract common pools of capital that address similar challenges and opportunities – rather than wait for the next federal government to right all wrongs.

Jane Jacobs’ perspective on money – like her observations about all things urban – is more relevant than ever.