The actor and Internet entrepreneur shares insights from his grandfather James Rouse’s career as a pioneering urban planner—insights that are relevant to all leaders.

Question: How did your grandfather James Rouse contribute to theories of urban planning?

Edward Norton: My grandfather [James Rouse] was a very famous commercial real estate developer, but more famous for being, in many ways, being a philosopher about cities. In the ‘40’s and ‘50’s, he was very, very ahead of the curve in terms of predicting what would happen if we failed to invest in inner city and keep it a vital place that people wanted to not only come to work, but to live. He kind of predicted the phenomenon of flight to the suburbs by the middle and upper-middle class and the collapse of the inner city. He talked about the perils of low-density development, you know, development based on the highway as opposed to mass transit and the way that that would create sprawl.

He saw a problem that a lot of people were just sort of writing off as a permanent condition in American life. People were saying, well 40 million people living below the poverty line and these decrepit neighborhoods and abandoned buildings—this is just a part of the inherent reality of American capitalism, where there’s going to be a certain part of the market that the for-profit real estate market and the government don’t cover, that gets let fall between the cracks.

And when a lot of that stuff came true in the ‘60’s and ‘70’s, he was looked at by a new generation of progressive urban planners and urban thinkers as a real visionary.

Question: Why was your grandfather able to tackle issues that others did not?

Edward Norton: He basically said, why are we accepting this condition? Why are we accepting the conventional wisdom that this is a problem that can’t be solved? That’s insane. And he rallied, he pulled in a lot of really young and brilliant people. He pulled them out of the financial sector and he sort of said, we need to envision, we need to come up with a mechanism that makes it make sense to invest in that part of the housing market.

And so he and some very young, very brilliant people came up with the architecture of what became the low-income housing tax credit. The Federal Low-Income Housing Tax Credit. It was a revolutionary idea. It was an idea of how you could incentivize people, banks, and companies to make investments in equity funds that invested in affordable housing through a federal tax credit program that just gave it a slightly boosted return through federal tax credits. And everybody across the whole political spectrum—Republican, Democrat—loved this program because it addressed a need without throwing government money at it. It incentivized banks and businesses to invest and get a return, but it aimed it a part of the marketplace that wasn’t being dealt with.

For the lawyers and the kids studying finance and business and housing and urban planning, you know, those are the ideas that the next wave is going to have to come up with. And it’s going to come in areas that people aren't expecting it to right now. It’s gonna come in things like energy or efficiency.

Question: What lesson should today’s entrepreneurs take from your grandfather’s story?

Edward Norton: Never assume that there isn’t a solution to a complex problem. It’s usually just because somebody’s not willing to put in, you know, the time and the brain power. Most people are on cruise control most of the time. They just are. They’re cruising along, taking things as they are.

People who are innovators tend to recognize a need before other people. That’s all. You know what I mean, they sort of say, I want this and it’s missing. But then they don’t stop at that point. You know, they don’t sort of go, oh that’s a bummer. They go, hmm, like, there must be a way to do that.

Recorded December 9, 2010
Interviewed by Max Miller
Directed by Jonathan Fowler
Produced by Elizabeth Rodd