FacebookTwitterRedditEmail

Poor Neighborhoods Need More Than “Investment”

Where some of us see distressed neighborhoods — where families endure poverty and homes fall into disrepair — others see dollar signs. In fact, the Trump administration now brands them “opportunity zones,” offering tax breaks to investors who invest capital there.

What remains unclear is this: Opportunity for whom? Big investors may stand to cash in, but many communities are saying they’re not getting the benefits they were promised.

This story goes back to the 1980s, when British Prime Minister Margaret Thatcher’s conservative government introduced 11 “enterprise zones” throughout the United Kingdom. Inspired, conservatives in the U.S. under President Ronald Reagan promoted the creation of these zones in 40 states.

Even many Democrats warmed to these zones as a viable pro-market approach to urban renewal. The idea resurfaced as “empowerment zones” under the Clinton administration in 1994.

Whatever you call them, they’re spaces where businesses can delay, reduce, or even eliminate taxes altogether on the money they invest.

The Trump administration has certified an estimated 8,700 census tracts as opportunity zones; the official list is 186 pages long. There are nearly 900 such zones in California, more than 600 in Texas, 500 in New York, and 300 in Ohio. The designated tracts in Puerto Rico account for nearly the entire island.

Advocates argue that these incentives encourage investors to direct money into distressed communities in ways that will lead to new jobs, better housing, and other businesses being willing to open up shop in the revitalized community.

There are at least two problems with that argument.

First, many distressed communities suffer from economic challenges that investment alone cannot address, including redlining and housing discrimination. These communities need systemic policy changes that get at the root of discrimination to set the stage for lasting economic change.

Second, studies across the country (as well as in the U.K.) offer little evidence that such incentives actually benefit neighborhoods in the long run.

An expansive study of 75 enterprise zones in 13 U.S. states concluded that tax incentives had “little to no impact on economic growth.” One study of a zone in New Jersey even concluded that increased economic activity within its zone came at the expense of non-zones in the nearby area — the kind of zero-sum economics that would discourage investments in the long run.

Amid all of this is the concern that opportunity zones will mean escalating housing costs, accelerating the process by which residents are displaced because they can no longer afford to live there.

There are ways opportunity zones can be made to work so that the people living in the zones benefit as well as investors.

One strategy is for investors to partner with anchor institutions — enterprises such as hospitals and universities that are anchored to the community by both location and mission. These institutions can play special roles in employing people in opportunity zones and supporting local small businesses through purchasing and contracting.

Even better, they should invest in employee-owned businesses.

A prime example for both strategies is the Evergreen Cooperatives in Cleveland, whose Cuyahoga County is home to 64 low-income “opportunity zones.”

Evergreen’s enterprises show the power of employee ownership to turn communities around and create economic opportunity. Employees who own parts of their place-based business have a long-term source of wealth and an incentive to stay and improve their neighborhoods, because doing so improves their businesses.

We also need to make more affordable housing available, especially through community land trusts, limited equity housing cooperatives, and other strategies that offer opportunities for resident equity building.

Under the Trump administration, opportunity zones — the rebranded “enterprise” and “empowerment” zones of the past — will have some new features but the same bottom line: investors stand to win, while residents lose.

Ensuring that people living in these zones are also winners will require us to push for more fundamental change.

Amadi Anene is a fellow at The Democracy Collaborative. He served as a senior adviser in the Small Business Administration during the Obama administration.

Distributed by OtherWords.org.

More articles by:
bernie-the-sandernistas-cover-344x550
Weekend Edition
December 06, 2019
Friday - Sunday
Jeffrey St. Clair
Eat an Impeachment
Matthew Hoh
Authorizations for Madness; The Effects and Consequences of Congress’ Endless Permissions for War
Jefferson Morley
Why the Douma Chemical Attack Wasn’t a ‘Managed Massacre’
Andrew Levine
Whatever Happened to the Obama Coalition?
Paul Street
The Dismal Dollar Dems and the Subversion of Democracy
Dave Lindorff
Conviction and Removal Aren’t the Issue; It’s Impeachment of Trump That is Essential
Ron Jacobs
Law Seminar in the Hearing Room: Impeachment Day Six
Linda Pentz Gunter
Why Do We Punish the Peacemakers?
Louis Proyect
Michael Bloomberg and Me
Robert Hunziker
Permafrost Hits a Grim Threshold
Joseph Natoli
What We Must Do
Evaggelos Vallianatos
Global Poison Spring
Robert Fantina
Is Kashmir India’s Palestine?
Charles McKelvey
A Theory of Truth From the South
Walden Bello
How the Battle of Seattle Made the Truth About Globalization True
Evan Jones
BNP Before a French Court
Norman Solomon
Kerry’s Endorsement of Biden Fits: Two Deceptive Supporters of the Iraq War
Torsten Bewernitz – Gabriel Kuhn
Syndicalism for the Twenty-First Century: From Unionism to Class-Struggle Militancy
Matthew Stevenson
Across the Balkans: From Banja Luka to Sarajevo
Thomas Knapp
NATO is a Brain Dead, Obsolete, Rabid Dog. Euthanize It.
Forrest Hylton
Bolivia’s Coup Government: a Far-Right Horror Show
M. G. Piety
A Lesson From the Danes on Immigration
Ellen Isaacs
The Audacity of Hypocrisy
Monika Zgustova
Chernobyl, Lies and Messianism in Russia
Manuel García, Jr.
From Caesar’s Last Breath to Ours
Binoy Kampmark
Going to the ICJ: Myanmar, Genocide and Aung San Suu Kyi’s Gamble
Jill Richardson
Marijuana and the Myth of the “Gateway Drug”
Muzamil Bhat
Srinagar’s Shikaras: Still Waters Run Deep Losses
Gaither Stewart
War and Betrayal: Change and Transformation
Farzana Versey
What Religion is Your Nationalism?
Clark T. Scott
The Focus on Trump Reveals the Democrat Model
Kollibri terre Sonnenblume
Do Bernie’s Supporters Know What “Not Me, Us” Means? Does Bernie?
Peter Harley
Aldo Leopold, Revisited
Winslow Myers
A Presidential Speech the World Needs to Hear
Christopher Brauchli
The Chosen One
Jim Britell
Misconceptions About Lobbying Representatives and Agencies
Ted Rall
Trump Gets Away with Stuff Because He Does
Mel Gurtov
Hong Kong, Xinjiang, and the Insecurity of China’s Leadership
Nicky Reid
Dennis Kucinich, Tulsi Gabbard and the Slow Death of the Democratic Delusion
Tom H. Hastings
Cross-Generational Power to Change
John Kendall Hawkins
1619: The Mighty Whitey Arrives
Julian Rose
Why I Don’t Have a Mobile Phone
David Yearsley
Parasitic Sounds
Elliot Sperber
Class War is Chemical War
December 05, 2019
Colin Todhunter
Don’t Look, Don’t See: Time for Honest Media Reporting on Impacts of Pesticides
FacebookTwitterRedditEmail