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Wake County Offers a Model for Eviction Prevention as Renters Face a National Crisis

October 1, 2020 / No Comments

Written by Phillip Kash and Sarah Kirk

The economic impacts of the COVID-19 pandemic have exacerbated pre-existing housing affordability challenges and will lead to an eviction crisis on a scale never before seen. In the face of this crisis, Wake County, North Carolina, recently announced the House Wake! COVID-19 Eviction Prevention Program following an in-depth study of housing needs by HR&A. The program offers a model for other state and local governments seeking to keep low- and moderate-income renters in their homes and to stretch limited public dollars.

Loss of income is the leading cause of housing insecurity for low- and moderate-income households, and the rise in housing insecurity tied to COVID-related job loss, reduced hours, and illness will be acute. Thousands of families will find themselves at risk of eviction or foreclosure and homelessness, as well as in need of expanded access to government services.

Local governments are largely on their own as they respond to this need. Most states temporarily suspended evictions and utility shut-offs in the spring to keep families in their homes, and the CARES Act put in place supplemental unemployment insurance to affected households. As is well-known, however, most of these federal and state protections have exhausted their funds or lapsed or shortly will. Attempts to pass additional federal recovery measures have stalled.

A notable exception to this litany of “too little for not long enough” is the CARES Act’s Coronavirus Relief Fund (CRF), an atypically flexible grant program that has awarded $150 billion to state and local governments to cover a wide range of costs incurred due to the pandemic as long as they were not previously budgeted for. Wake County, which encompasses the Raleigh metro area and is home to 390,000 households (including four staff members in HR&A’s downtown Raleigh office), received $194 million in CRF funds.

Wake County retained HR&A to estimate the scale of need for emergency housing assistance due to COVID-19, understand which residents faced the greatest impacts, and advise on a strategy to keep families housed. The County chose to focus on renters because of the weakness of State eviction protections for renters, stronger protections for owners at both the State and federal level, and the relative lack of assets among renters vis-a-vis owners at all income levels.

More than a third of Wake County households rent, and most of them have incomes below 80% of area median income (AMI) (62% of renter households, or 88,000 of 141,000). Eleven percent of renters were unemployed as we began the assessment stage of the project in June, principally as a function of COVID-19. We defined the households at greatest risk of eviction as being those who had become unemployed and whose income had been 80% of AMI or less – approximately 11,000 households or 7.5% of all renters.

The House Wake! Eviction Prevention Program – funded with $17 million of CRF allocations – and its sister program elements are designed to prioritize households at greatest risk of eviction, provide multiple safety nets to keep tenants in their home, and serve the most households by sharing the economic burden among the County, tenants, and landlords. The three-step intervention program consists of:

Eviction prevention through financial assistance to tenants and landlords to cover rent shortfalls resulting from a loss of income. The program will pay a portion of tenants’ rent from March through December, in exchange for landlords agreeing to forgive the remainder, discount rent January through March 2021, and forego eviction.

Eviction mediation services consisting of pro bono legal support for tenants who are unable to reach an agreement with their landlord. Through a partnership with Legal Aid of North Carolina, this program will aim to find solutions to stabilize tenant obligations and prevent eviction.

Relocation assistance, including transitional services and relocation support, to residents whose housing could not be stabilized through interventions 1 or 2.

Through these three steps, the County estimates that the Eviction Prevention Program will help keep more than 3,000 households in their homes, while facilitating access to other housing protection for additional households in need and testing the effectiveness of the program model to support future state or local funding if needed. Local and state governments nationally can learn from this model, including several key features that increase its potential to limit evictions over the long term:

It provides timely assistance to those in greatest need. The Eviction Prevention Program is targeted to low- and moderate-income renters, those residents most vulnerable to eviction in the short term.

It provides multiple points of intervention to reach more residents. Wake County renters interested in the Eviction Prevention Program may be unable to participate if their landlords are unwilling to participate, but the County can serve all income-qualified renters facing eviction through the other tiers of intervention, either to prevent eviction through mediation or to quickly re-home evicted households. The flowchart above illustrates the path of assistance for at-risk renters.
It incentivizes landlords to share in the cost of rental assistance. The goal of this requirement is not to be punitive or create burdens for landlords, but rather to distribute the costs among renters, landlords, and taxpayers. In exchange for forgiving a share of rent, landlords can receive compensation for lost back rent they otherwise could not recoup, and the program can reach more households by reducing the cost to serve each individual household. The table below provides an illustration of how the burden-sharing works form a landlord’s point of view, contrasting landlord recovery under the Eviction Prevention Program with recovery under an eviction scenario. The Eviction Prevention Program makes burden-sharing requirements explicit; the Eviction Mediation Program does not have set requirements but will aim to reach equitable settlements between landlords and renters, which may require concessions on the part of the landlord to prevent evictions.

It provides enhanced legal services to tenants. North Carolina’s eviction laws overwhelmingly favor the landlord, and renters have few rights and limited recourse to slow or prevent eviction. By layering funding for rental assistance with funding for legal services and mediation outside of court, the Eviction Prevention Program helps alter the balance of power between landlords and residents, slow the eviction process, and find alternative settlements.

Eviction prevention measures instituted at the local level must be tailored to match local needs, government resources, and market realities. These features will be critical to sustaining and maximizing the benefits of local efforts and, collectively, local efforts will be critical to forestalling a national housing crisis.

Work from Home Will Fade. Work from Anywhere Will Thrive.

September 21, 2020 / No Comments

Written by Danny Fuchs, Kate Wittels, Jessica Jiang, and Adam Tanaka

At this point, much has been written about the extent to which COVID-19 has disrupted commercial real estate occupancy. The share of remote workers nationwide surged from 13% to nearly 50% in a matter of weeks this spring. Six months later, office districts from Los Angeles to New York remain largely empty. Even as infection rates wane, evidence is mounting that the pandemic is accelerating a shift toward greater flexibility in talent’s choice of workplace. The white-collar Work from Home experiment of mid-2020 is beginning to end. In its wake, a new Work from Anywhere economy will rise.

HR&A’s own physical footprint has been evolving toward a Work from Anywhere model for some time. Six years ago, the firm maintained open plan offices in desirable mixed-use districts in New York City, Washington DC, and Los Angeles. By the start of 2020, employee preferences, a need to service a broader client base, and technological advancements had produced a more dispersed web of work environments. HR&Aers were working not only in our three “traditional” offices, but also in a retail storefront office in Dallas, coworking facilities in Raleigh and Chicago, and home offices in Atlanta and Vermont, as well as transient workplaces in numerous airports, hotels, and client offices across the country. This diffusion of work environments has been reinforced by the pandemic, as employees have moved closer to family while schools are closed, temporarily relocated to try a new city, or bought homes (and home offices) outside of the urban core but with the ability to commute to the office regularly. Two weeks ago, HR&A reopened its New York office at the request of staff who will use the space on a voluntary basis. We are proceeding with a phased approach to reopening our other offices as public health conditions improve and staff seek alternatives to working from home.

What exactly do we mean by “the Work from Anywhere economy?”

We define the Work from Anywhere economy as one in which most office workers have workplace choices. In the Work from Anywhere economy, the central office remains essential, but the choice to work at least part time from home, a coworking space, or new workplaces fashioned out of retail storefronts, hotels, and residential complexes is one that is real. Work from Anywhere does not represent the death of the office, but rather the rise of the diversified workplace.

The difference between Work from Home and Work from Anywhere is primarily the real estate footprint that employers purchase. Prior to the pandemic, Gensler’s 2019 Workplace Survey reported that 45% of US workers had a choice of workspaces within their offices; workplaces that offered variety and choice in work settings had a higher effectiveness and experience score. The change happening now is that the choice of whether to do heads-down work in the office lounge or at an assigned desk has expanded to include a home office, a co-working space or business lounge, a hotel on the way to a client meeting, or a coffee shop down the street.

In a series of articles, beginning with this one, we will explore the impacts this transition will have on people, companies, communities, and cities.

We begin by looking at the supply and demand characteristics of the transition. Thirty years ago, an explosion of coffee shops provided initial supply. Following the Great Recession, businesses of all sizes and industries explored the potential of coworking spaces and flex office models like Convene. By late 2019, the largest tenants in London, New York, and Chicago were coworking entities. Innovative office developers like Hines, Hudson Pacific Properties, Jamestown, RXR, and Tishman Speyer began to compete in “amenities wars” within office developments; four fifths of employers perceived amenities as “integral” to the employee experience. Now Marriott is rebranding some of its most popular travel destinations as glorified business centers – a tack being taken by others from DC to LA. The co-living company Common recently launched a competition seeking proposals from cities and developers for remote work hubs. We expect more such experiments to emerge.

On the demand side, employee interest in the Work from Anywhere model appears high: homeowners are building mini office buildings in their backyards, and stocks for home improvement companies are soaring. Employer demand is more complicated. Take the tech sector – already prone to remote work. Late last month, Pinterest paid a $90M penalty to renege on a long-term lease commitment in San Francisco in favor of a “more distributed workforce.” Meanwhile, Netflix CEO Reed Hastings disparaged remote work as a “pure negative” and insisted that the company would bring workers back into the office as soon as a vaccine was available.

Likewise, while 56% of hiring managers surveyed by Upwork said the shift to remote work had gone better than expected, J.P. Morgan Chase reported that productivity slipped among those working from home. J.P. Morgan and others have observed that certain aspects of white-collar work have proved challenging to adapt to a virtual setting, including onboarding, training, socializing, and unstructured collaboration. Employer demand will not be uniform; it will be informed by internal culture, worker-management relationships, the extent of supply-side changes, and successes and failures across industries, all of which will take time to manifest.

Nonetheless, the disruption in the geography of work is already undermining the tax base of cities, upending mobility patterns, and transforming demand for all manner of urban real estate. In New York City, nearly 10% of the city’s 2019 tax revenue was derived from what are now mostly empty office buildings; as of mid-September, weekday subway ridership is down by more than 70% compared to last year. As we explored in an earlier analysis, not all cities are the same: knowledge hubs like Washington DC, where 53% of workers are able to work remotely, will face very different challenges in the Work from Anywhere economy than tourism hotspots like New Orleans, where less than 40% of workers can telework.

In the coming months, HR&A, in partnership with you, our readers and collaborators, will examine the following questions:

How should office owners and developers respond to the Work from Anywhere economy? What services and amenities should landlords provide to stay competitive? What data will be needed to communicate the value of the physical office to tenants? How can residential, retail, and hospitality developers best position themselves to compete?
Which cities will benefit, and which are at risk of being left behind? What will dispersed work do to municipal finances, housing markets, commuting patterns, and neighborhood services? What uses will shrink and which will grow? How will the street experience change? What investments in physical or digital infrastructure should cities make? What are the implications for central city and suburban labor markets?
How can we continue to support a Just and Resilient Recovery in a Work from Anywhere economy? How will the erosion of the traditional office model impact the most vulnerable, including low-income households, communities of color, and undocumented immigrants? How should the labor force be reskilled to adapt – notably including the estimated 22 million workers in office support functions? How might redistributions of wealth within regions aid efforts to reduce inequality rather than continue to exacerbate it?

The promise of cities is anchored in density and diversity of people and experiences. Over the coming months, we look forward to exploring how urbanists in government, private industry, and nonprofits can work together to ensure our cities continue to thrive in a Work from Anywhere economy. If you have ideas or experiences to share, please get in touch with Kate Wittels and Danny Fuchs to carry on the conversation.

Can Urban Manufacturing Make Cities More Resilient?

September 1, 2020 / No Comments

Written by Sulin Carling, with Carl Hooks
Special thanks to Kevin Clyne and Meredith Nissenbaum

Manufacturing in the Time of COVID

The U.S. is dependent on goods that come from all corners of the world. As a result, this spring American cities were left scrambling when demand for critical medical supplies surged beyond what supply chains could handle. In response, local manufacturers innovated, in varying degrees of coordination with local and state government, to manufacture face shields, disposable gowns, hand sanitizer, nasal swabs, and more. Many of these efforts required expensive retooling, hasty matchmaking between manufacturers, and extensive searches for suppliers. “Success” has been relatively inefficient, costly, and difficult to scale. Even after many months, shortages of critical supplies remain.

With the increasing threat of climate disasters, supply chain disruptions are expected to become more frequent. There has been much discussion of potential limitations on the United States’ ability to scale production of a vaccine within the country.

Could bringing manufacturing back into our cities increase national resiliency while creating new economic opportunities for low-income communities of color disproportionately impacted by the pandemic? We believe the answer is yes, though urban manufacturing is and likely will remain smaller and more specialized than sub- and ex-urban manufacturing. It would be fruitful to think about regional manufacturing ecosystems that could reinforce supply chains and create economic opportunity. A deeper look at the manufacturing landscape in the New York City metro region demonstrates why.

Economics of Urban Manufacturing: New York City Region Case Study

Of the 459,000 manufacturing jobs located in the New York metro, 84% are located outside New York City. Of all subregions, Inner New Jersey – comprising the eight New Jersey counties closest to the city – contains the largest share of these jobs: 163,600 (36%). (Source: Emsi, NYC Department of City Planning.)

The average Inner New Jersey manufacturer employs twice as many people as the average New York City manufacturer (31 vs. 14) and pays less than half the rent on a per-square-foot basis ($10/SF vs. $21/SF). (Source: Emsi, CoStar.) While locating in a city offers proximity to talent and consumers, operations in aging buildings are often less efficient and more costly than in the suburbs.

As manufacturers scale, the benefits of affordable, modern facilities found in the suburbs outweigh the advantages of a central location. Inner New Jersey manufacturers range from mass producers of low-cost commodities to scaled-up advanced manufacturing firms. Manufacturers in New York City generally produce high-margin, small-batch, niche products, including food, woodworking, fashion, and high-tech products. Large “legacy” manufacturers that purchased land when prices were much lower are outliers.

Some have argued that NYC should embrace land use policies and incentives to counteract market forces that make NYC unaffordable for lower-margin manufacturers that offer good-paying, low-barrier jobs. The City should maintain land use policies that retain land for industrial uses, experiment with land use tools that facilitate industrial mixed-use space where feasible, and support provision of below-market space in City-owned properties like the Brooklyn Army Terminal or by non-profits like the Greenpoint Manufacturing and Design Center. On the other hand, the cost of more broadly counterbalancing market forces – through sweeping land use restrictions in a city with limited land area or broadly subsidizing the private market – is so great, that our limited tax dollars are better served by training workers for the types of more specialized manufacturing jobs locating in cities today and reinforcing regional transit connections to jobs outside the city.

In this market context, specialized urban manufacturers are likely to lead in creation of new technologies, while, in an emergency, large suburban factories can execute at scale. Further, with lower operating costs, the latter are better positioned to produce simple goods such as gowns and face masks at a lower cost.

The chart below illustrates the relationship between size, rent, and location for eight manufacturing firms:

Note: Businesses are representative of large and/or growing manufacturing sectors in the NYC metro. Estimated rents are based on asking rents in business’ buildings within the past five years or 2020 submarket rents. Analysis does not include “legacy” NYC businesses that may own properties or have older, lower-cost leases. (Sources: Costar, news reports.)

Leveraging Manufacturing for Urban Resilience and Economic Recovery

COVID gives us the opportunity to rethink how we can leverage regional manufacturing capability to increase both resiliency and economic opportunity. Given what we know about how market forces shape manufacturing in urban and suburban locations, the public sector should:

Support high-tech manufacturing that benefits from locating in cities and can innovate rapidly in a crisis. Innovation happens in dense, mixed-use environments powered by collaboration across sectors and companies, which will only become more important for post-COVID recovery. The Brooklyn Navy Yard’s Newlab partnered with 10XBeta, a product design and engineering firm, to design a cost-effective ventilator in just one month, leveraging a network of innovators and investment by the City of New York. Municipalities should leverage (or acquire) public properties to offer affordable space to select manufacturers, and should support innovation districts such as Cortex in St. Louis, the South Main Innovation District in Houston, and Tech Square in Atlanta, to encourage co-location of large and small innovative manufacturing businesses in flexible spaces with business supports such as incubators and technical assistance. The public sector can facilitate these initiatives, in partnership with universities and private developers, through provision of land, capital investment, tax increment financing, funds for programming, seed funding for businesses, and/or land use approvals.
Establish a regional manufacturing network that can be mobilized during a crisis based on a regional market assessment. Cities, counties, regional planning groups, and states should collaborate to identify the manufacturing assets most crucial in a crisis. They should conduct a regional inventory of manufacturers and suppliers to understand their capabilities, equipment, and space, and analyze market dynamics that drive where manufacturers choose to locate. This can inform policies that maintain and grow manufacturing capabilities, including land use policies that retain land for industrial uses, provision of affordable industrial space, economic incentives, and creation of a manufacturing business registry. Done on a regional scale, this can leverage smaller, innovative companies in urban areas and suburban manufacturers with greater production capacity. In a crisis, the public sector can call upon this network, facilitate new partnerships, and support retooling.
Fund workforce development training for low-income urban and suburban communities to address a legacy of inequitable access to manufacturing and tech jobs. Despite a national nostalgia for manufacturing jobs as a post-War route to the middle class, these opportunities were largely reserved for White Americans. Black manufacturing workers were relegated to the most menial and dangerous tasks, often as temp workers. Today, manufacturing in New York and Inner New Jersey remains majority White – although with a significant Hispanic presence. Our NYC Tech Opportunity Gap Study, conducted with Cognizant and Civic Hall, showed that tech, an increasingly important component of manufacturing, has an abysmal diversity record. Any public sector support for manufacturing firms should be paired with investments in workforce development organizations that are uniquely positioned to support post-COVID economic recovery in low-income communities of color, as well as incentives to rethink hiring practices to address underrepresentation.
Map regional supply chains to create redundancies, step in to redirect existing supplies when needed, and coordinate procurement in an emergency. Manufacturing locally is not the only tool to prevent supply shortages in a crisis; reinforcing supply chains is also key. Jurisdictions within a region should chart sources of essential goods such as medicine and food and address vulnerabilities, such as overreliance on a single transportation route or supplier. The public sector can also create regional partnerships to coordinate purchasing supplies rather than compete for them.

We cannot know what supply shortages the next crisis might bring. But as climate change accelerates and vulnerable populations become increasingly exposed, we must embrace a multi-pronged approach that supports regional manufacturing capabilities – with the associated economic benefits – while also shoring up our supply chains to make us all more resilient.

Listening to Institutional Leaders

August 18, 2020 / No Comments

HR&A staff members Adam Tanaka and Amelia Taylor-Hochberg spoke with four of our collaborators about how they’re leading their organizations through the COVID-19 crisis and toward A Just & Resilient Recovery. Read our interviews here:

University-Led Development with Jonathon Bates, University of Utah	Future of Community Health with Reann Gibson, Conservation Law Foundation
Future of Innovation Districts with Adam Klein, American Underground	Future of Volunteer Organizations with Josh Lockwood, American Red Cross

How Will the COVID-19 Crisis Shape the Future of University Real Estate Development?

Q&A with Jonathon Bates, Executive Director of Real Estate, University of Utah

For almost a decade, Jonathon Bates has served as the Executive Director of Real Estate for the University of Utah in Salt Lake City, where he also is the Director of the University’s Research Park. In response to COVID-19, Bates has had to adapt the Park’s master planning process to the uncertainties of higher education’s day-to-day activities, while continually reimagining how the Park can be an engine of creativity and growth for both the university and the city more broadly. HR&A spoke with Bates about how the Park fosters innovation and his approach to weathering the pandemic.

You have spent the past few years shepherding a major master planning process for the University of Utah’s Research Park. How has the pandemic impacted the project? What will change, and what will stay the same?

The pandemic obviously significantly impacted our planning approach. We have moved to an entirely online format for both stakeholder engagement and our steering committee work. It has also strengthened our resolve to create spaces and programming that increase that “bumpability” factor between researchers, students, faculty, staff, and our industry partners that is so critical to innovation.

Ultimately, we have supported the commercialization process for the university and incubated companies for decades, and the pandemic has not changed the master plan’s focus on ensuring we continue to grow and contribute to Utah’s economic vitality.

The University’s location at the base of the Wasatch Mountains makes it an ideal place for socially distant outdoor activities. Has the University pursued any deliberate strategies to increase access to outdoor spaces and get people out of doors?

Our setting against the foothills of the Wasatch Mountains is unique, giving us an opportunity to make ecological design our calling card. From the beginning of our planning process, we knew that our geographic location was a huge opportunity. We wanted to better plan and position our streets and walkways to make them more inviting places to conduct business beyond the brick and mortar office.

To that end, we are developing the concept of a green spine traversing the research park, with attractive outdoor spaces and an active transportation corridor. We plan to daylight an outdoor natural spring, and reinforce and expand our recently established pop-up venue for food and transportation — we call it “the heart of the park.” Individuals can convene over food and access e-bikes, scooters, university shuttles, and the local bus network.

How has the pandemic impacted the Research Park’s current operations? Are there any aspects of distance learning or remote work that you think will become more ingrained moving forward?

The percentage of individuals remotely working is still extremely high. Programming to build the research park community and the “bumpability” has gone 100% online, through video conferencing and online social events. But there is an aspect of community you do not find in remote work, so I think we will settle on a hybrid model where people can still physically connect on a campus from time to time.

Like bars, music venues, and other gathering spaces, higher education institutions are deeply impacted by social distancing constraints. What measures is the University of Utah putting in place, both in the short- and medium-term, to adjust the campus’ indoor and outdoor spaces to the new normal?

In the short term, the University made the decision to go 100% online for our academic processes. For the fall, students will have the option to take classes in person, and we are establishing social distancing guidelines in all spaces: on-campus housing, food venues, outdoors, and of course, athletic venues. Flexibility is key here — we need several different plans to adjust to as the pandemic continues to evolve.

How has the pandemic impacted the university’s economic development priorities and its partnerships with state and local government?

Thus far, Utah has weathered the economic storm of COVID resiliently, thanks to the breadth and diversity of industries here — in particular, the life sciences. That industry is anchored by the University of Utah and our integrated medical system, continuing to foster the incucation and spinning out of companies. With Salt Lake City Mayor Erin Mendenhall, we have been discussing how we can further foster the life sciences industry through an innovation corridor extending from our research park through the core business district.

How do you think the COVID-19 pandemic will impact the practice of university real estate development going forward? What will universities invest more in, or less in, when it comes to physical space?

We have been looking for ways to better monetize our real estate assets, through creative public-private partnerships, ground leases, and housing development. We’re also interested in future landbank opportunities for academic and healthcare expansion.

From a physical standpoint, we are going to have to continue to be flexible in our designs so we can pivot pedagogy and administration as the pandemic evolves. At the same time, we need to foster that critical cultural environment on campus that encourages interaction and leverages the outdoors. Ultimately I think the future is bright, with higher education institutions as placemaking and economic development leaders.

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How Will the COVID-19 Crisis Shape the Future of Community Health?

Q&A with Reann Gibson, Senior Research Fellow, Conservation Law Foundation

The Conservation Law Foundation (CLF), an advocacy group based in Boston, works to protect New England’s environment through legal advocacy and social science research. One of its major initiatives is the Healthy Neighborhood Study (HNS), a longitudinal study of the relationship between urban development and health in nine Massachusetts communities, each selected for their common struggles to achieve greater public health and economic growth, in the context of explosive regional development pressures. Using a methodology known as Participatory Action Research (PAR), CLF partners with over 30 resident-researchers from these communities to develop the Study’s research questions, collect data and determine how it should be analyzed — all in service of informing future planning decisions in these communities.

HR&A spoke with Reann Gibson, CLF’s Senior Research Fellow and manager of the study, about COVID-19’s amplification of environmental and racial justice issues, and the importance of elevating community voice through data.

How has the pandemic impacted CLF’s preexisting environmental advocacy initiatives?

COVID-19 has not meaningfully changed our work to build healthier communities, but it has highlighted its importance. We’ve always believed that racial justice is at the heart of environmental justice, and we know that after decades of racist housing and environmental policies, Black and brown communities are being hit very hard. These residents are also on the front lines of the climate impacts that disproportionately affect them and compound the impacts of COVID-19. We’ve had to adapt to remote work, but luckily our current research phase for the HNS is focused on preparing our analysis, rather than gathering data in the field.

What have you been hearing from the HNS’s community organizations about how they are coping with the day-to-day impacts of COVID-19?

The nine communities in the HNS work with us because they are likely to experience pressures from transit-oriented development. Those communities have also experienced historical disinvestment and are vulnerable on many fronts. With COVID, city leaders and community partners are better aligned than ever to protect people’s safety and help them get what they need to stay safe. There have been lots of great partnerships with community organizations helping organize donations and distribute funds to people in need.

One of the first things CLF did was write an open letter using HNS data to highlight some of the vulnerabilities faced by these communities and highlight the supports that are most needed. The HNS tells a unique story from the residents’ perspectives about healthy communities, so that when they are looking for resources, they have data to call on.

How have the HNS’s Participatory Action Research (PAR) techniques changed to adapt to social distancing measures?

Mainstream narratives lack the language to talk about long-term residents’ experiences in a gentrifying neighborhood. We are creating that narrative. We would not be able to do that without PAR, where we source data directly from residents, and they help develop the questions. CLF’s role is to make sure the survey meets the community’s needs for the data. Otherwise, we risk just replicating the mainstream media’s narrative on gentrification and housing, which focuses on the number of new white residents or the number of new developments, or percent AMI, or percent affordable housing.

Post-pandemic, which policies and programs do you most hope the HNS’s data will influence?

Ownership over our environmental changes matters for health. The community knew that five years ago. Data is important, but we need to be mindful of how it’s produced, and how it can reflect that sense of ownership. Who gets to decide what happens in a community should be sourced from the community living there now, and based on their direct needs.

Many of our community partners hope that the HNS’s data will influence decision making on the local and regional scale and impact community control, housing, and investment. We hope the key decision makers will understand the risks of excluding people and make changes that center community voice in these processes.

The protests following the murder of George Floyd have prompted a nationwide conversation about systemic racism, including framing it as a public health crisis. Do you think this will change public health’s role in planning?

Absolutely. We are on that path. We need neighborhoods that are healthier and more affordable. We also need better data and tools to understand what is going on in communities. We hope this moment will help us see as a society how critical it is to prioritize health and equity in all the investments we make in communities. The reckoning on systemic racism’s role in our nation’s history is long overdue. We hope that this moment is finally a catalyst for change.

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How Will the COVID-19 Crisis Shape the Future of Innovation Districts?

Q&A with Adam Klein, Chief Strategist, American Underground

Adam Klein is the Chief Strategist for American Underground, “the startup hub of the South.” Based in Durham, North Carolina, AU’s approach to fostering startups is rooted in diversifying economic opportunity and connecting entrepreneurs with the rich local resources afforded by the nearby Research Triangle Park and multiple universities. While AU’s day-to-day operations have certainly adjusted in response to COVID-19, Klein is confident that dense, in-person collaboration will remain integral to a successful startup economy, with platforms like AU playing a pivotal role.

What digital engagement strategies have you used to keep your members engaged during the pandemic? Do you think you will retain any of these methods even as social distancing measures are relaxed?

We launched a community-wide Slack channel about three weeks before COVID hit, as a means of organizing community conversations. We have launched more community-wide Zoom sessions that are practical, expert-driven talks. These have enabled us to engage speakers beyond the confines of the Triangle that we usually would not be able to get, like a mental health expert based in London, and the former head of Google for Startups. We plan to have those continue, post-COVID.

How are you approaching the use of your physical space as Durham starts to reopen?

Because some of our businesses are essential, we have not fully closed the space. But as more of our members return, our goal is for people to be able to get to their office without touching a door handle. We have invested in anti-microbial door handles, copper covers, hand sanitizers, and chemical wipes. We installed foot pulls on all the doors, a small, easy hack that one of our members came up with. We have pulled a lot of chairs out of the conference room so that social distancing is standard, and invested more in videoconferencing tech.

We have also worked with our landlords to bring in more fresh air throughout the day and more frequently replace the HVAC filters. Finally, we are asking our members to commit to daily temperature checks, to stay at home if they are not feeling well, and not to bring any guests, at least for now.

Have any of your members pivoted to developing new or modified products and services in response to the pandemic?

Most of our companies are enterprise software companies so they have not really been impacted. One of our software development shops, CrossComm, developed an app that helps Duke Health’s ventilators to be split and shared. They also created Three Good, an app that asks people to spend a few minutes every morning saying what they are grateful for, as a way to start their day in a different frame of mind. Another really neat company is MindSumo. They identify talent by posing large challenges to students. They partnered with the National Security Innovation Network to launch a contact tracing challenge at Fort Bragg.

American Underground has long been a leader in promoting diversity and inclusion in the innovation economy. Given the current national focus on the persistence of systemic racism, what lessons or best practices can you share for expanding opportunity in underserved communities?

The work of anti-racism has to be core to an organization. It also needs to start with a long time horizon, knowing that as a society we did not get here overnight. The work of inclusion and equity are part of our DNA at American Underground, and as a White-led organization now five to six years into our work, we are only now starting to hit our stride in terms of our impact in the Black innovation community.

Too often, innovation organizations go to the Stanfords and the MITs, and don’t make the right connections with historically Black colleges and universities (HBCUs) and other strong Black-led institutions doing powerful work.

Historically, Durham was home to “Black Wall Street” and known as the “Capital of the Black Middle Class.” How has that legacy shaped the city’s entrepreneurial ecosystem and what can other cities learn from Durham’s experiences?

It has shaped the city overall. The Black community has held political power in Durham for a very long time and continues to be a community power broker. We have a strong Black middle class and Black institutions, and so for people who are living in Durham, there is a desire to continue to carry that baton.

As a White man, one of my jobs is to ask how AU can play a supporting role. There is an awakening in the venture community that their investment thesis, that has historically centered on White men, is fraught with problems. AU has played an intermediary role, cultivating Black entrepreneurs and connecting them with VC institutions, so that we see economic growth in the Black community. Our work is about seeing wealth grow through broad ownership, not just in one community. For those interested in an example of this work, check out our Google for Startups Black Founder Exchange program happening this fall.

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How Will the COVID-19 Crisis Shape the Future of Volunteer Organizations?

Q&A with Josh Lockwood, Division Vice President, Northeast US, American Red Cross

Volunteer organizations play a central role in disaster response efforts, distributing supplies, coordinating services, and providing comfort to those most in need. The COVID-19 pandemic has disrupted conventional volunteerism, due to the constraints of social distancing and the exceptional duration and geographic dispersal of the crisis.

To learn more about how volunteer organizations are responding to the pandemic, we spoke to Josh Lockwood, Division Vice President of the Northeast United States for the American Red Cross. A seasoned not-for-profit executive, Lockwood oversees the Red Cross’ recovery efforts following disasters of all kinds, from hurricanes and housefires to mass shootings and train derailments. Prior to his role at the Red Cross, Lockwood was CEO of Habitat for Humanity in New York City, where he led the organization’s efforts to build affordable housing throughout the five boroughs.

How have the Red Cross’ day-to-day activities shifted since the onset of the crisis?

We have launched over 200 new programs across the country in response to COVID-19, including giving supplies to healthcare workers, feeding underserved communities, providing mental health support to grieving families, and doing wellness checks at nursing homes and veterans hospitals, powered by a trained volunteer base.

At the same time, the Red Cross is continuing its other initiatives. We collect 40% of the nation’s blood, so that hospitals and surgeries have access to transfusions. At the start of the crisis, nine thousand blood drives were cancelled, threatening the collapse of the US healthcare system. We had to do everything we could to make sure governors and mayors could allow us to collect blood in places that were still safe and convince the public that it was a noble thing to do, especially during a pandemic.

We also respond to 60,000 disasters a year, mostly home and apartment fires. During larger events such as hurricanes, we have deployed respondents directly. We have also transitioned other programs to operate virtually.

It has been a very intense period. We have lost members of our staff and volunteer corps to COVID-19, and those are incredibly tough moments that bring home the severity of what we are all dealing with.

Relative to other disasters, the pandemic is a long-term crisis rather than a one-off event. How has the duration of the crisis affected the Red Cross’ planning for the coming months and years?

Usually we are deployed for two to three very intense weeks after crises, but this is different. As such, we are taking a very different approach in terms of self-care and counseling for our staff. We have brought in psychologists to help us balance work and life, and we insert mission moments into our calls to remind everyone of why we are doing our work. We are also enforcing paid time off to ensure people can unplug.

Financially, we are very fortunate to have a very savvy business leader as our national CEO, Gail McGovern. We are better positioned than most not-for-profits to weather a drop in donations, which gives all of us great psychological comfort.

How has the Red Cross coordinated with state and local authorities in New York to deliver essential supplies and other assistance?

We are always well connected. When state or local authorities open an Emergency Operations Center, the Red Cross will always have a seat there. We also have a special role within federal emergency management written into our charter. We provide regular updates to mayors, federal officials, and so forth, to make sure they are aware of what we are doing.

Crises often contribute to a surge in mutual aid. Given the constraints of social distancing, how has volunteerism played out during the pandemic? And with lockdowns easing, how do you see volunteerism evolving in the longer-term?

The Red Cross has hundreds of thousands of trained volunteers nationally. Even without a pandemic, it is always a challenge to keep those volunteers engaged. So right now, with fewer services being delivered in the field, accommodating volunteers is much more difficult. That said, as a larger not-for-profit, we do have a virtual platform, and we have case workers and disaster responders who can do a lot of terrific work virtually. Until the vaccine comes, our focus is on engagement rather than recruitment.

As a disaster truly unique in living memory, what do you think the longer-term impact of the pandemic will be on the mission and scope of volunteer organizations overall?

I am not at all worried about volunteerism in America. There is a very generous and entrepreneurial spirit here. I do think we have learned how to perform virtually, so it is likely we will be more reliant on those processes going forward. We also need to think about maximizing the health of populations who may have preexisting conditions. Things like social distancing, wearing masks, and washing hands, will become second nature in our deployments and in our volunteer-led work. When the vaccine comes, I think there will be a rush of people racing to be out in the field again.

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Three Regional Strategies Essential for a Just and Resilient Recovery

August 10, 2020 / No Comments

Written by Kate Collignon with Adam Tanaka

Recovery Will Be Regional
The impacts of COVID-19, coupled with the national outcry for racial justice, have the potential to transform urban landscapes socially, physically, and economically. For this to be a positive transformation, we need regional coordination. Fortunately, notes NYC Dept. of City Planning Director of Regional Planning Carolyn Grossman Meagher, “During and immediately after a crisis, government tends to be more open to innovation. We are now seeing more coordination than ever before… Success … breeds trust: the more we see regional actors working together and creating positive local outcomes, the more local leaders will … accept these … partnerships.”

Regional collaboration has long been important for leaders seeking to align housing, employment, and transportation systems to ensure workers have physical and equitable access to jobs. Emergency response to COVID-19 has spurred new regional coordination around the purchase and distribution of personal protective equipment, supply chain support to ensure food security, and safe reopening. Regional coordination must now expand for recovery. In a June conversation hosted by HR&A, the New York Metro Regional Planning Network’s 23 member jurisdictions and the Regional Planning Association discussed regional coordination to support a strong recovery. As communities not only in the New York area but also nationwide look beyond stabilization, just and resilient regional planning must:

Plan for remote work

Meet changing housing needs

Sustain regional transit & TOD systems

Plan for Remote Work

relocate to suburbs or to other regions altogether

200,000 residents leave NYC every year, 2/3 for other regions

seek locations that are physically accessible

Tulsa, Savannah, and Topeka

meet telework needs

Meet Changing Housing Needs

HR&A analysis

pressures in the places to which they move

constrained housing supply

density brings contagion

overcrowding, institutional living, and other factors

immediate housing supports

“quarantine hotel”

fair share housing strategies that extend regionally

Sustain Regional Transit and TOD Systems

$1M per day in fare box revenues

main streets

$16B budget shortfall

advocate for federal funding

Start with Data

For remote work, facilitating conversations with major employers around return to work expectations to inform transit planning, and modeling how remote work may change travel behavior and demand, as the [Boston] Metropolitan Area Planning Council’s Deputy Director Rebecca Davis reports.
For housing, aggregating stark data on residential segregation to support campaigns like Desegregate Connecticut, which is capitalizing on the pandemic’s spotlight on disparities – and the Trump administration’s recent rollback of fair housing laws – to expand housing supply and diversity.
For transit and TOD systems, providing frameworks for targeting recovery resources that recognize potential equity impact, like the Chicago Metropolitan Agency for Planning’s open-source Community Cohort Evaluation Tool, which enables users to analyze projects and investments through an equity lens, and is being leveraged by partners to distribute CARES Act and transportation dollars equitably.

By starting with data and best practice sharing, cities, counties, states, employers, foundations, and other partners can help fuel economic recovery that makes our regions more just and more resilient.

Funding to Purchase Naturally Occurring Affordable Housing

August 3, 2020 / No Comments

It’s vital that we work to preserve properties that rent at rates that are broadly affordable. Here’s a closer look at three funds that can help preserve naturally occurring affordable housing.

HR&A Senior Analyst Daniel Warwick and National Housing Trust Public Engagement and Policy Associate Moha Thakur co-authored a piece in Shelterforce calling for the preservation of naturally occurring affordable housing (NOAH) units. In the piece they explore three funds and how each can be structured.

Read the full column here.
Learn more about HR&A’s affordable housing work here.

Saving Our Retail Corridors Requires Good Data

July 6, 2020 / No Comments

To shape an equitable and effective retail corridor recovery, public policies should be tailored to local conditions to support near-term reactivation and longer-term business survival.

Funding our Parks and Park Systems in the Coming Fiscal Crisis

July 2, 2020 / No Comments

By Candace Damon, Catherine Nagel, and Claire Summers

The impact of the COVID-19 crisis on municipal fiscal health will be extraordinary. With large portions of municipal expenditures mandated by state or federal law, discretionary spending will be highly constrained, and agencies that rely on unrestricted funds – fire, police, sanitation, schools, and parks – will be competing to establish the essential nature of their services. Historically, park systems have fared poorly in these competitions, and preliminary municipal budgets from around the country suggest that this crisis will prove no different, absent effective advocacy.

The last generation of park activism shows what effective advocacy looks like: many park and recreation systems have become more resilient to fiscal shocks by adding new sources of operating revenue. These include locally-specific sources of additional public funding (e.g. dedicated tax surcharges), contributed income (e.g. memberships and sponsorships), earned income (e.g. facility rentals and events), and “value capture” of a portion of the dollar value estimated to have been created by particular parks (usually those that could be shown to have created higher commercial real estate values).  As we enter the coming fiscal crisis, park systems that have built strong partnerships with non-profit and private entities and diversified sources of revenue should emerge stronger than those that did not, but the peculiarities of COVID’s impacts suggest that all of these new revenue streams are also at risk in the coming months and years. 

So with the General Fund shrinking; earned income at risk because its generation requires activities proscribed by social distancing; contributed income under pressure due to multiple demands on it; and the short to medium-term health of urban commercial real estate markets uncertain, where will park systems’ funding come from?

We should make the case to philanthropy, primarily local philanthropy, that supporting urban park systems now is an opportunity to advance long-term structural change. We spoke to three foundation program officers who currently support urban parks at significant scale, asking them to comment on the values parks foster that most resonated with them and the conditions under which they would consider increasing their support for parks and park systems. They were unanimous and emphatic in citing the potential for park systems to improve public health – physical and mental health and access to healthy food – and provide equitable access to an inclusive public realm. In the latter case, all interviewees stressed a broadening of the meaning of the words “equity” and “inclusive” to encompass not only the much-discussed 10-minute walkshed, but also concepts like establishment of broadband ubiquity in parks, partnerships with entrepreneurs and locally owned businesses to build community wealth, and close examination of the equity implications of some recreation being more conducive to post-COVID play (e.g. golf) than others (e.g. basketball).

The potential of philanthropy should not and cannot take local government off the hook: our public park and recreation systems need public funding. To paraphrase one of our interviewees, “We are not going to simply plug public budget shortfalls. We are philanthropists. The difference between charity and philanthropy is that philanthropy should change the conditions that led to the problem. Charity gets you the service you need. Our job is to challenge our grantees to retool to better serve their mission and then get them started.”

Philanthropy can help advocates make the case that public dollars should be allocated to reflect our values. Parks provide or have the potential to provide services more equitably, effectively, and efficiently than how those services are typically provided, including by public safety and criminal justice entities; private healthcare providers and insurers; and providers of aspects of food security/agriculture, affordable housing, and climate change/resilience services. Initiatives that demonstrate the integral nature of parks in urban life – and recognize the fiscal implications of those initiatives – are already gaining attention. LA County’s Parks After Dark (PAD) Program gives young adults a place to congregate safely at night. The LA County Parks Department and Sheriff’s Department believe that the program has meaningfully reduced crime and saved the County $2.2 million in criminal justice costs in 2018. In Philadelphia, rather than spending $9.6 billion on “gray” infrastructure to fix the city’s deteriorating stormwater system, the Water Department is spending $2.4 billion to integrate green solutions on public and private properties throughout the city, including 500 acres of public parks. Advocates need to insist that these and other efficiencies inure to the benefit of park systems’ budgets.

Racial equity will be central to any fruitful argument for increased funding of parks; any such argument must grapple with the often problematic record of parks and park systems on this front. We and others have written about this history elsewhere. Historic disinvestment has left many low-income communities and communities of color without access to quality parks and recreation opportunities and with park assets in need of significant upgrades. Both recent and historic park investment has tended to prioritize affluent neighborhoods, central business districts, and communities where “transformation” was hoped for. Examples are legion and date from at least Reconstruction and the origins of Plessy v Ferguson. Central Park owes its birth to the use of eminent domain and displacement of residents, including a 225-person mostly African American community. Mac Miller’s Blue Slide Park speaks to the amazing playground (that Candace grew up playing in) in Pittsburgh’s affluent Squirrel Hill. Opened in 1962 and billed as the “most imaginative” of the city’s contemporary wave of investment in public parks, in 1967 it was the site of a “play-in” by Black North Side children protesting their complete lack of playgrounds. In recent weeks, multiple reported incidents in urban parks across the country have reinforced the notion that public parks are White space, and activities acceptable when undertaken by White people are not when undertaken by people of color. Of course, our urban parks also improve mental and physical health, mitigate the impacts of climate change, lower crime rates, and make a city more attractive to employers. They can, and when well-designed and programmed frequently do, create a more inclusive public realm, including by providing places for emergency response, protest and celebration. City Parks Alliance, HR&A and others have sought to elevate these values while being mindful of more fraught legacies, creating playbooks for progress.

Successful advocacy for increased funding of parks will also require data-driven approaches. All of our program officer interviewees agreed that a quantitative demonstration of achievement of the broadly-defined values of a park or park system would be powerful, including performing the data collection and analysis needed to make that demonstration. Credible analyses of the benefits cited in this article have been performed in discrete instances across the country. HR&A has shown that parks investment in a LMI Black neighborhood – when driven by community priorities for that investment and overseen by community stakeholders – can help stabilize or grow Black population and create wealth for Black homeowners through single family home appreciation, while also welcoming new, non-Black residents. The City of Dallas is currently seeking to better understand its park systems users, including their demographic and geographic characteristics. City Parks Alliance has built on many of these analyses to create a framework for developing, implementing, and evaluating a data-driven equitable investment park strategy. We need to make these kinds of analyses and the communication of their results a standard component of advocacy. In the short term, this means message testing and leveraging voices from across sectors, including health, housing, business, and resilience to communicate the breadth of parks’ value and of the diverse coalition supportive of parks.

The coming fiscal crisis is an opportunity to reimagine urban park systems to achieve long sought goals of public safety, public health, equitable economic development, inclusive access, and environmental resilience. Now is the time to strategize, collaborate, and implement actions that will recognize those values.

Challenging the Systems That Perpetuate Racism: A Case for Public Banking

June 23, 2020 / No Comments

Written by Andrea Batista Schlesinger and Mary Jiang

City leaders are being called upon to use the power they have to make systemic changes. One power examined far too infrequently comes in the form of the billions of dollars that flow through city coffers and then through the commercial banks that manage local government transactions. The actions of commercial banks shape cities and their economies more than any mayor’s economic development policy. Historically, these actions have reinforced White ownership and Black poverty.

The relationship between banking and inequity consistently surfaces in our work. For example, the average loan approval rate for White business owners is 19% higher than for Black business owners and only 49% of Black-owned firms survived the past recession, compared to 60% of White-owned firms. As Black protestors have argued in response to the looting that has coincided with the peaceful protests of George Floyd’s murder at the knees of police, “[These buildings are] not ours. We don’t own anything. We don’t own anything.”

The lack of Black ownership, even in Black communities, is not a coincidence. The role of private finance in the perpetuation of racial disparity did not end with redlining—race and racism remain encoded in seemingly neutral concepts, such as financial “opportunity” and “risk.” The wholesale purchase of financially distressed homes in low-income Black communities presents an “opportunity.” Yet Black and Latinx households are less likely to qualify for conventional mortgages than White applicants even when controlling for income and loan size, because they pose a greater “risk.” Predatory lending to Black communities presents an “opportunity.” Yet because of historical and structural bias amounting to perceived “risk,” Black and Latinx entrepreneurs receive lower levels of conventional business financing, are discouraged from entering capital markets, and are underrepresented in business ownership.

These patterns intensify in the aftermath of natural and economic disasters. In the Paycheck Protection Program’s first round, businesses owned by people of color were disproportionately and functionally excluded from federal aid because they did not have relationships, or large payrolls, with mainstream banking institutions. Only 12% of Black and Latino business owners who applied for COVID-19 relief aid from the Small Business Administration reported receiving what they had asked for. These barriers have had lasting effects on the second round of funding, compounding the challenges of recovery. Despite these gaps in service, banks have profited from being the only options for their services: in the PPP’s first round alone, banks earned $10 billion in fees for processing essentially zero-risk loans with reduced vetting requirements.

We cannot make cities more equitable until we confront the role of private capital in perpetuating racism. As banking reform advocate Ameya Pawar argues, every decision a bank makes to lend or not lend, invest or not invest, serve or not serve, amounts to an economic development policy. Cities can influence these decisions by committing to full transparency about the accounts they hold with commercial banks, leveraging the scale of their accounts to influence commercial banks to reform lending practices, diverting public funds to local and regional banks and Community Development Financial Institutions (CDFIs) that meet the gaps left by large commercial banks, and providing essential technical assistance to build financial capacity in underserved communities.

Beyond these steps, some have urged local governments to create an alternative to commercial banking altogether by depositing government funds in, and processing their transactions through, public banks that are owned and operated by cities or states, oriented toward the public good, and directly accountable to publicly elected bodies. In the U.S., advocates have argued that public banks could serve as alternatives to commercial banks while collaborating with mission-aligned financial institutions such as local banks, credit unions, and CDFIs. Public banks could resist the prevailing risk/return principles defined by private loan terms to drive low-interest loans and investments in Black and Brown communities that have been disqualified from the most basic levels of financial support.

We have begun to explore how public banking might work in cities across the country. We evaluated the feasibility of a public bank for the City of Seattle and are currently doing so for the City of Philadelphia. In Seattle, the primary motivation to explore an alternative to commercial banking was to divest from Wells Fargo, which had been instrumental in funding the Dakota Access Pipeline. In Philadelphia, where we estimated a small business lending gap far greater than any suite of public programs could fill and where only 5% of bank and credit union branches are located in low-income, majority-minority neighborhoods, city leaders are interested in addressing deeply entrenched, racialized poverty by seeing how their dollars could leverage investment in local businesses that would create local jobs.

Setting up public banks is not easy, and while advocates for public banks inspire us to think boldly, oversimplifying the feasibility of establishing such institutions will not advance racial and economic equity. The credit rating agencies emerged powerfully from the 1970s’ urban fiscal crises to limit government risk, effectively exerting a stranglehold on city spending and making it difficult for cities to secure the initial dollars to capitalize a bank. The heralded Bank of North Dakota, the country’s longest running and most successful public bank, took 30 years to become profitable and owes much of its initial momentum to the state’s agriculture and oil industries. Many jurisdictions, particularly cities, are fighting for a public bank in fundamentally different economies. The U.S. still lacks a precedent for a City-owned public bank, and many cities face state-level preemption challenges and limited scale of deposits, compared to state counterparts.

Local, state, and federal banking policy change will be necessary to facilitate the creation of public banks. Change is necessary because we are committed to helping cities become less dependent on private actors, such that they have a choice about how to conduct business in ways that are consistent with their values. In this way, we see our ongoing public banking work as a way of advancing the autonomy and creativity of municipal governments, and the possibility of those who live in cities to hold them accountable. Which is to say, the case for public banks is as much about supporting the use of banking powers in the public interest and challenging a commercial banking system that has profoundly failed—at scale—to move capital to advance racial and economic justice, as it is about actually setting up such banks. Perhaps even the rhetorical threat of a public bank might inspire commercial banks to embrace an anti-racist future for the cities they serve. If it doesn’t, more and more cities will begin to take their financial power elsewhere.

Rethinking Economic Development

June 23, 2020 / No Comments

Our industry must embrace racial equity and shared prosperity as its core mission

I have spent much of my career working with local governments to shape inclusive economic development policy. The events of the past month have caused me to question traditional approaches to economic development, even the most progressive. A seismic shift is required for the economic development profession to contribute to ending systemic racism rather than continuing to perpetuate it.

Written by Cary Hirschstein

Most state and local governments deploy economic development resources to attract new jobs and secure capital investment. The term “trickle-down economics” has typically been reserved for federal economic policy, but most state and local economic development regimes follow a similar formula: we assume that if we grow the economy, we will generate opportunity for all and/or expand fiscal resources to support communities in need. Cities seek to attract high-wage jobs because they will pay higher taxes and drive greater spending within the local economy. This approach is built on a faulty premise: that growth yields equitable prosperity.

Economic development policy has transformed the American city while deepening racial divides. The core visions, initiatives, and tools of economic development have facilitated the return of investment to our downtowns, creating vibrant places where talent wants to be and businesses want to grow. At the same time, the imperative to “build on strength” tends to steer resources to White neighborhoods and central business districts. Prior to recently enacted policy changes, we found that parcels in one affluent, predominantly White neighborhood in Columbus, OH were three times more likely to have received property tax abatements than a comparison set of less affluent, predominantly Black communities. In Houston, 10% of the city’s property tax base is collected within its 26 Tax Increment Reinvestment Zones (TIRZ). The four wealthiest TIRZs combined retain more tax increment than the remaining 22, which they are able to reinvest locally. Studies examining federal expenditures to promote economic mobility show that benefits accrue predominantly to middle- and higher income households and limit intergenerational mobility for low- and moderate-income families.

Equitable prosperity is not a core mission of most “economic development” departments; rather it is the domain of “community development” entities. Although some cities have begun to merge community and economic development functions, they remain for the most part siloed. Economic development functions are generally better resourced than community development. Programs like workforce development and small business support that don’t involve headline-garnering, multimillion-dollar deals are often shunted to the margins of agency hierarchies.

Economic development professionals must embrace creation of shared prosperity and an equitable economy as core missions. Some City-led economic development departments have begun to employ equity as a primary lens for evaluation and deployment of their resources. We need to ensure these practices become the norm across the country, but also that they go far deeper to disrupt systemic racism. While we continue to invest in the renewal of our cities, we must also ask: who do our investments benefit, and how can those benefits be more equitably distributed? I offer five responses:

Shift resources to investments that promote racial equity. Cities should view their economic development expenditures and assets as an investment portfolio, a primary objective of which is to create more equitable local economies. Realizing this objective will require a close examination of the beneficiaries of past investments; a deliberate shift in target recipients, geographies, and tools deployed to reach them; and far greater transparency and accountability for the deployment of resources. The potential impact is immense. A 2016 New York Times study estimated that state and local governments provide $80 billion annually in business incentives. The foregone revenue of the 10 states with the largest tax breaks is equivalent to the annual salaries of 27,000+ teachers.

Articulate our values, use them to structure investments, and measure their actual benefits. We need to state what we expect of those doing business in our cities and insist, not just hope, that economic growth be a springboard for equitable opportunity. For those incentive deals we choose to do, requirements that provide strong, measurable public benefit should be the norm without exception. For example, New York City and State’s efforts to attract Amazon established no clear relationship between incentives offered and community benefits, which would still be true were a similar opportunity to be presented today. In contrast, Prosper Portland reformulated its mission, values and programs over the past five years to make racial equity the foundation of its work. All recipients of Prosper Portland’s largest incentive program, Enterprise Zone, execute a public benefits agreement. Companies can choose from a menu of options to fulfill their agreement, including creating a diversity hiring plan, engaging with local schools, and hosting events to support entrepreneurship. Initial results are promising, in part because companies wish to attract a younger talent pool that seeks employers with principles that align with their own.

Promote equitable access to jobs. There is a broadly shared understanding today that human capital is core to the future of local economies and that businesses follow talent. It is therefore incongruous that our economic development entities remain focused on attracting businesses rather than cultivating our workforce. Studies suggest that customized business services such as job training are as much as 10 times more effective than incentives in influencing business location decisions. To aid economic mobility, economic developers should target industry expansion opportunities that align with pathways for the existing workforce and also invest in upskilling. Cities must provide protections for low-wage workers – disproportionately Black and female. Indianapolis recently repositioned its core economic development incentives to prioritize a higher minimum wage, health and childcare benefits, workforce training, and community partnerships.

Invest in small businesses, with an emphasis on businesses of color. As the enormity of the COVID-19 pandemic became clear, Philadelphia distributed $13.3 million in grants and zero-interest loans to 2,000 small businesses, more money than it had distributed to all businesses citywide in the past 10 years through its primary job creation program. Indy Chamber issued $6 million in small business loans, a 15-fold increase over loan activity in a typical year. In both cases, the majority of recipients were businesses of color – 75% in Indianapolis and 60% in Philadelphia. Economic development leaders with whom I’ve spoken share the view that efforts to rebuild small business strength must be sustained. A focus on minority entrepreneurship is critical to counter structural disparities. According to Brookings, Black people represent only 4.3% of the nation’s business owners despite being 12.7% of the U.S. population, and if businesses in Black communities earned and grew at the same rate as in other neighborhoods, they would see an additional $3.9 billion in annual revenue. Providing the financial and technical support to grow more Black-owned businesses will mean looking to models like Oakland, CA’s Black Arts Business and Movement District, which established a development corporation and impact fund to support Black artists and business owners.

Transform economic development ecosystems. Community development is economic development, and cities’ institutions should align mission and coordinate investments in currently siloed entities to recognize that fact. In many cases, disruptive change will be necessary to inject new voices, establish new priorities, shift budgetary allocations, and truly transform systems. Public organizations must hire and promote leadership and staff that is more reflective of the demographics of their cities, and we must carefully consider whose voices and analyses are elevated as we refocus our work. Investments in capacity-building for local partners within the larger economic and community development ecosystem will be critical to ensure a more robust infrastructure.

There is great urgency to this work. We have seen how underlying economic inequities, matched with the indignities of the criminal legal system, have gotten us to a boiling point in our cities. The road ahead requires taking decisive action to promote racial equity and shared prosperity, including ending a decades-long experiment in economic growth absent a real commitment to equity.

Special thanks to Andrea Batista Schlesinger, Candace Damon, Leah Elliott, Gail Hankin, Jeff Hebert, Kyle Vangel, and Mary Beth Williams for their intellectual and analytic contributions to this article.