After
the deluge, what next?
Editor's note: Salon senior staff writer
Andrew Leonard co-moderated the panel, with assists from Page Rockwell, Aaron
Kinney and Jeanne Carstensen.
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By Joan Walsh
Sept.
28, 2005 | It's been
four weeks since images of Americans devastated by Hurricane Katrina and
abandoned by their government took over our television screens and our
political discourse. Despite multiple opportunities for distraction -- the
death of Supreme Court Justice William Rehnquist, confirmation hearings on a
nominee to replace him, John G. Roberts, even another major storm in the Gulf,
Hurricane Rita -- the nation, to its credit, hasn't looked away. Thanks to
Katrina, President Bush told a press conference Monday, "Americans saw
some poverty they'd never imagined before."
Some
Americans, of course, have done more than imagine it -- they've worked for
years to understand and ease the crisis of poverty, and to untangle its grim
synergy with race, which often paralyzes debate about its causes and solutions.
At Salon, we were underwhelmed by the president's policy response to Katrina,
much of which seemed like warmed-over Republican nostrums, heavy on tax
credits, vouchers and help for "entrepreneurs," but light on big
ideas on a scale that could make a difference to the hundreds of thousands
displaced by Katrina, many of whom were already poor. Even the name, "Opportunity
Zones," harked back to former GOP Rep. Jack Kemp's 1980s-era
"Enterprise Zones" -- tax credits and business incentives that had
little real impact on inner-city poverty.
But we
were also unimpressed with the relative silence of the Democrats, who didn't
seem to marshal an agenda to challenge or improve on the Bush Opportunity Zone
approach. So we convened an e-mail panel of our own, a group of people working
on poverty and opportunity issues from a range of institutions and ideologies,
and threw them a set of questions about a real anti-poverty agenda in the wake
of Katrina. Can Opportunity Zones work, and how? Are there better models from a
new generation of anti-poverty efforts? Should evacuees return, or be helped to
improve their lives wherever they landed? Should parts of
The good
news is there was some agreement, which in fact shouldn't be surprising. The
conservative critique of government poverty programs summed up by Ronald
Reagan's now-cliché "We fought a war on poverty, and poverty won"
could have come from certain liberal critics of the programs, who had critiqued
some of the same programs for putting money into bureaucracies and
"professionals," while not necessarily making things better for the
poor. Two decades after Reagan, there's broad agreement on several issues: that
work is almost always better than welfare, that bureaucracies such as housing
authorities are often a problem more than a solution, and that there's a strong
positive role for the market. (And it's worth noting that while Bush has mostly
ignored the issue of poverty, poverty "won" again on his watch, with
the percentage of American poor climbing from 11.3 under President Clinton to
12.7 in 2004.
And while
it's impossible to generalize about causes and solutions to poverty, the
poverty of
There
were other noteworthy observations. Everyone, even those whom most people would
consider liberal, thinks tax credits and market incentives can work, if they're
targeted well -- but there's a lot of concern the Bush administration's won't
be. And while Republican House Speaker Dennis Hastert ignited a storm of
protest when he suggested parts of
Everyone
agreed on a couple of other things: that solutions to the problem have to be
regional -- no city, especially New Orleans, can solve its poverty problems
alone -- and that the wishes of those displaced should play a role in what our
ultimate answers will be. But there was also plenty of debate, which you'll see
unfold.
Andrew
Leonard and I moderated the panel. Our panelists are busy people, and just when
we thought we couldn't ask them to keep this debate going, they kept talking.
In the spirit of open inquiry, we're going to publish the first part Wednesday,
and run the rest Thursday. We'd love to hear from you, and we'll run a package
of reader ideas and reactions on Friday. And we've opened a thread in our
membership community Table
Talk, for those who want to chat there. We'll keep the conversation going
as long as there's interest, and we hope that's for a long time.
The
panelists:
Angela Glover Blackwell
is the founder and chief executive officer of PolicyLink, a nonprofit
organization working to advance policies to achieve economic and social equity.
Xavier de
Souza Briggs is a professor of sociology and urban studies at MIT and
co-editor of "The Geography of Opportunity: Race and Housing Choice in
Metropolitan America."
Craig Colten is a
professor of geography and anthropology at
Edward
Glaeser is a professor of economics at the Kennedy School of Government at
Howard
Husock is a contributing editor to City Journal and the director of the
Manhattan Institute's Social Entrepreneurship Initiative. He is the author of
"
Bruce Katz is
vice president and director of metropolitan policy at the Brookings
Institution.
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Forget
Tourist
And for
extra credit: Do Bush (I) and Clinton-era Enterprise and Empowerment Zones
offer lessons, cautionary or otherwise, or does the devastation of so much of
New Orleans make comparison impossible?
Howard Husock
First,
it's important to appreciate the essentially correct impulse underlying the
Bush proposals. The physical rebuilding of
The White
House is correctly seeking to do what it can to make New
[Moderator's
note: "HOPE VI" was an ambitious, $5 billion urban redevelopment plan
launched during the
The fact
that the terminology (Opportunity Zone) of the president's proposal is
reminiscent of President Clinton's Empowerment Zone does not mean the two are
similar. The latter sought -- in the Model Cities tradition -- to rebuild
specific buildings and corridors, and offered grants to city governments and
"community" groups, generally staffed by professionals. A low-tax
"free-trade zone"
Angela Glover Blackwell
Tax
policies and market incentives have the potential to produce equitable
outcomes, but the record is mostly disappointing or worse: crony capitalism,
influential developers and businesses receiving the breaks without producing quality
jobs or desirable housing and communities.
The few
examples where they have worked the best operate on these principles and
cautions:
· Target not just the place, but the
people. While it can sound satisfying to announce that a neighborhood, district
or even a region has been singled out for special attention, location alone is
not enough to ensure that investors receiving tax breaks are being properly
attracted and rewarded for actually taking risks they wouldn't otherwise take,
or creating jobs for unemployed local residents. Geographically targeted
incentives need to be coupled with criteria that push new development to
directly benefit local residents and to be consistent with overall plans for
sustainable communities.
· Have explicit equity goals of local
or minority hiring or contracting and affordable housing, with claw-back
provisions to recover the subsidy in the event that the private sector doesn't
meet the goals or stay the course. Quality jobs, with decent wages and
benefits, training and advancement opportunities; and sustainable development,
with minimal environmental degradation and high levels of transit use and
energy conservation, are aspirations that can and should be translated into
practical investment criteria, as the growing number of private socially
responsible investment funds have been doing for years now.
· Tax credits for real estate
development should take lessons from how some states allocate their Low Income
Housing Tax Credits.
· Don't put the tax incentives in place
ahead of genuine community engagement in decision-making about the type of
community and city to be built. The rebuilding isn't just about disposing of
one property at a time or building industrial parks or shopping centers. In
this case more than ever, it is about creating whole new communities, so even
an openness to market choices must be tempered by a solid groundwork of basic
policies about the shape of the neighborhoods and the region.
Xavier de Souza Briggs
Angela
has covered a number of the most important lessons, saving me the toughest part
of this pop quiz. I'd add that while the evidence for luring businesses in with
tax incentives is weak, tax credits can be powerful development tools in many
other ways. The Low Income Housing Tax Credit, which Angela cites, is a key
example. So is the concept of the New
Markets Tax Credit, which has a much more limited track record. It provides
a "kicker" to encourage private equity investments in development in
economically distressed areas, lowering the upfront development costs in ways
that really matter. It "softens" risk but doesn't remove it, which is
healthy, from a good-government, good-market standpoint. So the main idea is
that tax credits belong in the tool kit alongside grants and subsidized loans
("patient" or below-market capital). None is a panacea.
Most of
the big lessons from the Empowerment Zones/Enterprise Communities are not about
tax credits but about creating a success environment for a wide range of
entrepreneurs, coordinating disparate functions in government (left hand/right
hand stuff), and not pursuing
fads of the hour, such as the idea -- popular in the mid-'90s -- that everyone
in inner-city America is dying to be, and can be, a successful entrepreneur.
Most low-income folks will get ahead through better jobs and training and by
tapping proven supports, such as the Earned Income Tax Credit, not by going
into business for themselves (and everyone can think of exceptions to this).
A real
Opportunity Zone would target workforce development just as intensively as
business development, and we know how to do it right -- the skills development,
job matching, transportation and child care and other enablers, etc. The same
is true for turning contracting incentives (that focus on who gets selected)
into real economic development, where clusters of businesses develop to raise
the bar, raise the performance for multiple firms. This helps connect
disadvantaged businesses to the wider regional economy. Much was learned about
this after the
Howard Husock
Xavier
makes a number of good points, especially regarding workforce development. It's
worth considering, however, what is specific about
Bruce Katz
The
concentration of subsidized housing in a few neighborhoods set off a
devastating chain reaction in
In
rebuilding
Howard Husock
I
couldn't agree more with Bruce that the many and various federal housing
programs created their own poisonous brew in
Bruce Katz
I think
Howard's neighborhood vision is a reasonable one. But the president's urban
homesteading initiative, to be frank, is not going to "get us there."
The scale of the effort is just too narrow -- given the limited supply of
federally owned land in
So here
is another idea. In 2000, the president announced a home ownership tax credit
program, modeled after the low-income housing tax credit program. The program,
through the syndication of tax credits, could be a very efficient way to raise
private equity for the development of large-scale, mixed-income communities of
homeowners. The proposal has gained bipartisan support on Capitol Hill, though
it has not yet passed the Congress. Why not put the tool to work in
Howard Husock
I
completely agree that the urban homesteading proposal is thin gruel, something
someone came up with to dress up the "HUD homes for sale" advertisements
that can be found in every Sunday newspaper. That said, I don't understand the
commitment to the mixed-income approach. Where are the middle-class families
going to come from? What would motivate their participation? Decent but simple
new homes and the chance to own -- or even to rent from a resident owner -- is
a far simpler matter and more likely to be sustainable.
Bruce Katz
We should
also remember the Government Accountability Office's assessment of the
empowerment zone program in 1999, which found that tax incentives were
primarily used by large urban businesses, not the small businesses touted by
the president in his Sept. 15 address.
Yet the
Opportunity Zone idea -- and the whole concept of tax incentives in general --
ignores a central question: What is our collective vision of the
Before
the hurricanes,
Such
economic restructuring is common in the
In
addition, the metropolitan area does not
specialize in the economically dynamic centers of high technology, new
industries and innovation; it ranks 38th among the 50 largest
The broad
challenge for this region is, in short, to transition to a high-road economy
that expands job opportunities for a broad range of the populace.
Opportunity
Zones fall far short of the challenge -- and, to be frank, do not seem to even
recognize the challenge before the region. Prior experience tells us that they
will most likely aid some large businesses (i.e., the gaming sector) that are
likely to stay in
So, what
to do?
Some
ideas:
· The feds can help the city and region
develop a short- and long-term strategy to nurture the competitiveness of the
region's major export industries. Which sectors does the region perform well in?
Can they be nurtured and expanded, particularly on the workforce side? What
other areas have established agglomerations, smart leadership and skilled
workers? Can losses in traditional sectors be reversed or stemmed?
The feds,
in short, can help
· The feds could enhance technical
assistance to manufacturing and other firms that may be able to retain or even
expand employment by modernizing production methods, reorganizing work
processes, retraining workers, identifying new markets or filling capital gaps.
· The feds could help capitalize state
and/or private venture capital funds that are targeted toward the needs of
small businesses in the
· The feds could help leverage the
assets of the university sector in the metropolis -- perhaps by expanding
research and education programs that are closely related to the workforce,
technology or other business needs of the region's major export sectors.
· The feds could put better tax credits
on the table (e.g., new markets) and modify the Opportunity Zone credit so that
businesses and workers benefit from federal aid. (Why shouldn't the tourism
industry in
· The major point is this: The federal
government will do "something" in the coming several months to
"rebuild" the
Joan Walsh, editor in chief of Salon
First,
full disclosure: I'm on the board of PolicyLink, and I worked for the Urban
Strategies Council when Angela ran it back in
I'm glad
to see the general agreement around the Low Income Housing Tax Credit, but I'm
trying to understand Howard's skepticism about using government incentives to
create mixed-income developments. I think the "shotgun house" models
Habitat is building are great, but why couldn't you also mix in some middle-income
housing? It seems to me that rebuilding these neighborhoods with all or mostly
poor people builds back in some problems -- namely, that neither the market nor
the political system is sufficiently responsive to them. To have vital shops
and businesses and schools would seem to me to require a mix of people. What am
I missing?
Howard Husock
"Mixing
in" the middle class sounds simple -- but becomes politically charged (if
you're trying to build mixed-income housing in otherwise affuent areas) and
logistically difficult if you have to recruit middle-class families to move to
lower-income areas.
Joan Walsh
But
hasn't it worked elsewhere? And aren't we talking, in
Howard Husock
But
what's the point? In effect, a mixed-income development provides significant
subsidy to households that could afford housing anyway -- in the belief that
their example will somehow inspire their neighbors. Where's the large-scale
evidence that that works -- and if not, why do it? I would argue that it is the
desire to "move up" from a poorer to a more affluent neighborhood
that helps motivate the poor to organize themselves and make good life
decisions (work, save, marry). Thus, the so-called economic stratification of
American neighborhoods strikes me as an important aspect of our social system
that encourages upward mobility.
Angela Glover Blackwell
Type,
cost and quality of housing are not the only factors that determine whether a
neighborhood will thrive as a stable mixed-income community or struggle as an
island of concentrated poverty and economic immobility. Make no mistake: The
reality is that concentrated poverty does not create the desire to "move
up," but rather hinders residents from doing so. Housing policies and
forms of building are key, of course, but what makes or breaks neighborhoods
are the combined qualities of public life: crime and safety, schooling, public
spaces, transit and other infrastructure, local retailing, and so forth.
Successful
mixed-income communities can take a variety of forms and will attract people of
different incomes for different reasons. For example, comprehensive inner-city
redevelopments like McCormack Baron Salazar's
These and
other approaches are certainly not easy or simple, but when well executed they
meet a combination of market niches that one can envision to a greater or
lesser degree in the
Howard Husock
There has
never been more concentrated poverty in this country than the Lower East Side
of New York, circa 1900. And yet the desire to move up and out was clearly
strong; by 1930, settlement house leaders in the neighborhood observed that
density had been replaced by "empties." It is not concentration of
the poor per se that hinders upward mobility -- indeed, the desire to move up
and out can be a strong one. But without the chance to own, save and then sell
to realize gain, the poor are unduly hindered. This has been the burden imposed
on them by public housing and other forms of subsidized rental. It is worth
bearing in mind when considering the developments to which Angela refers that
old-style public housing, too, was opened with great fanfare. Individualized
ownership of small properties offers a far more secure route to long-term
maintenance. I do agree, though, that these need not be single-family homes.
Multi-family homes -- including some with rental units (with owner-occupancy
encouraged) -- are a vital component of replacement housing, as well.
Xavier de Souza Briggs
Howard, I
read our history differently. Poverty concentration has never been a
"natural" condition of city life. Yes, those with the means tended to
avoid tenement slums, and immigrants with few options tended to congregate in
them. And yes, most Americans would agree with the idea of striving and
incentives to encourage same. But it is very hard to look at the evidence on
ghetto poverty neighborhoods and conclude that people lack motivation to leave
them. Highly regulated markets make it hard for those people to afford to do
so, and housing discrimination -- illegal under the law and also wrong -- makes
it even harder.
A host of
successful mixed-income developments demonstrate the demand by middle-income
buyers, at least in tight urban markets, and subsidy to market-rate buyers is
very minimal. The cross-subsidy mostly works the other way, to enable low- and
moderate-income families to live in environments that people of means are also
invested in. A demand study in
Public
housing used to be much more economically diverse, as you know. White families
with employed heads fought to get in, because it was better than the old stuff it
replaced. Likewise, subsidized or "social" housing is much more
income mixed in other parts of the world -- not
Joan Walsh
Yes, I have
to say that when I toured my Irish immigrant grandparents' neighborhood in the
Bronx with my godfather about 10 years ago -- Highbridge -- it was clear that
while it had been heavily Irish and immigrant in the '20s-'40s, there was some
economic diversity -- local shopkeepers and neighbors who helped my
grandparents and my dad and siblings when things were particularly tough.
Gradually a Hibernian buddy got my grandfather into the steamfitters union, and
they moved to the middle class. So ... the concentration and isolation of the
urban poor has seemed to me something especially pernicious, as well as an
unintended consequence, as Bruce points out, of bad social investment and
social policy. I would think
Howard Husock
It's the
hubris of "bringing people back in a different way" of which I'm
deeply skeptical -- i.e., that an agency, choosing among applicants and issuing
a Request for Proposals, can somehow find the right combination of people to
mitigate what are said to be a concentration of poverty effects. As for the
success of mixed-income projects, again, there remains a Potemkin
Village-quality to them -- the planners' idea of what an ideal community should
be. Sure, public housing once had a greater economic mix -- but that reflected
the post-WWII housing shortage. Similarly, there has been a mixture in
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