Making Promise Zones Work for Suburbs

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  • June 17, 2014

Elizabeth Kneebone, Alan Berube, and Alicia Berenyi

The U.S. Department of Housing and Urban Development recently sought comments on the selection process for the second round of Promise Zones. We submitted the following feedback on the proposed criteria.

The Promise Zone initiative offers an opportunity to better integrate federal funding flows and make place-based investments more effective in communities with high levels of poverty and a demonstrated commitment to revitalization. However, due to the current application process design, the program risks excluding communities that have become home to the largest and fastest growing poor population in recent years—the suburbs.

Between 2000 and 2012, the poor population in suburbs grew by 65 percent—more than twice the rate of growth in large cities (30 percent) and rural communities (28 percent). By 2012, more than 16.5 million residents in suburbia lived below the poverty line, surpassing the poor population in cities by 3 million people and exceeding the number of poor residents in rural areas by almost 8 million. To be sure, in 2012 the poverty rate in large cities (22 percent) and in rural communities (18 percent) remained higher than the suburban rate on average (12 percent). But today one in three poor residents in the United States live in suburban communities, outstripping cities (28 percent) and rural areas (16 percent) and marking a significant shift in the geography of American poverty compared to just a decade ago.

At the same time that poverty has become more regional in its reach, it also has become more concentrated in poor neighborhoods. While the majority of high-poverty neighborhoods remain located in large cities, suburbs account for a growing share of distressed census tracts. In 2000, 27 percent of the suburban poor population lived in neighborhoods with poverty rates of 20 percent or more—the level at which research has shown the negative effects of concentrated poverty begin to emerge. By 2008-12 that share had climbed to 38 percent.

The increase in suburban poverty is due to a confluence of many factors: population growth, new immigration patterns, the continued outward shift of employment, the growing prevalence of low-wage jobs, and changes in the location of affordable housing. Due to these demographic and structural changes, suburbs were home to the largest and fastest-growing poor population in the country even prior to the Great Recession. The downturn only served to exacerbate these trends as it pushed the number of people living below the poverty line in the United States to record levels. Between 2007 and 2010, highly suburbanized industries like manufacturing and construction lost the most jobs among major industries. Following the collapse of the housing market and onset of the recession, overall unemployment rates in cities and suburbs rose by nearly equal degrees.

As the nation has moved into economic recovery, poverty has not abated. According to the National Employment Law Project, low-wage jobs made up just 21 percent of jobs lost during the downtown but 58 percent of the recovery’s gain. Many of these jobs are located in suburban communities and filled by suburban workers. By 2012, within the nation’s 100 largest metro areas 67 percent of workers in low-wage occupations lived in suburbs. Due to the intersection of complex economic and social dynamics, even amid economic recovery, poverty is and will continue to be a challenge shared by suburban communities.

The suburban poor face unique obstacles to economic stability and success. These include: limited access to transit; patchy, thinly-spread, and financially tenuous safety net services; and increased stresses on schools that are often ill-equipped to respond to rapid demographic and economic changes among their student populations and communities. Furthermore, both governmental and philanthropic funding for suburban communities has often lagged behind the rapidly shifting trends. The fragmented federal funding system—which was largely designed with distressed inner-city or rural communities in mind—has proven inflexible and difficult to navigate and adapt to the suburban context. These challenges reinforce the hardships the poor face, including unemployment and underemployment, lack of adequate housing, limited educational opportunities, and communities with insufficient resources to begin stitching together stronger support systems for the suburban poor.

Promise Zones could be an important tool for helping suburbs to overcome some of these obstacles. However, as currently written, the application process largely overlooks struggling suburbs. To make this program an effective tool for confronting suburban poverty, the following three issues should be addressed.

  1. The language of the Promise Zone application should be clarified to explicitly recognize suburban eligibility.

Applications are currently divided between Urban and Rural/Tribal Zones. Suburbs are excluded from the Rural Promise Zone designation, since Rural Promise Zones may not include any part of a metro county, but are not explicitly included in the Urban Zone application. A key challenge the suburban poor face is that perceptions about the magnitude of the problem are out of step with today’s reality. By not clearly incorporating suburban poverty into the application language, the Promise Zones initiative perpetuates an outdated perception about the geographic distribution of poverty in the country. By not specifically soliciting applications from suburban communities or coalitions, it is not clear to these prospective applicants that they are qualified to even apply for the designation.

  1. Communities should be able to use a combination of poverty rates and poor population counts to determine eligibility.

The focus on rates to determine potential zones and “Need” disadvantages suburban applicants. Potential Zones are required to have a poverty rate or Extremely Low Income rate of 33 percent. In addition, applications are scored according to various criteria out of 100 points, including ten points awarded based on “Need,” which is determined by poverty, crime, employment and vacancy rates. A suburban county may have more poor residents than its central city or other parts of the region, but may not register the same rates as smaller, urban neighborhoods. While counties could narrow in on high-poverty tracts for their Promise Zone application, they will be limited by the requirements that the proposed zone has a contiguous geography and a population of at least 10,000 residents. Drawing the boundaries of a potential suburban Promise Zone that could be competitive with inner-city applicants may result in a more fragmented and less-effectively scaled intervention. These issues could be addressed by introducing different parameters in a joint Urban/Suburban Zone application or by creating a third application process for non-principal city metropolitan jurisdictions. Rather than focusing exclusively on rates, in a suburban context it may make more sense to use a combination of rates and population counts, which could extend eligibility to potential zones that have poverty rates below the 33 percent threshold but are home to significant numbers of poor residents.

  1. The current application process should more explicitly encourage cross-jurisdictional, collaborative approaches.

While the application does state that Promise Zone activities can be carried out by a variety of organizations and organization types, this is only an implicit recognition of the type of multi-sector, multi-jurisdictional partnerships that are forming around the country to more effectively combat suburban poverty. The application should contain language that explicitly describes these types of collaborations as eligible entities. This is especially important in suburbs where limited local capacity would preclude many jurisdictions from being able to compete for or participate in this program on their own.

President Obama envisioned Promise Zones as a partnership between the federal government and local communities to create jobs, increase economic security, expand educational opportunities, increase access to adequate housing, and improve public safety. To ensure that this program has the opportunity to reach some of the communities most in need of the technical assistance and capacity building the Promise Zone initiative promises to deliver, the application language and process should be revised to explicitly recognize and include struggling suburbs.

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