U.S. News & World Report: L.A. Mayor and Mastercard Call for Maximizing Opportunity Zones
To make the most out of opportunity zones, cities need access to local data.
By Eric Garcetti and Michael Froman
THIS WEEKEND IN Honolulu, mayors from across the country will gather at the U.S. Conference of Mayors Annual Meeting and assess the opportunities and challenges facing American cities and how the public sector must be empowered to best serve local communities.
This meeting comes at a pivotal moment.
The U.S. has posted more than 100 consecutive months of net job gains since the economic recovery began in 2010, making this the longest expansion in seven decades. News reports are filled with broad national statistics like these, but they do not reveal the truth found in America's neighborhoods: While the economy as a whole might be advancing, millions of people are being left behind.
According to the 2018 Distressed Communities Index from the Economic Innovation Group, 50 million Americans currently live in a distressed zip code. In some cases, in more affluent areas just five miles away, life expectancy can be greater by as much as 20 years.
Communities across the United States are mobilizing around an ambitious place-based economic incentive – the Investing in Opportunity Act, a part of the Tax Cuts and Jobs Act of 2017. By some estimates, this incentive could help direct hundreds of billions of dollars into 8,700 of America's most impoverished neighborhoods designated as "Opportunity Zones."
We must, however, approach this program with honesty and humility.
The history of place-based investment incentives is decidedly mixed, at best. The road to Opportunity Zones is riddled with the experience of prior programs that have fallen short of expectations. To get it right this time, we must look closely at the potential that already exists within these communities and build on it to extend the opportunity for a better life to the people living there. Simply put, Opportunity Zones should, in fact, create opportunity for those who need it most.
If Opportunity Zones prove to be nothing but a windfall for real estate developments that would have otherwise happened and which displace existing communities, then they will have failed.
We are likely to get much better outcomes if we start with better inputs. That requires access to better information, including a better understanding of economic trends and patterns within and across Opportunity Zones.
For example, spending patterns can give local leaders a better way to understand and market potential unmet needs of the community. In the New Orleans neighborhood of Gert Town, data insights revealed that only about a third of residents in that Opportunity Zone buy groceries in their own neighborhood, yet the total spending by residents is higher than in the surrounding communities. Simply put: Residents need fresh food and companies are leaving money on the table.
For community leaders to build a case for investments – in grocery stores or other businesses – they need access to timely data insights about what's actually happening in their Opportunity Zones at a neighborhood level.
That is why Mastercard and Accelerator for America, a non-profit formed by mayors and leaders to fight economic insecurity, have joined forces to provide 50 American cities with data insights and tools to develop investment prospectuses that will attract inclusive investments to their Opportunity Zones. Our goal is to help cities actively participate in the investment market to advance the interests of underserved communities, rather than passively allow investors to solely direct Opportunity Zone investments.
Opportunity Zones are not the only tool for potentially promoting inclusive growth, but they might be the newest, most significant addition to the toolbox of economic development. And at a time when not a lot of economic development policy is getting done – at least at the national level – the Investing in Opportunity Act is a rare expression of bipartisan consensus.
We have a duty, therefore, to try and do everything we can to make it work for as many people as possible, and to ensure that opportunity stays at the center of Opportunity Zones.
Read the full article here.