Obama’s Promise Zones a weak brew of recycled ingredients

On Jan. 9, amid a week that devoted unusual attention to poor people, President Barack Obama unveiled his new Promise Zone initiative. Touted as a comprehensive strategy to uplift impoverished places, the concept was set to debut in five sites, located in Los Angeles, San Antonio, Philadelphia, southeastern Kentucky and the Choctaw Nation in Oklahoma. The announcement offered no new funding; the only direct benefits are tax exemptions, yet to be passed by Congress, and five AmeriCorps VISTA volunteers assigned to each site. The new zones will be prioritized for competitive funding in other federal grant programs and will receive technical assistance to boost local interagency coordination and private involvement. It is not much — especially compared with the 1964 rollout of President Lyndon B. Johnson’s War on Poverty — particularly at a time when low-income housing funds have suffered a heavy hit from the sequester and when social support needed to sustain residents of distressed areas has dwindled.

Promise Zones are the latest iteration of an idea first promoted by Jack Kemp, secretary of Housing and Urban Development (HUD) under President George H.W. Bush. He called them enterprise zones; the Republican approach offered tax incentives and regulatory relief for businesses that would provide jobs and commerce in impoverished inner-city and rural areas. Several states adopted this idea, but no federal legislation succeeded until 1993, when President Bill Clinton relabeled them empowerment zones, with little substantive difference. Modest levels of funding were attached, the bulk of which went to private-sector and government entities with claims that it would trickle down in jobs for the impoverished inhabitants. Success was likewise modest and accountability lacking.

Early in George W. Bush’s administration, I served on a community advisory committee for the enterprise-zone program in Tampa, Fla. Most members represented nonprofits; I was the lone academic. Our liaison was the city’s housing director; he treated us with palpable disrespect and limited our function to doling out very small grants, most of which went to organizations that had members on the committee. Not long after my term ended, the housing director was convicted of misappropriating low-income housing funds to build a love nest for his mistress in the posh part of town. He lost his job and his house and was sentenced to eight years in prison. (These were unusually harsh penalties, but the sex scandal had stirred interest in the case. His wife’s public complaint likely was the only reason it came to light.)

To be fair, many officials overseeing enterprise or empowerment zones were not corrupt. But the extent of mishandling and misappropriation in these programs is rarely factored into explanations for why they had such a meager impact. According to a recent article in The Christian Science Monitor, Chicago’s Clinton-era program was among the least successful. (Unemployment actually went up.) As a former community organizer in Chicago and an Illinois state senator during the same period, Obama perhaps should have been leery of this approach. Despite his direct experience with Chicago’s poor neighborhoods, his urban policy has been remarkably conservative and largely reliant on Republican ideas.

Promise Zones build on several programs that were begun during Obama’s first term — a multiagency strategy called the Neighborhood Revitalization Initiative (NRI). That initiative combines Choice Neighborhood grants funded by HUD, Promise Neighborhood grants from the Department of Education, and the Department of Justice’s Byrne Criminal Justice Innovation program. The new zones have all implemented one or more of these programs and devised transformation plans based on the goals they set forth.

Obama’s place-based strategy differs somewhat from the more individualized approach of the Clinton and Bush years. Formerly, the emphasis was on removing poor families from areas of concentrated poverty and dispersing (“deconcentrating”) them into lower-poverty “opportunity neighborhoods” through vouchers for private housing. This was accomplished in a HUD program known as Hope VI, which demolished 255,000 units of public housing from 1993 to 2010. New mixed-income complexes with lower density were built on the cleared sites. Fewer than 1 in 4 previous inhabitants were able to return.

While Choice Neighborhoods and Promise Zones embrace many of the same goals and language as Hope VI, they focus on wider areas surrounding public housing projects. Demolitions will continue and tenants will still be dispersed with vouchers. The rationale that displacement is in residents’ best interest has been dropped. Hope VI produced no improvements in employment or school achievement, many problems (from transportation to extra utility costs) associated with forced relocation and lots of ugly resistance from relocated residents. In other words, deconcentration did not work well at all, but displacement will continue and the target neighborhoods will improve only through gentrification. Even under the best of scenarios, poor residents are unlikely to benefit.

Promise Neighborhood grants are modeled on the Harlem Children’s Zone (HCZ), an ambitious community-centered educational support program in New York City. Founded by the social activist and educator Geoffrey Canada (with major help from Wall Street and then-Mayor Michael Bloomberg), it aimed in part to expand charter schools in Harlem. Modest gains in test scores have been achieved with HCZ, but charter schools overall have a disappointing record. Private funding levels for HCZ are also extremely high and not replicable in most other places. Canada is a charismatic figure who counts as a close friend the millionaire (and his former Bowdoin roommate) Kenneth Chenault, and as an advisor billionaire Stanley Druckenmiller, also a fellow Bowdoin alum. Most activists do not have such advantages.

The Byrne program is designed to fight crime and enhance neighborhood safety. The program derives from the larger Justice Department grants credited with militarizing local police departments and ramping up the drug war. But police-community relations in poor neighborhoods are typically very bad, and more police attention is unlikely to help. Drug sweeps and stop-and-frisk activities exacerbate both the misery of poor families and antagonism between police and residents. Unless deep-seated mistrust can be confronted and eliminated, it will be very difficult to overcome historical obstacles to cooperation and respectful treatment. 

The new Promise Zones build on these programmatic elements. The zone choices are controversial. L.A.’s is in the city’s central section, where gentrification and displacement are already occurring, and does not include long-distressed areas in south L.A., such as Watts and Compton. Rural Kentucky, of all the distressed rural districts and deserving areas across the country, seems a somewhat random choice, but Kentucky Sens. Rand Paul and Mitch McConnell both attended the announcement, perhaps boosting the chances of bipartisan support. In his speech Obama said, “I don’t care whether ideas are Democratic or Republican. I do care that they work.” Unfortunately, many of the ideas he espouses under this mantra have been shown not to work. 

By giving priority to zone applicants for federal grants, the program puts all neighborhoods in unfair competition with each other. Already scarce federal dollars will be that much harder to obtain in other places with arguably greater needs or more promising projects. Similarly, nonprofits that are not part of the zone plan will find it very difficult to compete for public and philanthropic funds. This competition at the local level has always made cooperation among organizations very difficult. The otherwise sensible prescription to improve coordination and eliminate duplicative services has not been feasible in most neighborhoods and invariably requires that agencies sacrifice autonomy and staff, which most are reluctant to do. 

And then there is the corruption that never fails to intrude into this kind of redevelopment project.  Examples are legion of projects derailed by graft, greed or corner-cutting. Private partners are far less accountable than public servants. A Hope VI project in Tampa that built 12 single-family homes on a portion of the cleared site of a large public-housing complex went awry when it was discovered that the builder had used toxic drywall. The structures proved to be completely uninhabitable, but the new owners were still deemed responsible for mortgages they had taken out and any health problems their families experienced. The prime contractor had subcontracted the job to a company that had since gone out of business. The contractor and the city’s housing authority washed their hands of the problem. New homeowners lost everything. Many other examples in many other places could be cited.

A final, important problem is the lack of effective participation by residents. Amazingly, HUD’s description of stakeholders in designated Choice Neighborhoods — it lists “public housing authorities, cities, schools, police, business owners, nonprofits, and private developers” — does not include the people who actually live there. This patronizing posture has been a flaw in poverty programming for nearly 50 years. The widely held belief that residents of poor neighborhoods are culturally deficient, socially damaged by their environment and cognitively impaired by poverty diminishes their perceived capacity to join the partnership. But they are the ones who know their own problems, and their energy and compliance are critical to success. Obama, a former community organizer, should know that.

It is easy to criticize this initiative, and I honestly hope I am wrong. In a poisonous atmosphere of fiscal austerity, anti-Obama madness and disparagement of poor people, we should perhaps be grateful for any attention to this problem. However, bad policies and programs can sometimes harm more than help. Promise Zones seemingly promise little and may provide one more example of how, without adequate funding and genuine partnerships with the real stakeholders, the government cannot effectively help the poor.