In announcing a $1.4 billion state plan to revitalize poverty-stricken neighborhoods in Central Brooklyn, Gov. Andrew M. Cuomo likened his proposal to the federal Empowerment Zones implemented by President Bill Clinton in the 1990s.
Clinton, in 1993, designated nine economically distressed areas of the country — including Harlem and the South Bronx — as Empowerment Zones that received millions in federal funding and tax breaks meant to spur business development and job growth.
Cuomo, whose name is often floated as a possible presidential contender and who served as Clinton’s Secretary of Housing and Urban Development, has called for an influx of state dollars into East New York, Brownsville, Bedford-Stuyvesant, and Crown Heights. It would include $700 million to open a network of health clinics and $563 million to build affordable housing, with the aim of reversing poverty in what he described as an area “in this state that has the greatest social need.”
“Bill Clinton used to talk about this ... his approach was called Empowerment Zones,” Cuomo said in a speech before community leaders in Brooklyn earlier this month. “They were geographic zones where the community would come together. They designed what they needed, but the government was there to provide the approach.”
Anti-poverty policy experts and economists who have studied the impact of Clinton’s zones and similar initiatives in other cities, say the governor’s plan could turnaround conditions for neighborhoods with some of the highest unemployment and crime rates in the state. But in doing so, it also risks pricing-out low-income residents in the long run if the renewed area becomes more attractive to higher-income residents.
Christopher Wimer, co-director of Columbia University’s Center on Poverty and Social Policy, said improvement zones have been shown to “make a difference for places, if they are sufficiently funded and sufficiently targeted” in their mission. But he also pointed to studies that show as the zones become more “attractive,” rents tend to increase, making the neighborhood less affordable for existing low-income residents.
A 2013 study by economists published in the American Economic Review found that rents rose a total of $5.5 million per year in the first six Empowerment Zones designated by Clinton in Atlanta, Baltimore, Chicago, Detroit, New York and Philadelphia/Camden.
Wimer said it was difficult to gauge whether the same trend would apply to Cuomo’s proposal, noting that it was “broader” in scope than Clinton’s zones.
“It’s not just economic development stuff, it’s also about educational opportunities and health care programs and housing,” Wimer said.
Cuomo’s counsel, Alphonso David, said in an interview that he understood there was “fear” the plan would accelerate gentrification in a borough that has already seen rent prices soar over the last decade, but he said the plan had “safeguards,” including the construction of 3,000 affordable housing units on six state-owned sites, that are meant to ensure low-income residents are not pushed out.
“If you are creating jobs in those neighborhoods, if you’re creating affordable housing in those neighborhoods, if you’re addressing poverty in a way that hasn’t been addressed before, in a coordinated fashion, the people who are living in those neighborhoods will actually get to stay because there is an infrastructure to support them,” David said.
Cuomo has said his plan would generate 7,000 new jobs in the area via a workforce training program, and would also fund a host of after-school programs and educational initiatives aimed at keeping at-risk youth off the streets.
“You can either pay for a proper upbringing for a child with proper health care and proper support and proper education, or you can pay for a lifetime of dysfunction and we have been backwards and we have been paying for the dysfunction,” Cuomo said in defense of the plan during his Brooklyn speech.
Mitchell Moss, a professor of Urban Policy and Planning at New York University, said revitalization zones have had a “mixed record,” throughout the country. Their effectiveness is tied to the government’s ability to work with local groups on the ground, he said.
“This has to be done with attention to the organic character of the communities,” Moss said. “For these programs to work they have to build on local nonprofit and civic groups as well as attracting local investment.”
The Clinton-era Empowerment Zone that covered upper Manhattan and the South Bronx, served as a “catalyst for mobilizing private and nonprofit institutions,” and helped draw new business to Harlem streets now lined with pricey restaurants, multimillion dollar refurbished brownstones and large retail shops, Moss said.
Cuomo’s effort in Brooklyn, follows his “Buffalo Billion” plan that was launched in 2012. The plan pumped state dollars into Western New York to spur business development and job growth to one of the most struggling areas of the state.
A solar panel factory and several medical research facilities are among the projects the $1 billion plan has funded so far, but it has also come under scrutiny after a federal grand jury last November indicted two former Cuomo aides on bribery and extortion charges related to the doling out of contracts with the Buffalo plan.
Cuomo, after the indictments, said he would implement “reforms to make sure situations like that don’t happen again.”