Economics in Brief: What Does the New Tax-Break Tracker Reveal About Your City? – Next City

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Economics in Brief: What Does the New Tax-Break Tracker Reveal About Your City?

Home Owners' Loan Corporation redlining map of Philadelphia, from 1936. (Credit: Wikimedia Commons)

What Does the New Tax-Break Tracker Reveal About Your City?

Tireless watchdog Good Jobs First launched a new Tax Break Tracker. Search the online database to find out what state and local governments across the United States give away to corporations in the name of economic development, and the losses that result. As the nonprofit explains in the Tracker user’s guide: “Corporate tax breaks result in foregone tax revenue that may have been better spent on improving public services.”

This latest effort builds on years of work by Good Jobs First to call out the pitfalls of “corporate welfare.” Next City too has reported on why subsidies to retain a company headquarters or attract new Big Business are often a bad bet and don’t result in good-paying jobs for those who most need them.

Redlining Map Analysis Shows the Need for Different Anti-Discrimination Tools

Andre M. Perry and David Harshbarger at the Brookings Institution analyzed 200-plus maps of once-redlined areas in the United States and found that the current population in those places is “majority-minority but not majority-Black, and, contrary to conventional perceptions, Black residents also do not form a plurality in these areas overall.”

The racist housing and home mortgage policies known as redlining were put into place in the 1930s and for decades intentionally and systematically barred black people from one of the best-known paths to building wealth in the U.S.: homeownership. Perry and Harshbarger say that because of shifting demographics, designing solutions today based on this historic geography (as more than one Democratic presidential candidate is doing) won’t fully address the inequity that resulted from redlining. They note: “Clearly, these areas have suffered from a legacy of divestment, and deserve attention from policymakers. But a strategy to close the racial wealth gap that focuses mainly on these now-diversified locations risks overlooking Black neighborhoods elsewhere.”

How Opportunity Zones Are (or Aren’t?) Working in Pennsylvania

The Spotlight PA news project dug into how the Opportunity Zones program is playing out in Pennsylvania, from Pittsburgh to Philadelphia. Congress ushered in the Republican-designed tax incentive through the 2017 Tax Cuts and Jobs Act. It gives those who invest in development in economically disadvantaged areas a tax break. Next City has been regularly covering how Opportunity Zones may or may not work toward the politicians’ promise of helping the government-selected neighborhoods. From Washington, D.C., to Boulder, Colorado, some cities are working to ensure such development is done equitably, for the benefit of those who have long been marginalized by the financial system.

One marker of Opportunity Zone success would be evidence of the program spurring new investment in long-disinvested neighborhoods that many developers would consider risky — investment that would have been unlikely to happen otherwise. However, a developer in Philadelphia told Spotlight PA that an in-the-works loft apartment conversion in the gentrifying Brewerytown “was planned before the Opportunity Zone incentives became law — and would have gone ahead without them.” The outlet also noted that, in June, an official in the Pennsylvania governor’s office said, “If investment is not occurring in real estate markets within your community already, it’s not likely that this incentive will spur that investment.”

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi Community Development.

Tags: corporate welfareopportunity zonesredlining