Reinvesting in Black Neighborhoods
Donald Trump’s “Opportunity Zones” for inner-city neighborhoods either was ignored by most media outlets during his administration or criticized for benefitting big investors more than local residents. Barbara Samuels’ position, as quoted in The Baltimore Sun in August 2019, was typical. “The tax shelter is one that is really very susceptible for abuse, for providing subsidies not so much for the ostensible purpose [of providing] capital to distressed neighborhoods, but for the purpose of providing lucrative tax benefits to wealthy investors,” said Samuels, managing attorney for the ACLU of Maryland’s Fair Housing Project. “It was never really about investment of capital in poor neighborhoods. ... The fact that not much is going to trickle down to the neighborhoods is a feature, not a bug.”[1]
I don’t have a position on the value of those Opportunity Zones, but the fact is that local ownership and enterprises have been stripped from inner city neighborhoods in recent decades. I’m thinking mostly “Black” neighborhoods here, but there certainly are poor White neighborhoods that should not be forgotten. In any case, there has only been limited reporting on the loss of entrepreneurship in Black neighborhoods. The Washington Monthly, for example, noted that dozens of formerly Black-owned banks nationally have disappeared since 1985. Ditto for Black-owned insurance companies.[2] The overwhelming number of Black-owned businesses that remain are sole proprietorships.[3]
What I’ve noticed, perhaps anecdotally, is that many businesses that remain in Black neighborhoods are owned by people who live outside of those neighborhoods, particularly by Korean-Americans and Arab Americans, and increasingly by immigrants from the Asian Subcontinent. I played on a Senior Softball team for several years and one inner city field where we played was near a liquor store – when I’d stop by for a six-pack after a double-header I saw that all the employees were South Asian. One of the untold stories of the George Floyd murder was that CUP Foods in Minneapolis did not appear to be Black-owned. And – this may be shocking to you – I remember picking up a copy of the Nation of Islam publication Muhammad Speaks thirty years ago on a visit to the Southside of Chicago and Louis Farrakhan was railing against Arab American landlords in his city.
Equal Opportunity, Affirmative Action and Open Housing simply were among the factors that denuded Black neighborhoods of its leadership cadre and local entrepreneurship. This is rarely acknowledged, though Washington Post columnist Eugene Robinson documented the unintended consequences of the 1960s Civil Right legislation in his 2010 book, “Disintegration: The Splintering of Black America.” Many upwardly mobile Blacks followed the main chance and improved their own lives, but this meant leaving lots of other people behind. Earlier this year much attention was paid to the massacre of some 300 Black Americans and the destruction of “Black Wall Street” in Tulsa, Oklahoma in 1921. My point here is that most Black neighborhoods in mid-size and larger cities once had a High Street, if not quite a Wall Street. But they’re mostly gone, and the new business people are outsiders who only employ locals once their relatives have been taken care of, and they take most of the profits out of the community so there is not much of a trickle down economy or multiplier effect. Big Box stores have certainly hurt many small businesses, but never more so than in the Black community.
Jewish Americans were routinely excoriated in the past by Black notables such as Nikki Giovanni and Amiri Baraka, not to mention Malcolm X, for allegedly exploiting Black populations. At least the Jews could fall back on the defense of “ethnic succession,” namely the well-known sociological phenomenon whereby a group lower on the social ladder can only move up when the group above them moves up. Jews could finally buy into certain neighborhoods at a certain point and open up businesses and buy homes or apartment buildings, as well as build synagogues for themselves, but when they were ready to move up again they had no one to take their place, i.e., to buy their homes, apartments or businesses. That’s because the next group ready to move up the social ladder, African Americans, didn’t have much capital to invest so Jewish owners often resorted to running their businesses and renting out property as they moved on, i.e., they were absentee landlords. Recent immigrants have no such defense – whomever they are, their practices simply are predatory from Day One.
None of this helps the Black community. So, here’s a proposal, one that’s more focused than Trump’s Opportunity Zones, albeit just a “back of the napkin” sketch by me. How about a turnkey, franchise-style program backed by the federal government with subsidies for anything from grocery or variety stores to hardware stores and appliance stores and more as long as the owner/operators live in the neighborhoods they serve and hire only people who live locally, as well. Such a federal program could also forgive the income taxes that employees might have to pay, and would agree to pay the local property taxes for the franchise holders, as well, which would help local municipalities. Over time those “franchise” holders would build equity in the businesses, eventually owning them – but only so long as they stay local.
The devil is in the details, as everyone knows, but this at least points one way forward to help save the inner cities.
[1] https://www.baltimoresun.com/business/bs-bz-opportunity-zones-20190730-3b3koim5wfcovhnp6t32ja2h4m-story.html
[2] https://washingtonmonthly.com/magazine/marchaprilmay-2017/the-decline-of-black-business/
[3] https://www.brookings.edu/blog/the-avenue/2021/04/29/how-black-owned-businesses-can-make-the-most-out-of-the-biden-infrastructure-plan/#:~:text=According%20to%20our%20analysis%2C%20roughly,non%2DBlack%2Downed%20businesses.&text=Sole%20proprietorships%20need%20significant%20investment,they%20can%20do%20the%20same.