The Key to Making Economic Development More Equitable Is Making It More Democratic

The Key to Making Economic Development More Equitable Is Making It More Democratic

The Key to Making Economic Development More Equitable Is Making It More Democratic

How Oakland and other cities are experimenting with efforts to make local residents active participants in the development process.


At the watery edge of Sunset Park, a working-class neighborhood of Chinese, Latino, and Indian immigrants in Brooklyn, lies the South Brooklyn Marine Terminal, a vast plot of warehouses and docks managed by New York City’s Economic Development Corporation (EDC). The terminal is part of an ambitious plan to generate new industrial jobs, innovation, and economic development serving local residents and the city more broadly. The plan, which has been a top priority for the administrations of both Michael Bloomberg and Bill de Blasio, involves efforts to invest in infrastructure and create incentives for new manufacturing businesses while creating new parks for local community members.

But in early 2015, a brewing dispute over the management of the project threatened to derail it. City Council member Carlos Menchaca, who represents Sunset Park, raised concerns about EDC’s role in managing the land and project, blaming the agency for insufficiently involving the local community in shaping the vision for Sunset Park’s future. This 11th-hour snag led to an unusually public war of words between Menchaca and the EDC. After months of further negotiations, the administration agreed to create a planning-and-jobs task force to engage community members, in addition to reinvesting 5 percent of the site’s revenue into a community fund and improvements to the nearby Bush Terminal Park.

While that task force has engaged local residents in a series of town-hall meetings, private investment has rapidly poured into the area as developers snatch up property for new industrial and commercial uses. The influx has left local residents fearful that, despite the new task force, they are still being left out of the conversations about the neighborhood’s future. While many say they welcome the influx of investment and jobs, they worry that, without a voice in the process, they might be displaced or left out of the economic gains.

In the midst of our national conversation about economic inequality, these questions of local-level economic development are critical. Although easily overlooked in favor of more sweeping policy issues, the reality is that cities have a disproportionate stake in the inequality crisis. Urban areas house more than 80 percent of the US population—and within these urban areas, policy decisions about how to attract investment, development, and jobs play a defining role in who gains from the resulting benefits and who loses, often for years to come.

But, as the debate roiling Sunset Park suggests, the concerns over development go even deeper than job-creation numbers and zoning. Beneath the surface is a new and more persistent anxiety about governance—about who makes decisions and how those decisions get made. If economic policy is to address inequality, it must not only be the right policy; it must also be formulated and driven by the right people.

At the national level, a growing body of scholarship indicates that the economic policies that have helped exacerbate inequality are themselves rooted in political inequalities, as industry, business, and economic-elite interests have continued to sway elections, legislation, and policymaking. As scholars like Larry Bartels, Martin Gilens and Benjamin Page, Nicholas Carnes, and Jacob Hacker and Paul Pierson have argued, economic policies skew to favor the interests of wealthier citizens, whether as a result of more sophisticated and better resourced interest-group lobbying, the decline of unions, or more subtle forms of social and cultural influence. The implication is that greater democratic accountability may be a necessity to shift economic policies in a more equitable and inclusive direction.

This same diagnosis and prescription applies to cities. In this New Gilded Age, cities are on the front lines of the battle to address economic inequality and declining opportunity. And the way they fight these battles matters. From minimum wages, gentrification, and affordable housing to neighborhood development, job creation, and local hiring, the process by which cities pursue urban economic policy can mean the difference between economic growth that continues to exacerbate inequality, and a more equitable, inclusive form of economic growth. Achieving this more equitable growth requires not only the right policies but also systems to empower stakeholders to hold policymakers, developers, and industry elites accountable to these more equitable goals.

At the same time, by operating at the local level, cities offer real potential for rapidly engaging and empowering a wide range of stakeholders to remedy some of these structural disparities in political power. Cities can pioneer a new mode of democratic governance, where we build processes that include the full range of stakeholders, and provide them with a meaningful voice in shaping and driving economic policy. From New York to California, some of the most exciting innovations in urban development involve pioneering new ways to empower grassroots organizations and citizens—and in so doing, channel the benefits of growth more equitably.

* * *

This is not the first time economic inequality has led to greater efforts at political inclusion. Half a century ago, the War on Poverty took a similar tack. The centerpiece of President Lyndon Johnson’s domestic agenda, the 1964 Economic Opportunity Act, created expansive new programs to provide job training, early childhood education (in the form of Head Start), access to legal services, community health services, and more. But the most controversial and radical innovation of this agenda was its focus on grassroots political empowerment as a key to fighting poverty. The act called for local governments to form “community-action agencies” to oversee these programs, and to administer them to local communities of poor and minority constituents. Furthermore, these community-action agencies had a mandate to pursue “maximum feasible participation” of the poor, including through direct representation of poor and minority constituents on the boards administering community-action programs. The theory was that the only way to hold the War on Poverty accountable to its mission was by providing the poor with a role in designing and administering anti-poverty policies.

This influx of money into anti-poverty programs was important, but combined with these institutional forms of empowerment, the War on Poverty helped activate a huge wave of organizing and mobilizing at the local level as civil-rights activists jumped on the opportunity to demand representation on the community-action boards, and accountability for channeling funds and programs to their neighborhoods. As new historical accounts of the grassroots political mobilizations around the War on Poverty suggest, mayors and city officials, alarmed by these newly emboldened grassroots movements of poor and minority constituents, reacted with increasingly harsh measures, first attempting to coopt these movements by appointing representatives they could work with to the community-action boards, and then cracking down on protesters and activists, siphoning off funding for community organizations that were the most active in pressuring local leaders.

Even in Washington, DC, the participation mandate quickly came under fire. Local party officials pressured the Johnson administration to abandon the mandate, while Johnson himself had always been uneasy with the more radical political message of the War on Poverty, viewing the notion of “local action” as encouraging cooperation between Washington and local officials, not as a call for grassroots protest.

Despite these difficulties, the War on Poverty was enormously successful in reducing the poverty rate and creating new models for economic programs. More important, it laid a foundation for greater political empowerment of community groups and the poor as a vehicle for improving economic equity, in the process helping catalyze a wave of community organizing. It also established, or dramatically expanded, initiatives like legal-defense and tenant-advocacy programs to address economic disparities by politically empowering their constituencies.

This participatory aspect of the War on Poverty is compelling today because of how it contrasts with the specter of top-down, heavy-handed urban renewal of the sort championed by Robert Moses to the detriment of many minority and poor communities. Today the concern is somewhat different—not that officials will ram through policies, but that they will skew too far towards privatization and overly friendly collaboration with developers, industry, and the economic elite. By providing representatives of often-overlooked constituencies with a real seat at the table to shape, implement, and monitor economic development policies, grassroots participation offers the hope of a more equitable approach to economic development.

* * *

In a number of cities, efforts to empower stakeholders in economic-development projects have led to a more constructive and collaborative environment, which in turn has helped ensure a more equitable sharing of the gains. From housing to parks to infrastructure development, the economic and geographic environment within cities can undergo radical transformations, driven not by natural “market forces” but by an array of public policies—and by particular coalitions of political actors. These policies are often opaque to most residents. But empowering grassroots stakeholders in the nitty-gritty work of planning neighborhood redevelopment can help ensure that benefits of development are shared more equitably.

Consider the experience of Oakland. Rapid development and gentrification in the East Bay—in part fueled by the dramatic rise of housing prices in San Francisco—are creating both opportunities for economic growth and the threat of displacement of poorer and minority communities.

In 2000, the Oakland City Council designated the public land from the recently closed Oakland Army Base as a major redevelopment site, opening the way for construction of new public infrastructure, and laying the groundwork for new businesses and greater public access to the waterfront. Traditionally, community groups will seek a “community benefits agreement” (CBA) for redevelopment projects of this sort. A CBA is a three-way bargain between government, developers, and community representatives. In exchange for various tax and other incentives from the government, developers are required to provide some investments in neighboring communities, for example by hiring local workers in the construction projects, and setting aside funds for local parks and public spaces. The challenge with CBAs is that they can be time-consuming to negotiate and often lack meaningful grassroots community engagement. Moreover, they are rarely fully enforced, with the benefits failing to materialize long after developers have already cashed in their tax and other incentives.

The Oakland Army Base project, however, has been different. After lengthy negotiations that involved community groups, unions, developers, city government, and other stakeholders, the resulting CBA not only included provisions for local hiring and public investment in community needs such as parks, it also forged a deep collaboration between these different players. This agreement has proved remarkably effective and durable, in large part because of the effort to empower and include community representatives more directly in the negotiations, planning, and monitoring of the project.

In the buildup to the CBA, for example, a number of influential community organizations—from the East Bay Alliance for a Sustainable Economy (EBASE) to the Alliance of Californians for Community Empowerment to Oakland Rising—formed a broad coalition engaging thousands of voters in the low-income areas to support an inclusive economic development agenda. This grassroots movement helped change the debate around the project to focus more directly on how the redevelopment would serve local residents and the local community. In the end, the campaign brought together city officials and developers around an agreement on the local-hire and public-investment demands now baked into the CBA.

More important, the goals of the CBA are being implemented and monitored through an innovative, inclusive process in which community members are participating not only as sources of input but also as actual partners. To implement the local-hire provisions, the city created the West Oakland Job Resource Center, operating it in close collaboration with EBASE and other community organizations. The CBA requires developers to work with the Job Center to hire local residents; the Job Center helps make this possible by enabling employers to find qualified local workers, while also providing services, support, and referrals to job seekers looking to transform their engagement with the army-base project into longer-term careers.

This collaborative and inclusive process surrounding the Oakland army-base redevelopment is perhaps best exemplified by the Community Jobs Oversight Commission, a new body chartered by the city, which is comprised of representatives of the developers and community organizations. These representatives are appointed by the mayor and charged with the task of overseeing the redevelopment project.

The commission serves as a unique focal point for civic engagement, operating as a forum for airing grievances, a mechanism for ensuring that local-hire and public-investment provisions are in fact being met, and a vital point of leverage for community members to continue to have a voice in the ongoing implementation and development of the army-base project. By providing a public process for monitoring outcomes and airing grievances—and by including representation from all the major stakeholders, including community members—the commission has helped create an extraordinarily effective process; the redevelopment project is not only meeting its local-hire targets but exceeding them, according to members of Revive Oakland.

The Oakland experience is a good example of how a commitment to political inclusion can help drive economic inclusion. But this isn’t just a product of greater advocacy; it required a number of different actors to commit to an inclusive process. Government officials had to create institutions like the Commission and Job Center—and imbue them with real authority. Community leaders had to decide to shift from an advocacy stance to a collaborative one, joining in and investing scarce human and financial resources to make these institutions function. And labor leaders had to see that their interests in winning good jobs on the development projects were aligned with the community groups’ interest in access to those jobs.

Similar models of inclusion in planning and implementation can help create a more democratic approach to equitable development. EBASE itself is part of the Partnership for Working Families, a national network of community organizations that is attempting similar strategies in a number of other cities.

On the implementation side, a number of cities are considering more participatory approaches to monitoring and enforcing wage-theft policies. San Francisco’s Department of Labor, for example, provides grants and partnerships with community groups to expand their capacity to monitor and report violations. The national network of progressive local officials, Local Progress, has helped share lessons from this model, as other cities from Seattle to New York are now considering similar approaches.

Beyond their particular urban contexts, these examples indicate a broader potential. Participation and community engagement in these examples involve more than just town-hall meetings or comment periods. Rather, they involve empowering stakeholders to actually shape the strategy and vision for development plans, and to engage in the work of executing, implementing, and monitoring. This deeper engagement helps shapes policies at an early stage to make them equitable. If engaged early and in good faith, these community representatives can become important partners in implementing development policies and project goals.

* * *

These examples echo the War on Poverty attempt to empower a wider range of stakeholders, especially within poor communities and communities of color, by providing them with institutionalized points of leverage. The difference this time is that there is a greater potential for governments themselves to invest in and support this kind of engagement. In Oakland, New York, and elsewhere, the active efforts of city officials to create opportunities for early and active engagement makes participation genuine.

Equitable development is about more than getting the policies right; it is also about empowering stakeholders to outline the vision, implement the strategy, and monitor outcomes. Achieving this requires an ecosystem of actors committed to political inclusion and democratic participation. As a start, it requires government officials to create and manage an inclusive process that provides a meaningful voice to stakeholders, including institutionalized forms of representation or leverage—as with the War on Poverty Community Action Boards, or with the more contemporary efforts at participatory planning and monitoring. Next, it requires civil-society actors and other stakeholders willing to engage not just as advocates but as partners in implementing and enforcing standards. Finally, it also requires transparency and data. Beginning with stated public commitments to goals—such as the local-hire commitments in Oakland’s CBA—and metrics for monitoring compliance and impact through objectively trackable metrics.

We now have all the ingredients to do this; it is up to us to make the most of this opportunity.

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