The nation’s unemployment rate is at a 49-year low, wages are on the rise, and last year, the official poverty rate fell from 12.7 percent to 12.3 percent, with even larger decreases and record lows for Hispanic Americans and African Americans. While all these indicators are great news, not everyone is benefiting from the improved economy.
Investment in many places in this country has lagged for generations. A mere 20 counties accounted for half the national increase in businesses from 2010 to 2014. Meanwhile, small counties (fewer than 100,000 residents) accounted for only 9 percent of all job growth between 2010 and 2014. Small wonder that frustration is running high among those who feel they have been left behind.
During his inaugural address, President Trump declared that “the forgotten men and women of our country will be forgotten no longer.” It is critical that we deliver on this promise and ensure the gains of the past two years reach every American.
Last December, Republicans passed the Tax Cut and Jobs Act, which included a powerful new incentive promoting private investment in distressed communities designated as opportunity zones. Building on this success, the president established the White House Opportunity and Revitalization Council this past week. I am very proud to chair this council, which consists of members across 13 agencies whose mission it is to jump-start the development of distressed urban and rural communities by streamlining, coordinating and targeting public revitalization programs.
Opportunity zones are home to approximately 35 million Americans. It is estimated that the opportunity-zone designation could attract $100 billion in private investment in these areas, which would go a long way to spurring economic development and creating jobs. This kind of medicine is precisely what any doctor would prescribe to heal communities where the average poverty rate is 32 percent and where the unemployment rate is nearly twice the national average.
In addition to this private investment incentive, Congress last year appropriated nearly $20 billion in grants to state and local governments for economic development, entrepreneurship, safe communities, education and workforce development. Despite this investment of public dollars, 52 million Americans still live in distressed communities. Federal investments like these are often uncoordinated, scattered and unfocused, leading to varying results. This lack of coordination and targeting contributes to waste, as well as widely dispersed and ineffective benefits. The White House Opportunity and Revitalization Council is ready to consider more than 150 actions to better target, streamline and coordinate these federal programs.
Many of the communities located in opportunity zones are the same that the Department of Housing and Urban Development already serves. For example, there are approximately 380,000 public-housing units and approximately 340,000 units in the Project-Based Rental Assistance program within opportunity zones. Many local public-housing agencies are struggling to maintain aging units that are in desperate need of capital repairs. In fact, HUD’s budget cannot begin to keep pace with the growing capital needs of public housing.
To confront this imbalance, HUD continues to use a powerful tool to leverage billions of dollars in capital investment for affordable housing, and opportunity zones will allow it to access even more. To date, HUD’s Rental Assistance Demonstration program has preserved about 100,000 units of affordable housing, offering newly built or renovated homes to 100,000 families. Nearly a third of these homes are located in opportunity zones.
These are still early days for the work of the council and opportunity zones, but the groundwork has been laid. The seeds the president has planted are growing, and the promise they hold will improve places long forgotten and the lives of those who call them home.