Implementation of the next "big ideas" for Cleveland's future — whatever they may be — must meaningfully provide employment and wealth-building opportunities for its communities of color, write Amy Liu and Rip Rapson.
Civic leaders throughout Cleveland are engaging in serious introspection about the future of the city and region. In our respective roles as national leaders of a think tank and a philanthropy focused on city and regional prosperity, we have helped leaders across the country navigate transformative moments. One thing is clear from our recent visit to Cleveland: Few other American cities possess this community’s ardent motivation, deep capacity, and wide-ranging resourcefulness.
It is time for leaders to apply those assets to an issue that will define the region’s fortunes for generations to come: making racial equity a central tenet — and outcome — of Cleveland’s economic growth.
This was the clarion call at a recent daylong conversation we organized under the auspices of the Shared Prosperity Partnership — a collaboration among our two organizations (the Brookings Institution and The Kresge Foundation), the Urban Institute, and Living Cities. A broad range of the city’s civic and nonprofit leaders expressed with clarity the need to reset the table. It was a call to action that echoed other community voices — whether Chris Thompson arguing that the region must rebuild trust or Jan Roller recommending more seats at the civic table for women and people of color.
This reinvention is critical because, today, Cleveland is a racially inequitable place. Regionwide, black residents are twice as likely to experience a premature birth, more than three times as likely to live in poverty, and more than nine times as likely to be incarcerated as white residents. The Cleveland metropolitan area is the second most racially segregated in the country.
Beyond being morally indefensible, these disparities represent a severe economic liability. Racial segregation impedes the region’s low-income kids from achieving a better life than their parents, as Harvard researcher Raj Chetty and his colleagues have found.
Places with high racial exclusion experience slower economic growth; squandered talent and entrepreneurial potential; limited fiscal capacity to invest in competitiveness assets; and deep social and community distrust. With the Cleveland metropolitan area on pace to be home to one in three persons of color by 2030, preserving the status quo is simply self-defeating. On the other hand, if the region achieves greater racial income equality, Cleveland could enjoy an estimated $13 billion annual boost in regional income.
The issue is, of course, how to usher in this new era. Ultimately, the pursuit of racially inclusive economic growth requires each of the city’s civic sectors – City Hall, businesses, philanthropy, nonprofits, community representatives, and others – to acknowledge the structures that create racial exclusion and work together in unprecedented ways to unlock solutions to them.
At our meeting, leaders discussed one possible vehicle to achieve racial equity and inclusive growth: opportunity zones. Part of last year’s federal tax reform bill, the Opportunity Zones legislation allows for preferential capital gains investment in projects within state-designated low-income neighborhoods.
The city of Cleveland houses 47 of those neighborhoods, which cluster in areas such as Central/Kinsman, Glenville, and Collinwood. They are among 8,700 neighborhoods nationwide competing to attract up to $6 trillion in unrealized capital gains held by individuals and corporations.
Drawing on the expertise of diverse public, private, and community leaders, the discussion surfaced ideas for how Cleveland could identify investible projects that represent a more equitable vision. This includes flipping the script for as many investors as possible, emphasizing market assets that will attract significant capital to minority neighborhoods and minority-owned businesses.
That will in turn require that the community speaks with a unified voice about its top priorities. It will require assembling project investment plans that motivate co-investment from public and philanthropic actors. And it will require the community to think beyond individual projects to clusters of investments that most appreciably advance economic and community revitalization.
Creating a coherent roadmap for equitable Opportunity Zone investments is only a start.
Leaders must reform how the city and region plan investments in housing and transportation; how businesses and governments conduct hiring and procurement; and how the implementation of the next “big ideas” for Cleveland’s future — whatever they may be — meaningfully provide employment and wealth-building opportunities for its communities of color.
The Fund for Our Economic Future’s recent report, The Two Tomorrows, quotes Nobel laureate economist Joseph Stiglitz: “The only sustainable prosperity is shared prosperity.” Cleveland has made a powerful first step in that direction that, if sustained, can lead to a vibrant, inclusive tomorrow.
Amy Liu is vice president and director of the Brookings Metropolitan Policy Program; Rip Rapson is president of the Kresge Foundation.
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