Inner Cities and Chicago, IL

Inner Cities and Chicago, IL

BACKGROUND ON INNER CITIES AND CHICAGO, IL
November 5, 1999

BACKGROUND INFORMATION ON INNER CITIES

A booming national economy, coupled with the success of strong local efforts and the Clinton Administration’s community development agenda, has helped many cities experience a strong fiscal and economic recovery. But while many inner cities — poor urban neighborhoods within larger central cities — have seen economic gains, they still have not fully participated in the economic prosperity and may face the challenges of population decline, loss of middle-class families, slow job growth, income inequality, and poverty. Furthermore, inner city neighborhoods often lag behind the strong economies of the vibrant metropolitan areas in which they are located — and at the end of the 20th century there are still pockets of poverty amidst the growing national economic prosperity.

THE GOOD NEWS FOR OUR NATION’S CITIES

Population increased in two-thirds of all central cities from 1980-1998. Immigrant families play a significant role in creating these population increases, especially in gateway cities such as Los Angeles, Miami, New York, and Seattle. (Department of Housing and Urban Development).

Employment is on the rise in most central cities. The number of employed residents living in central cities grew by 10.4 percent, or 3.7 million people, from 1992 to 1998. In the nation’s fifty largest cities, the drop in unemployment was larger in the central city than in the suburbs. Just as important, in 77 large central cities, average annual pay rose by 4.6 percent, compared with a 3.6 percent increase for suburban jobs. Cities with dramatic declines in unemployment between 1992 and 1998 include: Detroit, MI (dropped from 16.9% to 7.2% during this period); Atlanta, GA (10.0 % to 5.6%); Hartford, CT (12.6% to 6.7%); Newark (16.6% to 9.6%); and Santa Ana, CA (11.8% to 5.2%). (Department of Housing and Urban Development, "State of the Cities, 1999").

Homeownership is increasing in central cities. For the first time in history, more than half of central city households are homeowners. Central city homeownership rates have increased from 48.9 percent at the end of 1993 to 50.5 percent in the third quarter of 1999. This increase in homeownership has been led by both African-American and Hispanic families, whose homeownership rates have been increasing faster than the rate for white families. (Department of Housing and Urban Development).

SOME CITIES STILL FACE CHALLENGES TO ECONOMIC PROSPERITY

Not all cities are sharing in the prosperity. Some inner cities with high unemployment rates in 1998 include: Madera, CA — 18.3%; Brownsville, TX — 14.5%; Atlantic City, NJ — 13.4%; Yuma, AZ — 19.7; North Chicago, IL — 10.2%; Flint, MI — 10.2%; Miami, FL — 9.3%; Newark — 9.6%; Hartford — 6.7%; and East St. Louis, IL — 9.8%. (Department of Housing and Urban Development, "Places Left Behind").

One in three central cities continues to lose population. Between 1980 and 1998, population declined 5% or more in 24.2% of the central cities. Over half (57.3%) of these cities lost over 10% of their population, despite the fact that the overall U.S. population grew by 19.3% during this period. These cities lost the workers and the consumers to grow their economy, as well as the tax base needed to protect the livability and strengthen the local business climate. Shrinking cities tend to have higher rates of unemployment than cities with a growing or stable population. (Department of Housing and Urban Development, "State of the Cities, 1999").

Poverty has also improved, but remains too high. Poverty in central cities declined from 21.5% to 18.5% between 1993 and 1998. However, inner city poverty remains significantly higher than the 12.7% poverty rate nationally. Moreover, nearly one-in-three inner cities, 170 cities total, had poverty rates of 20 percent or more in 1995. High poverty cities include: Washington, DC (21%); New Orleans, LA (34%); St. Louis, MO (30%); Philadelphia, PA (24%); Richmond, VA (25%); Newark (31%); Hartford (35%); and Miami, FL (43%). (Census Bureau and Department of Housing and Urban Development). While the strong economic growth in the past 4 years likely reduced poverty rates, poverty is still too prevalent.

Poverty concentration and job mismatches. The outmigration of middle and upper-middle income Americans has left behind concentrations of poor people and has sapped once thriving areas of their economic vitality. Rapid redevelopment outside of central cities has created a mismatch between where many potential workers live and where jobs are located. This leads to high joblessness in some pockets while jobs go unfilled in other parts of the same other wise healthy metro areas. (Department of Housing and Urban Development, "State of the Cities, 1999").

BACKGROUND ON ENGLEWOOD, CHICAGO

Englewood is a community area located on Chicago’s south side. It was once a stable middle class area, but has now become one of the city’s poorest communities.

During the first part of this century, the neighborhood flourished as one of the busiest commercial areas in the city, serving as a profitable retail center and home to many cultural amenities. However, at the beginning of the second-half of this century, commercial activity in the neighborhood began to decline with the onset of competition from newly built shopping centers in nearby suburban areas and as a result, by 1960 many long-time residents had moved out, causing housing to become vacant and abandoned. Key facts about Englewood include:

The population in Englewood is estimated to be 39,780 in 1998. (Claritas).
98.7% of the population of Englewood was African-American in 1990. (Bureau of the Census).
The unemployment rate for the Englewood community was 14.8 percent in 1998, compared to 5.7 percent for the city of Chicago. (Illinois Department of Employment Security).
Median household income is estimated to be about $19,000 compared to $32,400 for the city of Chicago. (Metro Chicago Information Center — Metro Survey, 1999).
Retail sales were estimated to be $105 million in 1998. (Claritas).
About half of the population of Englewood is estimated to receive food stamps, compared to 15 percent for the city. (Metro Chicago Information Center — Metro Survey, 1999).
Almost 20 percent of the population in Englewood is estimated to receive welfare benefits compared to 6 percent for the city of Chicago. (Metro Chicago Information Center — Metro Survey, 1999).
About 40 percent of those in Englewood are estimated to have checking accounts compared to 68 percent for the city. (Metro Chicago Information Center — Metro Survey, 1999).

EMPOWERMENT ZONE /ENTERPRISE COMMUNITY INITIATIVE TO HELP REVITALIZE INNER CITIES AND RURAL AREAS

In order to help revitalize inner-cities and isolated rural areas, the Clinton Administration has, among other initiatives, designated 135 urban and rural distressed communities across the country as Empowerment Zones (EZs) and Enterprise Communities (ECs). This includes a first round of EZs and ECs, designated in 1994, and a second round, designated in January 1999.

The EZ/EC initiative has already leveraged over $10 billion in additional public and private sector investment in community revitalization efforts.

The 20 Second-Round EZs (15 urban, 5 rural) all consist of census tracts with a minimum poverty rate of 20%, and at least 90% of those tracts must be in areas with a poverty rate of 25%. Second-round Zones also were able to designate up to 2,000 acres of additional property outside the formal poverty criterion that as part of the Zone can receive Zone benefits and be used for job creation.

The FY 2000 budget provides $70 million in funding for Rural/Urban Empowerment Zones/Enterprise Communities. The President's budget requested $165 million for next year -- the House and Senate bills included no funding. All of the urban and rural EZs (20 Zones) and rural enterprise communities (20 ECs) that were designated by the Vice President in January 1999 as Round II zones will receive funding.

The Chicago EZ was designated as a Round I Empowerment Zone in 1994. It encompasses three non-contiguous neighborhoods in the South, West and Pilsen Little Village areas of Chicago over an area of 14.3 square miles. The EZ includes a population of 199,938 and it received $100 million in Title XX SSBG funds, wage tax credits, and EZ-specific tax-exempt bonds financing authority. The EZ is currently engaged in 103 projects and programs and has committed $40 million of its EZ funds to leverage $191,169,873 from public and private sector programs. It has created 8 child care centers, 4 medical centers, rehabilitated or constructed 1,863 units of affordable housing, provided 50 businesses with technical assistance to create or retain 190 jobs, and funded 15 job training programs resulting in over 600 residents being placed in full or part-time employment.

BACKGROUND , CHICAGO, IL

The City of Chicago is located on the western shore of Lake Michigan and it is the third largest city in the United States. Over the last two decades, Chicago's economy has changed from one rich with high-paying manufacturing jobs, leaving behind a work force unsuited for the new service economy. As a result, its population decreased due to out migration throughout the 1980's, and other related urban problems, like crime, drugs, and the decline in its housing stock have also contributed to the deterioration of many Chicago once vibrant neighborhoods. Key Facts about Chicago include:

The population in Chicago has declined from 3 million in 1980 to an estimated 2.8 million in 1998, a 6.8% drop. (Bureau of the Census).

The poverty rate, which increased from 21.6% in 1989 to 27.1% in 1993, dropped to 22.8% in 1995. (Bureau of the Census).

The unemployment rate for the city declined from 9.6% in 1993 to 5.7% in 1998. Meanwhile, the unemployment rate for the suburbs declined from 6.1% to 3.4%. (Department of Housing and Urban Development).

Retail sales were $28.2 billion in 1998. (Claritas).

The per capita income is $30,717, compared to $25,288 for the nation in 1997. (Bureau of the Census).

The murder rate dropped 16% in Chicago between 1993 and 1998, from 30.3 per 100,000 population to 25.6. (Federal Bureau of Investigation, Uniform Crime Reporting).

Homeownership improved from 55.3% in 1993 to 65.4% in 1998. (Department of Housing and Urban Development).

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