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A Quick Guide to EDA’s $3B ‘Investing in America’s Communities’ Grant Programs

August 25, 2021 / No Comments

Written by Dorraine Duncan and Bret Collazzi
 
Last month, the U.S. Economic Development Administration (EDA) announced six new programs that will invest nearly $3 billion in regional growth, economic recovery, and workforce development over the next five years. Funded through the American Rescue Plan and collectively known as “Investing in America’s Communities,” the programs vary in funding amounts, goals, eligibility criteria, and application timelines.
 
The below “cheat sheet” is designed to help communities assess which of the following six programs align best with local goals:
 

  • Build Back Better Regional Challenge – $1 billion
  • Good Jobs Challenge – $500 million
  • Travel, Tourism, and Outdoor Recreation – $750 million
  • Economic Adjustment Assistance – $500 million
  • Indigenous Communities – $100 million
  • Statewide Planning, Research, and Network – $90 million

 
For all programs, unless otherwise noted, funding can flow to any EDA “eligible entity,” which includes City, County, State, and Tribal governments, higher education institutions, Economic Development Districts, and nonprofits working in cooperation with governments, but not to individuals or for-profit businesses. All awards will be made no later than September 2022, and all funding must be spent by September 2027.
 
For definitive guidance on each program, review the EDA’s formal Notices of Funding Opportunity (NOFOs), available through the EDA’s program site. For help approaching these and other federal funding programs strategically, contact us at buildback@hraadvisors.com.

 
 
 

Build Back Better Regional Challenge ($1 Billion)
 
For more guidance on Build Back Better, see “5 Questions to Shape Your Build Back Better Regional Challenge Application.”
 
What are the program’s goals?
 
Reinforce America’s global competitiveness in industries that will shape the future economy; build and strengthen regional clusters that grow those industries; and create high-wage jobs that are resilient to future economic shocks and accessible to historically excluded groups. EDA will award up to $75 million per region to invest in 3 to 8 projects that accelerate growth in these industries and improve job access. Applications should demonstrate a true regional partnership (including across city/county lines and across sectors) and buy-in from local government, industry, and community partners around a shared vision for investment.
 
How much funding is available?
 
This is a two-phase program. In Phase 1, EDA will award 50 to 60 regions technical assistance grants of $500,000 to support project definition and coalition building. In Phase 2, EDA will award 20 to 30 regions $25 to $75 million each. EDA will fund 100% of TA costs during Phase 1, and up to 80% of project costs awarded in Phase 2.
 
What types of projects are eligible?
 
Construction and non-construction projects, including infrastructure, planning studies, entrepreneurship and workforce programs, revolving loan funds, and more.
 
You should apply if… You lead a regional partnership that has identified promising growth sectors and can identify at least $25 million of implementation-ready projects that can be delivered by 2027 to sustain long-term job growth and equitable economic development.
 
When are applications due?
 
For Phase 1: October 19, 2021, with finalists announced in December. For Phase 2: March 15, 2022.

 
 
 

Good Jobs Challenge ($500 Million)
 
For support on Good Jobs Challenge applications, stay tuned for announcements from HR&A partner America Achieves, a national nonprofit focused on supporting regions with their applications to the Good Jobs and Build Back Better challenges.
 
What are the program’s goals?
 
Get Americans back to work by building and strengthening regional workforce training systems through sector partnerships. The program seeks to bring together employers who have hiring needs with entities such as colleges, labor unions, and nonprofit training providers that can help workers develop in-demand skills that lead to good-paying jobs. EDA encourages efforts to reach historically underserved populations and areas, communities of color, women, and other groups facing labor market barriers such as people with disabilities, individuals in recovery, and individuals with past criminal records. Applications should include firm employer commitments to hire, such through work-and-learn programs, apprenticeships, conditional hires pending successful training, and other employer commitments.
 
How much funding is available?
 
EDA will award $5 million to $25 million to 25 to 50 applicants. EDA will fund up to 100% of project costs.
 
What types of projects are eligible?
 
Proposals may fit into three workforce development phases: 1) System Development, including establishing sector partnerships; 2) Program Design, including assessing skills needs, developing curriculum for training, and recruiting trainers; and 3) Program Implementation, i.e. standing up programs that connect workers with quality jobs, including wraparound services.
 
Capital expenses, such as equipment and training facility leases, are permitted, but construction activities are not. Any workforce program that requires construction to be successful should apply to the Economic Adjustment Assistance program (see below).
 
You should apply if… You belong to a consortium focused on workforce training and development within target industries with high job growth potential.
 
When are applications due?
 
January 26, 2022, with awards made by July 2022.

 
 
 

Travel, Tourism and Outdoor Recreation ($750 Million)
 
What are the program’s goals?
 
Accelerate the recovery of communities that rely on the travel, tourism, and outdoor recreation sectors. Grants can be used for marketing, workforce training, and economic development to safely build back tourism activity, as well as infrastructure and workforce investments that diversify economies that rely too heavily on tourism.
 
How much funding is available?
 
Of the $750 million allocation, $510 million will flow non-competitively to States, territories, and the District of Columbia. The remaining $240 million will be awarded through Competitive Tourism Grants to non-State applicants. EDA expects to fund approximately 150 projects that cost between $500,000 and $10 million, although it will consider smaller and larger awards. EDA expects to fund at least 80% of project costs but may increase the federal share up to 100%.
 
What types of projects are eligible?
 
Marketing, infrastructure, workforce, or other projects to support the recovery of the tourism industry and economic resilience of the community in the future.
 
You should apply if… You are city, county, or nonprofit tourism-related entity whose economy relies heavily on tourism, has been impacted by the pandemic, and seeks to jumpstart local visitation. (States do not need to apply for their allocations.)
 
When are applications due?
 
Applications are open and will be awarded on a rolling basis. EDA encourages applicants to submit as soon as possible and no later than January 31, 2022.

 
 
 

Economic Adjustment Assistance ($500 Million)
 
What are the program’s goals?
 
The Economic Adjustment Assistance program is EDA’s most flexible program with grants available for a wide range of projects that help communities plan, build, innovate, and put people back to work through projects that meet local needs.
 
How much funding is available?
 
EDA anticipates funding approximately 300 projects that cost between $500,000 and $5 million. As part of the $300 million Coal Communities Commitment, EDA will allocate at least $200 million (40%) to support coal communities. EDA expects to fund up to 80% of project costs, with discretion to fund up to 100%.
 
What types of projects are eligible?
 
A wide range of construction or non-construction related projects, including technical, planning, workforce development, entrepreneurship, revolving loan, and public works and infrastructure projects. Tourism-related projects are restricted to the Travel, Tourism, and Outdoor Recreation program.
 
You should apply if… Your organization has an innovative approach to put people back to work, support economic recovery, and lay the foundation for equitable economic development (and other EDA programs do not seem right for you).
 
When are applications due?
 
Applications are open and will be awarded on a rolling basis. EDA encourages applicants to submit as soon as possible and no later than March 31, 2022, to provide adequate time for review and award.

 
 
 

Indigenous Communities ($100 Million)
 
What are the program’s goals?
Support the needs of Tribal Governments and Indigenous communities that were disproportionately impacted by the pandemic. EDA will support these partners to develop and execute economic development projects that are needed to recover from the pandemic and build economies for the future. Indigenous communities are encouraged to apply for this and other EDA programs.
 
How much funding is available?
 
EDA plans on funding projects that cost between approximately $500,000 and $5 million. EDA will fund 100% of project costs and reimburse pre-award engineering and environmental costs.
 
What types of projects are eligible?
 
A wide range of construction or non-construction related projects, including technical, planning, workforce development, entrepreneurship, revolving loan, and public works and infrastructure projects. Unlike other EDA programs, this program can fund new community health and higher education facilities.
 
You should apply if… You lead an Indian Tribe, consortium of Tribes, or a nonprofit serving Native Hawaiians or other Pacific Islanders whose community has been severely impacted by the pandemic and seeks to invest in economic recovery and development.
 
When are applications due?
 
Applications are open and will be awarded on a rolling basis. EDA encourages applicants to submit as soon as possible and no later than March 31, 2022, to provide adequate time for review and award.

 
 
 

Statewide Planning, Research and Networks ($90 Million)
 
What are the program’s goals?
 
The goals are three-fold: 1) to support Statewide Planning that will promote equity and develop resilient economies; 2) to Research the effectiveness of EDA’s new slate of programs; and 3) to develop Networks & Communities of Practice that support EDA program goals and grantees.
 
How much funding is available?
 
Of the $90 million, $59 million will flow non-competitively to States, Territories, and the District for Planning Grants $31 million will be awarded competitively for Research and Networks Grants available to any eligible entity. Research grants are expected to range from $200,000 to $600,000, and Networks Grants are expected to range from $2 million to $6 million. EDA will fund 100% of project costs.
 
What types of projects are eligible?
 
States can undertake a variety of planning activities, including developing economic development plans, analysis of the needs of persistent poverty communities, hiring disaster recovery coordinators, or statewide broadband data collection. Research Grants should propose real-time research and evaluation of the Good Jobs Challenge, Build Back Better Regional Challenge, Indigenous Communities program, and the Travel & Tourism program. Networks & Communities of Practice proposals should seek to develop sustainable national networks for existing and future EDA grantees or develop a Community of Practice around EDA program grantees, Coal Community grantees, or other areas of need.
 
You should apply if… You have the expertise and capacity to either evaluate EDA’s new programs or to develop national communities of practice to support equitable economic development. (States do not need to apply for their allocations.)
 
When are applications due?
 
Applications for Research and Networks Grants are open and will be awarded on a rolling basis. EDA encourages applicants to submit by October 31, 2022.

5 Questions to Shape Your Build Back Better Regional Challenge Application: Seize a Generational Investment in Equitable Economic Development

August 25, 2021 / No Comments

Written by Bret Collazzi, Kate Collignon, and Eric Rothman
 
Last month, the U.S. Economic Development Administration (EDA) launched one of the largest and most ambitious efforts in its history. With support from a $3 billion allocation in the American Rescue Plan, EDA created six new grant programs that drive regional job growth, workforce development, tourism recovery, and more.
 
The largest of those programs and the first to accept applications is the Build Back Better Regional Challenge, designed to strengthen regional industry clusters and create high-wage jobs in sectors that are resilient to future economic shocks and that reinforce America’s global competitiveness , from cleantech and artificial intelligence to life sciences and ag tech. EDA will award up to 30 regions nationwide as much as $75 million each to invest in projects that accelerate growth in these industries – anything from traditional infrastructure and planning studies to entrepreneurship and workforce programs. The first of two applications is due October 19. (For more details on the program, see our recent guide, developed with the national nonprofit America Achieves.)
 
Crucially, Build Back Better prioritizes equitable growth. The EDA will favor proposals where job and business opportunities benefit historically excluded groups, including women, people of color, and low-wage workers, as well as distressed geographies, with a $100 million set-aside for coal communities. Ensuring that investment creates broad-based economic opportunity will require a careful pairing of traditional infrastructure and real estate development with targeted workforce development strategies, startup support programs, and investment in backbone infrastructure such as affordable broadband. Successful strategies will require strong partnerships among government, industry, academia, and community organizations.
 
Build Back Better will be highly competitive. Based on our experience guiding cities, counties, and regional partnerships on transformative investments such as HUD’s Strong Cities Strong Communities and Amazon HQ2, as well as with federal grant programs such as TIGER and Choice Neighborhoods, regions seeking to stand out should consider five fundamental questions:
 

  1. What industry sector(s) represent your region’s most promising opportunity to grow high-wage jobs and broad-based economic opportunity? Some regions have placed a big bet on one growth sector; others will need to choose among several. Regions should consider from the start both which sector(s) have the potential to generate the greatest number of high-wage jobs and the potential for these sectors – based on their job profiles, existing employers, and relationships between industry and educators – to provide opportunity broadly across the region and particularly among historically excluded groups.

    2.  

  2. What assets give your region a unique competitive advantage for your target sector(s), and what are your limitations? Regional differentiators will vary by industry and region – for some, it’s a hard asset like a port or smart grid; for others, it’s a knowledge base that drives R&D or a quality of life that attracts and retains talent. Regions must be able to tell a story about the strength of these assets relative to other regions’ and about recent progress in strengthening them, whether measured in terms of job growth, wage growth, or private investment. Regions must also articulate the risks to future competitiveness, whether local talent base, business environment, or insufficiency of infrastructure. This discussion becomes the rationale for investment.

    3.  

  3. What are your region’s threats to equitable growth and opportunities to address them? Regions must also assess shortcomings in their existing and prospective clusters: What are existing job and wage disparities in target sector(s)? Are new high-wage jobs and business opportunities accessible to women, workers of color, and other underrepresented groups? Are there fundamental investments needed to enable broad job access, such affordable broadband, digital literacy, and transit access to job centers? Build Back Better provides a rare opportunity to connect capital, planning, and programmatic investments – how could applications seek to simultaneously grow total jobs, improve access to jobs for workers of all backgrounds, and address the gaps in access that underpin existing wage and work disparities?

    4.  

  4. What promising project models could Build Back Better jumpstart or scale up? In the end, Build Back Better is designed to fund up to eight projects in each region, and because all funds must be spent within five years, applications will be strongest where projects are already at least half-cooked. For programmatic projects such as those focused on workforce and entrepreneurship, regions should assess programs already in place locally that have shown success and could be scaled up with additional funding, as well as successful national models that could be adapted locally. For physical projects, while details such as siting and approvals will be locally specific, regions may be able to import funding frameworks, partnership models, and other strategies from national and global precedents.

    5.  

  5. What entity is best positioned to apply for Build Back Better and trusted to lead an inclusive coalition around a shared vision for growth? Build Back Better applications require a lead entity to coordinate approved projects. Just as importantly, regions need a trusted convener to build a coalition among government, industry, academic, and community partners. Who has demonstrated a commitment to equity and inclusion in the past? Who has the capacity to keep partners informed and the expertise to help shape mutually beneficial partnerships? The lead applicant and the convenor need not be the same entity but should trust and respect each other.

 
The $1 billion allocated through Build Back Better, combined with $2 billion in other EDA funds, will provide a historic down payment on equitable economic development in regions across the United States. High-profile grant competitions such as these provide a rare occasion to convene regional leaders across sectors to align around a vision and priorities that can have lasting impact – regardless of success in the competition. HR&A is excited to shape new paths toward growth that are both equitable and enduring for our clients who pursue Build Back Better and future funding opportunities.
 
For more information about the Build Back Better program or to discuss your application, please contact us at buildback@hraadvisors.com.

HR&A Advisors Opens Atlanta Office to Continue Advancing Transformative Economic Development Work Across the Southeast 

July 28, 2021 / No Comments
HR&A Advisors is proud to announced the opening of our Atlanta office in Tech Square in Midtown Atlanta. Led by Partner Mason Ailstock, the expansion will anchor the firm’s ongoing work throughout the southeast, which focuses on transformative and equitable regional development and includes multi-faceted projects in higher education, real estate, transportation, housing, innovation, infrastructure, and open space.
 
The announcement follows the hiring of two new Senior Analysts in the office, Christina De Giulio and Christopher Broughton. Both bring extensive experience in the Atlanta metro area and across the southeast and will support real estate and economic development projects for the office.
 
“Since joining HR&A nearly two years ago, I’ve worked to develop the firm’s Knowledge Economy practice, leveraging the innovation economy to guide transformative development,” said Ailstock. “Launching an Atlanta office will allow HR&A to support an even broader audience in the southeast and provide industry-leading services to help guide a just and resilient recovery.”

 
 

HR&A is committed to supporting communities across the nation, and formally expanding into the American southeast will bring us closer to that goal. Our projects in Georgia and the surrounding states advance our work to guide an equitable recovery from the pandemic and create more resilient, just communities. Under Mason’s leadership, the Atlanta office will continue HR&A’s work improving the region’s innovation districts, housing, transit, and public spaces.
 
– Eric Rothman, CEO

 
 
For more than 20 years, HR&A has led groundbreaking, innovative projects across the southeast. This includes work in metro Atlanta:
 

  • Advising on the development of Rowen, the 2,000-acre knowledge community connecting industry and education – with economic impact at scale. Located in the Atlanta Metro Region halfway between Atlanta and Athens, the Gwinnett County site is projected to create nearly 100,000 jobs and generate up to $10 billion in annual income at full buildout.
  • Guiding the Atlanta University Center Campus Master Plan with financial feasibility and economic development analyses, resulting in identification of opportunities for the schools to consolidate facilities and integrate with the surrounding community through mixed-use development on university owned property surrounding the AUC.
  • Partnering with Gwinnett County to lead the Gwinnett Place Mall Equity Plan, which will serve as the foundation for the site’s redevelopment and drive inclusive, equitable development and business opportunities for all of the County’s diverse communities.
  • Shaping Georgia Tech’s Tech Square in the heart of Midtown Atlanta where the firm developed a refined vision for the innovation district by identifying and applying best practices in placemaking, real estate value creation, and governance.
  • Working on multiple projects with MARTA and the Atlanta BeltLine, exploring opportunities to leverage transit infrastructure investments to foster economic development, access to opportunity, and increase mobility.
  • Supporting Resilient Atlanta, a comprehensive and actionable plan to address regional challenges while building capacity to better anticipate and respond to future climate change related shocks.
  • Working with the Atlanta Apartment Association to develop models that demonstrate the drivers of housing affordability and cost in the region and understand the impacts of municipal policies on affordability.
  • Developing a multi-pronged approach on behalf of the Buckhead Community Improvement District to meet residential demand and expand housing options across a broad range of household incomes in the Buckhead area.

Closing the Digital Divide in Affordable Housing

June 30, 2021 / No Comments

Written by Danny Fuchs, Youssef Kalad, and Raquel Vazquez
 
Essentially all residents of affordable housing in New York State have access to internet service from cable companies that serve every housing unit in the state. The pandemic has demonstrated that this service is woefully insufficient: speeds are too slow for reliable video connections or use by multiple members of a family; costs are too high for too many; and many more lack the devices or skills necessary to use the internet effectively. Most residents have only a single choice of provider. Residents and managers of affordable housing need new tools to close the digital divide.
 
Previously, we’ve written about how community-based organizations can help and how policy changes could help wireless internet services providers (WISPs) to address access and affordability challenges, particularly in larger buildings. We’ve also written about how ill-prepared governments are to address the situation.
 
Now, we’re excited to announce the launch of the Affordable Housing Broadband Initiative (AHBI), a partnership of House New York, the New York State Association for Affordable Housing (NYSAFAH), the Ford Foundation, Schmidt Futures, and HR&A Advisors. We are thrilled to also have the support of New York State Homes and Community Renewal (HCR) and the New York City Department of Housing Preservation and Development (HPD) as critical public agencies that can help deliver AHBI, and to be working with the Association for Neighborhood Housing and Development (ANHD) and the Supportive Housing Network of New York (SHNNY), among others, to reach tenants and building managers for a more inclusive planning process.
 
The Contemporary Policy Context
 
Impressive work on affordable broadband has been done in public housing developments. The Queensbridge Connected program provides free wi-fi to 7,000 residents in the nation’s largest public housing complex. Two developments in San Francisco have earned praise for their low-cost options. (HR&A is proud to now call one of the architects of the latter program, Preston Rhea, a colleague).
 
In New York City, HPD with support from NYSAFAH, has introduced new guidelines that will ensure affordable broadband in new, privately-owned affordable housing construction. While this program may be expanded to privately-owned affordable housing preservation financing, the vast majority of affordable housing residents live in buildings that will not benefit from such a program for many years to come.
 
Congress is seeking to give efforts like these a boost. Earlier this year, Representative Jamaal Bowman (D-NY) and House Financial Services Subcommittee on Housing Chair Emanuel Cleaver, II (D-MO) introduced the Broadband Justice Act of 2021, which would define broadband service as a utility in federally-subsidized housing and provide $5 billion for infrastructure upgrades and other essential uses – an Act that should be part of the $65 billion for broadband in the recently-announced bipartisan infrastructure package.
 
However, residents, building managers, ISPs and other industry players, and government agencies will still need tools and pathways to use these funds effectively.
 
Introducing the Affordable Housing Broadband Initiative (AHBI)
 
We are designing a comprehensive roadmap to expand access, affordability, and adoption of broadband in the more than 15,000 privately-owned affordable housing buildings in New York State. We call it AHBI (“Abby”), and we’re working to build a coalition of government and industry partners to help design and deliver this data-driven approach to shape the use of federal funds to close the digital divide in privately-owned affordable housing in New York State. Our intent is to subsequently scale the program nationally.
 
The work requires delving into the universe of existing privately-owned affordable housing developments, understanding the composition of the sector in terms of different building types with different levels of infrastructure quality and different tenant profiles, and designing a series of program tracks that are tailor-made to the diverse conditions of the sector overall. It will also benefit from a participatory planning process that creates space for input from all relevant stakeholders.
 
Partnerships and Building an Inclusive Engagement Model
 
AHBI envisions an ecosystem in which public-private partnerships expand broadband access, affordability, and adoption in affordable housing. In such a model, affordable housing developers and infrastructure and internet service providers will partner with government agencies, community-based nonprofits, and tenants on scalable, building-based solutions to achieve universal adoption in affordable housing.
 
The theory is that housing developers and building owners are looking to better serve their residents and differentiate their properties, and established and emerging internet service providers wish to leverage economies of scale to expand their footprints. Additionally, a network of fiber infrastructure providers, equipment and computing manufacturers, and skilled digital navigators will benefit by expanding their customer base as they ensure that architectural challenges and individual household needs are met. The challenge is complex – extending beyond the need for infrastructure upgrades or new affordability programs for broadband service to the imperative of addressing the device and skills gap that exists for many low-income and senior households – and will require dedicated action from all stakeholders to succeed. A successful program must be developed in conjunction with those most impacted by the digital divide – residents who are unconnected, under-connected, or poorly served by existing choices.
 
There are a number of potential solutions that AHBI may incorporate: funding or incentives for infrastructure upgrades to or within affordable housing buildings, bulk purchasing of service, provision of devices and digital skill-building to tenants, opportunities for new providers to be connected to building managers, and beyond. A menu of options may be designed for the sector overall, or be tailored to certain typologies of buildings across the state. We look forward to interrogating these models and others with the diversity of stakeholders that AHBI brings to the table, and then to work with them to implement solutions.
 
Opportunities to Participate
 
AHBI offers multiple platforms to connect with a range of individuals and professionals who can play a role in expanding broadband access in affordable housing throughout New York State. We’re actively looking for organizations interested in helping to shape the design and delivery of this program.
 
We have created a series of surveys for residents and tenants, housing developers and building owners, and industry and advocacy partners to share their feedback on their own experiences utilizing broadband and the challenges they perceive for their typology of building or their portfolio or the sector overall. We will use this input to shape more in-depth focus groups with each of the constituencies to gain a broader perspective of the critical challenges to broadband adoption and help us better understand the opportunities we can create to address these challenges.
 
We also invite everyone to attend a webinar about this program on Thursday, July 8th at 12:30 pm, in which we will discuss our agenda further and engage with New Yorkers interested in learning more and sharing their thoughts on how to make the Affordable Housing Broadband Initiative a strong, inclusive, and successful model for New York State. It is our hope that AHBI’s approach in New York can serve as a blueprint for closing the digital divide in affordable housing across the country – and that you will contribute to the process in New York or wherever you call home.

Google in San Jose: Yes, Public-Private Partnerships Can Deliver An Equitable Recovery

June 14, 2021 / No Comments

Written by Amitabh Barthakur, Judith Taylor, and Thomas Jansen
 
On May 25, the City of San Jose’s elected leaders unanimously approved a Google plan to build an 80-acre mixed use district between the city’s Diridon Station multi-modal hub and Downtown. The project began with a 2017 Google announcement of the project’s intent that was then discussed and negotiated by a diverse set of community leaders working with Google over the course of four years. By the terms of the resulting Development Agreement, what is now known as Downtown West will, when built out, include up to 7.3 million square feet of office, 4,000 homes, retail, hotels, community amenities, and up to 15 acres of parks and open space. It will bring more than 30,000 tech jobs to San Jose.
 
The approval incorporated an unprecedented community benefits agreement that will deliver a range of benefits. Silicon Valley Rising, a local campaign of labor, faith leaders, community-based organizations and workers, called the community benefits agreement negotiated for the project, “a new model for how tech should partner with … [a] … community to keep families housed, lift the quality of blue-collar jobs, and build lasting power in neighborhoods of color.”
 
The $200 million community benefits package, plus $250+ million in already-required contributions towards parks, affordable housing and transportation through already-established fees and requirements, includes:

  • A $155 million Community Stabilization and Opportunity Fund the goal of which will be to advance equity and opportunity and prevent displacement. The fund will be overseen and allocated by a community and expert-led committee.
  • 1,000 affordable units available to a range of incomes.
  • An unusual $7.5 million in advance payments to support economic recovery, job readiness, and community stabilization initiatives, of which $3 million will be delivered this month for anti-displacement initiatives.
  • A 30% local hire goal for construction and disadvantaged business procurement initiatives.

 
What lessons does the Downtown West deal offer for big tech, other major employers, city leadership, and community advocates as they consider their joint future dealings? Below we summarize our takeaways from the four years of support we provided the City of San Jose as its strategic advisor for the project.
 
Early activism sheds light on community priorities, which should, in turn, form the basis of community benefits negotiation. San Jose’s City leaders were pushed early and often by community and labor leaders to think cohesively about the impacts of the project. In addition to considerations of jobs and tax revenues, activists demanded that San Jose’s elected leadership consider possible negative project impacts on the city, its neighborhoods, and the region – geographies that are facing extraordinary challenges related to housing affordability, homelessness, and economic opportunities for populations of color. San Jose earnestly explored how the project could exacerbate these challenges and worked with Google and the community to design a project that would respond to these potential negative outcomes.
 
Community priorities were codified in a memorandum of understanding, which acted as a checklist for the success of the overall deal and Google’s commitments to address community needs. HR&A drafted development principles for the Diridon Station area, which were also incorporated into that early agreement. HR&A, in partnership with SkipStone, then helped the City negotiate specific terms of the Development Agreement to deliver on these priorities.
 
Engagement with a wide range of community stakeholders is critical, but following through by structuring a deal that puts community needs at the forefront is the most critical ingredient to building public trust in government. As of this writing, Downtown West has received unprecedented support from all corners of the community – neighborhood groups, housing advocates, labor groups, minority organizations, business groups and many others.
 
Facilitating a market-aligned development framework often has more value to private interests than conventional city incentives… and will garner more popular support. We helped the City of San Jose to evaluate and define its value proposition: of first and perhaps greatest value was the location of the site, which, because of significant public investment, was primed to become one of the largest transportation hubs in the region, providing access to a large regional talent pool. Second, the City agreed to co-design a streamlined regulatory structure for development of the district, which improved Google’s development economics by providing certainty, flexibility and density. These values created for Google through public investments in transportation infrastructure and regulatory actions allowed the City to justify a public benefits “ask.” No tax abatements, low-cost financing, or other conventional incentives were offered.
 
Resources need to be allocated for anti-displacement and affordable housing before the jobs arrive.
The City set a goal of ensuring that at least 25% of new housing in the district would be affordable to low- and moderate-income residents. The City took three steps to ensure that affordable housing would be in place before office development put pressure on existing housing stock:

  • Established policies that support the creation of affordable housing: The City adopted an updated Inclusionary Housing ordinance and a new Commercial Linkage Fee prior to finalizing the Development Agreement with Google.
  • Ensured development-ready land for affordable housing was available: We supported the City and Google to balance regulatory requirements and development economics to structure a deal in which Google will provide development-ready sites for 50% of the total affordable units to the City early in the project.
  • Initiated anti-displacement strategies early: Google agreed to pay approximately $7.5 million of its community benefit contribution before commencing construction to generate additional resources for the City’s existing anti-displacement, community stabilization, and job-readiness programs; almost half will be delivered this month to support tenant needs as COVID-19 eviction moratoria expire.

The community can and should be given control over how community benefit resources will be deployed. Extensive community outreach pointed to two broadly-shared views:
 

  • The community benefits package should support community stabilization and anti-displacement initiatives, as well as opportunity pathways for San Jose residents; and
  • Community members, not Google or City staff, knew best how these resources should be deployed over time.

 
The community benefits agreement accordingly directs the majority of community benefit contributions to a new fund to support community priorities. Google’s contributions to the Community Stabilization and Opportunity Pathways fund are tied to the pace of its office development.
 
The fund’s governance structure will include establishment of a committee composed of community members with lived experience and service providers or local experts with subject matter expertise, who collectively will have sole authority to allocate funds. A third-party fund manager will support grantmaking efforts and seek to leverage external resources to magnify the impact of the fund. This approach was critical to gain community trust and support for the project.
 

—

 
HR&A is proud to have supported the City of San Jose. Before the Downtown West community benefits agreement was concluded, the economic windfall associated with an influx of high-paying jobs would have been the only headline to announce such a project. The Downtown West project creates a new standard of success for development in Silicon Valley – one that maximizes positive benefits for both the economy and community and illustrates that the development process can by buoyed by understanding and delivering the priorities of the existing community.

Restaurants to Lead Real Estate Recovery

May 28, 2021 / No Comments

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Conde Nast recently named Red Rooster Overtown in Miami one of the 25 best new restaurants in the world.
 
This is a story of a restaurant that’s more than a restaurant. It’s a Black-owned endeavor that’s anchoring a large-scale, multi-phased development in Historic Overtown Cultural & Entertainment District.
 
Hear how Derek Fleming, HR&A Senior Advisor, has led this development to world-leading status in this week’s A Just & Resilient Recovery interview.
 

A Just & Resilient Recovery: Infrastructure Week

May 7, 2021 / No Comments

How would the American Jobs Plan reshape neighborhoods?

 
As lawmakers in Washington debate the largest spending bills in generations, we’re thinking about how this long-sought influx of federal funding can lead to more just and resilient cities and neighborhoods. Where is the opportunity greatest? What resources are needed in addition to spending? What considerations need to be at the fore so that we’re not just spending trillions of dollars but also driving systemic change? Nineteen HR&A subject matter experts share their thoughts. Tell us yours on Twitter or LinkedIn and sign up for our newsletter here!
 
Click through to see some of what’s on the agenda.
 

Image by Santo Jacobsson. He has a BFA in illustration from The Parsons School of Design. He is an illustrator based in NYC and Minneapolis. His main work pulls from his Ecuadorian heritage and queer identity. Find more at https://santojacobsson.myportfolio.com/ and his instagram: @santojacobsson.
 
 

CLIMATE JUSTICE

  		DIGITAL INCLUSION

 
DOWNTOWN INVESTMENT

  		FOOD EQUITY

 
GREEN JOBS

  		INNOVATION

 
PARKS

  		RETAIL

 
RETHINKING URBAN HIGHWAYS

  		TECH FOR GOOD

 
TRANSIT

  		URBAN RESILIENCE

 

 

Climate Justice
Written by: Jose Serrano-McClain and Candace Damon
Decarbonizing our energy infrastructure represents one of the most important ways to make progress on slowing climate change. In the words of one friend, “We need to stop burning things.” With that shift comes the need to decommission thousands of fossil fuel power plants across the U.S. — potentially transforming the physical fabric of the communities in which they are located.
 
These are communities that share the distinction of suffering the compounding harms of environmental racism and economic marginalization. They can embody the framework for a just transition, to “stop the bad” and “build the new.”
 
What these frontline communities need are resources and tools to shape the energy transition.
 
The current version of the American Jobs Plan may provide the resources: it includes $100 billion for power infrastructure and economic development investments in distressed and disadvantaged coal, oil and gas, and power plant communities. This sum is allocated to a variety of initiatives, some of which may be available for communities seeking to transform power plant sites while creating good jobs for community members.
 
But leaders from the frontline communities also need tools: they should be provided with capacity-building and demonstration programs that will allow them to collaborate on the research and development of next-generation energy services, technologies, and business models. In New York State, pursuant to the State’s Climate Leadership and Community Protection Act, the New York State Energy Research and Development Authority is experimenting with developing these tools. Lessons can also be learned from the Justice40 Accelerator, which is supporting frontline communities to apply for federal funds to build community-led climate and environmental justice projects.
 
In these “community energy labs,” the reimagining of decommissioned plants can happen alongside the envisioning of new energy occupations, the launch of community-owned energy projects, and the testing of community-driven pilots that advance a shift toward clean energy, local agriculture, expansion of community health infrastructure, and resilience investments.
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Digital Inclusion
Written by: Danny Fuchs and David Gilford
Universal high-speed internet connectivity is the electrification of the 21st century, yet tens of millions of American families lack this essential utility. The American Jobs Plan proposes investing $100 billion in broadband infrastructure, a once-in-a-generation opportunity to close the digital divide. While this national support is critical, there is no one-size-fits-all solution. Our Broadband Equity Partnership survey of local leaders found that communities across the political spectrum want to be empowered to deliver fiber deployment, subscription subsidies, and digital inclusion programs with local perspectives and fresh ideas. Local voices must be at the forefront of implementation across sectors, including new community-led models of public-private partnership.
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Downtown Investment
Written by: Kate Collignon
Dynamic Central Business Districts were essential to the resurgence of cities in recent decades, sustaining and attracting a skilled workforce and fueling innovation and economic prosperity. But this success was not shared equally: to many people, “talent attraction” now invokes the specter of racial displacement. As CBDs struggle to recover and adapt from both the COVID shutdown and the longer-term impacts of remote work, we have an opportunity to leverage infrastructure funds through the American Jobs Act to produce both a more equitable recovery and more resilient CBDs:

  • Leverage more than $200 billion in additional housing funds to convert office space that faces less demand amid remote work into affordable housing – sustaining and expanding activity downtown, diversifying uses to increase resilience amid future economic downturns, and ensuring broader participation in downtowns’ future.
  • Tap into CDBGs and neighborhood resilience funding to invest in the public realm to sustain and increase access to open space of all kinds to rebuild and expand access to this heavily used lifeblood during the pandemic, particularly in locations with limited access to green space.
  • Invest in adaptation of under-utilized storefronts to creative uses, and in the small businesses that have struggled amid the pandemic, recognizing the disproportionate impact that COVID has had on minority-owned businesses and leveraging more than $30 billion set aside for enhanced small business funding and MWBE investment.
  • And – with more than $600 billion proposed for transportation infrastructure – sustain and enhance the road and rail networks that make it possible for CBDs and employees from throughout the region to thrive by connecting people with jobs.

For CBDs to deploy these funds directly, cities of all sizes will need to have access to a sufficient share of federal resources flowing through states and counties and be given appropriate discretion over their expenditures.
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Food Equity
Written by: Derek Fleming and David DeVaughn
The Biden administration’s broad, inclusive approach to infrastructure investment presents a much-needed opportunity to address the food systems inequity experienced by marginalized, under-resourced, and Black and Brown communities across the country. While COVID-19 has demonstrated how emergency food systems provide vital nutrition for communities in crisis, it has also highlighted the need for alternative, community-controlled models.
 
Local decisionmakers around the country have been seeking to make capital accessible for Black and Brown food entrepreneurs, to incentivize new types of equity-based food businesses, and to develop cooperative groceries and food hubs, among other innovations.
 
Billions of dollars of spending contained in the American Jobs Plan – from Community Development Block Grants to workforce and small business funding to climate and resiliency funding – could be used to invest in critical food system infrastructure that champions marginalized communities. If approached as an overlapping pool of resources, the billions of dollars allocated to neighborhood investment can avail an innovative re-alignment in food systems, supporting Black and Brown food entrepreneurs and their local economies through community asset building. These funds can be a down payment for hyper-local-to-regional projects that can sustain communities’ health and wellbeing, while being intentionally designed to address generations of disinvestment and extraction.
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Green Jobs
Written by: Judith Taylor and Garrett Rapsilber
The American Jobs Plan’s proposed $400 billion investment in clean energy, zero-emissions transportation, and climate resilience would remake the U.S. economy with the potential to upend longstanding inequities in access to high-road jobs.
 
However, the transition to a green economy will require new skills training and a purposeful effort to create a more equitable economy. While the Plan includes $100 billion to fund “proven workforce development approaches” targeted at underserved groups (including $48 billion for new apprenticeship and education programs and $12 billion to target workers facing some of the greatest barriers to employment, such as formerly incarcerated individuals), the effectiveness of these workforce investments rests on coordination among existing workforce development partners and on centering new approaches to engage historically underserved communities.
 
As described in our report for the Los Angeles Cleantech Incubator, many people do not understand the full extent of jobs or training within the green economy. In order for Plan dollars to be invested in the right training approaches that will create successful, equitable outcomes, more work needs to be done across the country to understand the region-specific distribution of green jobs. Further, an understanding of regional green jobs data can be leveraged by workforce programs to illustrate career opportunities for women and people of color and to proactively reach out to underrepresented communities through partnerships with local schools, institutions, and non-profits.
 
Our study found that technical training, such as electric vehicle maintenance or energy modeling, must be paired with soft skills training and braided services, such as childcare and transportation assistance, to increase participation of women and people of color in training programs. Finally, outreach and training must also target blue-collar workers in transitioning industries to ensure no one is left behind.
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Innovation
Written by: Bob Geolas and Mason Ailstock
Could there be a more exciting time for innovation? Communities across the country are developing innovation communities, hubs, districts, and centers. Research in areas from health, wellness, climate, food, as well as the usual tech sectors are booming. The proposed infrastructure investments offered by the President will provide essential fuel to ensure that such efforts generate the greatest economic benefit for the most people, from $45 billion for increased R&D capacity at Historically Black Colleges and Universities and other Minority-Serving Institutions, to $20 billion for regional innovation hubs that seek to spread the economic benefits of the knowledge economy beyond major metros, to $31 billion to fund small manufacturers and set up innovation hubs in communities of color and other underrepresented communities. Across these investments, urban and suburban collaboration, equitable economic outcomes, and convergent sectors are required to support broader societal goals and human benefit. Now is the time for innovation leaders and communities do a deep dive, evaluate innovation assets, prepare to pivot into a new 10-year strategic plan, and secure infrastructure investments that align with local goals to propel their communities forward… as we all Build Back Better.
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Parks
Written by: Connie Chung
Parks are infrastructure – yet they’re not specifically included in the American Jobs Plan. Instead, there’s $50B to support resilient infrastructure (through FEMA’s Building Resilient Infrastructure and Communities program, HUD’s Community Development Block Grant program, new initiatives at the Department of Transportation, and others). Park system operators and advocates should seize the opportunity to tap into these funding sources, which can support hazard mitigation, nature-based solutions, capacity building, public-private partnerships, and a breadth of other public benefits. It’s obvious to us that parks fit the bill – they are nature-based solutions to mitigate climate change; they provide much-needed refuge; they are critical to public health; they create and sustain good jobs; they can protect us from flooding; and they bring joy. But tapping into this funding will require deliberate partnerships, credible demonstration of projects’ value (defined broadly), and a courageous rethinking of what we mean by “infrastructure” to include your riverfront, your running trail, and your neighborhood park.
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Retail
Written by: Kate Coburn and Sulin Carling
Storefronts are social and economic infrastructure of cities and neighborhoods, providing goods and services, entrepreneurship opportunities, and vibrancy. COVID-19 has caused a proliferation of vacant storefronts. We must leverage the American Jobs Plan’s small business support and transportation infrastructure funds to support storefront businesses and promote experience-focused storefront uses that can thrive in the era of e-commerce. We should:

  • Enhance experiences from storefront to sidewalk. Municipalities should widen sidewalks and help businesses create permanent outdoor seating structures while making open streets permanent.
  • Fund pop-up retail incubators in vacant storefronts. BIDs or other community organizations can lease underutilized storefronts and provide free space to entrepreneurs testing concepts before moving into permanent space.
  • Invest in digital infrastructure to help small businesses remain competitive. Local governments and BIDs should invest in broadband and shared online shopping platforms encouraging “shopping local,” replicating ShopInNYC, which offers free same-day shipping within NYC for orders over $59 from local businesses.
  • Facilitate innovative storefront reuse. Cities can fund technical assistance and ease zoning to encourage new uses such as pop-ups, co-located microbusinesses, or even housing.

These investments in commercial corridors will provide returns on par with the bridges and highways that get people there.
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Rethinking Urban Highways
Written by: Olivia Moss
Described by Secretary Buttigieg as “…a legacy of misguided investments and missed opportunities in federal transportation policies that reinforce racial and economic inequality,” highways have left scars in neighborhoods throughout the country, disrupting residents’ economic and housing stability and uprooting local businesses. The $20 billion commitment in the American Jobs Plan for programs to reconnect these neighborhoods with a focus on equity can support local government and advocates’ efforts to create covers or lids over highways, fill sunken expressways, and transform elevated highways into boulevards.
 
These projects in turn can create new space for parks, housing, and other community-serving uses. Such projects require thoughtful planning to develop strategies for funding complex infrastructure, enabling equitable development, and establishing governance structures to steward progress toward community goals. Even with federal funding, these projects represent major investments for local governments – a clear analysis of the benefits that align with such investment can guide decision-making and demonstrate the economic and equity benefits that can be accomplished by reconnecting neighborhoods and replacing relics of a misguided urban policy with new community assets.
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Tech for Good
Written by: Kate Wittels
With the onset of the pandemic we learned that high-speed internet is not a luxury but a necessary utility that all Americans need to participate economically, civically, and socially. But access to broadband is only half the battle – people also need internet-enabled devices to access the many useful websites and platforms that can make our lives more productive, as well as training on how to navigate the sites and software products.
 
As we saw with K-12 education during the last year, there are many great ed tech tools, but education cannot magically transition unless the teachers, parents, and students have devices and are taught how to use the tools. The American Families Plan calls for investing $9 billion in teacher training – we hope that part of the $9 billion will be spent on tech skills development and software awareness so teachers can leverage the best that ed tech can offer. More also needs to be done to ensure that all teachers and students have functioning tablets and computers. While the days of 100% remote education may be behind us, many of the software products that we depended on will likely remain and be integrated into teaching methodologies for years to come.
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Transit
Written by: Amitabh Barthakur and Paul Silvern
Transit can play an essential role in economic recovery and future resiliency of our cities and regions. Transit’s function – connecting people to jobs and services – and its well-documented impacts on expanding access to quality jobs, reducing congestion, and enabling sustainable growth ensure that increased investment in transit service and infrastructure will be a critical component of equitable economic expansion in our cities.
 
This is indeed a time to double down on these investments, and we are very happy to see some of the initiatives identified in the American Jobs Plan, including $85 billion to modernize existing transit and expand rail and bus transit systems and an $80 billion investment in Amtrak and national freight service. Transit agencies should work in close coordination with state and local governments while deploying these resources to ensure that they can leverage additional private investment and additional dollars identified in the American Jobs Plan (such as $20 billion to reconnect neighborhoods cut off by highways and $5 billion to redevelop contaminated brownfield sites) to support equitable growth.
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Urban Resilience
Written by: Jonathan Meyers
In most cities in America, property taxes represent a large portion of local government revenues, and these revenues are often the cornerstone of local governments’ ability to fund operations and pay debt service. Local governments face a major threat to their underlying business model in the form of climate risk. In most cases, assessed property value does not fully reflect climate risk. Among the many concerns associated with weather and human activity, these risks will significantly erode property value (and therefore local revenue). This may happen slowly, through actual loss of land to subsidence and costs of nuisance flooding, or it may happen in a single catastrophic event. In either case, local governments will be left without resources, and without the revenue needed to fund future investments.
 
The American Jobs Plan reflects the desire to invest in resilient and sustainable infrastructure at a local level, allocating $50 billion to safeguard critical infrastructure and protect communities from climate risks. This funding provides an opportunity to make thoughtful and necessary investments now – investments that address historic inequalities in where people live, in terms of how services are allocated and how infrastructure has been designed and built. This will also require us to think long-term about how City services are financed, how budgetary risks related to climate change can be mitigated, and how the restructuring of a City’s “business model” must be an opportunity for a more equitable and inclusive approach.
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The Restaurant Revitalization Fund: What local economic development stakeholders should know

April 23, 2021 / No Comments

Written by Erman Eruz

Applications open soon for the $28.6 billion Restaurant Revitalization Fund (RRF), which will provide grants to cover businesses’ pandemic revenue losses. RRF was established by the American Rescue Plan in March, and the Small Business Administration (SBA) released initial guidance on April 17.

Although $28.6 billion is a significant allocation, it falls well short of total restaurant revenue shortfalls over the pandemic, estimated by Congress at $120 billion (the original ask from House Democrats in the HEROES Act last September). Given expected demand, the funds will likely run out before all eligible applications are processed. Congress would then need to determine whether to expand the program to meet demand. For now, SBA is advising businesses to start applying from day one to increase their chances of payment and to demonstrate demand for a possible expansion.

The basic details of the program are as follows:

  • Eligibility: Funds are available to a wide array of privately owned food-related businesses, including restaurants, bars, caterers, food trucks and carts, brewpubs, and (if onsite sales make up at least 33% of gross revenues) bakeries, breweries, wineries, distilleries, tasting rooms, and inns. Businesses cannot have permanently closed, filed for bankruptcy, or operate more than 20 locations. Noncitizens are eligible as long as they have legal status and an individual taxpayer number (ITIN).
  • Funding Limits: Businesses may seek an amount equal to the difference between their 2019 gross revenue and their 2020 gross revenue, minus any Paycheck Protection Program (PPP) or other federal, state, or local pandemic aid. Awards are capped at $5 million per physical location and $10 million per business entity. Businesses will need to provide tax and/or bank information to document gross receipts.
  • Eligible Uses: Funds may be used for payroll, rent, utilities, property taxes, debt service (including principal payments and credit card debt), maintenance expenses, construction of outdoor seating, supplies, and other business operating expenses. Recipients are not required to repay the funding as long as funds are used for eligible uses incurred between February 15, 2020, and March 11, 2023.
  • Timeline: SBA is presently running a pilot to test the application process. A sample application form is now available here to allow applicants to prepare materials. SBA expects to begin accepting applications, including online, in early May.


    • SBA’s approach to RRF responds to lessons learned from the PPP’s first round, when banks prioritized their customers and larger businesses to the detriment of small, independent businesses in disadvantaged communities. To increase the likelihood of RRF funds going to businesses that need it most:

  • Within 21 days of program launch, the SBA will prioritize applications from businesses owned by women, veterans, and socially and economically disadvantaged individuals.1
  • The fund sets aside funds for microbusinesses: $4 billion for businesses with revenues of $501,000 to $1.5 million annually; $5 billion for businesses earning not more than $500,000 per year; and $500 million for businesses making under $50,000.
  • For businesses lacking digital access or literacy, phone applications will be available.


    • SBA’s stated goal with the RRF rollout is to provide “as much relief to as many businesses as possible in a short amount of time.” Local economic development stakeholders, such as local government agencies, chambers of commerce, downtown associations, Business Improvement Districts (BIDs), community-based organizations, and others, can play an important role in working with their communities to make sure that the business owners in the greatest need of these funds are aware of the program, begin preparing materials, and are able to apply as soon as possible.


    1. According to SBA regulations, socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. Individuals who are members of the following groups are presumed to be socially disadvantaged: Black Americans; Hispanic Americans; Native Americans (including Alaska Natives and Native Hawaiians); Asian Pacific Americans; or Subcontinent Asian Americans. Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.↩

    We asked collaborators across our network what’s needed to address tech’s racial income gap, and how data can support their work. Here is what they said.

    April 23, 2021 / No Comments

    The tech sector faces a deep and persistent racial equity crisis. Black and Latinx workers are significantly underrepresented across tech occupations, and more likely to hold lower-paying jobs in tech. This results in a “racial income gap” of up to $50 billion per year, as detailed in our companion analysis.

    We invited collaborators from across our network to share their ideas for how this data could support their efforts to broaden opportunity. We hope this will be the start of an open discussion. Please share your ideas to justandresilient@hraadvisors.com.

     
    Building inclusive programs to support minority entrepreneurship
    The Ion

    As part of The Ion’s vision to create an inclusive tech ecosystem and support equitable economic growth in Houston, we recently announced the launch of our Aerospace Innovation Accelerator for Minority Business Enterprises (AIA for MBEs). Dedicated to Black, Indigenous, and people of color-owned businesses, the 12-week program seeks to help entrepreneurs overcome high barriers to entry in the aerospace industry, a major economic driver in the Houston metro area. The accelerator will offer mentorship, training, corporate partnerships, access to capital, and networking opportunities with support from NASA’s Johnson Space Center and the U.S. Commerce Department. Read more about the initial cohort of four companies here.

    Another key partner providing support for the AIA for MBEs is DivInc, which just launched its Houston Accelerator and will have its Houston headquarters at The Ion. DivInc focuses on helping underrepresented founders, including women and Black and Latinx founders, build successful high-growth businesses through events, community building, and targeted accelerator programs. Together, the AIA and DivInc Houston’s accelerator are focused on supporting not only minority and women tech founders and entrepreneurs, but also providing support for minority business enterprises that are looking to scale and expand their reach.

    The Ion, set to open this year, will anchor a 16-acre, walkable innovation district in Houston’s urban core. It will house coworking spaces, maker spaces, classrooms, workforce development programs, and community event spaces designed to bring Houston’s entrepreneurial, corporate, academic, and investor communities together.


    Invest in Black talent and redefine the innovation district for equity
    Opportunity Hub (OHUB)

    HR&A’s data shows that we must join forces to invest in the early exposure, education, reskilling and upskilling, hiring partnerships, inclusive innovation, new venture creation, early stage capital, and access to markets required at scale to ensure that everyone in America has the opportunity to create multi-generational wealth that does not rely on pre-existing multi-generational wealth.

    For eight years, Opportunity Hub (OHUB) has been working to expose, upskill, and place Black Americans and others into software engineering, technical sales, and operations roles in the tech ecosystem. We have worked to incubate, accelerate, and invest in early-stage startups co-founded by Black Americans. Last year, we joined forces with Steve Case’s Rise of The Rest Fund and Morgan Stanley Multicultural Innovation to invest $2M in Black startups and build an ecosystem of more than 100 venture capital funds committed to increasing the flow of capital into Black tech startups. Via our 100 Black Angels & Allies Fund, we invest in Black technology startups, venture funds, and ecosystem-building companies while simultaneously working with organizations like The Links, Incorporated and UNC Chapel Hill’s Kenan Flagler to educate and certify a new generation of Black angel investors and limited partners. In partnership with SXSW, OHUB has built a growing community of 7,000+ students at 400 colleges and universities, including our nation’s Historically Black Colleges and Universities.

    In June 2020, OHUB formed Equity District, Inc. – hyper-local joint ventures with real estate developers, corporations, community foundations, colleges, and cities via public-private partnerships to build “Innovation & Equity Districts” – mixed-use residential, commercial, and retail community concepts that house OHUB’s early exposure, immersive rapid upskilling, talent placement, startup support programs. They provide capital access for socially disadvantaged communities located in and around Opportunity Zones. We’re now working with HR&A to integrate OHUB Equity Districts into innovation districts throughout the nation to ensure that the new innovation density that is being created doesn’t exclude, displace, or immobilize the surrounding neighborhoods. Current equity districts are being launched in Atlanta, Austin, Kansas City, MO, New Orleans, York, PA, Utica, NY, and Rochester, NY. Our goal is to launch 100 OHUB Equity Districts in the next 10 years with the teams, infrastructure, and funding to upskill 1.1 million Black Americans for immediate and available in-demand careers, and to accelerate and fund 10,000 high growth tech startups.

    OHUB, with locations across the United States, is the leading technology, startup and venture ecosystem building platform created to ensure that everyone, everywhere has equitable access to the future of work, fourth industrial revolution, and beyond as a path to multi-generational wealth creation with no reliance on pre-existing multi-generational wealth.


    Take a place-based approach to expand opportunity
    Urbane

    What does it mean to create pathways into the tech economy for candidates without tech experience or a related degree? How does access to opportunity play out, tactically, within a neighborhood or housing development? The best workforce development initiatives are grounded in place, building skills in tandem with trusted networks for generational wealth creation. If cities are to build tech sectors that leverage the diverse perspectives and full creative power of their residents, it requires attention to geography, culture, and informational networks on a micro scale. Hyper-local data capture and co-created programming are Urbane’s call to action to make consequential shifts in who gets to work in tech.

    In 2019, Urbane took a uniquely place-based approach to explore pathways into upwardly mobile tech sector jobs for residents of Marcy Houses, Armstrong Houses, and Lafayette Gardens, three New York City Housing Authority (NYCHA) developments in Bed-Stuy. An intergenerational resident cohort engaged in a workshop process to demystify the broad world of tech jobs and to co-design optimal, accessible training pathways. Residents informed the scaffolding for five pilot constructs, described further in, “NYCHA to Tech Pipeline: A Place-Based Approach to Tech Sector Opportunities in Bed-Stuy.”

    Urbane, based in New York, is a community development venture building bridges to wealth and opportunity.


    Explore the role of temps, vendors, and contractors in deepening disparities
    TechEquity Collaborative

    The findings in this data represent the reality in which TechEquity has long operated; the equity gap in our industry shows up not only as a disparity in representation, but a disparity in income equaling billions of dollars in missed revenue for Black and Latinx workers. Taken together, these factors mean a compounded racial income gap that will prove more and more difficult to unravel as time goes on. This data is not just numbers on a page – it is real lived experience and demonstrates the impact of inequality on an ongoing basis. While we often hear about high profile cases of racial disparity in the media; this data gives shape to all of the invisible cases that are happening in tech workplaces across the country.

    Over the next six months, we’re interested to see how this data shows up specifically for temps, vendors, and contractors (TVCs) – tech workers who are contracted through third-party staffing organizations and who receive lower wages, fewer benefits, and fewer opportunities than their colleagues who are full-time employees. We’ve gathered anecdotal evidence that tells us people of color are more likely to be TVCs in a world that is already inequitable for Black and Latinx workers. We created the Contract Worker Disparity Project to explore that inequity more holistically and shed light on the disparities these workers experience. You can learn more about the project here.

    TechEquity Collaborative, based in the Bay Area, mobilizes tech workers and companies to advance structural change that addresses economic inequity at its roots, focusing on housing and workforce & labor.


    Address the immediate need for reskilling and include all voices in these efforts
    New York City Employment & Training Coalition (NYCETC)

    Over the course of the past year, we saw New York City lose 750,000 jobs, 68 percent of which were held by people of color. Our members at the New York City Employment and Training Coalition are reporting a skyrocketing need for high-quality jobs, upskilling, and reskilling New Yorkers who have lost their jobs. In New York City, many of these jobs are not coming back, which is why New Yorkers need access to training programs that will provide crucial tech skills, qualifications and high-quality stable jobs that have been out of reach for too long. The city’s—and the nation’s—path to an inclusive and equitable recovery starts by expanding workforce and digital training opportunities for all.

    It’s also important that the path forward include the voices of those currently being left out of our normal power structures. NYCETC, in partnership with the Association for Neighborhood Housing Development and the Regional Plan Association, are working collaboratively on the NYC Inclusive Growth Initiative to develop an agenda that adds good jobs, retains and expands affordable housing, and drives the economy forward in a way that reduces structural inequities so New York City can have a truly equitable recovery.

    NYCETC is the voice of New York’s workforce development community. It is the largest city-based workforce development association in the country with over 180 members providing jobs for half a million New Yorkers.

    Tech’s racial equity gap costs Black & Latinx workers $50B a year. Our collaborators prescribe solutions.

    April 23, 2021 / No Comments

    Written by Kate Wittels, Shuprotim Bhaumik, Bret Nolan Collazzi, and Ashley So

    When HR&A released its first major tech ecosystem study in 2014, we were struck by the immense opportunity for economic mobility: unlike other growing, well-paying segments of the economy, many tech jobs did not require a formal degree or prior job experience, and, better still, those same jobs paid well above a living wage. Here was a sector the rapid growth of which could benefit a broad spectrum of workers and help narrow racial income and wealth gaps.

    Since then, we’ve worked with clients across the U.S. to try to leverage tech for opportunity, helping the City University of New York strengthen industry partnerships, promoting skills-based hiring through the Skillful Initiative, and working with innovation districts to promote equitable hiring and startup support, among other strategies. Countless other advocates, educators, nonprofits, government agencies, and tech employers have done more, pioneering new approaches to skills training, startup support, and culture change.

    Yet today, tech’s racial equity crisis is as deep as ever. Black and Latinx workers are grossly underrepresented across tech, as detailed in our recent study of New York City’s tech ecosystem with Jobs for the Future, LaGuardia Community College, and NYCEDC. Black and Latinx tech workers report exhausting and racist workplaces. Most venture funding flows to White males, who dominate leadership positions. These disparities not only have implications for income and wealth equity, but the absence of Black and Latinx workers on tech teams also reinforces structural racism, as shown by bias in facial recognition software and algorithms for search, health care, and hiring.

    Closing tech’s equity gap will take bolder action than we’ve seen to date. We are seeking to support change in two ways:
     

    1. Equip tech equity champions with data that demonstrates the size of tech’s racial income gap and the costs of inaction. The analysis below is a start.
    2. Collaborate with industry experts, advocates, and policymakers to use the data to inform efforts to narrow the racial income gap and promote greater accountability for action. We began by inviting partners in our network to share their ideas here. Let us know how you could use this data and what questions and ideas you have at justandresilient@hraadvisors.com.


    The scale of tech’s racial income gap

    Over the last decade, the national tech ecosystem grew 60% faster than the economy as a whole and now represents 12 million total jobs.1 From 2010 to 2019, tech represented 11% of new jobs and 13% of new income across the U.S.

    However while Black and Latinx workers make up 29% of U.S. workers, they make up only 19% of the tech ecosystem.2 When you look solely at tech occupations at tech companies – the highest-paid and fastest-growing positions in the ecosystem – the gap grows; Black and Latinx workers make up only 14% of jobs overall and 9% of developer jobs. Big Tech performs even worse: Black and Latinx representation across all jobs in these companies is as low as 10% at Google and Facebook.



    The result of these disparities is an estimated $46 billion “racial income gap,” consisting of:

  • A representation gap: 1.1 million fewer Black and Latinx Americans work in tech than if the tech workforce mirrored the U.S. workforce. Since tech jobs pay more on average than jobs with similar educational requirements in other sectors of the economy, shifting to a tech job would, on average, boost Black and Latinx workers’ earnings by $23,500 per year, or $27 billion in aggregate.
  • An earnings gap: The 2.3 million Black and Latinx workers presently working in tech earn $8,000 less on average than their White and Asian peers – owing to the higher share of Black and Latinx workers in lower-paid roles. If Black and Latinx workers were just as likely as their non-Black/Latinx peers to hold any tech job, their aggregate annual earnings would increase by $19 billion. This number would be higher if we accounted for the lower pay that Black and Latinx workers earn relative to White and Asian workers in the same position, estimated at $10,000 for frontline tech jobs in one recent survey.



    • Despite widespread diversity commitments and a robust tech training ecosystem, hiring over the last decade for the highest-growth tech jobs has continued to underrepresent Black and Latinx candidates, with the share of Black and Latinx new hires only slightly outpacing their share of current jobs. Among the three occupations that added the most positions since 2010, the Black and Latinx share of new hires remains well below the overall workforce. Two bright spots are systems analysts and cybersecurity jobs, where the Black and Latinx share of new hires meets or nearly meets their share of the overall workforce, potentially owing to inclusive hiring efforts focused on these skills.

    Given these trends, the racial income gap has actually widened slightly over the past decade as the overall workforce has grown more diverse. If tech hiring continues on the same trajectory as in recent years, tech’s representation gap will continue to grow over the next 10 years. To eliminate this gap within 10 years, tech employers would need to hire Black and Latinx candidates for at least 2 out of every 5 open tech positions, versus 1 out of 5 today overall and 1 out of 7 for core tech occupations.


    Research debunks the oft-cited view that the root of the problem is the talent pipeline; 20% of computer science graduates are Black or Latinx, well above their share of tech positions (14%), especially at Big Tech firms (<10%). To meaningfully address tech’s racial income gap, employers will need to not only rethink their hiring practices but also look to aspects of company culture that limit the advancement of Black and Latinx recruits, rethink the recruitment practices that pass over Black and Latinx talent, and invest more deeply in new models to train and onboard talent from more diverse channels.to train and onboard talent from more diverse channels.

    Where to go from here

    At stake is not only billions of dollars of annual income that could help mitigate deep racial wealth disparities, but also the full participation by Black and Latinx Americans in a democracy that is increasingly tied to who makes, uses, and controls the tools of the 21st century.

    How can we meaningfully build greater equity in tech? Read more for initial thoughts on how leading tech equity organizations plan to use the above data for change, sourced from across industry, advocacy, and policy. And let us know your thoughts at justandresilient@hraadvisors.com.
     
     

    1 We define the “tech ecosystem” as all jobs at tech companies, whether a software developer or an HR manager at Google, and all tech jobs in non-tech industries, such as a software developer for a bank or PR firm.
     
    2 This gap is wider if we compare the makeup of tech jobs to that of the working-age population, since Black and Latinx workers have above-average unemployment rates and below-average labor force participation rates.