Federally funded area is troubled

Eight years after officials launched an ambitious, $100 million urban revitalization program in Baltimore, the areas that make up the city's federally funded empowerment zone remains deeply troubled.

Although poverty has dropped, unemployment has increased. And, far from creating promised "neighborhoods of choice," the empowerment zone lost population during the 1990s at twice the rate of the city as a whole.


This mixed picture of success and shortcomings in the empowerment zone is apparent from other indicators as well.

Median household income is up in slightly more than half the renewal area, in some cases substantially, but down in the rest. Homeownership is up, but not nearly by the amount officials had anticipated.


This portrait is drawn from an analysis of Census 2000 data. The figures offer a broad, independent look at how the neighborhoods that compose the renewal area have fared during the 1990s -- a particularly apt benchmark, because the city used 1990 census figures to demonstrate that the decayed areas were worthy of special federal assistance.

The city was one of six nationwide to be designated a federal empowerment zone in December 1994, receiving tax breaks for businesses as well as $100 million in grants to help revive distressed areas of east, west and south Baltimore during a 10-year period.

About two-thirds of the money has been spent on programs for residents and businesses, including drug treatment, employment training and loans -- with the bulk of the remaining funds earmarked for job creation and readiness.

Diane L. Bell, chief of the nonprofit corporation that oversees the zone, views the census data as generally positive.

"I don't want to draw any wild conclusions. My point from the beginning is, this is not big-bang work. It is incremental," said Bell, president and chief executive officer of the Empower Baltimore Management Corp.

'Doesn't look good'

Others question whether more progress should have been made in creating jobs and reducing poverty, given the degree of public investment, while cautioning that the numbers reflect the early stages of a revitalization effort that is not set to end until 2004.

"Doesn't look good, does it?" said Anirban Basu, head of the Regional Economic Studies Institute, the consulting arm of Towson University, referring to the loss of jobs and population.


"One might have expected more to have happened by now," he added.

Basu noted, however, that the empowerment zone was designed to produce systemic economic and social change in some extremely disadvantaged neighborhoods.

"It may be we're not at the long term yet," he said. "Maybe it's just a matter of time."

Basu and Richard P. Clinch, director of economic research at the University of Baltimore, point out that empowerment-zone programs were not implemented until 1996 but that the census figures measure change over the decade of the 1990s.

"It may be that the empowerment zone did something good in 1996 through 2000, but that it wasn't enough to overcome the bad years before then," said Clinch.

Clinch, who has been hired by the empowerment zone to study the effects of proposed east- and west-side biotech parks on the job prospects of zone residents, said the potential impact of those parks and the newly opened Montgomery Business Park in West Baltimore could make a significant difference.


"A lot of benefits of the empowerment zone are yet to come," he said.

Population decline

Covering a swath of the east side from decayed areas north of the Johns Hopkins medical complex to the Fells Point waterfront; Harlem Park, Pigtown and Sandtown-Winchester on the west; and the Fairfield industrial area on the south, the empowerment zone covers nearly 10 percent of the city's total area.

As of the 1990 census, it housed nearly 10 percent of the city's population. But the empowerment zone's population declined from 71,503 in 1990 to 54,012 in 2000. The 24.5 percent drop was more than twice the citywide dip of 11.5 percent.

The poverty and unemployment rates remain 50 percent higher than rates citywide. The homeownership rate of 35 percent lags the citywide rate by 15 percentage points. And the percentage of people out of work increased from 14.9 to 16.5 percent.

On the other hand, census figures show that the percentage of people living in poverty dropped from 41.9 to 35.6 between 1990 and 2000. Homeownership rose from 30 to 35.2 percent.


Median household income, which in 1990 was below the citywide figure in all 24 census tracts that compose the residential areas of the zone, is now above Baltimore's median in two of the tracts.

Status of nearby areas

Compared with adjacent areas, the empowerment zone did much better during the 1990s.

In several areas bordering the empowerment zone, poverty and unemployment rates rose between 1990 and 2000. And a majority of the areas experienced an inflation-adjusted drop in median household income.

In almost every category, the west side of the empowerment zone, which includes the University of Maryland Medical Center and the Carroll-Camden Industrial Park, fared better than the east.

For example, the poverty rate in the west-side of the zone was 34.4 percent, compared with 37.1 percent in the east, while the unemployment rate was 14.7 percent in the west compared with 18.4 percent in the east.


Median household income, adjusted for inflation, rose in 8 of the 12 census tracts that compose the west side of the empowerment zone, but in only five of the tracts on the zone's east side.

Seven of the tracts on the east side had median household incomes below $20,000 a year, compared with five such tracts on the west side.

But the two empowerment-zone tracts with the highest median household incomes -- and the only ones that exceed the citywide median -- are on the east side.

They are the tract that includes Fells Point-Inner Harbor East, where income rose from $30,106 to $47,917, and the one that includes Little Italy and the demolished Flag House housing project, where income rose from $14,030 to $39,706.

Benefits documented

Bell, Empower Baltimore's president, said the decline in the percentage of people in poverty and the income rise in the majority of the tracts is consistent with internal empowerment-zone data showing that those who participated in zone-funded job training and placement programs experienced a significant increase in earnings.


As for the increase in unemployment, an interim assessment of empowerment zones in Baltimore and five others cities last year, before the release of Census 2000 economic data, noted that the empowerment zones "continue to struggle with the challenges of placing long-term unemployed in jobs."

Using a private database of employers, the assessment by Abt Associates Inc. and the Urban Institute for the U.S. Department of Housing and Urban Development said the number of workers in the city's empowerment zone grew by nearly one-third in the second half of the 1990s, but did not say how many of the jobs were filled by zone residents.

Bell said the rise in unemployment in the empowerment zone, which virtually mirrored the 1.5 percent increase citywide, was not necessarily a sign of failure but could reflect the success of zone-funded programs in drug treatment and job counseling.

"Do we have more people out there looking for work?" she asked.

Below stated goal

Despite the increase in homeownership in the empowerment zone, the rate of 35 percent is far below the zone's stated goal of bringing home ownership up to the citywide average of 50 percent.


Bell said she expects that figure to rise with the redevelopment of the Flag House property on the east side and a Bank of America-funded project to build 160 single-family homes in Harlem Park on the west. But she acknowledges that more needs to be done to increase the percentage of homeowners, a key measure of neighborhood health.

Providing desirable housing is essential if the zone is to attract new residents and to retain existing ones as they move up the economic ladder.

"We have to get a handle on that. That's clear for us," she said.

Sun electronic news editor Mike Himowitz contributed to this article.