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
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,
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
Median household income is estimated to be about $19,000 compared to
$32,400 for the city of Chicago. (Metro Chicago Information Center Metro
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
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
Homeownership improved from 55.3% in 1993 to 65.4% in 1998. (Department of
Housing and Urban Development).
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