DESCRIPTION OF ISSUE
CONTEXT
WHERE/WHEN APPLICABLE
RESPONSES
TESTIMONIES
LINKS

DESCRIPTION OF ISSUE:
In the Heart of the City, economic issues often relate to limited opportunities for commerce and employment. Resident demand for products and employment in the Heart of the City exceed local supply. Less government funding is available to subsidize small businesses than to subside housing. Thus, Community Development Corporations (CDCs) in the Heart of the City focus more on creating affordable housing than on generating the jobs and economic development, which are also critical to the health and stability of local residents.

Historically, economic development in Heart of the City neighborhoods has been stymied, at times, by disproportionate tax burdens relative to other Boston neighborhoods.

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CONTEXT:
Heart of the City purchasing power:
Although the median income in Boston's central neighborhoods is lower than it is in the suburbs, the high concentration of people means that purchasing power per square mile is high. Research done by the Boston-based Initiative for a Competitive Inner City (ICIC) shows that the total inner-city population of Boston (here defined as Roxbury, Dorchester, Jamaica Plain, Mattapan, the South End, and South Boston) is 240,000 and that this group has buying power of $1.3 billion per year. More than 30% of this demand goes unmet by retailers within the inner city (Ralph Buglass, 'Inner cities' business edge: Q&A with ICIC-Boston's Alvaro Lima,'  Pioneer Institute, 2001).

Public safety:
The success of urban retail districts is closely linked to public safety and the perception of public safety. According to the Boston Police Department, a grand total of 538 crimes were reported to the police in Egleston Square in 2001, as compared to 232 in the Centre Street/ South Street area, and 318 in Roslindale Village. In 2000, Egleston Square was one of eight "hot spots" of gun-related crime identified by the Boston police. This type of crime can discourage people in densely settled neighborhoods, such as Egleston Square, to take advantage of what would otherwise be a highly convenient shopping district.

According to Alvaro Lima, managing director of Initiative for a Competitive City (ICIC), the biggest challenge of economic development in Boston's inner city neighborhoods is the perception of the inner city by potential investors and businesses as an unsafe place and one that should be avoided. "Inner City 100" companies cite the perception of crime as a more significant barrier to investment than any actual crime itself (Ralph Buglass, 'Inner cities' business edge: Q&A with ICIC-Boston's Alvaro Lima,'  Pioneer Institute, 2001).

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WHERE/ WHEN APPLICABLE:
Uncaptured spending power:
There is significant uncaptured spending power in the Heart of the City that could be directed towards inner city businesses. For example, out of the $17 million that Jamaica Plain residents spend each year on clothing, only $2 million is spent in the inner city and $15 million is spent elsewhere. Grove Hall residents spend virtually none of the $8 million they spend annually on clothing in the inner city. Roxbury residents spend $6 million out of $8 million on clothes in the inner city and Mattapan residents spend $4 million out of $13 million on clothes in the inner city (Levne & Associates, Dudley Street Neighborhood Initiative Study, Strategies and Business Opportunities for Boston's Inner City, 2001).

According to the City of Boston Department of Neighborhood Development (DND), the average spending power per square mile in the Heart of the City is highest in Jamaica Plain and Dorchester ($272 million and $253 million respectively). Mattapan and Roxbury both have approximately $198 million of spending power per square mile, and Roslindale has $193 million of spending power per square mile (Commercial Trends Boston, 1st half of 2002).

Potential for parks and open spaces to drive economic development:
In January 1997, the Initiative for a Competitive Inner City (ICIC), a think-tank led by Harvard Business School professor Michael Porter, completed a high-profile study of the Franklin Park Zoo in the context of the Blue Hill Avenue/ Grove Hall area. They found that the zoo could be a powerful economic force driving local economic development. According to the study, consumer demand was for one million zoo visits each year (in 1997, when the study was published, only 170,000 visits to the zoo were made). The researchers postulated that a revitalized zoo could bring hundreds of jobs and millions of dollars to the surrounding communities through increased restaurant patronage, jobs at the zoo, vendor opportunities, etc. (Opportunity for Growth and Economic Development at Franklin Park Zoo, 1997).

The Arnold Arboretum and Franklin Park as a whole also have the capacity to draw people from throughout the region and could drive economic success in adjacent commercial areas such as Centre/ South Street, Roslindale Village, and Blue Hill Avenue. Tourists and other visitors are more likely to come the area if is accessible by safe and convenient transit.

Disproportionate financial burdens:
In addition to missed opportunities for economic development, the Heart of the City also, in certain cases, bears disproportionate financial burdens as compared to its neighbors. For example, car owners in Dorchester and Roxbury are charged unusually high insurance rates. In 2002, the car insurance rates for Dorchester and Roxbury were twice the state average ($2,039 and $2,110 a year), adding a significant economic burden for car owners in these neighborhoods (Jeff Lemberg, "Driven to territorial revolt," The Boston Globe, June 30, 2002).

For most of the last half century, Roxbury shouldered a disproportionate tax burden, which hindered its economic development. Between 1950 and 1980, assessed values of property in Roxbury did not keep pace with actual changing market values. By 1972, a family in Roxbury was charged almost 60% more in taxes than other families living in similar houses in other Boston neighborhoods (Avault & Seko, "Property Values, Taxes and Land Use in Roxbury: 1940-1984," 1985).

Rental rates in commercial areas:
The following figures show the average lease rates for retail and office space in various commercial areas in the Heart of the City in mid-2001 and mid-2002. In general, the lease rates have fallen slightly except for in Roslindale Square. This information is taken from Commercial Trends Boston 2001 Issue 4, and Commercial Trends Boston 1st half of 2002 Issue 6.

Retail Space             2001         2002
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Centre Street             $20-27     $19-27
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Roslindale Square       $14-18      $16-18
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Egleston Square         $12-20      $12-17
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Mattapan Square        $16-23      $12-20



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RESPONSES:
Public investment:
Economic revitalization has occurred along several corridors identified by the City of Boston as Main Streets districts. These include Grove Hall, Egleston Square, Roslindale Village, and more recently Centre/ South Street. Although not an official Main Street, the Blue Hill Avenue corridor has also been targeted for public investment and redevelopment. City efforts have been directed by individual program directors for each Main Street district along with groups of merchants and citizens. According to the Boston Consulting Group, the Main Streets in the Heart of the City area received a total of $70 million in investments between 1994 and 2001.

Boston Redevelopment Authority policies and programs:
The Boston Redevelopment Authority (BRA) manages real estate development, including the review of design, size, use, and development impacts. It considers community input in the review process. The BRA also administers the Boston Local Development Corporation (BLDC) program, which grants loans and microloans of between $5,000 and $150,000 to small businesses in or coming to Boston. Loan recipients in the Heart of the City include Swanson Woodwork in Jamaica Plain, Express Cleaners in Dorchester, and African Market in Roxbury.

Private Investment:
The City, State, and community groups have leveraged tremendous private investment in areas such as Grove Hall and the Blue Hill Avenue corridor, as well as in Main Streets districts for economic redevelopment.

Community Development Corporations (CDCs):
Economic development is part of the mission of many Community Development Corporations (CDCs) in the Heart of the City. CDCs typically offer business management advice and training, as well as loans to small businesses. One particularly active CDC is Nuestra Comunidad, which has its headquarters north of the Heart of the City, but provides loans, training, and other assistance to small businesses in Roxbury, Dorchester, Roslindale, and Mattapan.

The Jamaica Plain Neighborhood Development Corporation (JPNDC) led one successful economic development effort at the former Haffenreffer Brewery in the Heart of the City. Now known as "The Brewery," this small business center serves as an incubator for 40 small businesses and employs 200 individuals (see other entry). The Brewery is located in close proximity to Egleston Square, where local organizations are also attempting to foster an environment that is hospitable to new local business.

Increasingly, CDCs are pursuing work that combines economic development and housing. For example, Urban Edge is incorporating commercial space into its plans for Egleston Crossing, a housing and commercial development at the intersection of Washington Street and Columbus Avenue in Egleston Square. Egleston Crossing would create 6,000 square feet of commercial space along the Washington Street edge at 3033 Washington Street.

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TESTIMONIES:
"Actively promote a sustainable and diverse economy focused on job opportunities and creation of wealth" (Second goal of the Roxbury Strategic Master Plan, Draft II, December 2002).

"There are not a lot of good economic models for striking the balance between the stability of a community population and the economic development of an area" (Penn Loh, director of Alternatives for Community and Environment (ACE)).

"In Boston, the neighborhoods of Roxbury, Dorchester, Mattapan, Jamaica Plain, South Boston, and the South End all have economically distressed areas -- as measured by per-capital income and unemployment and poverty rates -- but it's a myth to think of these places as places that are so disadvantaged they can only be saved through government and subsidies. In fact, they have concrete competitive advantages that provide the basis for strategies for business growth" (Alvaro Lima, managing director of Initiative for a Competitive Inner City. From Buglass, R., "Inner 'Inner cities' business edge: Q&A with ICIC-Boston's Alvaro Lima,'  Pioneer Institute, 2001).

"[The Department of Neighborhood Development] didn't understand the centrality of housing [in the 1970s and 1980s]. We didn't understand that there was nothing we could really do [for businesses] when residential streets one block away were just coming apart. . . . Housing is the fundamental act of economic development" (Paul Grogan, who worked for the city's Neighborhood Development Agency in the 1970s and 1980s, from an article by Charles A. Radin, "A neighborhood reborn," The Boston Globe, Nov.15, 1998).


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LINKS:
Boston Redevelopment Authority and Economic Development

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