Category Archives: Poverty & income gap

The Inherent Flaw in “Opportunity Zones”

Map credit: Econ Focus

by James A. Bacon

The City of Norfolk is gearing up to take full advantage of tax breaks contained in the 2017 Tax Cuts and Jobs Act. City Council has designated the St. Paul area, home to three 50s-era housing projects, as an “opportunity zone.” Plans call for demolishing the three projects and replacing them with mixed-income development. The city will receive $30 million in Housing and Urban Development funds to jump-start redevelopment, but the bulk of investment is expected to come from the private sector.

More than 8,700 such opportunity zones have been designated across the country; about 10% are located within the 5th Federal Reserve Bank district, which includes Virginia. Through a mix of incentives, investors in opportunity zones can defer, reduce or in some cases eliminate capital gains taxes in the zones.

While the tax breaks may prove effective at channeling investment capital into the designated zones, it is an open question if it will actually help the poor people living there, writes Jessie Romero in the current issue of Fed Focus, a publication of the Federal Reserve Bank of Richmond.

The size of the potential tax break is what could lure new investment, but it depends on how profitable the investment is — which depends in part on rising property values and rents. So some observers fear that in many places, the opportunity zone designation will create or hasten a process of gentrification to the detriment of lower-income residents who don’t own their homes and instead are forced out by rising rents.

This strikes me as a legitimate concern. Indeed, the criticism goes to the heart of almost every government-subsidized redevelopment project. The more successful a project is commercially, the more likely it is to displace the very people it is meant to help. Continue reading

A War-on-Poverty Success Story

by James A. Bacon

Homelessness in the Richmond metro area has dropped by more than half since 2007, from about 1,158 homeless people to less than 500 this year. It is one of the great anti-poverty success stories — one of the few anti-poverty success stories — of our time. This dramatic improvement results from a dramatic shift in homeless policy from a model that sheltered families for as long as two years to a “rapid rehousing” model that gets them out of shelters and into permanent housing as quickly as possible.

As a national movement, rapid rehousing began in earnest with a Housing and Urban Development demonstration project in 2008. It has contributed to significant gains in communities across the country, but few have embraced the new paradigm with the enthusiasm of the Richmond region. To see the philosophy in action, I visited the Hilliard House shelter, in eastern Henrico County, operated by Housing Families First.

The Hilliard House is a solid brick housing complex with private rooms, a communal dining room, shared living space, and a cloistered courtyard. It is a clean, safe place where homeless families can regroup. Thanks to generous community support, when families leave, they are given linens, kitchen implements and cleaning supplies to help them set up house. Continue reading

The Issue of Guardianship and the Contribution of a Newspaper

Ora Lomax with a picture of her husband, William, who was committed to a nursing home against her wishes. Photo credit: Richmond Times Dispatch

On Sunday, the Richmond Times-Dispatch ran a remarkable article. It was remarkable both in the amount of space the newspaper dedicated to it, 5½ whole pages, and its subject, guardianship, a subject about which little is known by the public, but that could affect anyone.

The publishing of this series of articles illustrates the continuing value of newspapers. The RTD invested a lot of resources into this story. It was a year-long investigation in which staff combed through the records of hundreds of guardianship cases originating in the Richmond circuit courts. They examined all the public documents related to those cases. They created a database with all the relevant data from those cases. They also looked at some guardianship cases filed in Henrico and Norfolk circuit courts to see how such cases were handled in different jurisdictions. They interviewed dozens of people and attended guardianship hearings. No other media for the general public could, or would, dedicate this amount of resources to a single topic. Continue reading

RRHA Freezes Enforcement of Rent Collection

by James A. Bacon

The Richmond Redevelopment and Housing Authority (RRHA) has announced an agency-wide freeze on the enforcing rent payments through the end of the year. No public housing family will be removed from their home for debt owed to RRHA during that period.

“During this time,” the authority said, “RRHA will undertake an agency-wide evaluation of our public housing families’ rental accounts and give tenants that are in arrears the opportunity to come current. By utilizing a combination of repayment agreements, debt forgiveness, philanthropic contributions, and other eviction diversion methods, RHHA will endeavor to bring every RRHA family with a delinquent rental account as close to good standing as possible.”

The action comes in response to pressure from “tenant advocates,” reports the Richmond Times-Dispatch. Omari Al-Qadaffi, a housing organizer with the Legal Aid Justice Center, praised the move. “We’re very encouraged and we see it as a few steps in the right direction,” he said.

Now, nobody wants to see poor people needlessly evicted from their homes… Continue reading

Richmond’s Food Desert a Tough Nut to Crack

Photo credit: Richmond Times-Dispatch

by James A. Bacon

It is part of the liberal/progressive catechism that inner city neighborhoods across the United States, including Virginia, are afflicted by “food deserts” — large swaths of territory lacking access to stores selling fresh fruit, vegetables and other healthy foods. This deprivation is typically seen as a failure of the free-market system that requires remedy.

Seeking to do some good, Richmond philanthropist Steve Markel financed construction of a grocery store in the heart of the city’s East End — The Market @ 25th — and launched it to great fanfare a half year ago. The store served multiple laudable ends. It anchored a mixed-use development including 42 apartments, retail space, and office space in a depressed part of the city. It opened with 98 jobs, creating employment opportunities for the East End’s poor. And, most notably, it provided a source of fruit, vegetables, and healthy food.

Now we hear from the Richmond Times-Dispatch that the noble endeavor is encountering difficulties. The independent grocer has suffered millions of dollars in operational losses. Through layoffs and attrition, the staff has shrunk by a quarter since opening. Perhaps most discouraging of all, many of the store’s hoped-for poor African-American customers say the prices are too high and see the story as the spear-head of gentrification. Continue reading

How to Help Economically Disadvantaged Students

Click image to enlarge.

by James A. Bacon

Over the past several days I have been highlighting how public schools in Southwest Virginia have bucked the statewide trend of declining standardized test scores. While the Northam administration has implemented a top-down “social justice” approach, a consortium of rural Southwest Virginia schools has embraced a totally different  strategy: (1) identifying the most successful teachers across the region; (2) sharing their instructional materials and other best practices; (3)  measuring results and incorporating feedback, and (4) raising expectations.

John Butcher, the author of Cranky’s Blog, has done some follow-up numbers crunching to show just how effective Southwest Virginia’s Comprehensive Instructional Program (CIP) has been at lifting the Standards of Learning pass rates of economically disadvantaged students — the very same demographic the social-justice crowd wants, but has failed, to help.

The first two graphs (above) show how the reading and math SOL scores, which were at rough parity with statewide averages in 2014, have zoomed ahead of the pack. Continue reading

Republicans Must Find a New Way Forward

by James A. Bacon

Virginia is a blue state now. Not only do Democrats occupy all statewide elected positions — two U.S. senators, governor, lieutenant governor, and attorney general — with yesterday’s election, they control both houses of the General Assembly.

Republicans got their booties  kicked. And the butt-stomping is not likely to subside. The Dems will control the next redistricting, which will cement their dominance of the legislature. Auguring well for the blue team in the future, the fastest-growing region of the state, Northern Virginia, now is pure blue with bits  of purple on the exurban fringe. By contrast, Republican strongholds in rural Virginia have shrinking or stagnant populations. Also favoring Democrats in the long run is the increasing percentage of racial/ethnic minorities in the state and the declining percentage of whites.

Republicans need to re-define who they are and what they stand for, or they will become a permanent minority. News reports say that dislike of Donald Trump drove Democratic voter turnout, but the Blue Tide is much broader and deeper than voter animus of one man. Take Trump out of the equation after the 2020 election, and Virginia Republicans still have a huge problem.

Can the Republicans re-calibrate? I certainly hope so, because I’m terrified of the Democratic Party agenda of $15 minimum wage, spiking the right-to-work law, a damn-the-torpedoes-full-speed-ahead rush to a 100% renewable electric grid, spending and taxing, taxing and spending, and injecting its grievance-and-victimhood agenda into the consideration of every issue. But Republican priorities on culture war issues — guns, abortion, transgenders — are not winning issues statewide. As long as Republicans remain captive to its rural/small-town base, I don’t see how it can reinvent itself.

What does a rejuvenated Republican Party look like? (Or, if the GOP is incapable of reinventing itself, what does a successor party look like?) Continue reading

CIP: the Secret to SW Virginia Schools’ Success

School divisions participating in the Comprehensive Instructional Program

by James A. Bacon

The school districts of Southwest Virginia are among the poorest in the Commonwealth, but that hasn’t stopped them from out-performing more affluent districts across the state. Public schools in Region VII, stretching from the City of Radford to Virginia’s far-western tip in Lee County, have the lowest per-pupil funding in the state, yet they have the highest average pass rates for Standards of Learning (SOL) test scores. I highlighted those findings in a recent post. What I couldn’t say then was how Region VII managed to score the best results of the state’s eight education regions.

So I talked to Matt Hurt, curriculum director for the Comprehensive Instructional Program (CIP), a bottom-up initiative starting in Southwest Virginia, to find out more. It is a remarkable story and an encouraging one. With the right approach, Virginia schools can lift themselves up by their boot straps. Lesson for the General Assembly: The answer isn’t Mo’ Money.

Southwest Virginia students have not always been top SOL performers. Their rise to the top has occurred in just the past few years, says Hurt. The secret: Local school districts pooled resources to do three main things: (1) identify the most successful teachers across the region; (2) share their instructional materials and other best practices; (3) set high expectations, and (4) measure what works. Five years have made a significant difference. Continue reading

We Can’t Explain Virginia’s Declining Test Scores — Just Trust Us and Give Us Mo’ Money

by James A. Bacon

The Richmond Times-Dispatch took a good hard look today at the alarming decline in reading scores by Virginia students in standardized tests, including both the state Standards of Learning (SOL) and the National Assessment of Educational Progress (NAEP). But reporter Justin Mattingly came up dry in explaining what might have caused the lower scores, which represent a stark reversal from improving or steady scores over the previous decade. “Why scores are on the decline,” he writes, “is the million dollar question.”

Mattingly makes a remarkable statement in the article that deserves highlighting: “State education leaders — who aren’t sure why the scores have dropped so much —  are calling for $36 million to go toward new reading specialists.”

That’s not all they’re asking for. The State Board of Education is recommending the state increase support for K-12 education by $950 million next year. Virginia’s educrats can’t explain the decline in reading and math scores, but they still have the audacity to say, “Trust us to spend more of your money.”

The usual suspects, like the Commonwealth Institute for Fiscal Analysis, are backing them up. Providing no evidence to demonstrate an empirical link between the funding decline and student achievement, CI has been pounding the drums to remind legislators that state support, adjusted for inflation and increasing enrollment, is 8% less than before the Great Recession. Continue reading

Housing Values and School Quality

Virginia school proficiency levels. Source: StatChat. Click to enlarge.

by James A. Bacon

In an essay posted earlier this week on the StatChat blog, Spencer Shanholtz with the Demographics Research Group at the University of Virginia explored the relationship between housing values and school quality. He documents the reality that children living in census tracts with low-value housing are more likely to attend low-performing schools. He finds this disturbing. “Children in lower-cost housing should be able to attend good schools,” he says.

I quite agree. Every child should be able to attend a good school. The pertinent question is whether it is necessary for a school to be located in an affluent neighborhood and have students from affluent families in order to accomplish that goal.

In this, first of two blog posts, Shanholz provides some useful data. It would unfair to critique his argument until he publishes the second post. For now, let’s take a look at the case he makes and raise some questions for him to answer in his follow-up post. Continue reading

Rapid Rehousing: a Homelessness Program that Works

by James A. Bacon

Not only can Virginians count on getting electric current when they flip on the light switch, the Old Dominion can boast of something else that Californians cannot: The number of homeless people in the state is declining. A lot. And we’re spending a tiny fraction of the money that Californians do to deal with the problem.

The number of homeless people in Virginia has tumbled 36% over the past decade, from 9,080 people in 2010 to 5,780 this year, according to figures provided by Pam Kestner, deputy director of housing at the state Department of Housing and Community Development in a presentation to the Virginia Housing Commission. (Virginia Mercury reported on the presentation here.)

The homelessness rate in Virginia runs about seven homeless people per 10,000 residents compared to 33 in California and 46 in New York. Progress has been especially evident in the Richmond area, where homelessness dropped from 1,158 people in 2007 to 497 this year. While the state of California spends roughly $1 billion a year on programs for the homeless (and local governments spend hundreds of millions more), Virginia and federal government together have budgeted $17.4 million for homeless services this year in the Old Dominion.

This is a remarkable untold story. Who knew that Virginia had been so successful in copying with homelessness? Continue reading

Virginia Reading Test Scores Plunge

by James A. Bacon

Reading scores of Virginia students taking the National Assessment of Educational Progress (NAEP) tests, a national standardized test, plummeted this year, and math scores declined as well. The average reading scores of Virginia fourth- and eighth-grade students on the national tests fell by four and six points, respectively. The average math scores for percent proficient fell by two points for both grades.

In releasing the results, Superintendent of Public Instruction James Lane acknowledged that Virginia has a big problem. “The latest NAEP results — coupled with the declines we have seen during the last several years on our state reading tests — underscore the importance of the efforts already underway at the state and local levels to strengthen reading instruction for all students,” he said.

He implied that factors other than the Progressive “racial equity” policies he has championed are to blame. Rather, he said, “We must … recognize that Virginia’s schools are enrolling increasing numbers of students whose learning is impacted by poverty and trauma.”

The solution: $950 million in money for “equitable supports and services for all of the students who need them.” Continue reading

How to Integrate Richmond Schools: More Charters

by James A. Bacon

The Richmond Public Schools school board is desperate to get more diversity in its schools, meaning it wants more white kids in schools dominated by African-Americans. The board has been considering a proposal to smear the cream, so to speak: spread the limited supply of white kids, concentrated in two elementary schools, among more schools. Another option, described in the Richmond Times-Dispatch today, is to create a “weighted lottery” for open enrollment, giving preferential treatment to students from low-income students trying to get into schools that aren’t in their neighborhood zones.

One option that the superintendent and school board have steadfastly ignored is creating more charter schools. Richmond’s only charter school, the Patrick Henry School of Sciences and Arts, is about as integrated as you can get. The 318 students enrolled in 2018-19 were 41% white and 56% black, according to Virginia Department of Education statistics. Forty percent of the student body is classified as disadvantaged. In other words, Patrick Henry fits progressives’  dream of mixing poor African-American kids with better-off white kids.

Why don’t Richmond school officials look at Patrick Henry as a model? Could that school be doing something different than other public schools?

Continue reading

Do Financial Literacy Classes Do Any Good?

by James A. Bacon

It’s not often that I speak kindly of government programs of any kind. But a few days ago, I praised a financial literacy initiative recently announced by the City of Richmond with the goal of empowering citizens, especially lower-income citizens, with the knowledge to make better consumer decisions. The program not only educates but preaches the virtues of saving money, building assets, and participating in the banking system.

Now a column in Governing Magazine calls into question the value of financial literacy education, especially if it is tied to obtaining Medicaid benefits, as has been proposed in Kentucky. Matt Darling, vice president of Ideas42, a nonprofit that “uses behavioral science for social good,” argues that poor people already know how to handle their money better than wealthy people. They, unlike the wealthy, have to stretch a dollar. Additionally, he cites a 2014 study, “Financial Literacy, Financial Education and Downstream Financial Behaviors,” as evidence that “financial education programs, while well-intentioned, don’t noticeably improve the financial behavior of their participants.” Continue reading

Finally, an Anti-Poverty Program that Actually Might Reduce Poverty

by James A. Bacon

Most anti-poverty programs are double-edged swords. They alleviate the symptoms of poverty — insufficient money for housing, food, health care — but do nothing to induce poor people to change their behavior and improve their condition. But this program is different: With funding from the the Cities for Financial Empowerment Fund (CFE), the City of Richmond will start providing free, professional, one-on-one financial counseling as a public service to residents.

“Financial empowerment is necessary to build an equitable economic environment,” said Mayor Levar Stoney in a press release. “This opportunity for one-on-one counseling will give residents the power to make informed financial choices with confidence.”

Bacon’s  translation: Rather than treating poor people as passive victims, the financial counseling program will explain how they can take control over their financial destinies by taking modest, achievable steps. The program teaches, dare I say it, personal responsibility. Continue reading