Inclusive, Equitable, and Sustainable Economic Development Archives

August 25, 2020August 25, 2020

U.S. Kitchen Incubators: An Appetite for Food-Based Entrepreneurship

Economic development organizations seeking to create a more dynamic, entrepreneurial, and inclusive economy would be wise to pay attention to the U.S. kitchen incubator industry.

U.S. kitchen incubators — sometimes characterized as commercially-licensed kitchens, shared-use kitchens, commissary kitchens, kitchen accelerators, or ghost kitchens — are a unique type of culinary micro-enterprise. The terms are used interchangeably, but there are important distinctions between them. The primary distinguishing feature is the degree to which supportive services are provided to wholesale, retail, and catering food entrepreneurs. Shared-use kitchens offer minimal or no support; incubators provide expertise to new and early-stage startups; whereas accelerators look to scale up operations and achieve significant growth for established, investible startups (American Communities Trust, Econsult Solutions, Urbane Development, 2016).

These culinary production facilities are not to be confused with community kitchens, which serve neighborhood stakeholders and institutions, such as St. Mary’s Food Bank Community Kitchen and Local First Arizona Community Kitchen in Phoenix.

Industry surveys indicate that the number of U.S. kitchen incubators grew from no less than 135 in 2013 to more than 200 in 2016, expanding to 600+ across the 48 contiguous states and District of Columbia in 2019 (Econsult Solutions, Urbane Development, The Food Corridor, Catharine Street Consulting, 2020). They operate in urban (52 percent), suburban (27 percent), and rural (21 percent) areas, but are heavily concentrated near large cities (Econsult Solutions et al., 2020). Their popularity stems from the “locavore movement” that connects food producers and consumers within the same geographic region, the creation of food-based makerspace that focuses on handmade products, and a growing recognition that entrepreneurship provides an opportunistic pathway to economic success (The Food Corridor, 2020).

Culinary Entrepreneurship

The relationship between U.S. kitchen incubators, culinary entrepreneurs — chefs, caterers, farmers market and festival vendors, food truck proprietors, bakers, and specialty food producers — and the broader concept of small business entrepreneurship, is powerful.

National Trends

Let’s take a look at the broader picture.

According to the Kauffman Foundation, the rate of new entrepreneurs — or the number of non-business owners that start a new enterprise each month — has fluctuated between 0.27 and 0.34 percent of the adult population during the past two and a half decades. Expressed differently, roughly 300 out of 100,000 adults create a new business.

The rate of new entrepreneurs is highest among Latinos, who have consistently outpaced other races and ethnicities over time. New entrepreneurs who are Asian and White compete closely for second and third position. Comparatively, the rate is slightly lower among African-Americans (see chart below).

Richard Mulligan | The ED Advisor
Source: *Kauffman Indicators of Entrepreneurship, Ewing Marion Kauffman Foundation*, 2020

Overall, the rate of minority entrepreneurs has increased; while the rate of entrepreneurship among immigrants is significantly higher than for the native-born (see chart below).

This is important because the gap in wealth between immigrants and native-born citizens decreases considerably through business ownership.

Those with the least education have proven themselves to be more prolific when it comes to entrepreneurship in comparison to other groups with higher education attainment levels (see chart below).

Put together, early-stage entrepreneurship is fertile ground for a wide range of ethnic and racial groups looking to grow a business. This is particularly true for U.S. kitchen incubators, where on average, 52 percent of tenants are women and 30 percent are minorities. The diversity of food entrepreneurs is even more prominent in larger metropolitan areas like New York City, San Francisco, Seattle, and Chicago (Econsult Solutions, Urbane Development, The Food Corridor, Catharine Street Consulting, 2020).

U.S. kitchen incubators provide food entrepreneurs with a low-risk opportunity to access their own food production equipment and preparation space — a challenge for startups that is otherwise cost prohibitive. At the same time, entrepreneurs receive training, mentoring, and the opportunity to collaborate with a large network of food companies, while working to refine their business model.

From a “big picture” perspective, kitchen incubators serve as a catalyst for inclusive and equitable economic development.

Business Models

Similar to their tenants, kitchen incubators operate under a diverse set of business models, operating as stand-alone facilities or accessories to markets, community centers, and housing projects, or cloud kitchens. Facility goals are just as diverse, striving to fulfill owner-operated, corporate, non-profit, government, and university-sponsored missions. They can be self-funded, or receive financial support in the form of grants, debt-financing, corporate sponsorship, or investor seed funding. Some are run by culinary entrepreneurs who started their own business and decided to capitalize on the opportunity to lease space and supplement their cash flow. Other facilities are more intentional about supporting entrepreneurs, while providing a living income for their founders. Hence, there is no “standard” kitchen model that can be applied to a region’s culinary ecosystem (Colpaart, 2018).

A key point to remember is that kitchen incubators — like their food business tenants — are startup businesses that need to perform their own due diligence in terms of market research, business model development, financial planning, and marketing. In this regard, it is critically important to customize operations to serve their local communities.

Food Innovation Districts

On a state and regional level, U.S. kitchen incubators are taking root in food innovation districts. A food innovation district is defined as “a geographic concentration of food-oriented businesses, services and community activities that local governments support through planning and economic development initiatives in order to promote a positive business environment, spur regional food system development and increase access to local food,” according to Patty Cantrell of Regional Food Systems Solutions, LLC.

Michigan is a national leader in the establishment of food innovation districts — an outgrowth of the Michigan Good Food Charter, a statewide policy platform that envisions sourcing 20 percent of Michigan’s from Michigan food markets and production, providing 80 percent of the population with access to locally-grown, healthy foods. Several districts have already taken hold in the Eastside Neighborhood, Lansing; Eastern Market, Detroit; Grand Traverse Regional Market, Traverse City; Marquette Food Co-op and Hub, and; Grand Rapids Downtown Market, Grand Rapids.

Food Innovation Districts: An Economic Gardening Tool is designed to help other government and community leaders seize opportunities with local and regional food. Outlined is the process and tools used to create districts, which can be applied elsewhere in the nation. The districts are being put to practical use by fostering regional food hubs, kitchen incubators, farm-to-table retail and restaurants, farmers markets, food festivals, nutrition and cooking education, healthy food assistance, urban agriculture production, and community kitchens.

Culinary Incubator and The Kitchen Door have compiled lists of more than 1,000 kitchens from around the country. Select examples of incubator facilities identified in their respective databases for Greater Phoenix are shown below*:

Chef’s Shared Kitchen	Mesa, AZ
Commissary and Catering Kitchen	Tempe, AZ
Freedom Kitchen	Scottsdale, AZ
NT Kitchen	Phoenix, AZ
Phoenix Commercial Kitchen	Phoenix, AZ

Source: CulinaryIncubators.com

National best practices for kitchen incubators include*:

Commonwealth Kitchen	Boston, MA
Hot Bread Kitchen	Tempe, AZ
Pacific Gateway Center Culinary Business Incubator	Phoenix, AZ

Source: American Communities Trust, 2016

Phoenix 2025 Food Action Plan

As part of the City of Phoenix General Plan, residents approved a Healthy Food System goal to promote the growth of a healthy, affordable, secure and sustainable food system that makes healthy food available to all Phoenix residents (2015). The 2050 Environmental Sustainability Goals include a Local Food System Goal to maintain a healthy, sustainable, equitable, and thriving local food system (2016).

Incorporated in the Action Plan is a strategy to create a food business rental incubator in the South Central Avenue Corridor, possibly as a food hall. Links to The Shared Kitchen Toolkit: A Practical Guide to Planning, Launching, and Managing a Shared-Use Commercial Kitchen, the Minnesota Institute for Sustainable Agriculture’s Commercial Kitchen Guide, and CulinaryIncubator.com interactive mapping tool are listed as resources under the “Commercial Kitchen” category.

Other resources are identified for community gardens, farm-to-school, farmers markets, food co-ops, food hubs, food waste, healthy living, and urban agriculture.

Included in the Appendix is the South Phoenix Food Action Plan, which taps into the U.S. Environmental Protection Agency’s (EPA) Local Foods, Local Places Program, with management and technical assistance from the U.S. Department of Agriculture, Center for Disease Control and Protection (CDC), and Delta Regional Authority (DRA).

Meanwhile, a development proposal to create a “food innovation center” has surfaced in West Phoenix. Proponents hope to convert an old Kmart building into a center that serves nontraditional food businesses (e.g., food trucks, catering firms, and food delivery businesses). A career training center is also envisioned for the 112,000-square-foot building. Maricopa Community Colleges is conducting a feasibility study for Phoenix’ Community and Economic Development Department.

All of this points to the growing and evolving nature of kitchen incubators, their ability to provide food entrepreneurs with an education in running a business, and a means to provide food industry jobs and education opportunities for those looking to climb the economic ladder.

Editor’s Note: *These are not meant to be all-inclusive lists, but rather a partial sample of kitchen incubator facilities.

July 4, 2020January 14, 2021

Minimum Wage, Minimum Growth

Photo by Zhanjiang Chen on Unsplash

Raising the minimum wage leads to slower job and wage growth for younger, low-wage workers

Before the outbreak of the coronavirus pandemic, a host of cities, counties, and states moved to raise the minimum wage. Proponents argued that a higher minimum wage was needed to provide workers with enough income to afford a living wage — the amount required to maintain a normal standard of living. They viewed an increase in the minimum wage as an economic stimulus of sorts, placing more disposable income in the hands of low-income earners. Their hope is that a wage increase would help to lower employee turnover and reduce training costs. Critics claim that a higher minimum wage results in lower employment and reduced hours for existing employees. They believe an increased minimum wage creates a powerful incentive for large employers to automate jobs (witness the kiosks at McDonald’s), while driving companies with low profit margins out of business. Furthermore, they point to a lack of evidence that minimum wages are effective at reducing overall poverty rates or poverty rates among workers.

Amidst this debate, the W. E. Upjohn Institute for Employment Research, a private, not-for-profit, non-partisan, independent research organization that has studied policy-related issues of employment and unemployment since 1945, states that recent working papers indicate “the pass-through effect of minimum wage increases on prices is smaller than previously thought; small raises in the minimum wage lead to slower wage growth for low-wage workers; and that the minimum wage reduces job growth over a period of several years with the effects being strongest for younger workers and for those in industries with a higher proportion of low-wage workers.”

Local and State Minimum Wage Ordinances

Most initiatives to raise the minimum wage are at the local and state level.

Leading the charge is Seattle at $16 per hour for large employers and $15 per hour for small companies. Seattle is joined by Montgomery County, Maryland; New York City; and Washington, D. C., which have established a minimum wage of $15 per hour (effective January 1, 2020). The University of California-Berkeley Labor Center’s Inventory of U.S. City and County Minimum Wage Ordinances reveals that local governments with minimum wage ordinances are highly concentrated in eight blue states — California (36), New Mexico (5), Illinois (2), Maine (2), Maryland (2), Minnesota (2), Colorado (1), Washington (1) — and the District of Columbia.

The Economic Policy Institute Minimum Wage Tracker indicates that 27 states and the District of Columbia have changed their minimum wage law since 2014 (along with their current minimum wage and sub-minimum tipped wage: Alaska ($10.19/$10.19), Arizona ($12.00/$9.00), Arkansas ($10.00/$2.63), California ($13.00/$13.00), Colorado ($12.00/$8.98), Connecticut ($11.00/$6.38), Delaware ($9.25/$2.23), Hawaii ($10.10/$10.10), Illinois ($10.00/$6.00), Maine ($12.00/$6.00), Maryland ($11.00/$3.63), Massachusetts ($12.75/$4.95), Michigan ($9.65/$3.67), Minnesota ($10.00/$10.00), Missouri ($9.45/$4.73), Nebraska ($9.00/$2.13), Nevada ($9.00/$9.00), New Jersey ($11.00/$3.13), New Mexico ($9.00/$2.35), New York ($11.80/$7.85), Oregon ($12.00/$12.00), Rhode Island ($10.50/$3.89), South Dakota ($9.30/$4.65), Vermont ($10.96/$5.48), Washington ($13.50/$13.50), Washington, D. C. ($15.00/$5.00), and West Virginia ($8.75/$2.63).

Seven states have no minimum wage law or have in place a minimum wage below the federal minimum wage of $7.25 per hour — Alabama, Georgia, Louisiana, Mississippi, South Carolina, Tennessee, and Wyoming. The federal minimum wage applies in all of these states.

Cost of living plays an important role in creating industry and region differentials in minimum wage rates. For example, Oregon’s minimum wage law establishes a separate minimum wage rate for the Portland Urban Growth Boundary area and designated non-urban counties. New York law establishes separate minimum wage rates for New York City, suburban counties, and the rest of the state. Simultaneously, New York’s minimum wage law allows for variations by industry. The fast-food industry started at $10.50 in New York City and $9.75 for the rest of the state, both gradually rising to $15 per hour over a period of several years.

Another common feature is indexing for inflation, which calls for making annual adjustments in the minimum wage based on changes in the Consumer Price Index (states are measured against the national average, which is set at 100). This occurs in eighteen different states and the District of Columbia.

Richard Mulligan | The ED Advisor
Source: World Population Review, 2020

This hodge-podge of higher minimum wages is a reflection of several factors, not least of which are cost of living and political philosophy. It is no coincidence that the highest minimum wages are most often found in jurisdictions with the highest costs for housing, food, healthcare, and other expenses (see chart above). Nor is it a coincidence that the most expensive jurisdictions to live in are Democratic strongholds.

National Minimum Wage

Several groups advocate for raising the national minimum wage to $15 per hour — Campaign for America’s Future, Economic Policy Institute, FairShare, Interfaith Worker Justice, Let Justice Roll Living Wage Campaign, National Employment Law Project, Partnership for Working Families, Reclaim the American Dream, Restaurant Opportunities Centers United, and United for a Fair Economy. These proponents are primarily concerned about providing a living wage for workers, reducing poverty, and wage inequality.

Opposing their efforts are major business organizations such as the National Association of Manufacturers, National Federation of Independent Business, National Restaurant Association, National Retail Federation, and U.S. Chamber of Commerce. They argue that a national minimum wage of $15 per hour leads to increased labor costs and tough choices, causing employers to reduce jobs, reduce hours, or reduce benefits.

Lost in our political discourse are the implications of a one-size-fits all approach that creates unintended consequences for the U.S. and its tapestry of economically diverse states. It’s one thing to implement a $15 minimum wage for low-wage workers in Hawaii, which has a cost of living index of 192.9; another thing entirely to implement a $15 minimum wage in Mississippi, where the cost of living index is 86.1* The impact on lower cost of living states, their industries, and their employees, is broader and far more disruptive.

Weighing in on the discussion is the Congressional Budget Office, which estimates that raising the minimum wage to $15 from its current $7.25 could cost 1.3 million jobs, while increasing wages for 17 million workers.

Despite the state and region differentials in minimum wage, and the prospect of permanent job loss, the Democratic-controlled U.S. House of Representatives passed H. R. 582 – Raise the Wage Act to boost the national minimum wage to $15 per hour in a recorded vote of 231-199. The bill also eliminates the separate minimum wage requirements for disabled, tipped and newly-hired employees (under 20 years of age), bringing them into line with regular employees over a 7-year period. Political observers believe the Senate is unlikely to take up the bill, and President Trump has indicated he’s prepared to veto the legislation.

Minimum wage increases generate mixed outcomes. A higher minimum wage increases worker purchasing power and stimulates consumer demand. On the flip side, a higher minimum wage discourages employers from hiring low-skill, low-wage workers, which leads to slower wage growth — particularly for younger workers — and creates an incentive to replace human labor with automation technology. To a large extent, the gains and losses attributed to a higher minimum wage offset one another.

Perhaps minimum wage federalism offers a better answer.

Why Federalism Matters opens with this statement:

“What do we want from federalism?” asked the late Martin Diamond in a famous essay written thirty years ago. His answer was that federalism — a political system that permits a large measure of regional self-rule — presumably gives the rulers and the ruled a “school of their citizenship,” “a preserver of their liberties,” and “a vehicle for flexible response to their problems. These features, broadly construed, are said to reduce conflict between diverse communities, even as a federated polity affords inter-jurisdictional competition that encourages innovations and constrains the overall growth of government” (The Brookings Institution, 2005).

Democrats and other proponents of a higher national minimum wage of $15 per hour are pushing for a level of forced uniformity that ignores the dramatic effects that a “cookie-cutter” minimum wage policy has on employers and workers in different states across the country. As such, state governments and municipalities should be given the flexibility to continue experimenting with their own minimum wage policies. This allows other jurisdictions to learn from their successes and failures.

As an added benefit, decentralizing the minimum wage issue enables the federal government to focus on more important fiscal obligations. For example, COVID-19 has pushed the 2020 National Deficit to $2.74 trillion through June. Second-tier financial issues, like the minimum wage, should be delegated to lower levels of government.

If reducing poverty is the desired policy outcome, there is compelling evidence that the Earned Income Tax Credit (EITC) is a far more effective tool:

“Each one percent in a state supplement to the federal EITC reduces poverty rates by one percent. (It also provides an incentive to seek employment, since the credit can only be claimed on earned income)” (Economic Policies Institute, 2020).

Wouldn’t it be nice if the U.S. Congress chose to get the federal government’s fiscal house in order before attempting to dictate to the people about minimum wage policy? Wouldn’t it be nice if the U.S. Congress worked smarter, and not just harder?

*Editor’s Note: A worker earning $15 per hour in Honolulu, Hawaii is equivalent to earning $6 per hour in Hattiesburg, Mississippi, once allowances are made for the difference in cost of living.

June 14, 2020June 27, 2020

The Growing Divide Between the Haves and Have-Nots

The Growing Divide Between the Housing Haves and Have-Nots

Photo by Brian Babb on Unsplash

Affordable Housing is a Critical Part of Economic Development

Most economic developers occupy a privileged position in the community. They get to rub shoulders with academic administrators, corporate executives, government officials, media representatives, and other influencers. They might serve on the board of directors for a local charitable organization, or take a leadership role in philanthropic fundraising for arts and cultural programs. What doesn’t always get their attention are current trends in income and economic inequality, the growing divide between the “haves” and “have-nots,” and what they can do about it.

A case in point is affordable housing.

Lara Fitts, President and CEO of the Greater Richmond Partnership, writes:

“A few months ago, I was talking with a fellow economic development professional who asked me, why I cared about affordable housing because in his words, ‘affordable housing isn’t economic development.’ In his view, economic development is meant to help companies facilitate job creation, enhance the community’s tax base, and provide opportunities for increasing household incomes. However, what happens when a community is so successful in its economic development efforts that the supply of housing decreases and prices escalate so quickly that jobs and income growth don’t keep up?”

The truth of the matter is that affordable housing is a critical part of economic development.

Quality of Life

To ensure they’re able to attract skilled workers, companies are increasingly interested in localized quality of life factors in the site selection process. In Area Development’s “34th Annual Survey of Corporate Executives and 16th Annual Consultants Survey,” quality of life ranked 4th, behind only highway accessibility, availability of skilled labor, and labor costs and ahead of 24 other site location factors like state and local incentives and accessibility to a major airport. Baked into the quality of life recipe is a key ingredient — an employee’s ability to secure adequate housing.

Phoenix-Mesa-Scottsdale MSA
Homeownership Market — Richard Mulligan | The ED Advisor *Source: Area Development, 34th Annual Survey of Corporate Executives and 16th Annual Consultants Survey*

Affordable Workforce Housing

Consider for a moment how housing affects a business’s competitiveness strategy — indeed, a region’s competitiveness — in terms of attracting and retaining talent. When employees can’t afford to live near their place of work, employers have to spend more money on relocation expenses, wages, and face higher turnover rates. Where employees choose to live is also impacted by the work situation of their spouse, partner or significant other; commute times (the average is 25-35 minutes); neighborhood characteristics; schools; and safety.

Now ask yourself, when you’re considering a job offer, how long does it take before you start to factor in salary, housing options, and commute time? Then, for the sake of argument, imagine that you have accepted a position on the same pay scale as an “essential worker” — police officer, firefighter, nurse (LPN), or public school teacher. Your income falls within 60 to 120 percent of area median income. Mortgage lenders impose a limit of 28 to 30 percent of household income for principle, interest, taxes, and insurance (PITI). Given these parameters, what are your housing options?

The homeownership market appears to be out of reach — aside of being able to tap into a second income or some other type of financial assistance. This assumes prospective homeowners are looking to buy a medium-priced home in the Phoenix-Mesa-Scottsdale MSA, which has an affordability index of 6 (on a scale of 1 to 10; 1 is the most affordable, 10 is the least affordable), per Kiplinger (2020).

Phoenix-Mesa-Scottsdale MSA
Rental Market — Richard Mulligan | The ED Advisor *Source: The National Housing Conference (2020)*

This leads a prospective employee to the rental market, where a 1- or 2-bedroom apartment or other residential rental property becomes financially palpable. Even under these more favorable conditions, the 3-bedroom option is too expensive.

The State of the Nation’s Housing

The Joint Center of Housing Studies of Harvard University’s report, “The State of the Nation’s Housing 2019,” provides an overview of pre-coronavirus pandemic housing trends. Their researchers found that despite household growth returning to a more normal pace during the past decade, housing construction wasn’t able to maintain the same rate of progress, keeping pressure on home prices and rents and eroding affordability.

Factors contributing to the continued shortfall in housing supply include relatively weak household growth since the Great Recession, with the national vacancy rate for both owner-occupied and rental units falling to 4.4 percent, its lowest point since 1994. Influencing the slow construction recovery is a wariness on the part of builders and lenders, who haven’t forgotten how difficult it was to work through the housing boom of the early 2000s, which created an excess supply of homes. Labor shortages, complicated by an economy nearing full employment, and the rising costs of land and materials made it unprofitable for developers to build for the middle market. Instead, home builders chose to build in the higher end of the housing market, where they’re able to cover their expenses. Regulatory restrictions on higher-density development and not-in-my-backyard (NIMBY) opposition made it even more challenging to provide affordable housing products.

In terms of housing income and affordability, cost burdens have continued to move up the income scale. National Association of Home Builders (NAHB) economists have calculated that more than half of U.S. households — 63 million to be precise — are unable to afford a $250,000 home. In a similar vein, the Federal Reserve Bank of St. Louis determined that national house price indices have outpaced increases in per capita income and inflation since 2012.

One of those indices is the NAHB/Wells Fargo Housing Opportunity Index, which measures the share of homes that would have been affordable to a family earning the average median income, based on standard mortgage underwriting criteria. The index utilizes two major components — income and housing cost — and reveals how housing costs have worsened in recent years.

City of Dallas

The City of Dallas (pop. 1,343,573) — our nation’s ninth-largest municipality — has Housing and Neighborhood Revitalization, the Office of Economic Development, and Planning and Urban Design organized under the direction of Michael A. Mendoza, Chief of Economic Development and Neighborhood Services. This underscores the interdependence that exists between community development, economic development, and planning.

Dallas’ Housing Policy Toolkit consists of the following:

Market Value Analysis

The Market Value Analysis (MVA) is a data-driven tool that helps residents and policymakers analyze the local real estate market at a census block level. It is built on local administrative data and validated by local experts. This analysis was prepared by The Reinvestment Fund. Public officials and private actors utilize the MVA to more precisely target intervention strategies in weak markets and support sustainable growth in stronger markets.

Nine market types are identified on a color-coded spectrum of residential strength or weakness, along with the number of Census Block Groups in each market type. Included are multiple tabs for key indicators — median sales price, sales price variance, percent owner occupied, percent vacant homes, percent new construction units, percent rehabilitation units, percent foreclosure filings, and percent code violations.

The MVA also provides tabs to other geographic data for mapping purposes — reinvestment areas, bond projects, City land, tax increment finance (TIF) districts, public improvement districts (PIDs), New Markets Tax Credits, Opportunity Zones, Community Development Block Grant (CDBG) eligible areas, R/ECAP areas, DISD and RISD elementary schools, and DISD and RISD middle schools.

Comprehensive Housing Policy

Dallas’ Comprehensive Housing Policy is guided by the Market Value Analysis and identifies a housing shortage of approximately 20,000 units. Six out of ten families are housing cost-burdened (spend more than 30 percent of income on housing), making it difficult to build asset wealth and break multi-generational cycles of poverty.

Three overarching goals drive the policy: (1) Create and maintain affordable housing units throughout Dallas; (2) Promote greater fair housing choices; and 3) Overcome patterns of segregation and concentrations of poverty through incentives and requirements. Various housing and financial assistance programs, ranging from creation of a Housing Trust Fund to the adoption of an ordinance amendment that allows homeowners to build and rent Accessory Dwelling Units (ADUs) are contemplated in the housing policy.

Strategic Economic Development Plan

Complementing Dallas’ Housing Policy Toolkit is the Draft Strategic Economic Development Plan (2019). During the stakeholder engagement phase, respondents to an online residential survey identified affordable housing as a leading issue (ranked #3 behind quality of public schools and City infrastructure). The market assessment phase determined that Dallas has the second largest share of homeowners whose monthly owner costs are 30 percent or greater than household income, when compared to Chicago, Atlanta, Denver, Phoenix, Austin, Houston, San Antonio, and Fort Worth.

The Strategic Action Plan phase outlines four overarching goals, one of which is “Opportunity for All: An Equitable and Inclusive Economy.” Under this goal, interested parties will find “Strategy #1: Revitalize South Dallas/Southern Dallas,” that devotes a significant amount of attention to “Affordable Housing.” This is a best-practice example of how affordable housing policies are harmonized with Dallas’ economic development initiatives.

The link between affordable housing and economic development is stronger than many practitioners might realize. Too often, the creation and implementation of a diversified housing program is viewed as something that has or should be relegated to a separate community development or human services department. As a result, limited thought is given to the impact of affordable housing on local economic development. However, the relatively high ranking of quality of life in site selection, the prominence of affordable housing in quality of life assessments, and the high priority that citizens place on having a safe and decent place to live should give economic developers pause for thought.

Economic developers have the privilege of attending high-profile groundbreaking ceremonies for assisted corporate locates and other business projects. Those on the guestlist often read like a “Who’s Who” list of C-level executives, elected officials, and other dignitaries; people who reside in the top five percent income stratum. Behind the scenes are the assembly line laborers, call center operators, construction journeymen, distribution warehouse specialists, public sector “essential workers,” and retail associates who reap much smaller financial rewards. We owe it to them to make sure they share in the community’s economic growth.

Making affordable housing a reality, especially in locations that are close to work, maximizes their ability to build wealth.

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June 6, 2020June 27, 2020

The Age-Old Problem

Photo: Getty Images

Age discrimination needs to be a bigger part of the workforce conversation

Amidst a strong economy — before “social distancing” became part of the American lexicon — employers painted a picture of having to scramble to lure applicants. Nearly 7 in 10 employers reported talent shortages, the worst level ever and a jump of 23 percent from the previous year. That’s more than three times higher than a decade ago.

Richard Mulligan | The ED Advisor *Source: ManpowerGroup, 2020*

While employers struggled to fill positions, ProPublica and the Urban Institute were busy analyzing research data from the Health and Retirement Study (HRS), a premier source of multidisciplinary data that researchers use to address important questions about the challenges and opportunities of aging. They discovered that employers are hesitant to hire or retain older workers, potentially limiting their ability to stick around and retire on their own terms. Those unfortunate enough to be laid off have trouble finding a new job and experience long-term unemployment (ProPublica, 2020).

Between the time older workers enter the study and leave paid employment, 56 percent are displaced before they choose to retire. Only 1 in 10 of these workers ever recovers financially, earning much less than they did before their careers were disrupted. Years afterward, they’re still making up for ground lost and find themselves with fewer job prospects (ProPublica, 2020).

Richard Mulligan | The ED Advisor Source: ProPublica and the Urban Institute

An estimated 28 percent of stable, longtime employees sustain at least one damaging layoff by their employers between turning 50 and leaving work for retirement (ProPublica, 2020).

An additional 13 percent of workers who start their 50s in long-standing positions unexpectedly retire under circumstances that suggest they were encouraged to leave. They begin by telling survey takers they plan to keep working for many years, but, within a couple of years, they suddenly announce they’ve retired, amid a substantial drop in earnings and income (ProPublica, 2020).

So where’s the disconnect?

Age Discrimination

A primary culprit is the age-old problem of discrimination.

According to a 2018 American Association of Retired Persons (AARP) survey, 61 percent of older workers said they had either faced or seen age bias in the workplace; and 38 percent believe the practice is “very common.” A similar 2019 survey sponsored by Hiscox, a global specialist insurer, and conducted by Wakefield Research, found that 80 percent of older workers said their career trajectory had been impacted by their age, and 43 percent had left a company because they had experienced or witnessed age discrimination.

Feeding discriminatory hiring practices is the myth that older workers are somehow “washed up” professionally. Youth-obsessed hiring managers carry negative stereotypes about older workers, who are incorrectly viewed as being set in their ways, are less digitally savvy, are too highly compensated to retain, are complacent or unmotivated, and are difficult to manage.

To make matters worse, hundreds of the nation’s leading employers — Amazon, Cox Communications, Goldman Sachs, T-Mobile, and Facebook, to name a few — were found to have placed recruitment ads that excluded older age groups. They also shut out more experienced job applicants on Linkedin and other social recruting platforms. Such disclosures set off a wave of legal proceedings.

According to several civil rights groups — the American Civil Liberties Union, National Fair Housing Alliance, and Communications Workers of America, among others — some corporate recruitment ads were limited to “digital natives,” “recent college graduates,” or “people younger than 38.” Such hiring tactics are unfair, immoral, and illegal.

As part of a legal settlement with the plaintiffs, Facebook announced it would no longer allow businesses to buy targeted ads that potentially discriminate on the basis of race, gender, or age group. Anyone advertising home sales, employment opportunities, or credit offers — three areas where federal law prohibits discrimination in ads — no longer have the option of explicitly aiming ads at people on the basis of those characteristics. This policy change also applies to advertising on Instagram and Messenger, which are Facebook subsidiaries.

Despite this progress, age discrimination is an accepted bias that continues to pervade the hiring process in many organizations.

America’s Aging Demographics

Ironically, the discussion about age discrimination comes at a time when America’s population is growing older.

By 2060, the elderly share of the U.S. population (65 and older), which was 15.2 percent as recently as 2016, is expected to climb to 23.4 percent — an increase of 8.2 percent. Small percentage declines are predicted for the remaining cohorts: -2.1 percent (ages 45-64); -3.1 percent (ages 18-44); and -3.0 percent (under 18).

Compared to the younger population, the 65-plus crowd is the fastest growing segment of the American workforce.

Richard Mulligan | The ED Advisor Source: U.S. Census Bureau, 2020

Many people believe there is a strong correlation between America’s aging population and the Baby Boomer generation. That’s understandable, but inaccurate. Falling fertility rates and increases in life expectancy are the driving forces behind these demographic trends. This would have occurred even if the Baby Boom had never taken place. Baby Boomers have influenced the timing of America’s aging — at first, dampening its effect, but on the back end, accelerating it (Concord Coalition and Global Aging Institute, 2020).

Protecting Older Workers Against Discrimination Act (POWADA)

In January, the U.S. House of Representatives voted 261-155 in favor of H.R. 1230, the Protecting Older Workers Against Discrimination Act (POWADA). Sponsored by Representatives Bobby Scott (D-VA) and Jim Sensenbrenner (R-WI), the legislation would restore protections lost in a 2009 U.S. Supreme Court decision that required age to be the sole reason an employer fired or changed a worker’s job in order for the worker to win an age discrimination case.

The legislative process now shifts to the U.S. Senate, where bipartisan companion legislation (S. 485) is sponsored by Senators Chuck Grassley (R-IA) and Bob Casey (D-PA).

Our nation’s premier 50+ organizations — American Association of Retired Persons (AARP) and Association of Mature American Citizens (AMAC) — have thrown their support behind this legislation.

Unfortunately, age discrimination in the workplace is still disturbingly pervasive. Too many companies don’t seem to understand and appreciate the value of older employees. The positive qualities attributed to them — experience, perspective, adaptability, responsibility, commitment — can be tapped in many different ways. Measures such as the POWADA legislation are a step in the right direction toward eliminating discrimination and providing better access to quality jobs for older workers.

Countless workers in their 50s, 60s, 70s and beyond are actively engaged in their careers and enjoy working. Some are impacted by financial pressures caused by the COVID-19 lockdowns or Great Recession; some are caregivers for parents who live longer; others find meaning and self-fulfillment, or work to maintain their emotional well-being.

At 93, Tony Bennett, America’s iconic singer of traditional pop, big band, show tunes, and jazz music, has eleven concerts remaining on his 2020 tour. Franklin Graham, age 67, leads religious crusades and provides political commentary, all the while serving as CEO of the Billy Graham Evangelistic Association and Samaritan’s Purse, an international Christian relief organization. At 85, David McCullough, one of our country’s most beloved historians, known for his Pulitzer Prize-winning biographies of Harry Truman and John Adams, published his 13th book, “The Pioneers: The Heroic Story of the Settlers Who Brought the American Ideal West.” Nancy Pelosi, the 60th and 63rd Speaker of the U.S. House of Representatives, is 80 years old. Next year, the White House is slated to be occupied by one of two candidates who are working well beyond the age that most people start collecting Social Security. The incumbent, President Donald Trump, is nearly 74 years old. His challenger, former Vice President Joe Biden, will turn 78 less than three weeks after the 2020 Presidential Election.

Like many of today’s older workers, these prominent citizens are skilled, proficient, and have a strong work ethic. This leads to a priceless gift — the joy of work.

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May 17, 2020June 27, 2020

Social Entrepreneurship for Persons with Disabilities

Photo by Ian Schneider on Unsplash

Social entrepreneurship is on the rise.

Conventional wisdom tells us there is a big distinction between for-profit businesses and non-profit organizations. Businesses are laser-like focused on their market-driven business model; nonprofits strive to fulfill a charitable mission that advances the public interest. As the old saying goes, “never the twain shall meet.”

This traditional way of thinking is giving way to the notion that businesses can pursue profits and address key social and environmental issues. Likewise, nonprofits can stay on mission and generate a profitable revenue stream. Both concepts are essential components of an alternate business model — the social enterprise.

Properly executed, social enterprises are uniquely positioned as change agents for addressing a particular social problem. Social entrepreneurship is spreading across a wide range of industries and pursuing altruistic goals — not the least of which is giving persons with disabilities a lift up.

Motivating Factors

What is the motivation for pursuing social entrepreneurship and the desire to operate social enterprises for persons with disabilities?

A primary consideration is the economic divide that exists between persons with and without disabilities. The 2019 Annual Report on People with Disabilities in America, published by the Institute on Disability/UCED, University of New Hampshire, outlines the scope of their social and economic status:

Population

There are 42.6 million people with disabilities, who comprise 13.1 percent of the U.S. population. Disabilities refers to difficulties related to vision, hearing, cognition, ambulation, self-care, and independent living. The percentage of the population with disabilities has trended upward during the past decade, increasing from 12.7 percent in 2008 to 13.1 percent in 2018.

Education

Approximately 16.7 percent of persons with disabilities have not attained a high school diploma, compared to 7.7 percent of their peers without disabilities, reflecting a 9.0 percentage gap.

With regard to the gap between people with and without disabilities at the postsecondary level, 15.6 percent of persons with disabilities attained a bachelor’s degree or higher, compared to 38.4 percent of those without disabilities. This reflects a college-or-more gap of 22.8 percent.

Employment

About 37.5 percent of people with disabilities are employed on a full-time basis. In contrast, the employment percentage was more than double for people without disabilities at 77.8 percent. The employment gap is 40.3 percent.

Earnings From Work

The median earnings of full-time/full-year workers with disabilities was $40,454, compared to $46,250 of workers without disabilities, resulting in an earnings gap of $5,796.

Poverty

Earnings from work and personal income are indicators of a person’s financial condition. At the same time, poverty is measured at the family level. An individual is considered to be living in poverty if they live in a family with income below the poverty line — a figure that varies depending on the makeup of their family. In 2018, the poverty rate for people with disabilities was 26.9 percent, compared to 12.2 percent for people without disabilities.

Statistics don’t tell the whole story.

Parental caregivers worry about what happens to their developmentally disabled children when they grow up. As the statistics on disabilities have shown, their chances of obtaining employment, decent living arrangements, or achieving financial independence are significantly compromised. Government assistance and nonprofit agencies are helpful, but their resources are insufficient when it comes to overcoming the barriers that persons with disabilities face in society. A different model is needed that rises to the occasion.

Necessity Becomes the Mother of Invention

Parents and primary caregivers are taking matters into their own hands. They are starting businesses and nonprofit charities so their adult child can know independence and achieve a greater sense of belonging.

Outlined below are several examples of a larger growing trend — social enterprises that embrace the concepts of social entrepreneurship and inclusivity, and have a passion for working with developmentally disabled people.

First Place®

Aspiring to serve as a catalyst for international models, First Place® provides a supportive housing and residential transition program for individuals with autism and people with other disabilities. Folded into their program are sites for education, training, and creative inspiration.

First Place-Phoenix, the 501(c)(3) nonprofit charitable organization’s first new property, leases 55 apartments where residents are supported by a suite of resources and amenities that are designed to maximize independence, community integration, personal enrichment, and quality of life.

The Southwest Autism Research & Resource Center operates the two-year, tuition-based First Place Transition Academy, building crucial independent living and career-readiness skills for 32 participants each year.

First Place Global Leadership Institute works toward increasing the number of housing options available to persons with disabilities. The Institute collaborates with educators and medical professionals, focuses on autism research, and develops leadership skills and competencies to advance promising best practices.

Luna Azul

Located in Phoenix, Arizona, Luna Azul is the first for sale residential community in the nation that is specifically designed for adults with disabilities. This one-of-a-kind community consists of 30 single-family, cottage-style residences in a planned “pocket neighborhood” of smart homes. A partnership with Partners4Housing provides an online matching platform to help people move into independent housing. The homeowner’s association employs a full-time, on-site director and overnight staff to promote community engagement, safety, and peace of mind for the resident population and their caregiving families.

Not Your Typical Deli

Not Your Typical Deli is a full-service delicatessen and bakery, located in Gilbert, Arizona. It was created with a special purpose in mind — not only do they serve award-winning food, they also provide an integrated work environment for those with developmental disabilities. On average, 60 to 70 percent of their workforce is made up of adults with autism and/or other developmental challenges.

NYT Deli serves as a job-training site, offering three 12-week training programs per year for adults with developmental disabilities. Because of its popularity, the restaurant has a huge backlog of applicants to work at the deli. Rather than expand the deli, the owners created the Not Your Typical Culinary Academy to prepare students for employment in the restaurant or hospitality industry.

Spencer’s Place

Spencer’s Place is a coffee shop and bistro in Surprise, Arizona. The small business employs individuals with cognitive and developmental disabilities. Per their website, these individuals are able to “earn a paycheck, build relationships, gain a sense of purpose, and show the community the beauty of diversity and inclusion.” Spencer’s Place was created in partnership with the Employed and Overjoyed Foundation to promote equal employment opportunities for persons with disabilities.

Social entrepreneurship is the driving force for innovative business solutions that create employment opportunities and supportive housing for people with disabilities. That mindset is channeled through social enterprises that have a double bottom line of profit/loss and social impact.

Editor’s Note: The Case for Inclusion Report 2019, a publication of United Cerebral Palsy and the ANCOR Foundation, ranked Arizona #1 in their state rankings for performance in serving individuals with intellectual and developmental disabilities.

May 9, 2020June 27, 2020

Urban Agriculture: A Tool for Sustainability

Urban Agriculture Food Cooperatives Community Gardens Vertical Garden

Photo by Markus Spiske on Unsplash

Urban agriculture is steadily growing in popularity.

Ranging from community gardens to food cooperatives to vertical greenhouses, urban agriculture’s popularity stems from its ability to build community capacity, create local businesses and jobs, provide health benefits, strengthen rural-urban relations, support social movements, and contribute to local food security.

Outlined below are three urban agriculture initiatives that play an important role in reshaping community food systems. All three are sharp-edged arrows in the sustainability quiver:

Oshkosh Food Co-op

In November 2019, the Oshkosh Food Co-op launched a $1.6 million capital campaign to open a grocery store in Oshkosh, Wisconsin. Their campaign obtained pledges and gifts through member-owned loans, donations, grants, and developer/vendor support to achieve its fundraising goal in four months. The co-op is now in a position to construct a thriving, full-service grocery store in the heart of Oshkosh.

The Oshkosh Food Co-op plans to locate on the southwest corner of Jackson Street and Pearl Avenue in the Brio Building — the first of three projects planned by Merge Urban Development in the Marion Road District Opportunity Zone. The site was selected for its high visibility; easy access for bus riders, pedestrians, bikers, and boaters; and plentiful parking. The location is also classified by the U.S. Department of Agriculture as a “food desert.” Generally speaking, these are places where residents do not have ready access to healthy and affordable foods. The Food Co-op will lease 10,000 square feet on the first level, using 6,500 square feet and subleasing the remaining space. Groundbreaking is scheduled for Spring 2020.

Food Co-Op Initiative Development Model

To ensure success, the Oshkosh Food Cooperative is adhering to the Food Co-op Initiative’s Development Model (4 in 3). The development model provides a structure for planning and organizing the process of creating a new food co-op. The model’s four cornerstones are: Vision, Capital, Talent, and Systems. The cornerstones encompass the three stages of food co-op development: Organizing, Feasibility and Planning, and Implementation. Building the grocery store, hiring staff, and satisfying owner/member needs will be the first order of business for the immediate future.

Once open, the co-op will provide a year-round market for local farmers. The grocery store plans to source approximately 20% of its produce and goods from Northeast Wisconsin.

TigerMountain Foundation

The TigerMountain Foundation (TMF) in South Phoenix seeks to empower communities to better themselves from within. Central to this concept is asset-based community development that builds on existing strengths and brings individuals, associations, and institutions together to realize and develop their potential.

Urban agriculture and landscaping are central to the TMF mission. They are renowned for working with formerly incarcerated individuals and hardened persons exhibiting high-risk behaviors. TFM provides applied mentoring that teaches participants how to work in their community gardens (Garden of Tomorrow, Spaces of Opportunity Garden) and on their landscaping crews. Produce is sold at local farmers markets. Specialty crops are grown for area restaurants. Landscaping services are provided to local residents and businesses. Special emphasis is placed on developing a strong work ethic, strengthening entrepreneurial knowledge, and improving financial literacy.

In addition to producing sustainable food for the local economy and creating a sense of community, TMF is credited with launching more than 1,000 entrepreneurs in various businesses.

Vertical Harvest

“Vertical Harvest is dedicated to growing fresh local food and jobs in urban communities.” So reads the banner on the company’s website. Operating in the heart of Jackson Hole, Wyoming, the firm operates in a three-story, state-of-the-art, hydroponic greenhouse that grows 100,000 pounds of produce each year. That’s equivalent to the food yield on ten acres of traditional farmland. This allows the company to grow produce year-round despite the challenges posed by Wyoming’s harsh winters.

Locally-grown, fresh vegetables are sold to Jackson area restaurants, grocery stores, and directly to consumers at MARKET @ Vertical Harvest. This direct farmer to consumer retail store is located in their greenhouse facility. Patrons also have the option of purchasing locally crafted foods and gifts from around the Jackson Hole area.

Best of all, Vertical Harvest collaborates with Cultivate Ability to produce jobs, internships, and educational opportunities for individuals with intellectual and physical disabilities. The work of more than 15 local Wyoming residents with disabilities is organized under the tenets of Customized Employment, signifying an employee/employer relationship that meets the needs of both parties.

The company fields inquiries from cities around the world and plans to develop seven greenhouses in different locations around the country in during the next five years. The first greenhouse expansion project is scheduled to open in Fall 2020.

Sustainable Communities Innovation Challenge

In Summer 2019, Vertical Harvest was awarded a $500,000 contract through Fannie Mae’s Sustainable Communities Innovation Challenge. The open competition is part of a two-year, $10 million commitment by Fannie Mae to generate innovative ideas that address the nation’s affordable housing crisis. Contract awardees were chosen to create housing opportunities that are safe, sustainable, and affordable.

Vertical Harvest’s proposal calls for the preparation of a feasibility study that explores the potential for vertical farms at affordable housing developments in Metro Chicago. The goal is to improve food security and nutrition, while promoting holistic community wellness. Determining which greenhouse model can be integrated into the developments, and what products best serve the Midwest’s largest metropolis, will be focal points. The study will also look at complementary programs that might be incorporated into greenhouses and provide additional community benefits. Reports indicate the feasibility study will be completed in Summer 2021.

Each of these urban agriculture initiatives hold the promise of reconnecting the farmer and consumer, while making a positive impact on society.

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