Community Development vs. Economic Development: Residential Segregation, Tax Credits, and the Lack of Economic Development in Baltimore\u27s Black Neighborhoods

In 1967, the National Advisory Commission on Civil Disorders penned one of the most famous statements about race in America: “Our nation is moving toward two societies, one black, one white— separate and unequal.”2 For the city of Baltimore, MD, that statement rings true even in 2013. Outsiders think of Baltimore through the lens of HBO’s The Wire. Those who are from Baltimore or live in the city likely would say that driving through Baltimore is like driving through two different cities—nice areas with shops, restaurants, and beautiful architecture; and “not so nice” areas with blocks of dilapidated buildings and houses, liquor stores, and corner stores. Unfortunately, but by no mere coincidence, these areas and the people who reside in them mirror the two societies discussed in the Commission’s Kerner Report. This notion of two separate versions of Baltimore City again became the center of much debate as reports swirled about the use of the Enterprise Zone tax credit program in Harbor Point. Discussion points included the redrawing of the Enterprise Zone maps to include a predominantly African American public housing project that would have put the area in line with the poverty requirement for the Harbor East Development Corporation to receive the tax credit from the City of Baltimore.3 This paper discusses the issue of the lack of economic development in majority African American neighborhoods, positing that the lack of economic development is due to indirect racial bias in developers’ selection of where to invest and build businesses, and in the administration of the Enterprise Zone tax credit in Baltimore city. The paper begins by explaining the history of residential segregation in Baltimore. Next, I will discuss the current state of Baltimore neighborhood characteristics with the use of the Vital Signs 11 community report, showing that the effects of residential segregation are still very much prevalent in the city. The third section of the paper will shed light on the purpose and implementation of the Baltimore City Enterprise Zone tax credit program, indicating that there is bias against African American neighborhoods based on the program’s zoning of the city and the locations that the most development occurs. The criteria that developers use generally in determining where to invest are neighborhood characteristics that ultimately serve as a proxy for race, and Baltimore is no different based on developers’ use of the tax credit program