State and local innovation is driving the economic recovery
By: Debbie Cox Bultan, CEO of NewDEAL
Two years into the pandemic, as we enter a new phase of living with COVID, we must acknowledge that the virus brought more than just a historic public health challenge. The past two years have also made crystal clear longstanding and unsustainable inequities that predate and have only intensified during the pandemic — disparities in access to broadband and affordable housing, quality child care, and capital for entrepreneurs. At the same time, our country faces existential threats, from the impacts of climate change to systemic, persistent racism and unprecedented attacks on the very fabric of our democracy.
The good news is that, despite serious challenges, we have an incredible opportunity right now to address these problems and to set America on a path toward a more inclusive, prosperous, sustainable future for all. As President Biden said in his State of the Union address last night, “We are stronger today than we were a year ago” because of an agenda to “invest in America, educate Americans, grow the workforce, and build the economy from the bottom up.”
A big part of that investment has been led by state and local innovators across the country who are making tangible progress with the assistance of billions of dollars in federal funding from the American Rescue Plan Act and Bipartisan Infrastructure Law. That work should give us all hope.
In that context, I’m excited to launch a regular series spotlighting key trends and promising ideas in state and local policy, drawing from the work of the NewDEAL network of 200 exceptional state and local elected officials who are championing innovative, results-oriented solutions across the country.
Over the past year, the NewDEAL has been tracking how state and local leaders are working to build a better America post-COVID, including using ARP funds. Two areas that are seeing significant investment and will play a key role in whether we emerge from the pandemic as a more equitable society are housing and small business.
Access to housing is a fundamental building block of American prosperity. However, as the NewDEAL Forum noted a year ago, lack of access to affordable housing long predates the pandemic, with the problem “especially acute for people of color…Among Black Americans, 55% pay more than 30% of their income toward housing compared to 40% of white Americans.”
Local governments are spending one of every eight dollars they have received from the Rescue Plan on housing initiatives, according to the Brookings Institute.
In Boise, Idaho, Mayor Lauren McLean has announced the launch of a new Housing Investment Program, through which the city will partner with developers to build more multifamily housing in support of the Mayor’s efforts to provide housing options on a “Boise budget.” The initiative aims to build more than 1,500 housing units at 60 percent of area median income and would include 250 new units of supportive housing.
In Michigan, Representative Mari Manoogian’s bill to establish the state’s First-Time Home Buyers Savings Program was signed into law. This new program will allow residents to open special savings accounts to save for and eventually purchase single-family homes. Contributions and withdrawals from the accounts will be tax-exempt.
And in Denver, Mayor Michael Hancock launched a new concentrated effort to support those experiencing homelessness. The city is deploying more resources to support partner organizations that are providing rapid resolution, rapid rehousing, and permanent supportive housing solutions. Through this housing surge, the city aims to provide solutions for 400 households in 100 days.
A second area where NewDEAL Leaders are focusing their efforts is in supporting small businesses and entrepreneurs with a goal of addressing generational poverty through novel policy solutions. Roughly one in three small businesses closed during the pandemic — some of them temporarily, but many permanently. But opportunities for a turnaround exist. Seventy one percent of small business owners are optimistic about their own performance in 2022, an increase from 63 percent just one year ago.
To ensure recovery among small businesses and entrepreneurs is equitable, Philadelphia Councilmember Derek Green has proposed the establishment of a city-run public bank. If approved, the bank would elevate women and minority-owned businesses, reducing racial disparities in business ownership and making it easier for these companies to secure loans. Councilmember Green’s proposal took finalist honors in last year’s NewDEAL Ideas Challenge.
In Richmond, Virginia, Mayor Levar Stoney is working to build generational wealth with his new “Triple A” program, which will provide aid and relief to small businesses. This new program, named after its three steps “Assess, Address, Activate,” will be administered by the city’s Office of Minority Business Development and is designed to help small businesses recover from the effects of the pandemic using American Rescue Plan Act funds.
And in Manchester, New Hampshire Mayor Joyce Craig has announced the relaunch of the Manchester Small Business Grant and Program Assistance, which uses American Rescue Plan funding to support small and minority-owned businesses up to $10,000 and will be vital as the town rebuilds its local economy. All of these programs will funnel money to communities that need it and can serve as models for other policymakers to emulate.
Despite the challenges facing America as we emerge from the pandemic, state and local leaders are making significant progress, in part by leveraging historic federal investment. Next week, the NewDEAL will release a report highlighting even more success stories made possible by funds from the American Rescue Plan and I look forward to sharing with you more in this space about the good ideas being implemented around the country. In the meantime, if you want to learn more, please visit our website at www.newdealleaders.org.
Debbie Cox Bultan is CEO of the NewDEAL network of 200 rising state and local officials and of the NewDEAL Forum, which identifies and promotes innovative, future-oriented state and local pro-growth progressive policies that can improve the lives of all Americans.
