Date of Award

8-2019

Degree

Thesis

Degree Name

Master of Arts

Department

Political Science

First Advisor

Karen Beck-Pooley

Second Advisor

Holona Ochs

Third Advisor

Allison Mickel

Abstract

Community and economic development decisions affect every aspect of city life. Allentown, Pennsylvania is currently in the midst of redevelopment financed by one of the largest state subsidies in the commonwealth’s history, the Neighborhood Improvement Zone (NIZ) (Assad, 2017). The NIZ is an unprecedented state tax subsidy that most closely resembles locally-financed Tax Increment Financing (TIFs). Despite being the most utilized financing tool for urban redevelopment, the impacts of TIFs are still largely unstudied. The burgeoning literature trying to assess the effectiveness of TIFs is often too small in scale, focusing just on the redevelopment zones isolated from their surrounding neighborhoods, and utilizes misguided metrics of community and economic development success. This paper employs more comprehensive metrics like poverty rates, housing stability, and incomes of residents. It looks to analyze the effect the NIZ development has had on high poverty neighborhoods adjacent to the NIZ against comparable neighborhoods throughout the state, and examine how the city has trended as a whole over the span of NIZ development in context with analogous cities throughout the state. The paper also assesses whether the benefits of downtown development have spread throughout the city or remained isolated to the development zone, while trying to understand some of the mechanisms of TIFs that precipitate large sums of private investment that seldom benefit a city beyond the target area. Using census tract level data from the American Community Survey, I found that the lowest income neighborhoods in Allentown had higher rates of poverty than would be expected if those neighborhoods kept pace with similar high poverty neighborhoods in other cities. Additionally, these high poverty neighborhoods had no significant increase in incomes or employment compared to similar neighborhoods statewide. Furthermore, when compared to a cohort of comparable cities, Allentown’s metrics of economic wellbeing have lagged. Lastly, I found that the economic benefit of the NIZ has not spread beyond the development zone. While the development is still very much in its infancy, these findings point to a need for a reassessment of the development strategies, and the creation of parallel mechanisms to ensure the subsidy more broadly benefits the City of Allentown.

Share

COinS