Key Principles

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The Community Renewal Initiative is designed to assist distressed communities designated as Renewal Communities and Empowerment Zones with real opportunities for growth and revitalization.

Each Renewal Community (RC) has a Coordinating Responsible Authority (CoRA) responsible for coordinating development within the RC. The CoRA may be an entity, organization, person or persons and is authorized by the government(s) that nominated the RC for designation. The CoRA is the RC's central point of contact and takes on the responsibility and authority to implement the RC's tax incentive utilization plan (TIUP). Every RC submitted its TIUP to HUD in 2002, during the first year of designation, and the TIUP outlines how the RC will take specific actions to maximize the use of the tax incentives made available to the designated area. These tax incentives include employment credits, work opportunity tax credits, commercial revitalization deductions, increased Section 179 deductions, and 0 percent capital gains provisions on the sale of RC assets.

The TIUP outlines also how the RC will implement its Course of Action to help develop the designated area. The Course of Action, which the RCs submitted with their 2001 applications, is a written document, signed by a State or local government and neighborhood organizations, that demonstrates a partnership between such State or government and community-based organizations and which commits each signatory to specific and measurable goals, actions, and timetables. As indicted in the Community Renewal Tax Relief Act of 2000, these Courses of Action include at least 4 of the following:

• A reduction of tax rates or fees applying within the RC;
  
  
• An increase in the level of efficiency of local services within the RC;
  
  
• Crime reduction strategies, such as crime prevention (including the provision of crime prevention services by nongovernmental entities);
  
  
• Actions to reduce, remove, simplify, or streamline governmental requirements applying within the RC;
  
  
• Involvement in the program by private entities, organizations, neighborhood organizations, and community groups, particularly those in the renewal community, including a commitment from such private entities to provide jobs and job training for, and technical, financial, or other assistance to, employers, employees, and residents from the RC; and
  
  
• The gift (or sale at below fair market value) of surplus real property (such as land, homes, and commercial or industrial structures) in the renewal community to neighborhood organizations, community development corporations, or private companies.

As part of the RC application process, each RC provided a signed certification to HUD also indicating that local partners would work together to satisfy certain economic growth promotion requirements during the designation period. Representatives of the state and local governments with authority over the nominated area certified in writing that they have repealed or reduced, will not enforce, or will reduce within the RC at least 4 of the following:

• Licensing requirements for occupations that do not ordinarily require a professional degree;
  
  
• Zoning restrictions on home-based businesses that do not create a public nuisance;
  
  
• Permit requirements for street vendors who do not create a public nuisance;
  
  
• Zoning or other restrictions that impede the formation of schools or child care centers; and
  
  
• Franchises or other restrictions on competition for businesses providing public services, including taxicabs, jitneys, cable television, or trash hauling.

The framework for the Empowerment Zone Initiative is embodied in four key principles:

1. Strategic Vision for Change
2. Community-based Partnerships
3. Economic Opportunity
4. Sustainable Community Development

Strategic Vision for Change

The Strategic Vision for Change identifies what a community will become in the future and a statement of the values in the community used to create its "vision". The Strategic Visions that EZ applicants included in their strategic plans identify realistic goals and a strategy for achieving these goals. The vision should also define a performance measurement system that will provide the framework for measuring progress and evaluating and adjusting the Strategic Plan for a given EZ.

A vision for change describes what the community wants to become. A community may envision itself, for example, as a center for emerging technologies or for innovative methods of educating residents using information technology in partnerships with a nearby university or community college. A community may envision itself as a key export center for certain farm products or customized manufacturing goods; as a health care center; or as a vibrant residential area focused around an active local school, with access to jobs, retail markets, recreation and entertainment.

A vision for change is not a laundry list of concerns, shortcomings and deficits. Instead, it is a strategic map for revitalization. It builds on assets and coordinates a response to the needs of a community, such as public safety, human and social services, and environmental protection. It takes into account linkages to the larger region and how information technology can facilitate achievement of the strategic vision.

In pursuing its strategic vision, each EZ applicant created a plan that:

• States a clear vision and goals for the future;
  
  
• Explains how the vision creates economic opportunity, encourages self-sufficiency, and promotes sustainable community development;
  
  
• Builds on the assets and opportunities available and presents a coordinated strategy toward solving them; and
  
  
• Sets outs performance standards for measuring progress, and a framework for evaluating and making future adjustments to the Strategic Plan.

Community Based Partnerships

The Community-Based Partnerships principle encourages all stakeholders in a community to participate in the revitalization of distressed neighborhoods. Partnerships include residents, businesses, local political leaders, local, state and Federal governments, community development corporations, local public health and social service departments, regional planning organizations, unions, environmental groups, schools and universities, faith-based organizations, and other community groups.

Communities that stand together are communities that can rise together. Communities cannot succeed with public resources alone. The EZ Initiative is grounded in the belief that each community knows how best to solve its problems, and that residents, businesses, government, and non-profits must all work as partners to revitalize distressed neighborhoods. The Federal tax credits and grant funds provided to EZs are designed to help get revitalization efforts in motion, but partners in local communities, along with the assets they bring to the table, must work with the community to achieve sustainable results.

Resident participation in planning and decision-making in the EZs is another key component of Community-Based Partnerships. Successful and sustained revitalization in these areas starts with residents. Residents of the EZs must be involved in identifying the Strategic Vision for Change, developing specific goals, and crafting solutions. Residents must also play an active role in implementing and monitoring their plan for revitalization through governance structures that provide them with a real voice in decision-making. Each EZ is responsible for designing its own governance structure, which typically is a board composed of local decision makers chosen from a cross-section of the stakeholders in each community. Boards should not be so large as to be unwieldy in operation, yet they must permit an opportunity for all key stakeholders to participate. Some communities established a non-profit to implement their Strategic Plans and they used the non-profit's Board of Directors as the governance mechanism for the Zone. Others created stand-alone advisory boards to guide local officials during implementation.

Economic Opportunity

Economic Opportunity includes creating jobs within the designated EZ communities and linking residents to jobs throughout the region; providing entrepreneurs with technical assistance; providing greater access to capital and credit for businesses so they can expand and create job opportunities for residents; and providing residents with access to job training and job placement services, including those associated with the Welfare-to-Work initiative.

The first priority in revitalizing distressed communities is to create jobs for residents. The creation of jobs, both within the community and throughout the region, provides the foundation on which residents can become economically self-sufficient.

Communities should work with local businesses to understand their employment needs and to develop programs that match residents with real job opportunities. They should also develop programs to increase the flow of capital and credit to businesses so they can expand and create new high-wage jobs. Programs have included small business assistance centers, community development banks, micro-enterprise credit programs, and loan pools.

An EZ designee should understand:

• The existing economic base of the area including those sectors that will most likely provide job opportunities for residents;
  
  
• The credit and capital needs of business and the type of labor skills they need;
  
  
• The skill levels of residents and the kinds of programs that could upgrade those job skills;
  
  
• The barriers to employment such as child care, transportation, drug treatment, low job skills, etc., and how those barriers may be overcome;
  
  
• How the changing metropolitan, regional, national and global economic conditions, including military base closure and out-migration, affect the economic base; and
  
  
• How to bring jobs to the workforce and how to get people to job opportunities by improving transportation infrastructure.

Sustainable Community Development

Sustainable Community Development advances the creation of livable and vibrant communities through comprehensive approaches that coordinate economic, physical, environmental, community and human development. These approaches should preserve the environment and historic landmarks, address "brownfields" clean-up and redevelopment, explore the economic development advantages of energy efficiency and the use of renewable energy resources, and improve the quality of and/or access to health care and human services, education, child care, affordable housing, transportation and public safety.

While job creation is a critical first step toward the creation of livable and vibrant communities, the ability to sustain that positive momentum depends upon a coordinated and comprehensive strategy that creates an environment where human initiative, work and stable families can flourish. A community where the streets are safe, the air and water are clean, housing is affordable and secure, and human services are accessible, and where a vital civic spirit is nurtured by innovated design, is a community that can be a source of strength and hope for its residents. Sustainable Community Development promotes a holistic approach to revitalization through the coordination of economic, physical, environmental, community and human resources.