Published: Sept. 30, 2007 Anti-poverty programs
Are empowerment zones succeeding? It's hard to know
The U.S. government has given more than $1.1 billion to empowerment zones since 1994, but results are not easy to measure.

More than a decade ago, President Bill Clinton hoped to bring thousands of new jobs, more housing and better education to the country's decaying inner cities with the federal empowerment zone program, the most ambitious anti-poverty effort since Lyndon Johnson's Great Society programs.

But today, nobody can say whether the empowerment zone programs have succeeded.

Since 1994, the federal government has handed out more than $1.1 billion to local empowerment zones with only broad guidance, little oversight and few strings attached.

The idea was to give local areas flexibility to tackle their unique problems - such as housing, jobs or education. But the result is that success - and failure - have become almost impossible to measure.

Miami-Dade County was one of 15 urban areas selected as empowerment zones in 1999, making the county eligible for millions in grants and tax incentives for area businesses. Other empowerment zones include New York, Los Angeles, Chicago, Boston and Detroit.

While the first round of cities in the federal program received $100 million in grants, only about $26 million in federal funds went to Miami-Dade and the othercommunities selected in 1999.

In a report last year, the Government Accountability Office, the investigative arm of Congress, said the U.S. Department of Housing and Urban Development and other agencies failed to properly track the money going to empowerment zones - and poor oversight made it impossible to judge the program's progress.

The GAO found improved economic conditions in many empowerment zone areas, but could not tie the improvements to the program. (Miami-Dade was not part of the study.) The GAO said the program's effect was "unclear."

HUD has said it monitors empowerment zones primarily by reviewing the annual reports filed by local agencies. Those agencies are supposed to file "accurate and complete" information, detailing the jobs they created and other benchmarks.

But the GAO said these self-reported assessments are "not reliable," and HUD's inspector general repeatedly found that local agencies inflated their successes in these reports.

In a 2003 report, HUD's auditor reviewed 50 economic-development projects from six cities - none from Miami-Dade - and found that the results were reported inaccurately in 76 percent of the cases, often with exaggerated job figures. "The impression exists that the benefits of the program were greater than actually achieved," the inspector general wrote.

Under federal guidelines, HUD monitors are supposed to review empowerment zones periodically, examining contracts and possibly visiting businesses to confirm elements of the progress reports.

HUD hasn't reviewed the Miami-Dade Empowerment Trust or any of its contracts for five years, according to records and interviews.

Experts in economic development say it may still be too soon to gauge the overall impact of the empowerment zone program, which is set to expire in 2009.

The results of similar initiatives - also offering tax breaks and cash incentives for businesses in poor neighborhoods - have been "somewhat mixed," said economist John Foster-Bey, a former researcher with the Urban Institute.

"The issues that make business development difficult in those communities don't necessarily go away," Foster-Bey said. "Often you are not creating jobs, you are just moving jobs from one neighborhood to another."

"I'd be very skeptical," said Bruce Nissen of the Research Institute on Social and Economic Policy at Florida International University. "The political pressures are for them," though research on their effects is inconclusive.