Running head: COMMUNITY ECONOMIC DEVELOPMENT PLAN 1

Community Economic Development Plan: The Pearl District

Kate Washington
USP452 - Community Economic Development
Portland State University


COMMUNITY ECONOMIC DEVELOPMENT PLAN 2

The Neighborhood
The Pearl District is a deceptively affluent neighborhood. No one walking through it would guess
that it has a relatively high poverty rate. Even fewer people would be able to identify the low-income
buildings without a little research. Because the Pearl District is part of the River District Urban Renewal
Area, and therefore subject to the RDURA guidelines, and because most of its buildings were built after
the 1980s, its infrastructure is mostly new or renovated to high standards. The Pearl District is one of
Portlands newest neighborhoods, its neighborhood association only established in 1991, and as it was
built on brownfields and industrial train yards, there was little residential housing to clear away. The Pearl
District was a rare opportunity for urban revitalization from a clean slate and, therefore, the city and the
planners had high expectations for the walkable, dense, mixed-use, and more importantly for this papers
purposes, mixed-income neighborhood.
In 2010, with a population of 5,993, exactly half of Pearl District neighbors had college degrees,
22% of the neighborhood lived at or below the poverty level and the median household annual income
was $40,149. In comparison, 42% of Portlanders had a college degree, while only 9% of Portlanders lived
at or below the poverty level and the median household annual income was $52,294 (Washington, 2011).
In the same year, the Pearl District was home to only 289 children under the age of 18 indicating
a very small proportion of families within the neighborhood boundaries. Only about 2% were single-
parent families (Washington, 2011). Before this data, the only low-income building that provided units
large enough for families was The Sitka. Since then, the neighborhood has opened its first family-oriented
residential building, The Ramona, and has plans for a second, The Abigail, highlighting a growing focus
on attracting families to the Pearl in order to increase social diversity. To begin to understand the ways
these two buildings will affect the composition of households in the neighborhood, we can look at recent
data regarding The Ramona. Since opening in 2011, the percentage of families with children has
increased from 49% to 54% and the number of children living in the building has increased from 116 to
129 (C. Haight, personal correspondence, 2013). Most of these children (69%) are younger than six years
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old, which means they are not in school. A quarter of the households in the Ramona are single parents.
Considering over 200 households are on the waiting list, it is clear that the Pearl District will continue to
attract families with young children and as the only family-sized units being built are subsidized, these
families will continue to be low-income.
The Pearl District is a text book example of an urban mixed-income neighborhood. About half its
neighbors earn less than $50,000 per year, a quarter make between $50,000 and $100,000 and slightly less
than the remaining quarter make more than $100,000 per year (Washington, 2011). However, nearly a
quarter of its neighbors live at or below the federal poverty rate. The Pearl Districts high poverty is a
result of its high concentration of subsidized housing, a condition of development in the River District
Urban Renewal Area. In general, thanks to the high planning and development standards of the
neighborhood, the Pearl District offers a good quality of life, regardless of income, with public
transportation, paved streets, generous sidewalks, access to parks, fresh food, and civic opportunities.
However, as a case study for mixed-income neighborhoods, it is worth exploring ways the Pearl District
can improve, not only the quality of life, but also the economic situation of its low-income families.
The Problem
Low-income families are vulnerable families. Low-income families face several obstacles to
improving their situation. They must consider many factors when balancing work and children:
fluctuating schedules, nontraditional hours, limited resources, inflexible work policies, and the limited
supply (and quality) of local child care (Chaudry et al. 2011). Today, more than 43 million Americans
live in poverty (15 million of them are children), which disconnects them from the opportunities they
need in order to succeed and reduces their financial resilience. The effects of raising children in poverty
range from lower educational achievement to health risks. As adults, these children of poverty struggle to
contribute economically and often rely on the government for support. Childhood poverty costs the
United States an estimated $500 billion every year (Annie E. Casey Foundation Fact Sheet, 2013).
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Single-parent households are even more vulnerable, especially since, in addition to the
aforementioned barriers, most single-parent households are headed by women, who are faced with an
unequal gender wage gap. Mothers of all household types, however, experience the motherhood
penalty, earning less than women without children, less than men in general, and less than fathers (Frack,
2013). In fact, this wage gap is so significant that motherhood is a leading predictor of poverty in old age.
Nearly 75% of mothers work outside the home and 41% of mothers are the primary breadwinners, while
slightly less than 25% provide at least a quarter of the familys income (Family Forward Oregon, 2013).
The consequences of the gender wage gap are significant for these mothers and their families; mothers are
shortchanged about $11,000 per year in lost wages and $434,000 in their lifetimes (Family Forward
Oregon, 2013). This reduces their ability be economically secure as parents and in retirement.
The Plan
Improving their circumstances helps these families achieve self-sufficiency. Such improvements
are easier to make in communities with access to jobs, transit, affordable housing, and a supportive
network of resources (Annie E. Casey Foundation Fact Sheet, 2013). These conditions already exist in the
Pearl District and surrounding neighborhoods. One strategy for improving the circumstances of low-
income families in the Pearl District is providing flexible employment for parents with school age
children. To that end, this paper will discuss the option of creating an alternative staffing agency (ASA)
that focuses on part-time work. While low-income parents deal with many barriers to employment, the
other half of this equation is that employers are looking for temporary, flexible, part-time employees that
can be brought in and let go as supply and demand fluctuates. (N. Davis, personal interview, May 30,
2013) Temporary part-time employees complement the existing full-time work force and fill positions
that do not work for the majority of job seekers who want full-time, long-term employment that provides
benefits and career advancement.
ASAs are socially responsible staffing agencies that focus on the hard-to-employ. While staffing
agencies play a critical role in employment in America, they have a reputation as unscrupulous, often
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paying low wages, not providing regular work, and exploiting vulnerable populations. In contrast, ASAs
emphasize social responsibility as well as profitability. They follow a variety of models: non-profit, for-
profit, co-operative, and niche market (Shambrook, Amer. & Tam, 2005. While either the non-profit or
for-profit models would work in the Pearl District ASA, this paper proposes a niche market ASA that can
bill itself as providing part-time employment. The proposal is not a non-profit model because the for-
profit model allows for profit sharing, which is an important co-operative feature of the plan.
Interviews with representatives of two local developers revealed a perception that people with
high school diplomas are only qualified for food service and retail work (L. Jackson, personal interview,
May 23, 2013) (S. Miller, personal interview, May 23, 2013). In reality, low-income residents of The
Pearl are quite employable; they have secure housing, are usually eligible for support programs including
healthcare (thereby negating the need for full-time employment with benefits), have undergone a
background check as part of the housing process, and most have their high school diplomas, if not some
college or more. What they lack is flexible, part-time employment that pays a family wage. Providing the
opportunity for such employment would enable parents to get work experience, work without needing
after school child care, supplement the household income, and, most importantly, remain relevant to the
workforce until their children are grown and they are able to return to work full-time.
Implementation
A Pearl District ASA would ideally be created by a small group (3-5) of local parents with the
goal to eventually employ more local parents. These initial founders, following the model outlined in this
paper, would form an LLC and create a for-profit business. However, it bears repeating that any of the
previously mentioned ASA models could work in the Pearl District. Ideally, one of the founders would
have human resources or business experience, but even without this background, a couple or all of them
should enroll in PCC CLIMBs business plan class. Completion of the course gives participants full
access to PCC CLIMBs business development resources, which include human resources, financial, and
marketing advice.
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With a business plan and advising accomplished, the next step would be funding. Start-up capital
for this venture could be very little, so long as the founders are willing to only compensate themselves as
invoices are paid. However, to hire additional employees, they should plan to have three months wages
for every person they intend to employ. Calculating $12/hour, working twenty hours per week, they
would need about $3,000 per person (N. Davis, personal interview, May 30, 2013). If the founders
determine they need start-up money, micro-lending could be employed as a funding strategy. Another
funding source might be the Annie E. Casey Foundation which focuses on building better futures for
disadvantaged children in the United States by supporting initiatives such as the Working Poor Families
Project. A good model to examine is Employ America, which is a for-profit ASA that uses tax credits
such as the Work Opportunity Tax Credit as part of its funding. Should the founders wish to make the
ASA a non-profit, they could access federal and state monies, such as the National Fund for Workforce
Solutions, earmarked for workforce development initiatives.
Ideally, these founding parents would either be second parents in their households, and therefore
providing only supplementary income, or already receiving some kind of wage support. This would allow
the founders to put half their wages back into the company each month until they save enough money to
expand by adding more employees. At first, the expense of an office will not be necessary. The ASA can
be run out of someones home until it is ready to expand into a formal work space and then, it may rent a
small unit at Activspace a couple blocks away for about $400 per month.
As the proposed model is for-profit/niche market, co-operative aspects can be included as the
agency grows. Profit-sharing incentives could be provided for employees who refer new employees who
work a minimum number of hours. A co-operative daycare could also evolve alongside the agency.
Finding and affording childcare are critical to employment for low-income parents. In Multnomah
County, the median price of child care is $12,180 (Weber & Finders, 2013), which is nearly the entire
annual income of a part-time employee, and toddler day care consumes 67% of a minimum wage
workers full-time earnings (Weber & Finders, 2013). A variety of factors influence child care choices:
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family & household composition, age of children, familys socioeconomic status and resources,
race/ethnicity, proficiency in the English language, a childs health and special needs, parents
employment, the local child care market, and available information about said child care market (Chaudry
et al., 2011). Combine those variables with the high cost of child care and it becomes easy to see why a
parent may opt out of the workforce until their children are grown. However, opting out does not improve
a familys situation. Therefore, growing a co-operative daycare alongside the ASA will allow low-income
parents in the Pearl District greater availability to work. As it is a small neighborhood and only a couple
buildings provide low-income family housing, parents would not need to travel far for child care, either.
The Annie E. Casey Foundation (2013) outlines three primary priorities for alleviating poverty:
place, work, and wealth. The place, responsible urban development that benefits the poor, is the Pearl
District and the work will be provided by the ASA. The final priority, wealth, will be addressed by
creating a partnership with a community bank. In this partnership, the bank could help improve family
financial literacy by holding workshops about debt management, banking services, college savings plans,
and filing taxes. Finally, the ASA could arrange for savings accounts with matching deposits to increase
savings.
Monitor & Evaluate
As a for-profit company, the Pearl District ASA would be monitored by the city and state
agencies that set and enforce ethical and legal business practices. The success of the Pearl District ASA
will ultimately be determined by whether or not it makes enough profit to stay in business. However,
there are other ways to evaluate success. In this case, the ASA will evaluate success by the number of
people it is able to employ, its ability to pay a family wage, and whether the conditions of its employees
improve. Such improvement can be measured in many ways. A large and obvious improvement would be
moving out of low-income housing and on to better opportunities, however, more subtle improvements
include such achievements as paying down debt, affording a more reliable vehicle, increasing savings,
creating assets, adding to a retirement fund (or even creating one), affording better quality food, affording
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enrichment opportunities for children, and enrolling in classes or training to improve employability. As a
socially responsible company, it would be advisable that part of each employees intake is a statement of
goals so that the ASA can measure each persons idea and achievement of success.
Conclusion
Most businesses are started by people who know each other and have a high level of trust
together. Because of the way people live in the Pearl, so close in proximity, with much overlap of public
spaces, those networks are easier to foster especially with so many people of similar circumstances
living in the same building. If an ASA were to thrive anywhere, it would be in a dense, compact
community like the Pearl District, where residential and commercial spaces fill the same blocks, creating
unique opportunities and connections. Therefore, this paper proposes a part-time employment alternative
staffing agency for the Pearl District as a way to improve the circumstances for low-income families in
the neighborhood.
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REFERENCES
Annie E. Casey Foundation. (2013). Center for Family Economic Success Fact Sheet. Retrieved from
http://www.aecf.org/~/media/Pubs/Initiatives/FamilyEconomicSuccess/CenterforFamilyEconomicSucces
sFINAL3.pdf
Annie E. Case Foundation. (2013). Center for Family Economic Success. Retrieved from
http://www.aecf.org/MajorInitiatives/CenterforFamilyEconomicSuccess.aspx
Chaudry, A., Pedroza, J.M., Sandstrom, H., et al. (2011). Child Care Choices for Low Income Families.
Retrieved from http://www.urban.org/UploadedPDF/412343-Child-Care-Choices.pdf
Family Forward Oregon. (2013). Solving the Gender Wage Gap. Retrieved from
http://www.familyforwardoregon.org/site/wp-content/uploads/Solving-the-Gender-Wage-Gap.pdf
Frack, L. (2013). Equal Pay Day Press Release. Retrieved from
http://www.familyforwardoregon.org/site/wp-content/uploads/Press-Release-Equal-Pay-Day-2013-
FFO.pdf
Shambrook, A., Amer, T., and Tam, T.M. (2005). Staffing Agencies and the Hard-to-Employ Population.
Retrieved from
http://www.insightcced.org/uploads/publications/wd/Staffing%20Agencies_Hard_to_Employ.pdf
Washington, K. (2011). The Pearl District: An Urban Neighborhood.
Weber, B. and Finders, J. (2013). Child Care and Education in Oregon and its Counties: 2012. Retrieved
from http://health.oregonstate.edu/sites/default/files/occrp/pdf/state-profile-child-care-and-education-in-
oregon-and-its-counties-2012.pdf