by Benjamin Collinger
Uche Ogba and Christian Reed-Ogba moved from luxury apartments near the Pearl to the Gardens at San Juan Square in San Antonio’s west side. The Pearl is a renovated brewery complex that now houses many of the city’s most eclectic restaurants and upscale stores. It hosts a popular farmer’s market each Saturday and attracts a rich, predominantly white clientele. In contrast, their new neighborhood sits in District 5, the city’s poorest area. A mural that reads “Peace in the Barrio” adorns the street-facing wall of the San Juan community center, a place that hosts weekend events with multi-generational family attendance. Uche and Christian moved to the area to save money and grow their public relations firm, BethanyEast PR. I spoke with Uche at a coffee shop called Halcyon in the Blue Star Arts area south of downtown San Antonio. At night, its array of drinks and exposed brick walls within the boundaries of District 5 serve a creative atmosphere to San Antonio’s bohemians. During the day, the casual observer intuits that few of Halcyon’s patrons cross the train tracks – a kind of gate enclosing the impoverished south side – to return home. Ogba had just finished his specialty coffee as we began our conversation.
Before Uche and Christian married and founded their public relations firm, Uche was a solar engineer in Florida who decided to move back to San Antonio. Their move to the west side has allowed Bethany East PR to expand, become more profitable, and reach an entirely new community. Yet, Ogba illustrated the often insurmountable challenges for black-owned businesses like his. “Minority companies are starting and failing. A lot. San Antonio is notorious for minority companies not having access to funding. There are a lot of startups that are scaling up and getting additional funding to expand, but there are a lot of minority companies that don’t have access to those funds,” Ogba lamented. The United States Department of Commerce found that minority-owned businesses are three times more likely to be denied loans than businesses owned by whites; they also receive lower loan amounts and pay higher interest rates than their white counterparts. As a result, minority-owned businesses are often forced to rely on personal and family wealth rather than external debt or investment. Jackie Gorman, CEO of the nonprofit San Antonio for Growth on the Eastside, echoed Ogba’s point that difficulty accessing capital stifles business growth. We spoke in her organization’s office: a small old house downtown that was once used as a masonic hall. “Whereas others might be able to go to their family for investment, wealth in the minority community is not as deep,” Gorman said.
Social inequalities explain why entrepreneurial growth is often weaker in communities of color: lack of access to capital prevents expansion, and therefore, wealth creation. SA 2020, a non-profit organization that measures social indicators for San Antonio, collected and published a data profile of the city in early 2018. Their report highlighted a stark “economic paradox” where a “business-favorable climate, financial incentives, and affordable land and energy that attract a myriad of new and relocating companies” meets a city where nearly “one in five residents lives in poverty and the geographic distribution of that poverty makes us one of the most economically segregated cities in the United States.” In other words, San Antonio is a city of great divergences. Most of the economic growth is concentrated in the north-central parts of the city, while the far west, south, and east sides struggle. While many entrepreneurs are finding an atmosphere conducive to starting their business in San Antonio’s core, the city’s historical inequities concentrate the benefits of growth. The strong forces of residential segregation and disinvestment have built a city of contrasts in which the Ogbas and other entrepreneurs have found themselves immersed.
The Long Shadow of Segregation
In the past three decades, residential segregation by income has increased in 27 of the United States’ 30 largest metropolitan areas. The Pew Research Center reported in 2012 that the increases are related to longer-term rises in income inequality, which have shrunk “the share of neighborhoods across the United States that are predominantly middle class or mixed income.” Pew defines low income households as those with less than two-thirds of the median annual income of the surrounding metropolitan area; high income households have more than twice the median annual income of that same area. Using the Residential Income Segregation Index (RISI), which measures the “share of lower-income households living in a majority lower-income tract and the share of upper-income households living in a majority upper-income tract,” Pew researchers noticed a key pattern. The metropolitan areas with the highest RISI score have experienced population growth from both “high wage workers and well-to-do retirees” in addition to “low-skill, low-wage immigrants.”
San Antonio is emblematic of both trends. In fact, the city’s RISI score of 63 in 2010 is the highest in the United States. Put simply, in San Antonio, rich people live with other rich people; poor people live with other poor people. As Patton Dodd explained to me, inequity is often invisible to wealthy San Antonio residents because of the distance between areas that are “opportunity rich” and those that are “opportunity poor.” Dodd is the editor Folo Media, an organization that tells stories about inequity in San Antonio (his organization entered a mission clarifying “hiatus” in Feb. 2018). “Inequity” differs from “Inequality” because the former refers to instances of societal unfairness or injustice, while the latter more commonly describes differences. As a result, the use of “equity” as opposed to “equality” is an inherently political statement from those advocating for social justice. Community stakeholders often use “equity” as a proxy in the context of racial disparities; they say that policy should not just treat everyone equally. Instead, an equity paradigm pushes for policies that create opportunities in order to remedy disparities. Dodd is an earnest east-coast transplant with a doctorate in Religion who started Folo Media to draw San Antonio residents into a conversation about inequity in their community. “If you live in Stone Oak but work downtown, you feel like you’re traveling great distances over the course of a day, but at any given point, you may be a half mile away from a neighborhood that would really surprise you in how starkly different it is from your own. But you never encounter it because you’re in your car,” he said. “Segregation is a physical isolation in San Antonio more profoundly than I’ve ever experienced before.”
As a 2017 Urban Institute report on economic segregation demonstrated, historical and market processes exacerbate inequities like those found in San Antonio. Government policies “tend to benefit people with wealth, such as homeowners who receive federal tax benefits. Even income-based policies to increase investment in cities and neighborhoods have not reduced concentrated poverty in minority neighborhoods.” The authors note that economic segregation exists because the legacy of exclusionary de jure segregation continues as a de facto condition in American cities. That means that the benefits of a city’s growth are concentrated as a consequence of the way San Antonio was developed throughout the 20th century.
In 1934 with the establishment of the Federal Housing Administration, the U.S. federal government began assigning color codes to certain neighborhoods which signaled the level of risk in parts of San Antonio and other cities across the country. An October 1935 report from the Home Owners Loan Corporation (HOLC) surveyed San Antonio’s general economic conditions and its suitability for housing developments. HOLC said that San Antonio’s “large Mexican population” was a major drawback to development. “As a class they are non-productive, socially inferior, and in times of stress, a burden upon the community. In San Antonio the large Mexican population consumes most of the attention of the police, fire, and health departments, and more than one half of families on [welfare] are Mexican,” HOLC stated. In service of different objectives, the HOLC report highlighted the trend Pew identified in 2012: both military retirees and Mexican immigrants were reshaping the city’s makeup. The year was 1935.
The trend of increasing economic inequality has become ubiquitous in modern politics. Prior to leaving office, President Barack Obama called it “the defining challenge of our time.” French economist Thomas Piketty’s 2014 treatise on inequality – Capital in the Twenty-First Century – isolated the growth of capital versus wages as the central economic dilemma of the foreseeable future. If inherited wealth grows faster than the economy and salaries, economic divides among citizens will continue to widen. Piketty argues that this dynamic will occur in the twenty first century as it did during the nineteenth, generating “arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.” Since the 1970s in the United States, the upper decile’s share of national income increased from between 30 and 35 percent to between 45 and 50 percent in the 2000s. After the 2008 financial crisis and again in the early 2010s, that figure reached over 50 percent.
Although Piketty’s analysis can explain many of the big-picture economic divides in American life, the most popular metric of inequality does not explain San Antonio’s disparities. The city’s Gini Coefficient – a score in which a “1.00” means that one person owns all of the wealth in society – is far better than most of the country’s metropolitan areas. San Antonio’s score of 0.4556 makes it the 54th least equal metropolitan area in the United States. In other words, San Antonio seems not nearly as unequal as other cities. Yet, while the difference between the richest and poorest is less in dollar terms than other cities, the Gini coefficient does not account for the physical communities that people live in.
Dodd maintained that the national debate over “income inequality” gives the public the incorrect impression that the problem is about income. As he gestured toward the window, I saw that the conference room was perched above the well-groomed Quarry golf course. “It’s much more about the broader context that people live in,” Dodd said. Although it is a problem that belongs to everyone, the city’s sprawl and car dependence ensures that residents can avoid the profound impacts of segregation on schools, infrastructure, and health. In fact, trends of unequitable investment have detrimental impacts on residents’ health. A 2016 Bexar County Health Collaborative report demonstrated that east and west side residents have a life expectancy between 70 and 74 years, while the life expectancy in the northwest and southeast is 90 to 94 years. “What San Antonio is facing is useful in the national conversation about inequality because the city paints a really clear picture that what we’re really talking about is where people live, and whether where they live is an opportunity rich or an opportunity poor environment,” Dodd analyzed.
San Antonio’s economic segregation impacts all citizens. The Urban Institute studied how Chicago’s social indicators would change if the city’s level of economic segregation was reverted to the national median. Their models predict that if Chicago were to revert to the national median level of economic segregation, Black residents’ per capita income would increase 12.4 percent and $3.6 billion would be added to the local economy. The authors also state that the homicide rate would drop an astonishing 30 percent, and that the number of both Black and White people with bachelor’s degrees would increase 2 percent. Since San Antonio’s economic segregation is far worse – its RISI score is 63 as opposed to Chicago’s 41 – a reduction in its economic segregation would have similarly positive effects for the city at large. Critically for San Antonio because of its demographic characteristics, “economic segregation and Latino-white segregation may be associated with lower incomes for whites and Latinos. Further, economic segregation may be detrimental to the incomes of all a region’s residents, regardless of race or ethnicity.” But the impacts are clearest when comparing and contrasting a few of the city’s 10 districts.
Dodd has taken residents on what he calls “windshield tours”: driving people just slightly away from their normal routes. Rather than returning to the highway after a Spurs game, for example, he took participants through the east side and demonstrated the stark differences between other parts of the city. I took a windshield tour beginning from the Geekdom co-working space and drove east from downtown on East Houston street to see how quickly the scenery changes. Within minutes, I was in the historically neglected east side, a place which many San Antonians only know because of the march to commemorate Dr. Martin Luther King Jr.’s life. I have walked the route on MLK drive, a street parallel to East Houston, each of the past three years. But every time, I return with my classmates to the isolated bubble around Trinity University. Rather than originating in extreme income inequality, San Antonio’s problems stem from the effects of residential economic segregation.
Dodd and I discussed how a Department of Housing and Urban Development (HUD) experiment demonstrated the importance of one’s context. The Moving to Opportunity (MTO) experiment randomly selected a set of families living in high-poverty housing projects to receive vouchers which would enable them to move to lower poverty neighborhoods between 1994 and 1998. Raj Chetty and other Harvard economists evaluated the impact of moving to lower-poverty areas by examining HUD files and federal income tax returns in 2015. They discovered that children who move when they are younger than age 13 have an income that is 31 percent higher in their mid-twenties than their peers who did not move. Children who moved with their families to a lower-poverty area were also more likely to attend college. “Efforts to integrate disadvantaged families into mixed-income communities are likely to reduce the persistence of poverty across generations,” Chetty explained. However, the economists note that their findings do not support residential relocation for adults; targeting housing vouchers to families with young children maximizes the benefits to taxpayers because “gains from moving fall with the age when children move.” But most cities cannot afford to move residents and instead turn to place-based strategies to improve outcomes for residents. Those strategies, while creating material improvements, maintain distance and the isolation of city residents from each other and the economic growth San Antonio enjoys.
Startup San Antonio
And yet, San Antonio is a mirror of the state’s immense growth. Texas at large was ranked as the 6th most dynamic state economy in 2017 by the Economic Innovation Group, meaning that it enjoys high rates of business formation, workforce mobility, and favorable labor market conditions. Perhaps as a result, San Antonio’s startup scene is flourishing. The Ewing Marion Kauffman Foundation’s 2017 index of growth entrepreneurship measured several aspects of entrepreneurial ecosystems in cities across the United Sates. The Kauffman Foundation, the premier non-profit focusing on entrepreneurship, discovered that San Antonio is one of the best cities for growing a business quickly. It is tied with Columbus, Ohio, for the highest share of companies that scale-up (the number of businesses that began small, but grew to employ at least 50 people before they turned 10 years old). The data indicate that approximately 25 of every 1,000 firms in San Antonio achieved a comparable level of prosperity. The city has new access to investment from venture capital firms Alamo Angels and the Geekdom Fund, workshops such as Startup Grind and 1 Million Cups, and a new growth of co-working spaces like Geekdom. Geekdom is located on the seventh floor of the Rand Building – a short walk from city hall – and sports an open area for collaboration, private offices, and conference rooms equipped with soundproofing foam. New companies at Geekdom are vying for prominence in San Antonio’s conducive environment to build a sustainable startup. In April 2018, Geekdom announced that it is launching a pre-accelerator program to prepare local startups for investment and connect them to San Antonio’s extensive entrepreneurial network.
“San Antonio has grown immensely. Now it is a city with movement. 10 years ago, it was at the beginning stages and now you see construction where we are and a lot of vibrancy,” Magaly Chocano said. Chocano is the Spanish-born founder and CEO of Sweb Development, a creative website firm that she bootstrapped in 2008 after a career in advertising. Chocano launched her company two months after the launch of Apple’s App Store. Sweb’s office is in a renovated auto shop south of downtown. The space’s grey brick complexion and sleek conference room surrounded by an open floor plan give clients a sense of business prowess combined with an inventive flair. In years past, Chocano has relied more heavily on national clients. Today, local companies have more demand for Sweb’s services. She explained to me that her business has grown as a result of the increase in San Antonio companies with a need for cutting edge web development services. Chocano’s firm has helped the city become an ecosystem ripe for creative destruction in all industries.
“Nothing in San Antonio, in my mind, has been 100 percent spoken for. If you want to build it here, you can find your way to the top,” Ryan Salts, the Director of Launch SA, told me. The city’s economic development office created Launch SA in 2014 to serve as a community resource for entrepreneurs. Located in the downtown public library, Launch SA’s colorful space and glass-enclosed offices gesture toward its mission to democratize the entrepreneurial process. They support local startups through mentoring, a venture competition, and a place to pitch to the community on Wednesday mornings, among other programs (Last year, I was invited to pitch The Contemporary in the space during SA Startup Week). Salts noted that companies are moving from other cities to take advantage of San Antonio’s friendly atmosphere for regulation.
For example, the City of San Antonio offered Easy Expunctions undisclosed incentives to move from Austin to San Antonio. The company leverages technology to help clients clear their criminal records. In Texas, people can expunge – which means to seal and destroy – records if they were neither convicted nor required to receive community supervision. The company helps people wipe such records from background checks and is growing rapidly. As the San Antonio Business Journal reported, Easy Expunctions’ revenue recently doubled and the company may employ up to fifty workers in San Antonio. On April 17, 2018, they won $100,000 from Austin-based Capital Factory, a technology entrepreneurship accelerator. Easy Expunctions hopes to spread to all 50 states – it is currently active in six – and use its technology to expunge records from dozens of municipalities. Another technology company, Funnel AI, left Austin for similar reasons as Easy Expunctions. The artificial intelligence marketing company moved to escape a saturated startup ecosystem and find coding talent in San Antonio. Inside Funnel AI’s office in Geekdom, its founder, Sri Kamma, described to me how the company uses natural language processing to help connect businesses to prospective customers. As a result of the Students + Startups program I will be working for Funnel AI as its marketing intern this summer.
Students + Startups, a program that Trinity University and San Antonio’s 80/20 foundation created, is a tenant of the San Antonio startup community that is simultaneously spurring growth and economic divides. According to leaders of Students + Startups, the 80/20 foundation is concerned about losing talented young people to other cities. The program provides Trinity students with the opportunity to intern at a local startup during the summer and is intended to help build connections between Trinity students and startups in order to keep those individuals in San Antonio. Trinity University’s campus is perched north of the San Antonio skyline. It is a small liberal arts school adorned with consistent mid-20th century architecture and red bricks, a billion-dollar endowment, and a secular character despite its name. Students are aware that they live in “The Trinity Bubble”, but are often unaware of the phrase’s meaning in the context of San Antonio’s geography of inequality.
72 students competed for positions with 36 startups in a variety of industries at the Students + Startups speed interview night in Feb. 2018. In the poorly lit space often used for elite donor luncheons and special events at Trinity, students pitched their skills to the new engines of economic growth in San Antonio. Students stood on the outside of the room decorated with strange seemingly medieval relics before stepping into the fluorescently lit field of tables. The event was a clear microcosm of the city’s economic divide; opportunity was concentrated and only accessible to an elite group in the north-central part of San Antonio at a private university. Trinity University’s Stumberg Venture Competition evokes the same level of privilege. Twice annually in a futuristic cube-shaped room filled with university community members, locals, and media members, students pitch nascent business ideas. Winning $5,000 for a concept takes only a five-minute pitch and business plan presented to local entrepreneurs. Winners have the opportunity to develop their idea over the summer while being paid a stipend and receiving free housing. There are no credit checks or loans to repay; the competition takes zero financial share in the company; unlike businesses that struggle year upon year to access capital, the new student ventures are funded overnight. I know this because my company, The Contemporary, is a product of that very process and the “paradox” of entrepreneurial growth and inequality.
Molly Cox, the President & CEO of SA 2020, noted that the “paradox” that her organization has identified between entrepreneurial growth and inequality requires recruiting investments from outside the city while building the capacity of homegrown talent. SA 2020’s goal is to align nonprofits, city government, and corporations with the same goals to improve San Antonio’s competitiveness and overall indicators. “SA 2020 works in a theory of change that if everyone figures out the outcomes they are specifically responsible for, it allows us to start figuring out that continuum of care,” Cox said. In other words, SA 2020 helps organizations act efficiently upon the challenges they have already identified.
SA 2020 is an influential organization providing expertise and building consensus in a divided community. But why does this organization and other actors in the community development space describe San Antonio’s great divergence as a “paradox”? Merriam Webster’s defines a “paradox” as “a statement that is seemingly contradictory or opposed to common sense and yet is perhaps true.” Yet, the city’s great divergence seems to be the consequence of clear decisions city leaders have made over time. Was San Antonio designed to accrue benefits to the white and wealthy while segregating poor people of color away from the chance to create wealth? Economically distressed communities that provide cheap labor and live near booming business is often a symptom of capitalism. San Antonio relied on communities like “Cementville”, a settlement of Mexican-American workers for Alamo Cement, and other immigrant communities for production. The children of those workers were educated on-site in the “Bluebonnet School” instead of the mostly white Alamo Heights district nearby. Completing the cycle, “Cementville” is now called “The Quarry” and home to a new development of chain retail brands. Rather than considering whether present conditions are a “paradox”, city residents should ask themselves whether San Antonio’s booming startup ecosystem exists despite its history of exclusion, or because of its history of exclusion.
The stark differences between District 5 and District 9 correspond with the city’s unequal history and exemplify the high rate of economic segregation. While District 5 is in the south-west side of the city, District 9 sits in the north-central part. However, the districts are opposites in far more than geographical terms. As I drove north on San Antonio’s central artery – U.S. 281 – I noticed the proliferation of big box stores, new white concrete, and sprawling office building industrial complexes. The green lawns are well maintained and signs of capitalism are brightly lit. On the sunny Monday morning that I visited, area residents – 54.6 percent of whom are White (the highest proportion of Whites in any district) – were driving to work in their cars that both connect and isolate them from the city. Only 3.1 percent of District 9 is unemployed; an astounding 51.2 percent earned a Bachelor’s degree or higher; only 8 percent live in poverty. District 9 Councilman John Courage’s cramped field office (as opposed to the one in city hall) is in a corporate feeling building owned by the city’s quintessential institution of wealth: Frost Bank. Like its residents, the office is located far away from many of the city’s most vexing issues. At the end of a dark hallway sits a space decorated with technicolored photos and a technocratic map of the city. I waited for the Councilman’s previous meeting about the Via bus system in his district to end. “Hi, I’m Councilman John Courage,” he said to me as I stood to shake his hand. Courage is a retired teacher and a veteran of the air force whose comportment is half community sage and half political operator. Courage described that he has lived in many different parts of San Antonio and recognizes the disparities that have existed for many years. “There has been more than enough growth in our area but there’s not enough growth in many other parts of the city, whether it’s the south side, east side, or the inner city. That’s what I’m trying to promote more,” Courage told me as his communications director Zack listened in. “We are one city,” he insisted. The councilman says that he encourages developers to “build elsewhere” in order to create a more “equal type of growth in the city.”
The legacy of redlining is a major challenge to city council members like Courage who work to mitigate generational poverty. Children are especially vulnerable: the Equality of Opportunity Project discovered that children who grow up in the San Antonio metropolitan area instead of an average place make around 10 percent less income at age 26. “Economic segregation is a natural result of disinvestment in inner city communities,” Jackie Gorman from San Antonio for Growth on the Eastside said. She stressed that little public investment leads to developers not choosing to build as a result of crumbling infrastructure, a trend Courage says he is trying to reverse. As a result, property tax revenues decline and create poor school facilities and the perception of poor school performance. Residents then move to the outskirts of the city and take their money with them. “That perception perpetuates itself and becomes a reality and you get this circle that is a never ending cycle. It really starts with a lack of public investment in a community,” Gorman argued. The cycle of disinvestment becomes clear when comparing the north-central District 9 to the south-west District 5.
District 5 has over twice District 9’s unemployment rate. While over half of District 9’s residents have a Bachelor’s degree or higher, only 6.6 percent have that same level of education in District 5. The divergence begins at schools like Storm elementary in the San Juan neighborhood where the Ogbas live. The school’s high fences exist on the other side of the train tracks, only a half-mile away. Redlining policies entrenched socioeconomic segregation that isolated schools like Storm from crucial resources. With 18 independent school districts, San Antonio’s benefits are even more concentrated in wealthy areas. Economic segregation amplifies those disparities because lower property values translate to fewer resources. Moreover, over one in three people in District 5 live in poverty, a rate over four times higher than its counterpart to the north. When I asked District 5 Councilwoman Shirley Gonzales how policymakers should view the city’s uneven entrepreneurial growth, she said that District 5 is very entrepreneurial but her constituents often have trouble scaling-up their businesses. As we spoke in her city hall office, she asked several clarifying questions in order to narrow our conversation’s focus. “I think that the Latino community, especially in a neighborhood like mine, is very entrepreneurial. They start businesses all the time, they’re just not businesses that necessarily get a lot of recognition. If you go start another tacquería or another frutería, or open a barber shop, or a car wash, or you start cleaning houses, people don’t necessarily think of it as entrepreneurial,” Gonzales said.
Ryan Salts from Launch SA summarized the implications of Gonzales’ comment for San Antonio at large. “If you look at San Antonio as an ecosystem, you have half of the city that functions like a north Texas business. Maybe a white collar, thought related business? Then you have the other half, and there may be a geographical divide, that functions more like a south Texas business. What I mean by that is that it’s probably more trade related,” Salts said. He qualified the comment by stating that a colleague had identified the division, and that he was simply repeating a common view in the business community. Gonzales owns and operates a pawn shop which she has had trouble expanding because of city building regulations, a factor that she says inhibits growth of businesses in her district. Another challenge for District 5 is its lack of Class A buildings – new office buildings – for companies to use. As a result, companies cannot move into modern offices without building for themselves. Those impediments to business growth also mean that “once people have done well for themselves, they leave,” Gonzales lamented. The councilwoman told me that city leaders should prioritize reforms that facilitate business growth.
Inequality and City Policy
The city’s leaders have taken note of the stark inequalities between places like District 9 and 5 and have begun to take steps to mitigate a variety of community disparities. In 2013, the city council passed a non-discrimination ordinance which added sexual orientation and gender identity as protected classes in the city. The ordinance’s passage was followed by the creation of the Office of Diversity and Inclusion. More recently, the office was renamed the “Office of Equity” and has focused on promoting equity city-wide while also continuing its previous work: creating respect for the city’s diverse residents and administering the non-discrimination ordinance. However, its leadership is currently in flux. The city’s first Chief Equity Officer, Kiran Bains, announced her resignation from the office in an email to stakeholders on April 6, 2018 after her nearly three-year tenure. “Building off the foundation laid with nine departments and seven high-impact initiatives this year, the City is well positioned to continue the work,” Bains wrote. During the Taylor years, Bains guided the office in the face of bureaucratic challenges with the Mayor’s administration and began to promote equity as a framework for city policy. People familiar with the situation said that Taylor viewed Bains’ office as a politically biased organ of city policy intended to discredit her because she had voted against the non-discrimination ordinance as a Councilwoman. Bains’ resignation means that the city has lost one of its most vocal and institutionally knowledgeable advocates of equity.
In addition to enforcement of non-discrimination laws, the city’s non-profits and economic development office have a respectable array of programs designed to democratize entrepreneurial growth for San Antonio’s diverse population. For instance, SAGE makes investments to help east side businesses grow and mitigate the generational wealth gap in minority communities. For every $10,000 SAGE invests, they require the business to create one new job. At least 75 percent of the new jobs must go to low income individuals. In addition, Liftfund provides access to capital to minority entrepreneurs, while the city government’s economic development office has a similar program to grow minority-owned businesses. That office has also created a database – a “central venture registry” – to facilitate minority-owned businesses’ attainment of city contracts. Michael Sindon, the Assistant Director of the office, emphasized that they hope to use the city’s purchasing power to lessen disparities.
One instrument of the city’s purchasing power is its budget. In Sept. 2017, the City of San Antonio approved a $2.7 billion Fiscal Year 2018 budget with a stated goal of increasing the city’s equity. Sheryl Sculley, the City Manager with authority over the budget and more than 12,000 city employees, explained the new strategy in a letter to the San Antonio City Council and Mayor Nirenberg. While “equality involves ensuring all parts of the community receive similar amounts of resources regardless of need”, the new budget’s “equity approach [allocates] new resources to areas in need,” Sculley explained. In other words, the city government’s budget through an “equity lens” aims to acknowledge the structural disparities that San Antonio’s distressed communities face. The extent to which the city redistributes resources is limited to infrastructure improvements and various community programs. A $35 million increase in street funding will be concentrated in Districts 1, 2, 3, 5, and 10 with streets rated lowest on the city’s scale. Also, the budget allocates an additional $10 million to VIA Metropolitan transit to increase the frequency of 10 routes.
Last year, then District 8 Councilman Ron Nirenberg campaigned against incumbent Ivy Taylor on a VIA funding increase, telling me in Jan. 2017 that new and more frequent routes are critical for people who rely on the bus system. Nirenberg unexpectedly defeated Taylor, a fiscal hawk and social conservative, to become Mayor of San Antonio in the summer of 2017. He described persuading his constituents, people on the north side who are scarcely affected by the bus system, of the increased funding’s importance (his communications director called after the interview to ask me not to include the specific neighborhood). “Mothers [on the south side] are spending an hour and a half to two hours a day trying to get to school and work,” Nirenberg said. “By the time they get to work and come back, their kids are asleep and they don’t have time to work on homework with them. It’s a problem for the entire community because that’s what holds back our progress in economic development and community wellness.”
Other aspects of the budget intended to promote equity include $400,000 for the “Let’s Paint” program in District 4 and 5, $1 million for the “Under One Roof” program in District 1, 2, and 4. The city will also add $400,000 to the Northeast Corridor Façade Improvement Program. The façade program is similar to San Antonio for Growth on the Eastside’s storefront grant program, a city funded project that provides funds to businesses on the east side for exterior renovations. Finally, the budget written through an “equity lens” allots $789,000 for eight San Antonio Fear Free Environment (SAFFE) Officers that will be assigned to certain neighborhoods. The officers will serve residents by working with schools, youth programs, and acting as liaisons for city agencies. Ogba argued that the new approach is needed, but was skeptical that officials would follow through with the new policy. “Yes the funding is being diverted, but it’s not a matter of funding, it’s a matter of delivery. I don’t think it’s going to be fast enough. I see it on my streets – South Laredo and I-35, they had been given 6 months to fix the road, but it has been a year and a half,” Ogba said. Like Ogba, the city council members noted that reforms to mitigate structural inequalities will be a long process.
“As it took many years for the disparity to develop, it’s going to take a few years to create more equity in the process of helping redevelop and support those areas of town that need it more,” District 9 Councilman Courage explained to me. Courage is a progressive in a historically conservative district; his opponents split the Republican vote in 2017 to give him the victory. As the San Antonio Express News analyzed, “Courage is banking on the idea that ideology is national, and partisanship diminishes the more you zero in on neighborhood concerns.” He defended the equity budget as a measure that simply allocated “excess” funding to areas in need, rather than a redistributive effort that took away from his constituents. “If we’re improving one or five areas of the city, it really lifts the overall benefit to everyone in the city. You may not see it in your paycheck or your budget, but it improves everyone’s quality of life,” Courage said. District 5 Councilwoman Shirley Gonzales confirmed that funding levels in Fiscal Year 2018 did not decrease for any particular district. The city did not need to take away from certain areas because they could spend bond savings. Those savings will only exist during the current budget cycle; however, Gonzales wants to continue the equity budget’s method of applying additional funding to areas in need after the bond savings run out. “It absolutely should continue because it’s sustainable for the long term financial sustainability for our city,” the councilwoman said, explaining a recent report’s conclusion that development in the urban core is more affordable and beneficial to the city. The imminent debate over redistribution will clarify the city’s priorities. It is unclear how far the “equity lens” will reach, and if the city can sustain its current efforts.
San Antonio is the most economically segregated city in the United States. That fact exists regardless of whether one believes that its prosperity is despite or because of the city’s history of exclusion. As I spoke with various stakeholders in San Antonio’s communities, it became clear that the question hovering above San Antonio’s divide is a question of how far an “equity lens” can and should go to mitigate community challenges. Capital in the Twenty-First Century, via its advocacy for a global tax on capital and an expanded social welfare state, argues that social inequalities are acceptable “only if they are in the interest of all and in particular of the most disadvantaged social groups.” As Piketty noted, the central tension “of any rights-based approach [is]: how far do equal rights extend?” The way San Antonio residents and government policy react to the city’s inequities will answer Piketty’s question. The French economist’s position is not necessarily anti-capitalist – in fact, he derides the “lazy rhetoric” of anti-capitalism – but it is sure to lead to policies that are likely outside the realm of political possibility in many places. The “equity lens” debate in San Antonio assumes capitalism as a given, and therefore, the city’s solutions to the great divergence between growth and inequality have leveraged traditional tools to remedy disparities. Those policies and processes are then experienced by business owners and prospective entrepreneurs.
The Ogbas and Bethany East PR have an unusual story of prosperity. They moved to take advantage of what they saw as an opportunity in an overlooked, historically neglected community. They are succeeding despite San Antonio’s exclusionary history. However, few growing businesses are moving to places like District 5. Successful people and ventures often move out, widening the city’s great divergence. Perhaps a sustained city commitment to equity will allow the benefits of entrepreneurial growth to become more accessible to all San Antonio residents. For that to occur, the efforts of economic development stakeholders must be paired with the multiple community layers that contribute to growth. Achieving equitable development will not only involve implementing opportunity zones – disadvantaged city regions where venture capitalists receive tax benefits to invest – and increasing access to capital for minority entrepreneurs. Equitable growth for San Antonio’s residents is a matter of the broader context of housing, healthcare, and education. Unfortunately, concentrated wealth creation that comes from entrepreneurial success is merely symptom of nearly a century of policies and social forces that have been at the expense of San Antonio’s most vulnerable residents.
Benjamin Collinger is a junior History and International Studies major from Trinity University. Benjamin is the Editor-in-Chief of The Contemporary.
The views expressed in this article are those of the writer. The Contemporary takes no position on matters of policy or opinion.
The cover photo was taken by Victoria Uribe for Folo Media and used with permission.