Last month, ESI President and Principal Lee Huang sat down with Senior Advisor and former Philadelphia City Councilperson W. Wilson Goode, Jr. to discuss the state of equity and inclusion in filling city contracts. As a member of city council, Goode, Jr. was instrumental in creating initiatives to boost participation from underrepresented groups in city affairs. Read their conversation below.
Can you describe your first experiences around MWDBE goal-setting while as a City Council Member?
Cities need to develop a serious approach to supporting an inclusive economy through government spending. During my first year in office, the City was considering legislation regarding the
build out of Lincoln Financial Field and Citizen’s Bank Park. As a freshman councilperson, I was able to weigh in on it, however at the time, there was no current disparity study to point to and assess utilization of Minority, Women, and Disadvantaged Business Enterprises (MWDBEs). A study was initiated in 1998 but not yet completed, so the City’s stadium legislation couldn’t be based on any up to date and precise goals. Rather, it had to be driven more so by aspirational targets.
Eventually, Bill #030125 was signed into law in 2003, however a year later in 2004, the prevailing legal opinion was that council exceeded its authority to pass such legislation. After questioning during budget hearings and session hearings, the only way to implement the signed law was through a charter amendment, which I introduced – and it was approved by a supermajority of City Council and the voters through a ballot question.
In your view, how should DBE participation goals be leveraged to offer more opportunities for public contracting?
Disparity goals shouldn’t stop at billion-dollar investments like stadium builds, but instead they should be interwoven into all aspects of a city’s procurement and investment strategy. In Philadelphia, we have tended to look at large-scale projects to advance certain policies. From the stadiums to the convention center, to Mayor Kenney’s Rebuild initiative. In my opinion, I don’t believe these project-based efforts should be our primary way at addressing utilization matters, but they absolutely present a good opportunity to highlight the issues at hand.
What do you think city government levers are to affect availability? What can the City of Philadelphia do, and what should it do to grow capacity?
The City can do more when it comes to prime contracting with minority and disadvantaged businesses. The City sets overall participation goals, however majority-owned contractors are essentially
left to make best faith efforts to create opportunities for diversity. So, on some level, the City does not make any immediate decision on the diversity of subcontractors selected to participate at the bidding level and which entities are in the running for public projects except through goal-setting.
How can we create an inclusive entrepreneurial ecosystem if lending discrimination persists, particularly for African Americans? And without access to race-based data for business lending, how do we remedy discrimination?
The City needs to set the tone in terms of policy and investment. How can we create an inclusive ecosystem if lending discrimination occurs on any level? Match-paired mystery shopping has been one way of examining this issue on a national level where we can show that Black business borrowers are treated differently. The National Community Reinvestment Coalition has performed research in several cities and found that on average, Black borrowers received more examination of their business and questions about family income, while also receiving fewer resources and information from lending institutions.
We can create a better entrepreneurial ecosystem – but I don’t believe that we can call it “inclusive” without directly addressing such racial discrimination. We know that there are higher home loan denial rates for African Americans in areas where there are lower self-employment rates, in such places like Philadelphia, Pittsburgh, Baltimore, Detroit, Chicago, New Orleans, and Memphis. Systematic and historic differences in access to capital to buy a home make it inevitably harder for those to start businesses. Typically, our homes are our biggest asset on our balance sheets.
The City’s standpoint should be to look at disparities in terms of business and other lending, but also making it a point to focus substantial time toward investing in solutions to those problems, such as loan guarantee funds, special programming with banking institutions, CDFIs, and strengthening housing subsidies as examples.
Increasing self-employment rates and building up capacity in Black and Brown communities is good for the City as a whole. If policy leaders want to grow the economy, this is a good way to do it. Access to capital is incredibly important. There’s also no way MWDBEs can scale and grow without private sector procurement opportunities. The public sector measuring its spend is good, but how do we broaden the conversation to springboard businesses into accessing private sector contracting to generate revenue and scale up.
W. Wilson Goode, Jr. is a public policy advisor who served as a Philadelphia City Councilman At-Large from 2000 to 2016. Mr. Goode graduated from the University of Pennsylvania and did Graduate Studies in Policy Design and Delivery at Harvard Kennedy School. When Mr. Goode served on the Philadelphia City Council, he was the primary sponsor of over 145 ordinances including: budget appropriations; revenue increase for public education; civil service preference for local residents; living wage and benefits standard for City-supported employees; labor peace requirement for City airport and City-supported hotels; annual economic disparity analyses; diversity goals for city contracting; fair lending plans and community reinvestment goals from depository banks; contract enforcement of economic diversity; reduction of the business gross receipts tax; business tax credits for job creation and investment in neighborhood economic development; as well as landmark legislation enacting the only campaign contribution limits for municipal elections in Pennsylvania.
Lee Huang brings over 20 years of experience in economic development experience to ESI public, private, institutional, and not-for-profit clients. He leads consulting engagements in a wide range of fields, including higher education, economic inclusion, environmental sustainability, historic preservation, real estate, neighborhood economic development, non-profits, retail, state and local government, strategic planning, tax policy, and tourism/hospitality, and is a sought-after speaker on these and other topics.