The Teller Window
A view into the work of the New York Fed

« | Main | »

June 8, 2020

From Equitable Growth to Equitable Recovery

In recent years, the New York Fed’s community development team has focused on solutions for equitable growth — or economic development that aims to maximize resources for underserved neighborhoods, residents, and institutions. The goal has been to identify ways to raise living standards and create shared prosperity in Second District communities. With the coronavirus pandemic, that focus has now shifted.

The health crisis has inflicted severe economic damage and has exposed inequalities in social safety nets. COVID-19 also has disproportionately affected low- and moderate-income populations and communities of color. All told, the disparate effects of the health crisis on vulnerable communities have brought greater urgency to this work — especially in the context of a recession. Here we will look at potential tools, strategies, and opportunities to support an equitable recovery from COVID-19.

Data and Assessments to Drive Decision-Making

Over the last 12 months, we convened four listening sessions in a series called “Strategies for Equitable Growth.” At these events, leaders of various nonprofits, foundations, and community groups — along with policymakers and academics — discussed best practices and tools to create inclusive economies in both rural and urban areas of the Second District. Participants expressed concerns about the adverse impact of gentrification and displacement risks for low- and moderate-income residents and people of color.

Some of those with whom we spoke felt limited in their capacity to support tenants, workers, and minority-owned small businesses because of a lack of real-time data on the housing market and other areas. Many participants asked for research that merges quantitative analysis with the real-life experiences of residents in the areas of housing, health, racial equity, small business, and financial insecurity.

To help promote an equitable recovery from COVID-19, researchers could assess how vulnerabilities worsen in a recession, and how vulnerable communities experience public health shocks. If these assessments use common variables (such as labor force nonparticipation, SNAP use, excess deaths, and shootings) and causal factors (housing instability/overcrowding, disease exposure risk, ineligibility for governmental assistance), they might provide a clearer sense of where resources are needed and help researchers to forecast gaps. Then, public- and private-sector institutions alike could target programs and investments at neighborhoods in need.

Social Determinants of Health and Housing

The pandemic’s shelter-in-place directives have underscored the importance of stable, affordable housing. Health outcomes are strongly correlated with environmental pressures and resources, and many environmental stresses are connected to housing — including cost, conditions, terms, and location. When faced with housing-related stress — whether because of overcrowding or lost income — households begin to see health issues emerge alongside economic instability. These effects are magnified in the context of both a pandemic and a recession.

The disproportionate devastation the pandemic has brought upon African Americans and other communities of color is likely due to these preexisting social determinants of health. Put another way, those who are at greater risk of negative health and economic outcomes are even worse off during a crisis. Focused research in this area can help identify specific factors in people’s lives that contribute to disparate risks, and can inform policies to reduce those risks in the future.

Building Wealth and the Nonprofit Ecosystem

COVID-19 has adversely affected workers, renters and homeowners, minority business owners, and nonprofit organizations, among others. Immediate challenges include unemployment and loss of income, problems related to childcare and healthcare, financial shortfalls for nonprofits, and a lack of access to capital for small and minority-owned businesses. For many, economic and housing-related vulnerabilities can quickly become health vulnerabilities.

Therefore, in focusing on an equitable recovery, it’s important to consider a few tools that have been successful in increasing equity and stability in communities by preserving affordability and helping build wealth. These tools are also effective in bringing community-led decision-making to the table.

Master leases are one mechanism nonprofit organizations can use to combat displacement and preserve affordability. Through such programs, nonprofits own mixed-use commercial and residential space and have the ability to lease to small business owners at affordable prices and smaller footprints. Another example is community land trusts, which are designed to ensure community stewardship of land and long-term affordable homeownership. In both cases, nonprofits work directly with community members to increase economic equality by building wealth and locking in affordability. Such tools can continue to play a role in supporting vulnerable populations amid the recovery.

That said, the coronavirus pandemic has strained the nonprofit sector, causing increased demand for services and significant financial shortfalls. Driving capital to nonprofits in the immediate future will not only help marginalized communities recover but also promote community-led development.

Energizing the Private Sector

Private-sector investments and collaborations with nonprofits have supported greater equity in underserved communities. One example is investment in transportation. COVID-19 has underscored the importance of equitable and reliable transportation in getting essential workers to their jobs. In our listening sessions, we heard concerns about how transportation deserts contribute to racial and economic segregation, both in cities and in rural communities. To fill gaps that are not addressed by progressive urban planning and transportation policies, some private sector entities have come up with innovative ways to transport workers to their jobs and have contracted with hotels to keep workers overnight or on a temporary basis. In the COVID-19 recovery, private-sector firms could be motivated to invest in areas such as transportation to support essential workers and increase equity.

Looking Ahead

The New York Fed will host future dialogues and policy series around these topics as part of its continued focus on equitable recovery. On June 11, members of the public are invited to join “The Fed and Main Street: Immigrant Experience during COVID-19,” the third installment in a series discussing the effects of the pandemic and efforts to support the recovery. Later this month, a program will focus on the impact of COVID-19 on housing as part of an upcoming policy series.

For more about the New York Fed’s efforts to understand economic inequality and what can be done to address it, see Economic Inequality & Equitable Growth. For more on the Rutgers Center on Law, Inequality and Metropolitan Equity, see Rutgers CLiME.

This article was originally published by the New York Fed on Medium.

The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.


The Teller Window is a publication featuring expert knowledge and insight from the New York Fed, including thoughts and perspectives from senior leaders. It offers a deep look at issues that matter to the Federal Reserve’s Second District and the nation.

Articles on the Teller Window focus on the people and programs that help the New York Fed support the U.S. economy. They are written for a wide audience with the aim of illustrating what we are doing and why it matters. Stories include editorials, interviews, explainers, and reports on events and trends in our communities and region. The Teller Window is edited by the Communications and Outreach Group on behalf of the New York Fed. Separately, for analysis from New York Fed economists working at the intersection of research and policy, please see Liberty Street Economics.

The New York Fed began publishing on the Teller Window in November 2022. Articles with dates earlier than November 2022 were originally published by the New York Fed on Medium.

Step up to the Teller Window to learn more about the New York Fed’s work and views.