Flawed delivery of Historically Underutilized Business Zones (HUBZone) funding from the government has exacerbated food insecurity in D.C. Hundreds of millions of dollars in federal contracts were awarded to D.C. businesses enrolled in the HUBZone program from 2000 to 2018, but the use of outdated and unadjusted data allowed businesses in wealthy areas to qualify for more than $540 million in federal contracts. The Post found that the program used data from 1999 to designate poverty levels for 16 years, a method that failed to account for D.C.'s economic expansion or the inflated poverty levels seen in areas with large populations of college students who have little to no income.
Despite rapid economic development in D.C. from 2010 to 2020, Wards 7 and 8 lost four of their seven full-service grocery stores. In that same period, Wards 1, 2, 3, 4, 5 and 6 gained a total of 37 grocery stores. Worse, this occurred after the passing of the 2010 Food, Environmental and Economic Development in the District of Columbia (Feed DC) Act, which was designed to incentivize new grocery store development. The act’s grocery store development program was intended to provide grants, loans, federal tax credits and a flexible amount of technical assistance for eligible grocery stores that applied. In practice, the program has largely failed: No new grocery stores opened for 15 years, between 2000 and 2015, in the highest-need areas of Wards 7 and 8.
Additionally, included in the Feed DC Act is the qualified supermarket incentive, which provided $29 million from 2010 to 2017 for grocery stores to receive tax-exemption benefits for up to 10 years after development. Between 2010 and 2015, of the 22 stores that received incentives, only two were located in the highest-need areas of Wards 7 and 8, and one of those closed soon after opening.
And here lies the problem: Tax-incentive programs do not work. They do not adequately address the community needs of Wards 7 and 8 and, instead, have exacerbated existing food insecurity. According to the DC Fiscal Policy Institute, tax incentives offset only 1.8 percent of business costs. It is unlikely that disadvantaged communities would incentivize, let alone sustain, businesses based on this small percentage. The majority of claimed credits promoted supermarket growth in wealthier areas, such as Wards 1, 5 and 6.
Furthermore, tax incentives are written into the tax code, making it difficult to oversee and review them. Until 2015, D.C. had no formal process for reviewing adopted tax expenditures and did so without assigning any D.C. government agency to monitor their impact. Moreover, D.C. tax incentives do not include stipulations for clawbacks — recovery of disbursed money — if a company takes the incentive but does not deliver as agreed, causing limited government funds to be squandered.
With only three full-service grocery stores in Wards 7 and 8, serving more than 160,000 residents, community members are forced to rely on corner stores and fast-food restaurants that offer low-cost but unhealthy food options. The coronavirus pandemic has intensified disparities in access to nutritious foods in Wards 7 and 8, with food insecurity rates nearly doubling between February and May 2020, from 10.6 percent to 21.1 percent. To support residents who have limited funds, transportation options and time, several community-based interventions have been established.
One organization, D.C. Central Kitchen, seeks to promote food equity where the D.C. government has created inequity. Through D.C. Central Kitchen’s Healthy Corners program, sustainable partnerships are made with convenience stores and other local businesses to offer affordable fresh food. The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) in D.C. is also partnering with the program to expand food access for WIC-eligible families in Wards 7 and 8, where more than half of the population is WIC-eligible.
As health advocates, we call on D.C. to make the construction of full-service grocery stores in Wards 7 and 8 a priority, to take responsibility for the inequities caused by the HUBZone program and the Feed DC Act of 2010, and to commit to increased transparency in funding food equity initiatives in Wards 7 and 8.