incentives-and-equitable-economic-development

There are literally thousands of state and local incentive programs, many of which are – at least on paper – intended to help people in need or places that have been left behind. Here are several ways in which incentives are designed to achieve the goals of inclusive and equitable economic development.

People-based strategies

The Policy Agenda for All-In Cities from PolicyLink proposes several strategies for equitable economic development that can be connected to incentive policies, programs, and practices. A set of those strategies is intended to encourage activity to create good jobs and connect residents to those jobs through workforce training and local hiring practices. Incentives are often expected to achieve just those objectives. 

• As we’ve written, jobs are one of the dominant indicators states and local governments used to assess incentive program performance.
• Incentives often have wage requirements (frequently variable by location) or benefits standards in the application stage to determine eligibility or for scoring purposes. 
• Some local incentives (especially those aimed at redevelopment) have procurement or purchasing goals built into the contract to provide opportunities to local businesses, often focused on minority or women owned enterprises.
• Economic development organizations are increasingly focused on implementing sectoral or company-specific workforce development & training programs and apprenticeships. These efforts frequently emphasize bringing in un- and underemployed workers. There are many state and local incentive programs designed to make the connection between people in need of training and a better job and open positions with companies.

Place-based strategies

Other equitable economic development strategies emphasize place and include creating opportunity-rich neighborhoods and building resilient and connected infrastructure in underserved neighborhoods.

• Many local incentive programs are designed to encourage development and redevelopment, especially in “blighted” neighborhoods in need of fresh investment.
• Statutes and guidelines for programs such as tax increment financing (TIF) often explain that their intent is to improve underserved, distressed or blighted neighborhoods. It is clear that many of the programs are meant to generate public benefits such as community amenities (such as parks and schools), increased services (like grocery stores), and upgraded infrastructure, as well as to increase real estate investment and grow the tax base.

As I say often, smart incentive use is not about completing a deal, but achieving our community’s economic development goals.  Given incentive program design, we can often make a clear case for deploying those incentives to serve equitable economic development objectives.