Economic Development

Economic development is an area of almost limitless possibility for reform and improvement for cities. The vast majority of city economic-development dollars are currently spent inefficiently, subsidizing development that would have happened anyway and receiving little return in local economic benefit for those investments.


Cities too often pursue low-road economic-development policies. They compete against each other to see which locality can provide the greatest subsidy and the most favorable development terms for large national corporations, which stay as long as the subsidies keep flowing before pulling up stakes for the next locality.


There is a better way. The truth is that the kind of companies that cities really want to attract—those that create quality jobs and will not offshore their operations at the first hint of trouble—rarely make location decisions based on the availability of subsidies. These decisions are instead based on access to infrastructure, the quality of local human capital, supply chains, markets, and quality of life for their employees.


So rather than spend increasingly stretched local resources by throwing subsidies and tax incentives at multinationals, local governments should pursue high-road economic-development strategies that attract and build stable, sustainable local economies.


They should map their regional economy to locate areas of potential competitive advantage and develop those areas with the aid of more efficiently organized places. They should modernize and make their local infrastructure and transportation networks more efficient. They should cultivate and strengthen their human capital, enhancing the skills of the local workforce in ways immediately relevant to the region’s best employers. They should concentrate on growing local, place-based businesses rather than pursuing national chains. And they should focus on capturing the value of all of the above locally and sharing it broadly, deeply anchoring these firms in neighborhoods, local supply chains, and the broader community.


Value-Capture Strategies

Value capture essentially means capturing the increase in property value that flows from a public investment. Used wisely, value-capture strategies can allow cities to generate revenues from assets that would otherwise benefit private entities for free.

Anchor Institutions

Mayors can influence anchor institution behavior to bring more opportunity to their cities, and drive that opportunity toward the most underserved areas and residents.

Supporting Local Businesses

As part of their economic development strategy, municipal governments are increasingly thinking about how to cultivate smaller, locally owned businesses.

Combatting Poverty

In 2014, almost 50 million people in the US were living in poverty. In many cities, a least a quarter of the population lives below the federal poverty line.  Many cities are taking a comprehensive approach to fighting poverty by aligning policies, investments, and increasing access to federal and state support. Decreasing the number of people in poverty in your city improves the lives of those directly affected, and the local economy and quality of life as fewer dollars are spent on social services and more is spent locally.


Local government procurement practices can be a powerful tool for advancing equity and setting high-road standards city-wide. Where the city spends its budget in the private market, there is both clear ability and responsibility to ensure that public investment is used wisely in ways that move the city toward more inclusive prosperity. Cities are well within their legal authority to dictate certain requirements for hiring, job quality, and ownership when spending public money on contracts for longer-term services (vending, maintenance, etc) or on construction projects.

Food and Economic Development

Food production can be an important part of a city’s economic development strategy, strengthening the regional economy while expanding access to healthy, locally-grown food for residents. There are several opportunities for local economic development through food, many of which aim to shorten the food supply chain and bypass large-scale, industrial agriculture for locally grown food.