City leaders, including mayors, play a critical role in community wealth building and are this brief’s intended audience. However, this work requires multiple actors, including community organizers and developers. This brief is useful to anyone committed to equitable economic development in their community but is intended primarily for city leaders. This report was made possible by generous funding from the Surdna Foundation.
In this report:
- Introduction and background on US inequality
- Reference chart comparing traditional economic development with community wealth building strategies
- City Case Studies: Detroit, MI, Nashville, TN, Lafayette, LA
- Next steps for local leaders
Introduction
The U.S. is among the most unequal societies in the world. This is true in income and in access to quality of life opportunities (water, food, shelter, mobility, communication, education, healthcare, recreation). But it’s especially pronounced in wealth; in the U.S., the wealth gap has sharply increased over the last 30 years.
The wealth gap in the United States is a complex problem that reflects a long history of the disenfranchisement of working people, particularly people of color. Its causes are as diverse as its consequences: inequities in public education, predatory lending practices, uneven access to banking institutions, mass incarceration, and stagnating wages with dwindling job benefits are just some of the reasons for this gap. Cities have contributed to the wealth gap primarily through land use and zoning policies that have created concentrated poverty, especially in urban areas. Any solution to building community wealth should therefore start with a built-in consideration for equity that addresses these legacies.
What, if anything, can city leaders do about this?
Community wealth building is an approach to municipal economic development that balances opportunities for growth with community benefit. As the wealth gap continues to grow, cities can do more to ensure that new development projects create direct economic benefits for all. Cities can be powerful intermediaries between private interests and organized community voices.
This brief lifts up three examples of cities who are in the early stages of projects that show promise in helping to build community wealth. Consistent across all examples, however, is an intentional commitment by municipal leaders to invite community voices to the table and create economic opportunity for those most vulnerable and disenfranchised. Mayors and cities who want to address the wealth gap must build relationships with developers and organizers, listen to and incorporate community needs, and take risks by trying new things. This approach can appear daunting for even the most innovative city leaders. This work stands to benefit historically disenfranchised communities, the families that live in them, and the cities that they call home.
Traditional Economic Development Vs. Community Wealth-Building
The free market drives investment to areas that stand to turn the greatest profit.States and cities work collaboratively to intentionally steer investments to areas in strategic and equitable ways.
| Traditional Economic Development | Community Wealth Building |
|---|---|
| The free market drives investment to areas that stand to turn the greatest profit. | States and cities work collaboratively to intentionally steer investments to areas in strategic and equitable ways. |
| City rules and financial incentives prioritize profit and growth, typically awarding development rights and incentives to influential private actors. | Cities adopt rules like inclusionary zoning and form based codes to change the rules of development, and prioritize contracts for local companies and local hiring to make better use of taxpayer dollars. |
| Constituents are informed of new developments and may play a small role in providing feedback. | Cities help build community’s capacity to organize and advocate for community needs; community constituents are an equal partner at the table with cities and developers. |
| New investments and developments occur with little regard to community identity or culture. | Cities use placemaking as an economic tool by capitalizing what makes the community unique and working with existing community skills and strengths. |
| City economic development occurs in direct partnership with private developers but without further engagement of other partners. | Cities cultivate private, public, community based partnerships to build an infrastructure that helps identify, develop, and build community capacity to engage in economic development projects. |
City Case Study: Detroit, MI
Background
Detroit once boasted a booming manufacturing industry, which famously contributed to an auto industry upturn that peaked in the mid-20th century. International competition, deregulation, and decades of union busting, have since contributed to Detroit’s devastating decline.
In 2013, after a scandal involving city leadership and the worst of the Great Recession had passed, the city declared bankruptcy. This ushered in a new era of Detroit political leadership and a fresh vision for the future of the city.
Innovative Solutions
- Community Benefits Ordinance, which requires large-scale developers to proactively engage
- Detroit Land Bank Authority, which focuses on bringing land back to “productive use” and not focusing on profit
- Detroit Future City, which aims to build community capacity to be good stewards of vacant land
Main Takeaways and Best Practices
- Codify community engagement into citywide policy
- Establish minimal barriers to land ownership
- Align city, quasi-governmental agency, and NGO priorities
- Build and cultivate relationships with community-responsive developers
- Find the right answer for blight – it is not always infill development
- Distribute resources more equitable among neighborhoods and build and support comprehensive, inclusive, and vibrant neighborhoods
City Case Study: Nashville, TN
Background
Nashville is one of the fastest-growing metropolitan areas in the U.S. This has driven up area housing and real estate prices, threatening long standing residents who don’t want to leave their neighborhoods or homes. Since 2017, the City has worked with community organizations in the Wedgewood-Houston neighborhood to develop the new old State Fairgrounds and Racetrack (a publicly-owned site) equitably.
Innovative Solutions
- Responsible infill development, achieved through a community benefits agreement (CBA)
- Avoiding pre-emptive state laws by passing the CBA as an agreement between private parties
- Launching from the work done by community organizations to identify priorities for economic development
- Working with locally-based and locally-invested developers
Main Takeaways and Best Practices
- Establish requirements for public land sales and/or leases to developers, including Community Benefit Agreements and through building political will among elected officials
- Establish good working relationships with community organizers
- Aim to attract, support, and build the capacity of local investors for development projects
- Create an investment prospectus
City Case Study: Lafayette, LA
Background
The city of Lafayette found a stronghold in the oil economy as a home to many oil processing sites. But, like many oil-dominated economies in the South, an oil bust followed in the late 1970s. Though the city has since reinvented itself as a regional tech and telecom hub, the economy has not bounced back to pre-bust glory. City planning efforts have therefore contended with the aftermath of population decline, sprawl, and blight familiar to many post-industrial cities.
Innovative Solutions
- Combining storytelling from longtime residents and newer residents’ visions for the future to infuse planning with community history and a path forward
- The use of community storytelling by the Planning Commission to leverage investment that fits well in the community as it is
Main Takeaways and Best Practices
- Use democratic placemaking as an economic development tool
- Seek to identify rich cultural heritage rooted in marginalized communities and build an economic development strategy that will tap into that
- Invest in building long term community engagement capacity
Next Steps for Local Leaders
Cities play a critical role in creating opportunities to build community wealth. They also are uniquely positioned to undo legacies of racism and displacement that have contributed to the modern-day wealth gap. The three early stage examples explored here offer cities many guiding principles in wealth building practices through land use, including:
- Move beyond community engagement to recognize, support and work with strong, independent, and organized community and neighborhood groups. Equitable wealth building projects through land use require an earnest investment in community engagement processes. Such processes should center communities of color and other communities traditionally excluded from decision-making. But cities must also be willing to work with and support independent and organized community capacity. Even when this means that a city must compromise on their own priorities, development projects and their outcomes are strengthened through this process.
- Use democratic placemaking as an economic development tool. When residents participate in defining what makes their community unique and telling their community’s story, they can better meet community needs while pursuing development opportunities that build community wealth and power.
- Work collaboratively with partners. It is imperative that cities recognize their role as the intermediary between private interests and organized community voices. Building positive relationships with all stakeholders ensures that, to the greatest possible extent, there is alignment between all parties’ priorities.
Looking for more?
Is your city looking for ways to ensure that development is equitable, or seeking solutions to other issues? Mayors Innovation Project Member Cities receive free technical assistance on these and many more issues.