Placemaking for economic development
Placemaking as an economic development tool can be more efficient and cost effective than traditional attraction strategies.
The place-based economic development model for local governments is very different than the traditional model which typically focuses on jobs. One of the issues with traditional economic development is that the incentives are targeted at the newcomers of the community. Tax abatements for expansions or new construction are all about incentivizing the creation of jobs. Communities spend money with the hope of attracting jobs to relocate to the community. Unfortunately, these jobs do not often move to the new location, become residents and bring their economic multiplier that the community bases its decisions on. It is this multiplier effect that is supposed to pay for or offset the tax abatements and lost revenue.
The local place-based model focuses on a different model. The premise is a local government invests its revenue into local projects that preserve or enhance quality of life. This is also known as placemaking. These enhancements serve to add value and attract new residents. The added value and new growth generates more revenue for the local government. This is intended to be cyclical and fuel slow incremental growth in the community.
How do communities attract firms and jobs in an era of tight fiscal constraints? Traditional firm attraction techniques, such as tax abatements or other fiscal incentives, are either too expensive or simply ineffective. Current research shows successful firms now follow talent in their location decisions. The key difference between models is the focus of the efforts. In the traditional model, economic development is focused on incentivizing job migrators and the benefits are targeted at them. In the place-based model, the benefits go to the community trying to attract talent and jobs. The risk of loss in both scenarios ends up falling on the local government. In the traditional model, the risk is revenue stream loss due to lack of job creation or workers not spending money in the community. In the place-based model, the risk occurs in spending faster than revenue growth or investing in ineffective projects.
Businesses need talent. Talent needs place. So how do communities create place that is attractive to talent?
Smart Growth America recently released a report on the successes six cities have had using a place-based model. The report titled Amazing Place looks at placemaking as a solution to drive sustainable economic development.
Michigan State University has been on the leading edge of placemaking research and curriculum development over the last four years. Michigan State University Extension currently offers a six part course on placemaking, covering the different types, the economic benefits, the built form of place, planning and coding for place, public engagement and successful case studies in strategic placemaking for talent and firm attraction. A tailored placemaking strategy development workshop is also available for communities.
For more information on placemaking in your community, contact a MSU Extension Land Use educator.