Simon Nielsen 7/10/22 Simon Nielsen 7/10/22

Why Equity Is Key To Building Back Better

Dr. Mariela Alfonzo, founder of State of Place, discusses three pillars - data, community, and cooperation - needed to promote spatial justice to address inequitable disparities in access to good urban design and related quality of life outcomes.

By State of Place

Our Founder and CEO, Dr. Mariela Alfonzo, had the honor to be interviewed by Andrew Tuck, of Monocle’s The Urbanist podcast, about the need for a spatial-equity based recovery, which focuses on community-scale infrastructure that facilitates health, safety, environmental justice, and economic resiliency. The episode, which focused on how to build back more equitably, also included Sally Kneeshaw from URBACT (Chapter 1), a European exchange and learning programme promoting sustainable urban development, who discusses how Covid has highlighted the need for more gender-equal cities and Emily Hamilton, a Senior Research Fellow and Director of the Urbanity Project at the Mercatus Center at George Mason University (Chapter 3), who speaks about the need for zoning reform to ensure more equitable development.

Dr. Mariela Alfonzo’s remarks (Chapter 2) focused on her recent Slate piece, Building Back Better, but Better, in which she and her co-author, Sam Lubell, outline three pillars - data, community, and cooperation - needed to promote spatial justice to address inequitable disparities in access to good urban design and related quality of life outcomes. She also discusses State of Place’s project with the City of Philadelphia, which has tied the built environment (as measured by the State of Place Index) to Covid, various Covid-related comorbidities, environmental hazards, and neighborhood safety, and how evidence-based, data-driven citymaking can lead to more equitable, efficient, and effective planning, development, and policy.

We urge you to listen in to this important (female-led!!) discussion!

Simon Nielsen 5/3/22 Simon Nielsen 5/3/22

The Rural Renaissance

“We have all learned lessons this past year about simplifying and improving our lives by staying at home more and deepening our roots in our communities. And these lessons, I would argue, will incentivize more of us to participate in urban-based businesses by living in rural settings.” Michael H. Shuman, leading visionary on community economics, sees a bright future for rural communities and local economies.

By Michael H. Shuman, attorney, economist, author, and entrepreneur

If you believe the portrait of rural America depicted in the Netflix film Hillbilly Elegy, you might conclude that its residents are hopelessly impoverished, addicted, and depressed. That’s also the view of Eduardo Porter in “The Hard Truth of Trying to ‘Save’ Rural America,” whose much-discussed piece in the New York Times argues that the economic decline of rural America is so severe and irreversible that it may be better just to write it off and encourage its residents to move into nearby cities.

Yet as Mark Sappenfield writes in the Christian Science Monitor, a far better representative of rural America is Cassie Chambers Armstrong:

“Ms. Armstrong is author of Hill Women, which chronicles the generations of strong, resourceful Appalachian women who helped her on her way to three Ivy League degrees. ‘The impression is that it is so broken that it can only be saved if outsiders swoop in to rescue it,’ she tells me. But Appalachia ‘has all the skills it needs to solve its own problems.’”

I met another incredible rural woman about six weeks ago in rural North Carolina. Judy Carpenter, an award-winning trap and field shooter, is now investing her life savings into creating a model sustainable agriculture destination called Lucky Clays Farm. She invited me to lead a workshop on “Healing the Urban-Rural Divide.” I suggested to a room full of socially-distanced state and local economic developers that Stanly County, the rural locale we were in, should pursue a bunch of mutually beneficial projects with the fast-growing city of Charlotte, an hour’s drive west. Among them:

Diversify the food-growing capacity of Stanly County, where land is plentiful, to ease food insecurity in Charlotte. Lucky Clays Farm itself is prototyping hydroponic and aquaponic growing methods with urban sales in mind.
Upgrade the internet infrastructure in Stanly, so that entrepreneurs from Charlotte can take advantage of Stanly’s more affordable commercial rents to launch a range of innovative businesses serving regional needs.
Create a rural tourist destination in Stanly where rat-race-weary Charlotte residents can catch a weekend break. Again, Lucky Clays Farm has anticipated this by building getaway homes and a Wellness Center and by developing a modest hotel and foody restaurant.
Deploy a regional online platform for financing these businesses and projects through investment crowdfunding.

These kinds of projects, I suggested, not only would increase regional prosperity but also much-needed social harmony and understanding. The Cook Political Report recently published a provocative piece entitled “Density as Destiny,” noting that Bloomberg/CityLab has performed a preliminary analysis of the November election and found a political tipping point at 700 people per square mile. Rural counties with fewer than 500 residents per square mile were reliably Republican, while urban counties with over 1,500 residents per square mile were reliably Democrat. Those in between, suburban and exurban counties, were purplish and up for grabs politically. Regional efforts to bring together urban and rural neighbors can thus begin to heal the gaping political wounds in our country.

Honestly, I’ve long been pretty skeptical of regionalism. Most regional bodies promote the worst kinds of economic development, like heavily subsiding corporate attractions, and lack the democratic checks and balances that characterize local and county governments. But regional projects that involve localities working together on focused and transparent initiatives are more promising.

Not a few progressive urbanites think this is a fool’s errand. But they are ignoring clear signs of vitality in rural America. Internet connectivity is reaching more households and businesses. The average age of farmers is finally declining as more young people choose to become local-food farmers. Water quality is improving. Recent immigrants, unable to find affordable housing in cities, now diversify once all-white rural communities. According to the 2016 Census, rural households had higher rates of home ownership, more stable families, and lower rates of poverty than their urban counterparts. Little wonder that many rural counties (not all, of course) are experiencing a significant growth in population.

In preparing for my Lucky Clays talk, I read several books by North Carolina’s celebrated demographer, Michael L. Walden, a professor at North Carolina State University. His work documents the transformation of North Carolina from a mostly rural state to an increasingly urban one. In his 2008 book, North Carolina in the Connected Age, he ends a chapter on the state’s future with a series of questions:

“Will retail outlets become obsolete as online shopping becomes more sophisticated? Will shopping malls become ghost towns, and if so, could this change improve traffic congestion but decimate local governments’ property tax revenues? Will further breakthroughs in communications and virtualization turn the home into the workplace, thereby dramatically reducing commuting costs for millions of workers? Could improvements in online education replace lecture halls as the way millions of college students learn and thereby save the state government billions of dollars in spending to construct and maintain college buildings?”

Yes, yes, yes, and yes. But the driving force is not just technology, as Walden predicted, but COVID-19. The pandemic has fundamentally turned upside down the way we organize our buying behavior, our work lives, and our educational institutions. Don’t expect things to return to “normal” once vaccines are distributed. We have all learned lessons this past year about simplifying and improving our lives by staying at home more and deepening our roots in our communities. And these lessons, I would argue, will incentivize more of us to participate in urban-based businesses by living in rural settings.

Fifty years ago, rural communities were strictly defined by industries based on their natural resources—farms, fisheries, forestry, mining, and tourism. A few support services grew around the workers and companies in these industries, but if the big mining company or paper processor that anchored the industry shut down, usually the entire economy collapsed. These communities were fragile, undiversified, and impoverished. Even Jane Jacobs insisted in her Economy of Cities that these communities were little more than “supply regions” for cities.

Today, many of these same communities are experiencing a renaissance, as is apparent in Norwood, North Carolina, where Lucky Clays Farm is located. Rural regions now can provide early-stage entrepreneurs with low-cost housing, commercial space, and internet connectivity. They can offer a lower cost of living to retirees, who then bring their substantial pension, Social Security, and Medicare payments into the local economy. For urbanites who have had it with crime, failing schools, and dirty air, resettling in these communities is a chance to reset their lives. A growing number of us will embrace rural as places we love where we can reshape our professional and work lives to serve our quality of life.

None of this is meant to diminish the many challenges rural America faces. Compared to urban areas, for example, rural communities struggle for decent access to health care and in-person education. But the biggest challenge rural communities face, I would argue, is contempt and condescension from snooty urbanites. Whether you are a city mouse (as I am) or a country mouse, please consider reaching out to the other side of America. Our future as a nation depends on it.

Simon Nielsen 4/19/22 Simon Nielsen 4/19/22

Every Community Needs A Neighborhood Exchange

“The Maryland Neighborhood Exchange offers a model of what every community in the United States—including yours—should do. For very little cost, you can create a listing of local companies looking for investment dollars on the national crowdfunding portals and provide your neighbors an easy place to review opportunities to invest locally.” Michael H. Shuman, leading visionary on community economics, shows the value of local crowdfunding.

By Michael H. Shuman, attorney, economist, author, and entrepreneur

Three years ago, the Maryland Neighborhood Exchange was just a dream. We envisioned creating a website listing great local investment opportunities in Baltimore and mobilizing residents to invest in them.

Here’s what’s happened since: The Exchange has helped 44 Baltimore businesses successfully raise $3.3 million from nearly 6,000 investors. And these numbers will significantly grow in the years ahead. Thanks to the Exchange, the future of Baltimore’s economy lies, not just with bankers, hedge fund operators, or VCs, but in the wisdom of its 600,000 residents.

The “we” has been a partnership of Neighborhood Associates Corporation, run by Dr. Bobby Austin, and Community Wealth Builders, led by Stephanie Geller. The partners also have included several dozen community leaders we tapped for advice—fund managers, foundation program officers, incubator coordinators, entrepreneurship specialists, and policymakers.

To understand the importance of the Exchange, it’s useful to go back to the origins of investment crowdfunding. During the 2008 financial crisis, I wrote an article for the Federal Reserve proposing a $100 exemption in securities law to jumpstart struggling small businesses. At a time of economic turmoil, I argued, every American should be able to invest as much as $100 in any local business with no legal paperwork whatsoever. Up until that point, a local business often had to spend $25,000 or more in legal disclosures before it could accept even a penny from grassroots investors. One attorney ran with the idea and submitted a proposed rule change allowing the $100 exemption to the Securities & Exchange Commission (SEC). A petition drive then delivered hundreds of letters to the SEC supporting the change.

The SEC duly ignored our advice, but all was not lost.

Congress picked up the ball and passed the JOBS Act in 2012, creating a framework for investment crowdfunding. Any business could raise up to $1 million, any grassroots investor could invest up to $2,200, but the transaction had to be done on a regulated federally licensed portal. (The SEC recently raised the offering ceiling to $5 million.) My concern then was that moving local investment relationships onto national electronic platforms would weaken the relationship between a small business and its investors. Why not just permit local fans to talk freely with their favorite businesses, face to face, and allow them to invest modestly as they wish without lawyers?

Fast forward nine years, and I must concede that investment crowdfunding has worked better than I predicted. More than a million Americans have now participated, investing $1.1 billion in over 4,000 companies. The average successful crowdfunding raise is $376,000, with the average investor putting in about $800. The entrepreneurs who have been most successful are women and people of color, precisely those individuals whom the conventional capital markets historically redlined out. Crowdfund Capital Advisors estimates these raises have created 124,120 jobs. And all of this occurred with remarkably little fraud.

Despite these successes, my initial reservation about the JOBS Act remains. How can we strengthen the local relationships between small businesses and their fans? The national crowdfunding portals all claim to love community business, but in fact (with a few exceptions) their connection with any given community is shallow.

Weirdly, this pattern may be replicating the tragic history of stock markets in the United States. In the nineteenth century, stock markets popped up in regions across the country to make risk capital more available to promising local businesses. Over the last generation, however, all these regional exchanges were gobbled up by two national exchanges—the New York Stock Exchange and the NASDAQ. This centralization meant that tools that once capitalized regional businesses now focus exclusively on global corporations.

That critique is what inspired the Maryland Neighborhood Exchange.

In practical terms, here’s what the Exchange does: If you’re a business in Baltimore looking for capital—especially if you’re a BiPOC entrepreneur—we can help you prepare for successful crowdfunding. We recently helped SoFusion Cafe raise nearly $30,000. If you’re an investor in Baltimore looking for local opportunities, you can easily review our updated listing of local offerings (from the national crowdfunding portals). And if you’re a neighborhood looking to revitalize, we can work with you to help launch local investment events.

The Maryland Neighborhood Exchange offers a model of what every community in the United States—including yours—should do. For very little cost, you can create a listing of local companies looking for investment dollars on the national crowdfunding portals and provide your neighbors an easy place to review opportunities to invest locally.

Allow me to toast everyone who made this possible: Thanks to NAC’s President Bobby Austin and its Board Chair, Marilyn Melkonian, President of Telesis, for giving me the company time to develop the Exchange; to the Abell and T Rowe Price Foundations for supporting our expansion over the past year; to the Market Center and Southwest Baltimore neighborhood associations who were partners in local experimentation; and to Stephanie Geller for helping dozens of businesses in Baltimore take advantage of the Exchange.

If you’re interested in starting an Exchange like this in your own community, let me know. We can help!

Simon Nielsen 3/1/22 Simon Nielsen 3/1/22

Communities Key to Future Of City Centres

“Scotland is a nation of towns. Decades ago, Scotland’s town centres were bustling and vibrant, and the reason was we lived in them. Now we live a couple of miles out of town in car dependent housing schemes where many don’t even know their own neighbours as commuting leaves less time for communities.” Phil Prentice, CEO of Scotland’s Towns Partnership, writes on the key to a better urban future

By Phil Prentice, CEO of Scotland’s Towns Partnership, on behalf of Scottish Empty Homes Partnership

In the last 50 or 60 years, we have hollowed the life out of town centres and created a doughnut effect. The retail predominance of the 1980s and 90s put a premium on town centre space, shifting less valuable residential uses to the edge. An estimated 40 per cent of buildings in Scottish town centres are now lying empty, most above shop frontages. High streets have suffered from reduced local economic consumption and a lack of community.

It is a similar story in city centres. Glasgow and Edinburgh have the least densely populated city centres in Europe. If you look above the shops and restaurants at night in Europe, you can see people living in every window. Many have balconies and shared courtyards and green spaces that help combat loneliness.

Our 2014 Town Centre Action Plan explored how to bring back vacant and redundant space into productive use for housing, a possible solution for our changing demographic and to help tackle inclusion.

A market failure still exists as the system still supports unsustainable sprawl. Scotland’s new Town Centre Action Plan, to be launched in April, delivers a more holistic approach to placemaking. The focus is on prosperous, vibrant and environmentally sustainable 20-minute neighbourhoods. The concept is a multi-disciplinary approach to creating more liveable communities, with input from sectors as diverse as public health and transport.

The Plan aspires to deliver homes fit all for the 21st century. Much of the ageing generation stay on in large family homes that would be better for young, growing families because there isn’t suitable alternative housing available. In a city centre development, the elderly could downsize to large, future-proofed apartments with dining and recreation facilities as well as access to local services, such as GP surgeries and a children’s nursery where both the old and young benefit from inter-generational socialising.

There is also considerable demand from younger generations for single unit homes as more people want to live on their own. There are many empty homes in our town centres that could be upgraded and brought back into use, to serve this need. However, we need to ensure that the town centre is an attractive place to live.

While there are many positives to the sudden shift towards working from home as an outcome of the pandemic, cities have and will suffer from the lack of footfall. The answer to this is re-population of city centres at scale, with housing that is sustainable, pandemic-proof and meets demographic needs with a good mix of private and social housing. The best chance of city-centre coffee shops and local independent businesses thriving is for people to move back to into the city.

This approach is increasingly met with interest from institutional investors. Rather than quick, high-risk gains, this model will see patient capital investment over 40-50 years. Encouragingly, the new Planning Framework for Scotland seeks to minimise edge of town or sprawl development. This needs to be matched with a widespread shift in mindsets, as investors need the confidence that they will able to zone whole streets to develop at scale.

The future of Scotland’s towns and city centres lies in the place principle and a holistic approach that encompasses community wellbeing, the environment and local economies.

Simon Nielsen 2/2/22 Simon Nielsen 2/2/22

Rhode Island Innovates 2.0

Rhode Island has achieved one of the biggest drops in unemployment rates in the U.S. More than 20 new policies and programs aligned to support this growth. Despite substantial progress, a new round of policy and practice innovation is needed to continue the trajectory. Urban scholars Luise Noring and Bruce Katz recommend three main areas of focus, with 17 tangible and feasible suggestions for change.

Rhode Island has achieved one of the biggest drops in unemployment rates in the U.S.—from
11.2% in 2010 to 3.5% today. More than 20 new policies and programs aligned to support this growth, encompassing tax and regulatory reform, workforce development and talent attraction, quality of place, innovation and R&D, and supplier and industry cluster networks.
Despite substantial progress, a new round of policy and practice innovation is needed to
continue the trajectory—both doubling down on programs that are succeeding and responding to new threats and embracing new opportunities. Urban scholars Luise Noring and Bruce Katz recommend three main areas of focus, with 17 tangible and feasible suggestions for change.

By Luise Noring, assistant professor at Copenhagen Business School, and Bruce Katz, founding director of the Nowak Metro Finance Lab at Drexel University

After a decade adrift, Rhode Island’s faltering economy is on the mend and expanding anew. Following the Great Recession, Rhode Island’s economic recovery lagged behind the rest of New England, but recent progress indicates that the state’s economy has passed an inflection
point. The Rhode Island economy is growing, unemployment levels are at historical lows, average productivity has reversed its decline although it remains below the 2010 level, and advanced industry sectors are expanding with positive, reverberating effects for small businesses across the state.

Rhode Island’s nascent comeback is creating visible signs in the state—along the Providence River at the new Innovation & Design District, at Innovate Newport’s new co-working space, at Electric Boat’s new submarine production facility in the Quonset Industrial Park, in the Offshore Wind Farm near Block Island, and at the new Fascitelli Center for Advanced Engineering at the University of Rhode Island. As important, but less visible, are the thousands of Rhode Islanders who now hold quality jobs with decent wages due to customized training and the scores of companies that have expanded their businesses due to strategic investment and support. The turnaround of the Rhode Island economy is, however, still in its early stages. The creation of a solid platform for long-term prosperity is a decade-long project at a minimum, which needs sustained focus and integrated action across all sectors, including but not limited to the state government. The Rhode Islanders we have engaged with urged us to recommend maintaining (if not expanding) the programs
to continue building upon the progress that was initiated only a few years ago. Declaring victory and “turning the page” too quickly would only limit the potential future growth from the groundwork that has been laid.

Rhode Islanders also implored us to focus on challenges that have become more pressing and apparent since 2016: in particular, the economic restructuring that is forcing many Rhode Islanders to work for wages that are insufficient to make ends meet and the rapid pace
of technological innovation (e.g., automation, artificial intelligence), which already threatens the future of work in particular industries. At the same time, there are new opportunities to be seized, starting with the dramatic demographic transition that has put the state on
the trajectory to be a majority minority state along with the rest of the country. These challenges and opportunities cut across advanced and non-advanced sectors and companies, requiring either new or revised policy responses.

Rhode Islanders finally advised us not to ignore traditional, mostly self-inflicted, challenges—the low quality of schools (in certain communities) and infrastructure (more broadly), an inadequate supply of quality and affordable housing options, the fragmentation of municipalities, the sense of opacity and cost of doing business—which have taken on new importance and urgency in the state. They also recommended that we connect the dots between economic prosperity and disparate parts of the state’s agenda (e.g., climate resiliency, reducing health disparities, and increasing quality of place) which are inextricably linked. Economic development is not an act that can occur in isolation, even when specific supports for businesses, workers, and places are well designed and delivered.

In the end, Rhode Island is a small state in a highly competitive region, nation, and world. Its size could be a strength in a fast-moving and rapidly changing world, allowing the state and its sectors, large companies, small businesses, and anchor institutions to move into closer alignment faster than would be possible for larger communities. But being small requires the state to be agile and nimble to leverage distinctive strengths and connect related assets (e.g., the procurement needs of large employers and the demand needs of small businesses) in deeper and more sustained ways. It also requires the state to focus and target its allocation
of scarce resources.

In summary, the state has shown its ability to design, finance, and deliver a series of meaningful projects that support businesses, workers, and communities. It now needs to move from individual transactions to structural transformation and to grow the distinctive
assets and capacities of this special place into a productive, sustainable, and inclusive economy. That will require a shared vision among multiple stakeholders and a collaborative, cross-sector approach to shaping and stewarding the economy.

Read full report

Simon Nielsen 1/15/22 Simon Nielsen 1/15/22

Financing The Inclusive City: A Case Study Of The Danish Model Of Affordable and Social Housing

As affordable and social housing rarely yield high returns, the task of providing it falls on municipalities; however, these are often strained for public finances and face a multitude of conflicting investment demands. The question is then: How can cities provide affordable and social housing with a shortage of fiscal resources and a multitude of conflicting political demands?

Normally, the task of providing affordable and social housing falls to local governments and their administrations. Municipalities must single-handedly work out how to deliver and finance affordable and social housing in a city context that is often dominated by a free market paradigm. However, cities operating in free market economies often prioritise attracting talent and investment, which often contradicts efforts to provide affordable and social housing, as the capital gains achievable from these are diminutive in comparison with the gains from other, more profitable development and infrastructure investments. The logic follows that private capital always chooses the investments with the highest returns. As affordable and social housing rarely yield high returns, the task of providing it falls on municipalities; however, these are often strained for public finances and face a multitude of conflicting investment demands. The question is then: How can cities provide affordable and social housing with a shortage of fiscal resources and a multitude of conflicting political demands?

By Luise Noring, assistant professor at Copenhagen Business School

In an era of increasing economic inequality and decreasing economic mobility, housing segregation can make bad conditions worse. We know that housing segregation impedes economic mobility and thereby reinforces economic inequality. In addition, by not providing affordable housing in cities, effective medium and lower wages decrease, as medium- and low-paid employees (e.g., nurses, teachers, policemen) spend added costs and time commuting to and from work, for which they are not compensated in monetary terms.

If we want to successfully tackle social inclusion in cities, we have to rethink the political and economic infrastructures tying our cities together. By providing the basis for a diverse city, economic growth in the city is enhanced, as the economy thrives with access to employees with multiple skill sets and salary ranges. We must rethink the institutions tasked with delivering and financing affordable and social housing. In an attempt to find new and better institutional and finance models, this report explores the Danish model of affordable and social housing.

Three components characterise the Danish model of affordable and social housing:

• Non-Profit. This characteristic provides the basis of a model that is cost-efficient and where all cost savings are translated into reductions in rental prices. In this way, profits are not withdrawn to serve the owners; rather, profits are translated into price reductions for a population segment that is highly price sensitive. As an added benefit, this set-up provides the tenants with a sense of ownership, as all tenants contribute to and harvest the benefits of cost-efficiency. As follows, the model encourages the tenants to cherish their property – both through their sense of ownership and through the direct link between costs and savings.

• Self-Governance and Self-Organisation. In light of the current intense debate about citizenship and citizens’ empowerment, presenting a model based on self-governance and self-organisation is powerful. The concept of a “housing democracy” underpins this model, where self-governance and self-organisation guide every housing estate and cooperative. In this scenario, the tenants elect leaders for individual estates and for the cooperative as a whole. They help make important decisions on behalf of all the tenants. Housing democracy works as a conduit for tenants into the housing cooperative management and board of directors, who help manage the accumulated wealth of the cooperatives.

• Tenant Self-Financing. Built into this financial model is the accumulation of collective savings. Savings are accumulated within each affordable and social housing estate, cooperative, and across the industry, with all savings paid into private non-profit cooperatives by the tenants. This provides the basis for self-financing of the entire industry. In addition, it also creates a strong sense of solidarity, which means every tenant’s contributions go towards collective building renovations, energy infrastructure, green recreational areas, cycling and walking pathways, and social activities.

In short, this model can be used by any city wanting to empower citizens and give the city back to the citizens. This report presents a new model for urban development that is free of fiscal constraints, political demands, and prioritisations. As a self-governing and self-financing model, it generates almost all of the necessary funds and offers ample opportunities for citizen-driven, citizen-empowered urban development.

Read the full report

Simon Nielsen 1/10/22 Simon Nielsen 1/10/22

Understanding Scottish Places

How do we measure the strenghts and weaknesses of towns and help residents gain a deeper understanding of their homes? Understanding Scottish Places is a tool which helps towns practitioners and communities better understand the function of the towns they live and work in. The platform functions as a diagnostic tool while providing the opportunity to compare and contrast data about places across the country.

By Scotland’s Towns Partnership

Understanding Scottish Places (USP) has been developed by a consortium involving Scotland's Towns Partnership, Carnegie UK Trust, the University of Stirling and the Centre for Local Economic Strategies. The project has been funded by the Scottish Government and Carnegie UK Trust.

Understanding Scottish Places is an online platform for towns' practitioners and communities. It is designed to help us better understand the function of the towns that we live and work in and provides the opportunity to compare and contrast towns across Scotland.

USP combines a typology of Scottish towns and an assessment of inter-relationships to find towns from across Scotland which share socio-demographic characteristics and score similarly on an independence to dependence scale. It also houses a tool designed to help users gather locally available information about towns to complement the national data presented within USP.

About the USP Audit:

The USP Audit has been developed to complement the national data available about your town through the Understanding Scottish Places data platform. Created by STP and EKOS, it offers a simple way of capturing locally available data on towns. The USP Audit Manual guides you through the process of gathering a range of 50 relevant indicators across 7 KPI themes:

1. Locality Data
2. Accessibility
3. Local Services
4. Activity/Events
5. Development Capacity
6. Tourism and Visitor Profile
7. Place/Quality Impression

These can be collated on the USP Audit Template which is also provided on the USP site. By collating this data in one place, you can draw analysis and easily compare results year on year. USP Audits can also be used to compare with other towns in your region and nationally.

We hope that over time USP Audits will be gathered, shared and visualised as part of the Understanding Scottish Places website, enabling easy comparison. For the time being, there are several USP Audit case studies available for you to view on the site – these are also cited below.

About the USP Your Town Audit:

The STP Add-On to your Understanding Scottish Places (USP) report is a comprehensive study which builds upon the USP output to give the town a much wider appreciation and understanding of its role, function and performance. Importantly a user manual will be included to allow participants to undertake their own future audits.

USP Your Town Audit is the standard benchmark for measuring the health of a Scottish Town. It is designed to be the next step after practitioners have analysed their town using tools such as USP (Understanding Scottish Places) or the Place Standard.

Developed after wide consultation and collaboration, it captures the relevant KPI's to ensure you can develop a comprehensive benchmark and baseline.

The audit, prepared by socio-economic development professionals from EKOS and STP, will use a combination of data gathered through local place audits, business surveys, stakeholder consultations and official government sources.

“The audit process and outcomes have been praised by everyone who has seen them so far, your product deserves promotion!”

— Neale McIlvanney, Strategic Planning Manager, North Ayrshire Council

For more information please contact Ewan Robertson.

Simon Nielsen 1/5/22 Simon Nielsen 1/5/22

Partnerships For Improved Sustainability: A Case Study Method Applied To Partnerships In The Transport Industry

Across the world, governments are grappling with climate change and crafting solutions that aim to reduce carbon emissions and advance sustainable growth. In this report, urban scholars Luise Noring and Julie Jo Nygaard seek to understand how multiple public, private and civic stakeholders collaborate to deliver large-scale transformative projects in sustainable transport.

Across the world, governments are grappling with climate change and crafting solutions that aim to reduce carbon emissions and advance sustainable growth. In this report urban scholars, Luise Noring and Julie Jo Nygaard, seek to understand how multiple public, private and civic stakeholders collaborate to deliver large-scale transformative projects in sustainable transport.

By Luise Noring, assistant professor at Copenhagen Business School, and Julie Jo Nygaard,

*Photo: Hugues de Buyer-Mimeure/Unsplash*

National governments are the signatories to international agreements such as the Sustainable Development Goals (SDGs), New Urban Agenda and Paris Agreement. Successful implementation of these agendas will depend on the successful delivery of infrastructure projects across multiple sectors, such as buildings, energy, transport and waste. However, national governments cannot single-handedly implement such projects at the necessary pace and scale. The realisation of global goals will therefore depend on a constellation of different actors including governments, businesses and civil society.

Across the world, governments are grappling with climate change and crafting solutions that aim to reduce carbon emissions and advance sustainable growth. This report seeks to understand how multiple public, private and civic stakeholders collaborate to deliver large-scale transformative projects in sustainable transport.

Local governments control less than 20% of their carbon emission-producing assets.1 Thus, if cities want to achieve their sustainability goals, they have to look towards other public, private and civic actors for support. This report finds that by engaging in collaboration across sectors, we are able to implement novel initiatives that improve efficiency, competitiveness and help reduce CO2 emissions as well as water, air and soil pollution. The success of these initiatives depends largely on the success of these collaborative relationships. This reports investigates how initiatives for improved sustainability within the transport industry are delivered through various types of collaborative relationships.

We have selected a small group of case study sites: Site 1: Hamburg (Germany), Site 2: Örebro (Sweden), Site 3: Greater Copenhagen Region (Denmark), and Site 4: Region Skåne (Sweden) that we believe are first-movers in their regions for sustainable transport. We have identified a series of projects and collaborative relationships that each positively impacted sustainable transport. Thus, we have investigated the different stakeholders engaged in collaborations for improved sustainability in the transport industry. Such an inquiry provides, for the first time, an understanding of how stakeholders interact on project delivery for improved sustainability in the transport industry.

Sub-national agencies hold important powers over land use planning and waste management, and (to varying extents) buildings and transport systems. Many city governments have accordingly established ambitious environmental targets and programmes, learning from and working with other city governments and other stakeholders in the city to do so.

However, the scope for municipal authorities to directly pursue sustainability agendas is debatable. First, a substantial proportion of the environmental impacts attributable to cities are actually generated outside city boundaries from, for instance, leaching from landfills and emissions from power stations and the transport industry. Second, many local governments lack the legal authority, resources or capacity to address key drivers of environmental degradation. For example, few have the capacity to regulate energy supply, finance private transport or set building codes.

These barriers to local action have inspired widespread attention to the national governance of sustainability. National frameworks influence the powers and competencies of sub-national governments, thereby structuring the opportunities for environmental action. A narrow focus on governments therefore conceals the fact that central governments need to create policies, regulation and legislation that clearly articulate the rights and responsibilities of sub-national governments and then provide the information, resources and lessons to enable the transition to more sustainable development across wider societies and multiple public, private and civic actors. The interrelationships between these different actors is significant.

Participation and partnerships can unlock complementary capabilities to enable the planning and delivery of more complex projects and enhance the uptake and lifespan of those projects. These modi operandi can create avenues for information sharing, capacity building and empowerment. However, they can also create tensions where ways of working are not compatible and incentives are not aligned.

To achieve the SDGs, New Urban Agenda and Paris Agreement, public agencies must find ways to direct and coordinate diverse actors and initiatives. Understanding these local modi operandi is a precondition for advancing sustainability goals. By understanding existing network and actor structures, it is possible to identify who needs to be influenced or incentivised to drive change. By understanding existing capabilities, it is possible to identify capacity deficits that constrain action or collaborations that could enable it.

This research shows that there are enormous differences in the choice of the projects, partners and type of collaboration across the case sites. We believe that these findings should spark harder thinking about how we actually organise ourselves, individually and collectively, to deliver sustainability projects.

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Simon Nielsen 12/13/21 Simon Nielsen 12/13/21

Governing City Infrastructure: Who Drives The Urban Project Cycle: An analysis of Hamburg, Manchester and Pittsburgh

Across the world, cities are grappling with climate change and crafting solutions that aim to reduce carbon emissions and advance innovative, sustainable, and inclusive growth. Urban scholars, Bruce Katz, Luise Noring, and Savvas Verdis, have selected a small group of cities that they find to be first-movers in their regions for sustainable urban solutions.

Across the world, cities are grappling with climate change and crafting solutions that aim to reduce carbon emissions and advance innovative, sustainable, and inclusive growth. The primacy of cities requires us to understand how they are governed—not just in general but at the granular scale, where projects literally touch the ground. Urban scholars, Bruce Katz, Luise Noring, and Savvas Verdis, have selected a small group of cities that they find to be first-movers in their regions for sustainable urban solutions. The authors have decided to dig deep and ascertain the differences between city practices, given that cities operate under radically different regimes of government and governance.

By Luise Noring, assistant professor at Copenhagen Business School, Savvas Verdis, senior research fellow at London School of Economics, & Bruce Katz, Founding Director of the Nowak Metro Finance Lab at Drexel University

The 21st century will be a city-driven century.

Cities are on the rise at a scale and speed unprecedented in human history. They have become the undisputed engines of national economies and the centers of global trade and investment. They sit on the front lines of disruptive forces like population migration, demographic transformation, economic restructuring, income inequality, and climate change. And with many national and state governments mired in gridlock, cities are increasingly the vanguard of problem-solving and policy innovation.

Sustainable urbanization reflects one of the most critical areas for urban solutions today. While half of the world’s population now lives in cities, more than 70 percent of carbon emissions originate in cities. The unbalanced growth of megacities like Beijing, Lagos, and New Delhi is already precipitating severe levels of environmental degradation, air and water pollution, and deleterious health outcomes. This is why the 2015 Paris climate agreement and the UN’s recent Sustainable Development Goals recognized that cities will need to be a key part of the world’s response to climate change.

If cities are to grow in more sustainable ways, major interventions in the transport, buildings, and energy sectors will be necessary. Transport and buildings constitute the bulk of greenhouse gas emissions in cities, and cities consume over two-thirds of the world’s energy, primarily through non-renewable sources. The technologies for radically changing this reality—such as state-of-the-art mass transit, energy efficiency, and distributed renewable energy—already exist. The challenge lies in deploying these technologies at scale across cities with radically different regimes of government and governance.

This report represents an effort to show in granular terms how different cities are innovating in distinct ways around sustainable urbanization. Over the last decade, long-term sector-specific plans in energy, transportation, and urban development have become the standard
way through which many municipal governments try to influence sustainable development for the medium and long term. We believe practice must move beyond the realm of good planning and into accountability. Is a city delivering on its long-term targets and policies?
Is it forging new forms of governance that foster collaboration across the public, private, and civic sectors and at all levels of government—city, suburban, state, and federal? And is it doing so in a way that can be rapidly adapted by other cities and scaled by national governments and global markets? We hope this inquiry will both sharpen understanding
about the nexus between smart governance and sustainable urbanization at the project level and unveil a series of practical lessons and solutions that can be applied to cities in the United States, Europe, and ultimately beyond to cities in Africa, Asia, and Latin America where urban growth is primarily occurring. As the report shows, cities provide a natural experiment
since they undertake the same projects with radically different stakeholders and approaches. This enables us to assess benefits and drawbacks, identify best practices that might be ripe for adaptation and replication, and move closer to norms of behavior and financing that can be easily routinized.

The path to sustainable urbanization, in short, lies in granular application as much as grand policy.

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Simon Nielsen 12/10/21 Simon Nielsen 12/10/21

Cities And Refugees: The German Experience

Urban scholars, Luise Noring and Bruce Katz, examine the need to include cities as full-fledged participants and partners in the refugee response. They find that public, private, and civic leaders in municipalities across Germany and Europe have been on the front lines of refugee reception and integration. In the face of these huge challenges, they are inventing new methods of delivering the services that new arrivals need to be healthy and productive members of their new countries.

By Luise Noring, assistant professor at Copenhagen Business School, & Bruce Katz, Founding Director of the Nowak Metro Finance Lab at Drexel University

The arrival of large numbers of refugees into Europe poses a significant humanitarian challenge. The scale of the migration, the extent of the human suffering that has driven it, and the political complexities of resolving the situation all add to existing strains within the European Union. The crisis has destabilized the politics of the entire European continent, roiling the political systems of individual countries and threatening the solidarity of the EU as a whole. Leaders in Europe know that they must get a handle on the situation, and fast. Yet to date, the dominant focus of European decision- and opinion-makers has largely been on the immigration policies and perspectives of host countries. As priorities shift to longer-term economic and social integration, there is an equal, pressing need to focus on the role and actions of host cities. The reality is that refugees disproportionately settle in large cities, where they have better job prospects and existing social connections. Ultimately, it is those communities, rather than national governments, that will grapple with accommodating and integrating new arrivals. The responsibilities facing these cities and municipalities are enormous: how to house, educate, train, and integrate individuals from different cultures, with different education levels, who are often in need of emergency health care and special services.

Municipalities across Europe are faced with these responsibilities during a period of great social unease given the recent terrorist attacks in Paris, Brussels, and Nice; rising tension in everyday life around cultural and religious differences; and growing volatility in local, state, and national politics. In many respects, this complex and contentious environment requires greater, not less, focus on how cities design and deliver successful integration strategies.

To identify the scale of the challenge facing municipal governments, this discussion paper first investigates the flow of refugees and migrants into Germany’s 15 largest cities, both in terms of immediate allocation and potential secondary migration. The focus on Germany reflects the central role that it is playing in the European refugee crisis: in 2015, 1.1 million refugees crossed the German border; Berlin received nearly 10,000 refugees in November alone, the peak month of that year. The paper then identifies the distribution of responsibilities and funding across Germany’s federal system, the set of tasks that municipalities must undertake to promote social and economic integration, and the ways that German cities are innovating in the delivery of these tasks in the immediate aftermath of the large flows of refugees in 2015.

This paper is the first in a series examining the responses of local government, businesses, and civil society to the refugee crisis. Future research will further explore the city-level responsibilities for social and economic integration, with a specific focus on patterns of housing and social segregation, both within neighborhoods of large cities as well as in small suburban municipalities that surround such cities.

The paper finds that:

1. In the short term, refugees are proportionately distributed across German regions according to tax revenues and total population. The federal quota system for allocating refugees to states within Germany strives to be fair, equitable, and efficient, as it distributes refugees in accordance with a long-standing formula for distributing federal resources based on tax revenues and total population. The predictability and efficiency of the system is illustrated by the fact that the deviations from the assigned quota norm are minimal.

2. By nature of its simplicity, this distribution system imposes unique burdens on large cities, since it does not take into account higher population densities, special housing conditions of these urban communities, or secondary migration patterns. Germany’s large cities face existing pressures around affordable housing, making cost-efficient refugee housing more difficult. Cities also tend to be destinations for secondary migration, as refugees move toward social networks or larger job markets. Finally, the three German city-states of Berlin, Bremen, and Hamburg face unique challenges, including their geographic boundaries, which remove the potential for greenfield development or the settlement of their allotted arrivals in less-populous regions.

3. Similarly, the current framework for allocating funding and expenditures across federal, state, and city governments imposes uneven burdens on city-states and large cities. Uniform reimbursement rates from the federal government fail to take into account variations in housing costs, cost of living, and per-capita social service expenditures. Recent federal actions will help ease burdens, but more reforms and appropriations are likely to be necessary.

4. Despite these challenges, as they pursue the numerous tasks of economic and social integration, cities such as Hamburg and Berlin have shown a remarkable ability to innovate in the face of crisis. Innovations have included an expanded role of civil society, the use of technology to engage community participation, and the rapid building of non-traditional housing. The city-states have also provided an early warning system for the federal republic and helped to reform restrictive federal laws to be more responsive to local needs and circumstances.

5. The special role played by cities in emergency response and long-term integration requires new policy reforms and institutional practices. Federal and state governments and networks of local stakeholders should explore reforms that empower cities, speed the replication of promising strategies, and give city leaders a permanent seat at the policymaking table.

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Simon Nielsen 12/2/21 Simon Nielsen 12/2/21

Devolution To Cities: A Case Study Of KL (Local Government Denmark)

In this report, Luise Noring presents how Denmark devolved power to municipalities in a successful and replicable manner. Successful devolution in Denmark is largely due to the institutional innovation of KL - Local Government Denmark (KL - Kommunernes Landsforening). This report explores KL - Local Government Denmark’s strategies, while investigating how municipalities gain from increased devolution of political and fiscal power through organising for increased self-governance at local and national levels.

This report presents how Denmark devolved power to municipalities in a successful and replicable manner. Successful devolution in Denmark is largely due to the institutional innovation of KL - Local Government Denmark (KL - Kommunernes Landsforening). This report explores KL - Local Government Denmark’s strategies, while investigating how municipalities gain from increased devolution of political and fiscal power through organising for increased self-governance at local and national levels.

By Luise Noring, assistant professor at Copenhagen Business School

Many countries are debating the effectiveness of devolving governing responsibilities to cities. There is increasing recognition that many citizen-facing responsibilities, such as kindergartens, schools, elderly care, unemployment benefits, skills and job training, refugee shelter, and the integration of immigrants take place in cities under the management of municipalities. However, the fiscal capacity of cities to provide these services varies widely in different countries. For instance, continental European cities collect and allocate 50% of all taxes on average (Danmarks Statistik, 2012). In contrast, in the UK, despite the City Deals implemented since 2012 to increase the governing power of municipalities, UK cities only collect 5% of taxes (UK Parliament, 2018). UK Municipal expenditures extending beyond the revenue generated from their 5% tax share are financed through national government allocations that usually come with stipulations. Many cities struggle with a lack of the political and fiscal power necessary to provide the level of services they are obliged to deliver; there is often a schism between municipal obligations and the capacity of cities to fulfil them.

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Simon Nielsen 12/2/21 Simon Nielsen 12/2/21

The European Model For Regenerating Cities: Lessons From Copenhagen, Hamburg, Helsinki, & Lyon

In this case study, Luise Noring and Bruce Katz compare and contrast the Copenhagen model with major regeneration efforts and institutional innovations that are underway in Hamburg (HafenCity), Helsinki (Kalasatama), and Lyon (Lyon Confluence). Each of these case studies shows how cities are leveraging public assets in different contexts, under different circumstances, and in different geographies. The proliferation of disparate approaches offers multiple options for mature and developing cities interested in undertaking transformative interventions.

By Luise Noring, assistant professor at Copenhagen Business School, & Bruce Katz, Founding Director of the Nowak Metro Finance Lab at Drexel University

Cities across the world face increasing demands at a time when public resources are under enormous pressure. With urban populations growing, public needs for infrastructure such as water, energy, public transit, affordable housing, and waste management are growing as well.
At the same time, many older cities have legacy infrastructure (e.g., roads, energy) and underutilized areas (e.g., former industrial and harbor districts) that need to be repurposed for a radically changed economy. With public finance budgets overstretched and increases in taxes often contentious, government at all levels is challenged to finance these efforts.

This paper explores a model of urban development that both revitalizes cities and finances large-scale infrastructure by increasing the commercial yield of publicly owned land and buildings, sometimes without raising public taxes. The paper draws heavily on a recent case study that we conducted of the Copenhagen City & Port Development Corporation (hereinafter CPH City & Port Development). The paper also builds on The Public Wealth of Cities (Brookings Institution Press, 2017), the recent book by Dag Detter and Stefan Fölster that describes the hidden potential of cities to capitalize on unknown or radically undervalued and underleveraged assets. CPH City & Port Development deploys an innovative institutional vehicle—a publicly owned, privately driven corporation (hereinafter public asset corporation, or PAC) —to achieve the professionalized management of assets more commonly found in the private sector while retaining a large portion of value appreciation for public use. Combining strategic zoning, land transfers, and revenue-
generating mechanisms, this public asset corporation has helped spur a remarkable transformation of the city over the past 25 years, from an ailing former manufacturing
city to the third-richest city in the world. It has made Copenhagen’s traditional harbor one of the most exciting waterfronts in the world and used the proceeds of land disposition and development to finance the construction of a metro transit system across the city.

This paper compares and contrasts the Copenhagen model with major regeneration efforts and institutional innovations that are underway in Hamburg (HafenCity), Helsinki (Kalasatama), and Lyon (Lyon Confluence). Each of these case studies shows how cities are leveraging public assets in different contexts, under different circumstances, and in different geographies. The proliferation of disparate approaches offers multiple options for mature and developing cities interested in undertaking transformative interventions.

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Simon Nielsen 11/30/21 Simon Nielsen 11/30/21

Developing Urban Growth And Urban Quality: Entrepreneurial Governance And Urban Redevelopment projects In Copenhagen And Hamburg

By Luise Noring, assistant professor at Copenhagen Business School, Adam Grydehøj, and Jürgen Bruns-Berentelg

This paper considers the cases of urban redevelopment at waterfront and brownfield sites in Copenhagen (Denmark) and Hamburg (Germany) to explore how two municipal governments have pursued divergent kinds of entrepreneurial governance, even as they have aimed to create similar kinds of new-build neighbourhoods. Copenhagen and Hamburg have both engaged in large-scale speculative development projects, simultaneously raising urban land values and adding urban public good. The cities follow a long tradition of using land value capture to raise funds for municipal activities, yet their scopes of action and tools for achieving progress have been shaped by local economic and political conditions. Although both cities began redevelopment at similar kinds of sites in the 1990s, Copenhagen’s municipal government was relatively impoverished, while Hamburg’s municipal government was relatively wealthy. As a result, even though both cities deployed state-owned enterprises (SOEs) and revolving funds models to reinvest revenues in future development, they possessed different potential strategies for increasing intercity competitiveness: Copenhagen’s immediate aim in redeveloping its Ørestad and harbour districts was to fund a citywide mass transit system and thereby enhance competitiveness through infrastructure development, while Hamburg sought to use its HafenCity waterfront redevelopment to boost competitiveness through port modernisation, increased in urban quality and commercial expansion in the city centre. By comparing these two cases, we can better understand the contingent nature of entrepreneurial governance and urban redevelopment processes.

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Simon Nielsen 11/30/21 Simon Nielsen 11/30/21

Cincinatti’s Over-The-Rhine: A Private Led Model For Revitalizing Urban Neighborhoods

This case study focuses on the Cincinnati Center City Development Corporation (3CDC), a 16-year-old nonprofit corporation that has driven the regeneration of Over-the-Rhine, a formerly distressed community located near the traditional downtown. 3CDC powerfully blends corporate and philanthropic resources, strong professional management, and close cooperation with the public sector. It has a replicable governance structure and a strategic mix of public, private and civic ownership and responsibilities. It has already provided the model for the new Downtown Development Corporation in Erie, Pennsylvania and could be adapted to dozens of other cities.

By Luise Noring, assistant professor at Copenhagen Business School, Karen L. Black, & Bruce Katz, Founding Director of the Nowak Metro Finance Lab at Drexel University

Executive Summary:

In 2003, Cincinnati’s Mayor, Council and business leaders created a private, non-profit organization called the Cincinnati Center City Development Corporation (3CDC) to implement a revitalization plan for downtown and its adjacent Over-the-Rhine neighborhood. This paper explores how the Cincinnati model created a new type of institution that makes catalytic, non-conventional investments in real estate such as civic spaces, severely blighted properties, affordable and special needs housing, speculative condominium development, and retail and office developments. 3CDC and its corporate board used primarily private funding to improve civic spaces and to catalyze the transformation of vacant and underutilized properties into investable resources in order to reinvigorate Cincinnati’s dormant downtown and change the trajectory of a neighborhood plagued by blight and vacancy.

Who is 3CDC?

The Cincinnati Center City Development Corporation (3CDC) is a non-profit, privately led full service real estate development and finance organization formed in 2003 by Cincinnati corporate and civic leaders to direct the redevelopment of Cincinnati’s Central Business District – beginning with the area around Fountain Square – and the adjacent neighborhood of Over-the-Rhine (OTR).

What impact has 3CDC had?

3CDC has created a profound physical transformation of a 110-square-block area of Cincinnati over the last 15 years. With an investment of $1.4 billion, 3CDC has restored 166 buildings and 14 acres of civic space. 3CDC leveraged significant capital funding from Cincinnati corporate partners with conventional loans and public funding to complete large-scale redevelopment projects.

According to 3CDC, the $1.4 Billion investment resulted in:

166 Buildings Restored
14 Acres of Civic Space
2 Civic Buildings Restored
1,300 Apartments
534 Condominiums
156 Hotel Rooms
320 Shelter Beds
1,063,961 Commercial SF:
4,680 Parking Spaces

Why was 3CDC formed?

3CDC was established when Cincinnati was at a low point, having experienced decades of population loss and a 2001 multi-day racially-charged riot following the shooting of an unarmed black teen by police. The Mayor at the time, Charlie Luken, and corporate leaders agreed that action needed to be taken to spur revitalization and stem the tide of disinvestment in the core of the City. Corporate leaders hired a consultant (HR&A Advisors) and Mayor Luken formed the Economic Advisory Task Force. The consultant and task force both recommended the creation of a non-profit to provide the acumen to creatively finance and redevelop civic space and vacant properties and to manage a long-term strategic infusion of capital into Over-the-Rhine.

Has the Cincinnati Model created long-term inclusive growth?

3CDC’s regeneration of OTR and the confidence it engendered in the city’s largest employers and key stakeholders put Cincinnati back on track at a critical juncture in the city’s history. That, by itself, is an act with deep inclusive consequences, given how much opportunities for disadvantaged urban residents depend upon a prosperous economy and committed and sustained public, private and civic leadership. The substantial reinvestment in OTR’s housing market has, however, triggered a shift in neighborhood demographics. While 3CDC did not directly displace residents, as it primarily redeveloped vacant buildings and allowed renters to remain in the small percentage of occupied buildings it acquired, market pressures have motivated 3CDC leadership to undertake expansive inclusive growth strategies. 66 percent of the rental units 3CDC builds are affordable to households earning below 80% of area median income and 3CDC has helped to fund five new state-of-the-art homeless shelters. Today, OTR remains a high-poverty neighborhood (the neighborhood poverty rate is 41 percent, compared to 27.7 percent in the city as a whole) but with the continued creation of a mix of affordable and market rate housing and aggressive implementation of policies to ensure local residents benefit from new amenities, jobs and entrepreneurial opportunities, the Cincinnati model may become a success story for creating a sustainable, racially diverse, mixed income neighborhood.

Why is the Cincinnati Model important to explore?

The Drexel University Nowak Finance Lab has partnered with Accelerator for America to better understand the types of innovation in leadership, financing and collaboration that can regenerate our disinvested urban downtowns and neighborhoods. At a time when cities across the country are looking to create inclusive growth, it is essential that medium and small sized cities can identify, combine and reinvest local capital to revitalize old housing stock, reinvigorate flagging public spaces and create new jobs and vibrancy. The Cincinnati model shares important lessons on the power, agility, and leadership an organization needs to truly change the trajectory of neighborhoods plagued by blight and vacancy.

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Simon Nielsen 11/29/21 Simon Nielsen 11/29/21

From Vision To Value: A Case Study Of How Seven Danish Cities Conduct Area Development to Propel Urban Revival

“As the global recession, climate change, the pandemic to name but a few globally transformative events blow through the world, deep rooted inadequacies and malfunctions of our societies are exacerbated. In fact, such global events reveal good as well as bad societies. These events are compelling cities to rethink how we design, finance and deliver urban redevelopment. The pre-pandemic model was neither inclusive nor sustainable. In Denmark, an alternative model has emerged that uses the disposition of public assets to drive the creation of public wealth.” Urban scholar, Luise Noring, examines new ways to drive urban revival.

By Luise Noring, assistant professor at Copenhagen Business School

This working paper presents how large-scale urban redevelopment across seven Danish cities and towns is delivered and financed using land value capture. In all the seven cases, partially or fully municipal development corporations play a critical role in leveraging publicly accumulated and owned land and buildings to spur local economic growth.

The present working paper considers development corporations or equivalent public, private and civic hybrid entities that were selected based on their geographical distribution, including in cities and densely urbanized areas (Housing and Project Development in Aarhus, Stigsborg Havnefront in Aalborg), small towns (Nærheden in Høje-Taastrup, Køge Kyst in Køge, Holstebro Udvikling in Holstebro, Kanalbyen in Fredericia), and a rural area (Ringkøbing-Skjern).

The cities presented are driving transformational visions and associated initiatives and investments that remake their physical, economic and social landscape. These visions are driven by forward thinking city governments that use their partial or full ownership of the development corporations as institutional vehicles. The development corporations are able to catalyze long-term financing that aligns with the breadth and depth of the city vision. In some of the cases, the long-term horizon is backed by philanthropic patient capital that enables the cities to leverage land value capture for continuous reinvestment and revitalization. Such a tried and tested method evidenced by the case studies presented here renders an opportunity for cities across the world to embark upon similar trajectories.

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Simon Nielsen 11/26/21 Simon Nielsen 11/26/21

Public Asset Corporation: A New Vehicle For Urban Regeneration And Infrastructure Finance

Urban scholar, Luise Noring, assesses the effectiveness of different models of public/private sector participation for urban regeneration and land value capture, where the public land owner is required to act in the public interest and the private sector motive is driven by the need to maximize returns. The PAC model for urban development and infrastructure finance is a hybrid model combining public ownership with private management. The empirical analysis presents Copenhagen City & Port Development Corporation that has both financed extensive urban regeneration and the citywide metro system by leveraging the public assets, it manages.

By Luise Noring, assistant professor at Copenhagen Business School

Cities across the world are facing increasing demands for public infrastructure and other public goods at a time when public resources are under enormous pressure. With new cities emerging and urban populations growing, demands for public infrastructure (e.g., water, energy, public transit) are also increasing (The Guardian, 2016; The Guardian, 2018). At the same time, many older cities are challenged by legacy infrastructure, but also have former industrial and port areas ripe for redevelopment. With public budgets overstretched and tax increases often contentious, governments face difficulties financing the investments required for urban growth and development (Ingram & Hong, 2012).

Against this backdrop, the article presents public asset corporation (PAC) as a model for conducting large-scale urban regeneration and financing city-wide infrastructure investments without using scarce tax revenues. The existing academic literature distinguishes between public and private, emphasizing how public ownership and management affect operational inefficiencies and how privately held development corporations reap profit from the creation of a public good. The PAC model developed through the case study of Copenhagen City & Port Development Corporation (City & Port) provides a solution to the distinct pitfalls of public or private ownership. This article argues that the PAC model provides an alternative way forward that is politically sheltered, publicly accountable, cost efficient, revenue maximizing (for the public), and maintains a long-term outlook to see projects through to completion.

The article presents an introduction to the topic and the case study that lays the ground for the model of public asset corporation. The literature review provides a discussion on public versus private ownership and presents different finance mechanisms including: taxes, land value capture, tax increment financing and public-private partnerships. These are alternative ways to finance and deliver large-scale urban regeneration, infrastructure, and other public projects. The empirical analysis of City & Port that follows focuses on the aspects of public and private ownership, and the management and finance mechanisms presented in the literature review. The contours of the PAC model through its evolution at City & Port, particularly how it addresses ownership, management, and finance, illustrate this case study. The subsequent analysis demonstrates how the PAC has been adapted to other European and US cities using the examples of Hamburg and Philadelphia. Finally, the article concludes by summarizing the distinctive elements of the PAC and revisiting the existing literature presented earlier in the article.

Read the full report here.

Simon Nielsen 11/26/21 Simon Nielsen 11/26/21

The Copenhagen City And Port Development Corporation: A Model For Regenerating Cities

“This paper explores how the Copenhagen model can revitalize cities and finance large-scale infrastructure by increasing the commercial yield of publicly owned land and buildings without raising taxes. The approach deploys an innovative institutional vehicle—a publicly owned, privately run corporation—to achieve the high-level management and value appreciation of assets more commonly found in the private sector while retaining development profits for public use.” Urban scholars, Luise Noring and Bruce Katz, discuss the Copenhagen model as a tool for urban revitalization.

By Luise Noring, assistant professor at Copenhagen Business School, and Bruce Katz, Founding Director of the Nowak Metro Finance Lab at Drexel University

Cities across the world face increasing demands at a time when public resources are under enormous pressure. Many older cities, in particular, are plagued by outdated transportation and energy infrastructure and underutilized industrial and waterfront areas, all of which need to be upgraded for a radically changed economy. This has sent many U.S.—and global—cities scrambling to find new vehicles for infrastructure finance given the unpopularity of increasing taxes and the unpredictability of national and state governments.

To revive their flagging city in the late 1980s, a coalition of national and local officials laid the groundwork for the Copenhagen (CPH) City & Port Development Corporation. Its success
provides a 21st-century model for global urban renewal.

This paper explores how the Copenhagen model can revitalize cities and finance large-scale
infrastructure by increasing the commercial yield of publicly owned land and buildings
without raising taxes. The approach deploys an innovative institutional vehicle—a publicly
owned, privately run corporation—to achieve the high-level management and value appreciation of assets more commonly found in the private sector while retaining development profits for public use. The model reflects what Dag Detter and Stefan Fölster describe in “The Public Wealth of Cities” (Brookings Institution Press, 2017) as capitalizing on unknown or radically undervalued and underleveraged assets.

Combining strategic zoning, land transfers, and revenue-generating mechanisms, this model
has helped spur a remarkable transformation of Copenhagen over the past 25 years from an
ailing manufacturing city to one of the wealthiest cities in the world. It has made Copenhagen’s industrial harbor a vibrant, multipurpose waterfront while channeling the proceeds of land disposition, revaluation, and development to finance the construction of an expanded metro transit system.

The Copenhagen public/private corporate model combines the efficiency of market discipline and mechanisms with the benefits of public direction and legitimacy. The model enables large-scale regeneration to be conducted in a more efficient and streamlined manner than can be done by public authorities alone.

In this first in-depth case study of CPH City & Port Development, the corporation’s evolution
and accomplishments are examined in their historic, political, and economic contexts. The
corporation’s recent North Harbor redevelopment project is used to illustrate how it conducts business in close collaboration with local government, real estate developers, pension funds, and other urban stakeholders. Finally, the case study captures and codifies the political, institutional, and financial features that have enabled CPH City & Port Development to be successful and globally instructive.

Read the full report here

Simon Nielsen 11/16/21 Simon Nielsen 11/16/21

Structuring For Impact

“The world is changing. Businesses that exist for profit and purpose are now commonplace. Social enterprises prioritise people and the environment, ensuring they are looked after through business – rather than as collateral of profit-making.” The authors examine the potential for unlocking innovation and entrepreneurship while creating greater wellbeing.

By Steven Moe, Dr Jane Horan, Amber Hosking, Jackson Rowland, and Phillippa Wilkie

The Introduction

Social enterprise is about prioritising impact as well as profit. While New Zealand has legal structures which enable organisations who prioritise one or the other (i.e. charity or traditional business), Social enterprise does not fit neatly within these models, and often has only a passing resemblance to them. Instead, social enterprises operate with a different logic. The social entrepreneurs behind social enterprise pursue a different set of values from traditional business, with profit being only one factor in the mix, and often only as a means to achieving more impact. Based on the growth and contributions of social enterprise to New Zealand to date, it is clear that organisations who prioritise more than profit have significant potential to positively grow New Zealand’s economy in a broad sense, solving significant societal challenges along the way. Because of this, New Zealand needs a legal and policy environment that enables and encourages businesses that are trading for impact.

For the most part, however, operating a social enterprise in this country is more challenging than running a purely profit driven business. This report finds that the legal structures currently available in New Zealand are acting as barriers for, and disadvantage to, social enterprises. The array of issues and challenges social enterprises face using limited liabilitycompany structures, or any other legal structure in New Zealand, stems from the reality that these structures developed from a perspective that ‘doing good’ is separate from ‘doing business’. The distinction between doing good as charity on the one hand and doing business on the other is cemented in the prevailing attitudes of what charity as a way of doing good is allowed to be, and what doing business is required to be. This context makes doing business with impact far more difficult than standard for-profit business.

This report sets out evidence from social enterprises about the perceived challenges associated with the current legal structures and argues that evolving legal structures to remove some of those challenges will unlock the potential of business to generate social and environmental impact at scale that grows the wellbeing of New Zealand. Doing so would also support organisations underpinned by Te Ao Māori in a way that really honours Te Tiriti o Waitangi.

All but one of the social enterprises we spoke with in this research found that their legal structure created hurdles for their organisation. These hurdles appear to be most commonly centred around the enterprises’ inability to convey and protect their mission, and the consequential challenges that any workarounds to this create. Funding was the other key disadvantage, with many social enterprises finding accessing funding very difficult because of their structures, a hurdle which is having significant implications on the ability of these organisations, and their impact, to scale.

The world is changing. Businesses that exist for profit and purpose are now commonplace. Social enterprises prioritise people and the environment, ensuring they are looked after through business – rather than as collateral of profit-making.

The way social enterprises operate has the potential to generate significant value for New Zealand and to deliver the Government’s social and environmental outcomes, and embodies the ethos of the Living Standards Framework. By making minor amendments to the Companies Act 1993, this report argues that New Zealand has the capacity to create a world first model for business that enables organisations to trade for impact. And in doing so catalyse the extraordinary entrepreneurship that is happening in the social enterprise sector in New Zealand to unlock innovation that will create greater wellbeing for generations of New Zealanders to come.

From the Conclusion

If New Zealand really does want to be “on the right side of history” (Prime Minister Jacinda Ardern, Davos, Feb, 2019), evolving the legal structures in this country to help foster and support social enterprise is imperative. The social enterprise sector has the potential to lead the way for all businesses in this country to increase financial capital and to provide for the wellbeing of the people and the environment of New Zealand for generations to come.

The current array of legal structures available to social enterprises in New Zealand are not helping the sector thrive. At best, these structures are neutral for social enterprises, but for most social enterprises, the legal structures available create an array of barriers, or reflect broader structural forces that deny the different ways that social enterprises operate in the business space, despite that way being for the greater good of New Zealand.

In line with the Living Standards Framework being developed by Treasury and the Government as a whole, Michelle Sharp of Kilmarnock said, “the tools of business are critical to solving some of our most challenging social and environmental issues.”

This is about combining financial, social, cultural, and environmental capital in a way that is sustainable and viable. In a way that enables the entrepreneurial spirit that is so strong in New Zealand to combine with the efficiencies of business to tackle some of our most pressing challenges. Social enterprise has created a model that demonstrates that this is possible, despite the challenges the current structures pose. The potential for New Zealand if a more enabling environment is created for organisations to pursue impact through business cannot be underestimated.

This is the introduction and conclusion of the paper: “Structuring for Impact: Evolving legal structures for business in New Zealand”. It was released in April 2019 and was co-written with some amazing people: Dr Jane Horan, Amber Hosking, Jackson Rowland and Phillippa Wilkie.

Simon Nielsen 11/16/21 Simon Nielsen 11/16/21

The Hard Questions We Need To Be Asking

“When asked to look at any organisation from an independent consultant perspective we often use the phrase of “flying in from Mars”. In other words, if I were flying in from Mars today and wanted to set up an organisation to address your particular cause with the most impact, would I set up your organisation? The authors ask hard questions and challenge us all to reconsider our impact.

“When asked to look at any organisation from an independent consultant perspective we often use the phrase of “flying in from Mars”. This helps to explain the approach that a good consulting professional will usually take and their absolute level of objectivity in looking at all aspects of an organisation. In other words, if I were flying in from Mars today and wanted to set up an organisation to address your particular cause with the most impact, would I set up your organisation? And would I set it up like you currently operate and are currently structured and organised?” The authors ask hard questions and challenge us all to reconsider our impact.

By Steven Moe and Craig Fisher

The legacy of the past and our investment in the current can hold us back from achieving the future. When one is in the trenches consumed by how much needs to be done and the busyness of today we don’t always stop and reflect objectively on our organisation as we perhaps should.

When asked to look at any organisation from an independent consultant perspective we often use the phrase of “flying in from Mars”. This helps to explain the approach that a good consulting professional will usually take and their absolute level of objectivity in looking at all aspects of an organisation. In other words, if I were flying in from Mars today and wanted to set up an organisation to address your particular cause with the most impact, would I set up your organisation? And would I set it up like you currently operate and are currently structured and organised?

Unsurprisingly the answer is usually no. And this is understandable and explainable as new innovations continue to occur. Sometimes this can be a result of sunk costs or legacy ways of operating or thinking that came from a different paradigm when the situation was different.

Take cloud computing versus an organisation set up in the past that had to buy expensive computer servers and software to run on these in-house machines. Yet for the organisation that already has deeply invested in the legacy system it can then be harder to justify writing off that past investment to change to something new and possibly more efficient.

Likewise, the national federation of separate incorporated society branches of the same organisation. This structure probably made sense when transport and communications were not as easy as they are today, and more people had more time to take on board and committee roles in their spare time. However today that structure can curse a national organisation with duplicated costs, organisational sustainability issues, and unnecessary petty politics – all things which detract from whatever the good cause the organisation exists to address. We know of other organisations which have structure charts that stretch like an octopus across the full range of legal forms: companies, charitable trusts, incorporated societies. There are often valid historical reasons for why they exist that way: But is it the best way?

And if we were designing the most effective, efficient and impactful organisation today; would we design it like that?

So, here are some hard questions that we think all boards and senior management need to be asking. We appreciate that some of these questions may result in an instant reaction in many people in the sector that is likely to border on outrage.

1. What is our purpose?

Some organisations have forgotten what the original purpose was that they were set up to try and solve. Not perpetuate the provision of ambulances at the bottom of the cliff, but actually solve the issues with fences at the top. We often see organisations who are surprised when reading the actual purpose to realise how far mission drift has led them. The current leaders need to be clear on what the purpose actually is before anything else.

Organisations with laser like clarity on their purpose are those that generally tend to achieve it.

2. Do we have a right to exist?

Quite simply; does the positive impact of our organisation justify the cost and effort of all the things necessary to operate the organisation? i.e. are we delivering enough positive impact? Or are we just taking up sector oxygen?

While we have impressively low barriers to entry for NFPs and charities and community organisations in Aotearoa that doesn’t mean that all have an automatic right to exist.

The pass mark should not be simply an intention to do good – we need to ask these questions in order to work out if this organisation is actually being effective. In our view, a sufficient level of positive impact must be the lens through which this hard question needs to be answered.

3. Do we still need to exist?

Many organisations have morphed over time in terms of what they do. Often to follow the available funding. Sometimes this has led organisations away from what they were really unique at and expert at, and into other areas where they may be competing with other better, more specialist organisations. And competing for the same limited funding and other resources pool.

Would the wider society be better served if resources were focused on those organisations that were really unique and expert in an area? Would a governing body and management be able to admit that? If it is a new organisation then is it trying to replicate what someone else already does – entrepreneurship is lifted up as a high value in our society, but even more admirable might be sacrificing your ego to get in behind and really support someone else’s dream which happens to match yours. And in doing this eliminate unnecessary administration duplication and resources being diverted from creating more impact.

4. Should we have an end date?

While this may not work for all charities – if you consider it deeply it should for many - if they are being truly honest and committed to their cause.

Arguably one of the most noble measures of success of any charity that exists to address a social or environmental need is that they should no longer be needed.

Because the job is done. We have a feeling there will always be other issues that need addressing – hopefully they can be solved as well but not continued and perpetuated with an eye on continuing a legacy of having existed in the past.

For example, if your charity were set up to eliminate avoidable blindness, or to eliminate all pests in Aotearoa’s forests, when could this be achieved by? Set that challenging and motivating date.

Having an end date target in your strategic plan can be a very powerful motivating force to focus attention on the most efficient means of achieving the aim. Interestingly, having such a target and a goal of society no longer needing your organisation can also make those involved much less precious about how they achieve the target. The alternative is the building of a strong NFP/charity brand. Without clear focus on getting the job done, this can unfortunately (and often almost unconsciously) lead to more focus on the brand and protecting the ongoing nature of it - rather than why the brand actually exists in the first place. This is just human nature to protect what we have built. To be proud of our organisation doing good and our legacy. But are we being truly objectively honest towards our cause?

5. Should we continue to try and go it alone?

By any relative measure compared to many other countries we have a large number of charities and NFP’s in Aotearoa.

However, we are a small country with a small population and as a result by having a large number it means that the vast majority of these charities and NFP’s are also very small.

We are not saying that big is beautiful. However, we cannot ignore the fact that the existence of many very small entities results in a lot of duplication and administration that detracts from the amount of impact that can be achieved. As one example, think about governance boards and how many volunteers are needed to help operate so many entities. In any organisation there are critical size points below which even basic administration can seriously detract from the positive impact that can be created.

Do a search of the Charities Register or have a look on the internet and you will also quickly find that there are many NFP’s and charities existing to address the same or a similar issue and often even in a similar geographic area. As such they are usually competing for the limited resources available.

Again, if we are truly seeking to create the most positive impact for society at large, is this a sensible approach? Merging like organisations is at the extreme end of the spectrum to addressing this issue. We are not advocating that it always represents an appropriate solution because it has its own complexities. That can also be a bridge too far for many to contemplate, unless they are forced to by funders or legislation.

However, we are starting to see, and expect to see more of, an increasing pressure from funders wanting groups to work better together and for there to be better collaboration to achieve greater positive impact with the limited available resources. Hence even if a merger may be just too hard, there is still significant positive potential to be gained by closer collaborations. One example of this could be creating hubs where many entities can access and share common resources rather than needing to duplicate all – that can be a very effective option.

6. Are we thinking broadly enough about who we can collaborate with?

We believe we are headed into a much more global and interconnected future. It will be one where more and more businesses are waking up to for-purpose and social licence, and more enlightened Governments are waking up to holistically measuring wellbeing rather than just economic busy-ness. For your charity or NFP to remain relevant and impactful in such an environment are you thinking widely enough about who you could partner and collaborate with to create more impact?

Sometimes 1+1 can equal 3 if you get the mix right. But this takes inspired leadership skills to leave ego behind, to truly think openly and creatively, to expand your networks into perhaps surprising areas, to put yourselves in someone else’s shoes to understand how it can help them as well as wider society, to explore the unusual and untested.

7. Can we reimagine the future?

In the midst of uncertainty, people are re-evaluating what they support, so we suggest it may be time to look at our messaging and how we convey why our organisations exist. This is a time to have stronger communication to our stakeholders and the general public around what we do, and why.

Is this an opportunity to reimagine how we fulfil our purpose in order to be successful and as impactful as possible?

Those that can imagine the future can create it.

Extract from the white paper “Charting the Future: A Framework for thinking about Change” co-written with Craig Fisher in July 2020. While written with charities and NFPs in mind the principles apply to all. Thank you Craig for the chance to collaborate on this.

Simon Nielsen 11/15/21 Simon Nielsen 11/15/21

What Social Enterprises in Aotearoa Can Learn From Māoritanga

“While the term ‘social enterprise’ itself is relatively new, the fundamental concepts behind it are not. We are still at the early stages of the growth of the social enterprise sector here in Aotearoa. What better time to think about how Māoritanga – Māori culture, practices and beliefs and way of life – can help flavour our particular recipe?” The authors dive into a country’s past to find a way forward.

By Steven Moe and Wayne Tukiri

Until recently, not many people knew what a social enterprise even was. But in the last few years there’s been a growing awareness of companies that pursue “for purpose” objectives beyond the traditional profit motive. Often, these companies are able to reinforce and grow the communities they operate in, often meeting social needs which might otherwise have resulted in state-sponsored intervention or social programmes. Simply put, they do good.

While the term ‘social enterprise’ itself is relatively new, the fundamental concepts behind it are not. We are still at the early stages of the growth of the social enterprise sector here in Aotearoa. What better time to think about how Māoritanga – Māori culture, practices and beliefs and way of life – can help flavour our particular recipe?

By examining some of the key principles of Māoritanga, we can better understand what social enterprises are – and what they could be. Here are some examples:

Kaitiakitanga

Kaitiakitanga is the guarding of treasures and the concept of reciprocity and giving back. When creating a social enterprise it is vital that the purpose is well defined, understood and articulated for others. That purpose then needs to be closely guarded so that there is not a slow creep away from the core values in the midst of either success or failure – either extreme lends itself to a reframing of what the entity stands for. Keeping a sharp focus on the purpose of a social enterprise is a discipline: guarding the treasure.

Mōhiotanga

Mōhiotanga is the sharing of information, the building up of knowledge, and the provision of new information and strategies. In order for a business to succeed there is a lot of information which needs to be absorbed – and this is particularly true of social enterprise, which challenges the traditional way of doing things. The early days of a social enterprise are critical as the right structures are chosen, the team is assembled and the vision cast.

Tuakana/Teina

Tuakana/teina refers to relationships between older and younger people, and in particular the experienced helping those who are less experienced. This is reflected in many social enterprises with community elements where more experienced people work alongside – and support the career growth of – those who have less experience.

Manaakitanga

Hospitality, kindness, generosity and support. The process of showing respect and care for others directly relates to the altruistic and community focus of social enterprises. Often these social enterprises exist to meet some need in society through the business operation itself – for example, the type of person who is employed or the kind of product made.

Wairua

Wairua is spiritual well-being that involves a connection to our whenua (land), ngahere (forests), moana (sea), maunga (mountains) and awa (rivers). Many social enterprises consider natural resources and how they use them (or don’t). From the first, they focus on their impact on the environment and how they can operate in a sustainable way.

Mātātoa

Mātātoa is the Māori concept of being fearless, courageous and energetic. In a similar way, social enterprises need to be open to embracing new and innovative ideas that generally go against an established way of doing things. They often challenge the inbuilt assumption that a business is all about making a profit as they strive to also fulfil their purpose, which is usually the real driver.

Social enterprises have a unique opportunity to do something different here in Aotearoa; embracing the perspectives of Māoritanga and understanding their full breadth and impact could help us achieve just that. Instead of doing things the same way as every other country, we should try a new way of operating. The result could be a truly homegrown version of social enterprise which acknowledges and learns from our own rich cultural heritage and embraces it fully as a means to explain what we do and why we do it.

Tihei mauri ora!

Published as Opinion piece in Spinoff on 21 August 2018 co-written with Wayne Tukiri of RSM. Thank you Wayne for collaborating on this piece with me.

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