Neighborhood and Community Development: What it is and Why it’s Important
This post by Fred Steinmann
In the wide world of economic development, neighborhood and community development is both frequently used and largely misunderstood. In short, we know what it is (sort of), but we really don’t do a very good job in doing it. According to the International Economic Development Council (IEDC), “Neighborhood development focuses on the economic aspects of distressed neighborhoods – retail sector, market potential, employment opportunities, and available workforce – that can be developed to help neighborhoods compete and contribute to the urban economy.” That’s a bit of a mouthful. In an nutshell, neighborhood and community development is usually known by other, more familiar names – chiefly “urban renewal” from about the mid 1950’s to the mid 1970’s, and “redevelopment” since the mid 1970’s up to the present day.
But calling neighborhood and community development “urban renewal” or “redevelopment” grossly understates the vast complexities of neighborhood and community development. Neighborhood and community development is much more than building a convention center or a hotel or a new condominium tower. It’s also much more than just building grand public plazas or intimate pocket parks. As the IEDC points out, “The focus (of neighborhood and community development) is also on the economic development activities – job creation, business attraction, and retention – that can be targeted to low- and moderate-income neighborhoods. The important issue is to increase employment by creating jobs and retaining jobs.”
The focus on “creating jobs and retaining jobs” is often one of the greatest oversights of what we call “redevelopment” today. Gone is the concept of neighborhood and community development – i.e. the focus on creating jobs and retaining jobs – and in its place has taken the all important need for local redevelopment agencies and local governments to generate as much property tax revenue and sales tax revenue as possible. Now a lot of people will say that redevelopment is a valuable economic development tool for local governments. And I’m one of them! I am an unapologetic supporter of local redevelopment. But I would like to see local redevelopment agencies and local municipal/county governments think harder about the types of jobs their economic development efforts are creating. Distressed neighborhoods – those neighborhoods that are most likely to be in a redevelopment project area – often need new retail opportunities and new retail opportunities and development will certainly create new jobs for the residents of these distressed neighborhoods.
But the residents of these distressed neighborhoods, and the residents of the entire community beyond the distressed neighborhoods, need more than just low paying and low skill retail sector jobs. For the most part, retail sector jobs are often low skill, low paying and generally do not offer individuals a direct means of general upward mobility nor do they directly improve a community’s overall quality of life (those of you that have read many of my previous blogs will recognize that last sentence as the general “goals” of any comprehensive economic development strategy). In order to create mid to high skill and mid to high paying jobs at the neighborhood and then community level that offer individuals meaningful opportunities for general upward mobility and improve a community’s overall quality of life, local municipal and county governments need to evolve their current local redevelopment efforts by embracing a more broad neighborhood and community development strategy.
To do so, according to the IEDC, “Economic development activities at the neighborhood level deal with both place and people. The fundamental underpinning of neighborhood economic development is building assets both individually and collectively for the community.” Because many neighborhoods in any given urban environment are primarily residential in nature, local municipal and county governments must devote their economic development attention to increasing wealth at the individual household or family level. This means that the place-specific focus of municipal/county government economic development efforts in the past (i.e. via the small geographic concept of a local redevelopment project area that might be 200 acres within a municipality of several thousand acres for example) have to be widened to comprehensively understand how one neighborhood relates and interacts with another within entire communities and how job creation community-wide and workforce development community-wide can translate into real and tangible gains in personal wealth at the individual household or family level.
To do so, local municipal/county governments must also embrace wider non-property based approaches to economic development. As I mentioned above, local governments (especially today given shrinking municipal/county revenues and budgets) are so focused on generating as much publicly collected tax revenue as is practically possible that they have all but abandoned wider non-property based approaches. Instead, local governments tend to offer every kind of incentive they can think of in order to attract a new retail shopping center or auto-dealership or hotel or convention center to their community in the hope of generating the maximum amount of property tax revenue and, most importantly, new sales tax revenue. These property-based approaches certainly create new jobs and a TON of new sales tax revenue – a fact that local municipal/county governments won’t let us forget about as they always brag about the 125 new jobs at the new big-box retail store opening or the new 200 jobs at the new local sports stadium being built. But what they don’t tell us is that the average wage paid for each of those 125 or 200 or whatever number of new jobs created is about $9 per hour – hardly enough to send your kids to school or buy a house or buy a car or do just about anything with.
The exact means or specific strategies within a comprehensive neighborhood and community development plan I’ll address in my next blog – for now, it’s important to just understand what neighborhood and community development is and why it’s important. And neighborhood and community development is important for the following reasons.
First, as the IEDC points out, “Neighborhoods are the building blocks for healthy, thriving, vibrant towns, cities, and regions.” If one neighborhood begins to decline, the adjacent neighborhoods begin to decline and the entire community might not be all that far behind them. No doubt about it – shopping centers, auto-dealerships, hotels, convention centers, and even new sports stadiums are very important parts of developing a healthy and vibrant town, city, and/or region. But these property-based approaches represent only a PART of a more comprehensive and successful neighborhood and community development plan. We have to figure out ways of increasing net and individual levels of wealth for those individuals and families living within our community at the neighborhood level.
Second, as the IEDC points out, “With governments dividing and partitioning the greater city into neighborhoods for the sake of more focused and targeted community development, every development project or economic expansion campaign is likely to have a significant impact on at least one neighborhood. It is important to understand the dynamics of how neighborhoods work, how they can be protected and preserved, and what can be done to promote growth and renewal.” I really can’t say it better than that. In order to understand the specific impacts of specific economic development (property-based and non-property based) policies, programs, and/or projects, we also have to understand what’s going on at the neighborhood level. In the past, I’ve preached the importance of a regional approach to economic development. That said, we can’t forget about the neighborhood-level. Because if we do, our regional economic development efforts will be for nothing.
