Table of Contents | Chapter 5
Economic Development and Jobs
Sustainable development is premised on improving how society meets human needs for all people in a manner consistent with protecting the natural environment. A strong local economy is fundamental to a sustainable community because economic development and the jobs it creates are the vehicles for meeting human needs. Before anything else, people must be able to provide for the basic necessities of food and shelter for themselves and their families.
The economy of the nation as a whole depends significantly on the success of its many interconnected local and regional economies. In recent years, dramatic changes in the global economy have resulted in major shifts in local economies as both national and local markets adjusted to the trends. In some ways, the nation became more competitive. In the process, however, many local economies lost jobs and/or income; for some, the future of their communities was endangered.
Strategies to create strong, diversified local economies are needed to weather — and even take advantage of — fundamental shifts in national and international economies. The communities that prosper will be those that develop strategies to create resilient local economies that make the unique strengths of their people and their place a source of competitive advantage. Local economic development proposals should fill a niche in the regional economy, and promote partnerships among the private sector, workers, educators, and government. Business is a powerful force in our society: the expertise and unique resources of the private sector should be tapped within a process that brings diverse stakeholders together to forge new solutions to local economic problems. These efforts can create an environment that promotes entrepreneurship, innovation, and small business growth to marshal resources within the community to fill local economic needs.
A key part of a community's economic development strategy is to increase the diversity of the local economic base and to retain wealth in the community. Many communities are promoting this diversity by supporting businesses and industries that are at the forefront of environmental economic development opportunities. Environmental technologies promise both cleaner traditional industries and an important opportunity for creating jobs for the future that are based on cleaner and more efficient technologies. Strategies include investments in resource efficiency to improve the profitability of small businesses, mining the solid waste stream to develop community-based recycling businesses, supporting eco-industrial parks, and targeting the benefits of increased efficiency to create jobs and economic opportunity. A systems approach to community-wide economic development promotes maximum resource and energy efficiency of businesses, the community, and the region. Economic growth is achieved and human needs are met with improved efficiency and environmental performance. Pursuing such concepts requires imagination and effort. Initially, extra resources may be called for, but the rewards can be significant.
For example, due to rising demand for paper, New York City expects to earn tens of millions of dollars from selling newsprint collected through its municipal recycling programs. The city has turned its disposal expense of $6 million a year into a new industry that is creating jobs and putting money into its coffers. Other communities are taking similar steps. For example, some cities — including Newark, Los Angeles, Oakland, Philadelphia, and even smaller municipalities like Maywood Village, Illinois — have established market redevelopment zones that help them save money on waste management and that promote new industries. These new manufacturing jobs add significant value because raw materials are worth more once they have been baled, pulped, and converted into new products. According to the Institute for Local Self-Reliance, manufacturing recyclables into new products adds significantly more jobs than processing recyclables (which, in turn, creates more jobs than disposing of municipal solid waste).16
The creation of an eco-industrial park is another example of a new form of development that pays both economic and environmental dividends. Eco-industrial parks are an environmentally efficient version of industrial parks. They follow a systems design in which one facility's waste becomes another facility's feedstock, and they ensure that raw materials are recycled or disposed of efficiently and safely. This is just one aspect of eco-industrial development. The benefits and savings that will accrue to society from more efficient use of existing resources can provide the basis for an economic expansion that will increase economic prosperity for all. By preventing pollution, reusing and recycling materials, and conserving energy, new technologies can increase profits, protect and create jobs, and reduce threats to the environment.
The downsizing of the military is one example of external forces that change local economies. Military conversion is the process of reassigning military facilities, equipment, and personnel to new uses which help to mitigate the impacts of base closure. While the loss of a military installation is very disrupting in the short term, many communities are shifting their focus toward the future; and with persistence, creativity, and capital, they are creating positive outcomes that meet public and private needs. Conversion can catalyze sustainable development if appropriate resources are employed in the effort. By incorporating sustainable development principles into the federal dollars spent in the conversion process, including environmental cleanup, the federal government can serve as a catalyst for creating new industries that help these communities diversify their economic base.
Given that perhaps the only natural resource that can be considered unlimited is human intellectual capacity, training and lifelong learning are essential if communities are to develop a flexible, well-educated workforce. Education and training are arguably the most valuable pieces of any economic development strategy because they are the only way to build the intellectual capacity necessary for a trainable and employable workforce. This capacity, in turn, allows a community to adapt to the fundamental shifts in national and international economies that will continue in the years ahead. Partnerships that involve employers, unions, educators, and workers are key to ensuring that employees can take advantage of the opportunities offered by emerging industries.
Many countries and communities are investing in education and training to ensure that they can be competitive in the global economy. Of significant importance is the commitment to raise the skills of the least skilled. For example, policy experts have noted that Germany spends a much larger proportion of its education budget to raise the skills of the least skilled than the United States. They note that one result is that wages have been rising even at the bottom of the income ladder. Ensuring that the poor, inner-city, and rural students and potential workers, and women have access to quality education and training is critically important to increasing opportunity for all. Among these opportunities is the need to ensure that emerging technologies, particularly those connected to the use of computers, are available to as many people as possible.
Communities in the United States are demonstrating a renewed commitment to building more cooperative links among schools,job training providers, and businesses, as evidenced by the many public/private partnerships being established throughout the country. For example, the Chicago Manufacturing Center acts as a liaison between city colleges and employers to gather input for designing course work relevant to industry.
Many communities are also working to redevelop brownfield sites to improve public health and the economic competitiveness of these sites and surrounding neighborhoods. The issue of brownfields — abandoned, contaminated, and/or underused land that is often found in the inner city — is clearly linked to sprawl, land use, and regional decisionmaking as discussed in previous chapters, but brownfields also present important economic development and environmental cleanup opportunities as well. The term brownfields is used to describe a diverse array of sites. While some brownfields are essentially benign areas simply cluttered with litter, many of them may be complicated by real or perceived environmental contamination. Brownfields differ significantly from Superfund sites, however Superfund sites will require major environmental cleanup technologies and techniques before they are safe.
Cleveland, Detroit, and Chicago are a few of the many cities that are cleaning up brownfield sites as a strategy for revitalizing their local economies and improving the quality of life for their residents. By targeting economic development in otherwise wasted brownfield areas, these cities are planning to create jobs, generate tax revenue, and improve the environmental quality of the inner city. They are working to identify and eliminate barriers to redeveloping brownfield sites and to create partnerships among city, state, and federal environmental agencies, residents, local businesses, and lenders. They are also using incentives to attract and retain business activity. While the issues related to brownfields redevelopment are complicated and controversial — including appropriate cleanup standards, lender liability, and regulatory streamlining — many government agencies, municipalities, community groups, and environmentalists are working together to address them.
Many brownfield sites are located in neighborhoods that have endured extremely difficult economic, environmental, and social conditions for decades. In the spirit of sustainable development and environmental justice, brownfield redevelopment programs must involve local residents in making decisions about how these sites will be cleaned up and reused. The participation of residents who live near these sites is crucial to the long-term success of these programs. In some cases, residents, developers, and others in the market may not consider these sites to be highly desirable for commercial activity. Brownfields will not be redeveloped for commerce or housing in every instance. In fact, many communities are redeveloping brownfield sites into parks, open space, and even community gardens. Communities including Chattanooga and Sioux City have redeveloped former brownfields into new riverfront developments that include trails, parks, and other recreational facilities — contributing to a better quality of life, revitalizing surrounding neighborhoods, and sparking the interest of businesses who are more willing to set up shop nearby. It is important for governments to work together with residents, community groups, local government, developers, lenders, and others to identify people's needs and desires for these sites. By working in partnership, these groups can use brownfield redevelopment as one part of a larger strategy for revitalizing neighborhoods.
Access to financing for community initiatives is central to their existence. Funding not only enables community groups and others to implement their ideas, financial incentives also often dictate the choices made by individuals, companies, and institutions.
The task force heard the stories of communities that have been able to marshal an extraordinary amount of money to implement programs developed out of a planning and visioning process by bringing aboard a diverse array of primarily local funders. This diversity is key to fundraising, particularly in this age of constraints for government funding. In addition, emerging financing concepts are expanding opportunities. One example is the concept of a location-efficient mortgage. Such a mortgage would increase the borrowing power of potential homebuyers in high-density locations with easy access to mass transportation. A borrower would qualify for a larger loan based on expected higher disposable income from a reduction in or absence of automobile payments, insurance, and maintenance.
Policy Recommendation 8
Action 1. Communities can conduct an assessment of their economic, natural, and human resources to identify their comparative advantages and niche in the larger regional, national, and global economies. Ideally, this inventory and assessment would be conducted as part of a public dialogue and planning process within the community and the region.
Action 2. Local governments, businesses, and nonprofit organizations with relevant expertise should work together to create recycling-related manufacturing in conjunction with community-based projects to collect and recycle municipal solid waste. All levels of government should support these efforts by providing information and incentives, and by supporting pilot projects and leveraging their funding with public-private partnerships.
Action 3. Federal and state agencies should assist communities that want to create eco-industrial parks that enhance economic efficiency and promote environmental responsibility. They can do so by reducing regulatory impediments to the siting of eco-industrial parks that produce low levels of pollution through a zero-waste strategy in areas with mixed-use zoning; sharing information on similar efforts; and funding pilot projects.
Action 4. National business associations, large corporations, environmental groups, and federal and state agencies can work together to promote best practices and techniques in the areas of pollution prevention, materials reuse, and energy efficiency to small- and medium-sized companies.
Action 5. Federal agencies should help communities with former military facilities to convert them to new uses using principles of sustainable development. They can do so by bringing together development experts from multiple agencies and providing information on the range of alternatives for redevelopment.
Action 6. The federal government and businesses should improve working conditions. Government, for example, should set an adequate minimum wage and proper health and safety standards; and businesses could provide greater flexibility to telecommute, set work schedules to provide more time for community participation and/or parenting, and provide assistance with day care.
Action 7. Federal, state, and local government should support job creation and minimize large disparities in the distribution of wealth through tax strategies, health and welfare programs, and other government policies.
Policy Recommendation 9
Action 1. Businesses, teachers' unions, school officials, students, religious institutions, and local government within a community should develop training programs to ensure that workers have the necessary skills to take advantage of current and future economic development opportunities. They should work together to integrate current training programs, and they should marshal funding from the private sector, schools, and government to fill gaps in these programs. In addition to school curriculum, the programs include school-to-work, community service, summer jobs programs, apprenticeships, and job corps opportunities.
Action 2. Community-based coalitions should work together to invest in education and to link education and the community by sponsoring youth, tutoring, and other programs; directly funding projects; and providing in-kind and volunteer support. These programs should also focus on the needs of local employers.
Action 3. Federal and state governments should help people pursue education and job training throughout their lives by providing tax deductions on tuition, low-interest student loans, and other kinds of financial assistance.
Action 4. Federal and state governments, the private sector, and local communities should promote widespread public access to computers and computer skills training.
Policy Recommendation 10
Action 1. All levels of government should continue to encourage investment in brownfields redevelopment by eliminating barriers to and creating incentives for the cleanup and redevelopment of brownfield sites. Current efforts, such as the 1995 EPA Brownfields Initiative, need to continue evolving to work in partnership with diverse parties to clarify important issues and find shared solutions. These issues include: lender liability for cleanup; uncertainties for investors such as consistent and quantifiable cleanup standards, enforceable indemnity agreements, and covenants-not-to-sue; timely and conclusive efforts to detect contamination to allow cleanup and property sales to proceed; realistic cleanup standards appropriate to future uses of sites; and strengthening local workforce development.
Action 2. All levels of government should work with the mortgage bankers and other members of the financial community as well as with community groups to reexamine policies in light of the substantial progress that has been made by EPA and the Congress to respond to the lending community's concerns. Development of innovative financing tools that make inexpensive, renewable capital readily available for brownfields investment should be encouraged.
Action 3. State and local governments should be encouraged to develop revolving loan funds for cleanup activities at brownfield sites. Federal agencies should help provide seed money to capitalize a limited number of state or local revolving loan funds to further encourage their development and use. Federal agencies should continue to provide technical assistance to communities to assess what efforts are needed to inventory, assess, clean up, and redevelop brownfield sites.
Action 4. The federal government should assure that economic development programs that were in existence prior to the emergence of brownfields issues make brownfields projects eligible for those programs' funds.
Policy Recommendation 11
Action 1. The federal government should work with the housing finance community and with transportation and land use experts to further study, develop, and test pilot a location-efficient mortgage program that will be refined and eventually implemented nationally.
Action 2. The federal government should lead a public/private sector initiative to identify and end barriers to financing mixed-use, transit-oriented development. Participants should include: developers, architects, planners, local government officials, and development finance experts (banks, pension and insurance investors, public corporations which provide secondary markets, and community development corporations).
Action 3. The federal government should expand the home mortgage tax deduction to apply to mixed-use, multifamily units. It should also expand low income housing finance programs to include these facilities.
Action 4. The financing community, policy experts, and all levels of government should work together to establish underwriting criteria and a broader secondary market for loans for buildings retrofitting, mixed-use development, and businesses that harness environmentally sound technologies.