Place-based economic and community development models are designed to encourage collaborative and integrated approaches to make holistic improvements to the physical and civic/social environment. In contrast to traditional bottom-down program delivery models, place-based models use local facilitation to identify and bring resources to the entire community consistent with neighborhood-level priorities. While both models are useful, for individuals who live in lower income areas and need to address complex issues, such as business development, jobs creation, and affordable housing, place-based approaches have demonstrated to have certain advantages.
Another key component of a place-based model is that it builds upon the unique features of a community and existing physical and social assets.By strengthening an area's local identity and reinforcing cross-sector relationships, the capacity of the community to tackle the inevitable challenges to reaching goals is also improved.
Federal, state, and local governments have used place-based strategies for targeted resources for decades. In addition to federal Promise Zones, of which California has four, these include: federal Empowerment Zones and Enterprise Communities; federal Strong Cities, Strong Communities (SC2); Strike Force for Rural Growth and Opportunity Initiative; and the private sector All-In Cities initiative.
Transforming Tools into Impactful Programs
Unlike these place-based models, the Opportunity Zone is a tax provision. That said, the tax incentive provided through the Opportunity Zone is potentially of a much greater value to a broader array of investors than these place-based models. Opportunity Zones are designated in every state and, in California, are located in every county. If California wants to harness the power of the Opportunity Zone to transform neighborhoods, the state will need to develop policies and programs to align resources, develop marketing strategies, and support local community efforts to attract investments.
California, through the Governor's Office of Business and Economic Development, has taken a number of actions to facilitate the attraction of Opportunity Fund investment managers and support local community Opportunity Zone efforts. The state launched a CA Opportunity Zone Portal, formed an interagency working work, and the Governor Newsom held an Opportunity Zone Summit in March 2018. Members of the Legislature amended bills in 2018 to enhance the state's Opportunity Zone competitiveness, as well as introducing new legislation in 2019 to establish an Office of Place-Based Economic Strategies at GO-Biz and proving credit enhancements to Opportunity Zone projects that create wealth and asset formation to zone residents.