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Integrating Physical, Economic, & Fiscal Considerations in Community Planning

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Communities across the country are facing daunting challenges, grappling with fundamental issues of economic competitiveness and fiscal sustainability:

— How do we preserve our community’s economic strength in a competitive landscape?
— How do we ensure that local governments can continue to provide the foundational services like public safety and infrastructure that allow our communities to succeed?

Cities, towns, and counties develop policies by envisioning what they want to look like in the future. Typically, these visioning processes concentrate on the physical environment — including man-made and natural features. What local planning processes often fail to do, however, is strategically address the other two realms that are crucial to success — our economic and fiscal environments.

In reality, the success of our communities relies on all three realms: (1) making the most of our physical environment; (2) ensuring economic competitiveness; and (3) promoting fiscal sustainability.

These three realms are the underpinnings that make our cities, towns, and counties strong, and they are deeply intertwined. Each realm influences the others in multiple and multifaceted ways. In the end, our communities cannot succeed in any one realm if they fail to succeed in the other two. Because of the complex interconnections, true success hinges on a community having a holistic vision of what success really looks like, and an integrated strategy to achieve it.

How is This Different From What Communities Do Today?

To one degree or another, most jurisdictions already have plans in place to address each of the three realms. They have a plan for their physical environment; they have a strategy for economic development; and, in one form or another, key policy makers have a fiscal strategy to make ends meet. The problem virtually every community faces is that these plans are developed separately, and fail to adequately address the interconnectedness of the physical, economic, and fiscal realms.

In most every community we work, we see two common shortcomings:

1. Confounding effects among disparate plans; and
2. Community visions for the future that fail to meaningfully consider all three realms that underpin success.

In the most benign instances, confounding effects take the form of an element of one plan that does less than it could to support a strategy outlined in another. Less benign, and uncomfortably common, are instances where the strategies set out in one plan contradict and undermine — often unintentionally — strategies being pursued in another.

For example, we recently worked with a city whose economic development strategy hinged on an aggressive plan to revitalize its historic downtown and adjacent waterfront. The aim was to transform the downtown into an urban node of housing, retail, and other commercial uses.

The city had done many of the right things, but the crucial missing element was attracting multifamily development to the area in and around downtown. One reason: the city’s land use regulations — driven by the city’s comprehensive plan — had created a vast oversupply of land zoned for multifamily elsewhere in the community. As long as developers had plentiful (and low-cost) opportunities to develop multifamily across the city, the community was less likely to succeed in concentrating its (modest) multifamily demand downtown.

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