Six cities and counties will take stock of underutilized assets in Rethinking Revenue incubator

The Government Finance Officers Association in collaboration with various organizations including Urban3 and the Sorenson Impact Center has been spearheading a forward-looking approach to public financing, the Rethinking Revenue Project, an investigation of the foundational structure of government revenue and underutilized assets, for about a year now.

A new initiative launched by the collaboration is set to put some of the ideas and theories developed through the research to a real-world test. Six jurisdictions have been selected for the partnership’s inaugural Putting Assets to Work (PAW) Incubator, a project that will see participating governments put underutilized assets to better use generating revenue via public and private means.

“Selected candidates will now embark on a 10-month-long fact-finding mission to identify, map and plan uses for underutilized assets in their respective jurisdictions that could be suitable for private investment, with social and environmental benefits to the communities,” the report says. “The municipalities come from coast to coast, have leaders across the political spectrum, and have different priorities—but all see the promise in this innovation.”

The new revenue streams could be leveraged to create affordable housing, support small businesses, increase access to childcare, invest in transportation and enhance climate resiliency, among other things. Participating cities and counties are Annapolis and Anne Arundel County, Md.; Atlanta; Chattanooga, Tenn.; Cleveland; Harris County, Texas; and Lancaster, Calif.

At its core, the Rethinking Revenue project is based on the principal that modern revenue systems are potentially obsolete in certain ways. Practically, it’s focused on re-evaluating the way local governments fund themselves, and on developing novel revenue ideas/alternative taxation norms that are more in-line with today’s business practices. Publications created through the project have outlined the problem with current revenue systems, developed a criterion for evaluating the effectiveness of proposed changes and established practical ways communities can tackle the challenge.

The most recent paper outlines ways cities can maximize land use, such as by making financially savvy development the easier choice as opposed to default conventional development patterns aren’t the default; by calculating revenue per acre for all areas to develop a baseline; encouraging infill development and building up as opposed to out; require a cost-benefit evaluation for potential new development; understanding the fiscal impact of building and zoning regulation, then adjusting accordingly; identifying areas where cross-subsidization is happening and considering charging for it.

The incubator is poised to put these concepts into practice.

“This initiative is potentially transformative in increasing resources for jurisdictions to promote equitable growth and address both social and environmental needs in communities without creating additional tax burden for residents,” said Janis Dubno, managing director of impact finance at the the Sorenson Impact Center, which is housed at the David Eccles School of Business at the University of Utah. Dubno is leading the project for the center.

In Annapolis and Anne Arundel County, Md., the project “will support local infrastructure development through the new Annapolis and Anne Arundel County Resilience Authority,” said Steuart Pittman, Jr., Anne Arundel county executive. “The combination of these two innovative efforts will help ensure the economic and financial sustainability of our community into the future.”

Adrian Garcia, Harris County Precinct 2 commissioner said the incubator will help administrators there “identify how we can convert property we already own into new development that serves the community well and provides public benefit. Instead of letting undervalued and underutilized spaces collect dust, we will turn them into innovative developments that make the county an even more attractive place to live, work, and play.”

While the initiative is relatively new in the United States, having been first introduced in Salt Lake City by then-Mayor Ben McAdams, its concept has also been piloted “in several cities across the world already—notably in Hong Kong; Singapore; Hamburg, Germany; and Copenhagen, Denmark, with great success,” according to a statement from the Government Finance Officers Association. “With the stale impasse of tremendous social needs growing and strained budgets deepening, the time is right to explore the approach here in the U.S.”

In Utah, the county identified a “gold mine” of government-owned property equaling roughly $10 billion. Currently, the county is working to better utilize its assets.

“If we are able to improve the public return on our assets even slightly, we can start to address some of the major challenges facing our region like increasing the availability of affordable workforce housing and making investments in our transportation infrastructure, and we can do it without raising taxes,” McAdams said in a statement. 

To that end, participating cities in the incubator will aim to identify a budgetary goal, partner with experts from various specialties to inventory publicly owned assets, select underused assets and begin working to develop them to “their highest and best use within parameters set by policymakers,” the statement notes.