Unlock value in unused or underused assets
Cities often have assets (land, buildings, infrastructure) that are either unused or not used efficiently. Unlocking their value may be a way to increase revenues in the medium term. At the same time, selling assets can also deprive cities of substantial wealth, so use of the proceeds must be carefully targeted (ideally towards investment) and not just to cover operating expenditures. Leases of public assets to private investors can provide significant revenue but must be negotiated carefully.
ASSESSMENT
Some questions to guide your thinking
- What assets can the city consider utilizing to earn revenue that are currently underutilized or unproductive?
- What transaction can be executed (e.g., will it be a sale, lease, or something else)?
- How will the proceeds of those assets be used?
Reading
Considering an urban wealth fund
Project Syndicate 5 minutes
In this reading, Swedish public investment expert Dag Detter suggests that cities can more than double their investments – without having to raise taxes or cut spending – through smarter asset management and creation of an Urban Wealth Fund.
- Because many city leaders have not accounted for the market value of city assets, they cannot fully measure the cost of leaving these assets under-managed.
- Managing city assets better would help local leaders boost their economies, finance social and economic infrastructure, and develop strategies for vibrant and innovative projects.
- A fund can be managed at arm’s length in a transparent and accountable manner, guided by a city mandate but directed by a dedicated professional staff to keep it free from political influence.
Reading
Considering infrastructure investments to spur workforce development
HKS Data-Smart City Solutions (Harvard Kennedy School) 5 min
Are there city assets that could aid economic growth and equity? This article highlights how Louisville, KY used the water system to diversify its workforce, ensuring excluded communities could be a part of the economic ecosystem surrounding water and sewer repairs.
- Assets such as water and sewer systems represent opportunities for continuous investment.
- Louisville used water systems to increase vendor diversity and mitigate community hardships.
Reading
Creating an inventory of tangible capital assets
Government Finance Officers Association (GFOA) 5 minutes
This article describes tangible capital assets and the advantages for local governments of regularly conducting inventories.
- Inventory tangible capital assets once every five years, at least.
- Tangible capital assets include land, buildings, building improvements, vehicles, machinery, equipment, and infrastructure.
Reading
Considering an urban wealth fund
In this reading, Swedish public investment expert Dag Detter suggests that cities …
Reading
Considering infrastructure investments to spur workforce development
Are there city assets that could aid economic growth and equity? This article …
Reading
Creating an inventory of tangible capital assets
This article describes tangible capital assets and the advantages for local …