Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, February 25, 2015

Social impact bonds

I had a hard time wrapping my head around these financial instruments, but they are merely a way for financially-pressed governments to get loans.

They work like "tax increment financing," where bonds are sold against a presume rise in property tax revenues beyond a base line number, in response to various infrastructure investments, such as in transit.

But instead of being sold against a property tax revenue stream, social impact bonds are sold against future spending on particular government programs.  Here, the new investment enabled by the bonds is supposed to improve outcomes and reduce costs.  The "reduced costs" are monetized as a way to pay off the bonds.

Another comparable financing instrument are "green infrastructure bonds," which do the same kind of thing, focused on reductions in energy or other utility costs.

One example of a social impact bond is Salt Lake County's use of this form of financing to support the creation of Pre-K schooling programs for lower income children, in the belief that earlier investments in education will reduce other social and economic costs--paid out by various program services of the County---down the road.

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