Equitable Financial Incentives
In August of 2022, MPC released research and recommendations on the need to center equity in how development is funded in the City of Chicago. A new website equitableincentives.org, was launched to house the findings and help users understand how and where specific financial incentives have been used in the past, along with the steps Chicago can take to improve their use in the present and future. Below is a brief description of the project goals, high level takeaways, and recommendations:
Centering Equity
Equity should be at the center of how development is supported across Chicago. Every neighborhood in the city should provide residents with the opportunity to thrive, and financial incentives should be used to ensure that all communities have good jobs, access to transit, parks and open space, affordable housing, retail, and entertainment.
This August, MPC launched a website exploring how six financial development incentives have been used in Chicago over the last decade. By understanding how these resources have been used, we can better advocate for changes that root programs and processes in equity and lead to more resources in areas with greater factors of disadvantage. The website is a culmination of research, coordination with advisors and stakeholders, and mapping how incentives have been used in Chicago.
Project Goals
MPC’s Equitable Financial Incentives project was designed to better understand how equity is centered in the way the City of Chicago uses financial incentives to attract investments to communities. We looked at how and where six incentives have been used in Chicago and whether the funding has gone to areas that could be considered economically disadvantaged. Our definition of disadvantage was based on socio-economic factors that indicate long standing symptoms of disinvestment.
This research was conducted with the guidance of an experienced and diverse group of advisors. With their expertise, we developed recommendations for rooting the process and outcomes for financial incentives in equity, in order to better address longstanding issues of inequitable investment in Chicago’s communities. These recommendations will be tested out with public users via an ongoing survey accessible from the Equitable Financial Incentives website.
This research was designed to accomplish the following goals:
- Provide basic information about six public funding sources that are classified as incentives.
- Understand how equity has or has not been a driver of incentive use.
- Provide a clear, accessible picture of where and how incentives have been used in Chicago for the past 10 years.
- Determine whether incentive use aligns with socio-economic factors that can indicate areas of advantage and disadvantage.
- Identify recommendations to improve incentive programs in collaboration with advisors.
High-Level Findings
MPC has developed high-level findings based on research and conversations with the advisory group and other stakeholders in order to inform the recommendations.
The goal of the Equitable Financial Incentives project was not to provide recommendations on how to do away with all incentive programs. Nor was our goal to examine whether incentives, like TIF and others, produce benefits in the geography where they are used comparable to other areas. MPC heard from Advisory Group members and external reviewers that project goals should be focused on ensuring equity in the process and outcomes around the use of financial incentive programs. By refining the programs and making the data more transparent and usable for advocacy organizations and government stakeholders, progress can be made on promoting development in historically disinvested communities.
Here are MPC’s key findings from this research:
- Incentive programs do not center equity in their processes or outcomes.
- Incentives are difficult to access for applicants with resource constraints and limitations.
- The outcomes and impacts of incentives used in Chicago are unclear.
Recommendations
Along with research, an interactive map, and information about development incentives, the website will include a list of draft recommendations for more equitable financial incentives use in Chicago. The 10 recommendations were developed through an iterative process and in response to the key findings. They are organized under five headings:
- Develop and Track Outcomes
- Prioritize and Align Incentives to Achieve Equity
- Ease Application Process
- Streamline Funding and Communication
- Improve Accountability
Website users, advocates, and community organizations can learn more about financial incentives, explore an interactive map to see where funding has gone, read the recommendations in depth, and let MPC know what they think of those recommendations to increase equitable development in Chicago. Please explore the Equitable Financial Incentives website, watch the recording of the launch event, and take the recommendations survey!
