Inequality has risen across advanced industrial democracies over several decades due to economic downturns, decreasing real wages, the restructuring of government services and finances, the rise of financial services combined with a decline in the manufacturing sector, housing unaffordability, and an unpredictable job market. The changing economic landscape can have adverse impacts on democracy if unchecked, which calls for innovative solutions to mitigate the adverse effects on the social well-being of underserved communities.
We need to fund initiatives that improve collective social well-being. This involves understanding various methods used in cities to support social, physical, and economic well-being. Promising community economic development and wealth-building programs are becoming more common locally. These programs should be included in broader discussions about regional development and planning. It’s important to consider how the public can work with non-profits, public services, and agencies to use city finances to reduce inequality across geographical and demographic divides.
Tackling important structural challenges head on will require social models of development, involving public participation in helping set agendas and influence funding outcomes. Participatory budgeting is also a core element to ensuring that municipal finance and budgeting has a meaningful impact on mitigating inequality by supporting not only capital, but operational programming. If we can chart how local wellbeing programs operate, make important contributions, and face internal/external challenges, there are prescriptive opportunities for future pathways. There is a lot of opportunity to bring together different types of professional and lived expertise – resident, academic, private, and public sector – to collaborate on existing and future agendas for the financing of local social well-being.
Four Pathways to Financing Social Wellbeing
- Anchor Institutions as Employers
Universities, community organizations and hospitals are vital sources of building a community’s purchasing power and reinforcing local labor employment. The Democracy Collaborative highlights the growth of community wealth-building initiatives, such as the ‘Preston Model,’ which involves partnerships that use local funds for inclusive hiring practices. Many cities have introduced new policies to support and collaborate with local anchor institutions and community organizations like the United Way. - Community Land Trusts and Governance for Housing Affordability
There is a growing movement for housing affordability particularly through control of local housing stock. Community land trusts involve buying up available properties at market rates. They resituate housing stock to be affordable units for under-served members of the community. Community owned units are held by land trusts in perpetuity and are governed democratically. Public dollars have been deployed to support the purchase of land and rental buildings. - Community Grants and Partnerships for Urban Health Regeneration
There is a very important role for community economic development at the local level. Community grants often factor into the role of community and social development departments in place-based work. Often, the public use small pools of public funds to service community, resident-led, events geared to building social fabric. These grants can be collectively distributed in participatory ways through different types of hyperlocal interlocutors such as grassroots groups, planning tables, etc. - New Funding Strategies for Local Governance Models
Traditional economic growth models often prefer vibrant city centers with thriving service industries, a concept known as economic clustering. While economic clustering can create well-paying jobs, it also has drawbacks. This includes increased housing costs in urban areas and the displacement of markets to suburbs with fewer public services. It’s crucial to explore new approaches to economic growth and governance that promote (sub)regional development and use finance to address inequalities in underdeveloped areas.
Addressing the complex challenges of inequality and promoting local well-being requires collaborative efforts, innovative financing models, and a commitment to inclusive decision-making processes. By implementing the strategies outlined above and continuing to explore new approaches, cities can work towards creating more equitable and resilient communities.
