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June 2023

Driving Private Investment Toward Health Equity Using People-centered Local Policy

Driving policy decisions with equitable community engagement can effectively guide and incentivize private investment in health equity.

by Erik Calloway, AICP

Places shape health equity, and investments shape places, so how do we shift investments toward health equity?

Ensuring low-income residents and residents of color can live healthy, prosperous lives requires unlocking their communities’ physical, economic, and social potential. Community investment is needed to dismantle the drivers that create unfair barriers to that health. But who will make the needed investments? How do we attract those investments? And how do we know where to invest, what to invest in, or who to invest in?

The amount of investment needed to improve health equity is too large for City, County, State, or Federal government to cover. For example, the Low Income Housing Tax Credit has helped place 3.55 million housing1 units in service since it was adopted in 1986, yet there is still “a shortage of 7.3 million rental homes affordable and available to renters with extremely low incomes” today2. The types of investments needed are too varied to be funded by any one sector. And political, economic, and regulatory realities add costs and complexity that constrain investments from being made where and how they are needed.

Small and midsized cities may face greater economic barriers than larger cities. But they are often nimbler in their ability to collaborate across government, with community partners, and with private investors to change how and where they focus their attention. This presents opportunities to effectively listen to and respond to changing community needs.

Government, community development finance experts, philanthropy, community-based organizations, and anchor institutions need to change the way they think about community development to overcome these barriers. To realize this change, cities must drive decisions with equitable community engagement instead of shaping community engagement to justify decisions.

This shift takes time and effort, since no one person, organization, department, agency, or government can do it alone. But, with the right tools and strategies in place, it can be done.

What tools do we have to guide private sector investment?

Over eighty percent of investments in built structures across the country (including infrastructure, buildings, amenities) are made by the private sector3. But it is not just economics and market forces that guide private investment and create inequitable patterns of investment. Local laws, policies, and practices are a fundamental piece of capital flows and include:

  • Budgets (city-wide budgeting, departmental budgeting)
  • Planning documents (i.e., comprehensive plans, parks masterplans, transit area plans)
  • Development regulations (i.e., zoning)
  • Development incentives (i.e., density bonuses, tax breaks, tax increment financing)
  • Community benefits (i.e., development fees, open space requirements, street improvements)
  • Development approval processes (administerial approval, design review, appeals)
  • Public participation processes (public noticing requirements, advisory committees, community meetings)
  • Policy decision-making processes (public hearings, elected official voting procedures)

How have these tools created inequities?

Structural discrimination, disparities in political power, and governance that limits meaningful participation have resulted in a system of laws, policies, and procedures that defer decisions about what, how and where to invest to the private sector. But health and equity do not provide the types of monetary return on investment that the private sector relies on to guide their investments or that commercial banks use to approve financing for those investments. It is not uncommon for investors, in coordination with cities, to plan and design projects in ways that preclude community feedback from meaningfully shaping those investments in order to secure complex financing and minimize time-related costs. This focus on profits over community well-being is largely why the private sector has invested and continues to invest in ways that unfairly distribute access to healthy places.

How do we drive decisions with authentic community engagement instead of shaping community engagement to justify decisions.

Meaningfully inclusive and equitable participation represents a fundamentally new approach to community engagement. It isn’t just about changing how, when, and where local leaders facilitate community conversations. At its core, equitable community engagement is about redefining why engagement happens, how local leaders show up, and building trust4 between local leaders and their communities.

Most importantly, local leaders must demonstrate community orientation by leading with listening. Start conversations by asking what the community wants to discuss and shift from deficit framing to a focus on aspirations, strengths, skills, and assets5. From there, local leaders can prioritize actions that address community-identified aspirations and remove community-identified barriers to health.

Beyond community orientation, local leaders must establish credibility. This includes expressing an understanding of why there is a lack of trust, such as by acknowledging historic structural inequities6 and the history of inadequate engagement efforts. Local leaders must be reliable. This includes having conversations regularly, frequently, and without project-oriented asks, while tracking7 and demonstrating8 how those conversations are meaningfully shaping investment decisions. And local leaders must demonstrate an openness to learn9, accept community ideas and respect diverse experiences10.

One action cities can take to apply this new approach is to develop an equitable community engagement plan11. Cities with limited resources can start with a department-specific plan and then expand the plan to other departments. But ultimately, aligning engagement activities12 with planning across agencies13, departments, institutions, partners and investors can ensure consistent messaging, make efficient use of city resources, facilitate deeper conversations, and direct diverse investment streams to community priorities. Finally, cities can establish budgeting and capital investment planning processes, or even participatory budgeting14, that include mechanisms for reflecting community engagement.

Investing in health equity requires changing the policies that guide investment by prioritizing authentic community engagement.

Evidence shows that systems change can effectively reduce population-level inequities15. The built environment today is the physical embodiment of discriminatory laws and policies. Changing those conditions cannot happen without fundamentally altering the flow of private sector investment. This requires transforming the systems of local laws and policies that enable, direct, incentivize, and prohibit investment.

By transforming their approach to community engagement, multi-sector coalitions in small to midsized cities can build the public will necessary to impact systems change at the policy and practice level. And maintaining diverse, trusting relationships in the community will ensure that the community investments that follow are aligned with community needs and achieve equity over time.


About the Author

Erik Calloway headshotAs a managing director at ChangeLab Solutions, Erik Calloway, AICP, focuses on the links between the built environment and health. He conducts research, prepares strategies, and develops tools to help communities support healthy living and sustainability using equitable, people-centered policy processes.

Prior to joining ChangeLab Solutions, Erik worked for 13 years as an urban design consultant. He has led multidisciplinary teams during the assessment, community engagement, policy, adoption, and implementation phases of streetscape and public space design, district and corridor restructuring, city planning, neighborhood development, and downtown revitalization projects. He has given presentations to a wide variety of audiences on a range of urban design topics.

ChangeLab Solutions is a nonprofit organization that provides legal information on matters relating to public health. The legal information in this document does not constitute legal advice or legal representation. For legal advice, readers should consult a lawyer in their state.