Problem DescriptionCapital costs for investing in comprehensive and integrated resilient infrastructure systems are significant. Even where the benefits far outweigh project costs, often they are distributed among a wide range of direct and indirect beneficiaries from across sectors. In the face of shrinking budgets, cities need ways to motivate resilience investments on private properties and support private investment in public goods. Establishing a special assessment district that can help monetize the value of resilience upgrades and determine willingness-to-pay, can help mobilize private project developers and investors looking to install and finance resilient infrastructure projects.
A city’s ability to create a special assessment district that can levy taxes and/or fees offers a unique opportunity for financing comprehensive resilience upgrades. Local governments have used value capture mechanisms and borrowing against future tax revenues (i.e. tax-increment financing, TIF) or Development Impact Fees to incentivize, if not directly finance, development projects in areas with high private investment risk. These value capture mechanisms capture a portion of the value created for private property owners and developers as a result of public investments. The same mechanisms, in principle, could be applied to support private investments that similarly reduce disaster risks and/or insurance premiums across a broad area.
- Elle Hempen, re:focus partners
Solution StageOne of the 7 stages of an innovation. Learn more
|STAGE||SPECIALIST SKILLS REQUIRED||EXAMPLE ACTIVITIES||RISK LEVEL AND HANDLING||FINANCE REQUIRED||KINDS OF EVIDENCE GENERATED||GOAL|
|Generating ideas2||Ideation and facilitation of creative thinking|
|A clear account of change or likely causation, supported – but not overly constrained – by evidence||An idea or set of ideas to develop and test|