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MML #5: Making the Economic Case for Place

essentialTOPtempMML #5:  Making the POWELLad_01Economic Case for Place

(Crystal A. Proxmire, April 4, 2016)

Lansing, MI – What do communities need to thrive? This is the question explored in depth by The Michigan Municipal League and Public Sector Consultants in 2015.  They came up with eight elements of prosperous communities, and explored what research had been done about the economic impact of those elements.

Shanna Draheim, Senior Consultant with Public Sector, presented those findings to a room full of representatives from cities, counties and townships across Michigan at the Michigan Municipal League’s Annual Capital Conference March 23.

Draheim presented the report with an emphasis on the return on investment communities royal_servicesreceive when they develop in the suggested areas. She was followed by Robert Kleine, former State Treasurer and consultant with Great Lakes Economic Consulting who presented information about the cutbacks in support to the local governments from the state.  (Read about his presentation here.)  Together they urged members to consider thoughtful development and to get involved in educating the public about the cuts to local funding.

The “Eight Key Community Assets for Creating 21st Century Communities” are: physical design and walkability, multi-modal transportation networks, environmental sustainability, cultural economic development, entrepreneurship, welcoming, education, and messaging and technology.

Physical Design and Walkability:

“A lot of people talk about walk scores,” Draheim said.  Walk scores look at proximity to shopping, events, dining, etc.  According to the report “Good physical design and walkability is no longer a luxury, but is actually imperative for the economic success of a community.  dinos02sidelogo3Characteristics of good physical design and walkability include high density development, mixed land use, connectivity, public open space, sidewalk coverage, street density and personal safety.”

A 2009 study by Joe Cortright showed that office space in dense areas is an average of 74% more rent-per-square-foot than other parts of the metro area.  It also showed that increased walk scores correlate with increased home values.

Multimodal Transportation:

Draheim said multimodal transportation increases property values and that “investment in transit has a direct impact on employment.”  Bike paths also equate to higher home values.  The report gives examples in Indiana and Delaware where homes located closer to the area’s bike path sold for 4-11% higher than those further away.

blumz01A study by Smart Growth America noted that “Increased and improved transit can also spur transit-oriented development including housing, commercial and office uses,” according to the report.  “In response to the Great Recession, every dollar that the federal government spent on public transportation as part of the stimulus package created twice as many jobs as a dollar spent on a highway project.”  Individuals can also benefit from transit by saving money on their commute.

Environmental Sustainability:

Draheim encouraged attendees to think of ways to use “green” features and technologies in the projects they do.  “The research indicates that environmental sustainability initiatives can have a positive effect on a community’s image and attractiveness (to people and businesses), and that green infrastructure in particular is linked to increased property values, incomes, and employment levels,” the report states.

One of the dozens of studies MML and PSC looked at was a tree study in Grand Rapids.  garden16_ann_perry“Closer to home, the City of Grand Rapids evaluated the economic benefits of street trees in the city.  Monetizing benefits such as energy reduction, storm water management, air quality protection, increased property values and climate protection, the city’s study estimated that the average value per tree is $76.14, with a net annual benefit to the city of $4,694,139.50,” the report said.

Cultural Economic Development:

Several studies have evaluated the economic impact of arts and culture on communities. The report gives a few examples, including a 2012 study that found that Connecticut’s nonprofit arts and cultural industries “generated $653 million in total economic activity, supported 18,314 job, generated $462.5 million in household income to local residents, and provided state and local governments with almost $60 million in tax revenue.”

HowesLocationIn Michigan examples include The Woodward Dream Cruise and Grand Rapids’ Art Prize.


In terms of economic development, the report recommends cities work to attract high-tech startups.  Draheim said that entrepreneurs look for things like communities that have an incubator space and networking opportunities.


Venture capital investment tends to happen in communities that have diverse populations. Communities can demonstrate being welcoming by having inclusive ordinances, having events and festivals that celebrate communities within the broader community. Draheim gave the example of East Lansing as a welcoming community.lisa schmidt law


Education and economic success tend to go hand in hand, a trend that civic leaders can keep in mind as they consider opportunities in their community.

Messaging and Technology:

Draheim said that the way local governments communicate can improve how attractive they are to potential new residents and businesses.  “Broadband access is closely related to entrepreneurship,” she said.  “[Also], how are we using tech to communicate with residents?”  She explained that some cities now have apps for reporting non-emergency situations like GT ad 04potholes or street lights that are out.

Draheim wrapped up by saying that “Communities that are finding ways to weave all this together are having the most success.”

More information on “Creating 21st Century Communities” is available at

This story is part of a series on the MML Capital Conference that took place March 22-23 in Lansing.   For other MML-related stories see:

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