Economic development is a long-term initiative by lawmakers and local officials intended to raise the overall economic performance and stability of an area. Urban economic development is such an initiative carried out in an area classified as "urban," generally meaning a highly populated city or metropolitan center. Urban economic development usually consists of programs intended to bring businesses into the area and increase employment levels, ultimately resulting in economic growth. Common components include tax incentives for companies offering new jobs, programs designed to attract new residents, social development programs and tourism efforts.
The primary goal behind urban economic development is to increase the economic soundness of an area. Sometimes referred to as "urban renewal," such initiatives are generally launched in areas that are in decline, have already declined or have never experienced economic success. Most economic development initiatives, urban and otherwise, involve both business and social programs, and combine policy making with specific development projects.
One major facet of many urban economic development programs is business recruitment. Bringing new businesses into a city or increasing the hiring potential of existing businesses produces jobs for local citizens. This can, in turn, increase the per capita income; attract new residents; decrease area unemployment; and increase the city's tax base, both through income tax collections and business taxes. In addition, people who are employed and those who make more money generally buy more things, improving the local economy.
To attract new businesses, those involved in urban economic development will often offer tax incentives. They may also reduce or waive fees associated with setting up a business and may help negotiate favorable property purchases or lease rates. Another option for bringing in jobs is to initiate city development projects, such as road resurfacing, bridge repairs, landscaping projects and more. These projects have the dual benefit of creating jobs and beautifying the community.
Social programs often play a factor in urban economic development as well. This can include recruiting healthcare facilities and professionals to improve the area's health, launching school improvement projects, offering continuing education at attractive rates and building or expanding community and cultural centers. Literacy campaigns, anti-drug campaigns and anti-violence campaigns are also common.
As the area begins to rebound, additional efforts are often made toward recruiting residents and attracting tourists. This might include improving temporary and permanent housing and developing areas of interest, such as museums, parks and historical sites. Urban economic development is an ongoing process that can take years to fully realize its potential. In a successful model, the result will be a higher standard of living and quality of life for all residents, along with a thriving business community.