Solution

Financing Comprehensive Resilience Upgrades with Special Assessment Districts

This solution addresses capturing distributed resilience benefits and savings in US cities for city government and private property owners

Problem Description

Capital 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.

Building Blocks

Story

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.

Photos

Resources

Contributed By

Elle Hempen, re:focus partners

Solution Stage

One 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	Creativity methods Design tools Crowdsourcing Open innovation Awards and rewards Challenge prizes	High failure rate should be an explicit expectation Visible senior leadership essential HIGH	Usually grants, occassionally convertible LOW	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

Submitted By

Elle Hempen