Topic: Economic Development

Two skyscrapers stands in front of a background of blue sky

Q & A

Tax Incentives for Amazon HQ2—When Winners End Up Losers?
By David Franco, September 26, 2018

America’s second most valuable public company, Amazon has grown across multiple industries over the years and is planning a second headquarters. The company has cited incentives, such as tax credits and reduced-price land, as a key factor in selecting a host city. Daphne Kenyon, an economist and fellow at the Lincoln Institute, and coauthor of the Policy Focus Report Rethinking Property Tax Incentives for Business , has shared her insights into what Amazon’s second headquarters could mean for the Boston area – one of 20 finalists in the competition to host Amazon. What follows is an edited interview by David Franco, a Lincoln Institute intern in spring 2018.

David Franco: How would the location of HQ2 in Boston impact the city?

Daphne Kenyon: Despite Amazon’s claim that HQ2 would bring 50,000 jobs and $5 billion in investment, it is not clear that having HQ2 in Boston would be a net benefit for the citizens of Boston. Housing is already expensive in Boston, and such an influx of new employees could further drive up the cost of housing, for example. Also, if the city of Boston gave up too much in taxes and other financial incentives, the negatives of HQ2 could outweigh the positives.

DF: What factors should a city like Boston consider when deciding whether and how to provide tax incentives to a business like Amazon?

DK: As a matter of good practice, before promising tax incentives a city should systematically weigh the benefits and costs of attracting the headquarters. Our report (p. 49) sets out a benefit-cost framework that reminds policy makers to consider the effects of any potential tax incentive deal on the city’s finances, labor market, local economy, and quality of life. In some cases, the costs of attracting a firm outweigh the benefits. This can be summed up by the phrase: “when winners end up losers.”

One way to characterize the results of a benefit cost analysis is by stating the findings in terms of the cost per job gained. Certainly, attracting a business when the cost per job gained is $10,000 looks much better than when the cost per job gained is $1 million.

DF: Based on your research, how important are tax incentives to a company’s choice of where to relocate? What other factors would they consider?

DK: We found tax incentives are not the most important factor in determining business location. Companies consider a host of factors including traffic, climate, and, most importantly, characteristics of the local labor market. This includes wages, skills, and the availability of workers. Certainly, as home to more colleges and universities than any other city in the United States, Boston stands out in that regard.

DF: What other costs should cities consider when a large employer relocates?

DK: Cities need to think about the cost of infrastructure. Does the city have adequate infrastructure for the additional workers or will improvements to infrastructure impose big costs on the city? Boston has an aging, poorly maintained public transit system. That system already needs upgrades, but renovations would be even more important and urgent if Amazon brings its second headquarters to Boston. Another cost of playing the incentive game is that other businesses may request or expect such incentive packages in the future.

Seattle’s recent failed efforts to impose a head tax on Amazon and other large employers raises another red flag. Does Boston want a single employer to be so important to the city that it has outsize influence over political decisions?

DF: How do Boston’s tax incentives compare to those of the other finalists in the competition?

DK: We don’t know specifically what Boston or other cities are offering. This competition has not been very transparent. At least two cities — Toronto and Austin — have said they are not offering a tax incentive package. Columbus, Ohio, revealed its local tax incentive package, but we don’t know what Jobs Ohio, the state development agency, is offering. We will likely know about the tax incentives offered by the winning city, but might never know what the other finalists offered.

 


 

This article was originally posted on the At Lincoln House blog.

Photo by kiewic / Flickr CC BY 2.0

Course

2019 Professional Certificate in Municipal Finance – Chicago

March 13, 2019 - March 15, 2019

Chicago, IL United States

Offered in English


Events in Detroit, Stockton, Flint, and Puerto Rico highlight the severe challenges related to fiscal systems that support public services and the continued stress they face given local governments’ shrinking revenue streams.

Whether you want to better understand public-private partnerships, new approaches to debt and municipal securities, or leading land-based finance strategies to finance infrastructure projects, this Professional Certificate in Municipal Finance will give you the skills and insights you need as you advance your career in urban planning, real estate, treasury, or economic development.

Overview

Created by Harris Public Policy’s Center for Municipal Finance and the Lincoln Institute of Land Policy, this three day program provides a thorough foundation in municipal finance with a focus on urban planning and economic development. This course will include modules on the following topics:

  • Urban Economics and Growth
  • Intergovernmental Fiscal Frameworks, Revenues, Budgeting
  • Capital Budgeting/Accounting and Infrastructure Maintenance
  • Debt/Municipal Securities
  • Land-Based Finance/Land Value Capture
  • Public-Private Partnerships
  • Cost Benefit Analysis – Across Public Finance Instruments
  • Fiscal Impact Analysis

Participants will learn how to effectively apply tools of financial analysis to make strategic decisions and gain an improved understanding about the interplay among finance, urban economics and public policy as it relates to urban planning and economic development.

Upon completion of the program, participants will receive a Certificate in Municipal Finance.

Who Should Attend

Those with the following experience will be given preference for admission:

  • New to senior-level urban planners who work in both the private and public sectors as well as individuals in the treasury, economic development, and land development industry at large.
  • Relevant job titles include:
    • Urban Planners
    • Community and Economic Development staff
    • Developers and real estate professionals
    • Real Estate Attorneys
    • Treasury and Finance professionals

Space is limited.


Details

Date
March 13, 2019 - March 15, 2019
Application Period
October 8, 2018 - January 25, 2019
Location
The University of Chicago
Gleacher Center
450 Cityfront Plaza Drive
Chicago, IL United States
Language
English
Number of Credits
15.00
Educational Credit Type
AICP CM credits
Related Links

Keywords

Economic Development, Infrastructure, Land Use, Local Government, Municipal Fiscal Health, Planning, Property Taxation, Public Finance

Course

Geotecnologías Aplicadas a Políticas de Suelo

October 8, 2018 - November 21, 2018

Online

Free, offered in Spanish


El curso tiene como propósitos difundir el potencial de las geotecnologías para la mejor gestión del suelo y demostrar como la aplicación de los Sistemas de Información Geográfica (SIG) y los datos geográficos adecuados hacen más eficiente y efectivo el uso de los instrumentos de gestión de suelo.

Se considerarán conceptos claves, tales como el proceso de identificación de problemas urbanos y su abordaje con las geotecnologías; la problemática de trabajar con datos geográficos efectivos; y el uso de herramientas de análisis espacial avanzado para el modelamiento de problemas geográficos y sus soluciones, así como casos concretos de aplicación.

Durante el desarrollo del curso, el participante tendrá un acercamiento al uso de los SIG, así como a la elección de los datos geográficos útiles para aplicar en el estudio de diversos problemas. También conocerá el uso de las herramientas de análisis espacial para producir información adecuada para la toma de decisiones.

 

Requisitos previos: Familiarización con el uso de software SIG y datos geográficos.

Ver la convocatoria


Details

Date
October 8, 2018 - November 21, 2018
Application Period
August 17, 2018 - September 5, 2018
Selection Notification Date
September 26, 2018 at 6:00 PM
Location
Online
Language
Spanish
Cost
Free
Registration Fee
Free
Educational Credit Type
Lincoln Institute certificate

Keywords

Appraisal, Assessment, Cadastre, Community Land Trusts, Economic Development, Economics, Eminent Domain, Environment, Environmental Management, Environmental Planning, Farm Land, Favela, Floodplains, Forest Land, GIS, Growth Controls, Growth Management, Housing, Informal Land Markets, Infrastructure, Land Banking, Land Law, Land Market Monitoring, Land Market Regulation, Land Monitoring, Land Reform, Land Use, Land Use Planning, Land Value, Land Value Taxation, Land-Based Tax, Legal Issues, Local Government, Mapping, Natural Resources, Planning, Property Taxation, Public Finance, Public Policy, Public Utilities, Regulatory Regimes, Reuse of Urban Land, Scenario Planning, Smart Growth, Spatial Order, Sustainable Development, Tax Increment Financing, Tax Reform, Taxation, Tenure, Transportation, Urban, Urban Design, Urban Development, Urban Sprawl, Urban Upgrading and Regularization, Urbanism, Valuation, Value Capture, Value-Based Taxes, Water, Zoning

Course

Gestión del Suelo en Grandes Proyectos Urbanos

October 8, 2018 - November 21, 2018

Online

Free, offered in Spanish


Las intervenciones urbanas de gran envergadura, denominadas usualmente Grandes Proyectos Urbanos (GPU), combinan una escala espacial importante con la complejidad de su gestión, y constituyen uno de los rasgos dominantes actuales de las ciudades de América Latina. El componente suelo hace parte esencial en la estructura de estos proyectos, puesto que éstos pueden impulsar cambios urbanos inmediatos capaces de afectar los valores de los terrenos. La valorización del suelo generada por la implementación de este tipo de proyectos representa un potencial de autofinanciamiento y viabilidad económica, a partir de la movilización de plusvalías para beneficio público.

Los GPU incluyen intervenciones dirigidas a la recuperación de áreas urbanas deterioradas o abandonadas (incluyendo centros históricos), desarrollo de proyectos de expansión urbana, consolidación de centralidades, la utilización de tierras públicas en desuso (antiguos aeropuertos o puertos, zonas industriales, etc.) o la ejecución de proyectos de mejoramiento habitacional de gran dimensión.

Esta forma de hacer ciudad plantea una serie de desafíos: la articulación del plan de ordenamiento territorial con el proyecto, la captación de las plusvalías generadas por los proyectos, el rol de la institucionalidad pública y del sector privado, la conformación de un equipo gestor, la participación ciudadana, su contribución a la integración y cohesión social en la ciudad, la utilización del marco normativo urbanístico general o la adopción de marcos específicos, y su contribución a la sostenibilidad urbana, entre otros.

 

Requisitos previos: Manejo de conceptos de formación de precios del suelo y su relación con la planificación urbana.

Ver la convocatoria


Details

Date
October 8, 2018 - November 21, 2018
Application Period
August 17, 2018 - September 5, 2018
Selection Notification Date
September 26, 2018 at 6:00 PM
Location
Online
Language
Spanish
Cost
Free
Registration Fee
Free
Educational Credit Type
Lincoln Institute certificate

Keywords

Assessment, Brownfields, BRT, Bus Rapid Transit, Business Improvement Districts, Development, Economic Development, Economics, Eminent Domain, Environment, Environmental Management, GIS, Housing, Inequality, Infrastructure, Land Banking, Land Market Monitoring, Land Market Regulation, Land Monitoring, Land Speculation, Land Use, Land Use Planning, Land Value, Legal Issues, Local Government, Open Space, Planning, Pollution, Poverty, Public Policy, Reuse of Urban Land, Segregation, Slum, Smart Growth, Stakeholders, Suburban, Sustainable Development, Transport Oriented Development, Urban, Urban Design, Urban Development, Urban Revitalization, Urban Sprawl, Urban Upgrading and Regularization, Urbanism, Value Capture, Zoning