Local economies lack infrastructure reinvestment. Identifying and promoting regional assets, even those in disrepair, is the foundation to open capital markets for local economies.  

Small to mid-size cities lack capital for infrastructure development projects. Many Americans live near abandoned industrial or residential buildings, unused bridges or other dilapidated transportation infrastructure. This blight leads to disinvestment in nearby neighborhoods or commercial corridors. Building around blighted infrastructure encourages sprawl.

Few consider these structures as redevelopment opportunities.

The second form of infrastructure is forming under the umbrella of Smart Cities. Smart Cities offer several cost efficiencies to local Governments including environment and financial sustainability. Many cities across the Country need capital markets at the local level to invest in brick and mortal and digital infrastructure.  

Recognize Key Assets

Many small to mid-size regions or neighborhoods don’t record and promote the assets that are owned and controlled by Government organizations, authorities, or by councils. Much like an investment banker might identify a business opportunity, few local and regional Governments have the planning capacity to develop aspirational planning documents without capital in place to invest. Reinvesting in key assets could be a market problem as a problem of local will. Planners aren’t resourced like investment bankers who often receive equity in a successful project.

Within a region, only a handful of people might know what infrastructure is vacant or needs repair. Capital markets can help the community be more aware of those assets. Assets might seem dilapidated ordegraded, but awareness of development possibilities might unlock investment.

Local Governments are pressured to find capital to revitalize infrastructure. If private sector capital doesn’t exist, it is hard for local officials to allocate resources to planning initiatives.

Why aren’t local opportunities promoted to global investors?

Without private capital, there is often no other way to revitalize industrial space or attract mid-size or large jobs to the region. The alternative for many small to mid-size cities is to simply leave industrial real estate undeveloped as an eyesore catalyzing disinvestment for the nearby neighborhood.

Industrial Redevelopment is only one area that can be funded through capital markets. Under the umbrella of Smart Cities, many initiatives offer local Governments operational efficiency and environmental sustainability.

Many Governments use cost savings to finance the initial investment to deploy Smart Cities. Opening those investment opportunities to the community could encourage residents to quite literally take ownership of their city.  

Geography to Minimize Portfolio Risk

Another reason to open capital markets for local infrastructure is the diversification of investor risk. Climate change threatens to destabilize regions. Open capital markets can play an important public safety role as American mass migrant to avoid extreme weather or rising sea levels.

Even if society doesn’t experience the extremes of climate change, diversifying portfolio risk along geographic lines is an important way to deconcentrate our current financial order. Last decade’s financial crisis showshow fragile our financial system has become larger due to the concentration of global assets.

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