Economic development programs use zoning, revolving loan funds, local buying initiatives, government-subsidized research, and brownfield reclamation to stimulate economic growth and job creation in communities. Zoning can create corporate zones with tax credits for developers, while revolving loan funds provide interest-free loans for entrepreneurs. Buy-local initiatives encourage residents to support local businesses, and brownfield reclamation restores polluted industrial sites for new productive purposes.
Different types of economic development programs may employ zoning to stimulate economic development, establish revolving loan programs to help businesses, or provide training for entrepreneurs. Local buying initiatives are sometimes used to retain more economic activity within a specific area. At other times, local and regional governments, as well as academic institutions, may support research or subsidize investment in innovation. Other economic development programs can be designed to reclaim polluted industrial sites.
Zoning can be used as a tool in economic development programs. In some regions, laws are passed to set aside areas as “corporate zones,” where developers receive tax credits in exchange for infrastructure investments in vacant lots. For example, a company that wants to build a factory can receive a tax credit for a certain period of time, typically over several years. The operating idea behind these programs is usually to waive taxes for several years in exchange for enticing a developer to bring additional jobs to a community.
Launching a loan pool or revolving loan fund is another technique used by economic development programs. The idea, in this case, is that when a local or regional government invests a certain amount of money to start a loan program, the first beneficiaries return the money. These funds can later be used for other business expansions.
Sometimes a company will be offered a revolving loan with no interest or low fees. Group loans may be offered by non-profit community development organizations. These cash funds are often targeted at entrepreneurs, and loan amounts can vary.
Buy-local initiatives are a type of economic development program based on the concept that encouraging residents of a community to buy from each other will boost local businesses as well as increase local tax revenues. Government-subsidized research can also be used to develop new ways for a community to add value to locally available commodities. For example, a research project might involve finding new uses for leftover fiber from local agricultural crops and then incorporating this material into finished products. As the materials used for production can be free or relatively inexpensive, as they are often considered agricultural waste, new products can be produced and sold at a profit. This often results in new job creation in a community.
Brownfield reclamation is a specific type of program generally designed to restore heavily polluted industrial sites and renew land use for new productive purposes. These types of economic development programs generally rehabilitate land polluted by less technologically advanced manufacturing or mining methods that have resulted in contamination. Shipyards, rail yards, and sites that housed manufacturing operations involving toxic materials are often involved in exploration field rebuilding efforts.
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