Community Development or Economic Development

It seems to me that over the years, we as local government professionals (city managers, economic development folks, planners, etc) have differentiated between the two terms to mean two different types of development: Community development = residential development (or redevelopment) and Economic development = commercial and industrial development. Not only do we differentiate, but we segregate them in our thought processes.

Over the years, it has occurred to me that these two types of development in a development process are inextricably linked, often in a chicken and egg proposition: which supports which? Of course, there is also the thought process that we don’t really want a lot of residential development as the tax revenues (after ten years or so) are outpaced by the services required by the new residential development. However, it does take rooftops to attract commercial development (and their accompanying tax base); and we don’t want to live to far away from commercial development, as long as it is not in our backyard. But I digress, what I really want to address is the foundation of economic development: existing housing, especially older neighborhoods…

And what about the existing housing? Especially those over fifty years old? In particular, the ones in a neighborhood we classify as low-moderate income? I recall driving through a community with the CEO of a company that had just decided to locate in our community. He wanted a tour of the whole city (it was a small city of 6,000 people). As we drove on one street — in a higher density low-moderate income neighborhood, he asked, “How are you going to take care of me if you can’t take care of this neighborhood?” The houses were 50-80 years old; some of them at one time had been stately Victorian single family homes. Now they were divided into tri’s, quads and so forth. A couple of junk vehicles. Unkempt yards. Street alligatoring like a pair of shoes. My response, if I recall correctly was, “Um….”

I was city manager in a second city when our economic development director was talking to me about a visit by a delegation of Japanese businessmen and providing them with a tour of our industrial park. He indicated that we would need to take the state route bypass, adding another five miles or so to our trip. I asked him why we did not take them directly to the industrial park — right through town. He replied that the neighborhood that we were to drive through was too run down and that driving through this neighborhood would deter them from pursuing a project in this particular town. To say the least, I was a little taken aback.

If we ask the ED Director what the appropriate response is to these residential neighborhood issues, I am willing to bet that part of the answer is, “That’s not my job. That is a community development issue, not an economic development issue.” Hmmmm…

And herein lies the crux of my issue: ALL residential neighborhoods are the foundation of economic development, be it a commercial project, a downtown renovation project, or an industrial project. And it is the residential neighborhoods which are the cornerstone of community sustainability. So, why do we tend to ignore them in our drive for economic development in our communities? More importantly how do we include the neighborhoods in our overall economic development programs? More on this in a week or so. Thanks for tuning in.

I need to thank Ms. Della Rucker for her very valuable insights and edits to this post. Thank You Della!


About Economic Development Data Services, Inc.

EDDS is a company focused on providing effective, efficient solutions for local governments in the areas of community and economic development and strategic planning. We offer the BARC - Business Assistance Recruitment Calculator - tool and website solutions in developing economic development websites. Our new website is
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