Just beneath the surface of conventional media concern, the groundwork is quietly being laid for a powerful new strategic initiative: a progressive “ownership society.” Traditional liberal approaches may be blocked for the moment at the national level, but there are increasing openings for serious action at the state and local levels, with longer-term nationwide implications. What is striking is that the idea that wealth should benefit the community directly is quietly becoming a commonplace. This community-oriented concept is the polar opposite of the Bush ownership principle that wealth should be concentrated among individuals (especially those at the top).
The alternative idea–a community-benefiting ownership strategy–takes a variety of forms. At one level are enterprises largely or entirely owned by employees who live in the communities in which those enterprises are located. At another are community-building neighborhood corporations. At still another level are nonprofit efforts that undertake economic activity to support community-service missions. Beyond these are publicly owned enterprises that provide jobs and services but also make money for cash-starved local municipalities. Still other efforts include large numbers of cooperatives, community land trusts and hybrid community-oriented economic efforts. Moreover, a number of public-pension and other investment strategies either help nonprofit efforts (especially in housing) or contribute to local community finances by strengthening the local tax base. Some invest in worker-owned companies.
Virtually all these approaches differ from traditional social programs in that they do not depend primarily on taxing and spending–at a time when the ever-deepening fiscal crisis will continue to constrain traditional strategies. Many also anchor jobs firmly in local communities–at a time when globalization and runaway corporations threaten local economic stability.
The least well known of the efforts involves municipalities. The massive Bush-era cutbacks in federal funding now hitting the cities and states have dramatically increased pressures on mayors of both parties to explore new sources of revenue for public services. One of the most important involves real estate. As early as 1970 the City of Boston embarked on a joint venture with the Rouse Company to develop the Faneuil Hall Marketplace, the downtown retail complex. Boston kept the property under municipal ownership and negotiated a lease agreement through which the city secured a portion of the development’s profits in lieu of property taxes. By the mid-1980s Boston was collecting some $2.5 million per year from the Marketplace. One expert estimate is that Boston took in 40 percent more revenue than it would have collected through conventional property-tax channels.
Entrepreneurial “participating lease” arrangements for the use of publicly owned property are now common in many parts of the country, including New York, Los Angeles and Washington, DC. Under such leases a developer pays the public landlord both a yearly base rent and an additional amount pegged to project performance. The principle at work is similar to the one private developers commonly use in shopping-center leasing: The more money the developer makes, the higher the rent.