Could "Impact Bonds" Target Places Rather Than People?

Localities are experimenting with social impact bonds (SIBs) to fund America's social service infrastructure. John Roman asks if such an instrument could be used to help transform blighted areas.

1 minute read

November 16, 2013, 7:00 AM PST

By Jonathan Nettler @nettsj


"SIBs are currently being used to invest in people, not places," writes Roman, senior fellow in the Justice Policy Center at the Urban Institute. "But, for cities looking to innovate, SIBs may provide a promising model for funding reclamation of blighted areas cities inherit or want to develop."

"Under this model, private capital would be used to support revitalization projects, and cities would provide investors a cut of the revenue if the developments prove profitable," he explains. "Using SIBs this way has some advantages over people-focused prevention programs. Unlike the Rikers SIB, where 'savings' from reduced recidivism are unlikely to flow back in the government's coffers, cities would clearly identify savings in development and maintenance costs, plus reap the reward of increased revenue from more successful uses of now dormant properties."

Wednesday, November 6, 2013 in Huff Post Business

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