Offering incentives for new development: The role of city social status, politics, and local growth experiences

The propensity of municipal governments to offer incentives for new development is empirically examined, drawing upon both the literature on local economic development policy and studies of local residential restrictions. The data are from a 1998 mail survey of city managers in California in which officials assessed the likelihood that their local governments would offer financial assistance or zoning changes to various types of new business and residential land uses in their communities. Multivariate analysis indicates that local conditions resulting from past growth patterns-commuting times, job/ population balance, and housing affordability-play an important role in shaping respondents' assessments as to whether their cities are likely to grant incentives. Such factors deserve an important role in explaining local government growth orientations, alongside measures of community status, political institutions, and the strength of progrowth coalitions.