Chicago, Scotland take a community wealth building approach to economic development

With American Rescue Plan (ARP) dollars flowing to municipalities, local governments have the chance to invest these dollars for a more just, equitable, and sustainable future, using practical models now emerging. From Chicago to Sydney (Australia) and from Scotland to Northern Ireland, communities are investing in “community wealth building” to rebuild economies in ways that result in greater resiliency and equitable outcomes.  

In September 2021, Chicago Mayor Lori Lightfoot announced that Chicago would invest $15 million of its ARP funds in a pilot community wealth building (CWB) fund. In this city where 60 percent of residents are Black and brown, the work is being led by the Office of Equity & Racial Justice (OERJ). Last month, the OERJ launched its new CWB initiative, which “promotes the local, democratic, and shared ownership and control of community assets.” Specifically, Chicago is investing in four key institutional models—worker cooperatives, limited equity housing cooperatives, community land trusts, and community investment vehicles—to achieve its goals of community empowerment, neighborhood stabilization, dignified work, and narrowing the wealth gap.   

Community wealth building (CWB) is an economic development strategy that transforms local economies based on communities having direct ownership and control of their assets. It takes democratic community institutions and practices proven to work, such as community land trusts, worker cooperatives, and public banks, and supercharges their power by connecting and scaling them through policy development, institutional design, and ecosystems of support. It changes people’s lives by giving them control of the economic future of their communities.     

One place to see CWB more fully developed is in Scotland. There, the North Ayrshire Council was the first local authority to embrace this transformative economic development strategy—and today, five other local authorities are piloting CWB. Soon, with support from the Scottish government and the new Minister of Public Finance, Planning and Community Wealth Building, all 32 local councils across the country will develop CWB plans. This is a significant step for CWB, first articulated in 2005 by The Democracy Collaborative. North Ayrshire’s strategy is built on years of hard work with support from the UK-based Centre for Local Economic Strategies and consultation with The Democracy Collaborative and other experts in the field.   

The North Ayrshire Council set out clear objectives in each of the five pillars of CWB—inclusive and democratic enterprise, locally rooted finance, fair work, just use of land and property, and progressive procurement. Ten council staff devoted to the CWB strategy work closely with a CWB Commission of key local stakeholders. Since it released its five-year CWB plan in 2020, the council has taken significant strides as it brings a CWB lens to its decision making, including: 

An Anchor Institution Charter: CWB is a placed-based strategy that engages place-based institutions in building local supply chains and supporting local development. North Ayrshire brought together its anchor institutions—the local council, universities, and health service—and developed a charter in which the institutions commit to using their purchasing power to strengthen the local economy and create better jobs.  

A local dairy farmer, for example, is now supplying milk for the local schools. Previously, such local contracting faced many barriers, but the CWB Commission reduces these. Now, the farmer says, “the children at the local school can visit my farm and see where their food comes from.”  

Fair work: Located in a region with unprecedented levels of unemployment, the Ayrshire Council has created a Modern Apprenticeship program, creating 40 apprenticeships for youth. The authority is also leading the way as a living wage employer and working with local employers to adopt fair work practices and develop local talent.  

Municipal energy:  The Ayrshire Council is investing to achieve net-zero emissions by 2030. In the works are two solar farms, to be placed on municipal landfills and operated as a municipal enterprise, creating green jobs, supplying two-thirds of the energy needed for municipal buildings, including schools, and returning energy to the grid at a profit that will be reinvested locally.      

Capital investments: North Ayrshire set up a £3 Million Community Wealth Building Fund, capitalized from a £250 Million Growth Deal from the UK and Scottish governments for the authorities of the larger Ayrshire region. Ultimately, the goal is for all Growth Deal investment decisions to be made using a CWB lens, emphasizing contracting with local businesses, including cooperatives, and providing quality jobs that pay a living wage.  

In other investment, North Ayrshire has capitalized a £10.2 million Investment Fund to advance green jobs and to transition away from fossil fuels. 

The Council views their CWB work as directly supporting a “green new deal,” allowing the area to “build back better, fairer and greener.” The success of North Ayrshire’s program—which has inspired the Scottish government to advance policy and resources in support of CWB nationally —provides a window into what’s possible for cities and counties in the U.S. With significant ARP funds to spur economic recovery, municipalities can adopt community wealth building as a way to chart a new course, creating wealth that stays local and results in broadly shared prosperity.  

Sarah McKinley is a director and Neil McInroy a fellow at The Democracy Collaborative, where they are building a network of cities and regions across the U.S. and Europe to amplify and scale community wealth building as a new paradigm for economic development and a key pathway to a more democratic economy.