Investments

Building Cities With Online Platforms And Opportunity Zones

If recent headlines have taught us anything, it is that economic support and investments can go a long way toward helping cities, businesses and individuals navigate any number of challenges (the pandemic is only among the most recent challenges).

Unemployment is at historic levels. Small businesses (and not a few large ones) are at risk of going under. Across urban and rural settings, communities are in need of investment.

To that end, according to Valla Vakili, managing director and head of the studio at Citi Ventures, data can make all the difference in helping funds get where they need to go to revitalize those communities.

His conversation with Karen Webster took place after Citi Ventures added new features to the City Builder online platform — a digital offering launched at the end of last year that connects investors with “opportunity zones.”

Those new features include a project directory to train a spotlight on urban development projects seeking capital (investors typically get tax benefits when they reinvest their capital gains).

The directory’s projects span proposed multi-family housing to grocery stores to the redevelopment of under-utilized sites.

And underpinning it all is housing data, transit information and other sources of information — a central repository of information on more than 8,700 opportunity zones in the country.

As Vakili told Webster, “we’ve been motivated by the uneven nature of economic growth in the country — where you have a handful of cities that are attracting top firms, top talent, the best schools, and better housing.  And then you have much of the rest of the country trying to rush and catch up.”

Data, he said, can show that there are other parts of the country worth investing in and can bring investors to the funds that, in turn, will allocate data to the opportunity zones.

“The primary strategy is on digital products and platforms that help people and communities to make smarter economic decisions, to produce better outcomes,” he said.  Those decisions and outcomes focus on equitable urban growth, jobs and wages.

Determining Socio-economic Needs

City Builder can help determine needs by spotlighting the zones with, say, populations that spend more than 30 percent of income on shelter, indicating that the zone could benefit from affordable housing. In another example, zones, where a significant percentage of the population needs to travel more than a mile to a supermarket, can benefit from better grocery store access.

The opportunity is significant:  In a bit of quantification, he said that 12 percent of the country falls into the economic zones.

Drilling down a bit, he said the data can be segmented through filters designed to show the areas of investment that communities need — spanning everything from access to food, health care access, access to education and other metrics.  U.S. Census data provides demographic information while other sources, like Redfin Real Estate’s Walk Score, the company has said, can help users visualize residents’ quality of life.

Without that granular insight — and the interdependencies of several variables — he said, we remain “constrained in our ability to see the country,” hemmed in by the parameters of where we live and work.

With a nod toward the platform itself, Vakili said that there is a supply side and demand side in what the firm has said represents an intersection of private capital and public growth. The supply side represents all of the investment opportunities across opportunity zones. The demand side is represented by qualified funds seeking capital and the investors seeking to put capital to work. Data for the qualified funds, according to Citi, is gleaned from filings with the U.S. Securities and Exchange Commission and other sources, including the National Council of State Housing Agencies.

Capital, of course, is top of mind, as urban recovery also depends on the rebound of small- to midsized businesses in the wake of the pandemic and, now, the social unrest.  Recent studies by PYMNTS note that SMBs are fairly pessimistic about their ability to survive the top and bottom-line pressures of COVID-19.

“By no means are the economic needs and disparity of the country limited to the 12 percent of the U.S.” contained in the current opportunity zones, he said.  In the meantime, “we’re giving the same attention to [the] smallest rural area that [we] are giving to the largest metropolitan one,” he said.

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