Limited availability of investment capital for urban renewal

Experimental visualization of narrower problems
Other Names:
Limited availability of funding resources for urban services
Restricted access of municipalities to capital funds
Poor credit alternatives in urban areas
Limited city improvement capital
Municipal budgets are rarely sufficient to provide desired police, fire, educational and public works improvements, and rate assessments often remain unchanged for a number of years. Yet the access of many small communities to potential sources of development capital - innovative loans and grants from private corporations, foundations and government agencies - is severely restricted. For those classified as depressed areas, most risk capital is unavailable and investment opportunities are unattractive. With high insurance and unreasonable construction costs, residents have very little collateral, which hinders receipt of loans.

There are several elements which further block attempts to receive government grants: the funding procedures seem hopelessly tedious; few citizens are aware of the wide range of loans available; there is widespread belief in communities that accepting such grants is somehow dishonourable Lack of municipal capital affects the individual citizen as well as the municipality: large-scale farmers are reluctant to diversify their crops partly because, after several bad crop years, they do not see how they can raise the capital needed to purchase the necessary agricultural equipment; those who farm on a smaller scale cannot accumulate the capital needed for adequate irrigation or chemical crop treatment. Every plan for future development is inhibited by the lack of capital funds, and this generates an overall sense of hopelessness. Without growth in the funding base to provide loans, necessary upgrading of housing and services cannot take place; and local government is unable to ensure proper maintenance of roads, public buildings and necessary city services, which further lowers the investment potential.

Problem Type:
F: Fuzzy exceptional problems
Date of last update
16.02.1999 – 00:00 CET