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As the Opportunity Zones incentive evolves, two dominant, overly simplistic narratives have taken hold.

On one hand, there is the view that all cities should merely compile and bundle a list of investable projects and reveal the true strength of the market for some distant investor on Wall Street or in Silicon Valley who have no connection to the city in question. This perspective treats the market failure that Opportunity Zones was intended to resolve as one primarily involving information and marketing rather than underlying business demand and market realities.

The enactment of the Investing in Opportunity Act and the designation of Opportunity Zones across the United States compels cities and investors to rethink the interplay between sub-city geographies and private capital.

Consider this: US cities have evolved along distinct demographic, economic and cultural lines but have followed similar development patterns over the past 100 to 150 years. As Chris Leinberger and others have shown, a familiar set of urban archetypes have emerged across cities.

As many of you know, my good friend and business partner Jeremy Nowak passed away on July 28^th at the age of 66 due to complications from a heart attack.

There has been an outpouring of grief and appreciation in Jeremy’s beloved hometown of Philadelphia (Jeremy Nowak, 66, prominent Philadelphia investor, advocate, commentator by Chris Palmer & Diane Mastrull • He Will Not Rest by Larry Platt). And for good reason. Jeremy lived a remarkable life in the service of his city and, more broadly, disadvantaged places and people in the United States and beyond. He had a deep, unwavering commitment to making a difference in people’s lives.

Yesterday we released a policy brief entitled “How States Can Maximize Opportunity Zones”. The paper was written in concert with our good friends, Jamie Rubin and Dan Berkovits, under the aegis of The Governance Project, a new non-profit that aims to help state and local leaders leverage the private sector and private capital to deliver new solutions to critical challenges.

Our policy brief lays out a plan of action for states to realize the full economic and social potential of this unique tax incentive. To recount, the Tax Cuts and Jobs Act of 2017 provides a new incentive – centered around the deferral of capital gains taxes — to spur private investments in low-income areas designated as Opportunity Zones. Given the significant interest among investors, it is possible that this new tax incentive could attract tens of billions of dollars in private capital, making this one of the largest economic development initiatives in U.S. history.

The two of us have been spending the bulk of our time in hyper-invention mode. To maximize the potential economic and social impact of recently enacted federal tax incentives, Mayor Garcetti’s Accelerator for America has engaged us to create a new tool — an Investment Prospectus — to enable cities, counties and states to identify concrete investable projects and propositions in designated Opportunity Zones. We are using Louisville, Oklahoma City and South Bend as our test cases and we are grateful to Mayors Greg Fischer, David Holt and Pete Buttigieg and their teams for being co-creators.

When we prepared the initial outline for The New Localism in late 2016, we included a chapter simply entitled “Blue Sky.” Our goal was to identify a series of concrete ideas for urban stakeholders — city governments, corporations, philanthropies, universities, investors — to raise and deploy large amounts of public, private and civic capital for transformative impact. What ultimately emerged was Chapter Nine, where we put forward a “provocative agenda for supporting and scaling up the most critical investments needed in cities in the areas of innovation, infrastructure, and inclusion.”

Our book tour has included several events hosted by impact investors. A question that comes up in these forums: how does New Localism connect to the activity of intermediaries and investment strategies that have a social mission while also generating returns for private investors?

There is a very direct connection. And we want the connection to grow in depth and capital commitment. But for that to happen, there has to be more of a focus on place within the impact field – urban, metropolitan, and rural – than has presently been the case. It is possible that the newly legislated opportunity tax incentive may enable more of a place-oriented connection for impact investors.

In the final chapter of The New Localism, we recommended that each city and metropolis needed to ask the simple question “What’s Your City’s Edge?” as part of pursuing a growth strategy with inclusive, innovative and sustainable outcomes. This question appeals directly to the rising demand for data — and evidence-driven decision-making among constituencies that lead urban economic development. It is also a central question for those concerned with social mobility and neighborhood investment.

Our friends at Centre for Cities in London recently hosted a New Localism event at The Shard, Renzo Piano’s inspiring and imposing skyscraper on the south bank of the Thames. Being London, nothing was visible from the upper floors of the building given rain and fog on the evening of our gathering. But the discussion was illuminating nonetheless, which you can listen to here —www.centreforcities.org/multimedia/event-catch-city-horizons-bruce-katz-cities-age-populism/.

At its core, The New Localism is a book about the rise of networks and networked governance as vehicles for problem solving. As we state in the Introduction:

The current suite of supersized economic, social and environmental challenges and the abdication of responsibilities by the federal government and many states demand new models of local governance. The most effective local governance occurs in places that not only deploy the formal and informal powers of government but create and steward new multi-sector networks to advance inclusive, sustainable and innovative growth. The logic is incontrovertible: if cities are networks of institutions and leaders, then institutions and leaders should co-govern cities. (emphasis added)