by Robert S. Ogilvie, vice president for strategic engagement at ChangeLab Solutions.
Business owners regularly make decisions that can have tremendous impacts on community health – decisions about where homes are built, where businesses are located, and what kinds of products and services are available. Businesses can be powerful allies when it comes to improving public health. With the right incentives from local governments, business owners can be encouraged to invest not only in their own growth but also in new opportunities for physical activity and access to healthy, affordable food.
Incentives primarily take the form of financial rewards, but some local governments also offer low-cost, non-financial incentives. The following are examples of communities throughout the United States that have used incentives, many of which are low- or no-cost, to motivate business owners to consider public health in their decision-making processes.
Low- or No-Cost Incentives
When combined with other health-promoting policies, these low-cost incentives can help create healthy neighborhoods. Common low- or no-cost incentives include:
Bid Preferences. Many cities and states give local businesses preference during a procurement process. This is especially common when states and localities are soliciting bids from contractors to provide food to public facilities. At least 37 states have laws requiring some or all state and local agencies to give preference to food grown or processed within the state.
Exemptions. New York City’s Food Retail Expansion to Support Health (FRESH) program gives a host of zoning exemptions to the developers of grocery stores in underserved parts of the city. These include additional development rights, reduction in required parking, and larger as-of-right stores in light manufacturing districts.
Density Bonuses. In Denver, developers who build ground level food retail spaces into new housing developments are given a “density bonus” and allowed to add four square feet of mixed-use space for every one square foot of ground-level food retail space.
Streamlined Processes. In Minneapolis, farmer’s markets with five or fewer vendors have an easier, less expensive permitting process.
Incentives That Cost Money
Other types of incentives will cost the local government money through direct spending, loss in tax revenue, or staff time. No matter the cost, the resulting positive effects on public health will be worthwhile. Examples of this kind of incentive include:
Tax credits, exemptions, abatements. New York City’s Food Retail Expansion to Support Health (FRESH) program also gives grocery stores developers in underserved parts of the city a range of real estate tax reductions, sales tax exemptions and mortgage recording tax deferrals if they meet certain criteria.
Permitting Fee Reductions and Waivers. In Kansas City, Missouri, the city reduced the permit fees for mobile vendors who meet nutrition standards set by the city.
Grants, Subsidies, Loans. In Detroit, the economic development agency’s Green Grocer program recently awarded a grant to the owners of Metro Food Land to implement a healthy food rewards program, which tracks customers’ spending and gives them cash awards for buying healthy food.
Recognition Programs Requiring Extra Staff Time, Paid Advertising, and Rewards. In Colorado, the Smart Meal Seal and Smart Meal for Kids programs provides free marketing and training to restaurants that offer at least two meals that meet the program’s nutrition standards. State Public health staff train local health department staff on how to recruit local restaurants to the program. Local and state health department staff offer in-person and web-based trainings for restaurant owners on program implementation, marketing, and evaluation. The 200 participating restaurants (including 110 McDonald’s restaurants) use a “meal seal” to identify healthy menu items and to promote their participation in the program.
Funding Sources for Incentive Programs
Most local governments already have funding streams or access to funding streams that can be used to fund health-related incentive policies. In most cases, it will be necessary to expand eligibility criteria for an existing funding program or use existing funds in creative ways, generally easy fixes. Potential funding streams include:
• Federal or state chronic disease prevention grants
• Economic development funds
• Redevelopment funds
• Revenue from state or local taxes and fees
• Grants from local, state, or national foundations
• Private investment
Incentive-based policies present a win-win option, offering businesses greater freedom to operate in ways that make it easy to contribute not only to public health while maintaining their bottom line. ChangeLab Solutions offers an array of tools to help create healthier environments, including material your community can use to implement incentive programs.
Robert Ogilvie serves as the Vice President for Strategic Engagement at ChangeLab Solutions. Over the past 20 years he has worked extensively in community development and planning to help improve low- and middle-income neighborhoods.