Building more equitable cities through data-driven insights

Role

Interaction Design, Design Research

Client

Citi Ventures

Agency

IDEO, Manifold, CarbonFive

For over 200 years, CitiBank has been helping clients, firms, and economies thrive, but over the past 50 years, a growing disparity has emerged between cities that are succeeding and those that are not. They noticed that the playbook for building cities is incomplete.

They came to us with an idea: how might we raise the economic vitality of communities that are struggling to get what they need? Are there digital mechanisms that could help cities grow and build resiliency? Our incoming hypothesis was that data was the path to solving this problem. A small, scrappy team of designers, data scientists, and developers embarked on a “build to learn” process to build more resilient communities — through the lens of Opportunity Zones.

The result was City Builder, the first data-informed urban investment tool for Opportunity Zones that provides unique insights into what each community actually needs.

The Project Focus

Leverage publicly available data to highlight investments that maximize the positive impact of Opportunity Zones.

What are Opportunity Zones?

Opportunity Zones are areas designated by the Federal Government for tax benefits, as part of the 2017 Tax Act. Individuals can defer capital gains and receive additional tax benefits for investing in Qualified Opportunity Zone funds, with the most benefits conferred for investments of 10+ years. They present a unique incentive in which trillions of dollars in unrealized capital gains can be invested in socially impactful, financially advantageous ways.

With more than 8,700 designated opportunity zones in the U.S., finding information about individual zones previously required pulling data from multiple public records, but City Builder puts all this data in one place.

How We Got There

We conducted 8 rigorous sprints over a 6-month “build to learn” initiative. In that period, we spoke with ~110 people across the country ranging from private wealth managers to urban planners.

Early concepts uncovered that this product would appeal to fund managers and high net worth investors, but there was also the potential value for real estate developers, municipal representatives, and citizens as well. We narrowed in on fund managers and investors as a starting point for the MVP.

Then, we began asking questions about the type (and depth) of information needed to make confident investment decisions in these communities. We developed two concepts featuring the same data but presented as extreme opposites: one being raw data (quant-focused) and the other focused more on storytelling (qual-focused). This process enabled us to narrow in on the best components to include in our MVP.

We worked with a variety of stakeholders to evolve the MVP. The Alpha phase included building the fund database and making detailed enhancements to the map. As we began to integrate other pieces of the ecosystem, we realized just how disconnected communities, developers, and investors are in this process. The need for a new urban development ecosystem was clear.

What We Learned

To funnel investments into these communities, we must recognize that the process of building trust isn’t one size fits all.

In the Opportunity Zone space, there are vastly different perspectives on what makes a fund trustworthy. Established firms promote their track record, while newer, local firms emphasize the quality of the project. When we spoke with a west coast Fund Manager, we learned that “Just because they’re registered, doesn’t mean it’s good. I would like to know, what deals are out there and how do they stack up?” Just being registered with the SEC isn’t enough. Wealth Managers and Investors are careful to evaluate each firm and fund based on its merits and it’s a time-consuming, tedious research process. The takeaway? City Builder needs to enable a sophisticated due diligence process to build trust.

To align the necessary incentives, we need to acknowledge that “how” is just as important as the “what”.

Cities and project sponsors will be crucial partners in the success of both Opportunity Zones and the effectiveness of this product. When selecting projects, Investors, Developers, and Fund Managers all want to know “how easy is it to get permitting?” and “can I actually get this project done?” Cities, on the other hand, want to make sure investments get to the communities that need it the most. It’s a network of stakeholders where both sides want to know: “how do I make the most of Opportunity Zones?”

To make a positive impact, we have to inspire focused investments based on what each community needs.

The only way to uniformly raise the economic vitality of our communities is through consistent, strategic investments. However, creating a positive impact means different things in each community. What works in Los Angeles, might not be the right approach for Mobile, Alabama. We drew inspiration from the Mayor of Stockton, who takes a civic-minded approach to develop without displacing “by educating the community and offering community submitted projects.” With this mindset in mind, we combined quantitative and qualitative data to establish an economic baseline with the intent to guide investment decisions in a way that fulfills the unique needs of each community.

Our Shared Ambition

How might we leverage data to build more equitable, inclusive, and sustainable cities?

The Idea

City Builder is the first data-driven platform designed to improve the economic vitality of communities by driving consistent, strategic Opportunity Zone investments.

Browse Qualified Opportunity Funds. The investment directory regularly pulls information from disparate opportunity fund sources all into one place including SEC filings, the National Council of State Housing Agencies, and information provided directly from Qualified Opportunity Fund Managers. This is where the rubber meets the road in distributing funds for community development.

Explore Opportunity Zones. Search city maps for neighborhoods that need investment, guided by data-informed insights from census data, land use, and recent permitting activity. City Builder layers these data sources together to derive what type of investments this community needs, what this place is like, what the people are here, and what developments are currently ongoing. This is useful for individuals looking to create their own Opportunity Fund or, to validate the investment strategy of an existing fund.

The Impact

Today the platform is free to use for anyone, including non-Citi clients. Since launching the alpha, City Builder received first place for “Building Thriving Communities” in the 2019 Census Bureau Opportunity Project Demo Day and was recently named one of Fast Company’s Best of Urban Design in 2020.