Course Meeting Times
Lectures: Two sessions / week, 1.5 hours / session
Recitations: 1 meeting / week, 1 hour / meeting
Prerequisites
There are no prerequisites for this course.
Course Description
This course focuses on the tools and programs available to economic development practicioners to address capital needs for businesses and economic development projects. The course content is divided into four sections:
- An introduction to capital markets, market imperfections and perspectives on development finance systems.
- The basics of how firms and development projects are financed and how to analyze business and real estate financial statements to understand capital needs and evaluate the ability to support financing.
- Financial tools, policies, and institutional models to address capital gaps, supply financing, and stimulate private investment in community and economic development.
- Management of development finance institutions and programs including program design, operations, and capital management.
The course concludes by revisiting development finance systems and how the different tools, policies, and models work together and are related to other components of the development ecosystem. Throughout the semester, we will use Detroit as a case example on how different tools, policies, and institutional models are used, and how they function both in supporting individual projects and enterprise, and in combination as a development finance system that advances Detroit's community and economic development. We will also look at examples of how development finance tools and policies are being applied to address sustainable development goals, particularly around energy efficiency and renewable energy development.
The objective of this course is to provide students with a comprehensive overview of economic development finance practices in the United States and develop a knowledge base and skills to either be a development finance practicioner or apply economic development finance approaches to other fields of planning and community development. Students can expect to gain the following knowledge and skills from the course:
- An understanding of the operation of private financial markets and their limitations in serving economic development finance needs.
- How to think about the relationship of development finance interventions to the broader economic and community development system.
- Familiarity with the public policies, program models, and institutions that can be used to expand capital availability and address community development and business finance gaps.
- An understanding of different business capital needs and the appropriate financial instruments and institutions used to address these needs.
- An introduction to interpreting and analyzing business financial statements.
- Tools to evaluate and structure financing plans for firms and real estate projects.
- Knowledge of federal economic development financing programs.
- An understanding of operational needs and best practices in managing economic development finance programs and institutions.
- The ability to match feasible program approaches and models to address specific development financing gaps and business capital needs.
- The capacity to identify institutional and program resources needed to implement different development finance programs and institutions.
- An introduction to public finance tools and their economic development uses.
Grading
Grading will be based on each student's demonstration of their knowledge of the course material and capacity to apply this knowledge to projects, programs, and development finance needs. All course work will be considered in determining grades, with class participation in case study and other discussions accounting for 1/3 of your grade; the five written case study assignments for 1/3; and the term project for the final 1/3.