Rethinking "Business Friendly"

What does it actually take to attract new business to town?

Dear Boss,

It has been a while since my last update, and for that I apologize. The past months have seen the birth of our first child, the conception of our second, a number of new building and business acquisitions, two new hires, and several new renovation projects. During this time, I have also been contemplating the requirements for economic development in a small, rural town.

Traditional political approaches to being “business friendly” generally revolve around two ideas: taxes and regulations. Politicians frequently cite these two categories as what they will address in order to invite new businesses to town. The thinking goes: if we lower taxes and cut regulations, businesses will view our town as comparatively advantageous (relative to neighboring communities) and will choose to locate here.

This is a good start. Founding a business in any community is often a frustrating process as the entrepreneur spends his or her time jumping through various regulatory hoops and paying fees before any money starts coming through the door. For example, the Institute for Justice surveyed 20 cities, finding that the fees required for permits and licenses to start a restaurant averaged more than $5,300.¹ These fees and regulations sap the entrepreneurial spirit. Anything a city can do to lower those burdens and make it cheaper, faster, and simpler to start a business is helpful.

But focusing on regulations and fees, by themselves, is not enough to cultivate a flourishing town. Small towns also need to focus on cultivating a community that is attractive to both residents and visitors. This is the other half of being truly “business friendly”.

Currently unused spaces need to be developed and beautified, otherwise we risk alienating potential and current residents.

Beautiful people make more money. Economists call this phenomenon the “beauty premium”.² Attractive men and women are typically paid more than average folk for the same work. The reason for this is a bit more interesting than simple bias, however.

Being attractive results in more than an easy first impression on others, it also typically results in a greater self-confidence. Due to this self-confidence, physically attractive workers are perceived to be more capable by employers. Physically attractive workers also tend to have greater social skills than unattractive counterparts. Because of these factors, attractive individuals are able to benefit from the beauty premium and command higher wages.³

How does this apply to a city? As it turns out, it is not just beautiful people who tend to do better for themselves. Beautiful cities also do better, economically and socially. Socially, beautiful cities perform better due to a bit of circular reasoning. Those cities with less antisocial behavior and public displays of disorder tend to be considered more beautiful than other cities.⁴

Economically, beautiful cities (or beautiful districts within cities) do better as they attract more people and businesses. A city’s beauty is tied with low taxes as the most important predictor of future urban development.⁵ Furthermore, the population attracted by beautiful cities or districts tends to be highly skilled.⁶ It is important to note, however, that investment in beauty does more than attract outsiders, it also benefits current residents. In beautiful cities, home values are 16% higher than in less attractive municipalities,⁷ and perceived quality of life is much higher, regardless of local housing prices and wages.⁸

For our town to flourish, we need to invest in its beauty. Building and maintaining beautiful spaces is not an expression of arrogance or haughtiness, but is rather a statement of belief in our community. We make beautiful things so that they can be shared with others. Furthermore, beauty tends to result in better behavior in public and at home. You’re more likely to respect yourself and your neighbor when you are in an environment that is respectful of both of you.

Local beauty is found in more than just buildings and public spaces. It is also found in a city’s local engagement. Public spaces need to be used to create special moments that engender human interaction.

So, how can we seek out and cultivate beauty in ourselves and our community? It helps to have some sort of definition. According to St. Thomas Aquinas, beauty is “that which, when seen, pleases.” This pleasure is a response to something objective; beauty is inherent in its object, even if it can be obscured and ignored by you or me. Going deeper, Aquinas provides three properties of beauty: integrity, proportion, and clarity. This definition and its properties provide a useful framework to begin cultivating beauty at home.

Integrity

Integrity carries with it an idea of wholeness. Everything contains within it that which is important to its essence. In other words, a dog ought to have four legs according to its nature, not three or five. Something lacks integrity when it has either been deprived of something it ought to have or has too much of something which it ought not to have.

In the case of a small town, we also contain much of what is important to our own essence. In the Hillsdale area, we have natural beauty in abundance, local farmers and businessmen who provide for our material well-being, civic events that engage our community, excellent schools that care deeply about moral and intellectual formation, and – most importantly – reverent churches that nourish our souls and point us heavenward. Hillsdale also lacks many of those activities which detract from the good life: marijuana dispensaries, night clubs, and casinos are blessedly absent from local life.

There is still room for improvement in this regard. For instance, Hillsdale features many sports programs, and the local environment is highly supportive of year-round outdoor activities. Yet there is no decent sporting goods store within 30 minutes of Hillsdale. Hillsdale is surrounded by farmers who take pride in their produce, abiding by sustainable and organic practices, but relatively few local institutions source their food from these local farmers and there is no established Community Supported Agriculture program.

Proportion

Proportion is a quality that is further defined by order and harmony. We must grant attention to activities and places in our environment in an appropriate way, and we must ensure that no one activity or group of activities comes to dominate over all others. In this way, the community can maintain a sort of balance.

In Hillsdale, there is much room for cultivation of this quality. The City’s downtown is separated from its College neighborhood by a state highway that discourages foot and bicycle traffic between the two districts. The highway has become a disproportionate feature of everyday life in Hillsdale. Luckily, the State and the City are working to narrow this highway and encourage a more walkable environment. Further, there is an abiding homelessness problem that does not appear to be getting better. This problem is surprising, given Hillsdale’s remote location and small size, but it is ever-present and a growing concern. There are fledgling operations that are dedicated to addressing the homelessness issue locally, but they will need the support of the city’s various institutions if they are going to be successful.

Clarity

The final, and perhaps the most difficult, aspect of beauty is clarity. What does it mean for a community to have clarity? Perhaps it means that the activity of the community points the observer to the community’s ultimate end: its relationship to God.

There are many ways in which this clarity can be reinforced. Christian tradition provides a wealth of feasts and fasts that define the calendar year. This cycle redeems the time we are given by God and directs us towards our ultimate purpose. Regarding our local culture, the cycle also provides ample opportunity for public events. Some private groups have already begun reinstating this calendar by hosting Michaelmas festivities in the Fall. Similar public feasts should be held around the year to commemorate events such as the Transfiguration, the Ascension, Pentecost, and the Exaltation of the Holy Cross, among others. These events accomplish two aims, both of extreme importance: they bring a community together around a meaningful event, and they remind the community of the ultimate reason for its existence. The fact that we have largely lost the practice of these public feasts is a great blow to Christian culture, but they are still there, waiting to be picked up anew.

We maintain vestiges of the festal cycles, but we can and should do more to establish public reminders of our reason for being. Photo: Hillsdale Daily News

Cultivating beauty is difficult. It requires sacrifice. We may practice habits that harm our proportion, integrity, and clarity. Beauty requires that we sacrifice these practices, in ourselves and in our shared public life, in order ourselves to be pleasing, when seen. That sacrifice will result in short-term pain for ourselves and our neighbors, but it guarantees that we will have a better future. It’s uncomfortable, but it’s worth the tradeoff.

1. Meleta, Andrew, and Alex Montgomery. “Barriers to Business - Institute for Justice.” Institute for Justice, Feb. 2022, ij.org/report/barriers-to-business/.

2. Mobius, Markus, M., and Tanya S. Rosenblat. 2006. "Why Beauty Matters." American Economic Review, 96 (1): 222–235. https://doi.org/10.1257/000282806776157515

3. Id.

4. Carlino GA, Saiz A. “Beautiful city: Leisure amenities and urban growth.” J Regional Sci. 2019; 59: 369-408. https://doi.org/10.1111/jors.12438

5. Id. at 372.

6. Id. at 393.

7. Id. at 393

8. Id. at 385.