In 2025, more than half of US venture investment went to fewer than 20 ZIP codes — one vivid measure of how good our financial system is at concentrating capital in a handful of places. This leaves thousands of other neighborhoods stuck in a cycle of disinvestment and makes for a fragile economy where opportunity flows to a few and leaves many behind. The pathway to durable, more widely shared prosperity is straightforward: We need a community investment system rooted not just in dollars and deals, but in people and places.
When prosperity concentrates, everyone pays — with slower national growth, sharper political divides and costly bailouts when lagging regions or sectors falter. A system that leaves more than half the country outside the circle of investment is not only inequitable — it’s economically reckless. The 2008 recession made this clear, as federal stimulus in the US stabilized some markets while often bypassing the hardest-hit communities. Funds flowed to places familiar with federal formula funding rules or capacity to win competitions rather than those with greatest need. This was seen across the economy, particularly in health systems, where stimulus funds landed in more resourced, higher capacity clinics — often at the expense of those with the deepest need for help.
The lesson is simple and no doubt familiar to readers working in community investment and catalytic investment ecosystems: Capital alone doesn’t build durable prosperity. Where it lands, how it’s structured and whether it’s grounded in local knowledge all matter.
Reform begins with a simple premise: Capital is more than cash. Communities depend on social networks, public assets, local institutions and land, and they would benefit from adopting a “multi-capital” approach that treats these as core inputs. This would entail approaching investment through a broader lens by leveraging social networks, local knowledge and civic capacity alongside financial capital, thereby allowing public agencies and the people they serve to design for deals that fit local priorities, draw co-investors and endure political change because communities have a real stake in success.
The Lincoln Institute of Land Policy’s Accelerating Community Investment, or ACI, initiative roots its work in this exact approach — using networks and peer learning methods to connect public finance and other public agencies with communities and investors to foster more innovative uses of traditional market tools as a way to solve key social issues and produce better outcomes.
New tools are already emerging to correct our old model’s blind spots. We see blended‑finance funds use public capital to absorb early risk and attract institutional investors to markets once written off as “too risky” — like Wespath’s Positive Social Purpose Lending Program, which has invested over $2 billion in affordable housing and community facilities in underserved US communities.
This approach works in global markets, too — like in the Forestry and Climate Change Fund in Central America, where first‑loss public capital and technical assistance crowd in private investors to restore degraded forests.
These tools already finance affordable housing and resilient infrastructure in communities long dismissed as bad bets. The real question is whether we will make them standard practice rather than pilots.
Land-based finance
One additional strategy merits further discussion: land‑based finance. This set of strategies and tools treats land — and rising land values — as a durable source of community investment. When public actions such as new transit lines, parks, universities or zoning changes raise surrounding property values, that increase reflects collective decisions and public effort, not private initiative alone.
Land‑based finance allows communities to capture a share of this publicly created value and channels it back into local priorities, helping communities reinvest in themselves rather than allowing gains to accrue solely to landowners.
These approaches include value‑capture mechanisms such as taxes and fees, as well as public land development models that give communities greater control over how land is used and how its value grows. Tools like long‑term ground leases, publicly controlled development entities, and community land trusts allow development to proceed while keeping land — or a portion of its value — in public or community hands. In doing so, they create ongoing revenue streams for housing, infrastructure, and services, tying long‑term community benefit directly to long‑term land stewardship.
For example, DC Water financed green stormwater infrastructure through an Environmental Impact Bond purchased by impact‑oriented investors. The bond’s returns are tied to how well green infrastructure reduces flooding and sewer overflows — directly linking investor outcomes to improvements in land and neighborhood conditions, and turning land‑based value creation into a predictable funding stream for community resilience.
A second example comes from transit investment. In Denver, public investment in the redevelopment of Union Station was paired with land-based financing tools and development agreements that captured a portion of rising property values around the station. Those revenues helped fund the transit hub and surrounding infrastructure, ensuring that growth spurred by public investment recycled back into the district rather than flowing exclusively to private landowners.
By grounding investment in community need and enabling it through better policy choices, communities can bring their full balance sheet to the table, blending financial, social and civic assets to attract investors without ceding control. When combined with adoption of predictable, transparent rules, that sends a clear signal to markets: This is a place to co-invest in, with both return and impact.
The way forward
There is great opportunity here. Regions written off as “too small” or “too risky” often hold underpriced assets, strong anchor institutions and residents deeply committed to success. With the right structures and partners, these markets can deliver resilient, long-term returns while advancing broadly shared prosperity. The way forward rests on four key strategies:
Build investment practices around place. Investment strategies must be rooted in local assets, challenges, and aspirations — not driven by capital holders.
Advance multi-capital approaches. Thriving places blend financial, social, human, civic and natural forms of capital to sustain growth.
Foster innovative finance structures. Piloting, refining and scaling new financing models that prioritize impact, shared prosperity, and sustainability is essential.
Strengthen connections. Closing the gap between asset holders and communities — through curated networks and knowledge exchange — is fundamental to sustainable, widely shared prosperity.
When investment clusters narrowly, shared prosperity stops being the foundation of the American dream. It starts instead to look like a rigged lottery, where winning tickets go to people in the “right” places. In much of rural America and in disinvested urban neighborhoods, what’s missing is an investment system that can see — and value — a future where investment delivers on the promise of broadly shared opportunity.
By advancing multi-capital approaches, creating new financial structures and deepening connections between those with resources and those with vision, we can create an investment ecosystem that truly serves people and places alike.
R.J. McGrail is the director of the Accelerating Community Investment initiative at the Lincoln Institute of Land Policy.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
