City Policy Levers

Cities have clearly become laboratories for startup ecosystems.  While each city faces an array of regulations imposed by national and regional levels of government, many local leaders have used smart policy levers to differentiate their cities and attract entrepreneurs.

The Kauffman Foundation began exploring such levers more closely last year, gathering mayors from around the country and providing metropolitan-level data analysis, revealing best practices in boosting a city’s creative economy, for example.

Now, the U.S. Chamber of Commerce Foundation has a released a report looking at city-level business regulatory policies. Its 2014 Enterprising Cities: Regulatory Climate Index assesses

five areas of local regulation that a typical small business encounters in opening and operating in these cities: starting a business, dealing with construction permits, registering property, paying taxes, and enforcing contracts. In each of these five areas, the Index compiles number of procedures, time, and costs. 

Here they are the ten cities studied in the report, in alphabetical order, with some findings:

  • Atlanta offers one of the lowest employment tax levels.
  • Boston has moderate levels of regulatory efficiency.
  • Chicago has the lowest waiting for procedural steps in enforcing contracts (141 days)
  • Dallas is one the most efficient cities across all 5 areas of business regulation a
  • Detroit’s regulatory efficiency is moderate.
  • Los Angeles requires one of the highest number and costs to obtain construction permits.
  • New York City has one of the least efficient regulatory environments.
  • Raleigh’s regulatory efficiency is described as moderate.
  • San Francisco shows one of the best practices for opening a business.
  • St. Louis has the best practice for the registration of properties but scores below average in enforcing contracts.

In collecting the data for the index, the authors of the report found that all cities in general provide small businesses with information and materials to comply with their regulations in an inefficient way (e.g. disorganized websites, missing information). Moreover, few cities provide detailed information on the exact procedures, expected waiting time, and administrative costs for construction permits.


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