Public-private partnerships are gaining more attention as the United States looks to address its housing crisis. By outsourcing planning and development to private institutions, these agreements can help take the strain off of local governments and directly address housing concerns. In places like Bellingham, where there is an urgent housing crisis, P3s could be a fast, efficient solution.
However, mingling public projects with private interests historically invites potential accountability issues regarding quality, costs, and timelines. Governments need to ensure they’re working with an accountable partner to avoid costly delays, or worse, substandard housing.
This article will explore Public-Private Partnerships, their advantages and disadvantages, and how they can be used to create more housing in Bellingham.
Defining Public-Private Partnerships
Often formed out of necessity, P3s provide a means to share the costs and risks of large-scale public projects to the mutual benefit of contractors and the communities they serve. P3s are used to address public and private housing needs, but they may otherwise cover issues like water and sanitation, road maintenance, and the construction of educational institutions, parks, trails, and open spaces.
While there are numerous benefits to using P3s to tackle ambitious public works, the matter becomes more complicated when the issue at hand is housing. The quality of life afforded to current and future residents must take precedence in matters of revitalizing neighborhoods or developing communities. Projects such as these are destined to fail if the needs of the people are inadequately met.
The Advantages and Disadvantages of P3s
According to the U.S. Department of Housing and Urban Development:
“The public-private dynamic explains a lot about the design, challenges, and success of HUD programs. P3s open up new possibilities — for leveraging investments, efficiency, outside knowledge, or private markets — but they also present drawbacks.”
Collaboration between public and private entities can be a good thing, so long as their goals are aligned. Private interests are always going to be concerned with their bottom line, while the public is more likely to prioritize gaining access to necessary goods and services as quickly and efficiently as possible. At the heart of every successful Public-Private Partnership are expectations and negotiations ensuring residents and communities are the direct beneficiaries of the project.
As laid out in the report, Public-Private Partnerships in Housing and Urban Development (“The Global Urban Economic Dialogue Series,” Un-Habitat) major advantages and disadvantages of P3s include:
Advantages
Partners can allocate risk to the party best suited to handle it case by case
Private partners have inherent incentive to complete projects efficiently and under budget
Project payment is directly tied to performance and quality
Freed-up Public Sector Funds
Disadvantages
Unforeseen or additional costs
Complicated questions of accountability
The public sector has limited ability to make changes to the contract
To a certain extent, risk is inherent in P3s. The best way for the public sector to mitigate these risks is by working with private partners with deeper ties to their communities than their fiscal bottomline. In the case of housing in Bellingham, it means partnering with entities enthusiastic about ensuring factors like multi-generational housing, walkability, and access to neighborhood services while preserving the character that draws people to our city.
In turn, it’s the City’s responsibility to facilitate these factors by setting expectations and providing information, infrastructure, and access. Only by choosing the right partner and prioritizing local needs can P3s be successful. As this article in MDPI puts it: “Adding a fourth P, people, to PPP might be a first step in the right direction for this to transpire.”
How P3s, When Managed Correctly, Could Improve Our Communities
At the end of the day, private companies often have the luxury of experience, manpower, and time that governments may not. When these partnerships are well managed and thought out, they can provide an essential public good. We are in desperate need of communities with affordable housing in order to accommodate and sustain growth.
Adopting public-private partnerships to help tackle Whatcom County’s housing shortage could be a great way forward, but only so long as the partners have as much community investment as the citizens and government.
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Housing for Bellingham is a community resource that works to explain the fundamental processes and terminology associated with housing-related decisions in effort to inform the public. When the people understand land use planning processes and terminology, everyone can make more informed decisions about housing and land use policies in their communities.