Changing more than the tax code when it comes to government involvement

In the readings this week there were many suggestions about how an executive level office of social innovation could help foster and create avenues to encourage innovation. Among the many suggestions was the idea that the tax code should be changed, updating the laws that govern 501(c)3 status and the creation of new laws that would encourage hybrid organizational models that would propel innovation. While this is an idea that comes up a lot in my classes, and is one that I agree with, I think that government should use its influence beyond changing tax law.

One example that came up in a panel discussion, Creative Urbanism, here at Heinz College last week was how New York City changed it's zoning laws to encourage development of a neighborhood. During the 1960's artists illegally populated the dilapidated industrial area of SoHo in New York City. Instead of booting the artists to the curb, the city restructured it's zoning laws to create a certification process for the artists to stay and work, thereby improving the neighborhood overall. While the new zoning ordinances may have worked for a period of time, they were easily abused by non-artists looking for cheap residence and I would consider it an open question as to whether the program was a total success.

While this specific instance is an open question, I think the underlying idea is a good one and one that can be applied to the field of social innovation. How can government alter the way it treats property and zoning to encourage innovation? Working in tandem with changes in tax law, changes to the way property is treated could dramatically reduce start-up costs for many innovators and create long-term value for decrepit areas.