Putting a restoration, remediation, or adaptive reuse project in a city that’s just started its socioeconomic ebb means that the city’s declining fortunes will likely drag down the return on investment (ROI) of the project.  Put a good project in a city that’s entering a revitalizing trajectory-or that will perpetuate their existing renewal-and your property values will ride a rising tide. Boom or gloom: that’s what investors need to know.

March-April 2009’s StormWatch column issue introduced the idea that communities can have an RQ (renewal quotient), just as individuals have an IQ (intelligence quotient). The free RQ Quiz for citizens is now online.

The far more rigorous RQ Test for community leaders is being created in collaboration with a learning network of 20 communities from around the world (recruitment is currently underway: the first Canadian city agreed to enroll in June of 2009).

Now Revitalization Institute (of which I am executive director) is announcing an upcoming community forecasting service called Places To Invest (PTI). It will tell investors which communities are most likely to be on a revitalizing trajectory in the coming decade.

By revitalizing trajectory, I mean economic growth that increases quality of life and improves environmental health (many forms of economic growth do the opposite). In other words, rewealth: wealth-creation based in renewing a community’s natural, built, and socioeconomic assets. This is as opposed to dewealth, which is wealth-creation based on developing raw land and depleting virgin resources.

PTI reports will be driven by the score that communities achieve on the RQ Test. The RQ Test will be offered free of charge as an educational service. Communities can test themselves and learn a reliable recipe for rapid, resilient renewal in the process. If communities wish to have their scores publicized, there will be a modest charge for certifying their scores to ensure accuracy.

The scores will be available to PTI subscribers via an online database.  An annual Top 10 Places To Invest list will also be issued to the news media.There’s no shortage of annual rankings of cities: greenest, most sustainable, most livable, most walkable, most creative, fast cities, most business-friendly, and so on. But there are two problems with such lists.

The first problem is that few of these lists have a sound basis: most are created more for entertainment than as a tool for serious decision-making. A few derive from government data, but many are just the product of a single reporter, using his/her own judgment and preferences.

The second problem is that all of these lists are snapshots of the present or recent past.  This has some value, but families or businesses looking to relocate are going to live in their new community in the future, not the past. More important to them is where that community’s economy and quality of life are going in the coming decade. No one ever made money on the past. Investors don’t care as much about the current condition of an asset as they do about what it will be worth in the future.

The PTI list, on the other hand, is predictive. It’s a community forecasting tool for private and public investors, as well as for families and businesses looking for an up-and-coming places for relocation. The word forecast is used here with caution. As with weather forecasts, no one expects them to be 100 per cent accurate. In fact, people aren’t surprised when they are completely wrong.  But we check the weather forecast daily nonetheless, because some indicator is better than none.

So it will be with PTI. The top-scoring communities will, in fact, have a much better chance of revitalizing in the near future. But this doesn’t mean that external factors can’t render their efforts moot.

What’s more, communities are complex adaptive systems. They exhibit surprising behavior by their very nature. Forecasting their future might thus seem an exercise in frustration, but PTI has a significant advantage-it’s based on seven universal factors that a six-year global research effort revealed to be reliable indicators of rapid, resilient renewal.

The renewal quotient of a community is a numerical measure (from -500 to +1000) of its renewal capacity. Renewal capacity is the community’s ability to initiate revitalization despite initially empty public coffers, and keep it on track despite changing political administrations. Renewal capacity attracts restorative investment by providing greater safety and ROI to the private sector.

This is as opposed to the usual reactive mode of many communities. They wait for federal or provincial funds to arrive; they wait for a large private redeveloper to come to town; or, they indulge in that outdated, zero-sum “economic development” game of wooing employers from their neighboring communities and calling it “job creation.”

The RQ Test (which is the mechanism behind the PTI scores) is being devised by a growing global team of universities, non profits, redevelopers, technology partners, and planners being recruited during 2009. They will develop both the RQ Test and the PTI service over a two-year development period during 2010 and 2011.

This RQ Task Team will work in collaboration with the above-mentioned Advance Group of 20 communities. The Advance Group communities will be the first to take the RQ Test. Those that achieve a sufficiently high score will be listing in the inaugural 2012 Places To Invest report.