Community Based Development Organizations (CBDOs) often get drawn into an environmental agenda by the need to organize against an environmental hazard. In Roxbury, Massachusetts, for example, the Dudley Street Neighborhood Initiative’s early organizing targeted illegal waste transfer stations that blanketed their neighborhood; they got them shut down and the lots cleaned up. The group also organized and won a fight against the siting of an asphalt plant in the neighborhood. In Roxbury, as elsewhere, such organizing against environmental problems continues while the group has moved into environmentally related enterprise development, in this case an urban gardening project. (More on DSNI)
Community-based sustainable enterprises like DSNI’s protect or improve a community’s environment while creating wealth and jobs or job training. Such initiatives are prime examples of “sustainable development” – development that clearly takes into account the economy, ecology, and community, and they are on their way to becoming a new movement that crosses sectors, linking community development, social justice, public health, and the environment. This emerging connection is especially fitting for low-income communities, the very places that suffer the worst environmental degradation: when there’s hazardous wastes to be disposed of or a highway to be built or an incinerator to be sited, it’s the low-income neighborhood where it happens.
Most community groups doing work with environmental implications are involved in housing-related projects, for example, weatherizing homes for energy efficiency, removing lead-based paint or asbestos, retrofitting plumbing systems, or ‘deconstructing’ unused buildings and re-using still valuable components in construction programs. These projects come naturally to CBDOs, which usually have cut their teeth on housing production, and lend themselves to effective job training and business development. Other environmentally related business growth areas in which CBDOs work include transit-oriented development, brownfields redevelopment, waste clean-up, pollution prevention, remanufacturing, open space preservation, natural resource conservation, rural-urban market connections, and “eco industrial parks.”
No matter what the particular business, case studies point to a number of lessons, challenges, and next steps for this fledgling movement.
First, expansion of environmental community development rests on increased ability to use the strengths and positive features of the market – its laws of supply and demand, its ability to create wealth and jobs. Failure to acknowledge this has been part of the slowness of getting this movement started. “Though the accomplishments of CDCs are very good, their work hasn’t really been market driven. CDCs have been fixated on real estate development in a way that focuses on packaging the subsidies,” says Scott Bernstein, president of the Center for Neighborhood Technology.
A market mindset would mean, for example, that rather than launching a social-mission-driven recycling project, a CBDO would look at the materials market (wooden pallets newsprint, steel, fabric, glass, etc.) – a whole industry sector – and figure out points of entry into that market. The good news is, with growing green consumerism and new technologies and information (about pollutants, for example), numerous market niches are opening up.
A market mindset also means harnessing some form of local competitive advantage. In Akron, the Association for Better Community Development (ABCD) turned its neighborhood’s problems – mountains of abandoned cars and a 4-acre, overgrown auto salvage yard – into a competitive advantage. ABCD purchased and renovated the yard into a new business, Auto, Inc., that services old cars (which reduces pollution by improving engine performance) while it trains low-income, unemployed or hard-to-employ adults for jobs as auto mechanics or service technicians.
Community groups can also “commodify” ideas and activities, to make them into tradable products. An example of this is the Center for Neighborhood Technology’s Location Efficient Mortgage project, which developed the math to quantify the amount of money a family would save if they lived in a neighborhood with available public transportation. Mortgage underwriting standards can then change to reflect the increased amount of money the family has available to carry in mortgage debt. (More on LEMs)
Along with market knowledge, these initiatives need sustainable organizations with strong management and leadership that is skilled, entrepreneurial, flexible, and politically savvy. The CBDOs operating placed-based sustainable development initiatives have as a group been around a long time – the majority more than 20 years. Further, the bigger the organization, the bigger the project can be.
The successful groups also have a broad vision. Banana Kelly’s Bronx Community Paper Mill seeks to build mainstream market demand for recycled newsprint by creating a competitive product, generate more than 600 full-time good-wage jobs in the poorest section of the city, retrieve a huge former brownfield, save thousands of acres of virgin forest, and substantially reduce the city’s solid waste stream.
These broad visions need to be expanded to influencing public opinion and policy as well. “Sustainable neighborhood development needs to take into account the ability of capital to uproot itself,” warns Patricia Bauman of the Bauman Foundation. The agenda, then, must include a public policy element so community initiatives can link to and affect national and global codes of behavior.
Local initiatives can have a more significant impact if they not only have a broad vision, but are also embedded in a comprehensive urban community revitalization strategy. Think of the synergy created if Location Efficient Mortgages were made available to workers who got jobs through a Walk to Work project, like the one operated by Boston’s Fenway Park CDC that links neighborhood residents with jobs and job training in the neighborhood’s numerous medical institutions, and if the cost of maintaining those workers’ homes were lowered by installing efficient plumbing systems, like the Tucson Neighbors Helping Neighbors program; and by intensive weatherization improvements, such as those done through Cleveland Housing Network.
Time for a New Infrastructure
Despite such examples, community-based environmental initiatives as a whole don’t yet have a way to learn from or multiply each other’s impact. They need to tap each other’s expertise and work collaboratively on market development activities, such as ways to aggregate demand for new products and develop new distribution channels.
The community development field expanded its sheer numbers and collective capacities, especially in housing production, over the past 30 years, undoubtedly as a result of the multi-faceted infrastructure of support put in place for that purpose. That infrastructure building started at about the same point where the emerging environmental community development movement is today – where a few great and not so great initiatives bubbled up from the grassroots, demonstrating promise and inspiring attention. The time has come to create a similar infrastructure for the emerging community-based sustainability movement.
The new infrastructure would ideally address the emerging movement’s complete needs, especially technical assistance and ways to spread lessons learned. This could include a large pool (or pools) of money community initiatives could draw on to purchase expertise, peer-to-peer exchanges, and group or cluster meetings. Further, this work would develop a knowledge base to encourage replication: to “map the field,” chronicle and analyze initiatives, and disseminate findings. Innovators could be funded to take their expertise on the road as, for example, funders have enabled the Center for Employment Training of San Jose and Seattle’s AIDS Housing of Washington to spread their experience coast to coast. “Human relationships are part of how innovation occurs,” reminds June Holley of ACEnet, a community enterprise developer based in rural Ohio.
The infrastructure would also develop performance standards. Because environmental community development ventures are “pure inventions,” there are no performance benchmarks as of yet. But since performance measurements showing success are one of the precursors to proliferation, their development is a step that must take place next. Performance measures for place-based sustainable development have to capture and measure value in ways that connect to and reflect the broad market economy. In addition, these benchmarks need to include some way to show that large numbers of small developers in the aggregate can have a large impact.
Capital and Risk
One of the major challenges a supportive infrastructure would need to tackle is the lack of room to take risks and fail. It’s understood now that nontraditional economic development is an “evolutionary process, fraught with error and near disaster,” but there’s no system of resources to support that reality when it comes to environmental initiatives. It takes a lot of time to identify new markets and develop new products that meet the three criteria of sustainability, and it takes a long time to market them. “Our building materials exchange had to create a market; that’s why it will probably take three to four years to reach break-even point,” reports Michael Krause, director of the Minneapolis, Minnesota Green Institute. (More on the Green Institute)
Another challenge is that the corporate sector is likely to try to undercut business rivals. When an environmentally astute approach, such as the Bronx Community Paper Mill, offers more cost-effective production, it can undermine established for-profit markets and prices. Opposition from the corporate sector has been a fact throughout the life of the paper mill effort. High value markets are often dominated by other players.
Successful enterprises have had to rebound from and build on failures. Cass River Enterprises, a business launched by a rural Community Action Agency in Michigan, did a booming business manufacturing storm windows until it saturated its market; so the organization did a market study and found a new business area, in home remodeling and mobile home repairs.
Bronx 2000, a CDC, was similarly able to rebound when its recycling worker-cooperative business lost its contract with the city; the business was sold, moved out of state, and the worker co-op status ended. Bronx 2000 regrouped and founded a new for-profit business, Big City Forest. This company employs 20 workers in the remanufacture of wood pallets, 75 percent of which are made of prime hardwood, into furniture, building products, and refurbished pallets.
New capital is needed for initiatives of all scales. “To advance sustainability, small projects are helpful. But we need projects that are meaningful in size to impact the global manufacturing sector, which is the center of pollution as well as of social inequity. It’s important to own the paper mill to influence public policy,” says Allen Hershkowitz, a lawyer with the Natural Resources Defense Council, and one of the driving forces behind the Bronx paper mill project. For the very reason that environmental community development is most effective when it fits into our capitalist economy, some initiatives will require large-scale amounts of investment. The typical $250,000 grant or loan that CBDOs may get for a project will not make an impact for environmental initiatives that need millions of dollars per project. Further, high value markets require more capital up front as well as more marketing information.
Given these challenges, it is not surprising that successful enterprises are innovatively capitalized, drawing on multiple sources and using market approaches, such as fee for service contracts. The Akron CBDO-operated auto servicing business pulled together 15 sources (two governmental, the others all private philanthropy) to invest in the business’s start-up, in addition to the private contracts it wins and income it generates.
To further this movement, the new infrastructure would need to develop new capital mechanisms, including tax incentives, equity pools, and new money for debt financing; or it might be able to expand some of the mechanisms that already exist. Sustainable development needs “green venture funds” willing to accept risk – probably each specific to a product line or market, perhaps even with a regional focus. Venture capital that is “patient” must also be available.
Equity for business expansion is another missing piece. Bronx 2000 is not yet breaking even, because, although the market demand is there for its product, the business has not been able to capitalize itself adequately for its next stage of expansion.
Debt financing must also be made available. Existing community development financial institutions, including revolving loan funds, could take on this role. Environmental ventures would probably benefit strongly from sectoral funds, such as the ones that ACEnet has recently helped create for specialty food and specialty furniture networks. Perhaps financial institutions could adapt the Shorebank Corporation’s EcoDeposits model, which attracts federally-insured deposits for loans to entrepreneurs creating sustainable ventures in the Pacific Northwest’s temperate rain forest.
Funders – both government agencies and the foundation world – are generally part of the problem. Their funding programs pigeonhole applicants, so projects that are cross cutting are told “you have a good ideas but it’s outside my program area.” Funding is not flexible enough for market-driven projects that may need to shift midstream. Nor is funding long term or sustainable enough; true sustainability projects may require a decade, while funders usually end their support in three or four years.
Foundations could, however, be the critical lever to expand the capacities and achievements of sustainable neighborhood development. They could be the source of predevelopment grants; funds for technical assistance; long-term equity and debt investments in selected ventures; models for the for-profit and government sectors to emulate; the platform for public policy-making and for providing learning opportunities for citizens; and support for research into best practices.
It is also proper to expect and demand government to create a climate in which sustainability becomes widely accepted as an idea and practice. After all, it was government – for example, when it subsidized highway systems that drained city populations into the suburbs, when it gave public money for the construction of corporate mega facilities that caused locally-owned small businesses to wither away – that created some of the difficult conditions our communities find themselves in today. Among the tools of government are the enormous sums in subsidies and tax incentives awarded to businesses by national, regional, state and local governments. They should start tying these awards to the long-term health of communities in a meaningful way.
Involvement and Education
Money is great, but successful sustainable development enterprises also involve the community. The first step toward success for most was creating an open process, making lots of information available and enabling the community to learn and determine its own direction. The initiatives with the strongest community presence were those built on years of resident leadership. Sustainable neighborhood development is not the place for an outsider to come into a community with a ready-made one-time intervention or with pre-packaged advocacy.
One of the important ideas that has arisen among people trying to advance sustainability is that effective education is not teaching or preaching. It is instead the ability to create a climate and opportunities for learning in which people are inspired to ask questions and find the resources to come up with their own answers; they will then have the motivation to act on these answers.
Citizens need the chance to understand their local economy, that what they buy affects the community and its environment, that the current system is neither right nor immutable, and that positive alternatives are possible.
Financiers need help (accompanied by a persuasive push) to learn more about low-income communities, community development, environmental issues, performance measures and successes in relevant community-based investments, and the emerging connection between the environment and community development that produces investment-worthy ventures.
Environmental and community groups need help understanding market niches and each other. As a matter of fact, dissonance between the community development and the environmental movements has been another factor challenging the growth of neighborhood-based sustainability. People in both fields perceive the two goals as working against each other. And sometimes that’s the case. Sometimes it’s NIMBYism, falsely parading as environmental concern; other times, it’s saving the spotted owl without an equal concern for the impact on workers and low-income communities. For their part, community developers may undervalue a project if it doesn’t result in a building or a job. Additionally, the environmental movement is by and large middle class and white, putting it out of sync with the racial and economic diversity of community developers and the neighborhoods in which they work.
Both movements have had their hands full, and so there are few instances in which “environmental” groups and “community development” organizations sit down to create a common language, discuss their common vision, and formulate specific initiatives to attain that vision together. “People should be brought together in a way that makes it clear how it’s absolutely in everyone’s interest to play a part. Someone should show how the connection can happen in a way that’s equitable, where people who have never spoken together before, don’t even know who the others are, understand and work together,” says Lois Gibbs, founder of the Center for Health, Environment and Justice. (More on such collaborations)
Environmental protection and economic development, frequently described as contradictory goals, have in fact proved mutually reinforcing at the neighborhood level. The environmental benefits of these initiatives are impressive. They cut down on waste and prevent pollution, remanufacture materials ranging from newspaper to auto parts, improve air and water quality, conserve natural resources, preserve open spaces, and improve the level of public health.
The economic benefits are also clear. In all, among the 20 cases studied in a recent national analysis by the Community Information Exchange, 412 people have already received job training from these initiatives, while 1,105 people are or will be employed by the projects in “independent jobs,” that is, ones that either provide a livable income or are moving the worker up the ladder to a family-supporting wage.
These benefits, along with the opportunity to make new connections among groups working to better communities, are strong arguments for community developers to ensure a central place for the environment in their work.