The Emergence of the CDC Network

In 1967, the first CDC was born in Brooklyn’s Bedford-Stuyvesant neighborhood. Government, business and the middle class had pulled their resources from the area as the poor and non-white population grew. While then-Senator Robert F. Kennedy was taking a tour of the community, residents challenged him to support their vision of grassroots development. Kennedy and neighborhood leaders responded by organizing the Bedford-Stuyvesant Restoration Corporation as a means of reinventing the local economy and renewing hope.

As more communities across the country became desperate for jobs and safe and decent housing, CDCs multiplied. And when they needed a voice at the federal level, many came together to form national associations. Organizations like the National Congress for Community Economic Development and the Community Action Partnership became advocates for grassroots groups and brought them together to share their knowledge. In the late 1970s and early 1980s, intermediary organizations like the Local Initiatives Support Corporation (LISC) and the Enterprise Foundation were created to help CDCs with financing and capacity building.

An estimated 3,000-plus CDCs are now active across the United States. In the last 15 years, as CDCs have matured, the CDC network has emerged as a political force in several states, regions and metro areas. Networks bring CDCs together to share ideas and learn from each other, and they also give CDCs power by enabling them to flex their collective muscles in the public policy arena. At a time when CDCs’ funding, and their ability to revitalize neighborhoods, is in some doubt, networks have become critical agents of change. As membership organizations, networks build members’ capacity to carry out their particular mission, but they also advocate for and develop policy changes that benefit low-income communities as a whole.

While many CDC networks were founded for the purposes of advocacy and policy development, others started out as trade associations, bringing members together to talk shop and to build capacity in everything from financial management to community planning. “I think we always identified as a trade association, but one of the messages my members often send to us is that they consider the network’s advocacy work to be critical,” says Brenda Clement, director of the Housing Network of Rhode Island. “They value our being out there promoting the CDCs as a tool for solving the housing and community development issues in the state.”

The Coalition for Nonprofit Housing and Economic Development (CNHED) in Washington, DC, takes a different approach. It identifies strongly as a trade association and has many for-profit and government members. Yet it has worked intensively behind the scenes for a housing trust fund, using its connections in city hall and its research capacity to support an alliance of grassroots and policy groups.

“We don’t do demonstrations,” says Bob Pohlman, the group’s executive director. “We handle technical details to meet the needs of our producers, but with trying to pass legislation, we tend to try to submerge ourselves in order to promote the alliance. It seems to work best that way.”

The decision for networks to take sides on controversial issues doesn’t necessarily sit well with all members. When the Southern California Association of Non-Profit Housing (SCANPH) was presented with a state bill that would require affordable housing developers to pay prevailing wages, several members were in strong opposition, says Jan Breidenbach, the network’s director. The board, however, took a “high road” position, issuing a statement in support of increased wages and calling for more funding to pay for them. SCANPH officially remained neutral on the bill, but as soon as it passed, the network began discussions with labor unions on how to make it work. 

When debates like these arise within networks, a degree of unanimity is preserved because nonprofits maintain control. Government and private companies can be members but typically aren’t represented on boards of directors. In some networks they can’t participate in voting for directors or on policy issues. The networks were founded to serve the nonprofit housing industry, so it is understood that nonprofits should guide their direction.

“We take dues from anybody. But we have an institutional bias toward housing development by nonprofits,” says Breidenbach. “We believe that’s the best model for producing affordable housing.”

Supporting Social Justice
A recent report by the Center for Community Change on successful housing trust fund campaigns cited the critical role of CDC networks in Los Angeles and Seattle. SCANPH and the Housing Development Consortium of Seattle-King County (HDC) instigated the campaigns and went on to play a leading role.

SCANPH was launched in 1985 to represent CDCs in the Los Angeles area. The network collaborated with various social justice groups to create the Housing LA coalition, which eventually won the largest housing trust fund in the country. The campaign began with the production needs of network members in mind, but quickly expanded to include tenant groups because they had the constituent base to win a citywide struggle. At the same time, because many of its members have a foot in the corporate world, SCANPH was able to organize critical summits with business leaders to drum up support for the trust fund (see SF #122).

The nonprofit housing industry and affordable housing development itself are fairly youthful in Washington; the state was one of the last to establish a housing finance agency. So HDC filled a niche that was crying out for leadership; in addition to representing the housing producers in the Seattle area, it also set up an alliance of housing groups that works to influence statewide policy. HDC led campaigns in 1995 and 2002 to get Seattle voters to approve seven-year levies for low-income housing. And thanks in part to the network’s involvement, the state housing trust fund now receives an infusion of $100 million every two years.

“Because we as a group have taken some fairly careful and responsible stands on things that are well-researched, that has helped build the credibility of our organization,” says Carla Okigwe, executive director of HDC. “We’re looked to as the main voice of the local nonprofit housing industry.”

The Housing and Community Development Network of New Jersey (HCDNNJ) helped organize the Homes for New Jersey campaign in 2005. It calls for 100,000 affordable homes to be created or preserved over the next 10 years. Given that the housing crisis was creeping up the income ladder to affect the middle class and a governor’s race was in progress, the network decided that the time was right for the campaign. While the campaign is closely associated with the network, it has its own staff, and part of their job is to involve groups that are not part of the network. Organizations that endorsed the campaign were invited to a series of roundtables to discuss what housing policy should look like in the state; their ideas helped shape a policy paper that the campaign has presented to the new governor, Jon Corzine. Corzine endorsed the campaign’s goal of 100,000 new homes two months before the election.

Influencing Policy
Networks’ advocacy work doesn’t always take the form of a grassroots-style campaign. They have also become adept at working within policy circles to get things done.

In California, SCANPH played an important role in developing legislation that would allow a city to acquire land to replace housing lost to school construction. School districts around the state, but particularly the one in Los Angeles, need to build hundreds of new schools in the coming years. The network saw this as an opportunity to build a lot of affordable housing through joint development with the schools. But state law made clear that a school district could acquire as much land as needed for a school, and not an acre more. The network worked with the city of Los Angeles, an L.A. Unified School District (LAUSD) lobbyist and an ally in the state legislature to craft a bill that allows a city to acquire property to replace any affordable housing torn down for a new school, if it gives displaced persons the right to live in the new units.

After the bill passed in 2004, SCANPH formed a working group of 17 nonprofit developers, intermediaries and others to see if there was interest by the development community in doing joint partnerships with school districts. It was also important for developers to have a sense of what building housing over or adjacent to a school might look like. A request for proposals for the first LAUSD school-housing project was issued in August 2005. Building on this success, SCANPH recently convened a meeting on joint development that brought nine school districts and cities to the table.

In New Jersey, HCDNNJ campaigned in 2002 to get the legislature to create the neighborhood revitalization tax credit, which will provide up to $20 million annually to CDCs in eligible communities. The idea was a hard sell to legislators who were resistant to giving up $10 million annually in revenue (the tax credit to corporations is worth 50 percent of the money they invest). Still, political leaders were more receptive to the idea of a tax credit than to new taxes.

The concept of the tax credit came out of a network initiative that began in the late 1990s to encourage CDCs to do community organizing. “Part of that was working with community stakeholders to help them develop a vision for their community,” says Diane Sterner, HCDNNJ’s executive director. “That led to planning, which led to the tax credit program, because we didn’t want their plans to be completed and sit on a shelf. There wasn’t much at the time in terms of resources to fund plan [implementation].”

Once the legislature approved the tax credit, the network hired a full-time planner who works closely with members to help them create the plans. The network also conducts outreach to banks, utilities and other companies who can fund these plans. Recently the state agreed to provide seed money for five more plans each year, money that can be used to leverage more funding from private sources.

Building Capacity and Knowledge
Networks fill a huge gap that would otherwise exist in developing CDCs’ capacity to do their work. LISC has offices in some of the same cities and states where networks are active, but they offer a limited number of trainings each year with a focus on funding and development. Breidenbach notes that in Los Angeles, LISC helps CDCs with access to federal resources, while the network’s training is more geared toward helping them at the state and metro levels. In some cases, as in Rhode Island, LISC and the state housing finance agency both strongly encouraged housing developers to form a network to better serve their cause.

There are issues that are common to network members across the country, like basic property maintenance and how to get in compliance with government rules for tax credit developments. But there are also issues specific to certain places. For instance, in Washington, DC, much of CNHED’s training is focused on how to apply for funding from and affect the policies of a single city government, since the city has no state or federal representation.

Some networks conduct research and produce publications that can help members make sense of the various tools available to them. CNHED has been especially active in this area, distributing its reports not just to members but also to political leaders and the media. The network recently completed research on limited equity cooperatives and ways to maintain long-term affordability of subsidized housing. The group considers its research to be an important component of its role as an advocacy organization.

But it isn’t as if networks are the main source of information and members are their students. CDCs and other community development groups also use networks as a place to exchange ideas and educate each other. HANDS, Inc., a CDC in Orange, NJ, has been a leader in finding ways to bring abandoned property back into productive use, using a state law that the network helped write. The group sends staff to statewide network meetings to advise other CDCs how they can do it too. These meetings also allow for cross-fertilization of ideas, as CDCs, CDFIs, bankers and others share perspectives from very different corners of the development field.

Collaborations on specific development projects also happen when members interact through their networks. Groups that have experience in construction and building maintenance, typically CDCs, will often help agencies that have more of a social service mission to complete new projects.

Beyond offering trainings to meet specific needs, networks bring members together to talk about the big picture. SCANPH has organized two series of retreats to talk about the future of the community development field. It first brought CDC directors together in 1997; their discussions continued for more than a year. Breidenbach counted 21 separate collaborations between members that developed as a result of that process. Her network launched another series of meetings this fall. HDC is doing something similar in Seattle in response to the difficulties members are having in finding land for development and the money to pay for it, and to address the decline of federal subsidies for housing.

“We’re looking at how to shake our members up and think completely out of the box,” says HDC’s Okigwe. “Why did they take that leap of faith in 1980 to start nonprofits? It’s kind of like that.” No ideas are too far-fetched, she says; the network might start a new think tank, hire its own federal lobbyist or make proposals for affordable housing directly to the voters on the election ballot.

Staying Ahead of the Curve
Not all networks have been growing. The Tennessee Network for Community Economic Development, which once had five staff members, has now reverted to its original role as an all-volunteer organization. Board president Olliette Drobot attributed the network’s changing fortunes to a difficult funding climate in her state. Meanwhile, the Maryland Center for Community Development dissolved entirely this year.

For many nonprofit housing and community developers, networks will continue to be places to go for innovative ideas and ways to forge ahead in a challenging funding climate. Networks are taking on the newest trends in the field, as the Massachusetts Association of CDCs is doing with its green building program. The network has partnered with LISC and two green-minded nonprofits to offer technical assistance and aid in finding money for CDCs to pursue energy-efficient development. Other networks will be helping CDCs to find new sources of funding in the coming years as the federal government becomes even less of a reliable partner. While many in the field are worried about the future, for CDC networks, this fear presents an interesting opportunity.

“Right now, ironically, we’re in a growth pattern, because more and more funders are realizing a need for strong advocacy and a strong voice at the table around affordable housing,” says Clement. “So in this environment we’re actually growing stronger and bigger, and my ultimate goal would be to put us out of business rather than create a bigger office to talk about the problem. We just couldn’t capture the attention of funders before.”

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