Community development corporations (CDCs) are significant developers of housing for low-income households. With about 4,600 such organizations across the country having produced or rehabilitated more than 1,252,000 units of housing, CDCs are viewed as key engines for community renewal. Since their creation, CDCs have worked to improve deteriorated neighborhoods and promote community development. In fact, many groups are finding themselves in locales that are experiencing an urban renaissance, and part of this change is due to the work of the CDCs.
There are also many other nonprofit producers of housing, including 87 regional nonprofit housing organizations that are members of the Housing Partnership Network and seven nationally focused groups that are members of Stewards of Affordable Housing for the Future. These nonprofits do not confine their work to small geographic areas, as do most CDCs and, together, have developed or preserved nearly 300,000 units of housing. These large nonprofits are key actors in providing housing affordable to low-income households and together with CDCs they constitute a significant constituency.
Whether a CDC or other nonprofit organization is attempting to counter market trends and to promote housing and economic development, or whether it is operating in a gentrifying area and attempting to safeguard existing residents against displacement, it is certain to face significant challenges. On the one hand, many CDCs struggle to do development and management in areas that have been abandoned by the private sector and that are often plagued by high crime rates. On the other hand, some CDCs are operating in areas that have begun to show a resurgence of economic activity, private market investment and interest by a new wave of urban settlers, or gentrifiers. Such groups are challenged by a scarcity of affordable land and buildings, all of which makes their work as housing developers nearly impossible.
The housing produced by CDCs and other nonprofits is an important component of the U.S. social housing sector, which has about 4.6 million units. These groups could play an even more prominent role in expanding this sector if there were a federally mandated Right to Housing. Such a right could make the work of building “affordable housing” less challenging by providing a steady source of financing and greater organizational supports, and by allowing the nonprofits to focus more on community issues and less on the constraints and challenges imposed by capital.
CDCs and other nonprofits are well positioned to be advocates for a Right to Housing. In view of the large number of these organizations, the local prominence that many nonprofits enjoy, the strong networks and collaborations that groups have developed, as well as their deep commitment to their housing and community development work, CDCs and other nonprofits can play critical roles in promoting a Right to Housing.
In particular, CDCs and other nonprofits should include, as part of their mission, a broader commitment to altering the national context in which they do their work. Supporting the National Low Income Housing Coalition’s efforts to promote a Right to Housing, and becoming involved with the activities of this organization, would be a constructive step.
In addition, nonprofits collaborating at the local level have important experiences to share. Whether they are working with community leaders or testifying before Congress, the positive effects of their work generally translate into powerful stories with compelling messages. Lobbying local and Congressional representatives, while partnering with other housing groups, as well as with organizations with a related agenda, should be a part of the mission of housing nonprofits. In view of the positive effects that a Right to Housing would have on the ability of nonprofits to produce more and better housing, a strong motivation exists for these groups to become actively involved in advocacy efforts.
With a Right to Housing, financing would be more efficient and funding for groups would be more available, resulting in increased productivity of CDCs and other nonprofits. For a nonprofit to produce low-income housing, it must engage in “patchwork financing,” the assembling of numerous types of loans, grants and tax credits. This is a complex, costly and time-consuming process, and it is far less efficient than a single-source deep subsidy program. A Right to Housing would result in far simpler development financing, thereby significantly enhancing the capacity of nonprofits. In particular, a Right to Housing would be accompanied by a steady source of capital and deep subsidies. Competent producers, therefore, would be guaranteed funding, rather than being subjected to large fluctuations or sudden termination.
Also, with a Right to Housing, funding for nonprofits themselves would be improved and productivity would increase. With a less stressful work environment, organizations would be better able to maintain a stable work force. This would be a marked improvement over the present situation, where salaries are typically low, hours are long and the obstacles to completing tasks can be significant. It is not uncommon, for example, for staff members at all levels to experience “burnout” – exhaustion after several years that results in a resignation.
With a Right to Housing, CDCs would be in a better position to connect closely and pay attention to the needs of their residents and communities. Many CDCs have their roots in local protest and advocacy movements. In addition, more than one-half of the members of CDC boards are generally drawn from the local community. Because CDCs work at a local level and often adopt a comprehensive approach to community development, they are in a good position to coordinate effective community improvement efforts; most CDCs are involved with a range of activities beyond housing. The particular mix of initiatives that a CDC selects depends on its mission, the community’s needs, the CDC’s staff capacity and the availability of funds and other types of assistance.
As CDCs and other nonprofits have gone beyond producing “housing alone” (no small achievement in itself), they have emerged as leaders in providing – or in many cases, helping to coordinate – housing plus services. A robust Right to Housing initiative would involve a full array of programs connected to housing that would enable households to maximize their own capabilities and productivity. Such programs typically include a combination of the following: job training and employment counseling; after school programs for youth and teens; various services targeted to specific populations, such as the elderly and mothers with young children: health care; recreational activities; and opportunities for dealing with various types of abuse problems. To the extent that housing nonprofits have been among the pioneers in developing these types of programs, a Right to Housing would provide opportunities for CDCs to further develop their housing plus services initiatives, while also supporting their community-building agendas.
With a Right to Housing, support from the major national nonprofit intermediaries could focus on technical assistance. The Local Initiatives Support Corporation, Enterprise Community Partners and NeighborWorks America currently play important roles in influencing and supporting the work of CDCs and other nonprofits, and they channel significant private funds (as well as public funding in the case of NeighborWorks) to local chapters that, in turn, provide funds directly to affiliate organizations. In recent years, the involvement of intermediaries has grown significantly, and there is a prevailing view that CDCs are better able to deliver services with the assistance of intermediaries than without them.
If there were a full-scale Right to Housing initiative, with more federal funds available to nonprofit housing producers, there likely would be little need for the intermediaries to continue their key role of raising and disseminating funds. Instead, they could focus their efforts on providing technical assistance and serving as vehicles for communicating “best practices” on a variety of issues pertaining to financing, production management, community development and service delivery.
With a Right to Housing, CDCs would be in a better position to mediate the key conflicts inherent in their work: Capital vs. Community, Organizing and Advocacy. If there were a Right to Housing, the contradictions between capital and community would be lessened. A well-funded program would allow CDCs to function more independently in addressing the needs of communities and individuals, thereby virtually eliminating their dependence on traditional sources of capital, and placing them in a good position to more unequivocally serve the needs of their constituents. Even in the present era, while tensions may surface, CDCs appear to be doing a good job of mediating the two worlds and, much more often than not, keeping true to their mission to serve low-income people and communities.
Yet, it is still reasonable to question the extent to which CDCs – organizations whose names include the word “corporation” and that are forced to work closely with the powerful interests of a community (e.g. financial institutions and city governments) – can really be advocates for their low-income constituents? To what extent do the tasks involved with development and management conflict with the needs of low-income communities and their residents?
Although many CDCs arose from an organizing and advocacy agenda, as their work became increasingly focused on the technical aspects of development, some groups lost sight of their original mission. This conflict was identified early in the growth of CDCs. For example, two decades ago, Neil R. Peirce and Carol F. Steinbach, in Corrective Capitalism: The Rise of America’s Community Development Corporations, noted that CDCs “have to engage in virtually nonstop fund raising… [and that] closer association with the private sector and local government may discourage advocacy. Few organizations are anxious to alienate new-found funding partners.”
Nevertheless, many CDCs appear to be able to blend organizing and advocacy. In a 1993 study of CDCs by Mindy Leiterman and Joseph Stillman, organizing was identified as a constant theme; one executive director commented: “Organizing is like breathing – it is part of everything we do.” Further, studies by the Urban Institute in 1995 and 2002 found that a substantial majority of CDCs were involved in community organizing, or in closely aligned community building activities that require active participation of residents and businesses. And Randy Stoecker, whose earlier work argued that the fundamental conflict between capital and community introduces a virtually insurmountable obstacle to CDC success, recently said: “a CDC can accomplish community organizing when it is structured to manage the potential contradictions involved.” Furthermore, “It is possible for CDCs to use traditional confrontational power tactics in their organizing activities,” and there are a number of initiatives under way that are exploring ways to manage the organizing-development debate.
My sense is that the debate is moot. While some groups may be able to merge the two agendas, others may not be. Organizing is important. Development is important. And it is important that both be accomplished in the current environment as well as part of a Right to Housing initiative. However imperfectly CDCs would (and do) navigate between the needs of community and capital, it is not clear what other types of organizations would be better suited to this task. To produce the needed units of housing, both now and in the future, we will need all kinds of competent organizations, and, hopefully, they will be well connected with community needs and visions.
If and when a Right to Housing is adopted CDCs and other nonprofits would be well positioned to assume a major role in a wide-scale effort to develop housing and other community services. While they would still encounter some of the same problems that they currently face, a well-funded national program, supplemented by supportive and technically competent local and national intermediaries, would go a long way toward significantly increasing housing production.
In the meantime, as part of an overall commitment to provide increased funding for housing, the public sector should make sure that its investments strengthen CDCs and other nonprofits. In particular, these groups continue to need a steady source of income to cover operating expenses. And they also need a simpler subsidy mechanism that would allow them to package deals and develop projects much more efficiently than the current system that requires multiple subsidies and funding sources.
A number of existing programs, such as the Community Development Block Grant, HOME and the New Markets Tax Credit or organizations such as Community Development Financial Institutions, are good conduits for funding CDCs and other nonprofits. But bringing back a deep, single subsidy such as the Section 8 New Construction and Substantial Rehabilitation Program should be a top priority. Another possible source of funding could come through a new National Housing Trust Fund, which would provide a dedicated source of revenue aimed at producing, rehabilitating and preserving 150,000 units per year within the span of a decade.
A further proposal would target resources directly to CDCs and other nonprofits by creating a pool of technical assistance and capacity-building funds. The Community Economic Development Expertise Enhancement Act of 2005, although not enacted, could be reintroduced and would provide, over a three-year period, $225 million for community-based development corporations, helping to leverage private dollars to create affordable housing and jobs in dis-invested communities.
Alternatively, the federal government could bring back the 1980s Neighborhood Self-Help Development program, which provided categorical funding for neighborhood development organizations. Finally, all developments aimed at low-income households should be permanently affordable to this group; subsidies need to be provided over the long term to make sure these restrictions stay in place.
The mechanisms needed to support CDCs and other producers of social housing are well understood. We are not confronted by a lack of knowledge about how to solve our housing problems; our limiting factor is our collective political will. A commitment to work toward a Right to Housing should be part of a political agenda and ingrained in the work of CDCs and other nonprofit housing organizations.