The Trend Toward Larger Organizations
Rural community development corporations have long grappled with the issues of organizational and programmatic growth. Twenty years ago, less than a dozen NeighborWorks organizations (NWOs) served rural markets. The average rural NWO had three to five staffers and concentrated its revitalization efforts on no more than three communities. Rare was the NWO that served more than one county and had more than five people on staff. Today, the smallest NWOs have around 10 staffers and serve anywhere from three to five counties. The largest, such as Rural Opportunities Inc. (ROI) based in Rochester, N.Y., serve multiple states and keep hundreds of employees engaged in a full range of community- and economic-development services.
Throughout the 1980s, the more seasoned urban NeighborWorks organizations such as the Neighborhood Housing Services of New York, Chicago, and Los Angeles had the largest staffs and produced the greatest number of units of affordable housing and homeowners in the network. The rural groups in small towns in states such as Vermont, Wisconsin, and Texas ranked near the bottom in size and production. Today, the larger rural-serving NWOs dwarf the largest of their urban counterparts in organizational and staff size, service area, and production.
The Trend Toward Mixed-Market Service Areas
The search for sustainable scale and regional planning has contributed to the emergence of NWOs serving a mix of markets. The trend goes in both directions — NWOs that traditionally only served rural communities moving into urban and mixed-urban communities, as well as small, urban-based NWOs expanding into surrounding rural and mixed-rural areas. In many cases, formerly isolated rural communities join with larger, newly defined economic regions — and explore economic strategies most likely to yield a competitive edge in the global economy.
For example, Rural Opportunities Inc. has served rural communities in a multi-state region for decades. In 2006, ROI merged with Housing Opportunities Program Inc. (HOP), an organization with strong urban roots. CEO Stuart Mitchell says the merger “allowed us to strengthen our rural and urban real-estate development. For over 30 years we’ve thought of ourselves as rural and only rural. Our growing experience in mixed markets has made us think about the interplay of urban and surrounding rural communities. In a way, we’re now thinking that we can’t really be successful in a long-term community strengthening endeavor without working in non-rural communities as well.”
Community Ventures Corporation (CVC) in Kentucky, which provides technical assistance to entrepreneurs for small business development, is another example. CVC’s success and explosive growth, which CEO Kevin Smith refers to as a “10-year sprint,” included the organization adding a housing division to their economic development base and expanding to surrounding rural counties in a series of phased expansions. Started in urban Lexington, Ky., CVC now has five satellite offices, four of which are rural, operating Kentucky Enterprise Communities (KEC). KEC encourages satellites to be responsive to their own market conditions in both the range of programs and services offered as well as the resources secured in support of local operations. At the same time, the KEC model offers a range of efficiencies for the satellites based upon being able to tap into centralized operational support in Lexington.
Smith’s detailed cost analyses over time led him to conclude that a sustainable business model for exclusively rural areas would be heavily dependent upon deep subsidies which were increasingly hard to obtain. CVC’s success in Lexington, combined with the need for the economic stimulus of housing and economic development in Kentucky’s rural communities, forced Smith to find a way to blend the higher cost efficiency of urbanized areas with the lower cost efficiency of rural areas.
The Trend Toward Diverse Programs
Although a hallmark of the broader community-development movement is a commitment to strengthen communities, the dominant focus has been affordable housing. In rural America, where homeownership rates are traditionally as much as 20 percent higher than in non-rural areas, affordable-housing programs alone are often not enough to strengthen communities where seasonal labor is high and wages are low. Whereas the urban focus on increasing the rate of homeownership and improving the quality and affordability of rental housing, rural-serving NWOs focus on programs to sustain homeownership (which puts a premium on rehab, energy efficiency, green technologies, and financial counseling) as well as support entrepreneurial development to stimulate economic growth.
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