#158 Fall 2009

A Balance of Discipline and Flexibility Is Key To CDC Efficacy

We must define the community development field in terms of impact and organizational structure and look at CDCs as facilitators of development, not just developers.

What do CDCs need? And what do our communities need from community development corporations? How can we, as practitioners, help the community development field excel, be better understood, and gain needed federal resources to conduct its work at this critical time?

The continuing effects of the nation’s foreclosure crisis requires a competent and ready nationwide delivery mechanism composed of organizations that are used to thinking in a systemic way to get results at the local level. There is much work to do to rebuild neighborhoods, which are the roots of opportunity for families as well as the economic building blocks of cities and regions. This work should encompass energy efficiencies (green and transit oriented) for long-term impact and savings.

As Joe Kriesberg states in his piece, all community developers share a set of values “rooted in social, racial, and economic justice,” and for the last three decades, CDCs have exhibited just that: becoming best known for their affordable housing work in that social, racial, and economic context. CDCs are, in fact, community revitalization experts, employing community planning, housing and commercial development, neighborhood organizing and advocacy, community financing, human services and human capital development, greening and beautification, and dozens of other tools to bring about sustainable change in some of the country’s most disadvantaged areas.

But as we move further into the 21st century, and as we address the ever-changing needs of our communities, particularly in these economically challenging times, we need to aggressively analyze how the CDC model has changed since the 1970s. In doing so, we should examine specifically what many consider to be an over-emphasis on housing; create a resource base for concerns related to the community development field; move away from project-based development; engage in a discussion of existing funding structures (such as NSP), which are more bricks-and-mortar based and not operational based.

Moreover, we need to define the community development field in terms of impact and organizational structure and look at CDCs more as facilitators of development and not just developers. The National Alliance of Community Economic Development Associations (NACEDA) has proposed the creation of cohesive identity for community development, including expanding the model of unification, with an eye toward regional collaboration to increase the efficacy of a particular campaign.

We can do this, but we need to know that there are reliable funding sources available to solve the problems that are facing our communities. This is why a working capital fund for the community development field is necessary and should draw on the various agencies whose missions CDCs support: HUD, USDA, OCS, DOT, DOL, VA, and HHS. A recent goal has been to work toward getting HUD to direct states in the distribution of HOME funds to set aside 5 percent for community housing development organizations (CHODOs).

NACEDA has also found a lead sponsor for the Community Development Preservation Act, a bill that would achieve the same goal of needed funds available for community-based development organizations for core operating support to allow an organization to stay in business and to prepare and to adapt for the future. The funds would be distributed through HUD using a single application process, which would improve overall efficiency and reduce overhead for those organizations applying while also streamlining the decision-making, accountability, and monitoring activities of the administration.

The availability of reliable and stable funding would allow the strongest CDCs with the boldest and best plans to be free to focus on actually carrying out the difficult, but imperative work of rebuilding the distressed corners of America.

There are too many projects to list here that would benefit from a working capital fund, but one project of note is taking place in Somerville, Mass., a city of nearly 80,000 just north of Boston where Boston’s Green Line service is expanded and two new stops on the Orange Line have been added. About 55 percent of the city will be within a half mile of a new station, and of course, new development will follow. To ensure that this new construction maximizes the sustainability, livability, economic, and equity dividends possible from such an infrastructure investment, Somerville Community Corporation (SCC), led a community planning process, performed a detailed land-use survey to allow strategic investments to be identified and put in place. Sommervile is a CDC that works on both affordable housing development and homeless prevention services. The planning process drew on SCC’s existing network of partners in relevant areas, including housing, transit planning, open space, health, and environmental law. They expect to be working with the city on both zoning and related policy and identifying key parcels for acquisition and equitable mixed-use development. The funding for the Somerville transit-oriented development (TOD) planning process was private, though implementation of various portions will involve state and federal funds from many areas, including homeless prevention, DOT, and CDBG.

SCC Executive Director Danny LeBlanc says that the availability of working capital will be essential in order to achieve effective implementation of the strategic TOD plans. When an already hot market heats up around an impending improvement such as expanded transit, he notes, it’s nearly impossible to keep pace with it if you need to secure funding after parcels are identified for purchase — especially true in a place like Somerville that is nearly fully built out with small properties: “Working capital would allow us to act quickly and aggressively in the market, being there, being able to act quickly, is key to being able to maintain affordability.”

Though most of the country is not facing a hot market at the moment, the same dynamic applies to CDCs who are attempting to use NSP funds to secure strategic parcels for revitalization in distressed neighborhoods — they are in competition with remote speculators who have both liquidity and no intention of responsible disposition (and therefore no need to make their purchases “pencil out”).

Allowing CDCs the ability to move quickly with a flexible source of capital in every market could mean the difference between success and failure, opportunity and exclusion, and making the most of funding and paying too much for properties with marginal importance.


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    First, it was judges like Justice Arthur M. Schack of the New York Supreme Court, who made waves by tossing foreclosure motions because he found a rising level of errors […]

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