Impact of Community Development Corporations on Neighborhoods

By M. Isi Eromosele

Over the past 30 years, the most promising alternative model to direct governmental administration of community development programs has been that of community development corporations. Unlike government, community development corporations can respond quickly to the development opportunities offered by a changing marketplace.

They also can mix and match programs to respond to the multiple needs within a neighborhood more easily than can city government, which is responsible for programs in all neighborhoods.

And  CDCs are directly accountable to governing boards that include community representation, linking CDC directors  and staff links to a variety of community institutions, which can be enlisted in the task of community change.

As intermediaries between the community and the market, CDCs possess two great strengths: they pro-duce housing units, commercial space, community facilities, and other visible neighborhood improvements to help make the lives of people in the community better.

And they work with disparate community residents and leaders to help bring external resources to bear on the task of neighborhood improvement.

CDC Impacts on Neighborhood Markets

Differences across cities in CDC ability to improve neighborhood quality can be explained by differences in part by the strength of regional markets, but also by the quality of CDC industries, and the quality of the community development support system.

Overcoming deep and complex neighborhood problems demands long-term and consistently applied strategic investments, which few CDCs have been able to make     historically.

Industries with large numbers of CDCs able to make these long-term investments have achieved results, but not all industries have reached this level of size and quality. Those that have done so benefited from creation of strong community development support systems.

CDCs achieved the broadest results where they pursued a consistent community improvement strategy over time, supported by strategic alliances with other neighborhood and citywide actors.

CDCs most often credited with observable impacts in their neighborhoods were groups

that had been at work for at least a decade. These CDCs combined two necessary strengths - a track record of successful redevelopment, including a blended portfolio

of physical development and human service programs, and an ability to manage and   govern themselves effectively.

CDCs in cities that created effective community development systems early on tend to have multiple, strong, capably managed CDCs able to pursue neighborhood revitalization over the long haul. The key component of support systems is the relationships among individuals and institutions that can be used to mobilize and wield finance, expertise, and political influence for community development.

M. Isi Eromosele is the President and CEO of Oseme Group.

Neighborhood Problems And CDC Responses

By M. Isi Eromosele

Since the 1960s, the poorest neighborhoods of New York, Philadelphia, Cleveland, Chicago, Los Angeles and many other cities have seen the withdrawal of private capital. The most obvious signs of this disinvestment are the rows of blighted properties, many abandoned by their former owners.

Disinvestment was produced by a complex mix of social and economic factors, including racial segregation and middle-class suburbanization. The physical deterioration of neighborhoods was accompanied by other changes that aggravated the downward spiral.

Left with increasingly poor residents, cities lost much of their tax base and hence their ability to provide the high-quality public services needed to sustain the flow of private capital. Economic change often meant the loss of industrial jobs in inner-city neighborhoods.

Concentrations of poverty produced a kind of social isolation of the poor that made it difficult for them to take advantage of mainstream economic and social opportunities.

As communities declined, government agencies and private foundations have pursued a variety of strategies to improve neighborhood quality through investments in housing rehabilitation, commercial district improvements, upgrades to the transportation and under-ground infrastructure, renovation of parks and open spaces, and other activities.

The aim of these community development investments was to improve the quality of the neighborhood for those who lived there and at the same time, induce outsiders to make new investments, which in turn would further improve neighborhood quality.

Most community development agencies understood that physical revitalization alone would not be enough. Poor people needed opportunities to learn job skills and find employment, and some public agencies and private philanthropies turned their attention to business development, workforce programs, and other efforts to help people seize economic opportunities.

Further, families with children needed immediate help with educational programs, supervision of children after school, and other programs to help ensure healthy and stable families. Therefore, many community development programs also included these kinds of

social investments.

M. Isi Eromosele is the President and CEO of Oseme Group.

Community Development Corporations: Changing Support Systems

By Scholastica Wilson

In   recent years, community development corporations (CDCs) have received major attention from government and private funders as a promising way to improve urban neighborhoods and the lives of those who live in them.

These groups are nonprofit, community-controlled real estate development organizations dedicated to the revitalization of poor neighborhoods. They undertake physical revitalization as well as economic development, social services, and organizing and advocacy activities.

Because public services for poor communities are fragmented across multiple agencies and levels of government, CDCs often are the only institution with a comprehensive and coordinated program agenda.

CDCs as an industry made strong gains in their number, size, outputs, and contributions to neighborhood revitalization over the 1990s. They increased their ability to influence neighborhood markets and to respond to neighborhood problems. They expanded their physical revitalization activities and began to pursue more comprehensive approaches to community improvement.

These advances were largely the result of an institutional revolution within most major U.S. cities. Support for CDC initiatives had been largely ad hoc and poorly coordinated before 1990. By decade’s end, support for CDCs had become more rational, entrenched, and effective.

Community development support “systems” had emerged in many cities. These systems are comprised of the interrelated people and institutions that mobilize money, expertise, and political support for community development.

As prominent aspects of these systems, governments, financial institutions and philanthropic organizations came together to create new collaborative bodies to support CDCs.

These bodies linked CDCs to money, expertise, and political power. They attracted resources from local and national sources and channeled them to CDCs as project capital, operating subsidies, and technical assistance grants. They also engaged civic and political leaders in a neighborhood improvement agenda.

Scholastica Wilson is the Development Director at New Covenant Community Development Corporation.

Community Development Corporations: Strategies and Models

By Scholastica Wilson

Community development corporations are non-profit, community-based organizations that anchor capital locally through the development of both residential and commercial property, ranging from affordable housing to developing shopping centers and even owning businesses.

First formed in the 1960s, they have expanded rapidly in size and numbers since. An industry survey published in 2006 found that 4,600 CDCs promote community economic stability by developing over 86,000 units of affordable housing and 8.75 million square feet of commercial and industrial space a year.

No sector of the expanding community wealth-building economy is more celebrated for its success than community development corporations (CDCs). From humble beginnings, the CDC movement today has grown to an estimated 4,600 CDCs spread throughout all 50 states and in nearly every major city.

Community development corporations are typically neighborhood-based, 501(c)3 non-profit corporations, with a board composed of at least one-third community residents, that promote the improvement of the physical and social infrastructures in neighborhoods with populations significantly below the area median income.

Many CDCs perform a wide variety of roles, including housing, commercial, and retail development, as well as leading community planning, assisting with community improvement programs (improved lighting, streetscapes, and the like) and providing social services. In some cases, CDCs extend far beyond the bounds of a single community to cover an entire city, county, multi-county region, or even an entire state.

Scholastica Wilson is the Development Director at New Covenant Community Development Corporation