Community Development:
Strengthening the Connection between Goals, Practice and Research
Elizabeth Mueller
University of Texas at Austin
Alex Schwartz
New School University
Community development is about the revitalization of low-income communities through
the efforts of organizations that incorporate residents’ desires and talents. It has always
been a challenge to measure community development work, and decide which
organizations should be included in assessments of the field. The most common
approach in national studies has been to focus on organizations involved in physical
revitalization and thought to be responsive to residents’ concerns—typically, community
development corporations (CDCs). Observers of the field have always known that more
than housing was important to these communities. Yet it was difficult and, for
researchers, often impracticable, to define less tangible processes and the impacts of more
complex, holistic initiatives. Yet understanding comprehensive, integrative efforts to
change community conditions is now of central interest to many community development
funders and practitioners and forms the focus of many recent, high profile initiatives.
And new approaches to practice, in economic development and finance, are emerging.
So the earlier dilemma returns: how should we define community development and how
can we measure it?
In this paper we argue that thinking on the conceptual and operational definitions of
community development has out-paced existing empirical research. While scholars and
funders have rightly become increasingly concerned with thinking through the conceptual
underpinnings of community development strategies and practices, including how
broadly to conceive of the work of the field, researchers have been grappling with more
basic issues, from documenting the basic activities of community development
organizations, to designing methodologies and methods for evaluating complex, placebased initiatives. This disconnect hinders progress in the field by making it difficult for
proponents of particular strategies or conceptual models of the field to ground their
arguments in empirical evidence concerning the efficacy of particular approaches or
definitions.
We organize our argument as follows. We begin by reviewing recent discussions
concerning the definition of the field, contrasting this with the much narrower operational
definition offered in past works or by practitioners. We follow this with a brief review of
the history of the field, highlighting the lessons drawn and focus of practice during each
period. Following this, we discuss major community development initiatives, placing
them in the context of important economic and political changes currently shaping
strategies and results. In the second major section of the paper we review existing
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community development research, covering the major themes of past research, including
documentation of basic information on CDCs, their activities and needs, appraisals of
CDCs and their support systems, CDC capacity and capacity building needs, institutional
support for CDCs, and the impact of CDCs on households and neighborhoods. We
conclude this section with a discussion of the changing role of housing development in
the field, based on interviews and essays by several of the field’s longest-term
proponents. Finally, a discussion about the implications of the disconnect that we observe
between theorizing, empirical research and practice for future research. We offer
recommendations aimed at bridging this gap and thus strengthening the foundation for
work in the field by proposing a research agenda centered around several priority issues
for the field, ranging from development of greater clarity concerning common actors and
processes, to better understanding of the connections between substantive areas of work
in the field.
Characterizing Community Development: Putting boundaries around the field
In this section, we will discuss how to define community development, looking both to
stated goals for the field, the institutions that are considered the most appropriate vehicles
for reaching these goals and the implications of changing the definition. Based on this
discussion, we then consider what is known about the scope of the field’s work, based on
existing data sources. We follow this with a brief review of the modern history of the
field, emphasizing key points of transition, and how common wisdom around what
worked and what did not has shaped efforts over time. Finally, we discuss important
changes in the context for community development work and how these mesh with the
new comprehensive community initiatives favored by a growing array of funders and
practitioners around the country.
Community development has no precise, operational definition. In common usage, it has
generally referred to efforts to revitalize geographically defined communities, often by
producing or rehabilitating housing affordable to the community’s low and moderateincome residents, often in combination with other services. The institutional vehicle for
this work has been a community development corporation (CDC.) CDCs are a loosely
defined category. They are usually nonprofit organizations where members of the
community play some role in defining the organization’s agenda.
Ferguson and Dickens provide a broad definition of community development in their
edited volume aimed at fostering more discussion of the conceptual basis for the field
(Ferguson and Dickens, 1999.) They define community development as “asset building
that improves the quality of life among residents of low- to moderate-income
communities, where communities are defined as neighborhoods or multi-neighborhood
areas.” [emphasis in the original] (Ferguson and Dickens, 4-5.) They include five types of
capital in their definition of assets: physical, intellectual (human capital), social,
financial, and political. They do not specify whether assets should be built at a social
rather than individual or household level.
2
This broad definition leaves several issues open to interpretation. Two interrelated
debates dominate recent discussions over how to define the field of community
development: 1) whether or not community development is primarily concerned with the
physical rebuilding of low-income communities, primarily through housing development
and 2) whether or not “community development” should be synonymous with the work
of community development corporations. A secondary debate concerns the meaning of
community in the field and the proper role for residents in community development
efforts and organizations. Broadly speaking, the movement has been toward a broader
definition for the field, incorporating CDCs and many others, working on housing as well
as a range of other issues related to the field’s broad revitalization goals. The issue of
community representation remains hotly debated and unresolved.
Why housing?
Housing provided a logical entry point for community development work in the 1960s,
for several reasons. First, racial segregation, particularly in cities in the northeast and
Midwest that were the favored destination of black migrants from the rural south in the
first half of the 20th century, had resulted in crowded neighborhoods, where residents
were forced to pay above market rates for substandard housing. Despite changes in the
federal mortgage insurance policies that helped produce these conditions, and the passage
of Fair Housing Laws aimed at opening up the suburbs, central city residents continued to
have few effective choices and conditions in their neighborhoods remained grim (Massey
and Denton, 1993.)
CDCs were also responding to the crisis conditions created in some neighborhoods as a
result of urban renewal, urban riots following the assassination of Dr. King and arson and
abandonment by private landlords, all compounded by the contraction in investment
during the recession of the mid 1970s (Vidal, 1997). In addition, federal funding for
housing was available, facilitating such a focus. As she further argues, producing
housing would “stabilize the population, restore the functioning of the housing market,
and reestablish the market for commercial activity that would, in turn, support new
businesses to fill vacant lots and boarded-up storefronts” (1997, 432).
Yet a number of changes have made housing a less useful focal point for CDCs. Vidal
presents four key changes: 1) housing conditions now vie with other important issues in
many places, due either to improvements in housing over time or the expansion of CDCs
into new settings; 2) subsidies for affordable housing are increasingly difficult to find; 3)
housing development has become a riskier venture financially; and 4) rising demand for
other services, spurred by major policy shifts such as welfare reform (Vidal, 1997.)
Given these changes, arguments for broadening the scope of community development
work to include softer forms of development, in order to achieve a more holistic
revitalization of communities, have gained support.
Who does community development work, broadly defined?
If we widen our view to include more than housing, what does this imply about the
institutions to be included in any attempt to characterize the field? Ferguson and
3
Stoutland offer a conceptual overview of the array of functional sectors to be included in
any delineation of the field’s work and of different levels of organizations and institutions
to be included in what they label the “community development system.” (Ferguson and
Stoutland, 1999.) They list a wide range of functional sectors: property development and
rehabilitation; education, family and youth development; security and public safety; work
force development; business development; religious services; community planning,
advocacy, and organizing; and public health. Work in these functional areas can be done
by for-profit, nonprofit or governmental organizations. They then characterize
organizations as operating at differing ‘levels,’ starting at the grassroots with voluntary
organizations without paid staff, moving next to ‘frontline’ organizations that serve the
community directly, next to local support organizations that fund, regulate or provide
technical assistance to frontline groups, and, finally, to state, regional and national
support entities.
While Ferguson and Stoutland provide an overview of potential participants in networks
or alliances involved in community development work, their framework does not help us
sort out who is actually involved. In other words, as a guide to gathering data on the scale
and scope of community development work it is not yet operational. Clearly a key to
identifying actual participants lies in the networks and alliances that they describe as
critical to effective work. Their discussion is focused at understanding when such
alliances and networks make sense for potential participants rather than in identifying
those actually functioning for measurement purposes.
What does “community” mean in this more broadly defined field?
Is it a place, a group of places, a group of people? No matter the geography of the group,
what unites them should be pursuit of the ideals of community development. This implies
that the basis for community may change depending on the issue at hand and the
commitment and priorities of the stakeholders. Ferguson and Stoutland argue that
alliances will be formed based on various forms of trust between participants. This fluid
definition of community places attention more squarely on relationships and the basis for
them than on neighborhood boundaries or more permanent bases for community such as
race, ethnicity or social class. Another twist is added by allowing work done at a larger
level to be considered as part of the field if it benefits the neighborhood and forms part of
their strategy.
This definition introduces a tension around the importance of place. If groups of
neighborhoods work together on issues, and these alliances shift over time, are we losing
the holistic view of community needs that comes with attachment to a particular place?
The recent interest among academics and funders in social capital and ‘community
building’ builds on both research conducted at a regional level (e.g., Putnam’s 1993 study
of Italian regions) and of studies of social networks and forms of trust at a more intimate
scale (see Sampson, 1999.)
The meaning of community control
A key benefit of community development work has been thought to be the chance it gives
residents to have a voice in advocating for, designing, and implementing changes that
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will improve their living standards. Commitment to this ideal as part of the field’s work
is a key component of its widespread popularity—and legitimacy—with funders and
policy makers. It is also the basis for considering what Clavel and Pitt (1997) call the
“community option:” essentially decentralization of various government responsibilities
to neighborhood organizations.
In fact, there has never been a consensus definition of the vehicle for providing residents
with meaningful voice. Discussion has centered on whether or not CDCs are, or can be,
such vehicles. Kelly’s early study of the forms of governance of CDCs found a range of
interpretations (Kelly, 1977.) Yet even if one functional definition were to be adopted
(for example, the standards set for Community Housing Development Organizations
receiving HOME funds), this would not necessarily be a good indicator of community
voice. As Briggs and Mueller found in their study of three very different CDCs, including
community members on boards is only one aspect of organizational control and decisionmaking and can lead to very different outcomes (Briggs and Mueller, 1997.) Stoecker
argues forcefully that there is an inherent contradiction between the market logic in
which CDCs operate as housing producers and the advocacy role that they are asked to
play in order to give voice to community concerns (Stoecker, 1997.) Bratt and others
argue that this tension is not inherent but rather a result of funders’ priorities which are
malleable (Bratt, 1997.)
In the end, however, we need a common understanding of whether or not community
control, however defined, need be a criterion for inclusion in the field. We would argue
that it is, although with a new, broader conception of community development, such
control may rest in a decision-making process that spans organizations rather than being
embodied within each member of a community development network or alliance. Once
we establish the place and vehicle for such control, we need then establish a way to
identify organizations that meet this criterion. There is no easy solution here—control is
inherently qualitative and thus not easily measured. As Stoutland notes, existing surveys
generally take at face value organizations’ claims to be representative (Stoutland, 1999.)
Where does this leave us? Matching definitions and data
While the movement to a broader definition of the work of the field, and, as a result, of
the types of organizations to be included as actors in this work, is sensible on many levels
it leaves us with a practical dilemma. Data is not systematically collected on the field
under this new, broader definition. We provide here a brief overview of the best data
sources available and what we can glean about the scale of the field under our new,
broader definition.
The data source most commonly referenced in discussions of community development is
the survey conducted every two or three years by the National Congress on Community
Economic Development. Since 1988, NCCED, a trade organization of CDCs, with
support from several foundations, has conducted four surveys of its members and other
CDCs (NCCED 1988, 1991, 1995, 1999). These surveys provide basic information about
the number of CDCs in existence, their funding sources, the scale of their housing
production, and so forth and on general trends over time in these areas. The results form
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the basis for almost all estimates of the size of the CDC sector and the volume of CDC
housing production. However, it suffers from several serious limitations as a measure of
the field. First, it screens out organizations that are not focused on housing or
commercial development. Second, it does not screen for any meaningful measure of
community control or representation, taking organizations’ claims at face value instead.
Finally, what data is collected is presented in aggregate form and, until recently, had not
been made available to scholars for analysis, for example to establish simple correlations
among various forms of activity.1
The most recent survey, conducted in 1998, provides a profile of 1200 responding
organizations (NCCED, 1999). NCCED estimates that there are at least 3,600 groups
nationwide. While all respondents must be involved in physical development, the most
recent survey finds evidence that these groups are expanding the scope of their activities,
often providing social services or working to facilitate the employment of residents
through job training and economic development initiatives. At the same time, they are
continuing their work in housing, increasing the scale of production of affordable
housing, as a group, over time. In addition, the survey also reported that new types of
organizations—churches, community development financial institutions--are becoming
important members of the CD world. Moreover, some long-time members are taking on
different sets of activities—for example, community action agencies are branching out
from their historical social service orientation to take on housing and economic
development activities. The authors also note that new public-private partnerships have
emerged to support the work of CDCs around the country. They find that CDCs are more
evenly spread across the country than in the past, with 20 percent now found in the West
and 28 percent in the South, both historically underrepresented regions.
Activities in Which Majority of CDCs
Participated, 1998
Category
Percent
New Housing Construction
58
Housing Rehabilitation
69
Homeowner Counseling
61
Own/control and manage
59
housing
Advocacy and community
56
organizing
Source: National Congress for Community Economic Development (1999).
Estimating the scale and scope of work of the broader set of organizations laid out by
Ferguson and Stoutland is more difficult. From a variety of sources it is possible to get a
sense of the number of potential organizations working in the field. However, estimating
the impacts of their work would be a large task. Based on data available, it is clear that
the number of voluntary organizations likely engaged in community development is quite
1
Ferguson and Dickens gained access to the raw data and made the first such analysis (1999.)
6
large: they report that as of 1990, the National Neighborhood Association had a mailing
list of over 15,000 (Ferguson and Stoutland, 1999, note 16.) More recent data from the
nation’s largest cities supports this conclusion: a recent survey of neighborhood
organizations in the city of Los Angeles received 500 completed surveys (NPP News,
2001.) The Citizens Committee for New York reports working with 11,000 block,
neighborhood, youth and other neighborhood volunteer groups each year (City of New
York, 1996.) A Pittsburgh city web site lists 132 CDCs and other community based
organizations (Pittsburgh, 12/08/01.) Portland, Oregon has 95 registered neighborhood
associations (City of Portland Office of Neighborhood Involvement website, 12/08/01.)
Some data also exist on community-based organizations working in sectors other than
housing. The Coalition of Community Development Financial Institutions reports 456
members (Coalition of CDFIs website, 12/8/01.) The National Association of Community
Action Agencies reports 1000 members (NACAA website, 21/08/01.)
Beyond measuring units to looking at systems
The implications of the change in thinking about what constitutes community
development work go beyond the number of groups involved or the scope of their work
or scale of their outputs. It is also a qualitative change in the way that the field’s work is
done, emphasizing the importance of the relationships among actors and the basis for
successful partnerships. Measuring the presence of such relationships, and their meaning,
has been the focus of studies of the emerging field of comprehensive community
initiatives, and of the limited evaluative literature on community development
partnerships (both discussed below.) This approach places greater emphasis on strategic
decision-making and access to resources. Intermediaries have importance in this process
beyond their small numbers or even the amount of resources they bring to the table.
While, to date, we lack information that would allow us to characterize the breadth and
depth of such systems around the country, the emergence of this framework for
understanding and supporting community development work should, at minimum, cause
us to rethink our conclusions regarding the apparent spread of community development
work around the country. While CDCs are becoming more ubiquitous, popping up in
regions that were not traditionally home to many groups, we need to understand more
about the local technical and support infrastructure in these regions (as well as the reach
of national intermediaries offering such support) before we can draw conclusions about
the real meaning of this growth. The spare case study literature on efforts to foster a local
support infrastructure in new regions highlights the very different context and
considerable barriers to putting such support structures in place (Mueller, 1999, Gittell
and Vidal, 1998.)
Putting current trends in historical context
Discussion of community development is often prefaced by a short discussion of the
social movements of the 1960s and reference to the change in social and political context
since then. Reviewing the history of the field is important for several reasons. Based on
conditions in earlier periods, and the experiences of the high profile groups in each phase,
common understandings of what worked and what didn’t arose, shaping development in
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subsequent periods. It is important to revisit these lessons, and note the context in which
they emerged, when interpreting current developments. Heightened awareness of the
particular regional, political and economic conditions that have shaped our thinking, and
how they differ from current conditions, both nationally and locally, will help us to see
the meaning of current work more clearly. Our review focuses on community
development narrowly defined as primarily the work of community development
corporations.
The community development movement is commonly divided into three phases2: 1)
1960s: the establishment of a handful of federally funded groups, with activist roots often
in the civil rights and anti-poverty movements, 2) 1970s: the birth of hundreds of groups
in reaction to a variety of threats to their neighborhoods, from large scale transportation
projects to redlining to inadequate city services, and 3) 1980s: the proliferation of groups,
often focused on housing, despite the withdrawal of the bulk of federal funds from the
housing arena (Pierce and Steinbach, 1987, Vidal, 1992). To these three we can now add
a more recent chapter characterized by a broader agenda for change, incorporating new
functional areas of work and new institutions and actors. While new groups continue to
emerge, it is the changing character of the field as a system in these leading cities that is
notable since the mid 1990s. Rather than simple growth in the number of groups
producing affordable housing or other community projects, we are seeing increased
coordination of community development work in the most supportive local environments.
In addition, in cities with comprehensive community building initiatives, the character of
community development work is changing, with increased attention to community
planning, coalition building and a broader view of the work to be done.
Rather than reviewing each of these periods in depth, we concentrate here on briefly
describing the main features of each period, on the factors leading to transition to the next
phase, and on important lessons learned along the way.
The 1960s: National Activism and the War on Poverty.
Robert Kennedy’s well-known walk through Bedford-Stuyvesant, followed by the
formation of the Special Impact Program, by amendment to the Economic Opportunity
Act, helped formalize and support the work of a small group of early CDCs—13 in all
(Abt, 1973). During this period of social change and turmoil, these early efforts were
ambitious in the scope of their work, attempting to foster change on a number of fronts in
their communities and drawing on their activist roots in national movements. Economic
development, aimed at fostering the creation of jobs for neighborhood residents, as well
as the physical revitalization of their neighborhood and the provision of important social
services made up the ambitious agenda for these pioneering CDCs. These early efforts
targeted communities, rather than individuals, implying a need to focus on environmental
2
While we begin with the 1960s, community development work can be traced back to the various urban
movements that arose in response to large scale immigration and rapid industrialization in northern US
cities in the early 20th century, and to the Marcus Garvey self help associations established by freed slaves
after the civil war, a. The settlement house movement, in particular, broke from other charity organizations
in advocating for their communities to city governments and established a place-based approach. The
public health movement, with its network of community centers, was another important precedent.
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factors underlying poverty, through a more comprehensive approach than past antipoverty programs had attempted (O’Connor, 1999).
Importantly, these funds, channeled to these organizations through local community
action agencies, were not under the control of local political elites. The backlash against
what was seen as funding for opposition to local politicians was swift and this period of
direct funding for projects under the control of these new, community-controlled agencies
was brief (Katz, 1989).
In the end, early CDC economic development efforts (other than housing) were largely
seen as failures. To paraphrase one early director, CDCs created working poor jobs, they
were unable to create jobs that moved residents out of poverty (“Building Hope,” 1994).
Economic development, as an area of work for CDCs, fell out of favor. In contrast,
housing development efforts were seen as more successful and promising. This negative
perception of economic development efforts has colored the view taken of such work by
important private funders until only recently. Similarly, since this period, federal funding
to CDCs has generally flowed through the local political structure, making it hard for
them to play a strong local advocacy role while relying on local leaders to allocate critical
funding for housing and other activities from block grants. As O’Connor points out, the
heavy reliance of these early groups on government funding made them vulnerable to
cutbacks in the 1970s and 1980s (O’Connor, 1999). In addition, after the conflicts
generated by the ‘maximum feasible participation’ requirement of War on Poverty
programs, subsequent public programs tended to structure and limit the form of citizen
input required.
The 1970s: Neighborhood Organizing.
To these early groups, focused on addressing a comprehensive set of neighborhood
needs, were added a few hundred new, smaller groups, with more modest goals in the
1970s (NCCED, 1995). These groups formed largely in response to the threats posed to
their residents by large-scale transportation projects, or by the lack of public or private
investment in their communities. Once past the initial crisis that brought residents
together, surviving organizations tended to be smaller, and less ambitious in the scope
and scale of their work. Many of them chose to focus on the development of affordable
housing for community residents. In this work, they were aided by the creation of
important new federal sources of funding for affordable housing development in 1974
(Section 8 New Construction and Substantial Rehabilitation.)3 At the same time, the
federal government was retreating from its involvement in anti-poverty work and from
direct intervention in poor communities under the Nixon Administration’s framework for
decentralization. Federal aid, in the form of block grants, left agenda setting to local
elected officials. Decision-making occurred in the context of an economy characterized
by rising inflation, stagnant wages, giving rise to a markedly less generous view of
programs for the poor or for redressing past wrongs done to minorities. Internal debates
over people versus place-driven strategies and the economic conditions of the era
prevented the Carter Administration from implementing programs of any significant scale
3
A program providing a subsidy to owners of housing, over a period of 20-40 years, to fill the gap between
tenant rents and contract rents for new or substantially rehabilitated units. Created more than 850,000 units.
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(O’Connor, 1999). Together, these factors shaped the approach of new CDCs over the
course of the decade, keeping them focused on a less ambitious agenda and on the
lookout for new ways to raise funds. By the end of the decade, discussion had shifted
toward leveraging private sector resources. For many, this emphasis on technical and
financial skills was at odds with their advocacy roots.
The 1980s: the emergence of local housing movements.
The dawn of the Reagan administration brought with it a dramatic downsizing in the
federal resources available for housing or any other form of community development.
More importantly, policy making at a more macro level generated a rise in income
inequality that heightened the disconnect between low-income communities and the
benefits of economic growth (Bluestone and Harrison, 1988). An important piece of the
Reagan revolution was a more radical form of decentralization through which increased
responsibility for meeting social needs was again transferred to lower levels of
government, along with fewer resources, in the form of block grants. Together, these
changes intensified the need for community development work and made it imperative
that community development organizations enter into the local political fray to secure
resources increasingly allocated by state and local governments.
As Goetz documents, this fostered the creation of local housing movements in cities
around the country and at the national level through coalitions of groups (Goetz, 1992).
In the largest, most densely populated cities, where poverty rates were high, activism was
highest. In these places, coalitions of groups focused on the need for affordable housing
for low-income residents were formed to press city governments for funding and
attention to the issue. This organizing resulted in the dedication of more local resources
to housing needs through local trust funds, for example. However, it may also have
heightened the tendency to tackle the problems facing low-income communities
categorically rather than in a holistic, synergistic manner. By the early 1990s, CDCs
were often highly sophisticated developers of housing, and focused on strategies to
access local funds for this work. Yet they were also increasingly aware of the deepening
poverty of many of their communities. The attention of funders and practitioners began
to turn to ways to address the larger issue of poverty and its effects on all aspects of
community life. In order to try to implement strategies based on this more holistic
approach, funders and CDCs had to re-visit past lessons regarding the futility of
economic development work, of government job training programs or of meaningful
community involvement in designing or implementing programs.
Current Work: New Strategies
Important changes in the economic and political context for community development,
together with lessons gained through past experience, have resulted in meaningful shifts
in strategy and practice. The overarching theme of the economic changes is inequality:
the economic health of central city neighborhoods has become increasingly disconnected
from that of the larger national and regional economy and, combined with demographic
trends, have resulted in extraordinary concentrations of poverty in particular
neighborhoods. Growth that is skewed toward the wealthy has helped push housing costs
10
further out of reach for low-income community residents (Wyly et al, 1998.) Important
policy changes have been imposed on these trends: welfare reform has brought a
dramatic increase in attention to the problems of working poverty and to the supports that
the working poor need in order to keep their families housed, fed and healthy. And these
are overlaid on the continuing decline in federal funding for affordable housing
programs, the increasing block granting of various federal funds and de facto devolution
of responsibility for much social policy to lower levels of government. Under this new
structure, the competition for locally controlled public resources will likely be intense.
The lessons that have been taken from these changes can be broadly stated as twofold:
first, the need to focus on economic development by linking residents more directly to
jobs and capital, whether in or outside of the community, and second, in light of the new
politics of funding, the need to assess and advocate for community needs from a
comprehensive perspective, rooted in a community planning process. This section
organizes discussion of current issues around these categories and then adds a third,
crosscutting, ongoing concern: organizational effectiveness.
Accessing the benefits of economic growth
Nicholas Lemann’s provocative New York Times Magazine essay “The Myth of
Community Development” refocused debate on the efficacy of place-based economic
development (Lemann, 1994.) His attention to the issue was spurred by the Clinton
administration’s Empowerment Zone/Enterprise Communities program, which granted
tax benefits only to those offering jobs in the zones to zone residents. While many
disagreed with Lemann’s equation of community development with place-based
employment development, many would agree that expecting job development in lowincome neighborhoods to be the exclusive focus of community development efforts
would be wrongheaded. In fact, recent initiatives have promoted both better integration
of local residents and central city commercial districts into the regional economy.
Another important area of work under this heading is the creation of financial institutions
able to channel capital to community businesses and residents. We briefly outline work in
these areas.
Connecting residents to good jobs: workforce development. Recall that the conventional
wisdom following the early efforts of CDCs to create jobs or train local residents was that
these efforts were likely to fail and that CDCs should not attempt them. Yet a growing
number of groups are mounting such programs. Why is this area of work viewed more
favorably now? Harrison and Weiss, based on their case study analysis of CBOs offering
employment training, offer a succinct explanation (Harrison and Weiss, 1998). Past
approaches failed because they focused exclusively on upgrading skills and fighting
discrimination while ignoring the social and business networks that connect job seekers
and employers. The best networks are those that produce information about lots of jobs,
of various sorts. From the employers’ perspective, good networks help them identify
good employees, who are likely to be more successful since they were recommended by
others that they trust and with whom they maintain on-going relationships.
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CBOs that succeed in the area of workforce development are those that develop close ties
to employers generating many jobs and that are positioned to hear about large numbers of
jobs by being part of many different networks. Such groups have broadened their focus
outward from the community to encompass a new set of partners—community colleges
and other training institutions, employers of many sorts, public agencies involved in
workforce development or welfare reform. At the same time, these groups have
maintained the features that motivated them to enter the realm of employment—their
knowledge of and connection to community residents in need of stable employment
(Harrison and Weiss, 1998.)
Taking on workforce development means bridging many worlds at once. Because of the
challenges this poses to most organizations, Harrison and Weiss argue, many form
collaborative partnerships. The best partnerships are those based on the long-term
interests of partners, rather than short-term opportunities that arise (Harrison and Weiss,
1998, 39-41.) There are reasons to believe that these new partnerships will raise some
tensions for CDCs in the community. Such efforts are likely to reinforce the technical,
developmental orientation of many CDCs, making them less willing to engage in
advocacy around employment issues—minority or resident hiring requirements for
publicly-funded projects or local living wages ordinances, for example.
Increasing investment in central cities. Building on the observation that public funds for
community development are inadequate to the task and dwindling in any case, a growing
set of initiatives has aimed at linking private investors to poor communities. These
initiatives employ a variety of strategies, centered on creating or revealing existing
incentives for private investment in low-income central city communities. Factors
emphasized vary across programs but common themes include a focus on market
investment incentives (rather than socially-based ‘contributions’ or those resulting from
CRA threats), creation of new financial vehicles for financing community development
work, and creation of public incentives to reward investment. We outline three such
programs briefly below: The Emerging Markets Initiatives, the Initiative for a
Competitive Inner City, and work supported by the federal Community Development
Financial Institutions Fund.
The Emerging Markets Neighborhood Initiative was launched in 1998 by Social
Compact, a coalition of business leaders. The Initiative’s starting premise is that existing
market information undervalues inner city communities.4 In response, Social Compact
developed a new market analysis model, the Neighborhood Market Drill Down, that is
able to better reflect market potential in these areas using dependable, business-oriented
data. Models developed for analysis of suburban markets were adapted to fit the
characteristics of the inner city “in order to capture hidden populations, economies and
micro-market opportunities that exist below the radar of traditional market information
sources.” (About Social Compact, 12/11/01.) To date, analyses have been conducted of
four Chicago neighborhoods, two Washington, D.C. neighborhoods, New York City’s
Shorebank’s Richard Weissbourd and Christopher Berry come to similar conclusions in their paper “The
Market Potential of Inner-city Neighborhoods: Filling the Information Gap,”The Brookings Institution’s
Center on Urban and Metropolitan Policy, 1999. http://www.brook.edu/es/urban/weissexec.pdf
4
12
Harlem district and Houston, Texas. This work is supported by a broad group of
foundations and private corporations, as well as from fees for its work.5
The Initiative for a Competitive Inner City (ICIC) also focuses on the undervaluation of
central city assets including vacant, abandoned or underutilized sites near central business
districts, untapped markets with substantial purchasing power, and stable and
underutilized workforces. ICIC, established by Harvard Business School Professor
Michael Porter in 1994, works with communities around the country to uncover, market
and build on the competitive advantages they offer businesses. They have conducted
analyses of inner city Oakland, California, St. Louis and Boston. Their model emphasizes
use of clusters or sectors as the basis for strategic investment and business development.
ICIC has documented demand for retail services in central cities through its consumer
surveys of inner city households, helping to dispel misconceptions about effective
demand in this underserved population. It has developed a database on the most
successful inner city businesses, the Inner City 100. Current projects include
development of a State of the Inner City Index to assess economic health, assessment of
how fast growing inner city companies recruit, retain and promote inner city residents,
and development of a web-based Neighborhood Assets Model to enable economic
development practitioners to analyze community assets and develop business
development strategies (ICIC, 12/10/01.)
While not an initial focus on their work, recent ICIC reports have begun to incorporate
discussion of how community-based organizations can work to enhance the economic
value of their communities, particularly by collaborating in workforce development
projects.
Community Development Financial Institutions (CDFIs) work to increase capital
availability to inner city businesses that, for a variety of reasons, cannot access
mainstream financial capital markets.6 They are alternative financial institutions in the
sense that they offer different sorts of financial products and use different methods for
assessing credit worthiness. They provide access to capital to individuals and businesses
without access to mainstream sources of credit. In addition, they often provide crucial
training and technical assistance to borrowers. CDFIs receive funds from corporations,
individuals, religious institutions, private foundations and government. The establishment
of federal funding for CDFIs at the Department of the Treasury under the Reigel
Community Development and Regulatory Improvement Act of 1994 has greatly
facilitated the establishment and expansion of CDFIs around the country. In five rounds
of funding, the CDFI Fund has made close to $300 million in investments in CDFIs
5
Supporters include State Farm Insurance Companies, The Ford Foundation, the John D. and Catherine T.
MacArthur Foundation and the Fannie Mae Foundation.
6
Community development credit unions and community development banks provide traditional banking
services like savings accounts and personal loans. Microenterprise development loan funds provide small
amounts of business capital, as well as critical training and technical assistance. Community development
loan funds lend to build businesses, affordable housing and community facilities. Finally, community
development venture capital funds invest in business development (The CDFI Coalition,
www.cdfi.org/whatcdfi.htm).
13
around the country. In addition, through its Bank Enterprise Award Program, an
additional $135 million was awarded to banks and thrifts to incentivize their own
investment and lending in partnership with CDFIs. This money is estimated to have
stimulated an additional $3 billion in lending and technical assistance to CDFIs and low
income communities (U.S. Department of Treasury, 12/11/01.)
In December of 2000, New Markets Tax Credits worth $15 billion over 5 years were
passed by Congress. The Treasury Department’s CDFI Fund will allocate these funds to
“community development entities [CDEs],” e.g., CDFIs. Equity investors in these CDEs
will receive tax credits for their investment. The CDEs will use the equity investments to
make loans or investments in “qualified active low-income community businesses” or
CDEs or provide financial counseling or other services to eligible businesses (Roberts,
2001.) CDEs can use their tax credits to provide loans and equity investments to eligible
businesses or other CDEs, purchase other CDE loans, provide financial counseling and
other services to eligible businesses, or finance its own eligible businesses. These credits,
now beginning to be issued, should help bridge moderate financing gaps. It is hoped that
they will do for business investment what the Low Income Housing Tax Credit (LIHTC)
has done for financing affordable housing. However, the NMTC offers a shallower
subsidy than the LIHTC does and offers fewer tax benefits (Roberts, 2001.)
Existing reports provide information on the characteristics of CDFIs, less is known about
their impact. A 1998 GAO survey of CDFIs, with 623 respondents, found about 70
percent have been in existence for more than 6 years, and about 74 percent have less than
$5 million in assets in their loan and/or investment portfolios. Approximately 88 percent
of the respondents indicated that they provide lending services for such areas as
community development, housing, and/or small businesses, while about 20 percent
reported providing equity capital for businesses. Respondents target their services to
specific populations, such as low-income and moderate-income persons, members of
minority groups, and women. Helping to revitalize a targeted community was the most
commonly selected community development goal; it was the only such goal selected by a
majority of the respondents as primary for their organization. The most frequently
reported goals for each of the financial services provided were providing affordable
services, providing affordable loans and retaining or expanding existing businesses (US
GAO, 1998.)
Annual data collected by the National Community Capital Association (NCCA) on 51 of
its members indicate that assets under their management have grown, that new capital is
reaching communities in need, that CDFIs are successfully managing financial risk, and
that CDFIs are able to convert their growth into greater community impact (Randolph,
1999.) Surveyed organizations include some of the largest CDFIs in the nation. By the
close of 1998, these organizations managed $742 million in loan capital and dedicated 37
percent of their net assets to lending. Importantly, while they collectively managed $1.3
billion in financing, their loss rate was only 1.7 percent. They have helped to produce
more than 86,000 housing units, 66,000 jobs and 310 million square feet of nonresidential
space (Randolph, 1999.) Innovators such as The Reinvestment Fund in Philadelphia and
the New Hampshire Community Loan Fund in Concord have created venture funds
14
aimed at financing businesses with the potential to create jobs in distressed communities.
The Community Development Venture Capital Alliance reports 80 members, two-thirds
of which either operate or are planning to establish a community development venture
capital fund (CDVCA, 12/12/01.)
While these limited data paint a positive picture of CDFI impact, other reports raise
concerns about trends in the sector. Two areas of concern are lack of common methods
for documenting impacts and the growing gap between CDFI practices and those of
mainstream financial institutions. In 1998, the GAO was directed to survey CDFIs to
assess their use of performance measures. They found that most organizations employed
a variety of performance measures to assess their work (US GAO, 1998.) In the same
vein, the National Community Capital Association is documenting best practices among
their members and encouraging the use of well-designed performance measures. They are
working to develop common measures that are appropriate to the age, target population,
and market of different types of CDFIs. Development of such measures are considered
critical to the sustainability of the work of CDFIs since they provide confidence to key
investors.
A recent report released by the Brookings Institution and Harvard University raises more
fundamental concerns. The authors assess the meaning of the vast changes in the world
of finance for CDFIs. They draw three important conclusions. First, CDFIs generally
remain small, vertically integrated organizations, isolated from mainstream financial
institutions. As a result, the gap between them and mainstream practice is growing.
Second, CDFIs lack the array of financial infrastructure found supporting mainstream
financial institutions. Here is where the sector’s lack of commonly accepted practices and
tools comes into play. Development of such tools would represent the institutionalization
and spread of best practices to other organizations. Without such tools, innovations are
ephemeral. Lastly, CDFIs infrequently work with mainstream financial institutions, thus
further limiting their potential impact. A handful of new initiatives have recently been
formed to bridge this gap7 (Moy and Okagaki, 2001.)
Comprehensive development, building relationships among residents and organizations
In recent years, consensus has emerged around the view that physically rebuilt
communities are not revitalized communities. After large swaths of the South Bronx
were successfully rebuilt and repopulated, CDCs became painfully aware that these
communities were not stable, and that their organizations also were not stable without
further changes, particularly in the employment status of adult residents and in education
and social service changes aimed at improving their children’s future prospects (Sviridoff
and Ryan, 1996.) Foundations and practitioners both came to similar conclusions:
comprehensive change was needed and it was likely beyond the scope of any one
organization or organizational type. As other fields also began looking beyond their
traditional scope of operations, a happy convergence of interests emerged around the
These new initiatives are the Capital Markets Access Program at the New School University’s Milano
School, the Financial Innovations Roundtable at the School of Community Economic Development at the
University of Southern New Hampshire, and the Milken Institute’s Emerging Domestic Markets project.
Moy and Okagaki, 2001.
7
15
need for comprehensive, collaborative approaches to addressing local issues (Pitcoff,
1997.) The underlying tenets of this new approach are an emphasis on viewing
community needs comprehensively, on bridging gaps between functional sectors served
by existing community-based organizations, and on developing strategy through inclusive
community planning.
This movement to forge a new, more holistic approach to community development is
embodied in diverse collection of initiatives called “comprehensive community
initiatives” (CCIs) or “community building initiatives.” CCIs arose in response to
frustrations that developed as many disparate groups tackled different aspects of a
community’s problems, at times working at odds with each other and certainly
weakening their overall impact by parceling out funds categorically. In the context of
blockgranting, organizations more often are forced to compete for limited funds.
Fragmentation, in this context, is especially counterproductive. CCIs also represent the
convergence of trends in separate fields toward more holistic approaches to
understanding and addressing problems (Sviridoff and Ryan, 1996.) In spite of their
adherence to common tenets, CCIs vary greatly in structure and practice. In part, this is
because they tend to build on what already exists rather than create new structures. In
doing so, they must be sensitive to local history, culture and resources, local views of
priority needs and local leadership (see Chaskin et al., 2001.) They are supported by a
growing list of national and local foundations, as well as the federal Department of
Housing and Urban Development during the Clinton Administration.
CCIs aim “to foster a fundamental transformation of poor neighborhoods and the
circumstances of individuals who live there” (Kubisch, 1996, 1.) They arrive at their
agendas through broadly inclusive community planning processes and focus on building
the capacity of local residents and institutions to act on problems in a broad range of
areas. While this is reminiscent of early CDC efforts, contemporary CCIs are more
explicit in their understanding of the relationship between neighborhood issues and the
larger regional economy and seek to draw on outside resources and build connections to
them that benefit residents. The ultimate goal of their work is “changing the way that
business is done in the neighborhood” (Kubisch, 1996, 7). This goes beyond putting new
programs in place to changing the capacity of residents to engage and direct the course of
these programs, as a whole, to meet their expressed needs.
Based on findings incorporated in Voices from the Field: Learning from Comprehensive
Community Initiatives, Kubisch reports that there are at least 50 CCIs operating around
the country. She divides these into 3 groups by their functional focus and the type of
agency associated with this focus: human capital initiatives, led by social service
agencies and schools; neighborhood capital building initiatives, led by CDCs and other
local development organizations, and social capital building initiatives, led by local
religious or civic organizations or by community organizers (Kubisch, 1996, 2). CCI
programs include the Ford Foundation’s Neighborhood and Family Initiative, the Annie
E. Casey Foundation’s Rebuilding Communities Initiative and the Surdna Foundation’s
Comprehensive Community Revitalization Project.
16
Pitcoff identifies several challenges that have emerged in practice (Pitcoff, 1997, 1998.)
First, CCIs embody a new role for funders, in which they are more engaged and proactive
as well as more committed to letting residents determine the direction that the initiative
will take (Brown and Garg, 1997; Baker, Chaskin and Wynn, 1996.) Negotiating these
new roles can take time. In addition, many CCIs work through local foundations or
intermediaries, adding another layer of complexity to this process. It may take time for
the new CCI to trust that local organizations will really allow them to set their own
course or that foundations can be pushed to change their funding parameters in response
to community views. Technical assistance providers and evaluators will also play
different roles in CCIs and these roles will also need to be negotiated with the community
and the foundation. All partners will need to be more flexible concerning the timeline,
processes and products to be produced by the initiative than in traditional funding
relationships.
A second area of challenge concerns choosing the right organizational form and
governance structure for the new, comprehensive effort (see Stone, 1996, chapter 4 for a
good debate of the issues). Building on existing organizations raises the risk of leaving
out key constituencies and also means accepting whatever political baggage existing
groups bring with them. Setting up a new organization means creating a legitimate
process for determining governance and leadership and suffering through inevitable
growing pains. CCIs have taken both routes. Defining and maintaining the appropriate
level of community participation is also likely to be critical to the long term success of
initiatives yet there are no clear guidelines or models for how to do this well.
Third, CCIs are fundamentally about building the capacity of local residents and
organizations to push for change. Prioritizing this deeper, long-term goal may mean that
results may not be visible in the short term. Residents may become impatient with an
emphasis on planning and process without tangible results in the near term.
Authors writing about CCIs under the heading of “community building,” emphasize the
relationship building and organizing aspect of this work. They see these initiatives as
vehicles for re-building the social fabric of communities—what is often termed “social
capital.” These initiatives, in a broad sense, are strategies to reconnect residents to each
other and to the mainstream of society (Kingsley, McNeely and Gibson, 1997). They are
predicated on the view that a tangible loss of community in poor neighborhoods has been
a force in their decline (see Wilson, 1987).
Whether viewed through the CCI or CBI lens, this approach requires significant shifts in
how CDCs, in particular, operate. It requires them to place emphasis on areas of work—
specifically community organizing--that may be in tension with their current work
producing and maintaining affordable housing. The community planning mentioned
above as the basis for establishing the community’s new, more comprehensive agenda
would be led by community planners in inherently ‘soft’ and, at times, threatening
processes. This new level of involvement of the community, beyond those active in the
CDC or even just residing in its housing, would expose CDCs to a level of scrutiny and
17
challenge that could make many uncomfortable (Traynor, 1995.) For many of the most
successful housing producers, this would represent a painful shift in approach.
Organizing for community building, where knitting together many organizations and
interests is an explicit goal, means building consensus around goals, forging new leaders,
rather than identifying and confronting common enemies. Although certainly conflict
would occur over goals, role of the CDC, etc., it would be qualitatively different from the
era of national movements for civil rights or local battles against urban renewal that
spurred the creation of many CDCs. Perhaps the biggest threat would be simply the new,
broader definition of community that the process would bring. The CDC would become
simply one piece of the community rather than the embodiment of it (Traynor, 1995).
Making Existing Work More Effective: Capacity Building.
Capacity building efforts encourage CDCs to deepen competence in their core areas of
work—usually housing. Capacity building initiatives are generally motivated by funder
interest in making their investments more effective. They generally involve convening a
group of local funders and technical assistance providers to develop a coherent agenda
for funding.
National initiatives, including the Ford Foundation’s Community Development
Partnerships program and the National Community Development Initiative, have played
an important role in facilitating and funding capacity building efforts. The Ford
Foundation established its Community Development Partnership Strategy in 1983,
through which it provided support for a network of local intermediaries (called
community development partnerships) that in turn supported local CDCs. These
partnerships were usually initiated in cooperation with local community foundations or
other local organizations. They consisted of alliances of local banks, corporations,
foundations, and governments, as well as national intermediaries, brought together to
pool resources. Between 1983 and the mid 1990s, Ford and these local funders pumped
nearly $50 million into more than 20 local partnerships.8 Partnerships in each city
identified promising local CDCs and provided them with funds and technical assistance
to facilitate growth in their productive capacity and increased organizational efficiency.
Local partners were assumed to be best situated to select groups for funding. (Glickman
and Nye, 1996). In cities with multiple funders of community development, the
partnerships served to rationalize their investments in CDCs by providing a forum for
planning and prioritizing investments.
The National Community Development Initiative (NDCI) followed a similar strategy but
greatly increased the level of resources dedicated to capacity building and offered such
assistance to several cities with very little existing capacity. NCDI is a consortium of
funders formed in 1991 to substantially increase the amount of funding available to
CDCs in 23 cities, thus helping bring the field to a new scale, with a correspondingly
8
Case studies of five Ford-funded partnerships were conducted by a team of researchers led by the Center
for Urban Policy Research at Rutgers University under the supervision of Norman Glickman.
18
larger impact.9 Founding members10 were motivated by their belief that “CDCs offer[ed]
a promising approach for reclaiming low-income areas.” (Walker and Weinheimer, 1998,
2.) This initial group, joined in 1994 by the U.S. Department of Housing and Urban
Development and, subsequently, by several other major foundations and corporations11,
invested $150 million in CDCs in 23 cities between 1991 and 1997. Money was provided
in the form of grants or low cost loans. By 2001, a total of $250 million was to be
invested and new partners included several major banks, and two major foundations.12
Because the NCDI funders did not wish to take on the administration of the initiative they
enlisted the help of two major national community development intermediaries—the
Local Initiatives Support Corporation (LISC) and the Enterprise Foundation. LISC and
Enterprise helped form and support local partnerships in each of the 23 cities, ranging in
their degree of formality but generally comprised of local business, government and
private philanthropic partners. Creating and building upon this infrastructure is the core
of NCDI’s strategy (Walker and Westheimer, 1998.) This work included improving CDC
management systems, training board members and staff as well as strengthening
relationships with other organizations and with neighborhood residents. Support for
management and operations has long been problematic for CDCs, since funders continue
to look for measurable outputs in increasingly difficult environments. By 1997, 18 of the
23 cities offered CDCs core operating support through local programs (Walker and
Westheimer, 1998, 9). In some cities, the focus has been on creating new CDCs. NCDI’s
evaluators claim that the initiative has created a positive relationship between the level of
investment in CDCs in a city and the strength of CDCs—an indication that investments
are better targeted and supported (Walker and Westheimer, 1998, 6).
Capacity building efforts can be at odds with the priorities of community building.13 Not
surprisingly, this approach, while important to solidifying a base of local funding support
for community development, can create tension between funders and technical assistance
professionals and those CDCs attempting to conduct broader, community-driven work
that is not as tightly focused on housing production or other quantifiable outputs.
Capacity building efforts can result in pressure to rationalize work by avoiding
overlapping catchment areas or investments in multiple organizations pursuing similar
goals, or, finally, by encouraging ‘mergers’ of CDCs. The emphasis on increased scale
and efficiency, particularly in housing development, can clash with neighborhood-based
9
NCDI cities were Atlanta, Baltimore, Boston, Chicago, Cleveland, Columbus, Dallas, Denver, Detroit,
Indianapolis, Kansas City, Los Angeles, Miami, New York, Newark, Philadelphia, Phoenix, Portland, San
Antonio, San Francisco Bay Area, Seattle, St. Paul and Washington, DC.
10
The John D. and Catherine T. MacArthur Foundation, the John S. and James L. Knight Foundation, the
Pew Charitable Trusts, the Rockefeller Foundation, the Surdna Foundation and the Prudential Insurance
Co. of America. Notably absent was the major funder of CDCs historically, the Ford Foundation.
11
The Annie E. Casey Foundation, the William and Flora Hewlett Foundation, the McKnight Foundation,
the Lilly Endowment and Metropolitan Life and J.P. Morgan and Co.
12
Bankers Trust Co, Chase Manhattan Bank and NationsBank joined in 1997 as did the W. K. Kellogg and
Robert Wood Johnson Foundations. Hewlett and Lilly left NCDI at this point.
13
Capacity building efforts often speak of building the capacity of residents to represent themselves and
participate effectively in efforts to improve their community. We consider these efforts to be qualitatively
different from what we are discussing here and best considered as part of community building.
19
CDCs whose missions include housing but are not interested in increasing the scale of
their housing work.
National intermediaries have also mounted their own capacity building initiatives. In
addition to their role in NCDI, and their role as syndicators of the Low Income Housing
Tax Credit, LISC and the Enterprise Foundation also offer several other programs aimed
at building the capacity of local CDCs. LISC offers several programs aimed at helping
CDCs increase their ability to make major strides in economic development. For
example, they help CDCs plan and fund large scale retail developments through their
Retail Initiative. Their Neighborhood Main Street Initiative offers technical assistance to
CDCs as they work to revitalize local business districts. Their Organizational
Development Initiative offers the services of a consulting team able to help CDCs operate
more efficiently. Other efforts focus on development of programs in the areas community
policing and child care. (LISC, 12/12/01). Enterprise offers technical assistance in the
core areas of community development, with emphasis on affordable housing
development. They also participate in other foundation-funded community building
initiatives (Enterprise Foundation, 12/12/01.) The Neighborhood Housing Services
(NHS) provides an important source of funding and technical assistance for housing
development. (NHS, 12/12/01.) The National Council of La Raza, an important
intermediary particularly in the southwest, provides capacity building grants to CDCs. It
also operates the only Hispanic CDFI, the Raza Development Fund, and runs
homeownership initiatives aimed at low-income Hispanic communities in the southwest.
(NCLR, 12/12/01.) An entirely separate group of intermediaries focus on organizing
community based training and support. (See Delgado, 1994.)
Consensus organizing: building new community organizations in underserved places.
For places lacking CDCs, let alone a support infrastructure, seeding the development of
neighborhood groups is an important first step. Starting from scratch is obviously a
daunting prospect. Nonetheless, a model for doing just that has been developed,
implemented and evaluated. It centers on what is called ‘consensus organizing,’ in which
stakeholders are identified and brought together by a trained organizer. In contrast to
earlier conflict-based organizing models, they work first to build trust and consensus
among stakeholders around an initial project. A typical project is a small-scale real estate
project able to demonstrate competence to potential local funders (Gittell and Vidal,
1998.)
The consensus organizing approach was developed by Mike Eichler. Eichler, an IAFtrained organizer, helped to revitalize communities in the Pittsburgh area after the crash
of the U.S. steel industry in the mid-1980s by bringing residents together around the
common goal of restoring the region’s economic health. His work led to the formation of
more than 15 community development corporations (CDCs) in the Monongahela Valley,
and ultimately to the creation of a regional community development alliance, the Mon
Valley Initiative. The MVI and its member CDCs remain active agents for housing
revitalization and economic development (Consensus Organizing Institute, 2001.)
20
With the support of the Local Initiative Support Corporation (LISC), a national funder
and supporter of low-income housing, Eichler was able to refine his model and expand it
to new settings. Through the LISC Development Team, “an entrepreneurial group
charged with recruiting talented, dedicated residents to form community development
corporations and building relationships between the resident leaders and local
institutions, “ Eichler helped to establish new, productive CDCs in New Orleans, Little
Rock, Palm Beach County, Baton Rouge and Las Vegas (Gittell and Vidal, 1998.) The
model’s organizing principles include14:
1) Basing solutions on the people implementing them, not the program. A pragmatic
approach to solving a problem will position people and institutions based on their
interests, capabilities and relationships. It will not simply import programs that
worked in other places with different sets of players.
2) Giving a central role to the people experiencing the problem in developing
solutions. Solutions imposed upon people against their will or without their
participation typically fail. Tapping the knowledge and initiative of people
affected to help develop solutions that they "own" themselves. Helping them to
engage partners and set up support structures that will make these solutions
practical and lasting.
3) Harnessing the self-interest of diverse stakeholders to improve communities.
Looking for ways in which the individual interests of corporate leaders,
government officials, civic players and community residents overlap to create
opportunities for new relationships and innovative solutions.
4) Being savvy about building support for solutions: good ideas alone are not
enough. Even the best strategies for solving tough problems may be dismissed as
risky or idealistic. Approach people in ways that make sense to them, and help
them distinguish between serious solutions and potential flashes in the pan.
5) An effective problem-solving strategy is self-sustaining. The relationships and
problem-solving infrastructure developed will become locally owned vehicles for
lasting change.
Research in Community Development
Funding for research in community development has always been scarce (Ferguson 1999:
606). There is minimal institutional support for research: Foundations and government
agencies seldom provide multi-year funding for large-scale research projects in this area.
Most research is small in scale and carried out by individual researchers with minimal
funding. Existing research can be placed in three broad categories: large-scale, multi-year
studies, funded largely by foundations; evaluations of specific community development
programs and initiatives; and studies (primarily journal articles and books) by academic
researchers working with minimal, if any, external funding. Much of the research in
community development has focused on community development corporations (CDCs).
This work includes surveys and other overviews of the activities and accomplishments of
community development corporations; analysis of the broader institutional context in
which CDCs operate; appraisals of the strengths and weaknesses of CDCs;
14
From Consensus Organizing Institute website: http://www.consensusorganizing.com.
21
conceptualization and measurement of CDC capacity, and most recently the effect of
CDC activity on their target neighborhoods. A smaller but prominent body of work
examines the strengths and limitations of community development as a solution to such
entrenched urban problems as crime, unemployment, and under-performing schools.
This section reviews the main directions in community development research. It
examines the major themes in the research literature, covering the largest research
projects as well as smaller-scale studies. The section concludes with a look at emerging
directions in community development research and remaining gaps in need of additional
research.
Major Themes in Community Development Research
Basic Information on CDCs, Their Activities, and Needs
Collection of basic information on CDCs and their activities has been a high priority for
community development research. Several of the most prominent, and costly, studies in
community development present descriptive information on CDCs and their activities in
housing and other areas. That primary data collection has been a major emphasis for
community development research is not surprising, given the increased reliance of
government agencies on CDCs and other nonprofit organizations to carry out their
housing and community development programs, coupled with a paucity of information on
these organizations and their capabilities. Indeed, the prime motivation for founding the
Community Development Research Center (CDRC) was to establish a knowledge base of
information on CDCs.15
Most of our knowledge of CDCs derives from a handful of studies, some of which have
become dated. These studies include CDRCs’ Rebuilding Communities, NCCED’s triannual censuses, the NCDI evaluations, the Urban Institute study of CDCs for HUD, and
Edward Goetz’s survey of state and local government reliance on and support for CDCs.
In Rebuilding Communities, Avis Vidal, the project’s principal investigator and the
founding director of CDRC, examines in detail 130 “successful” CDCs in 29 cities.
Published in 1992, and based on fieldwork carried out in the late 1980s, this project was
the first comprehensive, national study of CDCs. The study examines the organizational
characteristics and resources of CDCs, their activities and accomplishments, as well as
their institutional support systems and their prospects for growth and expansion. With
regard to the internal characteristics of CDCs, the study looks at their origins, geographic
focus, staffing patterns (size, racial composition), leadership turnovers, board
compositions, salaries, budget sizes, revenue sources, and assets. While some of this
15
Founded in 1986, the Community Development Research Center (CDRC), based at New School
University, has produced three major studies relating to the work of community development corporations.
Originally supported with core operating support from the Ford Foundation, CDRC’s mission was to carry
out basic research on community development in general, CDCs in particular, and to disseminate the
results. The center raised several hundred thousand dollars from several foundations for each of its major
studies.
22
information is also provided in NCCED’s tri-annual-census, no other study provides the
same range of organization-level data in such depth.
Rebuilding Communities also documents the wide variety of CDC activities and the
relative importance of these activities to the organization. Housing development was the
single most common activity in terms of its prevalence and importance. Commercial real
estate development, business enterprise development, promotion of community pride,
social services and several forms of advocacy were other major activities. As with
organizational characteristics, more recent studies also describe the range of CDC
activities, but seldom in the same detail as presented in Rebuilding Communities.
Much of the information provided in Rebuilding Communities is now dated. However,
more recent studies have provided data on only a portion of the subjects covered in this
landmark study—and seldom to the same depth. One priority for research in community
development should be to update Rebuilding Communities. New interviews with the
(remaining) 130 original CDCs would provide unparalleled longitudinal insight into the
development of CDCs, touching on organizational and programmatic change.
National Congress for Community Economic Development (NCCED) The longest
running research effort in community development is the periodic survey of community
development groups conducted by the NCCED, a national trade association for CDCs.
With support from several foundations, NCCED has carried out four surveys, the first
published in 1988 and the most recent in 1999. The “census,” as NCCED calls the
project, covers nonprofit community-based organizations serving low- and moderateincome areas that produce affordable housing, develop commercial or industrial facilities,
operate a business, or provide loans or grants to other business enterprises. These surveys
provide basic information about the number of CDCs in existence, their funding sources,
and activities, including their housing production. The results form the basis for almost
all estimates of the size of the CDC sector and the volume of CDC housing production.
Although NCCED’s summaries of its survey results refer to the participating
organizations as CDCs, they also include Citizen Action Programs (CAPs), affiliates of
the Neighborhood Reinvestment Corporation, and CDFIs, and other nonprofit
development organizations. In the most recent report, 1,200 organizations responded to
the survey, 33 percent of the “estimated universe of eligible groups.”
The NCCED surveys produce the most commonly cited figures on CDCs and their
activities. The latest survey estimated there to be 3,600 CDCs in existence, which
produced 55,000 units of affordable housing. The survey provides a wealth of data on the
characteristics of the participating organizations, their funding sources, and their
activities.
As useful and unique as the NCCED survey is—it is the only one of its kind—it is also
quite limited. Most of the results are presented at a high level of aggregation. The
diversity of organizations covered by the survey makes it virtually impossible to
distinguish CDCs from other types of nonprofit organizations. Indeed, it is difficult to
23
discern the accomplishments of neighborhood-based groups from those of other
development organizations. Although NCCED refers to all of its respondents as “CDCs,”
only 17 percent actually define their service area as constituting a single neighborhood.
An additional 12 percent report having multi-neighborhood service areas and 20 percent
say they serve entire cities. Nearly half (41 percent) serve larger geographic areas,
ranging from an entire county to multiple states. In other words, only 1,044 of the 3,600
groups represented by the survey can be considered “neighborhood based” in the sense
that they serve one or more neighborhoods within a single city—of which only 612 serve
just one neighborhood. In the absence of disaggregated data, it is not possible to isolate
the characteristics and contributions of neighborhood-based (neighborhood-serving)
groups from organizations that focus on much larger geographic areas.
Not only does the NCCED census include many organizations that seem to operate on a
much wider neighborhood scale than most community-based groups, it also excludes
many other types of organizations that do target particular neighborhoods. For example,
community-based organizations involved in job training, health services, or youth
development are not covered in the NCCED survey unless they also work in housing or
economic development.
NCDI Evaluation. The evaluation reports of the National Community Development
Initiative (NCDI) address issues that extend well beyond the particulars of individual
programs. For example, the evaluation report for the second phase of NCDI provides a
cross-city analysis of CDC capacity, the effect of a changing housing finance system on
CDC housing production, and the ability of CDCs to engage successful in different types
of “community-building” activities (Walker and Weinheimer 1998). This report covers
the activities of CDCs in the 23 cities served by NCDI. While much of the most recent
evaluation report focuses on CDC capacity building, community-building, and the role of
the broader institutional environment—including the housing finance system--in
supporting CDCs and their activities, it also provides useful information on the operating
budgets and spending patterns of CDCs. Analyzing data derived from the IRS Form 990
tax filings for the tax years 1990, 1992, 1993 and 1994, the researchers examined key
financial characteristics of CDCs and other nonprofit organizations engaged in housing
production. They found, for example, that CDC expenditures increased more rapidly than
that the nonprofit housing sector as a whole. While spending by all nonprofit housing
development organizations in the 23 cities increased by 53 percent –about 11 percent
annually—from $375 million in 1990 to $575 million in 1994, CDC spending increased
by 63 percent—a compound annual rate of about 13 percent. By 1994 CDCs accounted
for 57 percent of the nonprofit housing development sector’s total spending, up from
about 50 percent in 1990. The NCDI study also found wide variation across the 23 cities
in the relative importance of CDC spending. Using the same IRS data source, the NCDI
study also looked at CDC operating expenses. It shows that CDC operating expenses
increased in every city, rising from an average of less than $10 million per city in 1990 to
$16 million in 1994.
Goetz’s Shelter Burden. Another source of essential information on CDCs comes from
Edward Goetz’s book, Shelter Burden (Goetz 1992). Whereas most studies of CDCs,
24
such as Rebuilding Communities and the NCCED censuses, are based on surveys of
and/or interviews with CDCs, Goetz examined the role of CDCs from the perspective of
state and local government. Drawing on surveys of state and local governments, he
examined the extent to which, and how, they support CDCs and other nonprofit housing
groups. Although the research was completed in the late 1980s, it is still the only national
study of governmental support for CDCs. Goetz found that 95 percent of the cities
surveyed (N=133) reported having CDCs engaged in the production of affordable
housing (Goetz 1992, 117). Of these cities, 45 percent reported having fewer than five
CDCs, 35 percent five to ten, and 16 percent more than ten. CDCs in most of the cities
surveyed produced modest amounts of housing, with a median of less than 50 units
constructed or rehabilitated in 1989. CDCs in 7 percent of the sample (9 cities) produced
more than 500 units in 1989. Extrapolating to the entire universe of cities with
populations greater than 100,000, Goetz estimated that CDCs helped build more than
23,000 housing units annually. Goetz’s survey also provides information on the types of
support states and local government provide to CDCs. Though dated, this information has
not been updated in more recent studies. Goetz found that while 82 percent of the cities
and 63 percent of the states provide project-specific assistance, only about half of these
governmental units provide support in the form of administrative funding,
predevelopment finance, or technical assistance. Regarding the source of funds
governments use to support CDCs, Goetz found that Community Development Block
Grants account for most city funding for CDCs and that state tax revenues constitute the
main source of state assistance.
Appraisals of CDCs and their Support Systems
A core theme in community development research is the ability of CDCs to develop and
sustain affordable housing. Several studies examine the obstacles CDCs face in
developing low-income housing and the assistance they require to overcome them. A
much smaller body of work looks at the difficulties of managing housing so that it
remains viable on a long-term basis. This research, much of it based on case studies and
interviews, has highlighted a common set of concerns, especially with regard to housing
development.
The research literature repeatedly emphasizes the same common difficulties in housing
development (e.g., Walker 1993, Goetz 1993). These are:

The need for multiple funding sources (creative finance). Most affordable housing
projects require CDCs (and other developers) to assemble several sources of
financing in order to underwrite a project. These include equity capital, mortgage
financing, and “gap financing.” The latter, consisting of grants and low-interest loans
(“soft seconds”) are necessary to keep debt service expenses in line with the projected
rent roll (DePasquale and Cummins 1992). Hebert et al.’s frequently cited study of 15
CDC housing development found that the average project received financing from an
average of nearly eight separate sources (Hebert et al. 1993). Moreover, the
complexities of assembling the financing makes it difficult for CDCs to standardize
the development process and thus requires extensive amounts of staff time.
25

Undercapitalization. Closely related to the need for multiple funding sources is the
tendency for development projects to be underwritten with very narrow margins.
Tight development budgets, as will be discussed in the following section on housing
management, make it more difficult and costly to sustain the housing long-term.

Scarce pre-development financing. A recurrent complaint is the shortage of funds to
cover various predevelopment expenses, including acquisition of development rights,
development feasibility studies, and so forth. As a result, CDCs are hindered in their
ability to respond quickly to potential development opportunities.

Lack of long-term operating support. Another frequently cited financial need
concerns ongoing operating support. CDCs struggle to obtain funds to cover staff
salaries and other operating expenses. In the absence of multi-year operating support,
CDCs are dependent on short-term grants and development fees and other sources of
revenue. Dependence on development fees is particularly risky since it requires a
steady if not increasing flow of development projects from year to year. Shortfalls in
production volume quickly translate into reduced development fees, impairing a
CDC’s ability to cover salaries and other operating costs.

Long-Term Viability. While much more research deals with housing development
issues, the long-term viability of CDC housing is of growing concern. The difficulties
of providing affordable rental housing to low-income households do not stop with the
completion of construction. Effective property and asset management are essential for
sustaining the housing over the long haul. CDRC’s study, Confronting the
Management Challenge (Bratt et al. 1994), is the first major analysis of how CDCs
and other nonprofit housing groups manage their rental housing. Based on case
studies of 17 CDCs in 6 cities, the study assessed the financial and physical condition
of a sample of rental developments and examined the factors that make for successful
property and asset management. The researchers found that while the sampled
developments were overall in adequate condition, a large percentage had precarious
financial positions. For example, more than half of the projects lacked any operating
reserves and one-quarter did not have any capital reserves. Moreover, half of the
developments relied on at least one source of nonrecurring revenue to meet their
operating expenses. Successful housing management, the study found, hinged on the
initial underwriting of the developments, their physical configuration, neighborhood
conditions (i.e., crime), organizational capacity of the CDC, the CDC’s commitment
to property management, and the strength of the local institutional environment.
CDC Capacity
A key issue in recent studies of community development concerns the capacity of
community development corporations and other organizations. Indeed, one of the field’s
only recent large-scale studies focused entirely on CDC capacity. The Center for Urban
Policy Research’s three-year study of the Ford Foundation’s Community Partnership
Program brought the issue of CDC capacity into national prominence. Starting with a
widely disseminated concept paper (Glickman and Servon 1998), the project produced
26
several explorations of the topic, including local case studies16 and a national survey of
CDCs. Although the project was funded to assess a particular program—local
community-development partnerships—it was designed to be of broad interest to the
community development field.
In “More than Bricks and Sticks,” Norman Glickman and Lisa Servon distill five
dimensions of CDC capacity:





Resources: ability to acquire and manage funding for grants, contracts, and other
resources;
Organizational: internal operations, including staff skills, board role, managerial
competence
Networking: ability to collaborate with their organizations both inside and outside of
the community
Programmatic: ability to deliver services in selected program areas;
Political ability to advance CDC agenda and represents neighborhoods interest in the
later political arena.
Glickman and Servon developed a detailed inventory of the elements that comprise each
component of CDC capacity. In case studies of five cities (four of which had a Ford
Foundation-funded community partnership and one that did not), focus groups of CDC
leaders (Nye and Glickman 2000), and a survey of more than 200 CDCs in 20 cities, the
project attempted to measure CDC strength along each dimension of capacity. In
addition, the project also attempted to gauge the effect of local partnership programs on
the capacity of participating CDCs. In this effort the national survey compared CDCs in
ten cities that receive support from local partnerships with those that do not. It also
assessed CDC capacity in ten cities that lacked local partnerships. The research found
that CDCs with partnership support show higher levels of capacity with regard to staff
size, training, and compensation; budgetary size and diversity; scale of housing
production; and in other areas as well (Glickman and Servon 2001).
The most recent evaluation of NCDI also examined CDC capacity. Using a slightly
different analytic framework than Glickman and Servon, the researchers looked at
capacity-building programs in several cities, tracing their influence on each component of
capacity. The study found that the cities with the strongest capacity-building programs
also had “higher than expected numbers of capable CDCs” (Walker and Weinheimer
1998: 51). The report found that multi-year core operating support programs are the
single most important form of capacity building. The NCDI evaluation team continues to
study the effectiveness of CDC capacity building programs in the third round of the
initiative, which concludes at the end of 2001. Among other questions, the researchers are
looking at the long-term impact of capacity-building programs in “younger
environments” such as Phoenix and San Antonio compare with more “mature” cities such
as Boston, Cleveland and Philadelphia. Another question is whether capacity-building
16
The five case studies were El Paso, Cleveland, Portland, Philadelphia, and Minneapolis.
27
programs that use performance standards will lead to a reduction in the number of active
CDCs through mergers and attrition (Walker and Weinheimer 1998: 53.)
Institutional Support for CDCs
Many of the same studies that examine the challenges CDCs face in developing and
managing affordable housing, and in other aspects of community development, also
assess the institutional support available to these organizations for addressing these
issues. This research examines how government, foundations, intermediaries and other
organizations assist CDCs. Some of it also examines the relationships between CDCs and
these other institutions and the effect these relationships have on the CDCs’ priorities and
allegiances. It also looks at the motivations different kinds of institutions have for
supporting community development organizations.
Much of the literature on community development highlights the role of “intermediaries”
in supporting CDCs in a multitude of ways (Walker 1993, Stoutland 1999, Rubin 2000).
Several studies describe how the Enterprise Foundation, the Local Initiatives Support
Corporation and other intermediaries address the needs of CDCs for financial and
technical assistance. The research documents the types of assistance intermediaries
provide CDCs and its effect on CDC capacity.
A few case studies, notably Yin’s article on Cleveland (1998) and Keyes et al.’s paper on
“Networks and Nonprofits” (1996) explore the composition of and interrelationships
within particular institutional support systems. Keyes et al., drawing from their research
on housing management in the nonprofit sector (Bratt et al. 1994), emphasize key
elements that bind together the institutional support system for nonprofit housing groups:




Long-term relationships of trust and reciprocity among individuals working within
nonprofit housing groups and the institutions that support them,
A widely shared ideology within the institutional network that “takes as its credo the
appropriateness of nonprofit housing sponsored as the vehicle for building housing
and developing communities in inner city neighborhoods;”
Mutual interest among all elements of the support system in seeing the nonprofit
housing groups succeed;
And in the case of banks, state housing finance agencies, and especially equity
investors, financial self-interest.
Rubin’s recent book, Renewing Hope Within Neighborhoods of Despair: The
Community-Based Development Model (2000) also lays out elements of the institutional
support system (Rubin 2000: 21-132). Drawing on multiple site visits to more than 70
CDCs in six Midwestern states over a five year period, Rubin discusses the kinds of
assistance a variety of organizations offer CDCs, highlighting the tensions and pressures
inherent to these relationships. In particular, he shows how acceptance of much needed
funding from government agencies and intermediaries can make CDCs beholden to
agendas other than their own. Rubin’s case studies show how CDCs navigate these
tensions.
28
One of the most insightful analyses of the institutional support system for CDCs and
community development more broadly is provided by Ronald Ferguson in the concluding
chapter of the book, Urban Problems and Community Development (Ferguson and
Dickens 1999).17 Ferguson offers a framework for understanding the development of
successful community development alliances. He identifies five key tasks in alliance
building and their associated tensions. Central to each task is the matter of trust. He
shows how trust involves a combination of motives, competence, dependability, and
collegiality:




Can I trust that my allies have motives compatible with mine, so that the alliance is
likely to serve, not undermine the interests that I represent?
Can I trust that my allies are competent (or can become competent) to do their part in
the alliance?
Can I trust that my allies have sufficient will and resources to be dependable?
Can I trust that my allies will be respectfully collegial? (Ferguson 1999: 592).
Ferguson discusses the chief challenges, all which pivot around trust, inherent to each
“task” of alliance building For example, one task is for alliance members to reach
consensus on “how the alliance will operate and what...it will aim to achieve.” Here, trust
plays an important role in helping participants resolve conflicts over “power,
interpretation, turf, and priorities.” “For each member, trust affects the perceived risk of
delegating power and decision making authority to others.” The less participants trust
each other, Ferguson argues, the greater the conflict is likely to be as each member seeks
protection against others’ shortcomings”(599). In elucidating the myriad ways by which
trust, or the lack thereof, makes or breaks community development alliances, Ferguson
posits an explanatory framework for understanding the dynamics of institutional support
for community development.
17
This book presents research sponsored by the National Community Development Policy Analysis
Network (NCDPAN). Not a research project or program evaluation, NCDPAN was established in the mid
1990s to strengthen the role of social science and policy researchers in developing the knowledge base in
community development (Ferguson and Dickens 1999: viiii). Directed by Ronald Ferguson of Harvard
University and William Dickens of the Brookings Institution, NCDPAN commissioned several economists,
political scientists, historians, sociologists and other social scientists to examine various dimensions of
community development, including the effectiveness of place-based community development strategies for
reducing the problems of urban poverty. Brookings published revised versions of these papers (originally
presented at a 1996 conference) along with additional commentary in 1999 in the book Urban Problems
and Community Development, edited by NCDPAN’s co-directors. The book looks at community
development from multiple perspectives as a strategy for addressing poverty, inadequate housing, crime,
and other urban problems. It combines historical and political analysis of community development
programs and organizations with studies of education, labor markets, business development and crime from
a community development perspective. The book also assesses the evolution and accomplishments of
community development corporations and explores problems and prospects for the evaluation of
community development programs. In addition to the book, NCDPAN also helped fund several doctoral
dissertations in community development. At present, the initiative is in abeyance. While additional funding
is available, the project directors have not yet decided on the initiative’s future direction.
29
The Impact of CDCs on Households and Neighborhoods
Perhaps the highest priority at present for community development research and
evaluation is to assess the extent to which CDCs improve the quality of life for the
residents of their housing and within their target neighborhoods. While previous studies
document CDC activities, such as the number of housing unites rehabilitated, few attempt
to demonstrate with any rigor how their activities affect the quality of life within their
communities. In part, the paucity of such research reflects its difficulty. It is not easy to
attribute changes in neighborhood conditions to the work of CDCs when so many other
macro and micro variables may also contribute to the change. There are no easy—or
inexpensive ways—to isolate the effects of CDCs from those of other organizations,
events, and trends. Unlike program evaluations based on random assignment, there are no
control groups in most studies of housing and community development (Hollister and
Hill 1995).
Several researchers have proposed a wide range of indicators of neighborhood change
that might be used to gauge the contributions of CDCs. The Aspen Institute’s Roundtable
on Comprehensive Community Initiatives, for example, has posted a lengthy list of
administrative and other small-area data that can be used to track neighborhood change
(Coulton and Hollister 1998; Rossi, 1999; Aspen Institute Roundtable on Comprehensive
Community Initiatives 2001.). The Development Leadership Network, a national
organization of practitioners, trainers, and other individuals involved in community
development has mounted a “Success Measures” project. With foundation support, the
network has recruited several organizations to evaluate their program activities. Unlike
most program evaluations, the community groups select their own criteria for assessing
their performance. The Network’s Success Measures Handbook (1999) provides dozens
of indicators in the areas of housing, economic development, and community building for
community organizations to use in this endeavor.
As inventive as these efforts are, indicators of neighborhood change do not get around the
issue of attribution. These measures provide a wide range of ways to show how
neighborhoods and their residents are changing, but they do not reveal the causal
mechanisms at play; they do not separate the effects of CDCs from those of other factors.
Moreover, these indicators are of limited use in defending CDCs against the arguments of
critics who question the ability of CDCs to improve conditions in urban communities.
David Rusk, in Inside Game/Outside Game (1999), for example, questions the efficacy of
CDCs. He shows that economic conditions, as measured by poverty rates, population and
household growth, and other indicators, worsened during the past two to three decades in
the target areas of 34 “exemplary” CDCs located around the nation. He concludes that
CDCs are seldom able to counter urban neighborhood decline; a task Rusk believes can
only be achieved through regional approaches.
One study that does look at CDCs in light of the “counterfactual” is Briggs and Mueller’s
analysis of the “social effects” of CDC housing. With several hundred thousand dollars of
foundation support, CDRC examined CDC housing in three cities with comparable lowincome housing in the private sector. The goal was to discern how, if at all, residing in
housing built and managed by CDCs improves the quality of life. In addition to on-site
30
ethnographic research at each CDC—New Community in Newark, Whittier Alliance in
Minneapolis, and Urban Edge in Boston--the project surveyed the residents of CDC
housing along with the residents of housing located in similar low-income communities.
The survey found that residents of CDC-housing were more satisfied with their housing
and living environments than members of the comparison group. However the study also
found that CDCs have measurable effects on residents’ lives only when they invest in
selected areas in a sustained ways; CDCs are considerably less successful in areas that are
not emphasized (Briggs and Mueller, 1997.) With regard to “community-building” the
study found that CDCs strengthened their residents’ sense of connection to their
neighbors and developed a sense of ownership of the CDCs only when they invested in
activities that fostered residents’ active involvement in associations and activities.
Closely related both to the assessment of CDC capacity and the impacts of CDCs on their
target neighborhoods is the question of CDC efficiency and effectiveness. Funders are
interested in knowing whether CDCs provide services and improve neighborhood
conditions in a cost-effective manner (Cowan et al. 1999). The stakes are high. If CDCs
are found to be less efficient than for-profit organizations or government agencies in
achieving the same results, they risk losing funding and other forms of support. Little
research has been done to date on this topic, however. The lack of research and analysis
reflects both the difficulty of data collection and the complexities of their interpretation.
Few CDCs activities are readily quantifiable, most notably housing production. Yet, as
Rohe (1998: 195) points out "CDCs often undertake community organizing, crime
prevention activities, advocacy, and other activities that are important in a neighborhood
revitalization effort but very difficult to quantify in meaningful terms.” Even when
outputs can be quantified, their interpretation is not always straightforward. Most
importantly, similar levels of output can mean quite different things, depending on the
context in which the groups operate, their mix of activities, and their priorities.
In order to assess the effectiveness of CDC activity one needs to take into account several
factors:





the size of the organization,
the scope of its activities (is housing the primary focus?),
the availability of financial and technical assistance and other resources,
the objective for engaging in particular activities (increase the supply of low-cost
housing, revitalize specific blocks, provide work experience for disadvantaged
residents); and
differences in local and regional contexts (poverty, crime, demographics, housing
stock)
The same amount of “output” can yield different judgments about an organization’s
performance, depending on these factors.
One study that does incorporate organizational and contextual variables in an assessment
of CDC efficiency is Cowan et al.’s analysis of 147 NeighborWorks organizations
affiliated with the Neighborhood Reinvestment Corporation. Using annual surveys
31
submitted by each organization as well as census data for their service areas, the study
assessed the amount of neighborhood investment that resulted from their activities.
Efficiency was defined as total investment (direct and indirect) divided by the
organizations’ total expenses for staff salaries and benefits. (The study recognized that
not all staff are involved in neighborhood reinvestment activities, but could not obtain
reliable data on the amount of time staff spend on investment-related vs. other
neighborhood activities) (Cowan et al.1999: 329).
The study included several contextual and organizational variables. Contextual variables
related to the character of the housing stock (age, homeownership rates), and resident
demographics (percent elderly, percent minority, and median household income).
Organizational variables included the group’s age, staff size, amount of training for staff
and board members, the executive director’s tenure, training, and compensation, the
number of activities in which the organization participated, and a dummy variable
indicating whether average annual investment exceeds $1.25 million. The authors found
that the strongest positive correlates of CDC efficiency were median household income,
executive director training, the extent of organizational training, and the number of
activities in which the CDC participated. CDC efficiency was negatively related to
compensation of executive director and staff size.
Similar studies of other community development organizations—including CDCs
supported by LISC and the Enterprise Foundation—would be extremely informative.
However, the amount of time and resources needed for data collection should not be
minimized. Some financial assistance may be necessary for the groups to collect and
compile the desired information.
The Place of Housing in the Community Development Agenda
A curious gap in research on community development concerns the role of housing in the
agendas of CDCs and other community development groups. Housing development and
rehabilitation have long been central to the work of community development
organizations. Yet, as the field has expanded to other areas, such as economic
development, workforce development, public safely, community organizing, and various
social services, it is becoming less and less clear how housing fits into the broader
community development agenda. There may be an “accepted wisdom” about the rationale
for housing development in community development, one articulated by highly
knowledgeable practitioners and scholars with years of experienced in community
development, yet it has been subject to little serious research.
Two of the most thorough discussions of the connections between housing and
community development are provided in Grogan and Proscio’s recent book Comeback
Cities (2000), and Vidal’s essay, “Can Community Development Reinvent Itself: The
Challenges of Struggling Neighborhoods in the 21st Century” (1997). Former LISC
president Paul Grogan and co-author Tony Proscio emphasize not only the catalytic
quality of housing development in stimulating other forms of revitalization, but also the
importance of successful housing development in conferring creditability to CDCs.
Moreover, once they have developed housing, the need to protect their assets prompts
32
CDCs to engage in other neighborhood development activities. The purpose of CDCs,
they write, is
not just to produce housing, but to produce housing as a catalytic and integrated
element of overall community renewal. They start with housing because houses
are there, often abandoned, usually cheap, and nearly always contributing to an
overall physical blight. But unlike typical housing developers, and most federal
housing programs, CDCs integrate their development of affordable housing with
any number of other public services and improvements beyond bricks and mortar
(p.71).
Once a CDC has proven its competence in housing, it soon becomes an
experienced, legitimate vehicle for addressing other neighborhood and
community needs. . . .Successful housing initiatives serve as concrete evidence
that the community group is an actor to be nurtured, bargained with, and
consulted.
For the CDC’s purposes, becoming involved in a wide range of public and private
activities affecting the community is a good way to protect assets and promote
development. Dealing with unemployment and gang crime, building day care
centers, and promoting and improving the retail strip are all ways to ensure that
housing efforts won’t be undermined by other developments (p. 71-72.)
Avis Vidal, in an essay on “the challenges of community development in the 21st
century” (Vidal 1997), also emphasizes the pivotal role of housing in community
revitalization. “Building housing . . . was the “natural place” for community development
initiatives to begin. “Replacing [deteriorated] housing would stabilize the population,
restore the functioning of the housing market, and reestablishing the market for
commercial activity that would, in turn, support new businesses to fill vacant lots and
empty storefronts” (432). She adds that the cumulative housing production of CDCs has
strengthened CDC neighborhoods and demonstrated the existence of meaningful
organizational capacity (432).
Vidal concludes that the focus on housing served the CDC movement extremely well. It
allowed a degree of standardization that enabled community development to achieve
meaningful scale for the first time. It has given CDCs, which have always pursued a
variety of activities, a shared substantive activity that enabled them to speak with a
unified voice on policy matters that affect them and their communities. And in the
context of the vision, it has allowed those who speak for the CDCs to speak with passion
while remaining politically neutral, with important appeal to both the left and the right
(433).
Vidal cautions that housing development will not always dominate the community
development agenda. Its salience reflects both the availability of funding and the
character of local neighborhood conditions. Reduced governmental funding for
affordable housing will make it difficult to sustain current levels of CDC housing
33
production. Moreover, housing development and revitalization is not likely to be the
highest priority in a growing number of neighborhoods with active CDCs. This is
especially the case in southern and western cities with a relatively new housing stock, but
is also evident in older cities of the Northeast and Midwest, where the housing conditions
have improved, reflecting in part the accomplishments of CDCs in building and
rehabilitating thousands of housing units.
To gain further insight into the role of housing in the community development agenda,
and to identify possible areas of additional research, we interviewed top officials at the
Enterprise Foundation and LISC.18 They discussed why housing has been so central to
the work of CDCs in the past two decades and the role it is likely to play in the future.
They also explored the relationship between housing development and other types of
community development activity, both for the targeted neighborhoods and for CDCs
themselves.
Like Grogan, Proscio, and Vidal, the interviewees stressed the multidimensional value of
housing. Housing is vital to community development because of its tangible, physical
quality as well as its symbolic character, its ability in inspire hope and confidence in the
potential for neighborhood renewal. Beyond its ability to meet immediate needs for
decent, affordable housing and in so doing revive blighted landscapes, housing
development also signifies to residents and outsiders alike the possibility of turning
neighborhoods around. It motivates residents and CDC and other stakeholders to seek
further improvements. The interviewees also saw housing as a baseline, a starting point,
for more comprehensive community development activities. Says one official, an
improved housing stock makes it much easier to win the commitment of residents,
businesses and public service providers. Tangible signs of community investment make
an area more attractive to private businesses, lead to improved police protection, and
greater civic engagement. Part of the explanation for these broader changes lies in the
need to protect the asset of newly built and restored housing. Residential property
owners, whether CDCs or individual homeowners, have a stake in protecting their
investment. For CDCs, this means attention to crime, unemployment, and other
destabilizing forces.
The intermediaries also emphasized the importance of housing in strengthening the
organizational capacity of CDCs. The ability to do housing rehab and construction at
“serious scale”, says one official, has turned community development from “a series of
anecdotes into an industry.” Housing, he continues, has given CDCs capacity not only to
develop housing but also to raise and invest capital and to build systems that allow them
to become major organizations that can, in many cases, branch out into other activities.
One question in need of further research is the extent to which experience in housing
development does provide the groundwork for addressing other community needs. The
intermediary executives agreed that skills gained in housing development are readily
We interviewed Michael Rubinger, President of LISC, William Traylor, LISC’s Program Director for
New York City, and William Frey, Sr. Vice President of the Enterprise Foundation and Director of its York
City office.
18
34
transferable to other forms of real estate development, such as shopping centers, day care
facilities, and perhaps even schools. It is more of a stretch to say that housing
development provides the right set of skills and partnerships to excel at running
commercial enterprises or social services. Officials from both LISC and the Enterprise
Foundation felt that neighborhoods are often better served when CDCs partner with more
experienced organizations in these other areas than when CDCs try to “do it themselves.”
They advise CDCs to act as brokers and conveners, to seek out the best organizations and
models and “connect them with resources.” The relationships CDCs formed through
their housing activities with government agencies, foundations and other funders, put
them in position to support other types of community development ventures, even if the
CDC is not the sole participant. “CDCs can be comprehensive in their identification of
community needs and bring appropriate programs into the community; they don't need to
be child care providers and economic developers.”
Like Vidal, the intermediaries do not foresee housing retaining its current level of
prominence. Rightly or wrongly, housing does not command the same cachet it enjoyed
earlier, making it more difficult to attract financial resources for new projects. Further,
there is simply less need for housing rehabilitation in a number of cities and regions in
which CDCs are active. To the extent CDCs remain active in housing, they are likely to
produce more housing for owner occupancy and less rental housing, in part reflecting a
shift in government priorities.
Community Development Research: Summary and Recommendations
This paper has charted the growing gap between exiting empirical research on
community development and broader conceptual questions about community
development strategies and practices. While scholars and certain funders are increasingly
interested in the connections between community development and urban problems and
in new ways of conceiving of community development, most of the research to date deals
with such basic issues as documenting the activities of community development
organizations, understanding their sources of support, and developing methodologies for
evaluating complex place-based initiatives. We argue that research in community
development needs to improve its coverage of current practice and produce a stronger
empirical basis for assessing the efficacy of new approaches and definitions.
Growing concern in the field centers on the role of residents in community development
organizations and initiatives, the kinds of activities that should be considered community
development, and on alternative ways of organizing comprehensive approaches to
community development. Yet, there is little research on these areas, and most of what
exists is not very analytic. Most research in community development is very much
grounded in the worlds of housing and community development corporations. Important
as it is, this research does not capture the full scope of the field, and its coverage of basic
issues about housing and CDCs can also be improved.
Research in community development, at least as measured in financial terms, has never
been a high priority of government and foundations. Most research focuses on CDCs,
looking at their accomplishments, organizational needs, and institutional support. Most of
35
this research is descriptive, based largely on surveys and case studies. Taken together, the
research has produced a basic understanding of CDCs, their activities, organizational
characteristics, needs and support systems. The earliest research tended to be mostly
descriptive, building a base of knowledge about an emerging industry. Subsequent
studies have looked more closely at the broader institutional environment in which CDCs
operate and how it contributes to their ability to meet neighborhood needs. While much
has been learned over the past decade, research in community development lags behind
the field’s emerging trends. It is important not to let our understanding of CDCs lapse,
but it is increasingly important to extend research in community development to new
areas of focus.
A richer, more comprehensive research agenda for community development should
encompass a range of key questions and concerns, including the following:











The role and effect of resident participation in community development organizations
and initiatives.
Comparative analysis of the different types of organizations that engage in
community development
Analysis of ‘faith-based” approaches to community development
Ethnographic perspectives on how community building programs and other CCIs
change the way neighborhood residents and local institutions respond to problems
and capitalize on opportunities.
The lessons for community development organizations that might be derived from
other types of nonprofit organizations that provide services to disadvantaged
communities
The role of race in community development
The role of housing in community development
The impact of devolution on the degree of competition and collaboration among
community development groups within individual cities.
The effectiveness and contributions of new types of community development
organizations, such as CDFIs.
Comparative analysis of CCIs
The effectiveness of community development organizations and initiatives in
improving neighborhood conditions
The above research needs can be met through replication of previous studies, better
dissemination of local studies, marginal improvements to ongoing research efforts
(particularly the NCCED surveys), and investment in more basic research on cutting edge
practices and priorities.
Replication of previous research
Several of the most informative studies of CDCs and their support systems have become
dated and should be updated. Much could be learned from revisiting the 130 CDCs
examined in Vidal’s landmark study, Rebuilding Communities. A new survey would
provide a rare longitudinal view of a national cross-section of CDCs during the 1990s and
36
early 2000s. It would shed light not only on their activities and priorities, but also on their
organizational development and stability. Such a study could also provide insight on the
role of housing within the community development agenda and be a vehicle for exploring
the neighborhood impacts of CDCs. Equally important, state and local governments
should be surveyed again to gain a more current view of their attitudes toward and
support of CDCs and other community organizations. Goetz’ original survey is now more
than 10 years old.
Dissemination of local research
The community development field is rife with reports on local programs and initiatives.
Typically prepared for individual clients or to an otherwise narrow audience, these
studies often offer information useful to the field as a whole. For example, in the mid
1990s the Neighborhood Preservation Coalition of New York State commissioned a
survey of more then 150 CDCs and other nonprofit community groups. Few researchers
outside New York are aware of the study. With the Internet, it would not be difficult to
compile fairly comprehensive inventories of what had been “fugitive” reports.
Improving ongoing research
The community development field is fortunate to have a recurrent source of information-NCCED’s periodic surveys. Their reports constitute the primary data source for
information on the size and scope of the CDC industry. However, the survey would be
more useful were its results made available on a more disaggregated basis. At minimum,
the data should be presented so that it is possible to distinguish groups that serve
individual communities from those that have much larger target areas.
Investment in cutting-edge research.
As noted above community development research has never received substantial funding.
Research funding is especially sparse when it comes to examination of conceptual or
theoretical issues relevant to the field. An exception was the foundation-supported
National Community Development Policy Analysis Network (NCDPAN), which
produced Ferguson and Dickens’ wide-ranging volume on Urban Problems and
Community Development. Although still extant, NCDPAN has been more or less inactive
since the book’s publication. This unique initiative should be reinvigorated, or another
vehicle should be created to sponsor more scholarly research in community development.
37
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