Archive for the ‘Community Development Partnership Act’ Category

Could 2012 be the best year for Massachusetts CDCs since 1982?


January 3rd, 2012 by Joe Kriesberg

Starting in the mid 1970s, Mel King and other visionary leaders of the community development movement worked systematically to build a support infrastructure for CDCs in Massachusetts. They understood that such a system could grow what was then a nascent movement of community based development organizations, largely in Boston, and transform it into a robust, statewide field that could achieve impact at scale. So they created CEDAC, CDFC, the CDC Enabling Act, Chapter 40F, the CEED program, LISC and ultimately, in 1982, the Massachusetts Association of CDCs. These institutions laid the foundation for what quickly became one of the strongest community development sectors in the country and left a legacy from which we continue to benefit today – 30 years later.

The past few years have seen a similar wave of system building for the community development field. Starting with, and emerging from, the Community Development Innovation Forum that MACDC launched with LISC in 2008, we have seen the creation of the Mel King Institute for Community Building, the transformation of CDFC into the Massachusetts Growth Capital Corporation, and the modernization of the 1977 CDC enabling law into Chapter 40H, which creates, for the first time, a formal CDC certification process. We have also seen a wave of efforts to lift CDC practice in areas as diverse as community engagement (LISC’s Resilient Communities/Resilient Families program), financial management (MHP’s efforts to promote Strength Matters) and asset management, real estate development and small business development (through programs at the King Institute.)  And we have formed new cross-sector partnerships between the community development movement and sister movements in transit equity, smart growth, public health, and energy, enabling us to move toward more comprehensive and systemic change.

These efforts have the potential to culminate in 2012 with the passage of the Community Development Partnership Act. This ground breaking and game changing legislation would leverage up to $12 million in new, private philanthropy for high impact community development efforts. The program is “community centric” rather than “real estate centric,” opening the door for CDCs to pursue broad, comprehensive community development strategies. The legislation has garnered widespread support both inside and outside the State House, with House Speaker Robert DeLeo recently indicating serious interest in moving the legislation forward. If we can pass the CDPA this year, in 2012, it will allow us to build on all the great work of the past three years and the past thirty-plus years and take it to a level of scale and impact we have never seen. And by passing it this year, we can ensure the program is implemented by the Patrick Administration and its outstanding new Undersecretary for Housing and Community Development, long-time friend Aaron Gornstein.

While the economy continues to struggle and our communities fight to recover from the recession, we have a chance to do something big, bold, meaningful and lasting by passing the Community Development Partnership Act.

And when we come together this fall to officially celebrate MACDC’s 30th Anniversary we will not only be able to celebrate our field’s extraordinary history, but also its exciting and bright future.

Posted in Community Development, Community Development Partnership Act, Comprehensive Community Development, Innovation, Joe Kriesberg, LISC | 1 Comment »

What is on the other side of the CDFI coin?


November 20th, 2011 by Joe Kriesberg

Increasing the suply of capital to low and moderate income communities has been a central goal of the community development movement since its inception. From the passage of the Community Reinvestment Act in 1977, to the Low Income Housing Tax Credit in 1986, to the establishment of the CDFI fund in 1995, to the New Market Tax Credit in 2000, advocates have won significant changes in public policy that have dramatically expanded the capital available to our communities. While there can be no doubt that this has been of huge benefit to our communities, I have often wondered whether we are so focused on the “supply side” that we have neglected to support the “demand side.”  You see, for every community development loan or investment, there must be a qualified borrower in which to invest. CDFIs can’t succeed without good borrowers.

The reality that lenders and borrowers are the two sides of the same coin became readily apparent in 2008 and 2009 when the tax credit market froze and both CDCs and CDFIs alike found themselves in a bind together, as the financial challenges of each sector negatively impacted the other. (Of course, many groups function as both a CDC and a CDFI – truly the same coin!)

So I was very pleased to read a recent article on the Living Cities Blog by  John Moon called In The Works: Understanding How Investments Get Made in Low-Income Communities… Or Don’t.  According to Moon, Living Cities is finding “that communities need not merely dollars, but also an effective capital absorption ecosystem.”

Moon continues: “What do we mean by capital absorption? Capital absorption describes the process by which capital flows to support the needs of low-income communities, either through direct investment or through financial intermediaries. Effective capital absorption requires a sufficient supply of capital moving from market, government or philanthropic sources to a set of capable borrowers. The borrowers then use the capital to strengthen a community’s vitality through the development, preservation or expansion of assets such as affordable housing, small businesses, health clinics and grocery stores. When looking at how to improve the level and quality of investments in low-income communities, the unit of analysis needs to be the capital absorption ecosystem. Traditionally, the field has focused on simply increasing capital sources, improving the capacity of particular financial intermediaries, or concentrating efforts at the project level.”

Among the borrowers that are needed, of course, are high-functioning, resident led community development corporations.  Yet, while CDFIs have grown tremendously since the launch of the CDFI fund, the federal government does not have any comparable system of support for CDCs – nor do most states.  Many, although not all, CDCs are undercapitalized, which limits their ability to pursue a community led agenda and their ability to leverage capital investments. The result, I fear, is a  capital absorption ecosystem (a.k.a. a community development ecosystem) that is growing out of balance. This imbalance – if it continues to grow – threatens to undermine both the CDFI and the CDC sectors and more importantly the communities we all seek to serve.

I believe that the Community Development Partnership Act, now under consideration by the Massachusetts Legislature, would provide CDCs with a system of support similar to the CDFI fund, thereby creating a better supply/demand balance in our “capital absortion ecosystem.”  MACDC is working hard to win passage of this legislation as soon as possible. We are also advocating for other changes in policy and practice that will help CDCs become stronger financially and thereby better able to leverage private and public investment. As policy makers, investors, foundations and practitioners look to increase the flow of capital to our communities, they need to strengthen both the lenders and the borrowers in order to create a healthy ecosystem that can significantly move the needle on economic opportunity and equity.

Posted in Community Development, Community Development Partnership Act, State Policy | No Comments »

Five reasons why June 1 was a great day


June 21st, 2011 by Joe Kriesberg

On June 1, 2011, the Joint Committee on Small Business and Community Development held a hearing at the Massachusetts State House on the Community Development Partnership Act. This bill, which is MACDC’s number one priority this year, would create a donation tax credit designed to spur public/private investment in high performing community development initiatives across the state. The hearing was a critical step in the long process of taking an idea, crafting it into legislation and ultimately getting it enacted into law. So, I was very happy to see how well the hearing went. Why was it a great day?

1. Our members have really engaged with the campaign to pass the CDPA and they helped us generate over 70 letters of support from a wide array of nonprofit organizations, community leaders, municipal officials, private businesses, and local CDCs. We also had four members deliver powerful and compelling testimony about how the legislation would enhance their communities. I encourage you to read the testimony from Gail Latimore, Elizabeth Bridgewater, Danny LeBlanc, and Emily Rosenbaum.

2. Eighteen people testified in person at the hearing, representing an equally broad array of people who understand the importance of community economic development. We heard that day from Mayor Kimberly Driscoll of Salem, Mary Borque, the incoming superintendant of schools in Chelsea, from Tom Kiefer, Executive Director of the Southern Jamaica Plain Health Center, Melissa Hoffer, Vice President of the Conservation Law Foundation, Boston Police Officers Lacey Seighton and Izzy Marrero, and Sean Caron from CHAPA. Their testimony provided powerful evidence that community development does more than build homes and create jobs, it also improves educational and health outcomes, and reduces crime and pollution. As Mayor Driscoll said, community development is essential to creating great cities and great places to live.

3. We were also joined at the hearing by some of our CDC colleagues from New Jersey, Philadelphia and Pennsylvania who came up to tell us about their experience with similar programs in their states. In fact, MACDC originally came up with the idea to draft and file this legislation precisely because of what we learned from our colleagues in other states. This was a powerful reminder of why national networks, like the National Alliance of Community Economic Development Associations (NACEDA) are so important to our work. Without NACEDA, these connections, and indeed this bill, would not exist.

4. The hearing also provided an opportunity to partner in a new and deeper way with some of our long time funding partners, including the United Way, the Boston Foundation and LISC. Each of these organizations testified in favor of the bill and have been helping us to advance the legislation.

5. Finally, June 1 was a great day because it offered us an opportunity to talk about the importance of community development on its own terms. Since the CEED program was eliminated nine years ago (CEED was a state budget line item that provided flexible funding for CDCs from 1978 to 2002), MACDC has successfully advocated for many programs and laws related to housing, small business development, foreclosure and economic development. However, this was the first time we were able to break out of those particular silos and talk about comprehensive community development – to talk about communities and neighborhoods, to talk about civic engagement and community participation, to talk about creating great places for families to live, work and play. This is what our members work to achieve every day so it was a thrilling to have the chance to “state our case” to the legislature.

As we move forward from the June 1 hearing we hope to celebrate more great days, including hopefully, a day sometime in the next year when Governor Patrick signs the Community Development Partnership Act into law.

Posted in Community Development, Community Development Partnership Act, Comprehensive Community Development, State Policy | 1 Comment »