Rising Above NACEDA Rising Above

34 Pages·2010·0.84 MB·English

Rising Above

Rising
Above
Community Economic
Development in a
Changing Landscape

A report by the National Alliance of
Community Economic Development
Associations, June 2010

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Table of Contents
Introduction .................................................................................................... 5
Who Are Community Developers? .................................................................... 7
Increasing Housing Choices............................................................................ 10
Stepping Up to Address the Foreclosure Crisis ............................................... 17
Building, and Rebuilding, Green ..................................................................... 19
A Comprehensive Revitalization Agenda ........................................................ 23
Resources for Getting the Job Done ............................................................... 26
Building a Stronger Development Field ......................................................... 29
Appendix: Methodology ................................................................................. 32

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Acknowledgements
A special thanks to the NACEDA Board of Directors as well as NACEDA member state
and city associations and all the organizations that participated in this survey. Special
thanks also to LISC for their assistance throughout and to Alan Mallach and the Census
Advisory Committee for their guidance. Funding for this survey was provided by the
Lilly Endowment.
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Preface

The National Alliance of Community Economic Development Associations (NACEDA)
was formed in 2006 by 11 state community economic development association leaders
who saw the need to strengthen the bonds between community organizations for
mutual benefit through sharing of expertise, capacity, and resources; and to bridge the
divide between policy makers and the people they affect in America’s communities.

Since its founding, NACEDA’s membership has tripled. It now represents 36 state, city
and regional community development associations. NACEDA also represents other
organizations involved in the field, including several universities. NACEDA’s members
promote the efforts of local community development practitioners through
communication and advocacy to build the capacity and reach of the community
economic development (CED) field.

This report picks up on efforts undertaken previously by the National Congress for
Community Economic Development (NCCED). NCCED released their first report on
the economic impact of the community development field in 1988 and released
additional reports in 1991, 1994, 1998, and 2005. This report builds on those prior
studies to measure the quantitative achievements of community based development
organizations. The numbers presented are estimates based on weighted data gleaned
from survey responses.
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Introduction
The years 2005 to 2007 were dramatic times for neighborhoods across the country as
the housing bubble that had been swelling grew to its largest proportions, and then
popped. As the results of this survey of community development activity help to show,
affordable housing developers and community-based nonprofits have long been part of
the solution. In fact, they were already working to counter the effects of a swinging
housing market, bad loans, and vacant properties long before these issues burst on the
national consciousness in 2007–2008.

This survey of the community development field takes up where the periodic ―censuses‖
conducted by the National Congress of Community Economic Development, left off. It
covers the years 2005–2007, with the goal of understanding what the field is doing,
how it is doing it, and what its levels of production have been. This report examines the
diverse work of community developers throughout our communities in the peak bubble
years, and gives us a picture of a field that is maturing after a large growth spurt and
has continued to carry out its mission in a steady fashion during tumultuous times.

Community development is a broad term, embracing a wide array of organizations that
work to reinvigorate lower income communities and serve low- and moderate-income
people wherever they may live. Different organizations go by different designations,
depending on their roots and mix of activities. Some are focused exclusively on
affordable ownership or rental housing development, perhaps over a wide footprint.
Many others focus in on a targeted geographic area with interventions that range from
community organizing to job creation to school programs to beautification. These
groups are often known as ―community development corporations‖ (CDCs) or
―community-based economic development organizations‖.1 This survey does include
housing totals from large, nonprofit housing producers, including organizations that

1 ―Community-based economic development organizations‖ are defined in federal law by HHS as being
nonprofit organizations whose primary mission is to serve, or provide investment capital for, low-income
communities and low-income persons and who maintain accountability to residents of low-income communities by
including representatives on their governing board or an advisory body.
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work in multiple states. Such groups were also counted in previous surveys. Therefore
we use the broader term ―community developers‖ to describe the field encompassed by
this survey.

Things have changed, of course, since the end of 2007. The scale of the foreclosure
crisis, combined with tight credit, weak housing markets, and a loss or massive scaling
back of many traditional funding sources has left many community developers
struggling at a time when the need for their various areas of expertise has never been
greater. The Low-Income Housing Tax Credit, for example, long a staple source of
equity funding, has contracted drastically as the price of credits has dropped, creating
funding gaps for organizations that had received allocations but not yet sold them.2
Banks, a top source for both grants and affordable financing, are not only short on
philanthropic funds, but have swung to an opposite extreme on credit from the bubble
years, drastically tightening the spigot on both construction financing and mortgage
financing, a triple hit for community developers. Organizational closures are looming
and mergers are being considered even as the work of community developers is in great
demand.

To continue the crucial work detailed throughout this report, the community
development field will need sustained support in the form of access to resources, public
policy reform that removes obstacles to the success of the field and complements its
mission, and assistance as it does the necessary work of self-reflection, planning, and
adapting to new circumstances. It is imperative that community developers with the
boldest and best plans be free to focus on actually carrying out the complex work of
rebuilding America’s most distressed areas.

2 Joint Center for Housing Studies, ―The Disruption of the Low-Income Housing Tax Credit Program:
Causes, Consequences, Responses, and Proposed Correctives,‖ December 2009,
www.macdc.org/research/disruption_of_the_lihtc_program_2009.pdf
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Who Are Community Developers?
Community developers primarily, but not entirely, work in urban areas: Three-quarters
of them include urban areas in their service area, and more than half are exclusively
urban.

Community development organizations tend to be small. Their median full-time staff
size is 7.5, and 75 percent of them have full time staffs under 30. There are, however, a
significant number of large organizations working in the field, with 10 percent having
full-time staff of 125 or more. While the median size has decreased since the last report,
the total number of employees has risen.

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Percent Community
Number of Full-Time Employees
Developers
Under 5 33
5-10 19
10-30 22
30-50 6
50-100 5
100-200 9
Over 200 6

The age spread of community development directors is quite similar to the last report,
but with a slight increase in directors in their 40s and decrease in directors in their 50s.
Thirty percent have a succession plan.

Sixty-one percent of community developers say they are standalone organizations, not
part of any national network, and 14 percent identify as faith-based (a notable decrease
from the previous survey’s 25 percent). Their origins and self-descriptions are widely
varied, depending on the time period and context in which they formed and the funding
streams they originally tapped.

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Percent Community
Community Development Origins
Developers
Community Development Corporation (CDC) 60
Community Housing Development Organization (CHDO) 47
Nonprofit CBDOs (community-based board) 26
Faith-Based Organization 14
NeighborWorks America/Neighborhood Housing Services (NHS) 11
Community Development Financial Institution (CDFI) 6
None of the Above 6
Community Action Agencies/Programs (CAA/CAP) 5
Habitat for Humanity 3
Youth Build 3
Local Development Corporation 2
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Increasing Housing Choices
Housing development is the core strength of community developers. Increasing the
supply of decent, stable affordable housing while fixing up vacant properties or filling in
vacant lots with new development has formed a foundation for successful neighborhood
revitalization by community-based developers for decades. Currently, 81 percent of
community developers carry out housing development.

Nonprofit developers form an essential core of affordable housing producers for the
nation: From 2005 to 2008, 35 percent of all federally assisted housing units were
produced by nonprofits (along with many more state or locally funded units), a
percentage that has remained basically unchanged since the period 1999–2004.3

Community Development Housing Production: Growth in a Downturn:
Community developers’ focus on affordable housing has continued to grow throughout
the survey period. From 2005 to 2007, community developers produced (through
acquisition, rehab, or new construction) an estimated 96,000 units of affordable
housing per year, up from 86,000 per year reported in the previous survey.

Increase in Community Developer Housing

Production
From 1994 survey to 1998 survey + 62,000 units annually
From 1998 survey to 2005 survey + 86,000 units annually
From 2005 survey to present survey + 96,000 units annually

3 Calculated from federal subsidy data, separate from this survey, by Chris Walker for a draft
LISC working paper entitled “Nonprofit Production of Federally-Assisted Housing Units.”
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