This article accurately portrays the state of the community development field . . .and it should worry those who are committed to resident-led community development. A strong community development eco-system needs strong CDCs, as well as larger nonprofits, effective government agencies and other players. But we can’t sit passively and hope that strong CDCs survive. We need intentional policies to enable them to survive and thrive. A few thoughts:
1. Over the past 20+ years there has been an intentional and dramatic investment in building the CDFI sector through certification, grants, technical assistance and access to capital. There has been nothing comparable for CDCs. This needs to change. 2. Our housing finance system has become dominated by tax credits – LIHTC, NMTC, Historic. More flexible and easier to use funds like HOME and CDBG have been slashed. These policy decisions have had significant impact not just on who develops housing but on what we develop. Community scaled rental projects, homeownership projects and rehab programs have suffered at the expense of larger, more complicated deals. In Massachusetts, over 80% of our flexible funding is used to fill funding gaps on tax credit deals, leaving almost nothing for other projects. This means our field is less able to meet the diverse housing needs of our diverse communities – and it has hurt smaller developers. And contrary to conventional wisdom, these smaller projects are often cheaper on a per-unit basis than larger deals. 3. We need to structure real estate deals so that owners have the financial incentive to steward those properties over the long term and have access to stable cash flow, year over year. This will help all of us move away from the boom/bust cycle of large developer fees once every several years. 4. Those who argue that smaller CDCs should focus on organizing, resident services, and other non-real estate activities, need to identify sustainable business models to support these activities. The reality is that there is no substitute for owning real estate, even though we have tried to find a partial solution with the Massachusetts Community Investment Tax Credit.
CDCs cannot do this work alone. But I cannot imagine an effective community development movement without CDCs. We should not leave their survival to chance.
On March 11th the Massachusetts Growth Capital Corporation held its annual Small Business Technical Assistance Grantee Mid-year meeting at Babson College in Wellesley, MA. MACDC President Joe Kriesberg, a board member of MGCC, attended the event along with more than a dozen MACDC member organizations that participate in the technical assistance program.
“The attendees represented the “best of the best” of small business assistance providers from across the Commonwealth and it is a privilege to have MGCC partnering with their efforts” said Larry Andrews, President and CEO of MGCC.
Mr. Kriesberg was there to talk to the grantees and participants about MACDC's current legislative advocacy efforts to retain funding for the program in the FY 2017 state budget. He noted that Governor Baker is supporting the program and we have strong allies in the House and Senate. At the same time, he urged everyone to contact their legislators to ensure continued funding.
The meeting also provided an opportunity for small business support organizations to network, share best practices and hear from organizations that can help strengthen their programs. Claudia Green, Executive Director of English for New Bostonians, shared an informative and inspiring presentation on the resources available for English as Second Language (ESL) and English for Speakers of Other Languages (ESOL) startups and entrepreneurs. NewVue Communities Director of Small Business Assistance, Ray Belanger, talked about how their organization methodically and strategically expanded its program to serve the entire North Central Mass region. Finally, the Lawyers’ Committee for Civil Rights and Economic Justice and the Conservation Law Foundation provided information on how they can provide businesses with free legal resources.
MGCC's Small Business Technical Assistance Grant program is designed to complement and enhance the traditional public and private small business assistance network by providing technical assistance or training programs for underserved and disadvantaged businesses with 20 employees or fewer. The grant recipients, which are selected in a competitive process, include community development corporations, micro-lenders and chambers of commerce. MGCC awarded grants to 30 organizations across the Commonwealth in Fiscal Year 2016.
On Monday, November 16th, United Way of Massachusetts Bay and Merrimack Valley, MACDC and Boston LISC were joined by Governor Baker and over 120 business, philanthropic and community development leaders to learn more about the Community Investment Tax Credit. MACDC's President Joe Kriesberg had an opportunity to speak - here are his remarks:
Good morning and thank you for coming.
I’m Joseph Kriesberg, President of the Massachusetts Association of CDCs. We serve as the policy and capacity building arm of the community development field and played a key role in enacting the Community Investment Tax Credit.
I also serve on the Local Advisory Board of the Local Initiatives Support Corporation which works to build stronger neighborhoods by investing in CDCs and community based economic development initiatives. Bob Van Meter, the LISC Director, is here with us this morning as well.
We are thrilled to join with our partners at the United Way to co-host this breakfast.
The CITC is rooted in three core values that serve as the foundation of the community development field.
The first is that people should have agency over their own future – both the future of their community and the direction of their own lives. And we believe that this can best be achieved when we come together as a community to get things done.
The second is that everyone should have the opportunity to participate in the economic mainstream and achieve their own full potential, regardless of where they live, where they came from or their racial or ethnic background.
The third core value that we work to advance is “inclusion”. We believe that our communities and our Commonwealth need to include everyone regardless of race, ethnicity, gender, or background --and we believe that we must work to reverse the historic and systemic bias that persists in our society.
For more than forty years, CDCs have put those values into action.
In your packets, you have a copy of our GOALs Report – Growing Opportunities, Assets and Leaders, this is MACDC’s Annual State of the Sector Report. You can see what our members achieved last year. And, if you think those numbers are impressive, listen to what they have achieved over the past ten years:
Spurred over $3 billion of investment in our communities.
Created or reserved over 12,500 homes
Created or preserved over 28,000 job opportunities
Helped 15,000 entrepreneurs start, stabilize or grow their own business
Served nearly 400,000 families
These numbers are visible all across the state. You can walk just a few blocks from here to Chinatown and see One Greenway preparing to welcome over 200 new residents to a mixed-income, mixed use development – indeed the ribbon cutting is tomorrow. Or take a walk to the South End and visit Villa Victoria one of the oldest CDC housing developments with over 400 families living in high quality apartments. As you travel further to Roxbury, Dorchester and Jamaica Plain you will see more housing, community & cultural centers, commercial buildings, a Food incubator, a factory, and small business complex and more – all developed by CDCs. Along the way, you will also meet local businesses that received a loan or technical assistance from a CDC, construction workers employed on CDC projects and first time homeowners educated by the CDCs like the Allston Brighton CDC.
But it is not just Boston. Go to the Main South neighborhood in Worcester and see how the CDC partnered with Clark University to completely transform the neighborhood; go to Greenfield to visit the Franklin County Food Processing Center which serves dozens of locally owned businesses; go to Fitchburg and visit the homeowners who were able to keep their home thanks to foreclosure counseling from the NewVue CDC; go to Chelsea and meet the single mothers who are accessing job training and financial coaching services that are putting them on the track to economic stability; go to Cape Cod and talk to the fisherman who are able to maintain their family tradition thanks to a partnership between the CDC and the Hook Fisherman Association.
Success stories like these abound across the Commonwealth.
The CITC was designed specifically to support this diverse array of work. It offers flexible funding that can be deployed based on the unique assets and challenges in each community.
Each CDC works with local residents and stakeholders to submit a detailed Community Investment Plan to the Commonwealth in which they lay out their vision for community improvement. The state selects the best plans and awards them an allocation of tax credits of up to $150,000 a year.
CDCs then use those tax credits to attract new donors and to enable existing donors to give more. Each dollar of state revenue is matched by a dollar of private revenue, creating a stable and diverse revenue stream for these high impact organizations. In fact, the 50% refundable state tax credit, combined with federal tax benefits, means that some individuals can get nearly 80 percent of their donation back.
Donors can be individuals, corporations, small businesses, foundations, universities, hospitals, and donor advised funds. Even those with little to no tax liability can benefit by getting a refund.
The CITC also gives donors three choices about how and where to invest.
Donors can give directly to one or more of the 47 CDCs participating in the program – there is a list of these groups in your packet.
Donors can give to MACDC or LISC – the two Community Support Organizations designated by DHCD to provide training, technical assistance and capacity building services to CDCs.
And, of course, donors can give to the United Way’s Community Partnership Fund which distributes the funding to CDCs across the state.
Last year, this program attracted over 1,000 donors and $4.7 million. This year, with your help, it is poised to double in size.
Together, Governor Baker, the United Way, LISC, the local CDCs, everyone in this room and many others not here today - are building momentum to transform communities and change lives.
Thank you so much for getting involved and for helping us to spread the word.
I'm now honored to introduce Susan Esper, Board Chair of UW and Partner at Deloitte, one of the largest supporters of the program.
MACDC applauds the Baker-Polito Administration’s new Real Estate Leveraging (REAL) Strategy that will use the public’s real estate assets to achieve important public policy goals, in particular the creation of new affordable housing and economic development opportunities.
Last year, candidate Charlie Baker spoke at the MACDC Convention about leveraging the state’s real estate assets to create more housing. Now, Governor Baker is turning that pledge into reality.
We are particularly pleased to see that this proposal emphasizes housing production generally and affordable housing specifically. This will require a creative, flexible and entrepreneurial approach – precisely what Governor Baker presents with this program. This approach requires balancing the need to generate revenue with the need to provide land at a price that allows the creation of affordable housing, without using limited public housing subsidies to pay for public land.
MACDC also supports the focus on creating economic development opportunities outside of Greater Boston where housing costs are less expensive, but economic growth has been slower.
MACDC and its members stand ready to partner with the Baker-Polito Administration to transform these under-used public assets into homes and jobs across the Commonwealth.
Since the CITC program started last year, there has understandably been much discussion about how CDCs across Massachusetts are raising new funds and diversifying their overall funding base (CITC: By the Fundraising Numbers). But what’s of even greater importance is how these organizations are actually using these funds to deepen their impact on people and places. Even though 2014 was the first year of the Community Investment Tax Credit, and the majority of donations arrived during the final quarter of the year, we are already beginning to see the impact of this program.
MACDC and DHCD surveyed all 36 CDCs that participated in the CITC program in 2014 and found that 64% of them expanded their organization’s goals and 89% deepened their community engagement. Check out the table (PDF) to see all of the results from our survey.
A core goal of the CITC Program is to encourage and support CDCs to meaningfully engage local residents in leadership roles. So we were pleased to see that 89% of the CDCs reported that the program helped them expand their community engagement work, 67% said it resulted in more board engagement, and 58% said it helped generate more volunteers. A second goal of the CITC program was to help CDCs offer a more comprehensive array of programs to their community that combines real estate development with business development, family asset building and community programing. Many CDCs are using their new CITC funds to do just that with CDCs also using it boost their small business work (25%), their workforce development activities (22%), their family asset building programs (33%) and their programs for youth & seniors (25%).
CITC funds are typically unrestricted, which means that they can also be used to build internal capacity. Therefore, we were not surprised to learn that 83% reported that they increased their operational capacity, with 33% of CDCs using CITC to expand their communications capacity; 28% to expand fundraising capacity; and 28% to improve information systems critical to measuring impact. This was indeed part of what we hoped to accomplish with the program since these capacities are key attributes of successful, 21st century CDCs. Equally exciting, 89% of the CDCs said the program would help them increase their organizational budget and 75% said it would help them leverage non-CITC funding.
The CITC program is just getting started. The early results suggest that the program is both growing resources for the field and enabling CDCs to strengthen and deepen their efforts. At the same time, we have room for growth and room for improvement. MACDC looks forward to working with our members and partners to ensure that CITC program reaches its full potential to help the people and places of Massachusetts thrive.
Members of MACDC met with leaders from Boston 2024 on July 24 to learn more about the proposed Olympic bid and to discuss how the games will ensure an equitable legacy in terms of housing, displacement, jobs, parks and transportation. The meeting was in response to an earlier letter that MACDC had sent back in February. Boston 2024 outlined impressive plans for 8,000 new housing units, new roads and infrastructure and expanded green space and parks. At the same time, MACDC urged Boston 2024 to increase the proposed amount of affordable housing at Midtown and Columbia Point and to develop a strategy for minimizing displacement during the summer of 2024 when millions of out of visitors could displace low income tenants. MACDC members also raised concerns about the loss of local jobs and the need to make sure that business and employment opportunities generated by the Olympics are shared broadly and fairly across the City.
America’s long standing effort to end housing discrimination and reduce racial segregation has been back in the news lately. The Supreme Court’s recent decision upholding Disparate Impact Claims was a partial victory for Fair Housing Advocates. However, the language in Justice Anthony Kennedy’s Opinion puts so many limitations on these claims that they may be hard to win in future cases, as described in this Article in Atlantic Magazine. Fair Housing Advocates generally applauded the decision and community developers like Enterprise Communities and Bart Mitchell from the Community Builders saw the court trying to balance the need to both expand opportunities in upper income communities while also investing to revitalize lower income neighborhoods. The Supreme Court seems to indicate that finding this balance is the job of local and state government – not the courts. Time will tell if that interpretation is correct.
A few days later, HUD issued its long awaited new Affirmatively Furthering Fair Housing rule that seeks to break down long standing patterns of segregation and fully implement the law’s mandate for local and state government to take pro-active steps to promote integration. One key benefit of the new rule is that it will compel local jurisdictions to think pro-actively about how to advance fair housing and to engage the larger community in that discussion and planning. And the Opportunity Agenda has published a useful guidebook to help them do it. At the same time, as this article in the Huffington Post makes clear, simply having the discussion and creating a plan is unlikely to end the debate over the future of our neighborhoods. While most fair housing and community development practitioners would strongly agree on the need to break down barriers for families and people of color in upper income communities, the implications for lower income communities, gentrifying neighborhoods and rural areas are not nearly as clear cut. Moreover, the tension between investing dollars in building affordable housing in upper income communities and building it in lower income communities will continue so long as there is such a large mismatch between the need for affordable housing and the financial resources available to build it.
You’ll have a chance to learn more and discuss these important developments at the upcoming Fair Housing Forum to be hosted by CHAPA and the Mel King Institute on August 6 at Boston Private Bank.
Massachusetts is home to many outstanding “housers,” but sadly we lost two of our best last week when Michael Stone and Florence Hagins passed away.
Florence was the Assistant Director for the Massachusetts Affordable Housing Alliance until her retirement a few years ago, but she was much more than that too. She was a devoted mother, community activist and the first person to ever buy a home with the Massachusetts Soft Second Mortgage program in 1991 – the first of more than 18,000 first-time homebuyers to use the program. Florence was just another community member hoping to buy a home when she ran into the same obstacles facing many moderate-income families of color in Boston. Then she discovered MAHA and the Soft Second Program and everything changed. She bought a house, became a volunteer, a staff member, and ultimately Assistant Director. Along the way, she negotiated with bank presidents and lobbied legislators and inspired all of us who do this work. All of us who knew her and worked with her will miss her deeply. You can learn more about her extraordinary life by reading this tribute from MAHA.
Michael recently retired as a Professor at UMass Boston where he had taught and wrote about affordable housing for decades. Of course, it was hard to tell that Michael had retired because he remained so active – serving on boards of housing nonprofits, conducting research, developing policy proposals, advocating, teaching, mentoring, and motivating all of us who had the honor of knowing him. Michael worked with the Boston Tenant Coalition, the Coalition for Occupied Housing in Foreclosure (COHIF), City Life Vida Urbana, and many others. His book Shelter Poverty: New Ideas on Housing Affordability has been called "the definitive book on housing and social justice in the United States." I can recall many conversations and debates with Michael where we would pore over his numbers and try to reach a common understanding. Sometimes we did. Sometimes we didn’t. But I also felt respected and always learned something in the course of our discussions. A few days ago, Michael passed away tragically while on vacation in Hawaii. All of us are still in shock. He was a good man who did important and impactful work that will long be remembered.
May the memories of these two wonderful people serve as inspiration to the rest of us who carry on the work of making sure that everyone has a safe and decent place to call home.
Governor Charlie Baker has tapped two long standing CDC leaders to fill high level positions in his Administration. Chrystal Kornegay, until recently the Executive Director of Urban Edge in Boston will serve as Undersecretary for Housing and Community Development and be responsible for running the Department of Housing and Community Development. Nam Pham, past Executive Director of Viet-AID in Dorchester and MACDC Board Member, has been named Assistant Secretary for Economic Development and will oversee the Massachusetts Office of Business Development and other economic development programs.
“We are very proud of what Chrystal and Nam achieved during their years leading CDCs in the City of Boston and excited about what they will achieve in their new positions,” said MACDC President, Joseph Kriesberg. “At the MACDC Convention last October, then-candidate Charlie Baker spoke eloquently about the importance of community development and promised to work collaboratively with our sector to help create and sustain great neighborhoods across the state. With these appointments, the Governor is off to a great start.”
As we begin the Holiday Season, many of us will be taking some time to reflect on our many blessings and to give back to our community. This year, for the first time ever, you have an opportunity to double the impact of your donations by leveraging the newly enacted Community Investment Tax Credit (CITC). As a friend of MACDC, you have certainly heard about the CITC many times. But did you know that this program has been enthusiastically embraced by both Governor Patrick (watch video) and Governor-elect Charlie Baker (watch VIDEO)? Both see the power of this public-private partnership and the power of resident-led community development.
We hope that you will consider the views of both our current and future Governors and use the CITC program to increase the power of your personal donations this holiday season.
You can participate in this program by donating on-line to the United Way’s Community Partnership Fund, which will then redistribute the gift to CDCs across the state.
You can also give directly to one or more of the 36 CDCs across the state who are participating in the program. To see a list of participating CDCs, CLICK HERE.
Remember, a $1,000 donation will cost as little as $350 once you consider the state and federal tax benefits. For some, the tax benefits might be even larger.
Can you think of a better way to make a difference this holiday season?