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Community Development Corporations

A community development corporation (CDC) is a nonprofit community-based organization. Although they often address issues such as job training and commercial revitalization, CDCs are best known for dealing with housing problems, especially replacing substandard and abandoned housing and providing more affordable housing for low- and moderate-income residents in the neighborhoods in which they serve. They are tax exempt under Section 501(c)(3) of the Internal Revenue Code.

Organization and Profile

CDCs have a staff, typically a combination of paid staff and volunteers, and a board of directors. A comprehensive, systematic study of CDCs (130 in 29 cities surveyed in 1988) found that these CDCs, with an average life of 12 years, had an average staff size of 19, with the median staff size being seven. A 2005 national CDC survey found a median paid staff size of 10. Typically, staff members, especially the executive director, play the key role in the development of policy and the implementation of programs. CDC boards also play an important role in determining their direction. CDCs usually operate in one or more neighborhoods, with their service boundaries generally identified with these neighborhoods. Resident representatives can be a majority or plurality of CDC board members. Other local institutions are usually represented, such as churches, civic organizations, and business groups. Outside representatives may include those from city government and financial lenders.

CDCs rely on a wide variety of funding sources, both for operating support and project development and management. These are both governmental and private (banks, corporations, and philanthropic foundations). CDCs have also received financial support from national organizations such as the Local Initiatives Support Corporation (LISC) associated with the Ford Foundation and Enterprise Community Partners. Another example is the National Community Development Initiative (NCDI), which is a consortium of major corporations, national philanthropic foundations, and the U.S. Department of Housing and Urban Development. The NCDI channeled funding to CDCs in 23 of the largest cities.

In addition to these national “intermediaries,” there are state and local CDC partnership networks. Examples of these local CDC networks include the Metropolitan Boston Housing Partnership, the Chicago Rehab Network, the Cleveland Housing Network, and the Pittsburgh Partnership for Neighborhood Development. These partnership networks comprise CDCs cooperating in jointly seeking funding, managing projects, and training staff. An example of a local intermediary is Neighborhood Progress, Inc., in Cleveland.

Origins

CDCs can trace their antecedents to the late 19th century and Progressive Era urban and housing reform movements. Reformers seeking to improve conditions in urban slums, especially those inhabited by immigrants, in lieu of governmental programs for housing the poor sought to persuade enlightened philanthropists to invest in limited-dividend housing as an alternative to slum tenements. This effort failed to attract many investors. It was not until the advent of the public housing program in 1937 that the federal government became involved in addressing the lack of livable low-income housing.

The modern CDC movement traces its origin to 1966, when Senator Robert F. Kennedy successfully sponsored special impact legislation to authorize the federal antipoverty program to fund large-scale CDCs in selected neighborhoods. The first of these was the Bedford-Stuyvesant Restoration Corporation in Brooklyn, New York. The anti-“redlining” movement of the 1970s spawned more CDCs seeking to promote reinvestment in poor, mostly urban neighborhoods where there was much poverty and blighted housing. Many were offshoots of parent community-advocacy organizations in this era.

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