September 9, 2019; Long Beach Business Journal
Community and economic development professionals in cities use a variety of strategies to grow their local communities, shape their economies, and advance equity and inclusion. As NPQ has reported, both in its newswires and through its Economy Remix series, including community voices and enhancing relationships is vital to any successful community or economic development effort. While there are a growing number of new community development mechanisms, such as the federal Opportunity Zone initiative, many traditional approaches still have tremendous value.
One often overlooked instrument is the Community Development Corporation (CDC), which has a rich history of mobilizing billions of dollars—$12 billion in the state of New Jersey alone—and creating resilient structures within low-income communities. For decades, CDCs have tackled some of America’s most challenging problems: neighborhood revitalization, affordable housing, community economic development, workforce development and job creation, financial empowerment, and food access. Through these efforts, CDCs have local impact by improving economic opportunities and social conditions in the communities they serve. Central to the CDC model is community engagement, an approach detailed in NPQ’s June 2018 newswire on Detroit’s Sinai-Grace Guild Community Development Corporation.
Unfortunately, for many communities, the CDC model has faded away, with cuts to funding and new philosophies taking root. However, in Long Beach, California, city officials have resurrected the model through a partnership with a nonprofit. This new CDC’s underlying goal is advancing economic inclusion, making the CDC model worth revisiting, for both community economic development professionals and nonprofits alike.
The first CDC was founded 52 years ago, in 1967, amidst a complex set of social and racial factors in the Brooklyn neighborhood of Bedford-Stuyvesant. Responding to increasing racial tensions both within New York City and nationally, Senator Robert F. Kennedy visited Bedford-Stuyvesant and worked with local residents to forge a new community development model that still underpins the foundational philosophy of many community development efforts. The CDC received the support of both Kennedy and New York state’s Republican Senator Jacob Javits, helping set the tone for bipartisan backing for the CDC model’s expansion across the country.
Kennedy’s vision for community development can be best summed up by Jack Newfield, in his 1998 book Robert Kennedy: A Memoir, who notes Kennedy’s holistic view of community development in the mid-1960s. Newfield quotes Kennedy, saying, “An effort in one problem area is almost worthless. A program for housing, without simultaneous programs for jobs, education, welfare reform, health, and economic development cannot succeed. The whole community must be involved as a whole.”
Kennedy’s model, later formalized through federal legislation, called for the creation of the Bedford Stuyvesant Restoration Corporation, the nation’s first CDC, which still exists today and has attracted more than $500 million in economic development investments since its founding.
Building on the legacy of the Bedford Stuyvesant Restoration Corporation, this week the Long Beach City Council approved funds to establish a CDC. The CDC will be managed by the Long Beach Community Action Partnership, a multiservice agency that provides energy assistance, youth programming, community service grants, and other programs that address poverty local to Long Beach. According to Alena Maschke, writing for the Long Beach Business Journal, the CDC’s staffing structure and programming will be defined through a series of meetings with such stakeholders as local educational institutions, small business owners, and nonprofit organizations. This type of inclusive involvement is at the heart of the initiative.
In April 2017, the Long Beach City Council adopted a 10-year vision for economic development, known as the Blueprint, which focuses on opportunity for workers, investors and entrepreneurs. A central element of the Blueprint is economic inclusion, and in April 2018, the city conducted the Everyone In: Economic Inclusion Listening Tour, focused on engaging those who are traditionally underrepresented and marginalized by economic development policies and practices. The result of the listening tour was a report detailing 12 Community Solution strategies, ranging from multilingual financial literacy classes to the creation of community hubs and resource centers. Building on this effort is the new CDC, which aims to increase access for residents and businesses alike by leveraging resources for economic inclusion.
Sign up for our free newsletters
Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.
While CDCs are not as common nationally as they once were, they still have a significant impact, which Long Beach hopes to replicate. For example, the Ohio CDC Association’s most recent impact report says CDCs across Ohio made substantial gains in multiple areas. In 2016 alone, these CDCs:
- “Invested over $350 million in their communities through affordable housing, serving more than 39,000 households”
- “Helped over 42,000 households with job training and small business development, resulting in 1,000 new or expanded local businesses that created more than 2,500 jobs in low income communities”
- “Connected over 131,000 Ohio and to CDC food programs, including investing $2.6 million in food access programs”
- “Improved the financial well-being of 35,000 people by investing $6.5 million in financial empowerment programs which leveraged more than $65 million of assets for low income people”
In fact, dozens of states have their own community economic development associations, many of whom have members that are CDCs. Nationally, the National Alliance of Community Economic Development Associations assists these state-based organizations by building capacity, advocating for public policies and resources, convening organizations to share resources and solve common problems, and partnering with other groups such as arts organizations and healthcare facilities.
Although the new CDC in Long Beach has some philanthropic support and is being managed by a reputable nonprofit organization, it remains to be seen what its long-term impacts will be. Regardless, its aspirations for economic inclusion point to the original intent of the Economic Opportunity Act of 1964, the signature piece of legislation that is credited with launching CDCs in every state as well as more than 1,000 Community Action Agencies nationally.
Cited by some as the United States’ official declaration of War on Poverty, the Act specified a range of workforce training programs, urban and rural community action programs, special programs to combat poverty in rural areas, and employment and investment incentives. It is only fitting to close this newswire with a look back at the Act’s declaration of purpose, as it is both a haunting reminder of the entrenched and systemic reality of poverty in America, and underscores the importance of exploring all solutions to advance economic inclusion:
August 20, 1964
Sec 2. Although the economic well-being and prosperity of the United States have progressed to a level surpassing any achieved in world history, and although these benefits are widely shared throughout the Nation, poverty continues to be the lot of a substantial number of our people. The United States can achieve its full economic and social potential as a nation only if every individual has the opportunity to contribute to the full extent of his capabilities and to participate in the workings of our society. It is, therefore, the policy of the United States to eliminate the paradox of poverty in the midst of plenty in this Nation by opening to everyone the opportunity for education and training, the opportunity to work, and the opportunity to live in decency and dignity. It is the purpose of this Act to strengthen, supplement, and coordinate efforts in furtherance of that policy.