COMMUNITY DEVELOPMENT CORPORATIONS

COMMUNITY DEVELOPMENT CORPORATIONS (CDCs) are nonprofit, community-focused entities whose mission is to support their affiliated city neighborhoods with a range of programs such as affordable housing, economic development, safety and social services. CDCs also provide an important bridge for connecting residents to city governments. CDC oversight typically comprises a paid executive director and small staff, along with a volunteer board, all of whom work together to formulate and enact community-based initiatives. 

CDCs began in New York City where, in 1966, Senator Robert F. Kennedy and his aides floated the idea of a community development corporation to—as former senator and UN ambassador Daniel Patrick Moynihan explained, “get the market to do what the [government] bureaucracy cannot.” The Ford Foundation and federal government invested heavily in the undertaking. The nation’s first CDC was subsequently launched in New York’s Bedford-Stuyvesant neighborhood. 

Over the next 10 years, CDCs were launched nationwide, generally in poor inner-city and rural areas. One early adopter was Pittsburgh where, in 1968, an inner-city block club, a local bank, and a foundation collaborated to give home-improvement loans and advice to residents whose low incomes rendered them too risky for conventional banks. 

In Cleveland, the first CDC was the Hough Area Development Corporation, formed in 1968. Similar to the Bedford-Stuyvesant model, HADC was supported by the U.S. Office of Economic Opportunity. HADC received an initial federal grant of $1.6 million, which it used to implement programs focused on low-income housing and community-controlled enterprise. Between 1968 and 1984, HADC helped create more than 600 units of low-income housing, a mixed-use community center and a manufacturing subsidiary that employed as many as 100 people. 

More Cleveland CDCs soon came into existence, albeit without the direct federal funding that HADC enjoyed. One such pioneer was Famicos Foundation, a Glenville-area initiative formed in 1970. Famicos is considered the first Cleveland-area CDC to apply a "lease-purchase" model, which involves acquiring and rehabilitating vacant or condemned homes and leasing them to poor families with the intent of enabling tenants to purchase the home after a 15-year residency. In 1981, Famicos helped launch the Cleveland Housing Network, now known as CHN Housing Partners. One of CHN’s flagship programs—tying low-income housing tax credits to affordable homeownership opportunities—is a highly successful example of the lease-purchase model. 

Early on, CDCs lobbied corporations to set up operations in city neighborhoods. Success in this area was moderate and many shifted their principal focus to housing assistance, for which there were both subsidies and increasing demand. Stabilizing the lives and residences of low-income people thus became the most vaunted and successful mission of Cleveland’s early CDCs. Other core missions included community organizing, political advocacy, and helping to give residents a voice in local government. Virtually all CDCs are now thought of as cornerstones for community planning.

By 1989, the City of Cleveland had formalized its support for CDCs and neighborhood housing development by dedicating nearly $9 million to housing-focused non-profits through the Community Development Block Grant (CDBG) program. To this day, these grants constitute the financial backbone of most Cleveland CDCs. The other primary chunk comes from Cleveland Neighborhood Progress (formerly Neighborhood Progress Incorporated), an outgrowth of the Cleveland Neighborhood Partnership Program. NPI was created in 1987 by the Gund Foundation, Cleveland Foundation and Mandel Foundation to support community development. The organization leverages corporate and foundation support to consolidate funding for CDCs. Smaller grants and donations generally compose the remainder of CDC funding. 

Today, there are CDCs in every U.S. state— almost 5,000 in total. Nearly all Cleveland neighborhoods have a CDC, the infrequent exceptions being communities that have been unable to marshal volunteers, resources or qualified executive staff. Any resident or owner of a neighborhood business can become a CDC member and, if nominated/elected, serve on a CDC board. Most board meetings are open to the public, as are subcommittee meetings, which may focus on tasks such as community organizing, safety, housing, economic development, strategic planning, governance, event planning, marketing, fundraising and the arts. Neighborhood block clubs, sanctioned by each CDC, also meet regularly. 

Cleveland has roughly 30 CDCs, supporting neighborhoods as far as Collinwood to the east, Old Brooklyn to the south, and Hopkins and Kamm’s Neighborhood to the west. Advocating at the city center are several CDCs, including Flats Forward, Downtown Cleveland Alliance, Historic Gateway Development Inc., and Historic Warehouse District.

Christopher Roy 

Last updated: 7/24/2020

Hexter, Kathryn and Norman Krumholz. Executive Summary: Re-thinking the Future of Cleveland’s Neighborhood Developers. Center for Community Planning and Development, Maxine Goodman Levin College of Urban Affairs, Cleveland State University, 2012.

Neighborhood Progress Incorporated.

The Community Development System: Urban Politics and the Practice of Neighborhood Redevelopment in two American Cities from the 1960s to the 1990s.

The Past, Present, and Future of Community Development: The Changing Face of Achieving Equity in Health, Education, and Housing in the United States. 

Overview of Community Development Corporations (CDCs)