Community Economic Development and Community Change (Projects (Efforts to…
Community Economic Development and Community Change
the local neighborhood is not a self-contained economic unit, but part of larger markets and higher levels of economic activity and decision making.
the broad economic trends and governmental policies that were instrumental in creating the conditions that led to isolated neighborhoods
of persistent poverty continue
focuses on economic development in a specific
neighborhood, but also that it focuses on the process of community building
community will play an active
role in the economic development process and gain access, participation,
and ownership of the economic activities in the locality.4
contribute to sustained economic development (and vice versa).
the field looks for outcomes relating to community building and community development in addition to economic outcomes.
the community is treated as both an input and an output in community economic development.
stimulating local job creation and aggregate business
Increasing the quantity and quality of jobs available in the neighborhood
and ensuring that local residents are hired are also common objectives,
as are altering the mix of businesses in the community so residents can have
greater access to basic consumer goods and services.
Increasing the access,
participation, and ownership of community residents in the economic activities
of the locality
reducing barriers to credit,
and providing technical
support and assistance to firms and businesses.
Others focus on attracting
outside investments and metropolitan businesses to the local economy.
increase asset accumulation and access to capital
low-income residents continue to face structural barriers,
such as minimum deposit requirements,
high service fees,
and complex paperwork
Monitoring CRA compliance and exerting pressure on commercial banks
alternative neighborhood financing and
developed products and processes that can be used by conventional institutions that are struggling to meet their CRA obligations
Comunity Credit Unions
some questions have been raised about the growth and overall financial
stability of some community credit unions
Community Development Banks
Individual Development Accounts
promotes asset accumulation among low-income households by providing opportunities and incentives for opening personal savings accounts.
provision of support services is critical, and some
participants will require fairly intensive case management
targeted lending programs that offer special funding
arrangements, counseling, and other supports for low-income individuals who
want to buy a home, start a business, or become self-employed
improving the general business climate, including physical infrastructure improvements
help promote business
development and business investment as well as improve the appearance of the
developing commercial real estate to make the building stock more usable and
upgrading building facades and improving window dressing;
improving the appearance of the streets by increasing trash collection, removing
graffiti or turning it into a tourist attraction (as has been done in Harlem).
Better lighting and streetscaping also help.
providing additional space for businesses, merchants, and restaurants,
and encouraging more residents and nonresidents to shop in neighborhood
stores and patronize neighborhood businesses
increased willingness on the part of outside groups to fund projects and invest
money and other resources in the local community.
help make travel in and out of the commercial area more attractive,
safer, and easier for both residents and nonresidents.
This can increase the
number of people who come into the area to shop or work,
consumer markets, increasing the level of aggregate business activity,
it easier for local businesses to find employees.
It has also been argued that
increased foot traffic in a commercial area can by itself contribute to less crime
and a sense of progress, which increases community pride and encourages investment.
rehabilitation and construction can also provide employment opportunities for
Organizing local merchants or business owners to work together is
another strategy that can produce improvements in the local business environment.
Community festivals can be another way to strengthen community
ties, promote local businesses, and entice nonresidents to a community.
assisting business development directly
• Strategies to link citywide economic development with employment opportunities for local residents
First Source hiring agreement ordinances
offering business incentives in exchange for specific guarantees
about hiring community residents and following up with efforts to ensure that
the businesses are supplied with a steady flow of job applicants
community organizations are actively involved in recruiting,
training, screening, and referring qualified community residents
for noncompliance are important in getting employers to take the requirements
Workforce development strategies
local organization or organizations work simultaneously with a number
of firms in the same economic sector in order to develop employer networks, set
industry-wide training standards, and create client-focused and career-directed
employment opportunities for community residents.
combines supply and demand side interventions
change the efficiency, institutional practices, and training routines of employers
traditional economic development
aiding the creation or expansion of small businesses
in the neighborhood;
ensure that the benefits of economic development
accrue to the community and its residents rather than to external developers
scholarly opinion remains quite divided
about whether small business development can be a major tool for inner-city
economic development and job creation
need access to capital
need access to management talent
access to networks
Community oriented businesses
not only become viable economic enterprises
but also provide products and services that are useful to the community and
that build other community assets
Types of businesses
home health care for the elderly or disabled;
services related to housing construction, rehabilitation,
and businesses that contribute to environmental improvements,
such as lead reduction and asbestos removal.
sources of employment for low-skilled, entry-level workers,
especially when they are linked to locally based training and hiring efforts
important that these activities
be regarded and treated as economic enterprises and not just as service delivery
CDCs and CBOs can use federal grants awarded through the Job
Opportunities for Low-Income Individuals (JOLI) program to provide technical
and financial assistance to develop self-employment ventures and other
business opportunities for low-income individuals.
attracting established businesses into the area;
in more jobs and income than the community could generate internally by
developing new small businesses.
attract a major retail chain store as an anchor store
in the revitalized shopping district;
traditionally focused on attracting manufacturing
firms to a locality.
125 More recently, attention is being paid to super markets,
big retail stores, back-office operations, and service-oriented businesses
in tourism and entertainment, health care, technology, or insurance
or designating the neighborhood as part of
an economic zone that offers special tax breaks or other incentives to outside
businesses that locate inside the zone.
the weight of the evidence is “not encouraging” about the potential
of state-sponsored enterprise zone programs to increase employment
they failed to offer sufficient
incentives for hiring local residents;
offered investment credits that were not
linked to the types of jobs that local residents were likely to qualify for,
not provide opportunities to prepare residents for employment.
offering tax credits or other business incentives
on a project by project basis;
the availability of incentives is rated quite low on
a scale of factors that influence decisions about where to locate a business.
it might be important to negotiate hiring agreements as part of the
retaining existing businesses that could expand their markets and improve production
and reduce costs by relocating
Aspen Roundtable measurement website (www.aspenmeasures.org) for information
on the community economic development measures and data sources
Efforts to promote asset accumulation and access to capital among community
Projects to improve a neighborhood’s physical appearance or the safety of
its commercial or residential areas
Efforts to organize community groups around economic development
projects or to
connect local residents or organizations to outside networks
or institutions important to the process
Targeted economic development projects aimed at developing and
expanding local businesses,
promoting local entrepreneurship,
businesses into the community from the outside, or creating employment
opportunities for local residents
Workforce development and job brokering strategies to prepare local
residents for jobs in or outside the community
Theory of Change
Economic Development Outcomes
Increased community access to sources of capital
• Improvements in the general business climate
• An increase in the number of healthy businesses (as measured by
increased sales, increased number of new and repeat customers,
and increased income)
An increase in the number of healthy businesses owned by local residents
• Increased employment opportunities for residents
Increased entree into the economic mainstream for some residents
Improvements in the price, quality, or mix of goods and services that are
available locally to community residents
• Growth in the size of the local entrepreneurial class
Increased asset accumulation
Community Development Outcomes
Improved quality of space
More use of commercial district
Improved organizational capacity
and local leadership
Improved reputation of community
organizations among outsiders
Improved civic pride
Community Development Inputs
Improved safety and security
Community Building Inputs
Resident participation in economic
Increased networking and
Human resources development
Economic Development Inputs
Commercial real estate development
Business promotion efforts
Small business incubators
CCI-sponsored business ventures
Employment linkage programs
Incentive programs to attract
Incentive programs to retain
The main interim economic outcomes relate to increases in consumer demand.
more residents and nonresidents might come
into the commercial area to work or shop.
intermediate outcomes on the community development
Enhanced organizational capacity,
in the reputation of local groups and the community in general among
(1) outside groups will view the
neighborhood in a positive light, want to do business or projects in the community,
or provide resources to the community; and (
2) community groups will be
able to put the additional resources to effective use.
Long Term Outcomes
and reinvestment in the community
reintegration of the neighborhood into the market system.”
Sequence of Actions
successful business development
can stimulate community development if local business owners use some
increased profit to help improve and maintain their storefronts and make other
improvements in the commercial district.25
Conversely, another common approach
is to use community resources to improve the commercial district with
the aim of stimulating business development.