Revised, August 1996
{Paragraph beginning "CDCs were joining local Chambers of Commerce..."
Randy Stoecker
Department of Sociology, Anthropology, Social Work
University of Toledo
Toledo, OH, 43606
(419) 530-4975
fax:  (419) 530-8406

Table of Contents

This is a revised version of papers presented at the 1995 Planners Network annual meetings and the 1995 American Sociological Association annual meetings. I thank Tim Mungavan, Ron Randall, Lucy Gerlach, Herb Rubin, Ed Goetz, Angela Stuber, Tim Siegel, Mickey Lauria, John Cabral, Wendy Plotkin, Dave Beckwith, Pedro Huesa, Elliot Smith, and anonymous reviewers for the Journal of Urban Affairs for detailed comments on earlier drafts.


This paper questions the viability of an urban redevelopment model that relies on small community development corporations (CDCs), and proposes an alternative. Because most CDCs are severely undercapitalized, they can not keep up with accelerating decay. But their existence, and the emphasis placed on their supposed successes, allows elites to blame poor neighborhood CDCs rather than external conditions for redevelopment failure. The model also emphasizes that CDCs be community-based, but because their resource base is controlled from outside the neighborhood there is really very little community control over CDCs. CDCs may even delegitimize more empowerment-focused community organizing attempts by making them appear radical. Consequently, the CDC development process may actually disorganize poor communities by creating internal competition or disrupting social networks. An alternative model of neighborhood redevelopment is proposed which emphasizes community organizing, community- controlled planning, and high-capacity multi-local CDCs held accountable through a strong community organizing process.


For over a decade now I have followed and worked with community development corporations, or CDCs. Characterized by an IRS 501(c)(3) non-profit tax-exempt status, a volunteer board, and an emphasis on physical redevelopment, CDCs have taken on the heroic task of trying to rebuild communities devastated by capitalist disinvestment. They have recently been popularized by public television, private press reports, and special set-aside funding in the 1990 federal Housing Act. I have become increasingly distressed, however, by the lack of impact they have, and by our fading memory of why there are CDCs to begin with. This paper analyzes the role of the CDC in the urban political economy, exploring what purposes it serves, and what impacts it can have. It also proposes an alternative model of urban redevelopment that emphasizes community organizing, community-based planning, and high-capacity multi-local CDCs.

The CDC can be traced back to Robert Kennedy's 1966 tour of Bedford-Stuyvesant, and the subsequent Special Impact Amendment to the Economic Opportunity Act (Bratt, 1989:191), which led to CDCs such as the Bed-Stuy Restoration Corporation. There were fewer than 100 of these first generation CDCs (Peirce and Steinbach, 1990; Zdenek, 1987), and their primary mission was job creation (Kelly, 1977:24). Between 500 and 1000 "second wave" CDCs formed during the 1970s (Peirce and Steinbach, 1990; Zdenek, 1987) from groups protesting redlining and displacement- based urban renewal (Vidal, 1992). These second wave CDCs shifted away from economic development toward housing development (Peirce and Steinbach, 1990; Vidal, 1992). With them came private philanthropy such as the Ford Foundation's Grey Areas Program (Peirce and Steinbach, 1990; Bratt, 1989:191), support groups, intermediaries, and funding from Title VII of the 1974 Community Services Act. Federal funding for CDCs between 1966 and 1980 rose to over $500 million. In the 1980s the number of CDCs expanded to as many as 2,000 (Zdenek, 1987; Vidal, 1992) as debt- weary governments at all levels withdrew from the pressing problem of urban poverty.

It is unclear, however, how much CDCs have accomplished. They are touted as having produced "thousands" of housing units in Boston, New York, Chicago, and San Francisco (Peirce and Steinbach, 1990). Vidal (1992) puts CDC's median annual housing at 21 units, compared to for-profits' 25 units per year. The National Congress for Community Economic Development in 1991 estimated that CDCs had created 320,000 units of housing--three times the production of public housing (Vidal, 1992), with another 80,000 units added since (NCCED, 1995). While somewhere between one-third and one-half of CDCs are involved in business development (Vidal, 1992; NCCED, 1989), housing is the biggest emphasis and the most carefully tracked (Gittell, Gross and Newman, 1994; Vidal, 1992). The success cases are also heavily promoted, such as Fr. William Linder's New Community Corporation in Newark (Lemann, 1994). Vidal (1992) concludes that 21 percent of CDC housing and business development programs, and 31 percent of CDC commercial property programs have substantially impacted their neighborhoods.

Those numbers hide some uncomfortable realities. On either side of that 21 unit median is wide variability that is not randomly distributed. In cities where there is one strong CDC there tend to be others, but other cities show little to no CDC housing production (Goetz, 1992). Research in Toledo, Ohio, for example, showed that no CDC produced 21 units of housing in a year (Stoecker, 1989), though recently CDCs have planned more activity. It is unclear, also, how much of the planned productivity actually comes to fruition. Berndt (1977:111) found that the ABT Associates study of first wave CDCs listed his CDC as having planned or completed 172 units, even though none were ever produced. Likewise, some Toledo CDC directors exaggerated their budgets and productivity in initial evaluation research (Stoecker, 1989). In the 1970s, evaluations ranked one-third of CDCs as highly successful and one-third as low (Kelly, 1977:111). Numerous analysts, including CDC advocates, cannot find evidence that CDCs have enough impact to reverse neighborhood decline (Rubin, 1994; Giloth et al., 1992; Berndt, 1977:133; Peirce and Steinbach, 1990), or that the development they produce wouldn't have happened anyway (Marquez, 1993). CDCs do better than local housing authorities at providing housing, but it's "a drop in an ocean of need." (Twelvetrees, 1989:155)--only .07 percent of the United States annual housing total (National Congress for Community Economic Development, 1989; cited in Adams, 1990). We could easily say, using Vidal's (1992) research, that only 21 percent of housing and business development programs, and only 31 percent of commercial property programs, have substantially impacted their neighborhoods. Twelvetrees (1989:12-13) reviews a large literature showing the overall failure rate of CDCs. He argues that if CDCs are to be rated according to three levels of success--staying in existence, achieving their major objectives, and achieving those objectives efficiently--then only the largest CDCs show success beyond the first level (p. 137). Indicators of community development such as quality of life, community stability, resident health and happiness, and personal empowerment are rarely referred to (Taub, 1990). Vidal (1989) notes that only 25 percent of CDCs say they have sparked major increases in community pride, and half say they have made "some" progress in strengthening community leadership. Keating et al (1990:213) conclude that CDCs fail to achieve the broader goals of "political and economic independence and self-sufficiency. "

These questions about success has led some to wonder if CDCs are a case of social movement co-optation (Gittell, 1980:36). Chicago CDCs resisted the notion that they should redevelop neighborhoods in such a way they would no longer need CDCs (Giloth et al. 1992). Many neighborhood association members see CDCs as having lost their grassroots mentality (Goetz and Sidney, 1994). Gittell (1980:40) showed that lower class voluntary organizations were more likely than middle class organizations to shift from advocacy to service because of problems maintaining long-term organizing efforts and financial support. Consequently, critics charge, CDCs have become just another developer following a supply-side free market approach to redevelopment (Lenz, 1988; Taub, 1990) rather than fighting for the social change necessary to support sustainable communities. Lemann (1994:30) charges that "Ghetto revitalization projects often have the word 'corporation' in their name in order to enhance their appeal to business contributors." Taub (1990:2) relates that "The CDC world is filled with tales of ruthless screening, fast evictions, and strict enforcement of behavioral standards." Lenz (1988:25) decries the "terrible paradox of thriving organizations and dying communities."

CDC advocates respond passionately. Like other service providers (Tracy and Stoecker, 1993), they see their work as at least a necessary band-aid. We should not expect high productivity from CDCs, they say, because they operate in "weak markets"--precisely why for-profit developers avoid those neighborhoods. Without CDCs, they argue, there would be no development in urban America's most deteriorated neighborhoods (Hamilton, 1992; Bratt, 1989:204; Vidal, 1992; Zdenek, 1987:115). Further, CDCs are more likely to meet the needs of the poor and even raise expectations that will lead to political pressure for social change (Hamilton, 1992; Bratt, 1989:204; Rubin, 1995; 1994b). Additionally, CDC adherents argue that the community organizing model--a more confrontational, conflict oriented political approach to addressing poverty--is no longer appropriate because neighborhood structure has changed, the targets are hidden, and there are fewer local vital organizations. They also critique organizing as manipulative and unrepresentative (Giloth, 1985; Goetz and Sidney, 1993).

Missing in this debate is a theoretical understanding of the CDC. How does the CDC interact with the contradictions of urban capitalism? What are the political-economic forces impinging on the CDC, potentially hindering effectiveness? To understand these questions we must look at the urban political economy and how the CDC model of urban redevelopment interacts with it.


The continuing critiques of CDCs across three decades suggests more is at issue than imperfect practice. My argument is not that CDCs have been doing bad things, or operate with evil intent. Indeed, my own work has shown the crucial role of the CDC in producing affordable housing (Stoecker, 1994). As Lenz (1988:25) notes, CDC practitioners "are good people with bad theory." Many CDC directors hold dearly to the goals of community empowerment and political activism (Rubin, 1994b; 1966). Some CDCs even succeed at avoiding the problems discussed below (Rubin, 1996), but those exceptions only serve to emphasize that it is not the CDCs, but the model we hold up for CDCs to meet and the American political economy that are the problems.

From the beginning CDCs were to accomplish bottom-up, comprehensive redevelopment (Lemann 1994; Kelly, 1977:22; Peirce and Steinbach, 1990:34; Bratt, 1989; Rubin, 1993, 1993b; 1994; 1994b; Zdenek, 1987; Twelvetrees, 1989; Keating et al, 1990; Marquez, 1993). And while some CDCs have been trying to focus their efforts, the popular imagination, analysts (Keating et al., 1990; Gittel et al., 1995), major foundation-sponsored programs such as the Ford Foundation's Neighborhood and Family initiative (Anglin, 1994), and federal programs such as Empowerment Zone/Enterprise Community program have put even more pressure on CDCs to follow this model. The "bottom-up" approach is supposed to help the community determine how to conduct redevelopment, and produce more homes and businesses owned by community members. Some CDC directors emphatically assert that "We are a community- controlled developer, not simply a not-for-profit developer building in a low-income community." (Rubin, 1994b:408). The second ideal is to empower whole communities through comprehensive treatment of social and physical conditions (Marquez, 1993), measuring success in terms of both physical redevelopment and community regeneration, participation, and empowerment (Rubin, 1994).

Now, as Kelly (1977:18) says, this model is "socialistic- sounding" but "The Socialistic aspect is more apparent than real." For the third part of the CDC model is an acceptance of supply-side economic models and "free"-market philosophy. The CDC model originally attempted to correct three market failures: 1) The inability of potential investors to see opportunities in the neighborhood; 2) profit maximization that prevented socially conscious investing; 3) social/legal restrictions on investment such as zoning laws. However, as government finances disappeared, CDCs had to give up even this moderate "directed capitalism" and "accommodate themselves to, rather than redirect, the course of the free market." (Marquez, 1993:289). The goal is not to transform society but to "extend the benefits of the American economic [those] that are left out." (Peirce and Steinbach, 1990:33)(my emphasis). Supply-side approaches of attracting capital are emphasized over demand-side approaches and political action (Kane and Sand, 1988:162; Lenz, 1988; Taub, 1990). At best, poor neighborhoods are seen as "weak markets" (Vidal, 1992) requiring reinvestment rather than as oppressed communities requiring mobilization, leading CDCs to work within the existing economic rules (Madison, 1995). Individual analysts may promote ideas such as social ownership of housing (Stone, 1993:192-193) but it is the rare CDC that pursues such an anti-capitalist route.

It is important to understand that this model can only work by assuming that capital (in the form of for-profit corporations) and poor communities have complementary interests. As Berndt (1977:126) noted early on, "CDCs have accepted the rationale of the corporation within capitalist society." Some analysts lump together neighborhood residents and absentee business owners as embodiments of "community-based" membership on CDC boards (see Vidal, 1992), a distinction that even state funding programs maintain (Stoecker, 1994:193). CDCs have come to operate more and more like businesses (Taub, 1990; Vidal, 1992), narrowing their activities to physical development (Twelvetrees, 1989:31). Many CDCs impose rules on tenants that are no different from any other landlord, rather than empowering residents to govern themselves (Taub, 1990; Bratt, 1994; Rubin, 1996).


Understanding the problems with the CDC model requires understanding the relationship between capital and community. New Urban Sociology theorists and others argue that the relationship between capital and community is at least potentially contradictory (Stoecker, 1994; Feagin and Parker, 1990; Logan and Molotch, 1987; Mollenkopf, 1981; Capek and Gilderbloom, 1992; Swanstrom, 1993; Bluestone and Harrison, 1982). Community's tendency is to preserve neighborhood space as a "use value" for the service of community members, while capital's tendency is to convert neighborhood space into "exchange values" that can be speculated on for a profit. This sets up an antagonistic relationship. Capital's conversion of neighborhood space into exchange values drives up rents, destroys green space, eliminates neighborhood-based commerce, and disrupts neighboring patterns. Capital is less willing to invest in neighborhood redevelopment that maintains neighborhood spaces as use values because that would prevent speculation and limit profit accumulation. Either through destructive investment, or disinvestment, community suffers.

Further antagonistic relationships exist in the city between workers and employers, and between renters and rentiers (Gottdiener and Feagin, 1988). Most important to the dynamics of this struggle, however, are those who are neither clearly workers or owners, renters or rentiers. Those in the middle--the middle class of professionals, managers, and small business owners living in mortgaged housing-- occupy contradictory locations between the haves and have nots (Davis, 1991; Saunders, 1978; Wright, 1985). The members of this vast middle are part owner, and part proletariat. They also control their own housing, but still pay rent in the form of a mortgage. As a consequence, they are pulled in two directions at once. They resent the banker who controls their mortgage and the renter who lives in the duplex next door. They resent the company president and the employees they manage. The middle class, because of their contradictory location between the antagonistic class positions of haves and have nots in both their work lives and their consumer lives, are culturally unpredictable and politically constrained.

It is this insecure and unpredictable middle location that CDCs occupy. CDCs manage capital, like capitalists, but don't invest it for a profit. They manage projects, but within the constraints set by their funders. They try to be community oriented while their purse strings are held by outsiders. They are pressured by capital to produce exchange values in the form of capitalist business spaces and rental housing. They are pressured by communities to produce use values in the form of services, home ownership, and green spaces. This is more than a "double bottom-line" (Bratt et al., 1994). It is the internalization of the capital-community contradiction and it leads to trouble. If there were no contradiction between capital and community, these would not be problems. But because that contradiction lays at the background, presenting itself at every eviction, every housing protest, every strike, every layoff, every foreclosure, and every bankruptcy, and every development deal, the CDC is caught between worlds. The result is three problems besetting the CDC model: 1) the limits to comprehensiveness, 2) the myth of community control, and 3) the development of disorganization.

A. The limits to comprehensiveness

CDC work requires expertise ranging from finance, insurance, and real estate to architecture to zoning laws, along with a vast amount of capital. The very things that can make CDCs "community-based"--their smallness and neighborhood roots-- inhibit access to the capital and experts comprehensiveness demands. The community-based ideology in the CDC model promotes amateurism and volunteerism (Adams, 1990), isolating CDCs from prominent capital actors and experts (Stoecker, 1990). Evaluations of CDCs show that they needed training and overall capacity enhancement in the 1970's and the 1990's (Vidal, 1992; Kelly; 1994). The median CDC core annual operating budget is only about $200,000 to begin with (Vidal, 1992:46), and there is a clear relationship between budget and success. Kelly (1977:117) found that two-thirds of the most successful CDCs had $2 million plus budgets, but only one-quarter of the least and moderately successful had that much. In Toledo, only CDCs with administrative budgets over $100,000 accomplished any redevelopment (Stoecker, 1989). Many CDCs, propelled by the greater availability of project money compared to operating support (Goetz, 1992), take on more than they can handle (Rubin, 1993b; Twelvetrees, 1989:157-158). Berndt (1977:59) disclosed that, of all the economic development projects begun by the Union Sarah Economic Development Corporation, only one was still functioning by the time his book was written. Among all subsidized housing developed in 1970s, the foreclosure rate for non-profit developers was four times that of for-profits (Bratt, 1994). And every failed project makes the next project more likely to fail (Vidal, 1992).

The ideology of the CDC as community-based also leads to a belief that the CDC is an alternative to government programs (Adams, 1990), and only about half of CDC operating budget needs are met through government sources (Goetz, 1993:122). The public sector is also reluctant to commit funds to CDCs because of the lack of CDC productivity (Rubin, 1993b)--caused by inadequate funding to begin with. Also, since CDCs purport to be community controlled, public administrators rationalize that their funding should come from the community as well. The impossibility of that occurring is ignored (Adams, 1990) and was only reinforced by the minuscule set-asides for CDCs written into the 1990 National Affordable Housing Act (Center for Community Change, 1991) that forces CDCs to expand even further beyond their capacity in order to have any hope of getting more money (compared to the billions of dollars in tax breaks for corporations to participate in the EZ/EC program (Lemann, 1994). As Piven and Cloward (1993) argue for anti-poverty spending in general, government funding of CDCs may be most useful for maintaining social order. Enough money is provided to stave off social unrest, but not enough to threaten the unequal balance of power. Conservative government celebrates CDCs while providing just enough money to help them fail, leading some to charge that government and corporations are "systematically hostile" to empowering community development (Madison, 1995).

The consequence is victim-blaming. CDCs who stay small either by choice or by failure in the funding competition are forced to live a hand-to-mouth existence and miss out on fleeting opportunities because the grant won't come until next year and the opportunity will pass next week (Twelvetrees, 1989:101; Rubin, 1993b). The "matching grants" game delays and even destroys projects (Rubin, 1993b). But developers are believed to fail or succeed based on their skills, not their circumstances, so project failure is attributed to the CDC (and thus the community) doing a bad job. The reality, however, is that CDCs are grotesquely underfunded organizations working in disinvested communities requiring massive capital infusion. "Self-help" is unrealistic under such conditions (Barton, 1977) and "may worsen problems in neighborhoods that require more, not fewer, resources.... An emphasis on self-help should not be used to divert attention from the context..." (Checkoway, 1985:482)

And yet the role of the CDC has become precisely to divert our attention from the context. The media celebrate a single small initiative in a sea of decay which is at serious risk of failure because the CDC cannot keep up with the overall pace of capitalist disinvestment. The public sees small CDC accomplishments portrayed as big victories, and comes to believe there is little need for their taxes or their donations. Then they blame CDCs and their associated communities when redevelopment fails. In Toledo, CDC directors have been pressured to resign for "not producing" in organizations that couldn't produce with the insignificant funding that Toledo foundations and government trickle down (Stoecker, 1990, forthcoming). The CDC in Cedar-Riverside was blamed for failure to purchase commercial buildings it could not afford because capitalist, not community, considerations set the selling prices (Stoecker, 1994:180-182).

Analysts sometimes play into this victim-blaming. Rubin (1993b) says (p. 431) "Once trust has been earned through the completion of successful projects, those in the community-based movement then can work to educate public officials to understand their ethos toward community renewal." But this is a catch-22, since most CDCs won't show success without enormous external funding and expertise up front. Bratt (1989:204) notes that CDCs don't have to shift the perception of responsibility off of government. But it is precisely because the issue is perceiving, rather than documenting, responsibility that CDC failure leads to victim-blaming. Poor communities are shut out of access to media that can help them present the real culprits--corporate disinvestment and government neglect.

Of course, the way to get beyond the problem of smallness and the failure associated with it is to access massive resources. That, however, carries its own burden, and leads to the next problem.

B. The myth of community control

The assumption in the model that CDCs are independent community-based solutions to urban decay mystifies the reality of external control. While some argue that the degree of CDC capitulation to outside elites is overstated (Rubin, 1994), others note that CDCs "are 'based in communities,' but they are not 'community-based.'" (Medoff and Sklar, 1994:260). Many activists see big CDCs as "just a branch of city government, or a front for various corporate funding schemes." (White, 1993). The PBS documentary of CDCs (Vanguard Films, 1992), in its coverage of The Woodlawn Organization, never once mentions its militant Civil Rights movement and community organizing roots.

The problem of maintaining community control is rooted in the fact that poor communities do not have enough community- controlled capital, and must woo outside capital (Berndt, 1977) whose tendency is to transform use values into exchange values. The role of funders in subverting social change efforts has been well established generally (Roelofs, 1987; Jenkins, 1985) and in regard to CDCs (Kelly, 1977:92). The Local Initiatives Support Corporation (LISC), the single most lauded funder of CDCs (Lenz, 1988; Peirce and Steinbach, 1990; Bratt, 1989:328), at the local level is controlled by elites who often view redevelopment from an exchange value perspective rather than a use value perspective. A Toledo coalition of CDCs, government, and funders was torn apart as one faction dominated by LISC and city hall, and another dominated by small CDCs and organizing groups, struggled over who would control a federal funding windfall and how it would be used (Stoecker, forthcoming). The Chicago LISC has been hesitant to support community, as opposed to real estate, development (Giloth et al., 1992). Other large foundation supporters of CDCs are little different, evaluating CDC proposals for their economic acceptability rather than their ability to serve community needs. And while CDCs may be able to use those funds without technically being co-opted, the funds still impose limitations because they embody the profit principle (Marquez, 1993:227-228; see also Stoecker, 1995b), especially after government funding plummeted in the 1980s and was replaced by comparatively minuscule private sector funding (Keating et al, 1990).

This sets up a secondary contradiction between affordability and control. Outside capital resists supporting redevelopment that maintains community control. Government, bowing to market ideology, follows similar rules. Affordable housing, for example, is created by subsidizing the landlord rather than the tenant. Additionally, CDCs often must choose between acting quickly enough to take advantage of fleeting funding opportunities, and practicing more cumbersome democracy (Twelvetrees, 1989:30-31, 63). When fiscally stressed city governments pressured community organizing groups to do their own housing redevelopment, "Some activists chafed at the changes, recognizing that many groups were losing the steady input and direction from neighborhood residents." (White, 1993:10). Thus, redevelopment that maintains community control is expensive and redevelopment that is affordable requires giving up control to outside funders. The Cedar-Riverside neighborhood in Minneapolis built and rehabbed 550 units of housing, over half of it controlled through lease-hold cooperatives and the remainder controlled through a management cooperative. But they found that, to keep the housing affordable, they had to accept subsidies that would force residents to move if their incomes rose too high. On the other hand, townhouses built with less subsidy were also less affordable (Stoecker, 1994). In the Los Angeles Route 2 corridor redevelopment process, residents did not want outside experts involved, and especially didn't want "Section 8" subsidized units because of the bureaucracy required, but they couldn't get funds otherwise (Heskin, 1991:26-27,73).

In addition, as funding becomes more scarce, CDCs package more complex, time consuming, costly, and hard to manage projects (Twelvetrees, 1989:152; Blakely and Aparicio, 1990; Vidal, 1992; Giloth et al., 1992; Keating et al., 1990). Cedar-Riverside activists had to determine how many families of varying sizes were in the project and then had to match families to houses, adding and subtracting bedrooms in units (and consequently driving up rehab costs) to get each home subsidized (Stoecker, 1994). CDCs often have more complex organizational structures than comparable for-profits, with three quarters having at least one subsidiary (Vidal, 1992). Chicanos Por La Causa had 110 different sources of funding by 1991 (Marquez, 1993). The Cedar- Riverside CDC had numerous sub-corporations, each with its own financial statement, and most board members were unable to follow which subcorporation was being discussed by staff at monthly meetings (Stoecker, 1994). This increasing complexity removes even more control from the community. Control devolves to staff, who often live outside of the community (Lenz, 1988; Vidal, 1992; Berndt, 1977:66-67; 112-114; Kelly, 1974; 1977:86; Giloth et al., 1992) and are more likely to emphasize the technical details of development over community empowerment (Rubin, 1994). CDC boards, at most, provide broad guidance rather than direct decision-making (Marquez, 1993).

Even if the board maintains informed control, it may not represent the community (Taub, 1990). When organizations led by the lower classes shift from advocacy to service, they move "from internal to external dependency" which includes dependency on staff and "imposed leadership." (Gittel, 1980:44). The first Bed-Stuy Restoration Corporation board was dominated by U.S. senator Jacob Javits, Ethel Kennedy, the chairman of Mobil Oil, and the president of Citybank (Berndt, 1977:112-114). Businesses often play a stronger role in directing CDC policy than residents (Vidal, 1992:40). Board members are often appointed or recruited (Kelly, 1977:46; Twelvetrees, 1989:30), and one-third (Vidal, 1992) to one-half (Kelly, 1977:46) live outside of the CDC service area. Research on early CDCs showed the poor to be underrepresented (Kelly, 1977:66; Berndt, 1977:63). Men have also dominated CDC boards, leading to even more of a business orientation in CDCs (Kelly, 1977:58; Gittell, Gross, and Newman, 1994). The fact that board membership is neither glamorous nor exciting also hinders resident participation. Cedar-Riverside was a very politicized neighborhood, but the CDC still resorted to a raffle at each board meeting to maintain a quorum (Stoecker, 1994). This lack of participation can lead to decisions that do not reflect the community, and produce festering resentments (Heskin, 1990:70). Twelvetrees (1989:141) argues that "It is unrealistic to expect a CDC to be a democratic community organization in the sense that it offers opportunities to participate in decision taking to large numbers of residents." Even CDC supporters such as Bratt (1989:312) agree that CDCs don't "necessarily aim for, nor result in, widespread participation by the affected tenants."

Regardless of how much those within CDCs think of themselves as having common interests with the community, it is questionable that they do. Two-thirds of CDCs manage the housing they develop (Vidal, 1992). Consequently, CDCs are landlords, and as landlords have an interest in maintaining the financial solvency of the organization, even if they are nicer about it (Bratt, 1989:234-5). Renters, however, have an interest in maintaining the affordability of their housing (Bratt, 1994; Rubin, 1994). This creates a structural antagonism that divides the CDC from the community. Bratt (1989:234-5) implicitly distinguishes "community-based group" (apparently referring to CDCs) and "its constituency" as if the concepts refer to different things. Keating et al (1990:213), in evaluating CDC success, say "no CDC has developed to the extent that it entirely owns or controls the housing and land" (emphasis mine). Residents also miss the contradiction. When redevelopment fails, they blame each other rather than targeting the external causes. In Cedar-Riverside the control-affordability contradiction nearly tore the community apart, as the community organizing group blamed the CDC and the CDC blamed the community organizing group for the loss of control over one redevelopment project (Stoecker, 1994).

Ultimately, the control-affordability contradiction has " created responsibility without control... [and] transformed political questions for the political community into technical questions more accessible to experts." (Heskin, 1991:73). Under these conditions, the CDC model is in danger of creating weaker rather than stronger communities.

C. The Development of Disorganization

Market processes are unpredictable, unstable, unaccountable, disorganizing things. They allow for the destruction of communities through both speculative investment and disinvestment. When CDCs behave as market-oriented organizations, they become part of the same disorganizing forces. CDCs often compete amongst themselves for funds (Rubin, 1993b), and are pressured to support the capital side of the capital- community contradiction and put organizational profit ahead of community benefit (Twelvetrees, 1989:86, 161; Berndt, 1977:125). Berndt, in 1977 (p.126) charged that CDCs were joining local Chambers of Commerce and that the national-level CDC-support organization -- the National Congress for Community Economic Development -- joined the National Association of Manufacturers (though NCCED states they have no current relationship with NAM). Both the Chamber of Commerce and NAM have consistently opposed legislation protecting the poor. CDCs, then, are enmeshed in the very networks that caused the problems to begin with, and thus limited to development possibilities dictated by the market rather than directed by the people.

When the CDC fails, it contributes to neighborhood decline. When the CDC succeeds, it may also lead to neighborhood decline by disorganizing the community. Community development, when it emphasizes the physical over the social and remains limited to the possibilities dictated by capital, may actually increase turnover, displacement, and otherwise disorganize a community (Taub, 1990). Local economic development, which produces jobs without impacting other neighborhood problems, encourages those who have the jobs to leave (Lemann, 1994; Marquez, 1993).

The market pressures CDCs to produce rental housing, and they often acquiesce, producing 80 percent of their housing as rentals (Goetz and Sidney, 1994). This can disrupt community in two ways. First, renters move more often than homeowners (Capek and Gilderbloom, 1992). Second, homeowners adopt a community control or "ideology of property" position while renters adopt an affordability position, often leading to a struggle for control of neighborhood organizations, including CDCs (Goetz and Sidney, 1993). In Cedar-Riverside this control-affordability contradiction took a bizarre twist. When the community organizing group joined in a development partnership to take over the ailing high-rise housing in its midst, it opposed an expansion of the number of Section 8 apartments in the complex, believing the complex was physically unsuitable for families. But this brought the organization, noted for its work in planning affordable housing in the neighborhood, head to head with fair housing advocates (Stoecker, 1994).

Can CDCs develop community? Analysts and CDC members in the 1980s emphasized that CDCs did "projects" (Mayer, 1983; Twelvetrees, 1989), but he continuing influence of the comprehensive emphasis has led to talk about CDCs promoting community organizing (White, 1993; Peirce and Steinbach, 1990; Rubin, 1996; Gittell et al., 1995). It is unclear, however, whether CDC advocates understand what community organizing is, would want to do it if they knew, or could do it if they wanted to. The CDC model, as Traynor (1992) aptly stated "has confused the building of power with the building of structures."

The classic community organizing model does not appear to fit the CDC definition that uses "advocacy" synonymously with "organizing." Community organizers understand organizing as developing relationships so people can press their demands collectively and gain power through that process (Alinsky, 1969; 1971; Delgado, 1994). Advocacy is an expert speaking for a constituency, rather than helping them speak for themselves (Beckwith, n.d.). Whether CDC supporters actually mean advocacy in this sense is unclear (see Rubin, 1993), but the confusion over the usage is telling. Goetz (1993:127) finds that CDCs try to make up for their lack of attention to community organizing by supporting other "organizing efforts," but describes those efforts as joining coalitions of other organizations and advocating around housing issues. Vidal (1992:163) found that 80 percent of CDCs said their brokering and advocacy work was as important as development. Rubin (1996) cites research saying one-half to one-third of CDCs do organizing. But again that does not appear to mean bringing neighborhood residents together to press for their needs collectively. Some analysts question whether CDCs do any substantial organizing, seeing them as consciously apolitical (Keating et al, 1990). The tensions created by community organizing in three Toledo CDCs led to the firing of one organizer and the resignations of others. Giloth (1985:39) sums up the problem by citing that "There is housing advocacy and development--but little squatting." In other words, working within the rules, CDCs accept what trickles down, rather than helping people mobilize to reclaim what's been taken away.

As a result of the confusion over terms, not only is organizing neglected, but the CDC tries to be the neighborhood voice (Vidal, 1992:162). This is dangerous, as we have already seen that CDCs are not adequate representatives of neighborhood interests. The CDC may even compete for public attention with organizing groups, dividing the community between CDC supporters and organizing group supporters (Stoecker, 1994; 1995a). The CDC may also delegitimize the organizing group by making it appear more militant, as CDCs are less threatening to power holders than community action organizations (Taub, 1990).

Even if the CDC understands community organizing as a true empowerment strategy, it is unlikely the CDC is the best vehicle for conducting community organizing. Constrained by their funding, CDCs cannot take the risks necessary to produce empowering community organizing. Rubin (1996) cites examples of CDC coalition-based organizing, which better protects the funding base of each member, but it is unclear how widespread that activity is, and the extent to which it involves grass roots organizing. Vidal (1992:159) implies that community groups should think twice about Community Reinvestment Act challenges because they might hinder the CDC's ability to get loans. Additionally, organizing and even service efforts take a back seat to development when financial or political pressures bear down (Gittell, 1980:46; Kolodny, 1985; Hamilton, 1992; Blakely and Aparicio, 1990; Rubin, 1996; Stoecker, 1995a). Rooted in the capital-community contradiction, development and organizing can also become contradictory missions (Stoecker, 1994; 1995a).

So the CDC model potentially increases internal community conflict, displacement, and disempowerment both when it fails and when it succeeds. While CDCs try to work where government left- off, they still depend on government; while they try to be community controlled, they still need to respond to outside schedules and funds; and while they are effective because they are small, the problems are big (Twelvetrees, 1989:190-1). But what is to be done? Many groups got into development because they believed they weren't getting enough out of community organizing. But they found that doing development affected fewer people and made organizing more difficult (Bratt, 1989:235). The problem is that CDCs are really not, nor can they be, about empowerment. If we shift from a community development model to a community empowerment model we can find a place for the CDC in community redevelopment that does not so readily contradict community empowerment.


Creating a new model requires that we first determine what CDCs do well. While at least one analyst concludes that the CDC approach should be discarded altogether (Berndt, 1977:139), I am not so sure. On the minus side, "CDCs are an irrelevance which diverts the talents of local people away from political pressure on those institutions which do have the power to revitalise the ghetto." On the other hand, "Without CDCs either nothing would have been done or 'development' would have been undertaken in a more ruthless way by government and the private sector." (Twelvetrees, 1989:169,171). Analysts and activists recognize the tension between community organizing and development and the necessity for both (Bratt, 1994; Stoecker, 1995a; Rubin, 1993b; Giloth; Peirce and Steinbach, 1990; Medoff and Sklar, 1990:261; Bradford and Cincotta, 1992). CDCs can produce affordable housing (Lemann, 1994) that is sensitive to residents' needs (Bratt, 1989). They can train residents in the redevelopment process (Rubin, 1994) and occasionally go beyond apartment building to develop co-ops and other types of affordable home ownership (Stoecker, 1994; Heskin, 1991).

CDCs probably can't do organizing, however. Of three kinds of organizing--confrontational, collaborative, and community-building--CDCs emphasize collaborative organizing, partly because it doesn't threaten CDC relationships with funders (Madison, 1995). But many still see confrontational organizing as necessary to bring capital into neighborhoods that can't produce a quick profit for investors (Bradford and Cincotta, 1992; Stone, 1993:277-309; White, 1993). We must emphasize human development and organizing as much as physical development, demand non-market solutions to the problems of poverty, be wary of public-private partnerships, subordinate development plans to an organizing agenda (Lenz, 1988), and promote community--not CDC--control of physical space. "Only when a building is under control of its occupants does its use value surpass its exchange value in importance in determining its fate." (Barton, 1977:21). Organizing groups should be separate from CDCs because of the danger of funders trying to control organizing efforts and the demands of development overwhelming organizing (White, 1993; Bratt, 1994; Rubin, 1996). They must also be organized carefully to prevent homeowners and business owners from dominating poor renters (Goetz and Sidney, 1993). These features of a new model of community development and empowerment are, with the crucial exception of the capitalist-resistant economic focus, similar to the original CDC model. The implementation of this model is very different, however, and consists of two components: a community- controlled organizing/planning process; and the high-capacity multi-local CDC.

A. Organize, Organize, Plan

Oppressed communities may benefit more by putting organizing before development. In Boston, the Dudley Street Neighborhood Initiative (DSNI) focused on organizing as the means to development, while partnering to do actual physical redevelopment (Medoff and Sklar, 1994). In Minneapolis, the Cedar-Riverside neighborhood residents placed neighborhood organizing and planning in the hands of the Project Area Committee, limiting their CDC to only implementing plans produced through the organizing process (Stoecker, 1994). In San Antonio, Communities Organized for Public Service (COPS) resisted pressure to become a CDC (in the words of their lead organizer, Ernesto Cortes (1995) "for the obvious reasons") after they achieved control of much of San Antonio's CDBG budget (Reitzes and Reitzes, 1987; Warren, 1995, Rogers, 1990; Sekul, 1983). CRA challenges, using a community organizing model, have produced enormous resources for community-based development--$7.5 billion by one estimate (Puls, 1991), including a $400 million settlement in Boston, $373 million in Chicago, (Squires, 1992), and $1 billion in Detroit (Everett, 1992). Bradford and Cincotta (1992:269) conclude "All of the other facets of reinvestment hinge upon the driving force of strong community organization."

It is also clear that successful organizing must lead to development, but only "when organizing is seen as the guiding force that creates the development opportunities." (Medoff and Sklar, 1994:261). When communities are not organized first, development is less likely to succeed (Medoff and Sklar, 1994:276). Organizing by itself may even be "as successful as CDCs in making development happen." (Twelvetrees, 1989:132). A large literature also shows that participation in neighborhood organizations also increases confidence, efficacy, power, identification with the community, interaction, mutual aid, leadership development, and problem solving capacity (see Checkoway, 1985). Organizing to prevent capital flight or speculation can be more effective than trying to mop up afterward (Giloth, 1985). " Even squatting campaigns have led to successful redevelopment (Schuman, 1990).

Gone are the days when the villains were clear and visible, however. Communities are less threatened today by the rogue speculative investor than by disinvestment attacking from the shadows. Capitalist disinvestment has so disrupted community networks that special forms of organizing that first build neighborhood relationships may be necessary before the community can engage in more public struggle (Stall and Stoecker, 1994). Defending against, and recovering from, the forces that cause decay also requires education and planning as much as strategy and tactics. Hamilton (1992:87-100), following Dean and Dowling (1987), describes a process that begins with some threat arousing the community, and then invokes a learning process as organizers help community members explore the causes and ramifications of the threat. The community then conducts research and begins a planning/organizing process that leads to social action. After evaluating their efforts, they expand on their initial organizing to spin-off development activity.

The most important part of this model is the planning process, increasingly seen by CDCs as central to development, even if still neglected in practice (Rubin, 1994b; Giloth et al., 1992; Keating et al., 1990). Community-based planning, if done correctly, serves a number of purposes. First, it builds a sense of community, becoming an organizing process. Second, it educates residents on what resources and threats exist in their neighborhood. Third, it builds community power, allowing residents to determine what kinds of development they want and thus better repel speculators. Finally, it helps residents plan for the ideal, without regard to limitations imposed by elites. Thus, residents are more likely to press for changes in the limitations rather than restrict their imaginations (Jones, 1990; Fainstein, 1987; Rohe and Gates, 1985; Stoecker, 1993). The planning process in Cedar-Riverside--which converted hundreds of rental units into co-ops, developed co-op businesses, provided play space for children, changed traffic patterns, and facilitated community gardens for families--provides the best example of a comprehensive community-controlled planning process that puts vision before budget (Stoecker, 1994). In East Toledo, community-controlled planning led to redevelopment of the area's industrial corridor, reviving a major shipyard and retaining the remaining industries (Stoecker, 1993). This kind of community- controlled planning process also helped DSNI pressure government to grant them eminent domain powers (Medoff and Sklar, 1994:265).

Cities such as Raleigh North Carolina, Arlington Virginia, Portland Oregon, and Minneapolis Minnesota now have city-sponsored neighborhood planning programs (Stoecker, 1993). The results of the most evaluated program, in Minneapolis, are mixed, given the domination of the program by elites and the divisions between homeowners and renters created by clashes of self-interest (Goetz and Sidney, 1993). However, the planning process does seem to increase resident participation in the neighborhoods, and in two cases has enhanced community organizing. The Bancroft neighborhood planning process helped start community organizing where none previously existed (Fainstein and Hirst, 1994). The Jordan Area Community Council's planning process prevented disruption of already strong organizing activity by doing a plan independent of funding expectations (Goetz and Sidney, 1993).

Making sure the planning/organizing process is inclusive and builds community rather than internal conflict is crucial. If a CDC leads the planning process by putting a limited budget on the table that won't meet the community's needs, trouble will follow. But if the community engages in a planning process that makes no assumptions about funding, a plan can evolve which includes everyone's desires in some shape. While there are a number of good community-based planning models (Rohe and Gates, 1985; Jones, 1990; Cassidy, 1980), Reardon's (n.d.; also see ESLARP, 1996) "empowerment planning" model used in East St. Louis is important to note. This model assumes that poor neighborhoods mostly need power to get empowering redevelopment. Consequently, the process emphasizes developing local people's organizations. The expert planner helps develop citizen leaders and provides specialized information to residents who then also become experts of a sort. The community's ownership of the planning process motivates them to pressure capital and government to fund implementation.

The importance of the planning process being truly comprehensive cannot be emphasized enough (Stoecker, 1993). Lemann (1994) notes that one of the negative consequences of all past "ghetto revitalization" programs has been that residents' move out as soon as their personal circumstances improve enough, disrupting community networks and draining community resources. People need to first have a sense of control over their community. "Unless democratic control can be institutionalized people become worn down by constant uncertainty and struggle and will often trade their gains for individual mobility." (Barton, 1977:27). Residents also need material reasons to stay, which means that their personal circumstances and their surroundings must improve together. And that means redevelopment can't be conducted by a small CDC doing a house here or there. It requires a massive influx of resources all at once, and that is where the high-capacity CDC comes in.

B. The High-Capacity Multi-Local CDC

We know that large CDCs accomplish more than small CDCs, and that there is some point below which the CDC is so small it is useless for anything except as an example for elites to use in victim-blaming. We also know that "The accountability of CDCs to the neighborhoods in which they operate is an important question, to which no general solution has...been found." (Twelvetrees, 1989:142). Finally, it is clear that CDC professionals care about neighborhoods, and are more effective and sensitive developers of low income housing than any other source, but "However humane CDCs actually are, we have to think of them as potential predators." (Twelvetrees, 1989:175). It is too much to expect a CDC to be large enough to do the job, accountable enough to remain under community control, and resistant enough to market pressures attempting to co-opt its agenda. DSNI, in fact, experienced some of its greatest problems when it was forced to add development to its organizing and planning agendas. DSNI shifted later development projects to regular CDCs, arguing that protecting its development potential meant defining itself as "organizer, planner, monitor, enabler, and protector of the community interests" (Medoff and Sklar, 1994:269). CDCs, on the other hand, are niche organizations most useful for bridging the gap between activists, service providers, and resource holders (Rubin, 1996).

Addressing this dilemma requires doing away with the mythology of the CDC as community-based. CDCs must attend to their own financial pressures, they are not good at organizing, and they must trade off development and empowerment. Removing the burden of the "community-based" label accomplishes a number of things. First, it removes the possibility of scapegoating the community when redevelopment fails. Second, it admits to the CDC's potential community-disrupting qualities, allowing residents to better organize to protect themselves. Third, it removes a competing voice from the neighborhood, allowing residents' voices to be heard without the filter of a developer.

Thus, we must clean up the acronym-laden fog of organizational definitions. Community development corporations, non-profit housing developers, community-based organizations, community-based development organizations, community housing development organizations, and all the other labels only confuse the distinction between community organizing and community development--a confusion illustrated by a quote from a funder who states "Not all CDCs should be developers." (Giloth et al., 1992:58). Let's reserve "CDC" for those organizations that build buildings and "community organizing group" for those organizations that build community power. And let's be wary of those who avoid admitting their priorities.

Next, CDCs must enhance their capital capacity. European CDCs produce as much as 55 percent of the housing in Sweden and 35 percent in the Netherlands (Adams, 1990). When we remove the community-based mythology from the CDC, each neighborhood no longer needs, nor should want, their own CDC. In Toledo, many small neighborhoods each have their own CDC, few large enough to do more than fill a couple of business spaces or rehab a couple of houses each year. Large CDCs have more capital capacity, more political capacity, and more collective talent to conduct physical redevelopment that can outpace community deterioration. This, of course, also makes them a greater threat. But there are a number of ways to deal with this.

The most important means of countering the large CDC's power is to make sure there are strong community organizing groups with comprehensive and detailed redevelopment plans, similar to the model used in the Cedar-Riverside and Dudley Street neighborhoods. And while organizing groups do not need the kind of development expertise that CDCs have, they at least need to know how to construct development contracts that hold CDCs accountable. There are also informal accountability tactics. The Cedar-Riverside "Project Area Committee" controlled community organizing and planning, separating those tasks from the CDC's economic agenda. They packed CDC meetings when necessary, meticulously followed each project, and at one point even tried to disband the CDC when it strayed from community principles (Stoecker, 1994). Community organizing groups can collectively press for policies preventing CDCs from operating in poor neighborhoods unless they contribute to independent organizing efforts. They can also demand a share of the city budget to support organizing. With the recent establishment of the National Organizers Alliance, there is likely to be more collective and well-networked organizing talent available than has been the case for a while. And, to the extent that there will be problems with the representativeness of some organizing groups, sensitive CDCs can refuse to do development in those neighborhoods. Unrepresentative organizing groups will not be able to muster the collective force to pressure a reluctant CDC to do the wrong thing.

C. Fight the Power

Is such a model--reemphasizing community organizing, expanding the capitalization of CDCs, and planning for redevelopment--practical or possible? The first question is whether CDC professionals will accept a model that reduces CDC power but expands CDC capacity, and emphasizes that CDCs are good at development, not community. Some CDCs will argue that development itself is empowering. But renting a shoebox apartment from a CDC is no more empowering than renting it from any responsible landlord. Co-ops can be empowering, employee- owned businesses can be empowering, and other community- controlled economic and housing alternatives can be empowering. But "developing" those alternatives cannot happen without organizing community, because those alternatives threaten the power of capitalists, and thus depend on community cooperation and collective action.

Advocates of the old model may also object to the emphases on community-based planning for empowering redevelopment, arguing that poor people have not the time, interest, or skills to participate in such endeavors. Who wants to go to a bunch of meetings to create plans that will never be fulfilled anyway? And why should we try to help poor people become home owners, or co-op owners, when apartments are the most "practical" option for them? But these objections border dangerously on elitism. It is only a short step from here to say poor people are too lazy and stupid to do something like this. Yes, it is very difficult to get people to meetings, especially when they are convinced that their participation will be of no consequence, but that is the result of an urban redevelopment process that still does not provide real community control and substantial resources. Poor and working class people will participate in meetings, and planning processes, that will lead to dreams that will come true. As I have noted, there are well documented cases of this from San Antonio, Minneapolis, Boston, Toledo, and Los Angeles. Not helping people to express their dreams destroys their imaginations, supports the imposition of artificial limits by the ruling class, and ultimately accepts injustice.

Finally, there is the potential objection that people need housing now, they need jobs now, they need services now. If that is the case, it is equally valid to help people occupy vacant housing now, to help them march now on wealthy corporations laying off workers, to help them protest now to politicians attempting to destroy government at every level. Furthermore, none of what I have said argues that CDCs should not continue to serve immediate needs, only that we rethink the kind of relationship CDCs have to poor communities. Finally, it is scary to hear some argue for the apolitical approach of using a CDC to create a few low-wage jobs after a year of paper-pushing when a strong, well-funded organizing campaign could pressure large corporations to provide many more better paid jobs. Granted, those jobs are still controlled by outside employers, but good jobs controlled by outside employers are better than bad jobs controlled by them. Development is the result of a strong community, not the cause.

There is a larger problem, and it is the perennial problem for going beyond the existing CDC model--who is going to pay for all this? A federal government in financial tatters, walled-in corporations, foundations that trickle minuscule resources on gargantuan problems? Our acceptance of these political realities as technical realities, however, contributes to the problem. Yes, home ownership for the poor is not practical, until we fight for the poor to receive home ownership subsidies proportional to those received by the middle and upper classes, until we demand real controls on corporate exploitation, and until we act on the understanding that foundation funds are really monies not paid to the workers to begin with. Of course development cannot be done without strong government dollars, hefty private sector participation, and enormous foundation support. But the money is there. Accessing it is a political problem, not a technical problem. This is one of the wealthiest countries on the planet. The fact that our cities are in tatters is not because of a shortage of money but because of a shortage of justice.

Is this too radical and unrealistic? Can funders be convinced to give tens of millions of dollars to comprehensive redevelopment in a single neighborhood? Can they be convinced to give that money only in support of neighborhood-based plans? Can support develop for market-resistant subsidies to community owned and controlled businesses that keep wealth in the neighborhood? Can government be revived to represent the people, rather than just the wealthy, and to manage an economy so that profit produces jobs rather than lines the pockets of the rich? Can CDCs be convinced to adopt a new identity that emphasizes their importance in conducting sensitive affordable redevelopment but makes them secondary to organizations emphasizing community empowerment?

The obvious, quick, wrong answer is no. That "no" seems to be the answer is only because we have come so far down the CDC model path that we have forgotten the real issue is power, not development. Much of the art of community organizing has been lost, or has not kept pace with the increasing sophistication of elites in hiding the real causes of urban decay. So long as the antagonism exists between capital and community, development alone cannot produce empowerment. However, good community organizing produced state and then national voting rights for women in the early 1900s, historical social safety net legislation of the 1930s, voting rights for African Americans in the 1960s, an end to a war in the 1970s, landmark environmental laws, the Community Reinvestment Act, the relocation of the people of Love Canal, and on and on and on. Community organizing is not impractical and unrealistic, its timetable for success is no longer than for the technical development approach, and the first barrier to its implementation is our inability to inspire our own imaginations. These ideals are unlikely to be achieved in the short term. But that makes it even more important that we not accept a redevelopment model which promotes the current national and corporate priorities and myths and undermines the potential for community development and empowerment.


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