A Smarter Way to Make Cities Work for All

A comprehensive community development finance system creates equitable communities—today and for generations to come

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Create Better Outcomes


All communities need clean, safe, and affordable quality housing. But America faces a deficit of 7 million units. Developing housing options depends on a well-resourced community development finance system to protect against the market forces of displacement and gentrification.

Developers make money from rent minus expenses. That’s why they charge market rates—both to cover construction costs and to generate financial return investors require. If rent is restricted, alternative forms of capital beyond bank debt are needed – things like Low-Income Housing Tax Credits, New Markets Tax Credits, tax exempt bonds or other subsidies. Developers also often work with philanthropies or nonprofits to offset costs.

Bottom Line: In community development finance, policymakers, impact investors and philanthropy can help align the tools and agencies needed to create those housing options. When they do, we see an uptick in the number of families who can find a safe and affordable place to live.

Small Business / Entrepreneur

Small businesses fuel America, creating two-thirds of all new jobs in the private sector. Millions aspire to start small businesses but lack start-up capital. Very new, micro or cash-short businesses often don’t qualify for federal help from programs at the Small Business Administration and are deemed too risky for traditional banks. Those run by people of color or first-time entrepreneurs are even less likely to receive help.

That’s why community-based lenders are vital, sometimes providing the only source of capital to these small businesses. CDFIs provide loans, mentoring and technical assistance in business planning, marketing, accounting and other areas where small entrepreneurs need help.

Bottom Line: Finding support for a small business is challenging. These would-be-business-owners create jobs, hire neighbors and breed creativity and innovation when they get support from programs that target young enterprises. Typically, these come via grants and program-related investments into CDFIs.

Community Driven Equitable Development

People in a place should have a clear say in how their community is shaped for the future and who will benefit from development. Equitable community-oriented development ensures this. It’s the strategic acquirement of land and property for the benefit of future development that meets specific, identified community needs—things like access to food, housing, transit, educational opportunities and good jobs.

To make this a reality, the finance community must work together with the public sector to ensure that development rights for the strategic parcels are not sold off prematurely, before consideration is given to community need. Transparency and accountability are key values. Many community-oriented development successes have followed a community-planning process, where the community together identifies and outlines its goals and neighborhood-level intentions for the future.

Bottom Line: Community-oriented design is a process and an outcome that ensures new developments meet the needs of current residents.

Cities & Projects to Watch

Memphis Crosstown Concourse

Crosstown Arts is a nonprofit that formed to facilitate the redevelopment of the Sears Crosstown building using arts and culture as a catalyst for change. With the help of an unprecedented 30 funding sources and commitment of nearly 40 founding tenants, Crosstown Concourse is born.


Strong philanthropic presence, a Federal Reserve office, and a thriving CDFI sector make this a city where community development finance is producing strong outcomes.

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