Until this summer, the community development corporations (CDCs) at work in Massachusetts were increasingly at odds with what they were originally intended to look like – according to the state’s outdated regulations, that is.
But August’s sweeping economic development package gives local CDCs something they say will make them stronger and better developers: A new definition.
The old definition for CDCs was created in the mid-1970s, according to Joe Kriesberg, president of the Massachusetts Association of Community Development Corporations (MACDC), and it reflected the assumptions of the time. Namely, that these organizations operated only in low-income areas with large minority populations, and were very locally focused to specific neighborhoods.
While many haven’t changed, others outgrew those ideas long ago, he said. They still serve low-income constituents, but can be in suburban, rural and urban areas. They can also span several towns or a whole region, not necessarily just a single neighborhood.
“We’re trying to sort of unblock some of the self-imposed constraints on our sector,” Kriesberg said. With a new definition – among other things – CDCs have a clearer mandate and an easier set of rules to follow.
That, in turn, helps them evolve in a rapidly changing environment, and better collaborate with for-profit entities – often on commercial real estate projects designed to improve lower-income neighborhoods.
Honestly, many CDCs had largely ignored their own legal definition for the past 10 to 15 years, Kriesberg said. And while it might seem like the recent change in description merely catches up to reality, its effects go further than that.
The definition ensures groups who identity themselves as CDCs meet a certain common set of characteristics, Kriesberg said, and will get rid of some of the confusion surrounding what, exactly, a CDC is and what it does.
It increases these entities’ credibility, and set up a deliberate, purposeful platform upon which CDCs can operate.
While these organizations had previously been required to have at least half their board elected by the organization’s membership, now they must have a certain amount of low- or moderate-income citizens on the board as well. CDCs can also merge with brother organizations more easily, Kriesberg said. Joining forces will help them keep up with rapid changes in the development market.
A Trusted Ally
In addition, the new rules establish a certification process for the first time.
Mossik Hacobian, president of Urban Edge, a CDC in Boston’s Jamaica Plain neighborhood, said the new certification likely won’t be a struggle for long-established organizations. Before, CDCs only had to file incorporation papers – and then pretty much went their own way, he said. The legislation now requires certification every four years, although the Department of Housing and Urban Development can decide to impose a more frequent certification requirement if it chooses.
Hacobian said MACDC worked to get these new rules on the books, and constituents like him were satisfied with what they saw.
To collaborators, including the Urban Strategy America Fund, the current system of CDCs – less formal though it may have been – has been a consistently strong partner in development projects, said Kirk Sykes, USA Fund’s president and managing director.
USA Fund is a real estate investment and development effort of New Boston Fund, and Sykes said he’s worked with a number of CDCs in the city that have been a major boon to the process.
These organizations have gained their credibility through long experience, he said, indicating that a new certification process or legal mandate wouldn’t have a substantial impact on the daily life of older CDCs.
For-profit entities such as USA Fund work with CDCs to advise them on what works for their particular neighborhoods, and help garner communication and support for various projects. It speeds along permitting and other processes, which require community involvement.
“They basically helped us be better at what we were doing,” he said.
