reassessing the role of housing in community‐based urban development

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HOUSING POLICY DEBATE VOLUME 18 ISSUE 4© 2007 METROPOLITAN INSTITUTE AT VIRGINIA TECH. ALL RIGHTS RESERVED.

Reassessing the Role of Housing in Community-Based Urban Development

Edwin Melendez and Lisa J. ServonMilano The New School of Management and Urban Policy

AbstractInthisarticle,weusearandomsampleofurbancommunitydevelop-

ment corporations (CDCs) to determine whether distinct types exist and,if so, toestimate theirprevalence in the industry.The typicalurbanCDChas a diversified portfolio of economic and social development activities,includingcommunityorganizing,and is likely tohaveahousingdevelop-mentprogram,althoughnotnecessarilyalargeonebecauserelativelyfewarehighproducers.

Large-scalehousingproducers,definedinthestudyashavingproducedatleast500unitsduringtheprevious10years,comprise18percentofCDCs.Alargeorganizationalcapacity,anaffiliationwithnationalintermediaries,thetrainingofstaffandtheadoptionofcomputers,thelengthofexecutivedirectors’tenure,andtheshareoffundingdevotedtohousingprogramsarethemostimportantfactorsincreasingtheoddsthataCDCwillbelongtothegroupofhighproducers.

Keywords: Community development corporations; Housing; Nonprofitorganizations

IntroductionForthepastseveralyears,scholarshavedebatedtheissueofwhatthe

appropriatemodelofacommunitydevelopmentcorporation(CDC)shouldbe (Bratt1997;Stoecker1997;Vidal1997)andevenhowtocharacterizecurrentandpastmodels.Specifically,manyresearchershavediscussedanar-rativeinwhichCDCshaveevolvedfromsmall,locallybasedorganizationsprovidingavarietyofservicesintolargeorganizationsthatfocusprimarilyonhousing,whileothershavediscussedamorerecentshiftinemphasistogobeyondhousingdevelopment(Brophy&ReillyLLC2001;Berndt1997;

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752 EdwinMelendezandLisaJ.Servon

BrattandRohe2004;Faux1971;GittellandWilder1999;Marquez1993;PeirceandSteinbach1987;Perry1987;ReingoldandJohnson2003;Rohe,Bratt,andBiswas2003;Rubin1994,1995;RubinandRubin1992;Stoecker1994,1997;VidalandKeyes2005;Zdenek1987).Forthepurposesofthisanalysis,aCDCisdefinedasanonprofit,community-basedurbandevelop-mentorganizationthatengagesineconomicdevelopmentactivitiessuchashousing production, commercial property development, business develop-ment, and/or job creation for the benefit of community residents (Bogart2003;Cowan,Rohe,andBaku1999;GittellandWilder1999;GreenandHaines 2002; National Congress for Community Economic Development[NCCED]1999;RomeoandLampkin2002;RosenandDienstfrey1999;Rubin 2000; Stoecker 1997; Stoutland 1999; Vidal 1992, 1997). DespitegeneralagreementonthebasicdefinitionofwhatconstitutesaCDC,modelshavebeenpositedwithoutsufficientdataandanalysistotesttheirvalidityandprevalenceinthefield.

Some of the most prominent voices in recent discussions portray anindustrywherenonprofitsponsorshipofcommunity-leveldevelopmenthasinducedhousingtobecomethedominantactivityofgrassrootscommunitydevelopmentorganizations.Housingproduction,inturn,propelsadynamicwhereitbecomesdifficultfortheseorganizationstoengageinotheractivi-tiesortobemoreresponsivetootherprogrammaticmission-orientedactivi-ties.Onthebasisofthispremise,someauthorsproposethatthisapproachtodevelopmentshouldchange(Stoecker1997,2003;Vidal1997)orthatitfunctionsquitewell(Bratt1997).

One narrative in the community development field is that during theformative years of the 1960s and 1970s, CDCs had broad social changemissionsthatencompassedawiderangeofactivities(Eisenberg2000;Git-tellandWilder1999;Halpern1994;Harrison1974;PeirceandSteinbach1987; Perry 1987; Stoutland 1999; Vidal 1992; Zdenek 1987). This nar-rativemaintainedthat,asthefieldmatured,CDCsbecamemorenarrowlyfocusedonhousingandeconomicdevelopmentandincreasinglyprofession-alized.Thewayinwhichthefielddeveloped—whichwasadirectresponsetopublicandprivatefundersandintermediaries—madetheseorganizationslessresponsivetotheirconstituentsandlessconcernedwiththesocialjusticeandchangemissionsthathadledtotheircreationinthefirstplace.

Stoeckerrepresentsoneview,claimingthatthepoliticaleconomyoftheprevalentCDCmodel sets up an“antagonistic relationship”betweenusevalue and exchange value (1997, 5). Further, the fact that the capital onwhichCDCsdependcomesfromoutsidetheneighborhoodsinwhichthey


TheRoleofHousinginCommunity-BasedUrbanDevelopment 753

workmeansthatCDCscannotnecessarilyservetheinterestsof“thecom-munity.”1Inarelatedcritique,FitzgibbondiscussesthedifficultyofCDCs’beingaccountabletoarangeofconstituenciesincluding“thepublicatlarge,thegovernment,donors,clients,andtheirownemployees”(1997,34).Ques-tioning theviabilityandusefulnessof“theCDCmodel,”Stoecker (2003)maintains thatalthough“communityorganizingandcommunitydevelop-menthavecomplementarygoals,theyarebasedonpotentiallycontradictoryworldviewsandoccupypotentiallycontradictorysocialstructurallocations”(493).Thewayoutofthisdilemma,recommendsStoecker(2003),istosepa-ratethefunctionsofcommunity-basedurbandevelopment:tocreateonesetoforganizations—CDCs—thatwilllimittheiractivitiestodevelopmentandanotherthatwillfocusonorganizingandempoweringthecommunitiesinwhichtheywork.2

Analternativeviewof theCDCmodelproposes that thisdualnatureasdeveloper andasorganizer andadvocate for the community facilitatesaccesstoexternalresourcesandiscriticalforCDCstofulfilltheirmission.Vidalarguesthat“thefoundationofthemovementisthecadreofCDCsthathavedemonstratedtheirabilitytomakeadifferenceintheircommunities.Accesstopoliticalandfinancialsupportfromoutsidetheneighborhoodiscriticaltotheirabilitytodothis”(1997,431).3Inotherwords,thefactthatCDCshavebeenabletoengageoutsidersintheissuesaffectingpoorcom-munitiesisapositiveaspectoftheirwork.HertakeonthefactthatCDCs’financial resources come from outside the community is markedly differ-ent from Stoecker’s (1997). Rather than separating housing developmentfromotheractivities,Vidalarguesthat“themovement’sfuturevitalityliesinfurtherdiversification,organizationaladaptationtonewroles,andiden-tificationofadditionalpartnersand stakeholders” (1997,429).However,theevidenceonwhetherCDCsshouldbemorecomprehensiveorspecializedis mixed. Although some researchers caution CDCs about the dangers ofcomprehensiveness (SteinbachandZdenek1999;Walker andWeinheimer1998),Rohe,Bratt,andBiswas,intheir2003studyofmerged,failed,anddownsizedCDCs, recommenddiversification.For them,diversificationof

1Bratt,inarejoindertoStoecker(1997),rightlypointsoutthat“anygiven‘community’iscomposedofcompetinginterestsandneeds”andthatitisverydifficulttodetermine“whoseinterestscomprisethoseof‘thecommunity’”(1997,24).

2Stoecker(1997)acknowledgesthatmanyCDCsdosomekindoforganizing(collabora-tive,etc.)butprivilegesconfrontationalorganizinginhiswork,becausehebelievesittobetheonlytypethatcanchallengecurrentstructural inequities.Fitzgibbon(1997)alsonotes thatorganizationsfocusedoncommunityorganizingfaceparticularchallengeswhenitcomestodefiningtheircommunity.

3Emphasisadded.SeealsoVidalandKeating2004.



activities,geographicarea,clientele,andfundingsources“makesanorgani-zationlessvulnerabletochangesinbothfundingprioritiesandcommunitydesires”(2003,60).4

Any discussion of the role and activity of CDCs must also take intoaccountthepolicycontextinwhichtheirworktakesplace.Inthe40-oddyearsthatCDCshaveexisted,publicpolicyhasprovidedincentivesinvari-ous,oftenincongruous,directions.Theearlypartofthecommunitydevel-opmentmovementwasclearlymarkedbyamorecommunity-participatoryandadvocacy-drivenpolicyframework.Althoughtheserootsareimportant,thepassageofCommunityDevelopmentBlockGrantsbrought localpoli-ticstotheforefrontthroughtheallocationoffunding,andtheCommunityReinvestment Act brought banks and other financial institutions into themainstream of the community development industry. These forces clearlypulledCDCs’organizationaldevelopmenttowardabroadersetofprogramsasopposedtoanarrowhousingfocus.

TheLow-IncomeHousingTaxCredit(LIHTC),whichwasenactedin1986andmadepermanentin1993,introducedtheneedforamoretechnicalgroupofCDCsthatcouldstructurecomplexfinancialtransactionstotakeadvantageof suchan important federal subsidy to theaffordablehousingindustry.5TheevolutionofCDCsthatcouldtakeadvantageoftheLIHTCtodevelopaffordablehousinginsignificantwayswasinparttheresultofthesupportprovidedbyintermediaryorganizationsthatfacilitatedsyndication,suchasLocalInitiativesSupportCorporationorLISC(anditsaffiliatetheNationalEquityFund)andEnterprise(anditsaffiliatetheEnterpriseSocialCorporation).Alsoimportantwastheavailabilityofprivatesectorconsul-tantswiththeexpertisetomanagethecomplexitiesoftransactionsinvolvingmultiplesourcesoffinancingandtaxcredits.6FeesfrommanagingprojectsfinancedbytheLIHTC,inturn,providedresourcesforstaffandoperational

4Inanearlierstudy,RohesummarizedexistingworkandconcludedthatCDCs“followacomprehensiveapproachtodevelopment,respondtocommunityneeds,leveragefoundationsupport,andtargetlow-incomeandmoderate-incomeareas”(1998,177).

5Rosen and Dienstfrey report that the “CDC-based production system is marked byextremeconcentrationofcapacity”(1999,445),with10percentoforganizationsproducinghalfofallhousingunits.

6RosenandDienstfrey(1999)assert that thesuccessof the“CDC-basedhousingsys-tem”(454)ispartlyduetointermediaries’mobilizationofcapitalforprojects,predevelopmentfinancing,technicalassistanceforstructuringcomplexfinancialfinancing,impactonorgani-zations’capacitydevelopment,and,asaconsequence,theenhancementoforganizations’legit-imacywithfunders.Walker(1993)attributesCDCs’enhancedcapacitytoundertakehousingandcommunitydevelopmentprojectstotheassistanceandactivitiesofintermediaries.



capacityandhelpedinstitutionalizeandstabilizeCDCs.Theconvergenceofthesevarious incentive structures for thedevelopmentofaffordablehous-ingand the interactionwithamultiplicityof localneedscalling forothereconomicandsocialinitiativesshapedtheprogramactivitiesofcommunitydevelopers.Inconjunctionwithotherhousingprograms,theLIHTCclearlyinducedspecializationinhousingamongasignificantnumberoforganiza-tionsinthefield.

BeforemakingnormativeassertionsaboutwhatCDCsshouldorshouldnotdo,itisimportanttoestablishthestatusquoandtogeneratesomehypo-thesesabouthowwearrivedatthecurrentsituation.WehaveconstructedacomprehensivedatasettoexaminesomeofthekeyhypothesespositedaboutCDCsandthecentralityoftheirhousingactivities.Itisimportantthatthisdebatebe informedbyaccurate,morerepresentativedatabecausepoliciesandfundingprioritiesareconstructedaroundassumptionsthatmayormaynotbetrue.Itisinthiscontextthatwestatethecoreresearchquestionsforthisstudy:1. TowhatextentareCDCsproducersofhousing?

2. What is the relationship between housing production and other pro-grammaticactivities?

Wearealsoparticularlyinterestedinorganizationsthatproducearel-atively large amount of housing. With respect to these organizations, wewouldliketoascertaintheanswerstotwointerrelatedquestions:1. Whatarethecharacteristicsandprogrammaticactivitiesofthoseorgani-

zationsthatproducearelativelylargeamountofhousing?

2. What factors may contribute to specialization as a (large) housingproducer?

To theextent that the fieldhasevolved towardamorecomplex rela-tionshipbetweenhousingproductionandotherprogrammaticactivities,wewill need to rethink assumptions, expectations, and evaluation models totakeintoaccountthenatureofthefieldasitexists(Chaskin,Joseph,andChipenda-Dansokho1997;Kubisch1996;SviridoffandRyan1996).

Our findingsbothconfirmsomeearlier researchandbegin toanswersomeoftheenduringquestionsabouttheseorganizations.Specifically,wefind that today’s typical nonprofit community-based, urban developmentorganizationislikelytohaveahousingprogram,althoughnotnecessarilyalargehousingdevelopmentprogram,andadiversifiedportfolioofeconomicandsocialdevelopmentactivitiesthatincludecommunityorganizing.How-



ever,wefindthatthefieldismorediverseintermsoftheroleofhousingdevelopment in a broad portfolio of CDCs’ programmatic activities thanearlierresearchwouldleadustobelieve.

WeclassifiedCDCsintofourtypesonthebasisofouranalysisofhous-ingproductionandotheractivitiesdata:Thefirsttypeconsistsofthefully20percent thatproducenohousingwhatsoever.The second type, on theoppositesideofthespectrum,consistsofthe18percentthatwecall“highproducers.”TheseCDCshaveproducedatleast500unitsduringthepast10yearsandarecharacterizedbyhigherbudgetsandstaffanddiversifiedeconomicdevelopmentandsocialservicesportfolios.Theremaining62per-centare“medium”producers,whichwedivideintoamiddlegroupof40percentthatengagesinlittleornootherhousingactivity(thethirdtype)andamiddlegroupof22percentthatengagessignificantlyinhousingproduc-tion,albeitnottotheextentthatthelargehousingproducersdo,andengagesextensivelyinotherhousingactivities(thefourthtype).

Oneofourmoreinterestingfindingsisthateventhoughweidentifyagroup of CDCs specializing in housing production and another group ofmiddle producers carrying a significant portfolio of other housing-relatedactivities,alltypesofhousingproducershave,forthemostpart,adiversifiedportfolioofeconomicandsocialdevelopmentprograms.AnothersignificantfindingisthatmostCDCshaveamodesthousingproductionandhousingactivities portfolio or no housing activities at all. These core findings arebasedonasurveyofcommunity-basedorganizationsthatengagedinatleastoneofabroadsetofeconomicdevelopmentactivitiesthatdefineaCDCandthusmetourinclusioncriteria.

Although it is generally accepted that the organizations that do com-munity-basedurbandevelopmentarediverse,weprovidedataabouthowonetypeoforganizationdiffersfromanother.Specifically,wecreateatypol-ogyoforganizationsbasedonhousingproductionandotherhousing-relatedactivities.UnderstandingthevarioustypesofCDCs,andtheirprevalence,shouldenablepolicymakersandfunderstocreatemoretargetedinterven-tionstobuildcapacityandsupporttheprogramsandactivitiesoftheseorga-nizations. This work would be particularly useful in areas where there isa mismatch between the need for affordable housing and the capacity ofexistingorganizationstoprovideit.Understandinginafine-grainedwaythecharacteristics of relatively large-scale housing producers may enable thiskindofcapacitytobebuiltinareasthatlackit.



Method and dataThisstudyisbasedona2003telephonesurveyof393urban,commu-

nity-based development organizations (CBDOs) across the nation.7 OurmainobjectiveindefiningtheuniverseofnonprofitorganizationsthatcouldpotentiallybedefinedasCDCswastohavethemostcomprehensivelistpos-sible.Theuniverseforthestudyconsistsoftwopanels.Thefirst,intendedtoprovideauniversefortheselectionofarandomsampleofcases,includesalloftheorganizationsidentifyingcommunitydevelopmentactivitiesintheInternalRevenueService(IRS)Form990datasetcompiledbytheNationalCenterofCharitableStatistics(NCCS),not-for-profitdevelopersextractedfrom the U.S. Department of Housing and Urban Development’s LIHTCDatabase, andorganizations from lists providedbynational intermediaryorganizations(LISC,theEnterpriseFoundation,Seedco,andtheNeighbor-hood Reinvestment Corporation), and regional associations of CDCs.8 Asecond, nonrandom panel comprising organizations included in the Vidal(1992)studywasalsoaddedtoalloworganizationsandtheindustrytobecomparedovertime.9Intotal,theuniversefromwhichtodrawthesampleforthestudyincluded8,358organizations,asdescribedintable1.Fromthisuniverse,weselectedarandomsampleof992organizationsandadded110organizationsthatsurvivedfromtheoriginal130intheVidal(1997)study,foratotalof1,102.10Animportantdesignfeatureofthisstudyisthatabouthalfof the randomsample cases came from theLIHTCorNCCS listsoforganizations,mostofwhicharepresumednottobeaffiliatedwithnationalintermediaryorothermembershiporganizationsofCDCs, the traditionalsourcesforearlierstudies.11

Thefirststepwastodevelopasurvey,includingscreeningquestionsfordetermining organizations’ eligibility for inclusion. The survey combinedquestionsfromearlierstudies(GlickmanandServon2003;Vidal1992)and

7TheCommunityDevelopmentResearchCentercontractedwiththeCenterforSurveyResearchandAnalysisattheUniversityofConnecticuttoconductthesurvey.

8The total numberof cases collected from theseorganizationswas39,076.A total of28,296wereineligibleforvariousreasons:Theorganizationswereforprofit,wereduplicates,orwerelikelytobe“paper”organizations—entitiesthatwerecreatedfortaxpurposesandhadcontactinformationsimilartothatofotherorganizationsinthedataset.

9ThecomparisonofCDCs’dataovertimeisbeyondthescopeofthisarticle.10Weaddedthe110organizationsfromtheVidal(1997)studytogeneratedatafortwo

pointsintimeforasubsampleofCDCs.ThiswillallowustoassesschangesinCDCcharac-teristicsandproductionovertimeandtocomparethesecharacteristicsofarandomsampleoforganizations.

11Forexample,theNCCED(2005)censusofCBDOsconsistedofamailsurveyoforga-nizations listedonvariousmembershipandothermailingrosterscompiledbynationalandstateorganizations.



newquestionsdesignedtoaddressaspecialtopicinthefield:CDCs’man-agementculture.Thesurveyconsistedofthefollowingsections:1. Screeningquestions,whichdeterminedwhethertheorganizationwould

bepartofthestudy

2. Organizationalcharacteristics,whichfocusedonoperationalbudgetandfundingsources,organizationalresources,socialprograms,connectionstootherorganizationsandagencies,andpoliticalandsocialcapital

3. Programsandactivities,whichaskedabouthousingdevelopmentpro-grams, commercialpropertydevelopment, andeconomicdevelopmentprograms

4. Anorganizationalsection,whichfocusedonleadershipandstaff,man-agementculture,andrelationshipswithotherorganizations

Wealsoaskedaboutsocialandothernoneconomicprogramsandactivi-ties,andaboutcommunityorganizingandadvocacy.

Becausetheyqualifyorganizationstobepartofthestudy,thescreeningquestionsareacriticalpartofthequestionnaire.12FollowingVidal(1992),wedefinedaqualifyingorganizationasanonprofit,urban,community-based

Table 1.DataSources,Sample,CompletedInterviewsandProjectedCases

Percent Includedin Adjusted ProjectedDataSources Eligible Sample theSample Interviews Yield Cases

Nationalintermediaries 4,160 379 9.11 92 0.23 943

Regionalassociations 1,558 111 7.12 32 0.25 384

Notaffiliated(NCCS,LIHTC) 4,852 502 10.35 181 0.39 1,900

Rebuildingcommunities 110 110 100.00 88 0.80 88

Total 10,680

Duplicatesacross 2,322 multiplelists

Completedinterviews 393

Partialinterviews 20

Othereligibles,including 106 aproportionofthe unknowneligibles

Total 8,358 1,102 13.18 519 3,315

12ThescreeningquestionsareincludedasappendixA.



entity thatengages inat leastoneofabroadrangeofeconomicdevelop-mentactivities,suchasdevelopingoradministeringhousing,developingoradministeringcommercialproperty,orsupportingordevelopingbusinessesorcommercialenterprises.Wealsorequiredthattheorganizationbeengagedinatleastoneneighborhood-basedactivity.Weexcludedorganizationsthatdidnotengageinoneoftheseeconomicdevelopmentactivitiesordidnotfocustheirworkinatleastonetargetedneighborhood.Thisdefinitionalsoexcludedanypublicagencythatperformsasalocalorcommunity-focuseddevelopmentorganization.Similarly,thosecommunity-basedorganizationsthatengagedonlyinsocialservicesoradvocacyandorganizingbutdidnotengageinatleastonecommunityeconomicdevelopmentactivitywerenotincluded.Itisimportanttonote,however,thatmanyofthesurveyedorgani-zationsprovidesocialservicesalongwiththeirothereconomicdevelopmentactivities.

Thedefinitionofanonprofit,urban,CBDOadopted for the study islargelyconsistentwiththedefinitionsadoptedbyearlierstudies.Inparticu-lar,theNCCEDmailsurveyissentto“community-baseddevelopmentorga-nizationsservinglowandmoderateincomeareas”and“activelyengagedinproducingorfinancingaffordablehousing,developingcommercialorindus-trialspace,operatingabusiness,orprovidingcapitalloanstosupportotherbusinessenterprises”(2005,1).ThisdefinitionofaCBDOisverysimilartoourdefinitionofaCDCanddiffersfromourdefinitionprimarilyinitsinclu-sionofcommunity-basedfinancialinstitutionssuchascommunitydevelop-ment financial institutions (CDFIs).Ourdefinition ismore restrictiveandincludesonlyorganizationsthataredirectlyengagedinhousing,commercialrealestate,andeconomicdevelopmentactivities.

WhatmakestheCDCuniqueamongcommunity-basedorganizationsisthehybridlegalformthatallowsittofunctionasaquasi-businessandquasi-nonprofit.NotonlyistheCDCeligibleforanumberofgrantsfromgovern-mentsandfoundations,butitcanalsogeneraterevenuesfromitsinvestments,ownproperty,collaboratewithfor-profitdevelopers,andreceivetaxcredits(Bogart2003;GreenandHaines2002;Rubin2000;Vidal1992).Thedualnatureoftheorganization,asaneconomicdevelopmentagentordeveloperandasanonprofitwithabroadersocialmission,iswhatdifferentiatesCDCsfromothercommunity-basedorganizations.AsRubinstates,“Community-baseddevelopmentorganizationsintermediatebetweentheempatheticworldofsocialserviceprovidersandthedog-eat-dog,bottom-linementalityoffor-profitdevelopers”(2000,2).

ThenextstepinthestudywastoestimatethetotalnumberofurbanCDCsintheUnitedStates.Asillustratedintable2,screeningresultedinthe



eliminationof463organizations;mostofthem(338)didnotmeettheinclu-sion criteria as operationalized in the screening questions. In general, theresponserate is thenumberofcomplete interviewswitheligiblereportingunitsinthesample.Althoughcurrentprofessionalguidelinesprovidevariouscalculationsforresponserates,weestimatedarateof79.5percent,assumingaproportionalallocationofunknowncases,and61.6percent,makingthemoreconservativeassumptionthatalltheunknowncaseswouldhavebeeneligibletoparticipateinthesurvey.13Ifeveryorganizationinthenonrandomportion of the cases is assumed to be eligible, we estimated the responseratetobe79.3percent.Therefusalrateistheproportionofalleligibleorpotentiallyeligiblecaseswherearespondentrefusestocompleteorbreaksoffaninterview.Assumingthatallunknowncasesintherandomsampleareeligiblerespondentsyieldsarefusalrateof7.2percent.Arefusalratethatapportionsunknowncasesaccordingtothesameestimate(41percent)usedforresponseratesyieldsarefusalrateof3.8percent.Therefusalrateforthenonrandomsampleis3.0percent.Onthebasisoftheseresponseandrefusalrates,weconcludedthatthestudyyieldedarepresentativesetofcasesanddatafromtheuniverse.

Weusedtheinformationfromthescreeningofcasesforinclusioninthesurvey toestimate the sizeof theurbanportionof the industry.Thepro-jectedtotalnumberofcasesorurbanCDCswasestimatedbymultiplyingthenumberofcasesfromthevariouslistsoforganizationsincludedintheuniverseforthesamplebytheproportionofeligiblecasesresultingfromthescreening.Then, thepredictednumberofurbanCDCswasused todeter-minetheoverallprobabilityofselectionandtheweightsforindividualcases(theinverseoftheprobabilityofselection).Accordingtotheseprocedures,the estimated number of urban CDCs is 3,315. Although this estimate issimilar to theNCCED (2005)projections,our studymethoddiffers fromothermajorsurveysandstudiesoftheindustry(GlickmanandServon2003;NCCED1999;RomeoandLampkin2002;Vidal1992;WalkerandWein-heimer1998) in some importantdimensions,whichprobablyaccount formuchofthedifferenceintheestimatedsizeoftheindustry.Thetwostudiesthathaveobjectivesmoresimilar tooursareNCCED(2005)andRomeoandLampkin(2002).

13FortheNot-for-ProfitRandomSample,eligibilitywasconsideredunknowniftherewasnoanswerorifnocontactwasmadeafternumerousattempts;ifcontactwasmadewithanansweringmachineorvoicemail,butnohumancontactwasmade;orifanonprofitrefusedtotakethesurveybeforeeligibilitywasdetermined.Partial interviewswere included intheanalysisandaretreatedasinterviewsforcalculatingtheresponserate.



OursurveydiffersfromtheNCCED(2005)studyinatleastthreeimpor-tantmethodologicalordesigndimensions.14First,incontrasttooursurvey,which includedonlyurbanorganizations, theNCCED(2005) surveywassenttobothruralandurbanorganizations(a10-pagesurveywasmailedtomorethan7,000organizations).Inadditiontomailresponses,180surveyswerecollectedfromnonrespondents.Intotal,999organizationsrespondedtothesurveyand,asindicatedintable3,thetotalnumberofCDCsispro-jectedat4,600,orabout4.5timesthenumberofrespondents.15Second,ourstudyisbasedonatelephonesurveyofarandomsampleofurbanCBDOs.Thisallowedustoscreenorganizationsandtocollectdataontheaccuracyoryieldofthevariouslistsusedtocompiletheuniverseforthestudy.Third,thesampleforourstudywastakenfromamorecomprehensiveuniverseofpotentiallyqualifyingorganizations.

Althoughtheuniverseforourstudyisroughlythesamesizeastheorigi-nal lists of organizations in the NCCED (2005) study, we excluded ruralorganizations(basedontheZIPcodelistedforthemainoffices)andsup-

Table 2. SurveyResults

Totalsample 1,102

Randomsample 991

Ineligible 463

Unknowneligibility 165

Unscreenedrefusal(unknowneligibility) 38

Partialinterviewsandothers 20


Responserate(withproportionalallocationoftheunknowns) 79.5%

Responserate(assumingallunknownsarenoteligible) 61.6% Nonrandomsample 111

Refusal 3


Responserate 79.3%

Totalcompletedinterviews 393

14NCCEDhasproducedfivereportsonthetrends,characteristics,andcontributionsofCDCsorCBDOs(1989,1991,1995,1999,2005).Themostrecentsurvey,whichwaswrittenbyCarolSteinbach,wasimplementedbytheUrbanInstitute,withtechnicaldesignandadmin-istrationassistancefromAspenSystemsCorporation.

15IfonlyurbanCDCsareconsidered,theNCCED(2005)surveyestimatedtheirnumberatabout3,400,afigurecomparabletoourestimate.The3,400figureincludesurbanCDFIsaswell.



plemented the lists providedby intermediaries andother industry sourceswithcasesfromtwopotentialsourcesofnonaffiliatedorganizations,therebyexpanding theuniverseofcases for inclusion.Thus,ourestimatespertainonlytourbanorganizations,whereastheNCCED(2005)studyprojectionsincludebothurbanandruralCDCs.

Otherstudiesoftheindustryarelesscomparabletoourresearchdesignandmethod.TheRomeoandLampkin(2002)studyisbasedondatafromtheForm990 that nonprofits use to report to the IRS.Their estimateof9,307organizationsissubstantiallylargerthanours.Thedifferencecorre-spondsinparttoaselectionofprogramsratherthanorganizations,withoutcontrolling forduplicate entries, and inpart toa selectionof casesbasedonthekeywordslistedbytheorganizationsontheirForm990,insteadofactualscreening.However,weusedthedatasetoforganizationsfilingForm990tosupplementtheuniverseoforganizationsfromwhichweselectedthesampleforthestudy.16TheotherthreeprimarystudiesontheCDCindustry(GlickmanandServon2003;Vidal1992;WalkerandWeinheimer1998)arerestrictedtoaselectionofcitiesandorganizationsanddonotintendtoberepresentativeofthefieldasawhole.Insum,byintegratingthecollectionoflistsusedbytheNCCED(2005)studyandorganizationaldatafromthesamesourceusedbytheRomeoandLampkin(2002)study,weassembledamorecomprehensiveuniverseoforganizations.Selectingarandomsamplefromamorecomprehensiveuniverseandscreeningqualifyingorganizationsforinclusioninourstudysupportamorereasonableestimateofthesizeoftheindustry.

Table 3. Earlier Studies of the Community Development Field

Author/Year Method Definition Scope Estimate

NCCED(2005) Mailsurvey Housingandeconomic National 4,600 development

RomeoandLampkin(2002) NCSSdatabase Housingandeconomic National 9,307 development

Vidal(1992) Sitevisits “Mature”CDCs 30cities N=130WalkerandWeinheimer(1998) Sitevisitandsurvey “Accomplished”CDCs 23cities N=163GlickmanandServon(2003) Survey PartnershipCDCs 20cities N=218 andcomparisongroup

16Wearethankfultotheauthorsforsharingthedatasetandforhelpinguscompiletheuniverseforthisstudy.



Analysis: Findings and discussionGiventheaforementioneddebatesonthefocusofCDCs’activities,weset

outtodeterminewhatCDCsactuallydofromaprogrammaticperspective.ThereisnoapriorireasontoassumethatoneparticulartypeofCDCwouldemergeorthatCDCswouldclusterintodistinctivegroups.Usinghousingdevelopmentandhousingactivitiesastheprimarydiscerningvariables,ouranalysis revealeda typologyof fourdistinct typesofurbanCBDOs.ThistypologyenablesustoconfirmsomeearlierresearchonCDCs,suchasthefactthatmostofthemproducehousingorengageinhousingactivities.Ourworkaddsvaluebypinpointing the specific typesofhousingactivities inwhich they engageand theprecise amountsofhousing theyproduce.WealsomovebeyondearlierstudiesbypaintingamuchmoredetailedpictureofCDCs’activities.Thispicturepromptsustoquestionthecontinuedrelevanceoftheterm“communitydevelopmentcorporation.”Itmaybemoreusefultobreakthiscategorydownintomorespecificgroupsbasedonourfindings.

TypologyofhousingproducersOurstudyinvolvedusingclusteranalysistoillustratethevarioustypes

ofhousingproducersandthediversityofportfoliocompositionacrossthefourtypesofCDCsweidentified.First,becausehousingproductionisthemainfocusofouranalysis,weusedanaverageof50unitsproducedorreha-bilitatedannuallyduringtheprevious10years,oracumulativetotalof500units,asanindicatorofalargeproducer.Onempiricalgrounds,thisnumberseemedtodifferentiatelargeproducersfromotherCDCs.17Becausehousingproductioncouldbedefinedintermsofeitherthetotalunitsrehabilitatedordevelopedasnewconstructionorintermsofthetotalnumberofunitspro-ducedforhomeownershiporrental,wedecidedtoincludetheorganizationsthatmettheminimumthresholdbasedoneitheroneofthesedefinitions.18

After defining the group of large housing producers, we integratedseparateorganizationswithnohousingproductionduringtheprevious10

17Wetestedvariouscutoffpointsincombinationwiththeclusteranalysis(tobeexplainedlater).Differentcutoffpointsdidnotproduceabettergroupingoforganizationswhenother(thanproduction)housingactivitieswereconsidered.

18WefollowthedefinitionofoutputusedbyVidal(1992,66):“CDCsengagedinhousingdevelopmenthaveeitherrehabilitatedexistingunitsorbuiltnewones.”However,byincludingorganizationsthatmeetthe500thresholdineitherofthesetwomeasures,wereconcilesomeinconsistenciesinthedatareportedbytheorganizationsaboutthenumberofunitsbuiltorrehabilitatedandwhethertheseunitswereconstructedtobesoldtothepublic,builtasrentalunitskeptby thedevelopingorganization,built foraclientorganization,orownedby thedeveloperbutmanagedbyanotherorganization.



yearsandcreateda secondgroupofCDCs.We labeled the secondgroup“non–housingproducers.”19Thoughthesetwoextremeswereobviouscut-offsfromthedistributionofthesamplebasedexclusivelyonlevelsofhous-ingproduction, theremainingmiddlegrouppresentedamorechallengingtask.Thequestion thatwe facedwaswhether the remainingCDCscouldbedividedintoone,two,ormoregroupsandwhatthecut-offpointswouldbeifwedeterminedthatthereweresubstantialdifferencesinthecases.WeusedclusteranalysisofCDCs’participationinother(nonproduction)hous-ingactivitiestodividethemiddlegroup.ClusteranalysisallowedustofirstdifferentiatestructuresandthentodeterminethenumberofgroupingsthatwouldmaximizethedegreeofassociationbetweenCDCsiftheybelongtothesamegroupandtominimizeassociationacross theresultinggroups.20WeusedEuclideandistance toestimate thegeometricdistanceamong themultiplehousingactivitiesavailablefromthesurvey(listedintable4).21

Themeansforthevariablesusedintheclusterprocedurefortheresult-ing groupings are shown in table 4. Ultimately, we divided medium pro-ducers into two groups. The first consisted of those with lower housingproductionandfewerhousingactivities,andthesecondhadhigherhousingproductionandamoreactivehousingprogram.Thoseinthesecondgroupwiththehighestaverageofhousingproductionanddevelopmentalsohaveahigherincidenceofengaginginthefollowingprograms:homeownershipandloanscounseling(2.36to0.79),tenantrightscounseling(0.65to0.40),repairof existingunitsandclean-upcampaigns (1.62 to0.84), andotherhousingactivities.

Basicdescriptiveandproductiondataforthefourtypesofhousingpro-ducersarepresentedintable5.Thegroupoforganizationsproducing500ormoreunitsduringthepreviousdecade(highproducers)isthesmallestgroup,with an estimated581organizations representing18percentof the total.AlthoughlikeearlierstudieswefoundthatmostCDCsproducehousingor

Table 4.MeansfortheVariablesUsedtoGeneratetheTwoClustersofMediumProducers

19Asinthecaseofthelargegroup,thecut-offpointforthisgroupprovedtodifferentiateorganizationsintermsoftheirprofileofactivitiesotherthanhousingproduction.

20Clusteranalysiswasusedtotestwhetherthegroupingresultingfromexperimentsthatincludedbothproductionandotherhousingactivityvariableswouldyieldsimilarresults.Wefoundthatcombiningproductionandhousingactivitydataminimizedthelogicalimportanceattributedtoproductioninouranalysis.Housingproductionwasreducedtoonemoreele-mentamongequalswhendeterminingthegroupings.Whenweseparate intotwosteps theprocedurefordevelopingthetypology,theresultinggroupings(oftwo,three,orfourtypesofCDCs)didnotshowthesamedifferencesinproductionandnonproductionactivitiesasthosereportedinthearticle.

21Euclideandistanceiscomputedasdistance(x,y)={Σi(Xi-Yi)2}–whereXiisthevalueof

variableXatobservationi,andYiisthevalueofvariableYatobservationi.



engageinhousingactivities,fully21percentproducenohousingatall.22Thelargest categoryofCDCs (40percent) consistsofmediumproducers thatengageinfewotherhousingactivities.Theremaining22percentaremediumproducersthatdoengageinotherhousing-relatedactivities.Thisgrouphassubstantialhousingactivities thatoftenexceed the levelofnonproductionactivitiesofthehighgroup.

We find important differences in housing production and ownershipamongthefourtypesoforganizationsoverthepastdecade.Bydesign,highproducershavethemostmeanandmedianlevelsofunitsofhousingbuiltorrehabilitatedorcurrentlyowned.Theseorganizationshavehousingproduc-tionorownershipthatismorethan10timesthatofmediumproducers.Forexample,over theprecedingdecade, themean for rental andhomeownerunitscompletedwas1,088unitsforhighproducersversusameanof127formediumproducerswithhousingactivitiesand106forthosewithfewhous-ingactivities(table5).Thedifferenceinthemedianandmeanlevelsforhighproducersindicatesthatthisgroupisfurtherbifurcated,withaselectgroupoforganizationsachievingsignificantscaleinhousingdevelopment.Identi-fyingthisclearlydistinctgroupofhighproducersisanimportantfinding.Whatdoestable5’sdistributionofCDCsacrossthefourcategoriestellusaboutthecommunitydevelopmentfield?First, it ischaracterizedbygreatdiversityamonghousingproducers.OnewaytoassesswhetherthesefourgroupscanbeconsideredCDCtypesor“models”istoassesstheiroverallportfolioofhousingandnonhousingactivities.

Table 4.MeansfortheVariablesUsedtoGeneratetheTwoClustersofMediumProducers

Cluster

Activity 1 2

Homeownershiploansandcounseling(0–3) 0.79 2.36

Repairexistingunitsandclean-upcampaigns(0–2) 0.84 1.62

Rentalconversionandhousingacquisition(0–2) 0.29 0.62

Propertymanagement(0–1) 0.53 0.57

Tenantsrights,counseling,oradvocacy(–1) 0.40 0.65

22Thisfindingdifferssignificantlyfromthe1991and1995NCCEDreportsandfromVidal(1992),allofwhichfoundthat90percentofCDCsengagedinhousing.WeattributethisdifferencetotheinclusionofabroadergroupoforganizationsaddedfromtheNCCED(2005)datasettotheuniverseforthestudy.Althoughtheycarryoutcommunityeconomicdevelop-mentactivities,theydonotproduceanyhousingandengageinminimalhousingactivities.



ToassessCDCs’housingactivityportfolio,welistintable6bygrouptheproportionofCDCsthatengageineachoftheninehousingactivities.Whilehousingactivitiesaregenerallyhighlycorrelatedwithhousingproduc-tion,thisgeneralfindingdoesnotapplytotherankingofactivitiesbetweenthehighproducersandthemediumproducerswithhighhousingactivities.Thelatteroutrankallothergroups,includingthehighproducers,insevenoftheninehousingactivitiesweinquiredabout,withtheexceptionofcondo-miniumconversionandpropertymanagement.Thesetwoareexceptionsinotherwaysaswell.Condominiumconversionisanegligibleactivitythat,forexample,only6percentofthehighproducerscarryintheirportfolio.Con-versely,propertymanagementisoneofthehighest-rankingactivitiesforallthegroupsrelativetootherhousingprogramming.Housingpreservation(asindicatedby“weatherizationand/orrepairofexistingunits”),homeowner-shipcounseling,andpropertymanagementaretheactivitieswiththehigh-

HousingProducers

Medium Medium High NotaProducer Producerwith Producer Produceror inthePast FewHousing withHousing Developerof Group 10Years Activities Activities 500orMoreUnits Total

Validnumber—sample(%) 77 152 83 81 393Validnumber—weighted(%) 698 1,317 719 581 3,315Frequency—weighted(%) 21 40 22 18 100

500ormoreunitsinthe 0 0 0 100 18 past10years(%)

500ormorerehabilitationand 0 0 0 83 15 newconstructionunitsinthe past10years(%)

500ormorehomeownership 0 0 0 79 14 andrentalunitsinthe past10years(%)

Mean10-yearsumofrental 0 106 127 1,088 261 andhomeownershiphousing unitscompleted(%)

Median10-yearsumofrental 0 60 84 850 57 andhomeownershiphousinghousing unitscompleted(%)

Mean10-yearsumofnew 0 114 137 1,441 328 constructionandrehabilitation housingunitscompleted(%)

Median10-yearsumofnew 0 80 95 903 78 constructionandrehabilitation housing units completed (%)housingunitscompleted(%)

Table 5.DescriptiveStatisticsofFourTypesofCDCHousingProducers



estproportionofCDCsparticipating.Thenonproducercategorydoesnotengageinmuchhousing-relatedactivity.

Overall, thesedatarevealgreatvariationamongurbanCDCs’portfo-lioofhousingactivities,withthemediumproducerswithhousingactivitieshavingthehighestoverallengagementinhousingactivitiesotherthanhous-ingdevelopment.Takentogether,thesesignificantvariationsinhousingpro-ductionandother(nonproduction)housingactivitiesvalidateatypologyofCDCsbasedontherelativeimportanceofhousingintheiroverallportfolio.

TheprevalenceofnonhousingactivitiesinCDCs’portfoliosThus farwehaveassesseddifferences among the four typesofCDCs

basedonhousingactivities.An importantquestion that follows fromourreview of the literature is whether housing production is associated withamoreor lessdiversifiedportfolioofactivities.Togauge the intensityofeach category’s involvement in various non-housing-related activities, wecreated a scale of the various activities that comprise the organizational

HousingProducers

Medium Medium High NotaProducer Producerwith Producer Produceror inthePast FewHousing withHousing Developerof GroupHousingActivity 10Years(%) Activities(%) Activities(%) 500orMoreUnits Total(%)

Weatherizationand/or 8 55 92 68 55 repairofexistingunits(%)

Residentialclean-uporpaint 6 29 70 49 37 campaigns(%)

Conversionofrentalunitsto 1 5 0 6 3 co-oporcondominium(%)

Housingacquisitionto 4 24 62 51 33 preventdisplacementor preserveaffordability(%)

Propertymanagement 10 53 57 73 48 services(%)

Administrationofloan 6 19 72 55 34 Funds(%)

Anti–Predatorylending 9 19 71 56 35 campaignorprogram(%)

Tenantsrights,counseling, 12 40 65 58 43 oradvocacy(%)

Homeownershipcounseling(%) 11 42 94 79 53

Table 6.TypeofHousingProducersbyHousingActivity



portfolio.23Anexaminationoftheportfoliocompositionofthefourtypesof producers reveals that CDCs engage in a substantial amount of non-housing-relatedactivityandthat,forthemostpart,theyarenotnarrowlyfocusedonhousing.

Table7showsthescoresforvarious indexesofnonhousingeconomicdevelopmentandsocialserviceandeducationalactivities.Asagroup,CDCsengageinawiderangeofcommunitydevelopmentactivities.However,con-trarytoexpectationsbasedontheliterature,thedatasuggestthatspecializa-tioninhousingproductionandactivitiesisnotassociatedwithalessdiverseprogram portfolio. In all activities except incubator programs, large andmediumproducerswithhousingactivitieshaveahigherindexofnonhousingactivitiesthannonhousingproducersormediumproducerswithfewhousingprograms.Infact,mediumhousingproducerswithhousingactivitiesexhibitthehighestscoresinthreeofthefournonhousingactivitiescategories.Thedata in table7also suggest that theportfolioofnonhousingproducers issomewhatlessdiversifiedthanthatofhousingproducersandthathousingproductionmightactuallybethefoundationforamorediversifiedcommu-nitydevelopmentportfolio.Thesefindingsclearlycontradictthecontentionthathousingspecializationisassociatedwithlessengagementinothercom-munitydevelopmentactivities(GoetzandSidney1994;Stoecker1997).

Further,examinationofbudgetdataclearlyrefutesthenotionthathous-ingdevelopmentandotherhousingactivitiestypicallyprevailoveramorebalancedportfoliowherenonhousingactivitiesplayasignificantrole.Rather,anexaminationofthebudgetallocationdataforcoreeconomicdevelopmentactivities includinghousing (presented in table8) supports theperspectivethatthereissignificantdiversitywithinthefield.Thereportedhousingbud-getasapercentageoftheoverallbudgetforthethreecategoriesofCDCsthat produce housing was approximately 33 percent (not shown in table8).24 Housing may represent the largest portion of their budgets, but the

23Thegroupingofvariablesisbasedonfactoranalysesconductedforeachofthetypesofactivities(socialandeducational,economicdevelopment,andhousing).Forexample,thescaleidentifiedas“homeloansandcounseling”includesthethreeyes/novariables:administrationofloanfunds,anti–predatorylendingcampaignorprogram,andhomeownershipcounseling.The loadingof thesevariables inthefactoranalysis indicatedthat theseactivitiesareoftenimplementedbytheorganizationsascomplementaryactivities.

24As is thecasewithotherstudies, thedatareportedhereareaffectedbythefact thatCDCsbudgetinverydiverseways.Theinformationusedinouranalysiswasobtainedbyask-ingCDCswhattheir“totalannual(coreoperating)budget,excludingconstruction”wasforthepastfiscalyear.Inaddition,respondentswereaskedtoindicateforavarietyofspecifiedfunding sources, includingother sources, “the approximatedollar amountof funding theyprovidefor[their]coreoperatingbudget.”Inafewcases,thetotalofthesefundingsourceswassuperiortothereportedoperatingbudget.Inthosecases,weusedthehighestvalueinourbudgetanalysis.



lion’sshareisusedforotheractivities.The21percentofCDCsthatdonotproducehousing tend togivepriority toeconomicdevelopmentactivities,whichaccountfor27percentoftheirbudget;forotherCDCs,expendituresforeconomicdevelopmentprogramsrepresentedasmallfractionoftheover-allbudget.Atthesametime,housingclearlyremainsimportanttothefield.ThesefindingslendcredibilitytoVidal’sassertionthat“CDCsthattrulyareinterestedindoing‘only’housingarefewandfarbetween.Muchmorecom-monaretheCDCsthathaveabroadmissionofcommunityimprovementandtothatendengageinavarietyofcommunityimprovementactivities”(1997,430).

CharacteristicsofhighproducersGiventhefindingofawell-definedgroupof18percentofCDCsthat

producearelativelylargeamountofhousingcomparedwithotherCDCs,wewantedtogainabetterunderstandingofthecharacteristicsassociated

HousingProducers


Socialandeducationalactivities

Jobtrainingandeducational 1.39 1.32 1.94 1.87 1.56 (scale0to5)

Socialservices 0.80 1.13 1.57 1.18 1.16 (scale0to5)

Allsocialandeducational 2.19 2.45 3.51 3.05 2.72 activities(scale0to10)

Economicdevelopment

Incubator(scale0to6) 1.67 0.58 0.94 0.88 0.94

Venturecapital(scale0to3) 0.10 0.11 0.11 0.22 0.13

Communityequity(scale0to3) 0.19 0.09 0.26 0.13 0.15

Commercialdevelopment 0.43 0.25 0.30 0.42 0.33 (scale0to1)

AlleconomicDevelopment 2.39 1.03 1.61 1.65 1.55 scale(0to12)

Totalofnonhousingactivities 4.58 3.48 5.12 4.70 4.27 (scale0to22)

Table 7.Social,Educational,andEconomicDevelopmentActivitiesbyTypeofHousingProducers



withhighproduction.Thisisimportantbecauseofpersistentconcernsaboutscalabilityandbecauseofthepresumptionthatlargerproducerswouldhavegreater expertise and resources. Specification of these characteristics mayalsofacilitatesupportforthecreationandstabilityofthesetypesoforgani-zations.Asnotedpreviously,wefindthatmostCDCsengageinarelativelydiverserangeofactivities.Ifthenonhousingactivitiesportfoliois“compre-hensive” (a conceptwidelyused in the field), thequestion thenbecomes:Whatarethetypesofactivitiesthataremoreconducivetohousingproduc-tionoraremoreassociatedwithhighhousingproduction?Weusealogisticregressionmodel to explain theodds thataCDCwillbelong to thehighgroup.Thelogisticregressionequationisasfollows:

logit(P)=α+β1X1+…+βiXi (1)

wherelogit (P) is the log of the odds that a CDC will belong to thehighhousingproducergroup(Highhpd),αistheconstantoftheequation,andβisthecoefficientofthepredictorvariablesX.ThedependentvariableHighhpd(0,1)equals1iftheorganizationcompleted500ormoreunitsofnewconstructionorrehabilitationor500ormorerentalandhomeowner-ship units over the past 10 years. Table 9 specifies the definitions of thevariablesincludedinthemodelandsummarizestheirmeansandstandard

HousingProducers


Housingbudgetaspart 6 33 36 40 28 oftheannualbudget(%)

Economicdevelopment 27 2 3 4 7 budgetaspartof theannualbudget(%)

Commercialproperty 6 2 1 3 3 developmentbudget aspartofthe annualbudget(%)

Table 8. EconomicDevelopmentBudgetCategoriesasPercentageoftheTotalBudget

Note:Thereportedbudgetsarecorrectedtobeconsistent,becausenotallCDCsreportedallthebudgetinformation(between5and18percentofCDCsineachgroupdidnotatleastreportonebudgetcategory).Incaseswithdifferencesinthetotalbudgetreportedandthesumofthebudgetbycategories,weusedthesumofthebudgetbycategoriestoreportpercentages.



deviations.Forinstance,about20percentofCDCshavealargecapacityasmeasuredbyalargestaffandbudget,42percentareaffiliatedwithnationalintermediaryorganizations,and72.8percentofboardmembersofthetypi-calurbanCDCarelocalresidents.

Table10presentstheresultsfortwotypesofmodels.Thefirstisabaselinemodelwithcontrolvariablesfororganizationalcapacity.FollowingVidal’s(1992)analysisofmatureCDCsandtheworkonCDCcapacitybyGlick-manandServon(1999,2003),weassumethatorganizationalcharacteristicsinfluence the “scale of their physical output” (Vidal 1992, 90–91).Thesecharacteristicsincludetheorganization’ssizeasmeasuredbylargebudgets

Table 9.DefinitionofVariablesforSurveyLogisticRegressionModel

StandardDefinition Mean Deviant

Dependentvariable

Highhpd Housingproducersandthedevelopersthathave 0.18 0.38 produced500ormoreunitsinthepast10Years

Independentvariables

large Largecapacity,asdeterminedbyhavinga 0.20 0.40 budgetof$1millionorhigherandastaffsize of26ormore

age AgeoftheCDC 21.5 13.3

loghstok LogofthehousingstockintheareaservedbytheCDC 10.4 1.62

affil Affiliationwithnationalintermediaries 0.42 0.49

comptrai Staffcomputertraining 0.30 0.46

prctbres Localresidentsasapercentageoftheboard 72.8 33.2

tenure Tenureoftheexecutivedirector(years) 9.27 7.76

staffturn Professionalstaffturnover(basedonthetotalofpart-time, 11.0 18.0 full-time,andvolunteerprofessionalstaff)(%)

phousb Housingbudgetasapercentageofthecorrected 22.9 34.7 annualbudget

prctbbus Representativesoflocalbusinessesandfinancial 29.4 23.5 institutionsasapercentageoftheboard

housact Housingactivity(scale0to9) 3.40 2.46

jobtraedu Jobtrainingandeducation(scale0to5) 1.56 1.33

socserv Socialservices(scale0to5) 1.16 1.54

econdev Economicdevelopment(scale0to12) 1.22 1.90

orgact Numberofcommunityorganizingand 2.16 1.41 advocacyactivities(scale0to4)



andstaffs, the importanceof theprogramarea(asmeasuredbyhousing’sshareofthetotalannualbudget),andthegroup’sexperienceandleadershipstability(usingtheageoftheorganization,professionalstaffturnover,andthetenureoftheexecutivedirectorasproxies).Otherorganizationalvari-ablesaretheproportionofrepresentativesoflocalbusinessesandfinancialinstitutionsandlocalresidentsontheCDC’sboardandtheproportionofemployeesreceivingcomputertraining.Finally,thebaselinemodelincludescontrolvariables for thesizeof themarketwhereCDCsoperate (asmea-suredbythehousingstockofthetargetarea)andforwhethertheCDCisaffiliatedwithanational intermediary(an indicatorofnetworkcapacity).Toestimatethesecondlogisticregressionmodel,weaddtothecoremodelorbaselineequationsomevariablestomeasuretheimportanceoftheport-folioasadeterminantofhighhousingproduction.Inadditiontohousingactivities,variablesforprogramactivitiesincludejobtrainingandeducation,socialservices,economicdevelopment,andthenumberofcommunityorga-nizingandadvocacyactivities.

Inthecontextofthesemodels,theoddsratioisawayofcomparingtheeffectofagivenvariable in theodds thataCDCwillbelong to thehighhousingproducer groupversus theodds that itwill belong to anyof theother groups, controlling for, or net of, the relative effects of other vari-ablesinthemodel.Thebaselinemodelshowsprimarilytwothings:first,thatresourcesandorganizationalstabilityincreasedtheoddsthatanorganiza-tionwillbelongtothehighgroupand,second,thattheboardsofdirectorsofthisgrouparecomposeddifferentlyfromtheboardsofothersuchorga-nizations.Astothefirstfinding,boththevariablethatcombinesstaffsizeandbudget(large)tocontrolforresourcesandthespecializationinhousing(asmeasuredbytheshareofhousingactivitiesfromthetotalbudget)have,asexpected,greaterthan1andsignificantoddsratiosforlargehousingpro-ducers.Havingalargecapacityincreasestheoddsofbelongingtothehighgroupbya factorof5.409,whilea1percent increase in theshareof thebudgetdevotedtohousingincreasestheoddsbyafactorof1.018.25Largestaffandbudgethavethehighestoddsamongallothervariablesforbelong-ingtothehighgroup.AlthoughtheageoftheCDCisnotasignificantfactorin the equation, other variables used as proxies for organizational stabil-ityimprovetheoddsofbeingalargehousingproducer.Highprofessionalstaffturnoverreducestheoddsofbeingahighproducer(0.964),whilethetenureoftheexecutivedirectorsincreasestheodds(1.033).Affiliationwith

25Anoddsratioof1impliesthattheCDCisequallylikelytobelongtoeithergroup.Anoddsratioofgreaterthan1impliesthattheCDCismorelikelytobelongtothehighgroup.



Table 10.SurveyLogisticRegressionResultsforBelongingtotheHighGroup

Model1 Model2 (Baseline) (BaselineandPrograms)

large 5.409*** 6.627*** (2.080) (3.127) age 0.998 1.001 (0.013) (0.016) loghstok 1.322*** 1.428*** (0.115) (0.168) affil 2.800*** 2.257** (0.994) (0.866) comptrai 1.976** 1.983* (0.695) (0.745) prctbres 0.989** 0.986*** (0.005) (0.986) tenure 1.033* 1.022 (0.020) (0.020) staffturn 0.964*** 0.956*** (0.013) (0.014) phousb 1.018*** 1.015*** (0.005) (0.005) prctbbus 1.020*** 1.018** (0.007) (0.008)

housact 1.392*** (0.154)

jobtraedu 1.024 (0.178)

socserv 0.739**` (0.091)

econdev 0.975 (0.095)

orgact 0.975 (0.164)

n 393 393

N 3,315 3,315 Prob>F 0.0000 0.0011

Note:Standarderrorsappearinparentheses.*p<0.10.**p<0.05.***p<0.01.



nationalintermediariesandthehousingstockoftheserviceareastargetedbytheorganizations(withoddsratioof2.800and1.322,respectively)alsoimprovetheoddsofbelongingtothehighgroup.Finally,itisimportanttohighlightthathigh-producingorganizationsarepredictedbythepresenceofalargerproportionofbusinesspartners(1.026)andalowerproportionofcommunityrepresentatives(0.987)ontheboard.26ThisfindingisrelevantforthedebatewithinthecommunitydevelopmentfieldovertheextenttowhichCDCsremainrootedintheircommunities.Wewilldiscussthisfindinginmoredetaillater.

Thesecondlogisticregressionmodelrevealstheimportanceandcomple-mentaritiesofhousingactivitiesforthelikelihoodofbelongingtothehighgroup.Theodds ratio for the scaleofninehousing activities (housact) is1.392 and is significant at the 0.01 level. The implication is that a morediversifiedhousingportfolioincreasestheoddsthataCDCwillbeahighhousingproducerinsteadofbelongingtoanyoftheothergroupsbyafactorof1.392.Ofalltheotherprogrammaticportfolioactivities,ahigherscoreinthesocialservicesindexreducestheoddsthatanorganizationwillbelonginthehighgroupbyafactorof0.739.Thesefindingsleadtoanimportantobservation.Highhousingproducersspecialize inhousingproductionbutarealsomorelikelytoparticipateinothernonproductionhousingactivitiesthantheotherCDCtypesusedasareferencegroup.Othereconomicdevel-opment,educationalandjobtraining,ororganizingandtrainingactivitieswerenotrelatedtoaCDC’sbelongingtothehighgroup.

Theresultsfromthelogitmodelsareconsistentwithourprioranalysisofthedata.Overall,theevidenceindicatesthathousingisthefoundationforamorecomprehensivesetofcommunitydevelopmentactivitiesthanwouldbeexpectedfromdiscussionsofthistopictodate.AlthoughsomescholarshavepointedtothediversityofactivitiespursuedbyCDCs(Brophy&ReillyLLC 2001; Vidal 1997), others maintain that CDCs are much more nar-rowlyfocusedonhousing.Eisenberg,forexample,assertsthatmanyCDCs“dropped their organizing, advocacy, and community leadership devel-opment activities” to focus almost exclusivelyonhousing (2000, 3).Ourresearchshows,however,thathavingfewornohousingactivitiesisstronglyassociated with a less comprehensive portfolio. In other words, organiza-tionsthatproducehousingtendtoengageinarangeofotheractivitiesaswell,whilethosethatproducenohousingtendtofocusonanarrowrangeofactivitiessuchaseconomicdevelopment.

26Anoddsratiooflessthan1impliesthatahighproportionofcommunityresidentsontheboardreducestheoddsthattheCDCwillbelongtothehighgroup.



CDCs’connectiontocommunitiesIfweassociate the largerproportionofbusinessand financial institu-

tionsontheboardsofthoseCDCsthatspecializeinhousingwithexternalcontrol,thenthefindingsfromthelogitmodelssupportthecontentionthattheseCDCsmayhave strayed from their roots (Eisenberg2000;Stoecker1997).However,theseresultsaretemperedbythefactthattheoverwhelmingmajorityofCDCs—79percent—engageinorganizingactivities.Specifically,asillustratedintable11,73percentofallCDCsorganizearoundcommunityplanningissues;55percentdevelopcommunityorganizationssuchasneigh-borhood associations, block clubs, neighborhood watch associations, andyouthgroups;58percentorganizearoundcommunity issues;and31per-centconductvoterregistrationdrives.CDCs’engagementinorganizingandadvocacy lendscredibility toBratt’sassertion that“numerousCDCs,par-ticularlythosethathavebeeninoperationforawhile,areactivelyengagedinbuildingthepowerbaseoftheircommunities,despitethefactthattheyalsoownandmanageaffordablehousing,andmaybeevencommercialproperty”(1997,27).27

HousingProducers


Organizecommunityplanning(%) 67.3 62.2 91.1 80.6 72.8

Organizearoundcommunity 48.1 50.9 75.2 65.0 58.1 issues(%)

Developcommunity 38.8 49.8 71.0 68.7 55.4 organizations(%)

Conductvoterregistration(%) 20.9 27.6 40.3 37.7 30.7

Performoneormoreofthe 73.2 76.1 96.3 88.3 82.0 aboveactivities(%)

Numberofactivities 1.75 1.89 2.78 2.51 2.16 (scaleof0to4)

Table 11. CommunityOrganizingandAdvocacyActivities

27Ourdatadonotallowustogaugethedepthandbreadthofthisorganizingwork,butratheronlywhetherornottheyengageinit.



Howdowereconcileourfindingswithcontendingviewsinthefield?Ourevidenceclearlysupportstheviewthatlargehousingproducersaremorelikelytohaveadifferentboardcompositionthanotherorganizations.Butthecompositionoftheboard,whichindeedshowsanorganizationalpreferenceforamorebusinesslikedecision-makingstructure,doesnotnecessarilyimplyanabandonmentofcommunityorganizingandadvocacy.Infact,highhous-ingproducershaveabove-averageparticipationinalloftheseactivities(80.6percentcomparedwithanaverageof72.8percentfortheOrganizeCommu-nityPlanningcategory).Highproducersexceednonhousingproducersandmediumproducerswithfewhousingactivities(whichtogetherconstitute61percentoftheindustry)inallsixcategoriesofthesetypesofactivities.Thisevidencesupportstheviewthathighhousingproducershavenotabandonedthesocialactivismmissionembracedbythecommunitydevelopmentfieldin general. Our findings also are consistent with case study research thatsuggest that community organizing and building connections to externalstakeholders are complementary, rather than competing, strategies whenbuildingciviccapacityinurbanneighborhoods(Saegert2006).

It is also important to consider the composition of the boards morebroadly,asanindicatorthatCDCscontinuetoberesponsivetotheircom-munities.Oursurveydatashowthatmorethan93percentofallCDCboardscontainlocalresidents(table12).Onaverage, localresidentsmakeupthemajority—73percent—ofthetotalboard.Atotalof8percentarereligiousleaders,7percentaregovernmentofficials,and29percentarepeoplefromthebusinessandfinancialworlds.28Thesefindingsrevisitconclusionsbasedonprevious,nonrepresentativestudiesassertingthatone-third(Vidal1992)toone-half (Kelly1977)ofboardmembers liveoutside theCDC’s servicearea.Onepossibleexplanationforthisfindingmightbetheimpactoftheboardcompositionrequirementforcommunityhousingdevelopmentorga-nizations(CHDOs)applyingforlocalgovernmentaidandthestate’sHOMEfunding.This important source for affordablehousing funding contains a15percent set-aside forCHDOs.29Andwhile somehave found thatmaledominanceofCDCboardsmayleadtoabusinessorientationinCDCs(Kelly1977;seealsoGittelletal.1994,whichiscitedinStoecker1997),wefind

28Totalsadduptomorethan100percentbecauseofoverlappingcategories.29TheCranston-Gonzalez1990NationalAffordableHousingActcreated,amongother

things,theHOMEInvestmentPartnershipAct,commonlyreferredtoastheHOMEprogram,whichhasa15percentset-asideforCHDOs.TheyareeligibletoapplyforallHOMEmoney,aswellastheset-aside.CHDOsarerequiredtohaveaminimumofone-thirdoftheirboardcomposedof residents living in low-incomeneighborhoods, low-income residents,or thosewhoareelectedrepresentativesoflow-incomeneighborhoodorganizationsbutwhoarenotpublicofficials(thesearecountedaspartofadifferentrequiredcategory).



HousingProducers

Medium Medium High NotaProducer Producerwith Producer Produceror inthePast FewHousing withHousing Developersof Group 10Years Activities Activities 500orMoreUnits Total

CDCwithboard(%) 100.0 99.1 100.0 100.0 99.6

Meanoftotalboardmembers 15.80 14.60 30.35 16.23 18.57

1to9boardmembers(%) 6.5 6.3 6.9 6.9 6.6

10to14boardmembers(%) 7.2 6.5 6.1 6.6 6.6

15to19boardmembers(%) 6.8 7.6 7.2 7.6 7.4

20to24boardmembers(%) 8.4 8.1 8.4 8.3 8.3

25ormoreboardmembers(%) 8.1 8.6 8.4 7.6 8.3

Boardmembersincludethefollowinggroups

Localresidents(%) 93.3 98.0 97.9 99.8 97.3

Localreligiousleaders(%) 39.2 49.9 45.2 47.9 46.2

Representativesoflocal 82.0 78.8 91.1 88.7 83.9businessesandfinancial institutions(%)

Localgovernmentofficials(%) 48.9 30.4 38.1 40.7 37.8

Boardmembergroupsasapercentageofthetotalboard b

Localresidentsasapercentage 66.3 79.0 73.3 66.4 72.8 oftheboard

Localreligiousleadersasa 8.9 8.9 5.7 6.1 7.7 percentageoftheboard

Localgovernmentofficialsas 9.8 5.8 6.0 7.4 7.0 apercentageoftheboard

Representativesoflocal 33.3 24.2 29.1 36.6 29.4 businessesandfinancial institutionsasapercentage oftheboard

Whiteboardmembers(%) 63.2 62.0 57.6 57.7 60.5

Blackboardmembers(%) 3.7 3.5 6.2 5.3 4.5

Hispanicboardmembers(%) 6.5 7.7 5.5 9.9 7.3

Femaleboardmembers(%) 33.1 43.9 44.7 42.5 41.5

Note:Between5and18CDCsdidnotansweroneormoreofthesequestionsandwereleftasmissing.aThefiguresrepresentweighteddata.bThelocalcategoriesmayoverlap.

Table 12. CDCTypesbyBoardCompositiona



that women constitute 40 percent of CDC boards. These findings do notnecessarilytranslateintocommunitycontrol,buttheydoindicateadifferentboardcompositionprofilefromtheonethatpreviousstudieshadsuggested.

ConclusionsInwhatwaysdoourfindingshelpustobuildknowledgeandrecom-

mendpolicyforthecommunitydevelopmentfield?First,oneofthecommonnarrativesdescribingtheevolutionofthefield—thatitshiftedfrombroadtonarrow,withafocusonhousing—isnotentirelytrue.WhileonegroupofCDCshasbecomefocusedonhousingandeconomicdevelopment,mostofthefieldremainsdiverse.OurfindingscontradictthenotionthatCDCsthatproducelargeramountsofhousinghavelessdiversifiedportfoliosandfewerconnectionstothecommunity.Housingappearstoserveasafoundationforhighproducers,versusorganizationswithlesshousingproductionornoneatall,toofferothercommunitydevelopmentactivities.

Withrespecttothedebateswediscussedintheintroductiontothisarti-cle,ourresearchshowsthatmostCDCscontinuetoengageinadiversearrayofactivities, lendingsupporttoVidal(1997)andRohe,Bratt,andBiswas(2003).Atthesametime,wefindsignificantsubgroupsofCDCsthathaveoptedtospecializeinhousingornottoproduceanyhousingatall.However,mostCDCshaveadiversifiedportfolioofhousingandnonhousingactivities.TofullyinvestigateStoecker’s(2003)claimthatdevelopmentandorganiz-ingshouldbeseparated,itisimportanttodevelopmeasuresofsuccessforboth activities and to explore the extent to which it is possible for theseactivitiestobecomplementaryand,byimplication,foraCDCtobeabletodobothwell.Thiskindofinvestigationwouldbealogicalnextstepfromthisresearch.AnotherusefulnextprojectwouldbetoinvestigatethefactorsunderlyingCDCs’decisionstofocusoneitherorganizingordevelopment.

Giventhediversityoftypesandemphases,CDCscannotbejudgedbythesameyardstick.Ourfindingsmayevensignaltheendoftheusefullifeoftheterm“communitydevelopmentcorporation.”Ourresearchindicatesthatwemustrethinkthewaythatwestudy,evaluate,andsupportCDCs,regardlessoftheirnomenclature.Onenextstepmightbetodevelopdistinctevaluation frameworksandsupport strategies tobeused foreach typeofCDC.SuchframeworkswouldbeusefulforrewardingCDCsbasedontheirintent,ratherthanonanoverlygeneralorinaccurateideaofwhataCDCissupposedtobe.



AppendixASectionA:ScreeningQuestions

SC1.Doesyourorganizationdeveloporpreserverentalorhomeownerhous-ingorengageincommercial,economicdevelopment,orotherrevenue-gener-atingactivities?YesNo (terminatetheinterview)DON’TKNOW (terminatetheinterview)REFUSED (terminatetheinterview)

SC2.Whatwouldyousayisthegeographicscopeofyourorganization?Isit

SC2.Neighborhoodorcommunitybased?Yes (continuetoQ1)No (terminatetheinterview)DON’TKNOW (terminatetheinterview)REFUSED (terminatetheinterview)

SC3.Wouldyousayitislocal,county,orcitybased?Yes (continuetoQ2)No (terminatetheinterview)DON’TKNOW (terminatetheinterview)REFUSED (terminatetheinterview)

AuthorsEdwinMelendezisaprofessoratMilanoTheNewSchoolofManagementandUrbanPolicy,andLisaJ.ServonisanassociateprofessoratMilanoTheNewSchoolofManagementandUrbanPolicy.

TheauthorsacknowledgethefinancialsupportoftheFordFoundationto the Community Development Research Center, as well as the valuableassistanceoftheUrbanInstitute’sNationalCenterforCharitableStatistics,the Enterprise Foundation, the Neighborhood Reinvestment Corporation,theLocalInitiativeSupportCorporation,Seedco,andothergroupsthatpro-vided lists for the universe of community development corporations. ThedatasetwaspreparedbyChristianVillenasandEdwinMelendez,withtheassistanceofJoyLaChelleBailiefromaprojectfundedbyLivingCities.Thesurvey was designed by a joint team of researchers from the Community



Development Research Center (Edwin Melendez, Lisa J. Servon, andAlexSchwartz)andresearchers fromaproject sponsoredbyLivingCities(AidaRodriguez,RikkiAbzug,andMaryWatson).The surveydatawerecollectedbytheCenterforSurveyResearchandAnalysisattheUniversityofConnecticutunderthesupervisionofChaseHarrison.TheFannieMaeFoundationprovidedfinancialsupportforconductingthedataanalysis.

The authors are particularly grateful to the organizations that parti-cipated in thesurveyandfacilitated thecollectionof information.Finally,theauthorsacknowledgethehelpfulcommentsofKristopherRengertandKil Huh, as well as those from two anonymous reviewers. Any errors oromissionsaretheresponsibilityoftheauthors.

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reassessing the role of housing in community‐based urban development

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