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As CDCs pilot resident investment in their projects, policy needs and opportunities will emerge. Initial recommendations include:
Incorporate Resident Ownership Into Existing Federal Community Development Initiatives. Federally-sponsored community development initiatives, such as Empowerment Zones and the New Markets Tax Credit, could be tailored to foster resident investment in neighborhood real estate projects. In addition, revision of federal securities laws to better reflect the financial and social goals of specific resident investment strategies could facilitate the work of CDCs in this arena by decreasing the effort and legal costs associated with complying with SEC regulations.
Utilize Existing Public Revenue Streams. States, counties, and cities can use various financing tools at their disposal - such as tax increment financing, Community Development Block Grant funds, tax credits and rebates, loan guarantees, land write-downs, zoning bonuses, and direct subsidies - to support planning and implementation of real estate projects with a resident investment component.
Fund Demonstration Projects. While they constitute a promising vehicle for building community ownership, many resident ownership mechanisms are still untested. Funding for demonstration projects that assess the effectiveness of these strategies will lay the basis for taking them to scale. Philanthropy can provide incentives for resident ownership in CDC projects through grants that support resident education and involvement as well as through Project Related Investments (PRIs).
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