By: Landon Bishops, Research Associate
In recent years, government agencies and private funders have increasingly focused on Community Development Corporations (CDCs) as a promising strategy for revitalizing urban neighborhoods and enhancing the well-being of their residents.1 CDCs are non-profit, community-based organizations that provide resources and programs to promote community development in a particular geographical area. These entities emerged in the late 1960s to combat poverty and disinvestment in minority communities across the United States.2 CDCs are notable for their ability to capitalize on private, public, and community resources, serving as a non-traditional form of community governance that prioritizes community residents and local stakeholders.3
According to The People’s Law Library of Maryland, CDCs are generally defined by their “community-based leadership and community-based goals.”4 Formally, a majority of CDCs in the United States are classified as 501(c)(3) non-profits; however, it is important to note that the term “CDC” is not an official government term and that no discrete tax classification exists for them.5 However, several information qualifications for CDCs are used by several government agencies to determine CDC eligibility. The Connecticut Department of Economic and Community Development (DECD) establishes several criteria for grant eligibility in its Community Investment Fund 2030, a recent, wide-scale initiative focused on promoting economic and community development in Connecticut communities.
These criteria establish a general set of characteristics common throughout CDCs in Connecticut. These criteria are (1) “focusing their efforts on serving one or more targeted geographic areas” (2) to “engage local residents and businesses to collaborate on community development programs, projects, and activities that sustainability enhance urban communities and create economic opportunities for low and moderate-income individuals” (3) representation of their respective leadership boards based on residents of the targeted area, low to moderate income individuals, accurate racial and ethnic makeup of the targeted area, and the utilization of committees and public meetings to ensure residents of the targeted area possess proper representation of the CDC.6 These criteria have precedence in other CDC classification criteria used in other states, such as those employed by the Massachusetts Department of Housing and Community Development (DHCD).7 CDCs often utilize a blend of state, municipal, and private funding to operate effectively, leveraging this diversified funding to achieve their goals. Some CDCs also use other non-traditional funding sources, such as university partnerships, to perform work in communities.
In Connecticut, CDCs have had a significant and growing impact on community development. The state is home to an estimated 169 community development corporations, which collectively employ nearly 1,400 people and generate over $120 million in annual revenue, with assets totaling $99 million.8 Affordable housing in Connecticut is defined as housing that costs no more than 30% of a household’s income.9 Despite the recognized importance of affordable housing options, as noted by the Connecticut Department of Housing, many communities across the state continue to face significant challenges in securing affordable, high-quality housing options.10 It is estimated that Connecticut will need approximately 92,560 more affordable housing units in the coming years in order to meet demand.11 Recent studies have highlighted persistent gaps in both affordable and accessible housing, particularly for low-income and underserved populations.12 While national research has examined the successes of CDCs in expanding housing equity and economic development, there is a lack of literature specifically addressing the strategies and impacts of CDCs in Connecticut’s affordable housing sector.
This paper aims to fill that gap by examining the impact of CDCs on the creation, management, and promotion of affordable housing in Connecticut. This paper will focus on three CDCs: Greater Dwight Development Corporation (GDDC), Norwich Community Development Corporation (NCDC), and Local Initiatives Support Corporation (LISC) Connecticut, which is both a CDC and a Community Development Financial Institution (CDFI). Focusing on these three organizations operating in diverse urban contexts, I will use a combination of quantitative and qualitative data to assess how CDCs use state and private resources to address affordable housing needs in their respective communities. These findings aim to inform policymakers, practitioners, and advocates seeking to provide affordable housing in Connecticut and similar environments.