Community benefits agreements, community ownership, and resident voice can help neighborhoods thrive from local investment.
The impending construction of the Obama Presidential Center in Chicago’s Woodlawn neighborhood comes with the promise of reinvigorating the community. A 2019 community benefits ordinance has mandated that the City and developers build with an awareness that their work benefit the existing community. New thinking on the ability of community benefits agreements (CBA) to leverage residents’ power could make the difference in creating generational wealth, expanding homeownership, and giving people a stake in how their neighborhood grows amid gentrification.
But there’s distrust around the proposed $500 million institution owing to a long history of efforts to push Black people off prime real estate in city centers.
Woodlawn is a two-square-mile neighborhood just west of Lake Michigan on Chicago’s South Side. Adjacent to the University of Chicago, with its long and controversial history of Southside urban renewal, the community of roughly 23,000 is more than 80 percent Black and has been shrinking since 1970.
“Displacement has already happened. There has been a population loss, so the concern is how to retard the decline, how to make it a neighborhood of choice.”
So when President Barack Obama, a former University of Chicago Law School professor who once lived in neighboring Hyde Park, announced in 2016 that his presidential library would be located in Woodlawn, the news captured widespread attention.
Although, for some, it only brought concern of further displacement and cultural loss.
“There are 102 acres of vacant land in Woodlawn, about half of it owned by the City — and over 200 acres of vacant land in the surrounding region,” said Ghian Foreman, CEO of Emerald South, an economic development nonprofit formed in response to the Obama Center to ensure that Woodlawn can grow in a smart, resilient way.
“Displacement has already happened. There has been population loss, so the concern is how to retard the decline, retain the residents who already live there, and make it a neighborhood of choice to attract more residents while making it a great place to live.”
Ahead of the Obama Center breaking ground, community organizations including the Obama Community Benefits Agreement Coalition, along with Alderwomen Leslie Hairston of the 5th Ward and Jeanette Taylor of the 20th Ward, submitted a community benefits agreement to the Chicago City Council that was at least five years in the making.
The ordinance ensures 30 percent of new developments on 52 vacant lots owned by the City be affordable to low-income residents. It provides landlord and homeowner support to preserve affordable rentals. It requires that any building owner wishing to sell give existing residents first dibs to purchase it, and several other features. The City Council passed the ordinance in September 2020.
“I see so many limitations with a CBA; it’s a good tool in the right situation, but I’d rather be in a situation with control. If the community owned the vacant land, then that’s a different story.”
However, some say the CBA doesn’t go far enough to ensure that Woodlawn avoids becoming the latest casualty of gentrification.
“A CBA is fine, but then that’s all you’re going to get: the minimum,” Foreman said. “I see so many limitations with a CBA. It’s a good tool in the right situation, but I’d rather be in a situation with control. If the community owned the vacant land, then that’s a different story. We could say: Here’s our financial objectives, job objectives.”
Pittsburgh and the Penguins
The Hill District CBA in Pittsburgh, has, since 2008, been touted as an example for Black and Brown communities looking to assert some control over their communities amid the kind of rapid gentrification that can lead to displacement.
Pittsburgh United and a coalition of community groups organized as the One Hill Coalition signed an agreement in 2008 with municipal authorities and the developers of the Pittsburgh Penguins’ sports arena. The agreement would ensure that the construction of a new arena in the Hill District would meet several conditions.
“Power comes from a lot of places and, usually the only power we have to get to the table is people power. The other side had money, lawyers and other stuff.”
Those conditions included the establishment of a steering committee composed of representatives appointed by the coalition and the City Council. The committee would draft and realize a master plan for the Hill District with extensive community involvement. Another condition was for the developer and the city to commit $1 million for a full-service grocery store in the neighborhood. Finally, the community wanted a career-development center, for which the city government allocated $300,000.
The group also demanded that the developers and the City conduct targeted outreach to and have pre-bid meetings with local, minority, and disadvantaged businesses in regard to opportunities stemming from the arena.
“The success of the Hill District CBA was a credit to the work that happened in the neighborhood,” Diamonte Walker, deputy executive director for the Urban Redevelopment Center of Pittsburgh, said.
“The corporation and stakeholders did a lot of work to organize, [and] we are demonstrating a governance model to honor agreements and position communities to advocate for themselves.”
However, more than a decade later, community organizations are still fighting for the CBA’s enforcement.
“One thing we didn’t do is secure sufficient resources for monitoring and enforcement of the agreement,” Carl Redwood, formerly of the One Hill Coalition said.
Redwood added that the Penguins have a roughly $750 million subsidy, but noted that there had never been a specific development commitment linked to parking revenue.
“So now the fight is how much will come back to the community, and who will control it,” Redwood said.
The Penguins have disputed the $750 million figure, and maintained that they have fulfilled their obligation to the community under the CBA.
“The Penguins have fully complied with the terms of the 2008 CBA, including our $1 million investment in the Hill District grocery store, investments in the First Source hiring center, and our hiring of hundreds of permanent workers at our arena who were primarily drawn from Hill District residents,” COO Kevin Acklin said.
“Since 2008, there has been a lot of additional work by the Penguins, including the Community Collaboration and Implementation Plan (CCIP) that was signed in 2014, and work toward advancing the Lower Hill redevelopment.”
“One thing we didn’t do is secure sufficient resources for monitoring and enforcement of the agreement.”
The Hill District CBA was a response to an earlier tragedy: the 1956 demolition of the Lower Hill District to make way for a new Civic Center. The plan, which invoked eminent domain, displaced as many as 8,000 people living in the 100-acre area, including 1,240 Black families who received no benefits since they had abandoned the area before the project had been approved.
The neighborhood had been targeted for demolition as early as 1943, when Pittsburgh City Councilman George Evans famously said that there would be “no social loss” if 90 percent of the buildings in the neighborhood were razed.
“My family was displaced from the Lower Hill. It’s my lived experience and my legacy,” Walker said.
The Penguins had occupied the Civic Center since 1967 but, by 2000, the organization maintained that they needed a new, more modern arena, and set their eyes on the remainder of the Hill District.
“My family was displaced from the Lower Hill. It’s my lived experience and my legacy,” Walker said. “I wasn’t here when the deal was structured, and it was shocking to hear that the benefits were given to the Penguins.”
Redwood and other organizers have likened the extraction of community benefits to picking up “crumbs” from developers and city officials.
“The CBA process is not equitable. When the community comes to the table, the community is always a junior partner just fighting to be heard,” Redwood said. “Power comes from a lot of places and, usually the only power we have to get to the table is people power. The other side had money, lawyers, and other stuff. We were able to insert ourselves into their process and extract some crumbs.”
Anchoring Community in Project Development and Decision Making
A CBA may ease the Obama Presidential Center’s integration into Woodlawn. But community organizers have said getting consensus on what will most benefit a community, maintaining engagement, and monitoring are and remain challenging.
Resident engagement, said Devin Culbertson, Director, National Initiatives for Enterprise, is a balancing act of wishes, power imbalances, and different people’s visions. Moving from a vision to an investment-ready project is a journey.
The power imbalance, he said, and the competing interests can lead to wildly different aims that are often working against the realities of the market — aiming for an entirely affordable development instead of mixed-income, for example, or the competing aims of both building wealth but keeping rents low. It’s perhaps one reason the early research shows that outcomes from resident-led development are ambiguous in whether it leads to quicker, larger, or more sustained gains for residents, the Urban Institute’s Brett Theodos recently pointed out.
Another option, Culbertson thinks, is to think of the process as community-responsive development. It’s better to conceive and propose something in partnership with the community than to ask residents to become developers.
“It’s less about having the community define the details of the development project,” he said, “and more about anchoring the project scope in the lived experience and expressed desires of the community partners, and then finding ways for the project to stay true to that,” Culbertson said.
Colleen Flynn, Senior Director, National Programs at Build Healthy Places Network, feels that despite the challenges, community led projects are critical to addressing racial inequities. “We believe that paying particular attention to who has decision-making power for such investments and how decisions are made is critical to ensure Black, Indigenous, People of Color (BIPOC) communities are the beneficiaries of community-level improvements,” she explains. “This is why we encourage and support investments that are in themselves community-level interventions to address historically racist policies.”
Widespread acknowledgement of the need to replace systems of inequality with those focused on equity, diversity, and inclusion have brought attention to other forms of community agreements, such as co-ops, accessory-dwelling units, and community land trusts, the latter of which have become especially popular.
Community land trusts are nonprofit corporations that retain land on behalf of a community, and in doing so keep homes affordable for the long-term. Families own their home but not the land on which it stands. The families build equity, but should they sell, they agree to cap profits, keeping the home affordable for the next family. There are currently over 225 CLTs in the United States and, as stewards of the land, they maintain a long-term relationship with residents and work with them to enhance the community.
“A community land trust could be very effective if you have the political will to fund it — unless you’re very early, before prices take off.”
However, like CBAs, community land trusts come with their own issues, including market pressure.
“It doesn’t take a lot of subsidy to buy the building in a low-income community and put it in trust but, almost universally, community ownership and community land trusts become of interest when the market is so hot that displacement is a problem,” Culbertson said. “By that point, the amount of subsidy you need to buy down from the market price to be affordable gobbles up the subsidy in short order.”
That was the case in Oakland, Calif., in 2018, when the community land bank tried to buy several single-family homes that a real estate developer was unloading. The Oakland Community Land Trust was founded in 2009 as an antidote to waves of speculative buying in Oakland after the housing crisis. In the span of a decade beginning in 2007 there were upwards of 13,000 foreclosures in Oakland, the vast majority of which were in the low-income neighborhoods, according to Steve King, the executive director of the Oakland Community Land Trust. Investors snapped up many of the foreclosures and rented them out while waiting for the market to recover — the bleeding edge of displacement pressure.
“Money — and the right kind of money — is the best tool to fight displacement.”
But by the time the land trust sought to buy a set of homes, the market was already high-priced, and it took a complicated collaboration between the land bank, three nonprofit funders, and the City to buy just a handful of homes — a proverbial finger in the dam.
Culbertson also said that, while there are circumstances where CLTs make sense, their reliance on subsidies can become a barrier, especially in fast-moving markets like was the case in Oakland. The key, he said, is to get ahead of the frenzy and buy land before the speculators arrive.
Beyond Community Land Trusts
Local governments are increasingly taking action with other methods as well to ensure that Black and Brown communities have some protection from the rampant land speculation that has displaced long-term residents. Permanent Real Estate Cooperatives, for example, permanently take land off the speculative market and move it into community stewardship. Community Investment Trusts allow investors an option to buy into a commercial project at low cost and with some protections as a way to build equity and benefit from any new economic prosperity. Neighborhood Investment Trusts are investment partnerships that connect and enable residents to become shared owners of properties in their communities.
The SEC, earlier this year, approved the East Bay Permanent Real Estate Cooperative (EB PREC) in San Francisco as a Land Housing Investment Fund. The designation enables the cooperative to raise up to $50 million, over a three-year period, by selling an unlimited number of $1,000 shares to accredited and non-accredited individuals in California, as well as in a growing number of US states. The organization, which has nearly 400 investors and around 100 community owners, aims to establish affordable co-op housing and mixed-use projects that are not subject to real estate speculation.
And local governments are also using existing tools like inclusionary zoning to help ensure residents can remain in communities as development grows. For example, the Pittsburgh City Council, in July, unanimously approved making a 2019 inclusionary zoning pilot program in the Lawrenceville neighborhood permanent. The ordinance, signed by Mayor Bill Peduto, mandates that developments of 20 units or more must set aside 10% of those units for residents whose income is at or below 50% of the area’s median income level.
According to estimates from developer Action Housing, the legislation will enable single-person households with an annual income of $28,000, and five-person households with a combined yearly income of $43,150 eligible to rent apartments in newly built developments.
Pennsylvania State Representative Edward Gainey, the frontrunner in Pittsburgh’s upcoming mayoral election and a proponent of the ordinance, has said that he supports its expansion throughout the city.
For many projects, however, the bottom line will still mean the need for funding, subsidies, and more investment — aka money.
“If you rush against displacement, you’re fighting against the market, and there’s no way to do that without money,” Culbertson said. “With community infrastructure in place and the right kind of money, that is the best tool to fight displacement,” he said.
A Growing Movement
It goes without saying that not all communities are feeling the heat that Woodlawn and Oakland have felt. For many urban neighborhoods, in fact, investments in persistently disinvested locations is very much needed and on a community’s wish list. The years of disinvestment have left residents without the basic amenities, safety, and services that so many other city dwellers take for granted — with serious consequences to all aspects of health and well-being. Other, smaller or declining cities need investment to jumpstart years of economic decline. The uneven pace of gentrification is evident in the fact that nearly half of all measured gentrification has occurred in just seven cities: Washington, New York, Los Angeles, Philadelphia, Baltimore, San Diego, and Chicago.
But for those experiencing the press of gentrification, an increasing number of communities are mobilizing in support of investments centered on residents and their collective vision for their neighborhoods. Projects like those noted above are showing developers, investors, and local officials that engaging communities and allowing residents to stay and enjoy the benefits of investment is the only way to avoid repeating history.