Resource Category: Community Wealth

Community wealth-building strategies, such as neighborhood crowdfunding or community land trusts, can promote shared prosperity and increase democratic control over neighborhood assets, while also expanding investment opportunities for community members.

Why Community Wealth Matters

Closing the racial wealth gap requires more than just investing in individual wealth accumulation and financial security — it also means investing in shared assets and resources in communities that have historically suffered from disinvestment and wealth extraction.

Community wealth-building strategies, such as neighborhood crowdfunding or community land trusts, are ways to expand shared prosperity and democratic control over neighborhood assets, while also providing investment opportunities to households that might not otherwise have access to them. In rapidly changing neighborhoods, community wealth-building can mean purchasing land or real estate to protect tenants from rising rents, reducing their individual cost burden while simultaneously protecting the real estate asset for long-term community benefit. It could mean supporting a local entrepreneur with the seed capital to start a new small business, or even a revolving loan fund to help folks cover emergency expenses.

For low-income and immigrant communities, as well as communities of color that have long turned to mutual aid and collective care for support, many of these strategies are not new. Recent initiatives draw on those traditions and bring in private, philanthropic, and public funds to help acquire new shared assets and support community wealth-building projects. Sometimes referred to as the “solidarity economy,” these community-led economic development initiatives can include: community land trusts, worker-owned cooperatives, real estate investment cooperatives, credit unions, a neighborhood nonprofit trust, and many others.

Importantly, community ownership of assets gives individuals meaningful decision-making power, including many communities who have historically not had a say in development decisions. Enhancing local control can promote neighborhood stability in places with rapidly escalating prices.

Interest in community wealth-building strategies has grown recently, with many philanthropic and public actors contributing to shared ownership models during the pandemic.

Resource Summaries

Summary July 2022

Commercial Community Ownership as a Strategy for Just Development: Case Studies and Implementation Lessons

By Julia Duranti-Martínez

Community ownership of commercial businesses and property can help build community wealth, preserve community-serving businesses, and spur equitable economic development.

This 2021 report by the Local Initiatives Support Coalition (LISC) provides five case studies of commercial community ownership throughout the country, and documents key takeaways for practitioners and researchers interested in this growing field. The report focuses on two broad approaches for community ownership of commercial spaces (as defined by the Urban Institute)– occupant equity, in which the tenants collectively own and steward the space; and neighborhood crowdfunding, in which community members are able to purchase a stake in an income-producing business or property. Often, these strategies are combined.

Community ownership of commercial businesses and property can help build community wealth, preserve community-serving businesses, and spur equitable economic development.

Successful community ownership of commercial spaces is about more than just financial goals; it is also about preserving community-serving businesses and extending community decision-making over development.

Sometimes, the goals of community ownership can come in tension with each other. For example, if market-rate residential rents are required to cross-subsidize commercial rents in a mixed-use development, then keeping rents low for one means increases in the other. Thus, it is important that the initiatives remain connected with community members and broader movements for racial, economic and environmental justice.

Many case study groups also stressed the need for technical experience and support — both for the trust or group managing the properties, and for community-serving commercial tenants, many of whom are new small business owners.

Read on LISC

Summary December 2021

Community Wealth-Building Models: Opportunities to Bolster Local Ownership

By Brett Theodos, Rebecca Marx, and Tanay Nunna

This report from the Urban Institute explains the need for community wealth building and provides four conceptual models for community wealth building strategies. Pointing to the wide racial disparities that exist in homeownership and other asset ownership rates, the authors demonstrate the need for more accessible investment opportunities, such as those that are pooled or institutionally backed.

Community wealth-building can occur through many different channels, and in the paper authors identify four promising approaches:

Neighborhood Crowdfunding: Community members have a fractional ownership or a small stake in an income-producing business or property. This can include investment cooperatives like the Boston Ujima Project’s Community-Governed Investment Pool.
Occupant Equity: Community members pool or source funding to buy real estate and remove it from the speculative market to preserve it for community use as long-term affordable housing or commercial space. This includes community land trusts, such as the Dudley Street Neighborhood Initiative.
Local Institutional Equity: Local community-based organizations (CBO) are given an equity stake in revenue-generating local real estate. The CBO invests this ongoing cash flow in the local community development and other community-based operations.

Read on URBAN Institute