Community Development Finance - Volume 21, Issue 3
In this issue of Community Investments, we explore the challenges and opportunities that lie ahead for the field of community development finance. The articles cover a range of issues, including practical strategies for coping with the current economic environment, ideas for strengthening the Low Income Housing Tax Credit, as well as information on the unique financial structure of nonprofits and its implications for nonprofit sustainability. We’ll also look at how small businesses are faring in the difficult economic climate and examine the role of P2P lending in community development finance.
The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or the Federal Reserve System. Material herein may be reprinted or abstracted provided Community Investments is credited. Please provide our Community Development Department with a copy of any publication in which material is reprinted.
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Table of Contents
For the past thirty years, low- and moderate-income communities have been able to draw upon credit and capital made available through a vast network of community development finance organizations. This network includes a broad range of different types of organizations and investors, such as community development finance institutions (CDFIs), banks, venture funds, and socially motivated investors, all dedicated to providing much needed financing for community development efforts.
Strength in Adversity:
Community Capital Faces Up to the Economic Crisis
This paper reviews the impact of the economic crisis on the
community development industry. Specifically, it asks, how are
Community Development Financial Institutions (CDFIs) faring?
Small Business Finance and
Small business owners have historically relied on
personal assets as an important source of support
for their enterprises — from the aspiring restaurant
owner relying on personal savings to the toy distributor
using a line of credit secured by her home. However, the
recent bursting of the credit bubble has led to a plunge in
values across most asset categories.
Strengthening the Low Income Housing
Tax Credit Investment Market
The Low Income Housing Tax Credit (LIHTC) has been
the federal government’s most successful program
for producing quality rental housing for low-income
families and individuals. It has created jobs, revitalized
low-income communities, and expanded low-income
families’ and individuals’ access to geographic areas that
offer relatively good employment and educational opportunities.
Moving beyond Mission: Effectively Funding the Nonprofit Organization
In his new book, The Housing Policy Revolution: Networks
and Neighborhoods, David Erickson shows
how the construction of affordable housing has moved
away from the federal government towards a network of
state and local governments, nonprofits and grassroots organizations,
the private sector, labor unions, foundations,
Peer-to-Peer Lending and Community
Peer-to-peer (P2P) networks directly connect computer
users online. Popular P2P platforms include
eBay and Craigslist, for example, which have transformed
the market for used consumer goods.
The Housing Policy Revolution
In the public imagination, the idea of government subsidized
housing conjures up thoughts of a hopelessly
inefficient Department of Housing and Urban Development
(HUD) or high-rise “projects” where crime and
drugs are rampant. That impression, however, bears little
resemblance to subsidized housing today.
The 2009-2010 Assets and Opportunity Scorecard
President Obama has spoken on several occasions of
the need for America to move from an era of borrow and
spend to one where we save and invest. But to do that we
need to understand the many factors that contribute to the
financial security of U.S. households and the hard choices
that individuals and families face when trying to balance
short- and long-term term financial needs.
Research briefs on the impact of empowerment zones on home prices; assets, liabilities and children’s educational attainment; CRA, business development and job creation; and the “debt poor.”
I received the save-the-date card for the 2010 National Interagency Community Reinvestment Conference in New Orleans. I’m thinking about going now that my training budget is back, but I have a couple of questions.
Data Snapshot: The Low Income Housing Tax Credit
The Low Income Housing Tax Credit (LIHTC) program was created in 1986 and has led to the development and rehabilitation of over 1.7 million low-income affordable rental housing units.