Investing in Community Infrastructure to Support Thriving Economies

Lessons from the 2022 National Interagency Community Reinvestment Conference

This is part two of a series that shares insights from the National Interagency Community Reinvestment Conference, held this past March. Read part one.

The 2022 National Interagency Community Reinvestment Conference provided community development practitioners with Community Reinvestment Act (CRA) training and the opportunity to reflect on lessons learned from the past two years on supporting the economic well-being of communities across the country.

There was a clear sense among conference speakers that community investments in a variety of areas are urgently needed, particularly as families and businesses continue to deal with uncertain economic outlooks due to ongoing pandemic-related disruptions. Recent SF Fed research on changing geographies of metropolitan poverty also suggests that a new set of solutions may be needed going forward.

“Not all communities have the anchors that are used to serving them, the anchor institutions,” said Melissa Jones of Bay Area Regional Health Inequities Initiative at the closing plenary on reimagining community reinvestment.1 “There’s a lot of work we have to do to think about how we rethink our footprints, how we rethink how services get delivered, how we rethink how financial opportunity is extended, that is going to be a really important part of how we move forward.”

Importance of locally and regionally driven investments

Investments in community infrastructure—which includes child care, workforce development, climate resilience efforts, healthcare, and more—must be made equitably and in ways that meet the specific needs of the region, said speakers across sessions.

The economic impact of climate risk

Recent research indicates the likelihood of negative economic impact driven by a changing climate, and underscores that vulnerability to these risks differs substantially within regions, driven by patterns of unequal development and opportunity.2

“We talk about climate as a threat multiplier,” said Dr. Denise Fairchild of Emerald Cities Collaborative at the “Meeting Equitable Community Development Goals in the Age of Climate Disruption” session.3 “Climate change impacts are felt first and foremost among low-income populations, whether you’re urban or rural.”

Equitable investments to support climate resilient communities address the specific risks that low- and moderate-income communities and communities of color experience. One example is increasing energy costs and its relationship to housing, health, and loan defaults, according to Fairchild. She went on to discuss that banks and lenders can mitigate this risk and protect their own assets through a variety of solutions, including energy disclosures on new and existing loans and financing tools for low- and moderate-income families to undertake energy upgrades in their homes.

The economic impact of care work

The conference also featured a discussion on the need for investment in the child care sector. At the “Building a Thriving Labor Force through a Supportive Caregiving Sector” session, Sloane Kaiser of the Federal Reserve Bank of Philadelphia shared research on working parents and labor force participation, which found that the annual national cost of lost earnings, productivity, and revenue due to lack of access to affordable child care was $57 billion.4

Laura Kohn of Mission Driven Finance noted that investment in child care providers—especially home-based family child care providers who are more likely to be deeply rooted in the communities they are serving—is an investment in community infrastructure.5 As she shared her experience creating a real estate investment trust that supports the development of center- and home-based child care facilities, she stressed that a core part of their model is partnering with the community, including working with local community investment companies.

The power of connecting local and regional issues

Making connections between local and regional issues and involving communities in promoting solutions are critical to encouraging investment in communities of color and low-income populations, especially as regional demographics continue to shift in northern California, said Debra Ballinger of Monument Impact at the “Regional Equity: Serving Low-Income Populations in Overlooked Geographies” session.6

Ballinger said the affordable housing crisis’s contribution to the jobs-housing imbalance is “a regional problem. It’s a statewide problem in California. And it’s definitely a local problem where we need to build greater allyship and political will to solve this particular issue.”

A key lesson, according to the panelists at the session, was to recognize the power of getting community members involved as advocates and decision makers in planning processes, grantmaking, and community development investments that help people afford housing near jobs and reduce residential displacement and commute times to jobs.

“We have several examples of how community has shown up,” said Ryan Quigtar of the Renton Innovation Zone Partnership.7 “The power’s in the people. The ability to organize, not have one person organize, but community being able to organize with each other and for themselves.”

A bolder role for CDFIs and banks

Speakers also highlighted ways that community development financial institutions (CDFIs) and banks can develop bolder partnerships with each other and other institutions to invest in urgent community needs and contribute to a stronger and more resilient economy for all.

At the “Meeting Equitable Community Development Goals in the Age of Climate Disruption” session, John Moon of Wells Fargo8 reinforced the scale of investment necessary—six times the current level of sustainable financing in the next eight years—to meet international climate objectives aimed at mitigating the most dangerous impacts of climate change. Some steps banks can take, he said, include knowing your carbon footprint, as having a lower emissions footprint could open up new or expanded sources of financing; “greening” portfolios by identifying emerging green technologies; and supporting customers and communities in their transition to lower their footprints through sustainable financing.

Elizabeth Mattiuzzi of the San Francisco Fed added that banks could partner with community institutions who are already doing this work. “There are CDFIs that are working in low- and moderate-income communities on all of those issues …it’s not about inventing a whole new set of investments. It’s about finding the folks who are doing climate resilience.” The SF Fed recently surveyed community development organizations about climate risk and resilience work in LMI communities and communities of color.

Another opportunity area for CDFIs is in the early care and education (ECE) area, said Angie Garling of the Low Income Investment Fund at the child care session.9 CDFIs lent $1.4 billion in micro business loans and $1.1 billion for K-12 facilities in 2015-2019, but only $143 million to ECE facilities in the same time period. Garling said CDFIs should consider ECE providers to be small businesses and provide the kind of products, technical assistance, and training they need to encourage increasing child care services and to support facility construction and renovation.

CDFIs can also promote equitable regional community development by aligning community priorities in grantmaking and investment, said Lisa Richter of Avivar Capital at the regional equity session. She shared her experience with helping Sierra Health Foundation pursue this objective through its aligned San Joaquin Valley Health Fund and San Joaquin Valley Impact Investment Fund. By investing in regional CDFIs, the Investment Fund is designed to sustain and scale regional goals that are advanced by community residents through the Health Fund’s grantmaking and technical assistance. These efforts help to build capacity and networks among community-based organizations, reinforcing their leadership in advocating for community needs such as affordable housing, clean water access, and small business development. Impact investment helps unlock greater amounts of patient capital to address these needs.10 With a CDFI-credit union, idle funds from the Investment Fund enable more community lending for mortgages, small businesses, and nonprofit services.

Building partnerships across the public, private, and philanthropic sectors was a key theme to drive investments into regions and populations that need it most.

“We’re good in partnership,” said Lisa Mensah, formerly with the Opportunity Finance Network, at the closing plenary as she reflected on lessons learned from the pandemic.11 “You need partners who have authentic credibility and can listen, and that’s where I think our field of CDFIs has become a set of institutions that were worthy of this moment and worthy of the partnerships.”

The National Interagency Community Reinvestment Conference (NICRC) is sponsored by the Federal Reserve Banks of San Francisco and Chicago, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.

Interested in more from the conference? Read part one of our takeaways from the conference, or watch the replay by registering to access the 2022 NICRC recordings.

Tina Chong is a senior communications strategist on the Communications + Experience team at the Federal Reserve Bank of San Francisco.

You may also be interested in:

1. For more on Bay Area Regional Health Inequities Initiative, see

2. Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change.

3. For more on Emerald Cities Collaborative, see

4. Sandra Bishop-Josef, Ph.D. et. al., Want to Grow the Economy? Fix the Child Care Crisis, 2019.

5. For more on Mission Driven Finance, see

6. For more on Monument Impact, see

7. For more on the Renton Innovation Zone Partnership, see

8. For more on Wells Fargo, see

9. For more on Low Income Investment Fund, see

10. For more on Sierra Health Foundation, see

11. For more on Opportunity Finance Network, see

The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.