In the 1960s, most of the nation’s CDCs received direct funding through the U.S. Department of Housing and Urban Development as a result of President Lyndon Johnson’s War on Poverty. But by the 1980s, CDCs could no longer look to Washington to fund their programs. Despite the reduction of government support for urban development, the number of nonprofit organizations serving low-income communities expanded across the country, funded largely by foundations.
James DiFillipis notes that “While only about 150 first generation CDCs were created in the late 1960s and early 1970s (and many failed within a few years), by the early 1980s another 500 to 750 second generation CDCs had been created.” In addition, local communities chartered 270
Furthermore, the lack of attention on the poorest of the poor, those living in public housing, received scant
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attention, save a few heroic efforts. For instance, in 1984, during the Democratic presidential primary, Jesse Jackson spent a night in the Forest Houses, a public housing project in the South Bronx, as a way to garner attention not just for himself as a candidate, but for the poorest of the poor living in public housing. Gerald M. Boyd, “Jackson Spends A Night In South Bronx,” New York Times, March 31, 1984, accessed March 15, 2017, http://
www.nytimes.com/1984/03/31/nyregion/jackson-spends-a-night-in-south-bronx.html.
James DeFillipis, “Community Control and Development: The Long View,” in James DeFillipis and Susan
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Saegert, editors, The Community Development Reader (New York: Routledge, 2012), 34.
their own banks, called community development financial institutions (CDFIs), though bank redlining continued. 271
In addition, national intermediaries emerged as conduits for community development financing. These included the Local Initiatives Support Corporation, formed by the Ford Foundation in 1979; Self Help, created in 1980 in North Carolina in response to the collapse of the textile industry; and in 1982, the developer James Rouse started the Enterprise Foundation in Columbia, Maryland, to fund affordable housing. In 1985, a national trade group, the National 272 Association of Community Development Loan Funds formed to serve the community
development financial institutions. As CDCs, CDFIs, and intermediaries proliferated, they 273 assumed greater scale and professionalization. The activism and conflict of the 1960s and 1970s yielded to collaboration and negotiation by the mid-1980s. Nowhere was this more evident than in Pittsburgh. Organizations like the Manchester Citizens Corporation (MCC), a CDC formed in the mid-1960s in Pittsburgh’s Manchester neighborhood, saw government funding cuts as an opportunity to change their operating strategy. As a result, some resourceful CDCs like MCC 274 adapted to the new funding environment.
CDFIs of the 1980s and 1990s were based on models established in Chicago with South Shore Bank in 1973, and
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the aforementioned Neighborhood Housing Services of Pittsburgh, which became Neighborhood Reinvestment Corporation.
The Enterprise Foundation is now Enterprise Community Partners. For more on these organizations, see Paul
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Grogan and Tony Proscio, Comeback Cities: A Blueprint for Urban Neighborhood Renewal (New York: Basic Books, 2001).
An earlier national intermediary, the National Federation of Community Development Credit Unions, had formed
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in 1974. The National Association of Community Development Loan Funds is now Opportunity Finance Network.
As I describe in my 2015 masters paper, “In the wake of the Nixon Administration’s budgetary cutbacks,
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community leaders sought alternative sources of funding. Led by Pittsburgh History & Landmarks Foundation and Manchester residents, they declared that private sources must be incorporated into a development plan. This mindset would be a critical component to the involvement of banks in Manchester’s real estate revitalization in the 1980s and 1990s, a strategy that similar community development corporations around the country would adopt, as well. But in the 1970s, MCC was on the forefront of this trend.” Dan Holland, “Forging A Consistent Vision,” (MA Thesis, University of Pittsburgh, 2015), 32.
As I write in my masters paper, in the 1980s, MCC built upon the based of support it had developed in the 1970s and expanded its relationship with foundations to fund its operating budget and banks to finance its housing work. As John Metzger writes, “The partnership, 275 then, became the vehicle to combine the varied financial resources into a single funding stream, the control of which would result in a more coordinated and strategic approach to community development.” In 1989, the city of Pittsburgh created an additional funder, the Advisory 276 Commission on Community-Based Organizations (ACCBO), to distribute block grant money to various organizations. 277
MCC’s approach reflected a new political reality in Pittsburgh. Tracy Neumann
characterizes Pittsburgh Mayor Pete Flaherty, who was in office during the Nixon administration, as a reformer ahead of his time. According to Neumann, Flaherty “heralded the emergence of policy instruments associated with devolution and privatization that took shape first under Nixon and then accelerated as the Carter and Reagan administrations increasingly withdrew federal resources from the urban sphere.” These actions “laid the groundwork for a neoliberal
retrenchment under the Reagan administration.” Many CDCs like MCC saw the writing on 278 the wall. If they were to fulfill their mission of returning vitality to their neighborhoods, CDCs would need to change with the times and seek pragmatic solutions to real estate that involved foundations, limited government funds, and bank financing.
Dan Holland, “Forging A Consistent Vision,” (MA Thesis, University of Pittsburgh, 2015), 40-41.
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Ibid, 14.
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Prior to ACCBO, the city had created the Neighborhood Fund, Inc. in 1984, but it was dissolved “as a result of
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conflict of interest problems.” ACCBO was the successor fund. Roy Lubove, Twentieth-Century Pittsburgh, Vol. II:
The Post-Steel Era (1996), 112.
Tracy Neumann, “Renaissance and Retrenchment in the 1970s,” unpublished manuscript, October 2013, 9.
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