Assessing the Role of Community Development Corporations in Inner City Economic Development


In the last decade of the twentieth century, the condition of American inner cities remains precarious. Many large central cities, particularly those in the Northeast and Midwest, continue to lose population and jobs as infrastructure and public services deteriorate in response to fiscal constraints.Concerns about crime and the breakdown of social order are omnipresent, even in cities where the statistics do not bear out these negative perceptions. Significantly, the problems of urban America are not distributed evenly throughout all neighborhoods. To the contrary, in many inner city neighborhoods, the concentrated effects of high rates of unemployment, poverty, and social disorder have made these areas communities in name only.

Traditional government community and economic development initiatives have had little impact in rebuilding distressed inner city neighbor-hoods. Nevertheless, in many instances, residents themselves are taking matters into their own hands and forming voluntary organizations to improve their communities. These nonprofit, community development corporations (CDCs) have historically focussed their efforts on housing production and management. Increasingly, however, CDCs are either en-gaging in or contemplating community economic development activities such as building commercial real estate projects or beginning business enterprises in inner city neighborhoods.

In this article, I examine the economic development activities of CDCs. Although the phrase “economic development” is sometimes used to refer to all activities of CDCs, I will use the term to refer only to activities whose primary purposes are the creation of jobs and the delivery of commercial services. Housing development and political advocacy are therefore not the focus of this article. Part I describes the economic and social conditions existing in many of the cities and neighborhoods in which CDCs operate. Part II examines why traditional economic development initiatives have had limited impact in spurring the growth of enterprise and employment in inner city neighborhoods. In Part III, I describe the growth of CDCs and their contributions to community development. Finally, in Part IV, I examine the role of CDCs in economic development and comment more broadly on community economic development as a strategy for assisting residents of inner city neighborhoods.

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