Looking at Community Development Non-Profit Organizations

Vol. III, No. 177 - Many organizations can play a pivotal role in improving communities and neighborhoods

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Recently, Troy City Council’s Finance Committee contemplated a resolution that would give the ability to the city’s Communty Improvement Corporation to purchase a downtown property. The commitee’s discussion lead to a broader discussion of what exactly is a Community Improvement Corporation? What can they do? What is their role?

And while the committee didn’t talk about other organizations, there is a whole cacophony of non-profit organizations that play a role in helping develop communities and neighborhoods. Today, we will take a look at the different types of the organizations and how each one can help grow our state’s hometowns.

These community development organizations play vital roles in revitalizing neighborhoods and improving quality of life, particularly in underserved areas. Here in Ohio, there are several types of entities to work towards these goals, each with distinct roles and responsibilities defined by law. Today, will examine the alphabet soup of four types of organizations that play critical roles in community development: Community Development Corporations (CDCs), Community Housing Development Organizations (CHDOs), Community Improvement Corporations (CICs), and County Land Revitalization Corporations (CLRCs).

Community Development Corporations (CDCs)

CDCs are nonprofit, community-based organizations focused on revitalizing specific geographic areas, typically low-income neighborhoods. Their core responsibilities include developing affordable housing, promoting economic development, providing social services, and engaging in community organizing and advocacy. CDCs often act as a bridge between residents and local government, giving voice to community needs. They are governed by a board that includes community representatives, ensuring local input in decision-making.

Key features of CDCs include their nonprofit status (501(c)(3)), community-focused mission, diverse funding sources from both public and private sectors, bottom-up approach to community development, and a wide range of activities beyond housing. CDCs in Ohio are not specifically defined in state law, but rather self-identify based on their mission and activities.

Community Housing Development Organizations (CHDOs)

CHDOs are a specific type of nonprofit organization recognized by the U.S. Department of Housing and Urban Development (HUD). Their primary focus is developing affordable housing for low-income communities. Key responsibilities include developing, sponsoring, or owning affordable housing projects, building organizational and housing development capacity, and maintaining affordability of housing units over time.

To qualify as a CHDO, an organization must be a registered nonprofit, have a defined geographic service area, have at least one-third of its board comprised of low-income community representatives, and demonstrate capacity for carrying out housing projects. CHDOs are eligible for special funding under HUD’s HOME Investment Partnerships Program, with at least 15% of a participating jurisdiction’s HOME allocation reserved for CHDO-developed projects.

Community Improvement Corporations (CICs)

CICs are defined in Ohio Revised Code Chapter 1724 as nonprofit corporations formed to advance, encourage, and promote industrial, economic, commercial, and civic development. Their responsibilities include acquiring, constructing, and leasing real property and facilities, making loans to businesses and other entities for economic development purposes, and serving as the economic development arm of local governments.

CICs include their ability to be formed by county, municipal, or township governments, a board that includes both public officials and private citizens, a broader economic development focus compared to CDCs, the ability to issue revenue bonds for development projects, and the capacity to act as a land bank for acquiring and managing properties. CICs have significant flexibility in their activities and can engage in a wide range of economic development initiatives beyond housing.

County Land Revitalization Corporations (CLRCs)

CLRCs, also known as county land banks, are quasi-governmental entities established under Ohio Revised Code Chapter 1724. Their primary focus is addressing vacant, abandoned, and tax-delinquent properties. Key responsibilities include acquiring, holding, and transferring distressed properties, clearing titles and removing barriers to redevelopment, demolishing blighted structures, rehabilitating properties for productive reuse, and assembling land for future development.

CLRCs have unique powers and advantages, including the ability to obtain properties through tax foreclosure, exemption from property taxes while holding land, a streamlined process for acquiring and disposing of properties, and the capacity to operate across multiple jurisdictions within a county. CLRCs work closely with local governments, CDCs, and other community partners to implement comprehensive strategies for neighborhood stabilization and revitalization.

Comparison and Interplay

While these organizations have distinct roles, there is often significant overlap and collaboration; in other words, they can play together in the same sandbox. CDCs have the broadest scope, engaging in housing, economic development, and social services. CHDOs focus specifically on affordable housing, while CICs concentrate on economic development. CLRCs specialize in addressing problem properties.

In terms of geographic focus, CDCs and CHDOs typically focus on specific neighborhoods, while CICs and CLRCs often operate countywide. Governance structures also differ, with CDCs and CHDOs prioritizing community representation in their leadership, CICs blending public and private sector involvement, and CLRCs being more closely tied to county government.

Funding sources vary among these organizations. CDCs and CHDOs rely heavily on grants and donations. CICs can access both public and private funding, including bond issuance. CLRCs often receive dedicated funding through penalties and interest on delinquent property taxes.

Legal status is another point of distinction. CICs and CLRCs have specific definitions and powers under Ohio law, while CDCs and CHDOs are defined more by their missions and federal recognition (in the case of CHDOs).

These organizations often work together to achieve comprehensive community development. For instance, a CLRC might acquire and clear a blighted property, then transfer it to a CDC for affordable housing development. A CIC could provide financing for a commercial project that complements a CDC’s housing initiative. A CHDO might partner with a CDC to provide supportive services to residents of its affordable housing developments.

While each type of organization has its specific focus and legal framework, they collectively form a robust ecosystem for community development in Ohio. Their diverse roles and responsibilities allow for a comprehensive approach to neighborhood revitalization, addressing housing, economic development, and quality of life issues in a coordinated manner. The interplay between these entities creates a synergistic effect, maximizing the impact of their individual efforts and contributing to more holistic community improvement strategies.

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