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The traditional model of community development finance is limited by market conservatism and a focus on scale, rather than local control. We need a new paradigm that prioritizes impact over scale, emphasizes flexible and creative financing strategies, and empowers community voice.
BOYLE HEIGHTS, A NEIGHBORHOOD IN EAST LOS ANGELES, is one of the city's cradles of Mexican American history and culture. At its heart sits Mariachi Plaza, a longtime gathering place for mariachi musicians for hire. Next to the plaza's pavilion is a statue of Lucha Reyes, the Mexican actress and singer known as the queen of ranchera music. A bright mural of Our Lady of Guadalupe looms. Although named after Irish immigrant Andrew Boyle and a historic host to waves of immigrants from Europe and Asia, the neighborhood is now 94 percent Latinx and was home to Antonio Villaraigosa, who in 2015 became the first Hispanic mayor of Los Angeles in more than 130 years.
In 2016, Boyle Heights erupted in protests against a rising tide of gentrification and displacement that threatened the enduring character of the neighborhood. As in many communities across Los Angeles, residents-75 percent of whom were renters-faced skyrocketing housing costs that threatened to remove them from the city center. "Keep Beverly Hills out of Boyle Heights," read protest signs.
In response, Inclusive Action for the City (IA), a small non profit that advocated for and extended microloans to street vendors, proposed that owning property was the best way for residents to avoid displacement. While IA had a bold vision, it lacked the financial resources to carry out its idea. So it teamed up with Genesis LA, a community development financial institution (CDFI), and two longtime community development organizations, East LA Community Corporation and Little Tokyo Service Center, which had experienced staff and additional financial resources.
Together, the four organizations created a new joint venture, the Community Owned Real Estate (CORE) program, whose long term goal was to create a pathway for tenants to become owners. Their short-term approach was to purchase buildings, preserve existing businesses, offer commercial spaces to local entrepreneurs, and provide technical assistance and other resources to help tenants grow their businesses and organizations and, ultimately, purchase the buildings themselves.
New Markets Tax Credits (NMTCs), to which...