Over the past four decades, CEDAC and the Massachusetts CDC movement have literally grown up together. We even share a piece of legislation: Chapter 40H contains both CEDAC’s enabling language, and the definition of a Community Development Corporation. As we look ahead to our 40th anniversary, we’ve taken note that in the past few years, we’ve spent many an evening and weekend celebrating some of our CDC partners’ 40th (and even a few 50th!) anniversaries at gala dinners and street parties – and, our friends at Massachusetts Association of Community Development Corporations (MACDC) will mark their 35th anniversary this November.
Community development corporations (CDCs) form the backbone of the state’s affordable housing sector. As of this year, 61 CDCs have been formally certified by the Department of Housing and Community Development (DHCD), representing every corner of the state – from the Berkshires to Nantucket. With thousands of affordable housing units in their portfolios and programs that include small business lending, community organizing and workforce development, these organizations represent a major engine of revitalization and redevelopment in the Commonwealth.
40 years ago, CDCs represented a new and exciting pathway for the redevelopment of our neglected cities, driven by the people who live there. But as new non-profit organizations, CDCs needed to develop technical real estate skills, and few had balance sheets that would readily attract conventional lenders. That’s where we came in.
Supporting the Sector
CEDAC put together a small team of “experts” who could provide the technical assistance that CDCs required to get some of those early projects done, in some cases even acting as project managers for organizations that had only minimal staffing. And while many organizations have grown into large, sophisticated real estate developers, CEDAC staff continue to provide deep technical assistance, especially to smaller non-profit developers.
We quickly learned, however, that what organizations needed most was money: early stage financing to pay for predevelopment activities such as architectural design, development consulting, environmental engineering and legal analysis. Our predevelopment lending program responded to that need, and remains one of the only available sources of unsecured predevelopment loans for CDCs and other non-profit developers. Since that time, we’ve added our acquisition loan program, line of credit, and bridge loan program – each time in response to what our borrowers tell us they need. It’s worth noting that our loan loss rate is less than half of 1%, far lower than that of most commercial lenders – it is a testament to our partnerships, and to CDCs’ high capacity to manage their projects to completion.
Developing as we Develop
Together with our CDC partners, we’ve learned to use tax credits, to integrate commercial uses into residential developments, to support our most vulnerable residents with supportive services, to preserve existing affordable housing at risk of loss to the market, and so much more. We’ve also been MACDC’s partner as a founding donor and steering committee member of the Mel King Institute for Community Building, which offers trainings and workshops on every conceivable topic in the field of community development. And we’ve cheered on CDC advocacy on so many topics, including the passage of the Community Preservation Act in Boston and other communities; the Community Investment Tax Credit legislation that provides CDCs with unrestricted operating funds; and the new Community Scale Housing Initiative for small housing projects.
The community development sector in Massachusetts has matured over the past four decades into a sophisticated movement. CEDAC is so proud of the opportunities we’ve had to support our CDC partners throughout that time, and we can’t wait to work together on the next wave of innovation.
