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Resident stock ownership in CDC projects is an emerging strategy to provide low- income/low-wealth residents the opportunity to own stock in neighborhood commercial real estate projects carried out by CDCs. While not yet fully implemented, resident investment in community real estate projects is being explored by several CDCs around the country.
CDCs are non-profit entities established by local stakeholders-residents, business owners, faith-based institutions, service providers-whose goal is to revitalize a targeted low- or moderate-income community. CDC commercial real estate developments include shopping centers and mini-malls in urban core areas, occupied by businesses that serve the needs of local residents.
CDCs generally develop or acquire commercial real estate to stimulate the neighborhood economy and provide needed retail services. The CDC's involvement in the project may be as developer and then owner (or part owner), or the CDC may acquire the project after another entity has developed the site.
Stock ownership in CDC projects is among a broad array of emerging resident ownership strategies being explored in communities across the country. For more a comprehensive review of existing, emerging, and conceptual resident ownership mechanisms (or "ROMs") in the areas of business, real estate, financial institutions, home equity, and natural resources, see the PolicyLink report Sharing the Wealth: Resident Ownership Mechanisms.
Ownership in CDC projects gives residents a vested interest in the growth and prosperity of their community's economic development activities. It gives them a voice in the development process and enables them to play a new role—of stakeholder and shareholder—in partnership with the CDC and other investors. It provides an opportunity for residents and families to increase their financial assets as community assets appreciate—thereby building family security while at the same time building community.
Several CDCs are currently exploring the resident stock ownership option. For example, Anacostia Economic Development Corporation (AEDC) in Washington, D.C, plans to make 10 percent of the stock in its shopping center development available for purchase by residents in the sixth year of the project's development, 2003. The Westside Economic Development Corporation in Oakland, California, is considering alternatives for building a resident ownership component into its Jack London Gateway shopping center.
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