Resident ownership in CDC projects is still in the development phase. Several guiding principles can maximize the success of resident ownership strategies:
Resident Involvement. Residents—the ultimate beneficiaries of this strategy—need to become engaged early in the CDC's real estate development efforts, and stay involved throughout the planning and implementation processes. Participation can build a broad sense of ownership even before stock has been sold, and effective resident leadership will ensure that the project as a whole meets community needs. Such involvement can take a variety of forms and may be initiated by a group of residents or by the CDC.
Access to high-quality technical support and legal assistance. Implementation of resident stock ownership in CDC projects requires specialized technical expertise in a mix of finance, real estate, corporate law, tax accounting, and other areas. In particular, competent legal assistance is essential for exploring the most viable options for selling stock, as well as to ensure that the CDC is in complete compliance with SEC regulations.
Funding and financing for planning and implementation. Resident ownership in CDC projects involves a substantial commitment of time and resources on the part of the CDC, over and above what is required by typical development projects. Stock ownership opportunities must be tailored to the local interests and capacities of residents, and residents must be educated and involved in the process. These activities incur costs. Implementation of resident ownership can be facilitated by early and ongoing investment on the part of funders who are willing to support meaningful participation and decision-making—and ultimately ownership—on the part of residents in the project.
Active engagement in the political process. Many successful CDC real estate developers are seasoned participants in the political process. Outreach to local elected officials can help build institutional and financial support for resident investment and ownership in CDC developments.
Strong accountability systems. The credibility and support for resident ownership as an emerging strategy can be enhanced through the implementation of effective and transparent monitoring and evaluation systems.
Telling the story. Effective documentation of efforts to build resident ownership in CDC real estate development can contribute to the collective knowledge base about how these strategies work, particularly in relation to addressing the legal and regulatory hurdles. Telling the story is an important way to share accomplishments, encourage replication, and reduce the time and effort required for future ownership endeavors.
