In 2010, Living Cities launched the Integration Initiative, an effort to transform the systems that shape the lives of low income people in five U.S. metropolitan regions: Baltimore, Cleveland, Detroit, Minneapolis-St. Paul and Newark.
In the course of developing the Integration Initiative, the Living Cities team was repeatedly struck by gaps in what we have begun to refer to as “capital absorption capacity” – the ability of communities to make effective use of different forms of capital to provide needed goods and services to underserved communities. As a result of this experience, Living Cities is developing a research agenda meant to illuminate the political, social, cultural, and financial elements that create capacity for the effective deployment of investment capital in underserved communities.
Our focus is not on the supply of capital, although an adequate supply of capital is clearly fundamental. Nor are we focused specifically on the nature of, and ways to build, investment intermediaries that meet certain criteria of scale and sectoral reach. Instead, we are looking at how communities themselves deploy investment and create an environment that puts dollars to work on behalf of low income people.
Our goal is to build a new framework for understanding capital absorption capacity. The framework assumes that many stakeholders – from intermediaries to community groups to public agencies to the mainstream investment community – are required to make community investment possible. These stakeholders interact with each other and with the policy and regulatory environment in places to create an ecosystem for capital absorption. We believe that understanding the overall ecosystem (the interplay of the actors and functions that produces an environment for community investment) in a particular community is just as important as identifying the specific actors that are present or absent in that community.