CDFI Role in Reinvigorating Cities
Living Cities is working with federal agencies and community development financial institutions (CDFIs) to discuss ways of enhancing economic revitalization through investments in CDFIs, which provide loans, investments, and technical assistance to underserved communities.
Through the Integration Initiative, Living Cities is learning a great deal about the challenges that local communities face in utilizing CDFIs to the greatest benefit. CDFIs play a pivotal role in the Integration Initiative, which is investing $85 million in commercial debt, flexible loans and grants in five sites to help cities re-imagine what to do with underinvested neighborhoods and find new ways to reconnect low-income people to opportunity.
Oftentimes, CDFIs are too small to accept significant debt in a community, which challenges the city’s ability to absorb and use new capital. At other times, CDFIs specialize in a type of lending that is not broad enough to meet some community needs.
In July 2011, Living Cities convened White House officials and 30 key staff representing 10 federal agencies, including Treasury, Housing and Urban Development, Transportation, Health and Human Services, Labor, and the Small Business Administration, to discuss ways the federal government can better utilize CDFIs in revitalizing America’s cities. The event, co-sponsored by the CDFI Fund, also provided an opportunity to discuss the approach the Integration Initiative is taking in cities, the role that CDFIs are playing, and opportunities for federal agencies to better align their work with that of Living Cities.
Several agencies outlined specific ways in which they hoped to facilitate or learn from the Integration Initiative, and White House officials and agency participants praised the initiative as helping to point the way toward a new model of collaborative problem-solving for cities.