1. Opportunity Zones will take effect in force
No surprise here. Opportunity Zones were the big community development story in 2018 and will continue to be in 2019. Proposed regulations should be finalized this year, creating more confidence for investors. Opportunity Funds are already being set up, and investment volumes will grow rapidly.
But because of variation in the economic standing of Opportunity Zones, the incentive’s effect will likely vary. Some weak-market Opportunity Zones can expect no or little new investment because of the incentive. In Opportunity Zones that are already attractive to investors, especially those likely to gentrify, investment levels will be appreciably higher. This is because one of the three benefits for investors from Opportunity Zones—the permanent exclusion of taxes on new gains when their investment is held for 10 years—is a generous subsidy but only where investments appreciate in value.
Disclosure requirements will also be worth watching. It is important for the Internal Revenue Service to require transaction-level reporting on Opportunity Fund investments and to make detailed data available to help local governments and stakeholders track the program’s progress and find ways to improve it.
2. Geographic winners and losers continue to solidify
Amazon’s process of opening a new headquarters got the most attention, but Google, Microsoft, Apple, and Salesforce also made recent decisions to move jobs to new metropolitan areas. Leaving the Bay Area might make it appear that tech profits will be more broadly distributed, but leading firms are actually reinforcing a broader trend of concentrating wealth in a dozen or more large metro areas, with many parts of the country falling behind.
Compare, for example, Amazon’s decision to move into Long Island City, New York, and Arlington, Virginia, with General Motors’ announcement that it would soon close a plant in Youngstown, Ohio, putting 1,500 people out of work in addition to the 3,000 autoworkers already laid off. Youngstown’s population peaked in 1930 and has lost ground ever since, dropping 21 percent since 2000.
The concentration of jobs and wealth in a few metro areas is concerning for the strength of our nation’s economy and democracy, as smaller communities may continue to dwindle in population, opportunity, and quality of life. Local efforts can help, but addressing these challenges will require federal commitments we have not seen in decades.
3. Alternative ownership structures raise opportunities
Alternative ownership structures are gaining prominence in policy circles, even if the enterprises themselves face challenges in growing. In an economy where business start-ups are at all-time lows and income inequality is at a modern high, co-op businesses offer alternatives to traditional shareholder- or proprietor-owned business structures. Expect more policy and philanthropic interest in co-ops in the year ahead, especially among worker cooperatives.
Co-ops are important in housing as well—including both high-end housing and affordable shared ownership, like what ROC USA does with mobile home parks. But other models of shared ownership are growing, too. Community land trusts (CLTs), like DC’s new Douglass CLT, are getting attention in new ways.
For example, a recent survey of hospital CEOs shows respondents were interested in supporting CLTs. In a CLT, a nonprofit corporation buys or holds land and makes that land available for development that aims to improve the community while preserving access in communities undergoing rapid economic change. This model, among others, can help community anchor institutions like hospitals, churches, or universities take an even more active role in leveraging their land for community development in 2019.
4. Climate change will bring new disasters and the need for new funds
Natural disasters of increasing severity will continue to pose a threat in 2019, even while the recovery from 2018’s hurricanes and wildfires remains unfinished. We anticipate that more states and localities will emphasize preparedness, and even the federal government will start to do better, rather than continuing to focus so heavily on recovery after disasters strike.
Yet, most federal disaster funds will still go toward recovery—for example, via the Community Development Block Grant program. There will be continued need to help communities build back in ways that are more resilient to future disasters and that take advantage of federal disaster funding—one of the few new, large federal supports available.
5. Reimagining public assets can boost safety and connectedness
Communities are also regaining an appreciation for public assets. Broadening from a purely economic lens, cities and counties will continue to rely on and repurpose their public assets—like parks, libraries, schools, and community organizations—to bring people together. “Creative placemaking” can build new economic bridges across communities while reducing the divisions that can jeopardize public safety.
These placemaking efforts also offer opportunities for residents to contribute to the reshaping of their community’s places and spaces. In this way, placemaking activities are the connective tissue that brings together resources, capital, and actors to focus on revitalizing public assets.
The SE is about building an economy for people and planet. Are you interested in being able to find worker coops, community land trusts, community gardens, social currencies, credit unions, community banks, and other solidarity economy businesses or practices? You can find them here.
Creating a Solidarity Economy Giving Project
Editor’s Note: Fascinating things are going on in the realm of giving circles and community giving projects. We are pleased to share this piece by Cheyenna Layne Weber, one of the founders of Solidarity Economy Giving Project in New York City, which aims to bring together donors in new ways.
From Cheyenna Layne Weber:
There are more than 2,000 solidarity economy organizations in New York City, most of them founded and maintained by women. These democratic, member-led groups take different legal forms, but hold certain values in common—social and racial justice, ecological sustainability, mutualism, and cooperation. They include low-income credit unions; cooperatives providing food, affordable housing, and childcare; cooperatives of farmers and workers; community gardens and land trusts; and community-supported agriculture. Together, these form a solidarity economy based on meeting material needs rather than making profits. (Explore these models in this short video.)
Women form solidarity economy organizations as creative solutions to systemic oppression faced in workplaces, families, housing, food systems, and financial institutions. Latinx women in Staten Island formed worker co-operatives that operate cleaning or childcare businesses while providing living wages and control over working conditions. Bangladeshi women in East New York grow food for their families in a community garden they control. In the Bronx in the 1980s, low-income women formed affordable housing co-operatives , which endure despite rising real estate values. Around that time, women of the Lower East Side formed a low-income credit union that not only continues to serve the immigrant community but has expanded to Harlem and Staten Island. In all five boroughs, no matter the race or ethnicity of the community, women are building a solidarity economy.
So why have you never heard of it? The erasure of women’s labor in the home has been well-documented, and a similar dynamic emerges for women’s labor in communities and workplaces. This is especially true when the labor is not designed to add value for shareholders of a corporation, but rather benefits the community members who control and make use of the services of a solidarity economy organization. Many innovative women are also overlooked because they do not fit patriarchy’s conception of the entrepreneur: white, male, affluent, able-bodied, straight, and Christian. Thus, dominant institutions like government, philanthropy, and the private sector have little understanding of the incredible entrepreneurial role women often take up, and until recently had expressed little interest in learning more. This is beginning to change as cities like New York and philanthropists such as Robin Hood Foundation have begun investing in worker co-operatives to ameliorate poverty.
But it is not enough. Solidarity economy organizations often lack funding, especially those run by and serving women who are of color, immigrants, low-income, disabled, queer and/or trans. While a few co-op loan funds and investors offer capital (such as The Working World or Cooperative Fund of New England), it is almost impossible for these women to find micro-grants to cover costs like training and technical assistance, crowdfunding matches, emergency support, or event sponsorships. Of the available grants, arduous application processes, requiring professional grant-writing or prior relationships to power (such as alumni networks), exclude women working within solidarity economy organizations.
To meet this gap young philanthropists and organizers created the Solidarity Economy Giving Project (SEGP). A program of the Cooperative Economics Alliance of New York City (CEANYC),a democratic membership organization for NYC-based, solidarity economy enterprises, the Giving Project is the only solidarity economy grantmaking effort in the United States controlled by grassroots leaders. The Project includes a multi-racial, multi-gender, and intergenerational Giving Circle whose members each give a minimum $2,000 gift annually and jointly host a fundraising party. Giving Circle members lead the program, which includes learning from local solidarity economy leaders about their work; developing an analysis of racialized capitalism; building skills to improve social justice philanthropy; and plenty of time to enjoy being with others dedicated to redistributing their wealth to address capitalism’s harmful impacts. Members also encourage each other to do more than just move money — to also become advocates and participants in the solidarity economy. Organizers initially hoped to raise $15,000 in the pilot year and ultimately raised $50,000. Now midway through year two, the Project has raised $61,000 in total.
Grassroots leaders designed the grantmaking process, which includes a very brief application and a reduced reporting structure. The grantmaking committee is comprised of the elected members of CEANYC’s Board of Directors. SEGP donors do not participate in fund disbursement, and grantees are not burdened by site visits or extensive interviews with funders. Instead, donors trust the solidarity economy community to distribute these funds. This transfer of control flies in the face of traditional philanthropy, where a donor’s name is often affixed to a gift, and breaks with the convention of foundation-based Giving Projects where full-time staff support participants in grantmaking decisions.
The impact of the Giving Project has been profound, even in its first full year of grantmaking in 2018. Grants included support for:
- Nine women (seven women of color) to attend cooperative leadership trainings;
- An affordable housing co-op in Brooklyn to prepare a vacant unit for a new family;
- Manhattan community gardens to provide programs for low-income Latinx children;
- Expanded staffing and ownership opportunities at catering and food processing worker co-ops led by people of color; and
- Crowdfunding matches for a healthcare co-operative and a new food co-op that both serve Brooklyn communities of color.
The SEGP is something that like-minded donors could do in any city, and it is sorely needed. (Check out the solidarity economy in your area!) Whereas most funding is piecemeal,such as support for community gardens by health funders or credit unions by Community Reinvestment Act funds— we need resources to unify these disparate models in a single solidarity economy vision.
The Hildegard Fund and Economic Justice grantmaking of New York Women’s Foundation and the new Solidarity Economy Initiative funders collaborative in Massachusetts are promising steps by funders in support of a united solidarity economy rests on the power and potential of women’s leadership. Key to such efforts is acknowledging that this work must be self-directed from the grassroots, and that resources must flow to under-resourced, dedicated innovators, not to well-connected charismatic white men or existing grantees who happen upon co-ops as a good idea they want to adopt.
A solidarity economy that meets all of our needs and welcomes all of our contributions is possible. The Solidarity Economy Giving Project is a small step in that direction.
We welcome any opportunity to support others who want to implement a similar program. Reach us at any time via email@example.com.