How Did This Happen?

This happened, in part, because the CLT model (as it is typically implemented) is not financially self-sustaining.

Most CLTs focus on providing an affordable single-family homeownership option in which the organization owns the land underneath the house, and the resident owns the house and pays a small monthly ground lease fee ($35 or so) to the CLT for use of the land underneath the house. CLTs, then, tend to be dependent on external funding, because ground lease fees alone are not enough to pay someone to complete the set of tasks administering a CLT necessitates (overseeing home sales, screening potential buyers, linking buyers with lenders, and collecting lease fees, among others).

Funding a CLT’s operations then becomes one of the primary motivators of the organization. And as HUD funding dwindles, securing coveted HOME or Community Development Block Grant (CDBG) awards has become a highly competitive process requiring formulaic objectives, exact budgets, and absurdly regimented financial record-keeping practices.

CDBG Requirements: A Case in Point

About a year ago, I was appointed by my local alderperson to the Citizen Advisory Committee (CAC) to oversee a city’s allocation of CDBG funding. I saw the absurdity firsthand.

Every local government body that allocates CDBG funds is required to have a CAC, nominally to give localities more control over the administration of federal grants. In practice, sitting on the CAC felt like being a cog in the federal bureaucracy, a volunteer administrator checking boxes and adding up points, making sure all the grant sub-recipients fulfilled their end of the agreement.

CACs monitor each recipient nonprofit’s economic activity and progress toward stated objectives, acting as a disciplinarian to make sure they satisfy HUD’s requirements. If the CAC fails to properly discipline any sub-recipient, the city could lose the entirety of its CDBG funding.

As early as 1969, Sherry Arnstein (famous for her piece, “A Ladder of Citizen Participation”) put CACs on the lowest rung of the participation ladder, Manipulation, or a “distortion of participation into a public relations vehicle by powerholders.” In the decades since Arnstein’s writing, local power to influence decisions over the allocation of CDBG funds has been tightened even further, ostensibly to reduce the mismanagement of funds.

The resulting requirements are nearly impossible for small nonprofits to meet. For example, for an organization to simply purchase program supplies using CDBG funds, they must:

• Request a withdrawal of CDBG funds from the municipality
• Buy the supplies within three days (or else write a justification for why the purchase took longer than three days or return the funds)
• Produce and keep a purchase order or requisition form from an authorized representative of the organization
• Keep an invoice from the vendor with a signature from an organizational representative that the goods were received
• Document where the supplies are stored
• Document which cost objective(s) were fulfilled by the purchase of the supplies
• Document which budget line item the supplies fall under
• Ensure that the three separate individuals in the organization handle (1) authorizing the transaction, (2) recording the transaction, and (3) maintaining custody of goods purchased

All of these requirements, of course, come after an organization has already written a specifically organized grant application meeting the objectives and checkboxes required by HUD, including documentation of highly regimented accounting practices in their organization.

The regulations around CDBG allocation represent just one example of how the dominant paradigm of grant funding inhibits the autonomy of nonprofits. Private foundations can be just as cumbersome and biased in their grant stipulations. And, of course, only specific activities fall under the grantees’ goals. CDBG money, for example, very explicitly does not fund “political activities.”

The Result: Professionalization and the Abandonment of Community Organizing

Requirements like those above are what led authors and editors of The Revolution Will Not be Funded to argue for the abandonment of grant funding for nonprofit work. Just the administrative burden of meeting the conditions of funders requires paid staff, office equipment, budgeting software, and professional skillsets beyond the capacity of many grassroots organizations. Once they grow to the capacity to handle grant application and administration tasks, many organizations find their goals totally transformed to meet the goals of their funders and their energy for grassroots organizing channeled into bureaucratic work.

This argument is not new: Frances Fox Piven and Richard Cloward, in their 1979 analysis of social movements, Poor People’s Movements: Why They Succeed, How They Fail, make the case that “organizations endure, in short, by abandoning their oppositional politics.”

The result of these funding trends for the CLT movement is that it shifted from being a movement for community control of land and became a group of affordable homeownership providers largely delinked from grassroots organizing efforts. There are exceptions, of course, but CLTs with more radical ideals of community control and anti-gentrification organizing tend to have a harder time finding the funds to fulfill their missions.

Most CLT funders are concerned primarily with the number of affordable homes secured, not the ways that residents are engaged or the specific needs of the local community. Some CLTs have managed to develop community centers, playgrounds, commercial spaces, and urban farms — which they saw as important for their local communities — by getting more creative with their budgets and funding sources.

Paul Kivel’s chapter in The Revolution Will Not be Funded encourages organizations to think about who they are accountable to: funders or grassroots organizations? He writes:

In the nonprofit industrial complex, accountability is directed toward the ruling class and its managers — toward foundations, donors, government officials, larger non-profits, research institutes, universities, and the media. These are all forms of top-down accountability. I am suggesting a bottom-up accountability guided by those on the frontlines of grassroots struggles for justice. In which direction does your accountability lie?

Toward Greater Community Control: Two Directions Forward

So how might a movement for community control of land and housing become more accountable to “those on the frontlines of grassroots struggles”?

The challenges faced by the CLT movement are primarily the result of two specific problems: the model’s dependence on external funding, and the stipulations for receiving that funding.

To address these two challenges, I offer two directions forward for land and housing struggles.

First, this movement must find more community-based sources of funding. Land and housing are expensive, which is what makes these efforts particularly important and uniquely susceptible to co-optation by funders.

Many housing cooperatives use their residents’ equity to fund site acquisition and ongoing rent to cover maintenance costs without using grant funding at all. But resident equity usually isn’t enough for low-income groups to acquire properties in expensive urban markets.

For this reason, groups like the East Bay Permanent Real Estate Cooperative and Ecovillagers Alliance are developing models for non-resident members to invest in property that will still prioritize resident control of development and stay affordable for generations. Because these community investment models require complex legal structures and involve ownership of significant assets, some level of professionalism and sound financial practices are still important to making them work. But using this community capital strategy allows for a greater balance to be wrought between professionalism and community control.

CLTs by themselves tend to not generate enough revenue to repay a loan (even one sourced from the community). But in the right conditions, CLTs can find community financing strategies to be helpful in securing capital for site acquisition with revenue-generating community partners. Oakland CLT’s vision for acquiring multiple community-financed sites in partnership with a set of mission-aligned local organizations may indeed light the way for other CLTs struggling with the tensions between grant funding and community control.

Still, sometimes you just need free money to make a project work (especially in hot markets). This brings me to my second point: funders with a conscience need to try harder.

Funders who wish to empower communities to make decisions about development must change the paradigm of grant requirements. We might not expect this kind of sincerity from most funders (public or private), but as many Americans think about what a democratic socialist government could look like, we should begin to imagine federal programs that empower rather than restrict institutionally marginalized groups.

Let us not forget that the early years of the War on Poverty included funding for the Community Action Program (CAP) that called for “maximum feasible participation” of the poor in deciding how to use these funds locally. In many cases, this money directly funded community organizers who led sit-ins and other direct actions that were wildly successful in changing local policies, and even national policies like welfare reform. When mayors felt threatened and brought their grievances to national leaders, more restrictions were placed on CAP funding to limit its use primarily to service provision instead of political activity.

To bring in a more recent example, David Cameron’s administration — “conservative” by United Kingdom (UK) standards — hired and trained five-hundred community organizers between 2011 and 2015 in the UK’s poorest neighborhoods through the Community Organiser Programme (COP) under the “Big Society” initiative. COP also helped build an independent body to continue to train community organizers after federal funding for it subsided, called The Company of Community Organisers.

As COP researcher Robert Fisher argues, if a conservative government in the UK could do it, funding community organizing might be a feasible option in the coming years in the United States. Furthermore, developing an institution to continue to train organizers as part of a community organizing policy would help ensure that the momentum could be carried forward if a conservative backlash were to slash federal funding for organizing.

Acquiring and administering property should not be the only goals of the housing and land movements in the United States. To confront the inequalities perpetuated by private property ownership — including deepening wealth disparities and the domination of urban development decisions by the elite — advocacy for affordable housing should always be coupled with grassroots movements for community control of land. Somewhere along the road, the CLT movement largely abandoned this vital piece of its legacy.

To reignite possibilities for community control, communities could look to innovative funding models that reduce their dependence on grants and instead source capital from community investors. Additionally, federal grants could offer greater autonomy and incentives to organizations to work directly with those on the front lines of the housing crisis to make decisions and take action regarding the land on which they live and work. A government with these interests in mind could even help fund community organizers in the housing movement. At this critical political moment, we must push ourselves to imagine and demand nothing less.