Back to Neighborhood Transformation mainpage
2/15/02: The following is from a recent publication from the FannieMae Foundation on Community Development in Miami, Boston, and Washington D.C.. The except here is a history (critical) of Community Development in Miami along with the final findings. to view the entire report, visit www.fanniemaefoundation.org.
COMMUNITY DEVELOPMENT IN MIAMI
Taken from "Fuel Lines for Urban Revival Engine" by Alexander Von Hoffman, FannieMae Foundation
"Miami, in the words of LISC officer Sandra Rosenblith, is "a tough town" for community development. Unlike cities in which community development emerged from the antipoverty programs and black protests of the 1960s, community development did not come to Miami until the 1980s. Riots provided the immediate catalyst for revitalization efforts. In 1980 the acquittal of policemen charged with the fatal beating of an African-American insurance agent, Arthur McDuffie, triggered violence that resulted in 18 people dead, 1,100 people arrested, more than $80 million worth of property destroyed, and damage to 240 businesses in the amount of $150 million. In 1982, 1984, and 1989 riots again broke out in Miami' African-American neighborhoods (Porter and Dunn 1984). Immigration to south Florida played a role in those upheavals; Miami's poor African Americans resented the new arrivals. In 1980 the Mariel boat lift brought approximately 125,000 Cubans to the United States and introduced a large, unskilled, poor working-class Cuban population to Miami. The Mariel immigrants created a striking contrast to the successful middle- and upper-class Cubans who had come earlier to U.S. shores. In addition, some 60,000 Haitians arrived by boat in south Florida between 1977 and 1981 (Portes and Stepick 1993; Russ 1999).
Convinced that the lack of African-American business entrepreneurs had caused the riots, Miami's business and government leaders adopted a strategy of fighting poverty by financing, the ventures of inner-city business entrepreneurs, rather than nonprofit community organizations. The chamber of commerce, Dade County officials, and the Miami Herald crusaded to attract the Control Data Company, whose subsidiary, Urban Ventures, had successfully implemented computer training and business development programs in Minneapolis. The city's major corporations raised $7 million to fund a business assistance center, which opened in 1982 and began offering loans and technical assistance to current and aspiring small-business owners. In 1983 the City of Miami created Miami Capital Development, a lending entity with a $6 million revolving loan fund intended to help businesses create jobs. In the rush to begin the process, however, the business assistance center and Miami Capital Development failed to underwrite carefully, and local newspapers soon reported spectacular failures in the loan programs (Jones 1984; Martin 1999).
At the same time that local leaders embraced the entrepreneurial approach, LISC took an unusually direct role in launching a nonprofit community development system in Miami. After the 1980 McDuffie riots and Mariel boat lift, Mitchell Sviridoff, who was then starting LISC, asked Sandra Rosenblith to go to Miami and find ways that the new organization could promote community development. Before joining LISC, Rosenblith worked at the National Council for Equal Business Opportunity, an agency funded by the Ford Foundation, she worked for two years at the Federal Home Loan Bank, and she helped community development groups in Mississippi and the South Bronx (Rosenblith ).
Starting virtually from scratch, Rosenblith launched an educational and recruitment campaign for community development in Miami. She explained to business and community leaders how CDCs operated and how they were funded. For those who were interested, she led tours to-other cities to observe community development systems in action. Rosenblith forged an alliance with the deputy director of the Dade County Office of Community Development, Ernest Martin, who embraced nonprofit community development and funneled CDBG funds to CDCs (Martin; Rosenblith 99)
Eventually Rosenblith helped start three community development organizations: TEDC, East Little Havana Community Development Corporation, and the Haitian Task Force. She also established a network of private business leaders to support community development. Because Miami lacked a tradition of supporting community development groups, Rosenblith gave more grants to the fledgling CDCs than LISC usually did. In addition, she hired a lawyer to establish the new groups as 501(c)(3) nonprofit organizations and brought in consultants to help formulate strategic plans. Once the three CDCs were in operation, Rosenblith worked closely with the inexperienced directors and their staffs to help create their first deals (Pitts 1999; Rosenblith 1999).
In 1984 LISC made Miami an area of concentration by opening a permanent office in the city. To channel local money into community development, Rosenblith organized a local advisory committee, which was led at first by Anthony Burns, chairman and chief executive officer of the Ryder System, and subsequently by James K. Batten, then president and later chief executive officer of Knight-Ridder, Inc. Both companies maintained their headquarters in Miami. The committee also had representatives of major regional banks such as Southeast Bank and NCNB National Bank.
In 1992 Sandra Rosenblith began a new assignment-starting a new rural program for national LISC-and started transferring control of the Miami office to her chief program officer, Claire Raley. Raley became program director in 1994 and built on the pioneering efforts of her predecessor by working with Miami LISC's existing CDC partners while increasing the number of CDCs with which LISC did business.
Nor was LISC alone in promoting nonprofit community development. In 1985 The Enterprise Foundation started Greater Miami Neighborhoods, a nonprofit housing developer that later became an independent organization affiliated with Enterprise. Also active was Neighborhood Housing Services, a lending and home improvement program of the Neighborhood Reinvestment Corporation, which had been operating a branch in Miami-Dade since 1973.
Philanthropic institutions also responded to Miami's social problems after the riots. In the wake of the McDuffie riots, the Ford Foundation sent significant sums of money to local CDCs and the Haitian Refugee Center. The Dade Partnership for Community and Economic Development was established in 1989 largely with Ford Foundation money and was administered by the Dade Community Foundation, a leading philanthropy in south Florida. Like the Neighborhood Development Support Collaborative in Boston, the Dade Partnership for Community and Economic Development distributed funds from member foundations, banks, and other businesses to help pay the operating expenses of CDCs. For several years the Dade Partnership contributed large sums to the three Miami CDCs LISC had helped establish .
The activities of the foundations and intermediaries helped promote political support for community development in south Florida. Led by Miami mayor Maurice Ferre, several leading officials in Miami, neighboring cities, and Dade County endorsed community development and inaugurated task forces to encourage CDCs to help redevelop low-income target areas such as Little Havana, Overtown, Liberty City, Little Haiti, and the city of Opa-locka. In 1981 the Florida state legislature passed the Community Development Assistance Act, which enabled the state to pay about $100,000 a year to each of 15 CDCs for their operating expenses. Soon thereafter the government of Dade County enacted a surtax on property sales to create a low-income housing development fund, through which it began distributing revenues in about 1985 (Martin 1999).
Unfortunately, enthusiasm for entrepreneurial development and a lack of understanding of nonprofit community development undermined government efforts. The Community Development Assistance Act, for example, established a revolving loan fund to make loans to businesses-the entrepreneurial approach-but provided no technical assistance to help new CDCs develop and carry out programs. Responding to press criticism of the business assistance center, legislators placed restrictive underwriting requirements in the state's loan program, making it difficult for CDCs to obtain loans. The state also adopted rules for allotting low-income housing tax credits, which favor applicants that have site control, a building plan, environmental assessments, and projects with large sites and numbers of units. In practice, large private real estate developers are more likely to meet those criteria than are nonprofit CDCs, which are unable to pay the large expenditures (sometimes exceeding $1 million) that are required in the early stages of housing development. Within Miami's city government, Mayor Ferre favored nonprofit community development, but the more powerful city manager, Howard Gary, favored the entrepreneurship strategy (Burnham 1999; Duran 1999; Martin 1999; Perez Camayd 1999; Rodriguez-Tejera 1999; Rosenblith 1999).
During the 1990s Miami's emerging community development system lost momentum. The quality of corporate leadership suffered after James Batten died and Knight-Ridder, Inc., moved its corporate headquarters out of Miami. First Union Bank bought out Southeast Bank and moved its headquarters out of town. Indeed, corporate mergers and moves left Miami without a headquarters of any Fortune 500 company, except Ryder Systems. The owners of Cuban-American businesses were more inclined to support the arts and education than community development efforts aimed at black urban poverty. In other cities LISC's local advisory committees are composed of major financial institutions and philanthropic foundations, but in Miami the local advisory committee includes several representatives of small- and medium-sized banks and businesses (as well as a few large ones) and only one foundation member (Burnham 1999; Martin 1999).
In 1997 LISC took over the administration of the Dade Partnership for Community and Economic Development, which it renamed the Dade Partnership Capacity Building Program. By then, however, the amount available to each CDC had declined to about $50,000 in operating support a year for three years. This decline occurred partly because the number of-CDCs receiving support increased and partly because the initial Ford Foundation partnership grant had expired and not been fully replaced by other funders (Burnham 1999; Perez Camayd 1999).
Like the city government as a whole, the city's CDBG program was highly politicized and not well run. In the course of transferring control of-the city government from African Americans to Cuban Americans, deals were made by which CDCs that had not demonstrated an ability to carry out programs received long-term support. At the same time the city's bureaucracy became increasingly paralyzed as years of mismanagement took its toll. Finally, in 1995 the city had a $63 million deficit, forcing the state of Florida to establish an oversight board to run the city. As was the case in Washington, DC, such changes initially slowed down all agency activities until the new regime took over (Martin 1999). Miami's CDCs also had problems. Some failed. The Haitian Task Force, for example, fell apart because of dissension over the election and overthrow of Jean-Bertrand Aristide as president of Haiti. Other CDCs were poorly run, but because they had cultivated powerful political sponsors, the government continued to support them instead of more productive groups. Surveying the landscape in 1993, Bratt and her colleagues found that few of the more than 20 nonprofit housing organizations in Miami had developed multifamily rental housing for more than four years, and these were primarily for the elderly (Bratt et al. 1995). By the late 1990s, 43 CDCs existed in the Miami-Dade County area, but only about a quarter of them were productive and at most 3 to 5 of them were in the top tier of CDCs across the country (Burnham 1999; Jones 1999; Martin 1999).
Ernest Martin, a strong supporter of community development, retired in 1992 from Dade County's community development department and was replaced by officials who, put off by ineffective CDCs, returned to the policy of distributing CDBG funds to infrastructure improvements rather than community development. In 1998, for example, Dade County spent almost three-fourths of its $22.1 million CDBG funds on administrative costs and public works, leaving the county's 40-plus CDCs to fight for the rest (Burnham 1998; Martin 1999).
Today a cadre of experienced housing and community development operatives and officers of supporting institutions such as Greater Miami Neighborhoods, Legal Services of Greater Miami-South Florida Community Development Coalition, the Fannie Mae Partnership Office, and Greater Miami LISC are working to build public awareness of community development and create an effective political coalition that can lobby for more favorable government programs. Although these supporters of community development have lately made progress, it is too early to judge whether they will finally create a viable community development system."
The author then goes on to conclude based on the case studies:
1) The communities in which the CDCs operate differ by history, character, and conditions, and these various circumstances influence the short-and long term strategies that CDCs adopt. The institutions that support community development should diversify their needs and goals to account in their programs.
2) As part of the democratic ethos of the community development movement, CDCs consult neighborhood residents to various degrees in setting their agendas. However, the participation of local residents in CDC's affairs can create problems.
3) Financial intermediaries assist community development groups in crucial ways. They provide financing, technical assistance, and strategic advice; they also promote public and governmental support for community development and occasionally even help to organize CDCs.
4) Despite criticisms that intermediaries such as LISC influence CDCs to follow the intermediary's agenda, in the three cases presented here the officers of community development organizations and financial intermediaries have the same goals.
5) Simplifying methods for acquiring funding and changing local government's policies and administrative methods would improve the cumbersome process of carrying out community development projects.
6) The political environment of the city or region greatly influences the success of a CDC and local community development support institutions. Therefore, officers of funding institutions, scholars, and practitioners should develop ways to institute nonprofit community development as public policy in areas where it has little support and further strengthen policies in areas where it is well established...in Miami, enthusiasm for private business ventures and relative indifference to nonprofit community development pose large obstacles for CDCs and supporting institutions.
Steering Committee Announcement
Meeting with Rene Rodriguez at M-D Housing Agency Board Room on Tuesday, February 19th at 2:30pm. Agenda will focus on recycling tax delinquent properties and infill development program.