Why Community Spaces Matter

Sponsored: Attend the Social Purpose Real Estate Summit to join the growing community spaces movement.

Community spaces are on the ascendancy. Almost as a reaction to the isolation of the pandemic, investment and interest are rising in shared spaces that bring neighbors together. Community spaces are all around us but we don’t think of them as a class of real estate. They are unified by the themes of improving community, civic and personal health, building power and lifting up voices of those disenfranchised by capitalism.

Community spaces are part of ‘buy back the block’ efforts and a solution to how to activate street level spaces in urban housing projects. They’re homes to workforce development and social service hubs. They’re refugee settlement centers. They’re safe spaces for marginalized groups such as trans youth. They’re power building strategies in neighborhoods with a history of absentee ownership. They’re places that incubate locally owned businesses. Increasingly, they’re climate and disaster resiliency centers, grid independent and ready to support those displaced by environmental disasters, and to sustain our vulnerable neighbors during times of extreme heat and cold. They’re nonprofit centers that foster collaboration and long-term affordability and stability. They’re arts and culture facilities providing access to under-resourced areas. They’re re-entry centers improving lives and reducing recidivism. They’re affordable child-care options near employment centers. They’re health care facilities providing high-quality care to neighbors without access to consolidating hospital systems. They’re food pantries providing access to healthy food for our most vulnerable neighbors. They’re youth hubs providing safe spaces and growing our future leaders.

In many places in the country, community spaces constitute facilities that would otherwise be provided by the government, i.e. access to human services that form the backbone of the safety net for millions of Americans. The privatization of our social safety net is not new, but it has grown to new depths under small government proponents. Underfunding our safety net has created a crisis that is evidenced by increased housing instability, the opioid epidemic and widespread food insecurity.

For these reasons, support for these facilities should and must start to be capitalized by local, county and state government. Philanthropy must also commit to providing the upfront capital to fully fund further community space projects. This approach is easily justified as a long-term strategy to making nonprofits sustainable and preventing displacement. This time of depressed commercial real estate values is a perfect time for funders to step up and capitalize projects that create permanent value and benefit. This funding must go beyond double digit returning “impact investment.” In order to compete with private equity in a competitive market this capital should be made readily and quickly available for deployment.

The primary national source for these projects is the New Markets Tax Credit Program. NMTCs have provided a catalyst to some social purpose real estate projects but the program that once promised to provide 15-20% of project costs now sometimes provides half of that. This increases the reliance on debt financing with its incumbent life-cycle cost burden and unrelated business income tax implications. The erratic issuance of credit allocation by the US Treasury and the highly competitive nature of the program limits its application to more developer driven projects rather than those imagined by local communities.

The community spaces movement needs to grow its infrastructure to include an umbrella of real estate practitioners ready to work in tandem with local communities to deliver impact without an extractive motive. The Nonprofit Centers Network’s Social Purpose Real Estate Summit (www.spresummit.org) in Detroit, Michigan on October 24-26, 2023 will bring together these practitioners, facility operators, and funders. Join us there to be a part of growing the community spaces movement and to show why community spaces matter.

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David Schrayer is the Co-Director of the Nonprofit Centers Network and the Social Purpose Real Estate Summit. David began his career in real estate in the San Francisco Bay Area in the 1980s working as a tradesman for a design-build firm on residential and commercial projects. Seeking to make his career in the third sector, David relocated to New York City where he found his calling in developing affordable housing and mixed-use projects in the Hell’s Kitchen and Loisaida (Alphabet City) neighborhoods of Manhattan. Since then David has had the joy of working in a variety of roles from single-family residential building to disaster recovery in post-Katrina New Orleans and sitting on private and governmental advisory boards. Since 2013, David’s professional focus has been on multi-tenant nonprofit spaces in New Jersey, New York, California and Michigan. David loves what he does and believes that creating permanent community-held assets through nonprofit centers is key to promoting social equity.

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