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Arthur L. Johnson 

Fall Quarter, 2004

 

COMMUNITY ECONOMIC DEVELOPMENT

 

 

Readings and Topics

 

           

Bill Simon’s book, The Community Economic Development Movement:  Law, Business, and the New Social Policy (2001), summarizes the themes of this course.  Please read it as soon as possible and there will be specific assignments in the book for various classes below.

 

Call the bookstore (617/373-2286) or Gnomon Copy (617/536-4600) to determine if the course materials are available in advance.

 

1        Class Introduction -  September 1, 2004

Readings:

*          Simon, supra, pages 1-5;

*          “Remembering” from Peter Medoff and Holly Sklar, Streets of Hope:     The Decline and Rise of an Urban Neighborhood, pages 7-35, (South End Press, 1994) (Course Materials, at pages 1-15)

 

2.     CED Walking Tour of Jamaica Plain – September 8, 2004

*          Jamaica Plain Neighborhood Development Corporation Handout

 

            3.         What is Community Economic Development?

                 a. The Debate

 *            Nicholas Leman, The Myth of Community Economic Development, New York Times Magazine, December 9, 1994. (at 17-24).

*          Charlotte Kahn, Rebuilding Boston, The Boston Review, June-September

            1994 (at 25-32).

 

                 b. Defining a Community: Case Study - Dudley Street Neighborhood Initiative I

                        *          Medoff and Sklar, supra, 11-14, 37-62  (at 3-5, 33-46)

                        *          Note on Statutory Conditions on CDC Governance (at 47-48).

 

4.        The New Social Policy:  The Turn to Community-Based Development

   Readings:

a.             Simon, supra, pages 7-40;

b.            The History of Redevelopment of Urban Neighborhoods:

*       “Past Federal Policy For Urban Neighborhoods” by W. Dennis

         Keating and Janet Smith, from Keating, Krumholtz & Star,

         Revitalizing Urban Neighborhoods (1996) (at 49-52).

*       “Swimming against the Tide”  by Alice O’Connor, from Urban Problems and Community Development, (1999) (at 53-69).

 

 

*       “Federal Subsidy and the Suburban Dream: How Washington Changed the American Housing Market” and “The Cost of Good Intentions: The Ghettoization of Public Housing”, from  Crabgrass Frontier, by Kenneth T. Jackson (1985) (at 71-96).

        

                        c.          Two Case Studies:  

*          Sonya Bekoff Molho and Gideon Kanner, Urban Renewal: Laissez-Faire for the Poor, Welfare for the Rich, 8 Pacific Law Journal (1977) (at 97-104).

 

5.      What makes for a good urban community?

Readings:

*          “The uses of sidewalk safety” from Jane Jacobs, The Death and Life of Great American Cities,  29-35, 50-54 (1961) (at 105-109, 110-112).

*          Jacobs, supra,  “The generators of diversity”, 143-151 (at 113-117).

*          Jacobs, supra,  “The need for mixed primary uses”, 152-177 (at 119-131).

*          Jacobs, supra,  “The need for concentration” , 200-221 (at 133-143).

 

            6.   Financial Institutions and Local Underdevelopment

 

                        a. Banking Law, especially the Community Reinvestment Act:

*          Jonathan Macey and Geoffrey Miller, Banking Law and Regulation 208-

                 22 (Aspen: 2d ed. 1997) (at 145-152).

*          Anthony Taibi, Banking, Finance, and Community Economic

                  Empowerment, 107 Harvard Law Review 1463, 1507-11 (1994) (at

      153-156).

*          Jacob Schlesinger, Gramm Crusades to Overturn Community Lending

        Act, Wall Street Journal, April 19, 1999) (at 157-159. ).

*          Note on 1999 “Sunshine” Amendments (at 160).

 *          “The Credit Revolution” from Comeback Cities, by Paul Grogan and _______ Proscio (2001) (at 161-171).

 

            b. Microenterprise Programs

*          Lewis D. Solomon, Microenterprise: Human Reconstruction in America’s

                  Inner Cities,15 Harvard Journal of Law and Public Policy 191, 195-

                  209, 218-19 (1995) (at 173-188).

*          John Buntin, The New Republic, “Bad Credit, Microcredit yields

                    macroproblems”, Mar. 31, 1997 (at 189-190).

*          Daniel Pearl and Michael M. Phillips, “Bank the Pioneered Loans for the     

Poor Hits Repayment Snag”, Wall Street Journal, Nov. 27, 2001 (at 191-193).

 

c.       Access to Good/Bad Credit

Good Credit:         

*          Grzywinski, Ronald, “The New Old Fashioned Banking”, The Harvard               Business Journal, May-June, 1991 (at 194-205).

Bad Credit/Predatory Lending:

*          Goldstein, Deborah, Protecting Consumers From Predatory Lenders:  

                                          Defining the Problem and Moving Toward Workable Solutions,

                                          Harvard Civil Rights-Civil Liberties Law Review, winter,  2000 (at            

                                          207-234).

 

            7.   Community Business Development I

a.    B-School Goes to the Inner City

*          Michael Porter, The Competitive Advantage of the Inner City,  Harvard Business Review, May-June, 1995, pp. 55-71 (at 235-251).

*          The Porter Approach in action:  “West Louisville Competitive Assessment and Strategy Project” (at 272-253 – the article was copied backward).  

 

            b.. Programs for Minority and/or “Socially Disadvantaged” People

                        *          City of Richmond v. J. A. Croson Co., 488 U.S. 469 (1989) (at 273-282);

*          Federal Section 8(a) Procurement Preference Regulations (1997) (at 290-     295).

                        *          Government Accounting Office, Small Business Administration: Status,

                                    Operations, and Views on the 8(a) Procurement Program (1988).

 

            8.   Property Rights as Enablements and Constraints

                a. Equity Limitations in Housing Ownership

*          Duncan Kennedy, The Limited Equity Co-op As A Vehicle For Affordable Housing  Howard Law Review, (2003) (at 297-329).

*         Massachusetts Government Land Bank, What Is a Limited Equity Cooperative? (1987), pp. 1-5 -- 1-10 (at330-.336).

 

                b. Constitutional Constraints: The Exactions Issue

                        *          Boston Redevelopment Authority, Linkage (1988) (at 337-338).

                        *          Henry George, Progress and Poverty (1879) (at 339-340).

                        *          Dolan v. City of Tigard, 512 U.S. 374 (1994) (at341-350)..

*          Note on the Scope of Dolan (City of Monterey, Ehrlich [Cal]) (at 351-     356).

 

            9.  Business Development II

                 a. Local Preferences

                        *          Hicklin v. Orbeck, 437 U.S. 518 (1978) (at 357-336).

                        *          White v. Massachusetts Council of Construction Employers, Inc., 460 U.S. 204 (1983) (at 367-369).

*          United Building and Construction Trades Council v. Camden, 465 U.S.    208 (1984) (at 370-376).

 *          City of East Palo Alto (California), Draft First Source Hiring Ordinance (1995) (at 377-387).

           

 

     b.De-Regulation as a Development Strategy

   *          Samuel Staley et al., “Beantown Rap: Boston,” from Giving a Leg Up to    

                                      Entrepreneurship (Reason Public Policy Institute) (at 389-398).

 

            10.  Enterprise Structures: Community Development Corporations (“CDCs”)           

*          Avis S. Vidal, “CDCs as Agents of Neighborhood Change: The State of    

the Art”, from Revitalizing Urban Neighborhoods, pp149-163 (at 399-406).

*          Sara E. Stroutland, “Community Development Corporations:  Mission, 

     Strategy and Accomplishments”, pp193-203 (at 407-412).

*          Avis S. Vidal, “Can Community Development Re-Invent Itself?”, Journal

                    of American Planning Association, Vol. 63, No. 4, 1997 (at 413-422).

 

            11. Enterprise Structure: Worker Cooperatives

                              a. Historical Case Study: Mondragon

*          Harvard Business School, The Mondragon Cooperative Movement (at 423-436).

                              b. Law

           *          David Ellerman and Peter Pitegoff, The Democratic Corporation:                 

                                                    The New  Worker Cooperative Statute in Massachusetts, 11                      

                                                    NYU Review of Law and Social Change 441, 453-63 (1982-   

                                                    83)  (at 437-463).

 

                               c. Case Study – Job and Business Development:

*          “Cooperative Home Care Associations:  From Working Poor to

               Working Class Through Job Ownership.” (at 449-495).

                  

            12.   Enterprise Structure: Legal Needs of CDCs as Nonprofit Corporations I

                  a. Nonprofit Corporation Law

                      *            James Fishman and Stephen Schwartz, Choice of Legal Form of a

                        Nonprofit Organization, Nonprofit Organizations 61-68 (Foundation                    

                        Press: 1995) (at 497-503).

                      *            In Re Los Angeles County Pioneer Society, 257 P.2d 1 (Cal. 1953)          (at 504-513).

 

                  b. Tax Exemption Issues I

                      *            James Fishman and Stephen Schwartz, Affirmative Requirements for Tax

            Exemption Nonprofit Organizations 336-38 (1995) (at 514-516).

                      *            IRS Definition of “Charitable”: 28 CFR 1-501c3-1d2 (at 517).

                      *            IRS, Charitable Status of Nonprofit Housing Providers, Revenue Ruling

                                              70-78 (at 518-520).

*            IRS, Nonprofit Housing Provider “Safe Harbor,” Announcement 95-37 (at 521-524).

 

 

 

 

            13.    Enterprise Structure: Legal Needs of CDCs as Nonprofit Corporations II

                        a.         Tax Exemption Issues II                                

*          Fishman and Schwartz, Notes on the Unrelated Business Income  

Tax,  Nonprofit Organizations 736-38, 774-76 (1995) (at 525-530).

            *          Irwin Borof, Escaping the Perils of Private Foundation Status, 

National Economic Development and Law Center Report,                          winter 1983 (at 531-536).

b.                  Tax Exemption Issues III: Procedure

*          Case Study: URIAH 501c3 Application Materials (at 537-586).

 

14.        Enterprise Structure: Legal Needs of CDCs as Nonprofit Corporations III:

 Governance Issues.

            *          Fishman and Schwartz, Notes on Fiduciary Duties, Nonprofit

                                    Organizations 183-  88, 214-16 (1995) (at 587-593).

                        *          Stanford Bookstore Case Study (1992-3) (at 594-627).

                        *          Note on New Sanction for “Excess Benefit Transactions” (at 628-630).

                         

            15. Affordable Housing Development I:  The Specialty Practice of the CDCs

                 a. Affordable Housing Development and Finance:

           *           Jason deParle, “Slamming the Door,” The New York Times Magazine,

                                               Oct. 20, 1996, at 53 (at 631-644)..

*          John Emmeus Davis, “Beyond the Market and the State: The Diverse   

                         Domain of  Social Housing”, from The Affordable City:

                        Toward a Third Sector Housing Policy, (1994) (at 645-661).

*          C. Theadore Koebel, “The Tortuous Path of Nonprofit Development”,

                          from Shelter and Society:  Theory Research and Policy for       

                          Nonprofit Housing (1998) (at 663-669).

*          Philip Halpern, “Strategies for Financing Affordable Housing”,     

                                                  Real Estate Review, 1994 (at 671-683).

                 b.  Case Study

*          Harvard Business School, “The Forest Glen Cooperative” (1995) (at 683-699).

 

 

            16. Affordable Housing Development II

                        a.         501 c(3) Exemption Issues:

                                    *          Plumstead Theater Company (Tax Court 1980) (at 701-704).

*          Housing Pioneers v. Commissioner, 58 F.3d 401 (9th Cir. 1995) (at 705-708).

 

b.      Allocation Issues:

*          Ebert and Carroll, “Needy Lose Out at Navy Yard”, Boston     

                  Globe, (1999) (at 709-713).

*          Langlois v. Abington Housing Authority, 207 F.3d 43 (1st Cir,

                   2000) (at 714-723);

*          HUD regulations on PHA local preferences (at 724-725).

*          City of Boston, First Time Home Program, “Who Can Buy these   

             Houses” (at 726).

 

c.       The Low Income Housing Tax Credit Program:

*          Case Study:  Placement Memorandum for Hyde Square Limited

Partnership (at 727-773).

 

17.    More Case Studies:

*               Commercial Development in the Neighborhood :  Materials on the     

              Jackson Square K-Mart Controversy (at 775-805).

 

18.    What happens when the Neighborhood improves and the Gentry arrive? 

 

*               Jacobs, supra, “The self-destruction of diversity”,  241-256 (at 807-815).

*               J. Peter Byrne, “Two Cheers of Gentrification”, Howard Law Journal,    

                      Spring 2003 (at 817-836).

*               John A. Powell and Marguerite L. Spencer, “Giving Them the Old “One-

           Two”:  Gentrification and the K.O. of  Impoverished Urban Dwellers   

            of Color”, Howard Law  Journal, Spring 2003 (at 837-885).

*               J. Peter Byrne, “Rhetoric and Realities of Gentrification: Reply to Powell

                                            and Spencer”, Howard Law Journal, Spring 2003 (at 887-891).

 

19.    The Future of Community-Based Development.

 

*               The Critique from the Left:  “The Community Economic Development

                   Movement: A Metropolitan Perspective”  David J. Barron, Stanford     

                   Law Review, Dec. 2003 (at 893-922).

 

       *               The Attack from the Right:  “Don’t Let the CDCs Fool You”, from

                                            America’s Trillion-Dollar Housing Mistake, by Howard Husock,

                                             (2003) (at 923-932).