Community Benefits Agreement
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What is a CBA? A community benefits agreement is a legally enforceable contract, signed by community groups and by a developer. These agreements set forth a range of community benefits that the developer agrees to provide as part of a development project in exchange for community support of a given project. Successful community benefits agreements rely heavily upon the formation of a multi-issue, broad based community coalition including community, environmental, faith-based and labor organizations.
Challenges of economic development
While economic development projects are often heavily subsidized by taxpayer dollars, they produce decidedly mixed results for citizens. While many of these projects bring sorely needed jobs and tax revenues back to areas that have been disinvested, there is usually no guarantee that the “ripple effects” of the project will benefit current residents. Many developments cause inner-city gentrification, pushing out low-income residents as housing prices raise. Other projects create large numbers of dead-end low-wage retail and service sector jobs. Even after investing billions of dollars in economic development, many metropolitan regions continue to experience spiraling poverty, sprawling, unplanned growth, a crisis of unaffordable housing and declining quality of life for low and middle, income communities.
CBA’s-A new movement
As local governments grapple with their responsibility to shape development and land use patterns, a new movement has emerged to challenge conventional thinking and offer a broader vision. This movement is centered on the concept of community benefits—the simple proposition that the main purpose of economic development is to bring measurable, permanent improvements to the lives of affected residents, particularly those in low-income neighborhoods and communities of color. Leading organizations include The Partnership for Working Families, Los Angeles Alliance for a New Economy, Georgia Stand-Up and Pittsburg UNITED. This movement pressures the public sector to play a more strategic role in land use planning and urban growth, in order to leverage its multibillion dollar investment in the private sector towards creation of good jobs, affordable housing, and neighborhood services that improve the quality of life for all residents. The community benefits movement began in California, where organizations in Los Angeles, San Diego, San Jose and the East Bay have worked individually and collectively to realize the tremendous social justice potential of economic development and land use planning. The movement is spreading rapidly to other regions in California and taking hold in metropolitan regions across the country, including Denver, Milwaukee, Seattle, Pittsburgh, New Jersey, Boston, New Haven, Phoenix and Atlanta.
Who is involved in the negotiation of a CBA?
CBAs are generally negotiated between leaders of community groups and the developer, prior to governmental approval of the project. However, there are innovative examples where coalitions have established standards for development projects during the planning stages before the developer is identified and the specific plans are determined (i.e. Milwaukee, Atlanta). Sometimes a government agency will play an active role in CBA negotiations.
• Community organizations and labor unions must build a broad based campaign with comprehensive and concrete requirements of a proposed project.
• Developers will negotiate with community representatives to gain community support to move a proposed project forward. Some developers want to work with community groups in order to promote community involvement whether or not project approval is dependent on community support.
• Government agencies may or may not be involved in CBA negotiations. Government representatives may act on the behalf of the community in negotiations with the developer.
• Attorneys will become involved since CBAs are enforceable contracts, with legal consequences for both developers and community groups. Ideally, the community organizations will start the negotiations directly with the developer and attorneys for both sides are brought in to formalize the contract after an agreement has been reached.
What kind of community benefits can CBAs include?
Each particular CBA will depend on the community’s needs, the size and type of the proposed development, and the relative bargaining power of the community groups and the developer. Benefits contained in a CBA may be provided by the developer or by other parties benefitting from the development subsidies, such as the stores that rent space in a subsidized retail development. Typically, CBAs include job quality standards, mechanisms that ensure low-income residents will have access to newly created jobs, and affordable housing requirements. Benefits that have been negotiated a part of CBAs include: • A living wage requirement for workers employed in the development.
• Requirement that construction contractors pay prevailing wages
• Responsible contractor provisions that make it easier for employers that pay good wages and provide job training can compete for construction and/or property management contracts.
• A “first source” hiring system, to target job opportunities in the development to residents of low-income neighborhoods.
• Space for a neighborhood-serving for a neighborhood-serving child-care center.
• Environmental standards.
• Construction of parks and recreational facilities.
• Community input in selection of tenants of the development.
• Community involvement in environmental remediation efforts.
• Provisions that address parking and traffic and the increased pollution that can result from new development.
• Construction of affordable housing.
What are the benefits of CBAs for developers?
CBA negotiation process often improve the quality of development projects, by creating a clearinghouse for identifying and addressing community residents’ and workers’ needs. Though developers are often initially recalcitrant, they quickly come to realize the benefits of working with coalitions that bring all stakeholders to the table. Participating in CBA negotiations eliminates surprises in the development approvals process, and provides developers with community support that can help their projects navigate the public approvals process quickly. Any development project of significant size has to go through a complex governmental approval process. As a proposed project moves through this process, government officials and community groups may request that the project provide particular community benefits, or that the project be tailored to the needs of the community. CBAs enable developers to gain a coherent and comprehensive account of a community requirements rather than having to engage community organizations one by one. Overall CBAs can foster a collaborative relationship between developers and community members rather than an adversarial relationship.
Monitoring a CBA
Community groups should consider how each benefit in a CBA will be monitored. Financial commitments and other one-time benefits are probably the easiest aspect of a CBA to monitor. Much more challenging are ongoing tenant commitments, such as living wage and local hiring requirements. The most effective approaches include affirmative reporting requirements as well as the ability to investigate complaints of non-compliance. Required reports should be no less frequent than once a year, should be publicly available and should be due by a particular date each year. However the details play out, community groups should never settle for a monitoring system where performance reports are not verifiable.
How is a CBA enforced?
This depends upon who signed the CBA and what enforcement provisions it contains. As a CBA is a legally binding contract, it can be enforced only by a party that has signed it. CBA’s that are incorporated into the development agreement can be enforced by the government as well as by community groups.
Benefits of a CBA
The community benefits approach makes the development better for the community, developers and local officials by creating an overall win-win-win scenario. This approach facilitates communication between developers and local officials through which community needs and concerns can be addressed. The end result is a development project balances the needs of the community with the vision of the developer.
Inclusiveness: The CBA negotiation process provides a mechanism to ensure that community concerns are heard and addressed. While some cities do a good job of seeking community input and responding to it, many do not. Low-income neighborhoods, non-English speaking areas, and communities of color have historically been excluded from the development process. Laws concerning public notice and participation are poorly enforced, and official public hearings are held at times and places that are not neighborhood-friendly. Having a CBA negotiation process helps to address these problems, providing a forum for all parts of an affected community.
Economic growth: CBAs support economic growth by allowing businesses to develop and expand in a way that is sustainable over the long term. CBAs also alleviate some of the negative side-effects associated with economic growth.
Enforceability: CBAs ensure that the developer’s promises regarding community benefits are legally enforced. Developers “pitching” a project often make promises that are never written into the development agreement, or are never enforced even if they are included. This is especially true of promises about jobs being created for local residents. CBAs commit developers in writing to promises they make regarding their projects, and make enforcements much easier.
Accountability: CBAs enable citizens to hold governments accountable for the use of tax dollars. Public subsidies should not be applied to development projects that will increase poverty. Additionally, CBAs help the public, community groups, government officials, and the news media monitor a project’s outcome. Having all the benefits set forth promotes transparency and allows everyone to understand and assess the specific commitments made by a developer.
Coalition-Building: At the heart of the community benefits strategy is coalition building. Organizing and maintaining a coalition, facilitating compromise and crafting a shared agenda is essential to creating a successful CBA. If enough stakeholders come together with a common vision for economic development, developers are likely to want to negotiate an agreement. The CBA process offers developers and attractive alternative to litigation and polarizing public debates.
Efficiency: CBAs place the requirements and plans of all parties on the table from the beginning. Such agreements generate a collaborative relationship from the beginning avoiding community objection and costly delays.
Clarity of Outcomes: CBAs provide local governments with the information they need to show successful delivery of promised benefits, such as creation of jobs. Very few state and local economic development entities can quantify their outcomes when questioned by legislatures or the public about the success of their programs or the public’s return on investment. CBAs can be a vehicle for governments to gather and maintain information that demonstrates that the jobs and other benefits actually materialize.
Reference
[1]Community Benefits Agreements: Making Development Projects Accountable by Julian Gross with Greg LeRoy and Madeline Janis-Aparicio
[2]Community Benefits Agreements: The Power, Practice, and Promise of a Responsible Redevelopment Tool by the Annie E. Casey Foundation.
