Building Local Power, Agency, and Ownership through Community Wealth Building
Chicago, ILFormer Chicago, Illinois Mayor Lori Lightfoot committed $15 million in ARPA fiscal recovery funds in November 2021 to the Community Wealth Building (CWB) Initiative—a new, nontraditional approach to economic development that “promotes the local, democratic, and shared ownership and control of community assets to transform our economy to be more sustainable and just.” The initiative is working to build a supportive ecosystem for community-owned businesses and launch large-scale pilots of four different shared-equity ownership models: worker cooperatives, limited-equity housing cooperatives, community land trusts, and community investment vehicles for commercial real estate. Nneka Onwuzurike, First Deputy of Business and Neighborhood Development in the Office of the Mayor, describes their goals as, “Economic development from an equity and racial justice perspective that actually builds power, and builds wealth for residents within that neighborhood.”
Why this investment?
The Community Wealth Building Initiative grew out of the City’s work to create an equitable economic development strategy. City leaders saw that while their efforts to hire developers of color and local community members on development projects was an improvement, the impacts were fleeting. The construction jobs associated with development projects were often temporary and the projects increased wealth for owners living outside the community, but not for local residents. In contrast, community wealth building aims to ensure sustainable, lasting community ownership of assets. As Onwuzurike describes, “Wealth building can look like buying into a housing cooperative with limited equity that restricts your resale value, knowing that your child and your children’s children will be able to still afford to live in your neighborhood. The neighborhood will not gentrify overnight and your culture will still maintain.”
Beginning in January 2020, former Office of Equity and Racial Justice (OERJ) Chief Equity Officer Candace Moore began convening a small group that included City departments along with three external partners—LISC Chicago, World Business Chicago, and Black Chicago Tomorrow—to define their approach. They were inspired by the Democracy Collaborative, which in 2005 described community wealth building as creating inclusive, sustainable economics through locally rooted and broadly held ownership that disrupts the extractive economy for a more democratic one. In January 2021, OERJ invited thirty community leaders for a six-month long working group to co-create a Chicago specific definition of community wealth building, design shared values, determine short and long-term outcomes, and analyze existing work. The working group and OERJ presented their definition and provided recommendations to the City, philanthropy, and public sector in July of 2021, and four months later, former Mayor Lightfoot committed $15 million ARPA dollars to fund the historic Community Wealth Building Initiative.
What is this investment?
The Community Wealth Building Initiative provides financial support and specialized, technical assistance to catalyze the growth and development of community ownership models in four arenas: business (worker cooperatives), homeownership (limited-equity cooperatives), land stewardship (community land trusts), and commercial real estate (community investment vehicles). The initiative is unfolding through three phases of implementation:
- Strengthen the ecosystem. In September 2022, grants opened for the Community Wealth Ecosystem Building (Community WEB) Program. The Department of Planning and Development awarded $6 million in two-year grants to fund an interconnected network of advisors of 17 organizations that “start, sustain, and scale CWB models” through specialized, culturally relevant technical services around business development, finance, operations, and research.
- Build the pipeline. The second phase, launched in May 2023, consisted of $4 million in grant funding to support the development of “shovel-ready, investment ready” community wealth building projects. 27 organizations received grants of up to $150,000 to execute planning and pre-development activities over a twelve month period.
- Invest in pilot projects. The third phase launched in September 2024 and will create a Shared Ownership in Commercial Real Estate Fund. The City is seeding the fund with $4 million and intends to partner with the program administrator to fundraise to double the fund and provide more development grants to projects.
Centering equity in the program
The Community Wealth Building Initiative is a prime example of Chicago operationalizing their vision that equity is both a process and an outcome. Chicago centered community voices and racial equity in program design and implementation of the CWB Initiative by moving away from traditional community engagement processes that seek to only inform or consult the community. Onwuzurike says the design process exemplified “what it looks like to truly co-govern, to bring community to the table and share power” and that racial equity was a priority from the outset—shaping how the community engaged with the initiative.
To ensure the design and implementation of the CWB strategy was community-led, the OERJ engaged twenty community leaders with diverse lived experiences, knowledge and skills from community organizing, policy advocacy, real estate, finance, business, and research fields to form the CWB Advisory Council, which established ten collective values, including:
- Equity & Racial Justice – Promote equitable opportunities and outcomes for everyone, with an intentional focus on removing systemic barriers that have caused historical and present-day inequities.
- Community Relationships – Be rooted in relational practices, not transactional ones; recognizing the interconnectedness of our communities and movements; center care and love for one another.
- Abundance & Shared Prosperity – Remember there are enough resources for everybody; resist scarcity mindset.
With local philanthropic support, CWB was able to offer $2,500 stipends to compensate advisory council members for their time and intellectual labor, reflecting the City’s values of equity and accessibility.
This non-traditional approach to community and government partnership required moving at a different pace, and what is often referred to in community organizing spaces as the “speed of trust.” The OERJ acknowledges that there have been times when they have reverted back to old patterns of solving problems on their own without community input, and they were called back into remembering that shared power with community means sharing in holding both the problems and the solutions. Chicago and the CWB Advisory Council also embraced failures as valuable learnings that supported idea iteration.
Ultimately, the City of Chicago plans to step away from taking the lead with the CWB Advisory Council and shifting the power into the community member’s hands, with smaller representation from the City and more representation from community leaders.
Outcomes to date
The City will be evaluating the outcomes of the program when the three year initiative comes to a close in 2024. The University of Illinois Center for Urban and Economic Development (a funded partner of the City) plans to release an evaluation report before the end of the year on ccwbe.org. To measure its impact, the CWB Initiative set performance metrics for each of its strategies—including, the number of businesses and jobs preserved or created, the number of CWB nonprofits and housing projects in the pipeline, and the number of consulting services provided—and the City is tracking disaggregated demographic data on business owners and workers served by the initiative.
Thus far, the CWB Initiative has awarded nearly $10 million to 44 organizations. Its ecosystem support grants provided nearly $6 million to 17 organizations including Centro De Trabajadores Unidos: United Workers Center, Chicago Community Loan Fund, Project Equity, Urban Homesteading Assistance Board, and TREND Community Development Corporation. Its pipeline grants have supported the growth of small community-based organizations such as We the People, a community investment vehicle structured for South Shore residents to co-own and control a portfolio of mixed-use properties on 71st street; Turning Red Lines Green, a community land trust led by the Street Vendors Association of Chicago that includes a shared kitchen and restaurant, Jumpstart Housing Cooperative, a housing coop for formerly incarcerated people, and Corner Store Co-Op, a worker cooperative gift shop in the National Public Housing Museum, owned and controlled by current and former public housing residents.
Toward transformative change
The combination of once-in-a-lifetime ARPA funding, the OERJ infrastructure, and the pre-existing momentum of local community organizers and practitioners set the stage for integrating Community Wealth building into future City investments in economic development. The initiative has demonstrated the benefits of meaningful community engagement and co-governance as well as how public funding can seed new models of equitable economic development. Onwuzurike says that the CWB Initiative has fundamentally shifted the conversation around public ownership, community voice, and equity as a process and an outcome in Chicago. The vision now is to secure sustainable funding sources and embed community wealth building into housing and planning departments. The successes of the pilot hope to continue through scoring favorably on developer proposals that grant set-asides for cooperative models and commercial real estate.
The goal is to capitalize on this transformative change and integrate the CWB framework into every other funding stream in the City. The requirement for every City department to prioritize, operationalize, and report on racial equity goals allows agencies like the Department of Housing or the Department of Planning and Development to engage with funding cooperative models and utilize a CWB lens in decision making.