Aiding underserved with housing, small business. That’s the goal of new Stanislaus effort
A two-pronged effort has begun in Stanislaus County to set disadvantaged residents on a path to homeownership and small-business success.
A study by the L.A.-based California Community Economic Development Association (CCEDA) identified the need for strategies to address homeownership and small-business growth in the county. Respectively, creating a community development corporation (CDC) and a community development financial institution (CDFI) aims to bring solutions to those issues.
Modesto’s City Ministry Network (CMN) approached the grassroots nonprofit South Modesto Partnerships (SMP) in 2020 with the opportunity. SMP since then has transitioned to serve as a CDC under the name Stanislaus Equity Partners (STEP), according to the county.
STEP President Joe Duran said the CDC formation creates a window for change in the region. “Every once in a while, there seems to be an opportunity that can become a catalyst for systemic change in communities. And for our community, I believe the opportunity is now,” he said in a CCEDA summary report.
A CDC’s purpose is to revitalize distressed communities through the development of affordable housing, businesses and employment networking. South Modesto Partnerships was required to convert because CDCs are transactional in nature and require different competencies.
One of STEP’s core initiatives is to collaborate with housing partners to develop “cost-effective housing projects,” states a county action summary. Through interviews with over 40 local stakeholders, research and extensive discussions with CMN members, CCEDA came up with strategic opportunities.
One strategy for housing is to create rental properties with an experienced developer, which Self-Help Enterprises and the county’s housing authority already have expressed interest in.
The housing authority also stated its desire to increase homeownership, which the CCEDA reports is only 55% among Modesto residents. The national average is 65%, according to the U.S. Census.
CCEDA Executive Director Roberto Barragan said CDCs have been helping to revitalize communities for over 40 years. He said when CCEDA conducted interviews, community-based organizations were pushing for such a creation.
“They want to see an organization that was specifically focused on affordable housing, financial literacy, on small-business assistance,” he said. “I think this is a great opportunity to take the cumulative experience of community development corporations and implement it right there in Modesto.”
Financial institutions to help underserved
Under STEP’s second initiative, underserved communities will gain business consulting services and access to capital, the action summary states. STEP will support low- to moderate-income entrepreneurs on their pathway to self-sufficiency by investing funds.
For small-business development, the CCEDA recommended hiring a consultant to design a business strategy. Interviewees mentioned a microenterprise food incubator pilot program similar to San Francisco-based La Cocina and Watsonville-based El Pájaro CDC, which provide shared commercial kitchens to low-income entrepreneurs as they formalize and grow their businesses.
Participants also raised concern over residents, including immigrants, who face obstacles trying to access financial services and education. Furthermore, noncitizens will be taught how to use their individual taxpayer identification number to access loans for automobiles and other assets.
Barragan said STEP will partner with local banks, including Valley First credit union, to reach residents who will benefit from increased financial literacy.
About $5 million is being put toward the creation of the CDC and CDFI, with funding coming from the American Rescue Plan Act (ARPA), according to the action summary. Across California, 68 receipts were awarded grants totaling over $95 million in pandemic relief funds, Barragan said in a news release.
CDFI Fund Director Jodie Harris said the funds provide CDFIs an unprecedented amount of flexible capital. “These awards … help distressed and underserved communities across the country take meaningful steps towards recovering from the debilitating economic impacts of the COVID-19 pandemic,” she said in the news release.
Interviewees also came up with over 20 potential development projects, including building tiny homes on church properties for the homeless and proposing a location for new housing.
Contact STEP at www.cityministrynetwork.org/cdc.
This story was originally published July 27, 2021 at 2:22 PM.
