Community Benefits Agreements in a Value Capture Context

Laura Wolf-Powers discusses how community benefits agreements (CBAs) enable community organizations and special interest groups in the vicinity of a development project to negotiate with developers for affordable housing, public facilities, and job opportunities. In return, the groups offer their support of the project. She specifically evaluates the CBAs for Cherokee Denver’s redevelopment of the former Gates Rubber factory site.

Although CBAs can help developers remove the uncertainty of public opposition, this approach is controversial for three reasons. First, although CBAs are similar to development impact fees and exactions that are used to mediate negative externalities generated by development projects, it is unclear whether the same principle can be applied to achieve the objectives of poverty reduction and income redistribution. Second, there are issues related to the representation and definition of community interests. Activists may bargain for their own interests in CBAs instead of broader community benefits. Third, CBAs may duplicate other mechanisms that local governments use to capture land value. The implications of CBAs for other value capture instruments are unknown. Wolf-Powers speculates that the resolution of these issues depends on a clearer definition of the CBA as a tool to mitigate negative externalities or an instrument to pursue redistributive goals.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2011 and is Chapter 9 of the book Value Capture and Land Policies.