Capitalizing on Community: Affordable Housing Markets in the Age of Participation

• Published date: 01 June 2020
• Date: 01 June 2020
• Author: John N. Robinson
• DOI: 10.1177/0018578720911472
• Subject Matter: Articles

https://doi.org/10.1177/0018578720911472

Politics & Society

2020, Vol. 48(2) 171 –198

© The Author(s) 2020

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DOI: 10.1177/0018578720911472

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Article

Capitalizing on

Community: Affordable

Housing Markets in

the Age of Participation

John N. Robinson III

Washington University in St. Louis

Abstract

This article examines the affordable housing market to develop a new way to

understand the problem of co-optation in participatory urban governance. Through

a case study of the Chicago metropolitan area, it uses data from 105 in-depth

interviews—supplemented with ethnographic, archival, and secondary data—to

shed light on the circumstances in which poverty-managing organizations compete

for the resources necessary to house marginalized populations. Findings show how

community-based groups, which have long housed the poorest neighborhoods and

residents, are systematically excluded from access to development capital in favor of

other “grassroots for hire” organizations more amenable to the elite co-optation of

grassroots empowerment—a process referred to as co-optation by cohort replacement.

The article discusses implications of these findings for the study of urban development,

participatory governance, and the changing social safety net.

Keywords

urban, housing, social policy, markets, nonprofits

Corresponding Author:

John N. Robinson III, Department of Sociology, Washington University in St. Louis, One Brookings

Drive, St. Louis, MO 63130, USA.

Email: jnrobinson@wustl.edu

911472PASXXX10.1177/0018578720911472Politics & SocietyRobinson

research-article2020

172 Politics & Society 48(2)

In the predominantly black neighborhood of West Garfield Park in Chicago, a commu-

nity-based organization (CBO) named Bethel New Life began small but eventually

“attained international recognition” for its success in housing “tens of thousands of

residents in its . . . developments.”1 In 1987, the pioneering CBO became the first

organization in the nation to finance affordable housing development using the Low-

Income Housing Tax Credit (LIHTC). That policy would become a leading tool used

by CBOs to draw resources into financially neglected urban communities.

The Bethel New Life of today, however, is a shadow of its former glory. Most of its

properties have been foreclosed or repossessed. The organization ceased all housing

production activities in the mid-2000s.2 Asked about the status of CBO-produced

housing in communities like the one that Bethel serves, Nathaniel, a former housing

division staff member, dismisses the prospect:

Ain’t none of that happening. What’s happening is some white boy, who’s running a $400

million firm, has created a small little entity that he calls the Low-Income Housing Tax

Credit poo poo. And he applies, and gets some money in here . . . and then creates a

development over here that nobody in here could afford.3

If nothing else, Nathaniel’s words convey the sense of loss felt within many com-

munity-based nonprofits today. Over previous decades, CBOs emerged as primary

resource brokers and representatives for marginalized communities,4 especially via

their role as housing providers.5 However, evidence from the Chicago area suggests

that these groups today increasingly struggle to gain access to development capital,

which undermines their ability to house poor families.

Research on affordable housing focuses on demand-side factors and broader resi-

dential patterns, but—as the story of CBOs’ current housing market struggles sug-

gests—these issues are influenced in turn by a relatively underexamined set of

processes shaping where, how, and for whom affordable housing gets developed. This

article examines the supply-side politics of affordable housing and by doing so sheds

light on the changing role of CBOs as resource brokers within disadvantaged com-

munities. It draws on a growing body of work on the tensions and ambiguities of par-

ticipatory governance,6 and it highlights how those dynamics shape the competition

for resources around housing production.

Specifically, I examine the affordable housing market in the Chicago metropolitan

area, with an emphasis on the allocation of LIHTC money. In this region, as elsewhere,

the LIHTC accounts for the vast majority of newly produced affordable rental housing

units, having effectively replaced such traditional programs as public housing and

project-based Section 8.7 The LIHTC represents a far-reaching privatization of social

policy: codified at Section 42 of the Internal Revenue Code, it allocates tax credits to

nonprofit and for-profit developers, who in turn exchange those tax credits for private

equity investment from some of the nation’s largest financial service companies. Most

studies of the LIHTC examine the degree to which this policy either exacerbates or

ameliorates residential segregation.8 This article, however, explores the LIHTC’s sup-

ply-side politics and how it distributes capital unequally.