Community Benefits Agreements

Residents of low-wealth neighborhoods and communities of color are often subject to the negative impacts of large urban development projects, including gentrification and displacement, but have only limited access to the new economic opportunities that such projects provide. This dynamic occurs partly because community representatives do not have a meaningful seat at the table during the key stages of project development. A community benefits agreement (CBA) is an economic empowerment mechanism by which community organizations and representatives can negotiate directly with developers for the benefits most important to them – shaping urban development projects to improve the lives of the low-income residents and residents of color who bear the burdens of systemic inequities and are typically excluded from or harmed by such projects.

A CBA is a legally enforceable contract between a coalition of community-based organizations and the developer of a proposed project. In exchange for the coalition's public support of the project in the approval process, the developer agrees to contribute benefits to the local community if the project moves forward. In this way, the coalition has a hand in shaping the project, while the developer builds community support and strengthens local partnerships. The result is a smoother approval process for the developer and a better project for the community.

Community benefits outlined in a CBA can cover a range of issues prioritized by the community coalition, such as affordable housing, local and targeted hiring, living wage requirements, open space, and other benefits. In addition, CBA terms are enforceable by coalition organizations directly against the developers, providing these organizations with a level of certainty that traditional planning processes cannot provide.  When CBAs work well, this inclusive process – and reliable legal mechanism – can help deliver concrete economic and social benefits to affected communities. CBAs can be focused on a particular neighborhood or cover an entire city as in the case of Detroit.

See the Partnership for Working Families and the Community Benefits Law Center for more resources on Community Benefits Agreements.

• Coalitions of community-based organizations and other stakeholders build sufficient political leverage to shape terms of development in their communities; they then negotiate a CBA directly with project developers, providing public support to projects that will deliver a strong slate of community benefits.
   
• Developers directly negotiate a CBA with community coalitions, gaining support for their project and building local partnerships that will benefit the project over time.
   
• Elected officials and city staff keep lines of communication open to ensure consistency with the city's policy goals. 

Strong Coalitions: The CBAs that deliver the most robust slate of community benefits are negotiated by a credible, unified coalition of grassroots community organizations that can leverage a sophisticated campaign, including organizing capacity, media engagement, policy research, and legal capacity.  Community/labor coalitions have been particularly effective. 

Role of Government: CBAs supplement the existing processes by which a public entity shapes a large urban development project.  City staff and elected officials can show inclusive leadership by (i) ensuring transparency around project development, (ii) indicating to developers the importance of broad community support during the project approval phase, and (iii) allowing space for CBA negotiations without trying to control them. 

Resistance to the concept: City staff and elected officials may be resistant to CBAs because they are either unaware of how CBAs operate or are threatened by what they perceive to be a release of control over project development.

Misuse of CBAs: Developers and city staff that are in strong support of a proposed project may misuse the CBA concept:

• They may characterize the Development Agreement or a portion of it as a CBA – even though it is not negotiated by and will not be enforceable by community representatives.

• They may arrange for and release to the public a "CBA" between the developer and a friendly local body, such as the local chamber of commerce, that will not press the developer for changes to the project.
   

Each of these methods attempts to occupy space that a robust, community-driven CBA effort might otherwise fill.

Importance of sufficient community leverage: Without demonstrable public pressure and legal leverage sufficient to shape the dynamics of project approvals, developers may lack the incentive to negotiate. 

No CBA can involve all stakeholders: Certain segments of a community may be unable or unwilling to participate in a CBA negotiation process; no one should take a CBA effort as channeling or capturing every community opinion or priority.

Legal Fees and Enforcement: In some communities, law clinics at universities can help represent coalitions and draft CBAs. However, if these services are unavailable, the community coalition will have to pay legal fees to retain counsel out of their pockets. Moreover, in the event the CBA needs to be enforced, a significant amount of legal fees may be required. In addition, projects can take a decade or more to come to fruition.  As a result, community coalitions may lack the long-term capacity to monitor CBAs and enforce CBA terms against successors to the developer. 

CBAs function best for large development projects in urban areas, where there is a broad-based community coalition, and the developer desires community support to obtain public subsidies and/or approval of a proposed project. Community representatives are in a stronger position to negotiate if the city shares the community coalition's policy goals and encourages the creation of a CBA. 

• In 2018, the non-profit Race Forward’s biannual conference in Detroit made headlines by negotiating a CBA with local leaders. The organization created a CBA for the event after community groups argued that many national conferences simply extract resources from Detroit and fail to benefit residents. As part of the agreement, Race Forward agreed to wage requirements, local hiring goals, and leadership opportunities for community members. Race Forward also gave a series of $100,000 micro-grants to grassroots organizations in Detroit as part of the CBA. The organization plans to pursue similar agreements for its future conferences.
   
• In 2018, the community coalition Stand Up Nashville negotiated a community benefits agreement (CBA) to accompany a proposed soccer stadium funded with $225 million in public subsidies. The CBA contains requirements for living wage jobs, first-source hiring, affordable housing, a child-care center, and other community benefits.  Nashville Mayor David Briley supported the campaign for the CBA, penning an open letter to the city expressing his support of the stadium in large part because it would have a CBA attached. Its passage marks the first CBA in Tennessee for a major government-led project.
   
• In 2016, Facebook entered into a CBA with a community coalition concerning a major office expansion in East Palo Alto. The CBA requires Facebook to provide nearly $20 million toward a fund for affordable housing in the region. This fund was soon leveraged to include approximately $60 million of additional funds, to be expended on the same terms.  The CBA also provides funding support for other issues of community concern, including legal support for tenants and policy advocacy campaigns. 
   
• In 2001, the Los Angeles Staples Center CBA set a precedent for what is considered a successful CBA, with community benefits commitments conservatively valued at $150 million – about double the amount of the promised city subsidy for the project. The community coalition that negotiated the CBA consisted of more than 20 organizations. The CBA contains commitments relating to a broad range of issues, including affordable housing, parks, and open space, local hiring, and living wages.