FEATURE: What if they threw a recession and nobody showed up?

December 7, 2008

FEATURE: What if they threw a recession and nobody showed up?

(From CCEDNet’s BC/Yukon Newsletter)

By Nicole Chaland and Nathan Hunter

It’s Henry Paulson’s party, and he can cry if he wants to, we just don’t have to be there. And that’s exactly what the Community Economic Development movement has decided to do, and we won’t be attending the recession either.

Credit unions – a classic Community Economic Development model – as opposed to banks, are owned entirely by their customers. If you have a chequing account at a credit union, you are an owner of that credit union. By definition, credit unions are locally-owned, locally-managed and locally-governed. Shares are issued to members and are not sold on the stock market. They also tend to reinvest profits into their community. As such, credit unions -as this article explains- while not immune, are less susceptible to the volatility of the international and financial market.

Housing Trusts-another tried and true CED model- set aside land, forever, for affordable housing. Individual homeowners, co-operatives and non-profit housing associations purchase long terms leases from the trust and own their buildings outright. Individual homeowners buy and sell apartments or homes through the same real estate market as everyone; prices fluctuate with the market but are lower because the trust owns the land. It’s easier for co-operatives and non-profit housing associations to develop affordable housing because they do not need to worry about the cost of the land. Trusts are common-place in Canadian ecological conservation efforts but haven’t been applied to housing widely. In the US however, where philanthropy is more common place, housing trusts are a staple ingredient in affordable housing efforts. Recently, they are being re-examined in light of the recent sharp increase in foreclosures.

Housing experts across the country have their eye on community land trusts as proven means of preventing foreclosures. A survey released March 2008 found only two foreclosures among a national sample of 3,115 land trust homeowners. From Holly Sklar, “No Foreclosures Here.

If a community collectively owns its financial services and land for housing it is more resilient against the whims of the global market. Ultimately we are experiencing first-hand what happens when decisions are made by a handful of people who are neither accountable nor altruistic. Communities have relinquished responsibility for the health of their economies; communities can and should ask senior levels of government for help to reclaim responsibility through Community Economic Development.

An economic stimulus package can either contribute to short-term economic growth, possibly benefiting the very people and mentality which caused this mess in the first place and we can shut our eyes til the next economic shock comes along or the money can be used to directly benefit Canadians within a sustainable economic and environmentally sound model, and get us off this track.

Community Economic Development isn’t a bubble, it’s a rock, and a foundation, and one that we believe a healthy, sustainable community can be built upon.