Sonoran desert scrub, the ancient ecosystem that teaches us important lessons about resourcefulness, interdependence and resilience, probably doesn’t sound like much to the uninitiated. Lost to many is the strategic work occurring, especially beneath the surface, that offers living things opportunities to thrive in good times and survive the bad times.
The Sonoran Desert version of Local Initiatives Support Corporation, an anti-poverty, anti-displacement and anti-racism organization, has many of the same qualities of Arizona’s signature habitat. For the uninitiated, history and testimonials tell the story of adaptation and evolution of an intermediary and community development financial institution (CDFI) whose array of projects, products and practices invigorates what we see above ground in today’s comprehensive community development ecosystem.
Thirty years ago, forward-thinking local advocates planted a Phoenix version of a social justice movement spreading across the nation to organically address the community and economic development truths about systemic bias and inequity, particularly in housing, by creating access to opportunities for historically marginalized people and neglected neighborhoods.
Nothing survives in the desert without amazing adaptation. Plants and animals have evolved to do what they need to do to prosper in place. For example, root systems for some plant species spread extensively to maximize what’s available near the surface. For others, roots run deep to find the water and nutrients to sustain plants. And there are indications of “communication” among species— signals sent about threats and opportunities.
Over the years, LISC Phoenix has implemented a variety of integrated strategies and targeted investments to help community members find paths to prosperity and to preserve and protect neighborhoods. It has adapted to the needs of the community by going straight to the source – the residents and businesses in them.
LISC-style comprehensive, equitable economic development draws upon a wealth of knowledge about local markets that comes with research and data and the experience and wisdom of people within communities. Information from charrettes is as essential in creating strategies as data-driven market scans.
What took root over three decades is a place-based system of collaborative development strategies and targeted investments. This goes beyond survival in the moment. It’s about enabling individuals and communities to contribute to the sustainability of an ecosystem that supports future equitable growth and development.
And so LISC Phoenix, with its corporate, foundation, public and community partners, pumps life into communities through access to capital, resident-driven quality of life plans, health impact assessments for neighborhoods, transit-oriented development, adaptive re-use of buildings, permanent supportive affordable housing, small-business development, storefront improvements, health clinics, creative place-making, playing fields, a predevelopment revolving loan fund, financial opportunity centers, and child-care resources.
What has grown in the desert is a practice of urban revitalization that addresses the negative impacts of racism and bias, repairs the damage of previous urban planning decisions, encourages healthy, sustainable communities, and fights against displacement of people and small businesses in neighborhoods experiencing pressures of gentrification.
Three Decades
For 30 years, LISC Phoenix has directed resources and supported strategies that address threats to the health and well-being of vulnerable populations. For the sake of a resilient community development ecosystem that embraces diversity, equity and inclusion, it had to grow influence and diversify investments to meet the region’s social and environmental challenges.
Decade 1
1992-2002
Even though the sprawling, fast-growing Phoenix metropolitan area was young by modern-day standards, there were telltale signs of harmful practices like redlining that led to blight and destruction of neighborhoods and put minority households in a financial disadvantage.
As desert scrub was scraped away at an astonishing rate to make room for rooftops on the outskirts of the region, concerns grew about the hollowing out of community cores, especially downtown Phoenix.
“The idea of Local Initiatives Support (Corporation) made sense,” said downtown Phoenix advocate and business leader Marty Shultz, who was a founding member of the LISC Phoenix local advisory committee. “But at the time, I think we were thinking about general community development because 30-plus years ago Phoenix was largely unformed in this regard. … LISC had a reputation for being involved in fundamentals — fundamentals of housing and homebuilding, some involvement with transportation, that kind of thing — that led to the development of cities.”
Also, the fundamentals of construction financing, through, for example, its connection to Low Income Housing Tax Credit (LIHTC) syndicator National Equity Fund, and of nonprofit organization budgeting and capacity building.
“They (LISC and CDFIs) were always relationship banking,” said Diana (Dede) Yazzie Devine, president and CEO of Native American Connections, a leading Arizona developer of permanent supportive affordable housing for low-income and chronically homeless individuals.
“They understood your relationship to the community and that they needed to underwrite,” Devine said. “But they could underwrite the relationship and your commitment and service to the community as part of the underwriting. They still do.”
The original LISC Phoenix staff, led by David Yniguez, spent significant time and energy in the 1990s explaining the LISC model and the role an intermediary and community development financial institution could play in addressing opportunity gaps and revitalizing neighborhoods. There was much discussion about Low Income Housing Tax Credits (LIHTC) work and the function of community development corporations.
Affordable housing then, as now, was a top issue. While LISC branches in places like New York, Boston and Chicago, focused on increasing affordable housing units, the Phoenix office emphasized homeownership. That distinction was an adaption of the LISC model to the local environment.
“We were different in Arizona because we had a homeownership program,” said Silvia Urrutia, a former LISC Phoenix staffer and a longtime expert in affordable housing. “That was not what most LISC people did. Most of them did a lot of rental and not homeownership. The market here was such, at that time, that we could do homeownership.”
LISC Phoenix focused on capacity building in the nonprofit sector that could manage tasks of increasing affordable homeownership and housing. It trained a generation of leaders who would go on to lead community development corporations and other nonprofit organizations concentrating on housing.
Joel McCabe, now vice president and chief operations officer for Trellis, a nonprofit that provides homeownership counseling, financial access and neighborhood development, was among them. His first encounter with LISC Phoenix was during his first days of work in 1993 at the then John C. Lincoln Hospital, which had assigned him the duties of executive on loan to a community development corporation serving Sunnyslope.
McCabe was among the nonprofit administrators, particularly in the housing sector, who were part of quarterly LISC Phoenix trainings. LISC also made consultants available to help review development budgets and to think construction financing.
LISC Phoenix established itself in its first decade as a listening entity and a conduit for bring about change. McCabe said the community would say what it wanted and led the pursuit of the goal and LISC helped all along the way.
“LISC was really instrumental,” McCabe said, “in building the capacity of these organizations and helping them grow. … LISC was just instrumental in the whole (community development corporation) movement in Phoenix. And then it evolved and matured.”
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Decade 2
2002-2012
As the affordable housing crisis continued, the growth and development patterns of the Phoenix metropolitan area drew questions, criticism and assertions that Phoenix was the least sustainable city in the world. Density, especially in the urban core, became less of a dirty word, and LISC Phoenix leveraged partnerships across multiple sectors to drive conversations about building a sustainable city in the desert.
LISC Phoenix acted on the realization that it was not possible to house our way out of poverty. The clear and obvious effects of discrimination, bias and disinvestment that caused inequity required focused attention and targeted resources across multiple sectors. And, this time, solutions should be driven by the community.
The Great Recession, fueled by subprime lending practices that disproportionately affected already vulnerable populations, hit the Valley hard. At the same time, light-rail began operations in December 2008 along the first 20-mile line from central Phoenix to west Mesa, changing the urban landscape.
Teresa Brice, LISC Phoenix executive director from 2006-2014, led the office during light-rail construction, the Great Recession, and the recovery from it. LISC Phoenix adapted to old needs and to the new environment for sustainable growth with a pivotal shift in emphasis to equitable transit-oriented development, a new tap root in 21st century community development.
The LISC Phoenix “Our Future is on the Line” tagline created by Brice became a rallying cry, a statement of fact and the way forward on smarter growth and development without leaving people behind.
“We knew that if we could connect affordable housing and public transportation, it would give people the opportunity to connect to jobs, schools, small businesses,” Brice said. “At the same time, we could work on addressing the vacant commercial spaces that were along the light rail corridor. I said there’s no reason we can’t leverage this investment to our benefit. Because the private sector was not paying one bit of attention to the light-rail corridor. We started talking about what that would look like, what that would mean.”
The equitable transit-oriented development approach infused rigor and energy into the comprehensive nature of LISC-style community and economic development.
“We were doing small business work,” Brice said. “We were doing community health clinics. We were obviously funding lots of affordable housing. We were sort of tying a lot of different strands together and trying to make inroads at various touch points – zoning issues, neighborhood organizing issues, capacity building.”
In 2007, a game-changing partnership with Arizona Community Foundation created the Affordable Housing Fund, which provides zero-interest loans to nonprofit housing developers for the predevelopment phase of affordable housing projects. The revolving loan fund helps projects through costly planning and design phases before construction begins – something Patricia Garcia Duarte, executive vice president for homeownership initiatives at Chicanos Por La Causa and former longtime head of Trellis, calls a “rare commodity.”
“It’s very much in high demand,” Garcia Duarte said. “It’s a wonderful resource to have because community development projects, especially multifamily and single-family housing, they will require that the nonprofit spend so much upfront for predevelopment related things – the market studies, the architecture renderings, all those things that need to be done upfront. The predevelopment fund provides that. It’s tremendously helpful. But for that money, the nonprofit would have to pay for it out of their own resources, if it has any.”
The emphasis on transit-oriented development helped ensure affordable housing, not just market-rate or luxury housing, was part of the mix in the mad rush to develop infill projects along the light-rail line. But knowing there’s more to building wealth and improving quality of life than housing, the LISC Phoenix transit-oriented-development emphasis also helped establish a health clinic and supported adaptive re-use projects like the Newton along line.
In 2011, LISC Phoenix in partnership with Raza Development Fund created the Sustainable Communities TOD Fund, which initially provided $20 million in seed money for local projects in areas often avoided and deemed too risky for private investment. That fund helped build nearly 1,800 units of housing and 200,000 square feet of commercial and community space.
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Decade 3
2012-2022
After 20 years of targeted investment in projects and strategic support for neighborhood leadership to build healthy, inclusive neighborhoods, LISC Phoenix was well-established in the community development ecosystem. It was a go-to source of financial support, technical assistance to nonprofits, and information, both from a national perspective with its access to research and data and at the hyperlocal level with its habit of actively listening to residents and business owners and facilitating connections to funders.
The light-rail extension through downtown Mesa is an example of the difference experience, trust and commitment to a community engagement process makes.
Disruption during the inaugural light-rail construction phase was notoriously difficult for businesses. Many of them did not survive.
Long before construction of the three-mile Mesa extension began in 2012, LISC Phoenix-backed community engagement through NEDCO, a nonprofit and community development financial institution, worked with businesses to help them survive construction phases and to prepare them to thrive when the work was complete. A variety of place-based strategies are credited with the downtown Mesa corridor having a remarkable net-zero loss of businesses during three years of light-rail construction.
LISC Phoenix dug deeper in its third decade, doing more with more.
- In 2012, it obtained more access to capital to increase health care and affordable housing for low-income residents through the Healthy Futures Fund established through a partnership with the Kresge Foundation and Morgan Stanley.
- In 2015, LISC Phoenix and Raza Development Fund put up another $30 million for equitable transit-oriented development.
- In 2020, it partnered with Arizona’s Managed Care Organizations to do underwriting and asset management services for the Arizona Home Matters Fund, an effort to increase sustainable affordable housing solutions that support healthier individuals, families and economies.
More of the same in LISC Phoenix’s third decade also included supporting enhanced community engagement efforts that empower residents and business to make decisions about their communities. LISC Phoenix supported health impact assessments for the Phoenix Coffelt-Lamoreaux public housing redevelopment project (2013), the Madison Heights affordable housing community in Avondale (2014), and the Choice Neighborhood Initiative for the Edison-Eastlake Community in Phoenix (2016).
Jane Pearson, a former health consultant for LISC Phoenix who helped facilitate community plans and assessments, said meaningful engagement with residents and businesses helps drive solutions that come from the wisdom of communities.
“When I try to describe LISC to people who have no idea who LISC is, I usually say LISC Phoenix is part of a national organization that is what I would call a fiscal intermediary that allows money to be pooled and then reinvested in the community for community development,” Pearson said. “Meaning, how do you help communities become healthier and stronger and more vibrant? LISC provides some of the resources not just for projects but for communities to think about what they want to do.”
The strategic work of supplying nourishment to nonprofit organizations focused on closing opportunity gaps, establishing a culture and a foundation for building healthy communities, and protecting people and places from displacement and erasure, prepared LISC Phoenix for the unprecedented challenges of the COVID-19 pandemic.
LISC Phoenix pivoted to meet the needs of the community by administering Funds to Feed grants from the city of Phoenix to small community organizations capable of serving the region’s most vulnerable populations. That work was a direct result of trusted relationships built in the community over decades.
Thank You to our History Maker Sponsor
Knowing the history of LISC Phoenix establishes a solid foundation for understanding goals and objectives behind current community and economic development strategies firmly rooted in 21st-century reality. The work ahead will build on successes achieved with our partners and sponsors to address inequity and empower underserved communities.