Why the Need for an Ownership Revolution Has Never Been Greater
* Dissertation: Towards a New Form of Economic Development: Why the Need for an Ownership Revolution Has Never Been Greater. By Jerome Birolini. Schumacher College, MA Economics for Transition. 2014
"The following paper is rooted in what is now globally recognized as one of the main threats for the future of our civilization, namely social and economic inequality. After initially looking at the causes and consequences of inequality, we will focus our attention to the economic thinking which came out of highly unequal times. The mutualist and cooperative principles which were at the heart of their practices remain a great source of inspiration for today's activists and have been informing some of the most promising social experiments which are currently taking place around the Globe. In the second part of the paper, we will look into more details at the community land trust, the social enterprise and the co-operative, three different types of community wealth-building strategies. By vesting ownership in community stakeholders and therefore preventing capital to leak out from the locality, these types of approaches have proved that can help improve the ability of communities and their residents to own assets, anchor jobs, expand public services, and ensure local economic stability while contributing to environmental sustainability and social justice. Yet a key lesson learned from the case study analysis is that a core element of their success is the support of local civic leaders and the establishment of multi-stakeholder partnerships. As economic decline, government austerity, privatization and wealth inequality continue to squeeze ordinary citizens and lead to the rapid expansion of a new precariat, we will argue that this type of collaborative, locally-rooted and community-owned approaches should now be embraced by the public sector if we are to advance the building blocks for a fairer, more sustainable and more resilient society."
Recommended is chapter 4 on public-social partnerships:
The problem of inequality is not so much a matter of technical economics. It’s really a problem of practical politics. We must end the rent-seeking society we have gravitated toward, in which the wealthy obtain profits by manipulating the system. - Joseph Stiglitz
We will now look at three highly successful community-based developments that have taken place in recent years (i.e. the Champlain Housing Trust in Burlington, Vermont, Coin Street Community Builders in London and the Evergreen Cooperative Initiative in Cleveland, Ohio). As we will see, the three initiatives share the same common enabling factor, namely, the initial backing of enlightened public officials who were aware of the existence of an alternative, believed in its transformative potential and had the courage to implement it. The aim of this exercise will be fourfold:
- to identify what were the socio-economic conditions among which the decision to support the development of community-owned and community-led alternatives was taken;
- to understand what were the local authorities' needs and priorities at the time and which were the critical factors or arguments which induced political leaders to favor a social-public partnership rather than a more orthodox private-public one;
- to see how the community-based alternatives have performed over time and how they were able to address the specific challenges of both the community and the public sector;
- and last but not least, to see how those lessons can be of assistance to a growing precariat, which is increasingly likely to require (but lack) an access to affordable land, community assets and productive facilities and on the other hand, to a public sector, which is likely to continue to be faced with rising social costs and declining levels of taxpayer funds.
4.1.0 The Champlain Housing Trust
The Champlain Housing Trust (from here on referred to as the CHT) is the largest CLT in the USA and the first one to have expanded its landholdings through a partnership with a municipality. The CHT resulted from the merger of the Lake Champlain Housing Development with the Burlington Community Land Trust (the BCLT), both of which were created in 1984 at the instigation of the Burlington's municipal government. At the time, the level of grassroot activism from citizens had been intensifying with were tenants rights organization raising concerns that the development of an expanding business district had put the city at risk of gentrification and displacement. The rising discontentment combined with the radical thinking at work among some of the activists led to the election of a third party mayor in Burlington: Bernie Sanders. After the first Reagan administration ended federal government programs to fund affordable housing, the Burlington's progressive municipal coalition started to grow increasingly concerned that a rising cost of housing combined with declining levels of federal subsidies would lead to a shortage of affordable social housing, the displacement of lower-income families and the destabilization of local residential neighbourhoods. They decided to shift the focus of the city's housing policy on two pillars: encouraging the nonprofit production of affordable housing and ensuring the perpetual affordability of any housing produced using subsidies provided by the public sector. After various unsuccessful attempts to limit the increase in the cost of housing through rent control mechanisms, the Burlington administration turned to the Institute for Community Economics (ICE) which had been promoting the CLT concept since the 1970's under the leadership of Bob Swann and Chuck Matthei. John E. Davis, who was on the staff of the ICE back then, was sent to Burlington to help create the trust. After more than four months of intense preparation and planning work designed to build an initial base of support and educate the community about the CLT, the trust was incorporated. The BCLT was set up as a classic CLT in the sense that the ownership and the use of the land were separated while restrictions on the resale price of the properties on the land were put in place. The funding as well as the support provided by the municipality proved to be crucial for its development. The BCLT was started with a USD 200,000 grant from the city of Burlington which was later complemented by a USD 1 million line of credit from the city employees' pension fund. The first house was initially acquired on the open market at full market price and it was only later that the BCLT, now known as the CHT, started to acquire properties on more favorable terms. Twenty years after the initiation of its activities, the CHT has grown into a very significant social landlord with more than 2,300 units of permanently affordable housing under its management and stewardship. The CHT has also developed a wide range of complementary services designed to improve the quality and the affordability of the housing for the residents. Two centers for homebuyer education were notably set up in order to assist first-time buyers in their acquisition and help them manage their finances. Additionally, a number of partnerships were developed to provide advantageous terms to low-income households and assist them with down payments were developed. Finally, office space has been created and leased out to a number of local non-profit organizations which provide health care, day care, senior services, legal aid, homelessness assistance and other essential services to residents of the trust. Operationally, the CHT has developed a fee-based membership which helps cover its costs and build its balance sheet. Contributions come in various forms, from a ground rent charge of USD 25 per month from leasehold members to gift capital from local businesses, social investors and individuals supportive of the trust's work. These funds have since been used to leverage the additional capital grants received from the city and the state and acquire land and loans for development finance. From time to time, the trust tried to engage in non-residential projects with the aim to diversify its revenue stream. But almost none of the projects undertaken were able to reach break even and become sustainable profit centers. According to John E. Davis and Pat Conaty (both interviewed for the present dissertation), commercial development has proved to be a more complex and risky venture, requiring a different set of skills as well as a greater tolerance for risk which the members of the CLT movement have yet to acquire.
In 2008, Burlington Associates performed a full-scale cost-benefit study to examine the impact that the CHT had had in terms of affordability, access to homeownership for persons of modest means, stewardship of public resources and stabilization of residential neighbourhoods. The following findings, extracted from the study, were outstanding: - In terms of affordability, the results have shown that the trust was continually helping persons of more modest means to access homeownership (the study demonstrated that the average earnings of its households were of 68.6% of the average median income (AMI) in 2008 vs. 69.4% of AMI in 2002). The affordability of its homes also improved, with properties now being accessible to persons earning as low as 53.4% of AMI (vs. 56.6% in 2002). - The CHT has been a creator of individual wealth. Burlington Associates estimates that on average, homeowners investing in a CHT home for five-and-a-half years, have pocketed net equity gains of USD 12,000. Those who have made capital improvements in their homes received even more. - As a direct consequence of the above mentioned the residential mobility was also enhanced. 67% of the CLT homeowners that have sold their homes with the trust were indeed able to afford to move on to open-market properties. - Finally the CHT did a great job in retaining community wealth. In total, Burlington Associates estimated that an initial public investment of about USD 2.2 million allowed the CHT to bring homeownership within the reach of 357 lower-income households. Had these subsidies not been retained in the homes, allowing their owners to pocket both the public's investment and all capital gains when reselling, Burlington Associates estimates that the size of the public’s investment needed to serve the same number of households at the same level of income as CHT had served would have been five times greater. By succeeding at providing affordable housing and regenerating its local neighbourhoods while retaining community wealth, the CHT has proven that it was possible to promote the interest of low-income, first-time homebuyers while looking after the interests of the larger community. Over the years, the CHT has won many awards for its outstanding achievement and innovation, among which the prestigious United Nations World Habitat Award for the Global North in 2008. The support of both the city of Burlington and the state of Vermont has been - and still remains - absolutely crucial in expanding the trust's operations. This is what enabled the organization to eventually scale up and to become self-sustainable. There is absolutely no doubt that the strong and generative partnership that the CHT has developed with its local governments has been its greatest enabler of success. John E. Davis was notably unequivocal on the matter: “in order to have an expanding CLT movement, you need the support of the public sector”. He also acknowledged that given the CHT's dependence on public authorities and the lack of alternative sources of capital, the expansion of the trust would be severely compromised in the absence or the withdrawal of such support.
The social, economic and societal benefits brought by the CLT are clear and significant. And yet the needs of both the precariat and the public sector go well beyond permanently affordable housing. For instance, the provision of stable living-wage employment opportunities and/or the economic revitalization of disinvested neighbourhoods, which CLTs are not equipped to deliver at the moment, will be crucial for the well-functioning of any community as well as the well-being of any of its member. Unlike other parts of the Co-operative movement which has found ways of generating their own capital, and develop on a scale that is still largely underestimated, CLTs do not provide co-operative accumulation and therefore do not solve the social reproduction issue. Therefore, and if we are to make the CLT a progressive movement for change, there is a need to complement CLTs it with other forms of generative and for-benefit enterprises such as social enterprises and co-operatives. Indeed, only such forms of generative and community-owned ownership models will be able to provide both the movement and its members with the cooperative accumulation and the capital that will strengthen their viability, and eventually make them economically autonomous.
We will now turn to another example of a community-based development initiative which was also able to see the light thanks to the support of local authorities: Coin Street Community Builders (CSCB). Even though it was not set up as a CLT, parallels can be drawn between the CHT and a community-development organization such as CSCB since both share the same common objective: the regeneration and stewardship of their local communities. As for the CHT, the appropriation of the land was supported and facilitated by the local authorities. And as in Burlington, this also proved to be the crucial step which enabled the community-led organization to start regenerating its neighbourhood. But unlike the CHT, CSCB very early chose to develop a commercial strategy with the aim to become financially self-sustainable. This has since enabled them to diversify their revenue stream and make the whole organization much less reliable on local governments' grants for its expansion and therefore much more free to design its own development agenda and provide not only affordable housing but also for a number of the socio-economic needs of its local residents.
4.1.2 Coin Street Community Builders
Coin Street Community Builders (from now on referred to as CSCB) is a London-based development trust which emerged after several years of resistance and activism by a group of local residents. In the 1970's, most of the South Bank of London was owned partly by the Greater London Council (a top-tier local government administrative body which from now on will be referred to as the GLC) and partly by private developers. Due to a lack of investments, much of the land had become derelict and had attracted the attention of developers who planned major office developments. The proposals from the private sector were strongly resisted by the local community who assisted to the rapid degeneration of its neighbourhood, with many of their peers forced to move out due to a lack of affordable housing. In 1977, a group of them joined together to form the Coin Street Action Group (from now on referred to as the CSAG) and went out to draw up rival plans for the site based around the twin demands of affordable housing and open space. In 1983, after years of sustained community pressure, the members of the CSAG finally won the support of local authorities who decided to hand them over the land. The success of the community in winning over the land was not only due to the perseverance and political savviness of the campaigners but also to a very favourable political environment. At the time, the GLC was controlled by the Labour Party which was highly supportive of community-based initiatives. The Coin Street proposal notably won the backing of important political figures such as Ken Livingstone. Additionally, the abolition of the GLC was announced at the height of the campaign, providing its left-wing majority with the increased freedom and flexibility that they needed to hand over the land to the community on highly favorable terms.
In 1984, the Coin Street campaigners incorporated CSCB, a company limited by guarantee in order to buy 13 acres of land from the GLC. The estate was sold by the GLC for GBP 1 million, at a very significant discount to market price which at the time was estimated to be of GBP 4 million. In order to bring down the market value of the land, the GLC created a number of covenants on the site so that parts of it could only be used for affordable housing and open spaces. The GLC and the Greater London Enterprise Board also provided CSCB with the funding required for the acquisition on very favorable terms.
Faced by an obligation to service its immediate borrowings and develop its newly-acquired land, CSCB chose to develop a commercial strategy with the aim to become financially self-sustainable. According to Kate Swade from Shared Assets (interviewed for the present dissertation), the executive management of the trust had, from very early on, a keen idea of being as autonomous as they possibly could and did not want to be dependent on grants to be viable and any revenue activity had to be self-funding, create jobs and an economy. Profitable temporary schemes such as car parking and advertising hoarding were initially set up and rapidly enabled CSCB to start building its balance sheet. Once the organisation became more solid financially, it started to deliver on its promise to provide affordable housing and open space. From 1988 to 2001, four housing co-operatives were set up and led to the development of more than 200 units of affordable properties. In 1995, CSCB decided to take on the development and refurbishment of what is now recognized as the emblematic flagship of the South Bank of London: the OXO Tower. Right from the start, members of the trust noticed that if they decided to partner with a private company, they would inevitably be faced with a serious conflict of interest. In the words of Iain Tuckett, CSCB's Executive Director, the interests of an investor with equity is to carry out the development as cheaply as possible, to let it as quickly as possible and then to sell off the rental stream, and that clearly is a very different approach to ours, where we want to hold the property in perpetuity and to use the lettings to achieve social and community objectives - and commercial objectives. The GBP 20 million development was eventually pursued by CSCB alone and became a great success. The OXO Tower is now a host to two highly successful restaurants as well as a set of design, arts and crafts shops commercializing high-quality and expensive fashionable items. The Tower has become a major attraction for both tourists and wealthy Londoners alike. The development of profitable commercial ventures such as the OXO Tower have enabled the organization to meet its social and community objectives more easily by cross-subsidizing them. For instance, the high standards of development coveted for the fourth of their housing co-operatives (Iroko) were made possible by a subsidy of several million pounds by CSCB. For Tuckett, CSCB has taken a Robin Hood approach, catering for the needs of people with money in order to fund its social objectives. According to him, one of the greatest failings of social enterprises is to confuse social objectives with economic requirements. Overall, the social and economic achievements of CSCB over the past 25 years have been nothing short of outstanding. Thanks to a relentless activism and a very skilled management of its operations, the local community has not only saved its area from being turned into a commercial development estate, it has created a not-for-profit company which has taken control of redevelopment and delivered on its promise to provide affordable housing, recreational open spaces (i.e. a park, a riverside walkway open to the public) as well as various community facilities that have transformed the area into a vibrant neighbourhood. Crucial to their success were the identity and the strong sense of purpose that were developed during the years of campaigning prior to the establishment of CSCB. Another factor of success was the continued presence of key people, such as Iain Tuckett, who have consistently demonstrated the skills, the business acumen, the intelligence and the probity to turn CSCB into an exemplar of what a community-based development can achieve, even in extremely difficult and competitive circumstances. Yet, none of these accomplishments would have occurred without the initial support of local public officials who believed in the project and assisted the local community to acquire and own the land for its own benefit.
Despite its many achievements, CSCB has sometimes been decried for being an undemocratic organization. Unlike the open and inclusive governance proposed by the CLT and other forms of democratic and mutual organizations, CSCB has notably refused to include local representatives in the organization management and has chosen not to give individuals supportive of the initiative the possibility to become members. Some observers have suggested that CSCB had developed a self-perpetuating Board structure where the Directors choose for themselves who they want to bring in. Some decisions that have been taken such as incorporating the trust as a company limited by guarantee (instead of opting for a more inclusive and open legal structure), or, in the words of Iain Tuckett, to have kept representing the social and community values of those involved in the campaign (instead of representing the interests of the current stakeholders) have transformed a community-led development initiative into a top-down enterprise, managed and governed by a limited number of individuals. As suggested by Andrew Bibby, a journalist who specialises in co-operative business, mutuality and social enterprise, this form of governance has ensured the Board and management had the skills it needed to operate effectively, but it could make it increasingly remote from the constituency that it claims to represent.
Yet to portray the whole Coin Street development trust as an undemocratic enterprise would clearly be unfair. On the one hand, the company limited by guarantee (i.e. CSCB) is only one of the many legal structures that have been set up by the trust over the years. For instance each one of the four housing co-operatives is managed and governed by its members and therefore fully democratic and fully mutual. On the other hand, the senior management as well as the Board of Directors of the trust have maintained the intention to remain very close to the ground. Very thorough surveys of the area, including in-depths interviews of local people, are regularly performed and have continually informed their agenda. Finally, both Kate Swade and Tim Crabtree (who has also been joined on the phone for the present dissertation) recognize that most of the development trusts that have been set up in the United Kingdom over the past two decades have also opted for this type of top-down organizational structure which gives the organization the ability to respond swiftly and efficiently before a fast-changing socio-economic environment. As previously mentioned, the skills, the leadership as well as the vision demonstrated over the years by the members of the management team has been a critical factor of success and both Kate and Tim have openly questioned whether CSCB would have been able to achieve what has been achieved without such a top-down approach. At the end of the day, and as explained by Kate Swade, the function of CSCB was to develop the land that the CSAG has fought so hard to acquire, create a local economy and make of the neighbourhood a vibrant place to live. And this is exactly what they have achieved.
It is easy to see how such an initiative can be of assistance to a growing precariat. Besides providing affordable housing, preventing the displacement of the members of its local community and bringing back a vibrant community life to a declining neighbourhood, CSCB was able to revitalize the local economy, create jobs and stop money leaking out from the community by making the whole area attractive to both private entrepreneurs and wealthy clients alike. And yet, CSCB is more a community-initiated initiative rather than a community-led one. As we have seen, the organization and management of the trust remains mostly top-down, severely limiting the involvement, the ownership and ultimately the role that the members of the community can play in the initiative and on the future of the area.
We will now look at a third and last example of a community-based development: the Evergreen Cooperative Initiative in Cleveland. Alike the CHT and CSCB, the emergence of the Evergreen co-operatives is possible thanks to the backing of enlightened local public officials which believed in the potential of a community-led alternative and had the courage to support a non-orthodox form of development. In a sense, the Evergreen co-ops can be seen as a synthesis of the best of the two models previously discussed. On the one hand, Evergreen has developed a successful commercial strategy which has permitted them to generate their own source of capital through co-operative accumulation and therefore scale their operations up quickly and significantly as well as simultaneously attend to some of its communities' multiple socio-economic needs. On the other hand, it was founded on a much more open, much more inclusive and much more dynamic system of governance which enables for upscaling while encouraging a distribution of power and control.
4.1.3 The Evergreen Cooperative Initiative
The Evergreen Cooperatives is a group of worker-owned businesses launched by Cleveland’s largest foundations and anchor institutions. Even though the launch of the Evergreen Cooperatives Initiative is much more contemporaneous than the development of the CHT or CSCB, it emerged in an analogous context where a growing lack of decent and stable economic opportunities was leading to the impoverishment of local residents and the destabilization of inner-city neighbourhoods. After years of disinvestment and job dislocation, the city of Cleveland and the region of North-Eastern Ohio started to be faced with startling unemployment and rampant levels of poverty. With the aim to rebuild neighbourhoods and improve the economic opportunities of the people who live there, the Cleveland Foundation established the Greater University Circle Initiative in 2005 (from now on, the Greater University Circle Initiative will be referred to as the GUCI), a multi-stakeholder collaborative initiative made up of local institutions as diverse as the Cleveland Foundation, City of Cleveland, Cleveland Clinic, University Hospitals and Case Western Reserve University. The initiative was designed to break down the barriers between the area's major anchor institutions (having an economic self-interest in having vibrant and healthy local communities) and some of Cleveland's most economically distressed neighbourhoods. The GUCI initially tried to dynamise its local economy by offering various kinds of incentives destined to the private sector. The reasoning was that those incentives would attract the private investments and create the jobs which would eventually help address some of the challenges faced by the city's most disinvested communities. Nevertheless, the coalition soon realized that this strategy would prove costly and ineffective. On the one hand, private investment and for-profit corporations tend not to be rooted in place and generally relocate as soon as more favorable economic conditions appear somewhere else. On the other, such type of local economic development usually does not offer the members of marginalized communities more than a temporary access to low paying jobs which do not enable them to build equity, therefore leaving them locked in the poverty trap. In other words, by transferring scarce resources from the public to the private sector such a policy would further fuel income and wealth inequality and would therefore not help solve the problems faced by the city of Cleveland but rather accentuate them. In 2006, social entrepreneur and co-founder of the Democracy Collaborative, Ted Howard, gave a talk in which he outlined the great transformative potential held by anchor institutions in terms of community wealth building. The arguments advanced by Howard caught the attention of some of the members of the GUCI and eventually led to the reworking of the group's local economic development strategy. The coalition started to consider how a cooperative anchor institution strategy could help them achieve their goal and two years later, the Evergreen Cooperative Initiative was born. Its strategy would be to improve the ability of communities and individuals to increase asset ownership, anchor jobs locally and ensure local economic stability by creating new green community-owned and -run businesses and then redirecting a portion of the significant procurement power of local anchor institutions towards those newly-created, locally-rooted businesses.
The Evergreen cooperatives were established on the model of the highly successful Mondragon Corporation (for further information on the Mondragon Experiment please refer to the Appendix C - The Mondragon Corporation and the Emilian Model). For instance, Evergreen decided to incorporate a holding company (the Evergreen Cooperative Corporation) which is now responsible for keeping the long-term vision of its founding members while acting as a source of continuity for all of its cooperative enterprises. Its model of governance also emphasizes the network aspect of the Mondragon system. Evergreen functions as a connected group of mutually-supportive cooperative businesses, each of which is owned and controlled by its workers but also part of a worker-owned and worker-controlled association (in this case the Evergreen Cooperative Corporation). Finally, Evergreen has put in place the Evergreen Cooperative Development Fund, a non-profit revolving loan fund which provides funding for the expansion of existing cooperatives and seed capital for the creation of new ones. The fund currently has approximately USD 200 million of assets under management and invests in individual Evergreen companies as deeply subordinated debt at a 1 percent interest rate.
The Evergreen Cooperative Initiative currently consists of four cooperative ventures: the Evergreen Cooperative Laundry, Evergreen Energy Solutions, Green City Growers Cooperative and the Neighbourhood Voice. The Evergreen Cooperative Laundry is the greenest and most energy-efficient industrial laundry in northeast Ohio providing laundry services to major local institutions such as hospitals, clinics and hotels while helping them reduce their carbon footprint. Evergreen Energy Solutions is a community-based clean energy and weatherization company which designs, installs and maintains photovoltaic solar panels arrays on the rooftops of the state of Ohio. Green City Growers Cooperative is a 3.25-acre (13,150-square-meter) hydroponic greenhouse located in the center of Cleveland. It currently produces about 3 million heads of lettuce and leafy greens and three hundred thousands pounds of herbs every year for the residents of the Greater Cleveland. Finally, the Neighbourhood Voice is a free, 10,000-circulation, citizen-driven newspaper which covers worker co-op activity in Cleveland and other issues of concern to residents. Between them, the three cooperative businesses (i.e. the Evergreen Cooperative Laundry, Evergreen Energy Solutions, Green City Growers Cooperative) currently have close to 150 worker-owners, most of whom were formerly in the ranks of the long-term unemployed, hold prison records or have struggled with substance abuse. The long-term objective of Evergreen is to expand into a diversified network of small for-profit cooperatives employing up to 5,000 people.
Central to each one of its cooperatives is a system of capital accumulation designed to allow the worker-owners to participate in the wealth creation process. Besides partaking in operation management and organizational governance, the worker-owners of the Evergreen cooperatives receive living wages and have the right to a portion of the firm's profits. In return to a USD 3,000 investment into the cooperative (which is funded through a 50-cent per hour payroll deduction), they receive a percentage of each cooperative's profits which is based on a formula that includes length of employment, annual hours worked and salary. The typical worker is expected to build a USD 65,000 equity stake in their business after eight years on the job.
The success of the Initiative's first three for-profit ventures can be attributed to a combination of factors: - First, Evergreen has put in place a formal business development process whose role is to carefully design new business models and ensure their future viability. Any new business idea must meet a number of criterias including: matching the needs of its local anchor institutions, employ at least 50 people from the local community, be profitable and be a local champion in terms of ecological sustainability. The multi-stakeholder collaboration which underlies the business development process is a key factor of success which almost secures the profitability of new cooperative ventures by providing them with a guaranteed source of revenue before they even start operating. - Second, the GUCI provides the Evergreen Cooperative Initiative with the funding, the expertise as well as the guidance necessary to make every single cooperative successful. For instance, the support of a number of public and private institutions was crucial to ensure that the Evergreen Laundry Cooperative would be properly capitalized. In total USD 5.8 million were secured from the following sources: USD 1.5 million from the Department of Housing and Urban Development and the City of Cleveland, USD 1.8 million in New Markets tax credits, $750,000 from the Cleveland Foundation, and $1.5 million from two banks. - Finally the Evergreen cooperatives would be nothing without the commitment, the passion and the professionalism displayed by its worker-owners who seem to have embraced the culture of solidarity as well as the ecologically sustainable vision promoted by the Initiative.
A study performed in 2013 by the Cleveland Foundation accounts for some of the results achieved by the GUCI in its first nine years of operation. In such a short period of time, the accomplishments of the initiative are nothing short of exceptional. They include: - An institutional partnership and a multi-anchor approach which has become a model for cities around the U.S. and beyond, - A business growth and retention program that resulted in more than USD 200 million of local investment since 2008 (the physical developments included the redevelopment of Uptown Cleveland, the improvement of local transit systems, and many more), - The creation of three new employee-owned businesses that serve institutional needs, employ economically-disadvantaged neighborhood residents and build community wealth, - The regeneration of community life through the network-building programs which connect local residents with each other and with institutions to develop new community projects.
Despite its short track record, Evergreen's continued viability and expansion (in terms of revenues, jobs and enterprises) offers a strong message of hope to the economically-distressed communities, cities and regions around the Globe. Thanks to a creative and collaborative economic initiative, and by capturing some of the city's major economic flows and leverage them to the benefits of the communities living there, the GUCI was able to revitalize the local economy of some of Cleveland's most marginalized and disinvested neighbourhoods. The benefits of the Evergreen model go far beyond the economic and include coalition building, workforce development, neighbourhood regeneration, sociological empowerment, enhanced ecological sustainability, and increased urban sustainability and stability. According to Lily Song, they also recast the responsibility of anchor institutions, many of them beneficiaries of public funding, with respect to their surrounding communities. What the GUCI and the Evergreen Cooperative Initiative are currently achieving is within reach of any locality. Like CHT and CSCB, Evergreen demonstrates that the empowerment of impoverished communities and the reduction of wealth and income inequalities does not require the investment of vast sums of money but rather the cooperation and commitment of a group of enlightened individuals.
These are very important lessons indeed for both the precariat and the public sector. The establishment of a collaborative multi-stakeholder coalition as well as the economic cooperation secured from the city's major anchor institutions provide each co-operative with a guaranteed source of revenue which somehow insulates them from the pressures of an unrestrained market. This, in turn, gives Evergreen the possibility to transfer the control and ownership of the whole Initiative to its members (whereas such a distribution of power would not have been possible - or would have put the whole initiative at risk - in an environment as competitive and as fast-changing as the one faced by CSCB). Thanks to its elaborated and dynamic system of governance and ownership, the Evergreen Cooperative Initiative achieves what CSCB could not, namely, to provide marginalized and distressed individuals not only with a living-wage job but with a wealth creation mechanism and the opportunity to become the owner of their job, something that most of them would not even dare to dream of. By so doing, it provides them with the tools necessary to build their own wealth and therefore to become the masters of their own faith. In other words, Evergreen provides much more than mere economic empowerment, it gives an invaluable sociological and psychological empowerment.
For the public sector, the message is clear: alternatives to the traditional and private forms of economic development (proposed by capitalists and socialists alike) exist, and they work. By vesting ownership in community stakeholders (as opposed to investor-driven corporations) and by directly harnessing the economic power of existing local assets (as opposed to letting it be subject to the forces of an unregulated market), collaborative social-public partnerships have the potential to enable community-led economic developments that are effective, just, ecologically-regenerative, inclusive and equitable.
Yet the transition from our current political-economic system which systematically promotes and pushes for private forms of enterprising, to one that supports economic democracy and mutual practices while handing the power over to the community will be far from easy.
But why is that so and what can we do about it?
On the Evergreen Cooperative Initiative
"“These are very important lessons indeed for both the precariat and the public sector. The establishment of a collaborative multi-stakeholder coalition as well as the economic cooperation secured from the city's major anchor institutions provide each co-operative with a guaranteed source of revenue which somehow insulates them from the pressures of an unrestrained market. This, in turn, gives Evergreen the possibility to transfer the control and ownership of the whole Initiative to its members (whereas such a distribution of power would not have been possible - or would have put the whole initiative at risk - in an environment as competitive and as fast-changing as the one faced by CSCB). Thanks to its elaborated and dynamic system of governance and ownership, the Evergreen Cooperative Initiative achieves what CSCB could not, namely, to provide marginalized and distressed individuals not only with a living-wage job but with a wealth creation mechanism and the opportunity to become the owner of their job, something that most of them would not even dare to dream of. By so doing, it provides them with the tools necessary to build their own wealth and therefore to become the masters of their own faith. In other words, Evergreen provides much more than mere economic empowerment, it gives an invaluable sociological and psychological empowerment. For the public sector, the message is clear: alternatives to the traditional and private forms of economic development (proposed by capitalists and socialists alike) exist, and they work. By vesting ownership in community stakeholders (as opposed to investor-driven corporations) and by directly harnessing the economic power of existing local assets (as opposed to letting it be subject to the forces of an unregulated market), collaborative social-public partnerships have the potential to enable community-led economic developments that are effective, just, ecologically-regenerative, inclusive and equitable.”