For Neighborhoods, Not Profit: Intermediaries and Public-Private Partnerships in Boston, 1968–91

That nonprofit community development corporations (CDCs) drove a movement to improve urban neighborhoods through housing and economic development in the 1970s and 1980s has been well documented by historians. Much of this attention has linked CDCs to black capitalism, grassroots movements, and inadvertent gentrification. Less attention has been given to the parallel rise of new organizations, known as intermediaries,founded during these same decades that aimed to attract, package, and leverage private capital investment in low-income neighborhoods. Sometimes chartered by state legislatures as quasi-public corporations, other times initiated by corporate leaders or philanthropists, and always structured as nonprofit organizations, these intermediaries sought to yoke neighborhood improvement to capital markets through strategies of asset acquisition, debt financing, and tax syndication.

This paper takes the history of the community development movement in Boston during the 1970s and 1980s to examine these nonprofit intermediaries and their impact on the city’s neighborhoods. Organizations including the Boston Housing Partnership, the Community Economic Development Assistance Corporation, Inquillinos Boricuas en Acción, and the Local Initiative Support Corporation (LISC) feature centrally. These organizations successfully proved that, with the right packaging and partners, low-income housing could produce both a financial profit for investors and a neighborhood benefit. This paper explores the sinews of public-private partnerships, emphasizes the importance of government and philanthropic funds, and situates the rise of intermediaries in the longer history of the American welfare state. Doing so reveals that the courting of private capital existed as a decidedly liberal tool of social welfare and urban development. It also reveals that the embrace of markets and privatization began as a local effort to reinforce the capacity of the public sector, rather than circumvent it. By recognizing community development corporations and nonprofit intermediaries as private sector actors, this paper offers a new narrative of privatization.