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Community organizing is one of the more difficult activities to get funding for, but it is necessary for successful commercial stabilization. Changing a district to make it more livable while maintaining the existing community's cultural identity is a delicate balance. Without the active involvement of a broad set of community members, hitting that balance is practically impossible.
Facilitating merchant involvement is very time consuming, but can be very valuable. Merchants know what is happening on the street. The best merchants know a lot about their customers, why they shop there, and often about other needs in the community. Merchants often know before anyone else when a business is about to close or a landlord is planning renovations.
If organizing residents is challenging, however, organizing merchants is even harder. People who succeed at operating neighborhood businesses often do not like to spend time in community meetings. Even if there is some ongoing merchant participation in merchant associations or Main Street program meetings, involving merchants requires visiting them in their stores for one-on-one conversations.
A good commercial leasing agent can
look at a vacant office or retail space in a familiar neighborhood and almost
instantly make an educated guess about how much it will 
lease
for and how quickly it is likely to lease. Commercial brokers, however,
are frequently not willing to list space in tougher neighborhoods.
This means CDCs are left to their own devices when it comes time to find
tenants for commercial space in struggling neighborhoods. It also
means they are forced to finance and build that space without the reassuring
voice of an experienced broker establishing the value.
In many disinvested neighborhoods there are so few broker-assisted transactions that no one knows what the market rent is. The process of rebuilding these commercial real estate markets requires a growing network of people with personal experience building and leasing these spaces.
The field of community development
has grown to include a very wide range of financing sources-from tax credits
to loan funds to community development financial institutions. Though many
are useful in developing commercial or community facilities, most were developed
primarily to finance affordable housing production. Community- 
serving
retail space, however, is much riskier than affordable housing, and many
of the housing-specific financing tools do not adequately address that difference.
Housing lenders often see commercial development as an afterthought and attempt to limit the risks of retail development in mixed-use projects in ways that also limit the economic development potential of the project. Nonprofit developers will need new financing tools to realize their full potential as developers of neighborhood stabilizing retail space. See Appendix for more details.
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