In the simplest sense, economic development is about bringing nice things — paved roads, public transit, modern housing, business plazas, etc. — to communities that don’t have them. But traditionally the agencies and organizations leading these projects haven’t given much thought to who owns the nice things — or how those nice things will affect a neighborhood’s culture and affordability.
As a result, development in U.S. cities has followed a familiar script: new amenities and infrastructure go in, quality of life improves, new neighbors and businesses flock to the neighborhood to enjoy that quality of life, competition for housing increases and rents go up, and eventually the people who were meant to benefit from all those nice things are priced out of their now gentrified neighborhood.
This cycle can feel inevitable, but if Mercy Corps NW’s Plaza 122 experiment is successful, it might show a way to break the cycle: giving locals the opportunity to invest in their own community’s development — and to build wealth in the process.
THE BIG EXPERIMENT AT PLAZA 122
Mercy Corps NW currently owns the Plaza 122 business hub in East Portland, but it’s starting to sell ownership stakes to local residents and pay out annual dividends.
To buy in, neighborhood residents first have to participate in a financial literacy class, which is available in Spanish, Vietnamese, Arabic, and Russian. After completing the course, they can make micro investments of $10 to $100 in the plaza each month. With enough of these investments, the community will eventually own Plaza 122 in full.
We sat down with Sven Gatchev, who helps oversee the Community Investment Trust program, to get the scoop.
How did the community investment trust program come together?
We asked people, ‘What do you want in your community? What’s missing? Are you investing and saving right now?’
People were very interested in actually owning something themselves, a piece of real estate, be it their home or even something else.
What’s the problem this is solving?
People were saying, “Hey, I want to be putting some money away somewhere, but I don’t really feel that I have a place to do so.”
Once you come out of our class, you now have a tangible opportunity to own something at a very affordable rate and you can actually be putting away money safely. Another upside is that [residents] are connected with the community and with the performance of this thriving, diverse plaza.
What’s next for this program?
This is the pilot and the first of its kind. We want to make sure that we offer a model that can be replicated by other organizations, not only here in Portland, but across Oregon and the nation.
Learn more about Plaza 122 on Mercy Corps NW’s website, or watch this presentation to go deep in the weeds. (Thanks to Wilfred Pinfold for sharing the recording!)