Urban Wire How equitably dispersed is community development funding in the Greater DC area?
Brett Theodos
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The Washington, DC, region is one of the nation’s most economically vibrant areas, but it contains striking levels of inequality. Community development financing in support of affordable housing, small businesses, and community facilities is designed to lift up places that have insufficient access to capital. But how equitably are community development resources distributed across the DC region?

Our new Community Development Financial Flows data tool shows how well counties and county equivalents are accessing federal funds. Looking from 2011 to 2015, we tracked funding in four dimensions—housing, small business, impact finance, and other community development—and created a combined average measure.

To capture investment relative to need, we scaled each dimension by a per capita denominator (either the number of people who earn below 200 percent of the federal poverty level or the number of people working in small businesses).

We couldn’t capture information about the full set of federal, state, local, and philanthropic community development financing, but the investment flows we track are vital for communities, and understanding their implications is important for local leaders looking to draw more resources.

Strengths and weaknesses in the DC region

DC-area counties generally fare well compared with other US counties in accessing community development financing. DC is ranked at the top among all US counties and county equivalents. As shown below, this top ranking is driven by high levels of housing, impact finance, and other community development capital flows. But the District shows lower levels of small business investment.

Neighboring Arlington County, Virginia, also has high levels of per capita community development investments relative to other counties (99th percentile). Like DC, it has high levels of housing and impact finance investments but lower small-business lending.

How DC-Area Counties Fare in Accessing Community Development Financing

Nearby Fairfax County, Virginia; Montgomery County, Maryland; and Loudon County, Virginia, are all in the top quarter of counties in our data. Although these counties look similar in our combined measure, there are differences across the four dimensions.

Loudon County is weak on housing but strong on small business. Montgomery County is strong on other community development but middling on small business and impact finance. And Fairfax County scores comparably across the four dimensions.

Prince George’s County performs the worst at accessing community development funding among counties in the DC metropolitan area (43rd percentile). It does well in housing capital, but it is weak in small-business financing. Full rankings for all counties in the DC area and broader US can be found in the data tool.

What does county rank suggest about local capacity?

Are county ranks in community development actionable? The locus of control sits with several actors depending on the program or incentive. Some funding flows are more readily changeable than others, but collectively, local officials—in partnership with others—can make area improvements. The information in this data tool can spark local dialogue and inform strategy design.

To that end, we offer several questions to guide discussion and reflection as you use this tool.

  • How does your county rank overall and by component? How does this compare with your prior understanding?
  • How does your county compare with neighboring or similarly situated counties?
  • For dimensions where you identify deficits, which governmental and nongovernmental actors have control or influence about these capital flows?
  • How sophisticated are local nongovernmental actors, and what is their track record in attracting capital from federal and other competitive sources?
  • How robustly are your state, county, and major cities engaged in cultivating, partnering, seeding, and providing incentives for private-market provision of community development capital? Does the county get its fair share of state resources?

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The Urban Institute podcast, Evidence in Action, inspires changemakers to lead with evidence and act with equity. Cohosted by Urban President Sarah Rosen Wartell and Executive Vice President Kimberlyn Leary, every episode features in-depth discussions with experts and leaders on topics ranging from how to advance equity, to designing innovative solutions that achieve community impact, to what it means to practice evidence-based leadership.


Research Areas Neighborhoods, cities, and metros Greater DC