As communities grapple with the issues of business districts languishing half-vacant, of essential commercial spaces that are controlled by distant landlords or big retail chains with no regard for neighborhood needs, and of Wall Street’s approach to finance, some neighborhoods are coming up with their own solutions.
They’re joining together to invest in, develop, or own their local businesses themselves.
The benefits of community ownership of commercial spaces include new jobs nearby, strong incentives to shop locally, local sources for key goods, closer ties with neighbors, and in some cases, a return on investment.
There are four primary models of community ownership of commercial spaces. These are: investment cooperatives, commercial community land trusts, customer cooperatives, and community-owned stores. Though several of these models are small, they hold outsize potential.
For more information on each model, including policy recommendations to help them scale and spread, see the pages below.
- Our resource page, “Keeping Commercial Space Affordable for Local Business,” and our April 2016 report, “Affordable Space: How Rising Commercial Rents Are Threatening Independent Businesses, and What Cities Are Doing About It.”
One way that residents of a community can jointly capitalize a new local business is by starting a cooperative, a business that is owned by its member-customers, who provide the necessary capital in the form of member dues, govern the business democratically, and receive a share of any surplus or profits. Continue reading
Community land trusts are best known for a pioneering approach to affordable housing, but some neighborhoods are exploring their commercial potential. Continue reading
Another approach to community ownership of commercial spaces is to create a community-owned store that is structured as a local stock corporation. There are at least a dozen examples of these around the country. One of the best-known is the Powell Mercantile in Powell, Wyoming. Founded in 2002, this profitable downtown department store is owned by about 800 local families who capitalized the business by buying shares priced at $500 each. Continue reading
In the vacuum left by traditional economic development and Wall Street’s approach to finance, investment cooperatives allow communities to put their capital to work in their local economy, catalyze the creation of new jobs, re-imagine their neighborhoods, and earn a return on their investment. Continue reading