Thomas A. Musil, D.P.A., assistant professor in the finance department recently presented his research on Regulation of Real Estate Development Through the Use of Community Benefit Agreements. Here then are five questions with Prof. Musil:
Q. What are Community Benefit Agreements?
A. CBAs establish a process for real estate developers to include community objectives as part of the development. The developer enters into a private contract, usually with a coalition of community, faith based and/or special interest groups in exchange for their support, cooperation or forbearance regarding the proposed development. The community group typically gets the developer to agree to include any of several components in the project or in the development process. This includes things like local hiring, hiring from under-represented groups, creation of minority owned businesses, and paying for support of the community coalition. In fact, in some cases the community coalition has an approval process and monitors the development activity and final management of the development.
Q. What are you hoping to accomplish with your research?
A. Very little is known about CBAs. There is scant evidence of how these agreements produce outcomes and enhance the project and/or the community. In my research, I specifically looked at 28 of the 50 projects nationally where CBAs have been used in the development process. I reviewed at each of these projects in terms of their impact on environmental justice – the fair treatment and inclusion of all people regardless of their race, color, gender, national origin or income. Of the CBAs reviewed, 28% involved hiring in the agreement, 57% required communication between developer and community, 53% contained requirements in terms of minimum wage or living wage jobs and 53% related to contracting with certain groups such as those who are local or typically harder to employ.