The Coachella Valley and Central Appalachia are textbook examples of how diverse rural communities are in America. Across almost any indicator—from climate to demographics and economic growth—these areas look radically different from one another. Even their geographic differences are stark: the Coachella Valley is 45 miles of desert in Southern California while Central Appalachia spans 230 hilly counties across seven states. But underneath the unique issues facing each region are similar barriers to community and economic development.
Rural communities by their very nature are more sparsely populated, meaning that both population and potential deals are smaller in number and spread over a wider geographic area. The individual and institutional capacity required to get investments from an idea to execution are often spread out. These challenges make it especially hard to coordinate existing resources, let alone justify the time and effort for new stakeholders to get to know the area. If rural communities need more than one deal at a time to sustain investor interest and deal generation capacity is thinly spread across towns, what can they do?
At this year’s Opportunity Finance Network Conference, Connect Capital team members from Coachella Valley and Central Appalachia spoke about the value of a thinking regionally. Instead of building up the deal generation and execution capacity of individual towns one-by-one, these teams are building capacity at a regional level.
Connect Capital is a two-year CCI initiative that assists communities to attract and deploy capital at scale to improve residents’ health and increase their access to opportunity. In Central Appalachia, the team is working to increase local business ownership and shift the region’s narrative away from one of poverty towards one of opportunity, innovation, and capacity. The Coachella Valley team aims to significantly reduce the percentage of rent-burdened residents through the development and preservation of affordable and mixed-income housing.
The teams are learning that the capacity to spot potential deals needs to be local, as the people who know their communities best are the ones who can see where opportunities may lie. Yet the next step in moving deals towards execution, the framing of investable transactions, is a critical but relatively scarce skill that can be shared across a wider geographic area. Regional CDFIs can bring high-quality deal framing and packaging abilities to the table that are key to the success of community and economic development in these regions.
Community and economic development is inherently place-based, and the move to thinking regionally instead of locally may seem counterintuitive. However, moving to a regional scale isn’t expanding the scale of the problem, but making the solution more likely.