Community Development Funding

Community development includes community-driven efforts to create vibrant, healthy, and livable neighborhoods, while developing economic and employment opportunities for low-income residents. Historically, it has focused on affordable housing and jobs, but increasingly includes investments in parks, trails and public spaces as central to healthy, livable neighborhoods.

Federal Funding

  • New Markets Tax Credits

    New Markets Tax Credits finance projects that have social and economic benefit for low-income communities, including public housing authorities, schools, and community-based nonprofits. They attract private capital into low-income communities with tax credits in exchange for investments in Community Development Entities (CDEs).They are complex, can be difficult to set up, often have high legal fees, and they need to generate a revenue stream to be viable, but for large projects in low-income communities, tax credits can be a significant source of funding. The park projects funded so far have included parks and recreation centers in Cincinnati, Ohio, Washington, D.C., and Pensacola, Florida.As with all significant investments in low-income communities, existing residents should be involved in the planning and decision-making to ensure they benefit from the investments.Opportunity Zones,1 are a new federal tax incentive to encourage investment in recreation facilities and other park-like properties. However, because they are meant to support businesses (ideally ones that appreciate in value), it may be challenging to use them to directly improve public access to parks and green space. Given the current newness of the program, it’s too early to review their use in practice.

    Typical Grant Amount
    Over $1,000,000
    Accessibility of Funds
    Very Difficult
    Park Funding Use
    Capital/Land Acquisition, Operations/Maintenance, Programming
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  • Community Development Block Grants

    The US Department of Housing and Urban Development’s Community Development Block Grants (CDBGs) invests in urban communities to increase quality, affordable housing, improve community living environments, and expand economic opportunities. CDBG investments must benefit people of low and moderate incomes. As such, they can be a good source of funding for equitable park investments.Under CDBG, public and nonprofit park leaders need to partner with local community development organizations and the city agency that manages the CDBG funds. Cities must develop a Consolidated Plan that sets local investment priorities and the projects need to meet the priorities outlined in the Consolidated Plan.Because of their flexibility, CDBG funds have been tapped by many park systems. From 2010 through 2018, CDBGs funded nearly $900 million in parks and recreation projects. CDBGs can also provide for maintenance and operations, youth employment, and other park-related investments. The 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES) Act included $5 billion in funds for CDBG, an increase of $1.7 billion over the previous year’s funding.

    Typical Grant Amount
    Varies by State
    Accessibility of Funds
    Accessible
    Match from other sources
    Varies by State
    Park Funding Use
    Capital/Land Acquisition, Operations/Maintenance, Programming
    Eligibility for Accessing Funds
    Local governments
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State Funding

Many states fund climate mitigation and resilience activities. Here are a few of the largest.

  • Massachusetts Community Preservation Act

    The Community Preservation Act (CPA) helps Massachusetts cities preserve the character of their communities. It allows communities to create a local community preservation fund for open space protection, historic preservation, affordable housing, and recreation. To date, 177 municipalities in the state have adopted the CPA. Each year, the municipality is required to spend at least 10% of its annual CPA revenues on each category — open space, historic preservation, and affordable housing. The remaining percentage can be used towards any of the funding categories. Over 2,500 parks, playgrounds, and other outdoor recreation projects have been funded by the CPA.The CPA statute also created a statewide Community Preservation Trust Fund, administered by the Department of Revenue, that provides distributions each year to communities that have adopted the CPA. These annual disbursements incentivize communities to pass a CPA.
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Additional Resources

Case Studies

Share Your Experience

This Hub highlights select federal and state funding programs that can be particularly effective at funding parks and green infrastructure in low-income communities. It is not intended to be a comprehensive source of funding opportunities, but a starting point with examples, links to additional information, and case studies.

We invite you to help us make this Hub stronger by sharing your experiences applying for, and implementing programs with these funding sources.

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Community development includes community-driven efforts to create vibrant, healthy, and livable neighborhoods, while developing economic and employment opportunities for low-income residents. Historically, it has focused on affordable housing and jobs, but increasingly includes investments in parks, trails and public spaces as central to healthy, livable neighborhoods.

With funding from local sources matched by banks, philanthropic institutions, and the federal government, community-based organizations, park and recreation departments are driving park improvements, and, in some cases, are taking on control of park operations and programming to ensure they reflect the needs of local residents.

Federal Community Development Block Grants have been an increasingly common source of funding in neighborhood parks in economically distressed neighborhoods. New Market Tax Credits, which are a newer source of federal funding for community development, are not often used for parks and recreation; however, increasingly, communities are using New Market Tax Credits to fund successful park and recreation projects.

A variety of local funding strategies are used to fund parks as part of a community development effort, many of which are detailed in the City Parks Alliance report, Closing the Gap: Public and Private Funding Strategies for Neighborhood Parks.