A BILLION Dollar Opportunity for NYC: Expanding Bank Reinvestment Resources for Equitable Economic Development

ANHD’s analysis finds that the percentage of local NYC economic development-related bank reinvestment is significantly lower than national averages.


Economic development is probably the most misunderstood and underutilized of the Community Reinvestment Act’s (CRA) community development categories. This is true nationally, but is especially true locally in New York City. In a new ANHD White Paper released today, an original ANHD analysis finds that the average percentage of dollars towards economic development by banks in New York City in 2013 was 38% less than their national counterparts. This low level of bank reinvestment has contributed to a lack of support and infrastructure needed for a robust economic development programs and policies.

The white paper challenges banks in NYC to collectively devote at least $1 Billion more of their CRA dollars towards equitable economic development and to partner with the nonprofit and government sectors to develop the tools to use those dollars most effectively.  $1 billion dollars in community development loans, investments, and grants as well as small business loans to underserved business owners and communities would help bring the local bank reinvestment industry more in line with what banks are doing across the country and help raise the bar for this category of reinvestment as we seek not just dollars, but quality dollars.  Given the City’s serious affordable housing crisis, this increase of equitable economic development resources must expand banks’ overall commitment to community development, and come on top of, and not in place of, their ongoing support for affordable housing.

Just as the affordable housing ecosystem did not happen on its own, an equitable economic development ecosystem must also be intentionally created.  This is one of the three principle themes to ANHD’s Equitable Economic Development Initiative.  A new ecosystem requires a comprehensive commitment of time and capital from banks and government, the expertise and collaboration of all stakeholders involved, and a commitment to work together.  ANHD proposes a CRA Equitable Economic Development working group be convened to start developing the tools and approaches needed to create this ecosystem.  This working group should include representatives from the New York City Economic Development Corporation, the New York City Department of Small Business Services, the Mayoral administration, financial institutions, and experts in the field, including Community Development Corporations, community based organizations, Industrial Business Service Providers, nonprofit developers of industrial space; workforce development providers, and organizations that focus on small business development and commercial revitalization.

But this problem is especially acute in New York City.  ANHD’s analysis finds that the percentage of local NYC economic development-related bank reinvestment is significantly lower than national averages.  From an analysis of over 30 regional and national banks around the country, we found that these banks dedicated an average of 12.6% of their total CRA-eligible community development loans, investments, and grants to economic development.  In contrast, local New York City banks dedicated just 7.8% towards economic development for a total of $743 million in 2013.  This means that in 2013, the average percentage of dollars towards economic development by banks in New York was 38% less than their national counterparts.  However, the average actually obscures the level of economic development CRA investment by many NYC banks.  The national median of CRA-eligible community development loans, investments, and grants to economic development was 10.6%, whereas local New York City banks’ median investment was just 0.5% to economic development.  We do note that New York City banks were more in line with the national averages in the percentage of grants to economic development.  However, overall a shocking half of New York City banks dedicated less than 1% of their total CRA community development dollars towards economic development.

As economic inequality and economic development become priority issues for local government and community efforts, ANHD believes that the financial sector covered by the CRA should increase its involvement by partnering with government and communities to invest an additional $1 billion in programs and activities supporting equitable economic development that have a concrete strategy to create and preserve quality jobs and economic opportunity for low-income New Yorkers and underserved communities.

Equitable economic development goes beyond expanding the tax base and beyond simply creating and preserving jobs. It is about the jobs being created and the people being served.  Equitable economic development is about creating the systems and environments to create a stable middle and working-class employment base and workforce that creates a meaningful path to the middle class. This can happen through multiple strategies and sectors, but must ensures that the systems and opportunities are intentionally extended to the low- and moderate-income (LMI) and underserved communities that need them most through targeted strategies for quality job creation, small business development, and workforce development and placement.


Increasing investment in equitable economic development will take time – it requires an ecosystem of resources, programs, tools, and partners that is not nearly as well developed as it is for affordable housing. Over the 35 years since the CRA was passed, New York City has developed one of the richest ecosystems in the country to build and preserve affordable housing.  The CRA has fostered collaboration among governments, developers, nonprofit organizations, and banks that has led to the creation of a robust infrastructure with a wealth of CRA motivated capital to support it. Also, while affordable housing is still difficult to build and preserve, we have a clear definition that housing costs of less than 30% of one’s income is considered affordable. The same set of tools, infrastructure, and metrics to evaluate them do not exist for economic development.


New York City has a unique opportunity today to invest more in equitable economic development activities through policies and public dollars that increase access to quality jobs for lower-income populations and neighborhoods throughout the city.  They can only be successful if they can leverage these investments with private sector financing that will be most impactful if tools are developed by the cities and nonprofit organizations that will use them most effectively.  $1 billion additional dollars towards high-impact, effective economic development opportunities will go a long way towards creating a more equitable city for all New Yorkers.

Read moreless

Share this page: