The Next Chapter of Community Development Finance and Place-Based Investment

Why It Matters

The launch signals a coordinated effort to close capital gaps and modernize place‑based policy, offering investors and policymakers a clearer pathway to drive sustainable growth in underserved communities.

Key Takeaways

• Urban Institute launches Center for Local Finance and Growth.
• Capital flows remain 21x higher in top versus bottom cities.
• Federal place‑based programs face shrinking budgets and fragmented design.
• Permanent tax credits aim to boost rural and low‑income investment.
• Scaling CDFIs requires half‑billion to billion dollars per census tract.

Summary

The Urban Institute unveiled its new Center for Local Finance and Growth, positioning it as a nonpartisan hub for research, tools, and dialogue on community development finance. The launch event, attended by over 1,200 online registrants and a slate of former Fed officials, framed the conversation around making more communities "investment ready" and leveraging place‑based policies to spur inclusive growth.

Speakers highlighted stark disparities in capital distribution: a 21‑fold gap separates the most‑invested cities from the least, with rural and small‑town America suffering chronic under‑investment. Federal programs such as CDBG and HUD’s housing initiatives have contracted to a fraction of their inflation‑adjusted peaks, while the sector relies increasingly on market‑based incentives like the New Markets Tax Credit and Low‑Income Housing Tax Credit, now made permanent.

Brett Theodos illustrated the divide with concrete data—Utah’s median income rose 80 % over five decades, whereas West Virginia saw no real growth for two generations. He also cited the Urban Institute’s new landscape review, which documents nine systemic challenges and calls for a "Tennessee Valley Authority‑scale" commitment: half‑billion to a billion dollars per census tract over 20‑30 years, reduced transaction costs, and sustained, geographically targeted investment.

The implications are clear: without coordinated federal action, robust financing tools, and a long‑term capital commitment, the promise of place‑based development will remain fragmented. Scaling CDFIs and cementing permanent tax incentives could unlock private capital, but policymakers must align resources, streamline regulations, and embed community voices to ensure lasting economic revitalization.

Original Description

Join former Federal Reserve Vice Chairs Lael Brainard and Randal Quarles for the launch of the Urban Institute’s Center for Local Finance and Growth, which will equip leaders with evidence and tools to strengthen local economies.

The launch event will spark conversation on how communities can attract and deploy capital to drive growth. Through candid discussions with local and federal policymakers and mission finance leaders, attendees can expect an exploration of how to navigate the new opportunities created by the One Big Beautiful Bill Act, make communities investment ready, and ensure local growth delivers economic benefits for all.  

Convenings like this one represent the center’s mission—to serve as a trusted resource for the community economic development sector. Through data-driven analysis, strategic advising, and cross-sector convening, the center accelerates solutions that expand capital access and ensure more places have the resources to thrive. Join us as we help leaders in rural, suburban, and urban communities build affordable housing, grow small businesses, and meet residents’ needs.