Economic development projects are frequently underwritten by public subsidies yet offer no guarantee that benefits will reach existing residents. Developments can trigger inner-city gentrification, raising housing costs and displacing low-income residents, or may produce only low-wage retail and service jobs. The community benefits movement arose to challenge this pattern and began in Los Angeles, where early successful implementations occurred at the Hollywood and Highland mixed-use project and the Staples Center / LA Live development. It subsequently spread to cities including Atlanta, Chicago, Denver, Milwaukee, Minneapolis, New Haven, New York City, Philadelphia, Pittsburgh, San Diego, San Francisco, San Jose, Seattle, Syracuse, Washington D.C., and Wilmington.
Key organizations in the movement include the National Community Reinvestment Coalition, The Partnership for Working Families, Los Angeles Alliance for a New Economy, Strategic Actions for a Just Economy, SCOPE Los Angeles, and Pittsburgh UNITED.
CBA advocates promote three core principles. Inclusiveness ensures that community concerns are heard, particularly in low-income, non-English-speaking, and minority communities that have historically been excluded from development processes. Enforceability makes developer commitments legally binding, addressing the common problem of promises made during project pitches that are never written into approval documents. Accountability gives citizens a voice in how development subsidies are distributed, holding governments responsible for the use of tax dollars.
Negotiations between a CBA coalition and a developer typically begin after a project is announced but before governmental approval. Coalitions are usually broad-based, incorporating neighborhood groups, environmental organizations, labor unions, and faith-based organizations, often operating under a model coalition agreement developed by the Public Law Center at Tulane University Law School.
Common CBA provisions include living wage and prevailing wage requirements, local hiring goals and job training programs, minority- and women-owned business contracting targets, union neutrality requirements, retail space set-asides for small and local businesses, green building requirements, parks and recreational facility construction, affordable housing requirements, and environmental mitigations exceeding those required by state or local law. The specific mix of benefits can be tailored to each community's needs and the scale of the development.
A CBA is enforceable only by its signatories. One-time financial commitments are relatively straightforward to monitor, but ongoing requirements such as living wage and local hiring standards may remain in effect for decades. CBAs address this through periodic reporting requirements, complaint investigation mechanisms, and oversight committees. Where a CBA is incorporated into a development agreement, government agencies may also have a monitoring role.
The Los Angeles Staples Center CBA is generally regarded as the most well-known and successful example. Other notable CBAs have covered the Consol Energy Center arena in Pittsburgh, the Bayview-Hunters Point development in San Francisco, the Gates-Cherokee project in Denver, the Ballpark Village development in San Diego, and the Obama Presidential Center in Chicago. In preparation for the 2010 Winter Olympics, a CBA for Vancouver's athletes' village on False Creek targeted 100 jobs for inner-city residents and approximately $15 million in goods and services from the inner city; a 2008 report cited actual job creation of 120 and procurement closer to $50 million.
Critics have noted that CBAs offer no mechanism to ensure they truly represent the full range of community views. The Atlantic Yards CBA, for example, was criticized because it was negotiated by only a handful of community groups, all of which received funding from the developer, while many other community groups were excluded. A New York City Bar Association report also questioned whether CBA negotiators would drive appropriate bargains and whether the process might interfere with planning. Some agreements have additionally faced legal challenges related to exactions and consideration.
In the United Kingdom, Section 106 agreements and in Canada, Section 37 agreements impose similar community benefit obligations on developers. These instruments differ from the American CBA model in that they are part of development agreements with government bodies rather than private contracts between developers and community groups.