The Community First Fund in central and eastern Pennsylvania has developed a “Small Cities Strategy” to focus on the special needs of communities in its market area. Each of the 13 counties served have one or more core cities or towns with populations ranging from 10,000 to about 60,000. Small cities and towns and so-called “micropolitan” communities do not have the economic or political clout of large cities but are nevertheless significant centers of population and production, drawing workers and shoppers from a wide local area. To effectively serve those communities, community development financial institutions (CDFIs) must  achieve sufficient scale, both in terms of geography and in their range of lending products and technical assistance services. Unlike those in larger urban areas, CDFIs serving small communities cannot limit their work to housing, microfinance, or community facilities but must serve a broad range of community development finance needs.
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According to a 2003 Brookings Institution study on small cities in Pennsylvania, neighborhood decline is weakening the small cities, small towns, and older suburbs in which 58 percent of the state’s residents live and where many of its critical intellectual, health, and business assets cluster. The same factors hold true in many of the country’s older small cities, towns, and rural communities. In particular, unbalanced growth patterns are taking a drastic toll on the health and real estate of the original “neighborhoods of choice” in Pennsylvania—its city residential blocks, charming rural and urban boroughs, and inner-ring townships. People are moving out. Vacancy is on the rise in smaller, older municipalities, and in the most-affected areas, a vicious cycle of social distress, deterioration, and abandonment is destroying their neighborhood appeal.

Further, the Brookings study found that these trends are also limiting the opportunities available to growing numbers of low-income and minority Pennsylvanians. Most notably, the movement of jobs and middle-class families away from the cities, boroughs, and older townships into the outer townships means that low-income and minority workers have become spatially separated from economic opportunities.

This is an excerpt from The NEXT American Opportunity. The full text can be downloaded as an Adobe PDF Document.