in community development, bringing with them an important source of capital and financial expertise. by working together, bankers, community development practitioners, state and local governments, and other community stakeholders have learned a great deal, and the community development field has matured significantly. places and people at one time, policy discussions revolved around whether community development was about people or places. i would argue that the debate is over and both sides won. successful community development is based on attention to both the physical infrastructure, whether housing or commercial spaces, and the health and welfare of the residents therein. bis central bankers ’ speeches cra supports community development by requiring financial institutions to identify and address the financial needs of the communities they serve. safe and affordable housing will always be an important concern for lower - income americans, but the recent recession and resulting damage to communities across the country make it clear that communities are more than physical structures. sustainable communities – those that can weather economic downturns – not only provide decent housing, but also have the resources to support individuals and families and to create a dynamic business environment. for this reason, community development today is a multidisciplinary exercise that challenges us to think holistically about how housing relates to jobs, educational opportunities, transportation, healthcare, and other services and amenities. neighborhood stabilization taking a well - rounded approach is essential now, as weak national economic conditions have caused particular hardships in lower - income communities, and have stretched the federal, state, and local resources available to address neighborhood stabilization and revitalization. in some areas, high rates of vacant and abandoned properties resulting from foreclosures have depressed housing values, drained the coffers of local governments, and created breeding grounds for crime and other social ills in what were otherwise stable, albeit low - income, communities. the result has been a shift in focus in community development, from building new housing to preserving or disposing of existing housing. in recent years, local governments and community - based organizations have struggled to counter the effects of foreclosures on neighborhoods. some communities have found success by establishing land banks to manage low - value properties that might otherwise sit vacant if left to the private market. 1 land banks are typically public or nonprofit entities, often with a limited lifespan and sunset provisions. the notion of a land bank, as opposed to a land trust, is that properties are brought in and moved out of a land bank ’ s portfolio rather than permanently preserved. while part of the

land bank ’ s portfolio, foreclosed properties can be physically rehabilitated, rented, sold to new owner - occupants or responsible investors, or, in some cases, demolished. using this kind of mechanism, a community can gain control of vacant properties and keep them from causing problems for the surrounding neighborhood until market conditions are more conducive to redevelopment or sale. land banks are just one example of the new approaches to housing issues that are being pursued across the country, many with the assistance of the neighborhood stabilization program ( nsp ) administered by the department of housing and urban development. the nsp program offers some funding to tackle these issues, but it also provides a structure to bring community stakeholders together to identify the best strategies for addressing foreclosures given the particular circumstances of each community. whether a community decides to purchase and rehabilitate homes for resale, demolish vacant homes, or create land banks to help control the destiny of these properties, the collaborative problem - solving approach used by nsp is one that can make the most of limited resources. neighborhood stabilization is doubtless the precursor to community development in some communities and, in recognition of this, the federal banking agencies amended cra regulations to specifically recognize neighborhood stabilization activities in designated nsp see thomas j. fitzpatrick iv ( 2010 ), “ how modern land banking can be used to solve reo acquisition problems, ” in reo and vacant properties : strategies for neighborhood stabilization ( pdf ), proceedings of the conference, reo and vacant properties : strategies for neighborhood stabilization, cosponsored by the federal reserve banks of boston and cleveland and the federal reserve board ( washington : federal reserve board of governors ), pp. 145 – 50. bis central bankers ’ speeches areas as appropriate for cra consideration. 2 in addition, the federal reserve has identified and shared a number of promising practices for dealing with foreclosed and vacant homes. 3 while some cities are pioneering with land banks, others, such as cleveland, detroit, and baltimore, are using data to plan for the future in ways that city governments wouldn ’ t have imagined just a few years ago. partnering with local foundations, universities, and community organizations, these cities are collecting extensive property data to identify neighborhood assets and build on those strengths. 4 in phoenix, local officials and non - profits are partnering with local realtors to match families with affordable homes for sale. unemployment the foreclosure crisis that resulted from unsustainable subprime lending has