Small businesses in Massachusetts are having a hard time staying afloat. Since the pandemic, the rate of openings and closings has been volatile. Between 2020 and 2022, according to data from the US Small Business Administration (SBA), the state gained 19,000 small businesses. But these gains started to shrink in 2023, and in 2024, the state actually lost 5,000 small businesses. Across Massachusetts, small business owners are struggling.
And yet, small businesses play a vital role in helping commercial areas stay vibrant in post-industrial cities. These businesses support the local economy. They are destinations where people gather, shop, and work. And their architectural charm and human scale attract tourism. When they close, it is a sign of economic trouble that cannot be ignored.
To support small businesses, elected officials rely on longstanding grants and technical assistance programs. But public funding for these programs is stagnant. For instance, state spending for technical assistance to businesses in Massachusetts has remained unchanged for years: in 2021, it was $5M, and in 2026, it is projected to be the same.
One common economic development strategy—particularly in post-industrial cities—is to attract large businesses with incentive packages. However, independent research suggests this approach is often an inefficient and ineffective use of taxpayer resources.
But there’s another important strategy, which is often overlooked. To help keep small businesses open so that they can serve the community, one option is to give residents the opportunity to invest in their local business economy. Community Investment Vehicles (CIVs) are platforms that enable residents to collectively put money into neighborhood assets such as real estate and local businesses. In return, the residents get shares and receive annual dividends. Over time, as the mortgage on the community’s collective property is paid down and assets appreciate, residents also build equity.
The Portland Community Investment Trust (CIT) offers a good example. Operating in the East Portland Mill Park neighborhood of Portland, OR, it launched in 2017 and since then has generated over $1M. Investments from local residents—who paid in some cases as little as $10 per month—have resulted in a fully occupied community-owned marketplace that has strengthened local families’ financial resilience and created lasting neighborhood benefits.
Before Portland CIT launched, Mill Park’s brick-and-mortar small businesses faced challenges much like those in Massachusetts post-industrial cities. At Plaza 122, the mid-century mall that became the site of the CIT intervention, small businesses had to contend with unstable leases and operated out of an unkempt commercial building that was in foreclosure and one-third empty. These businesses also struggled to serve Mill Park’s growing immigrant communities, including low-income renters.
A key initial step for the CIT was securing the site. The project’s lead developer, Mercy Corps, a Portland-based international humanitarian organization, evaluated sites that demonstrated not only financial feasibility, but also social benefits for low-income residents and commercial tenants. These benefits included proximity to affordable housing units, strong neighborhood associations, and public transportation.
Mercy Corps ultimately selected Plaza 122 and acquired the property from an insurance company holding it in foreclosure. To finance the acquisition and redevelopment, Mercy Corps secured funding from regional CDFI Beneficial State Bank, as well as Mercy Corps’ own reserves and outside impact investors.
With the site secured, Mercy Corps prioritized engaging residents to find out their needs and desires. Mercy Corps received pro-bono assistance with this step from student teams at Willamette University and two AmeriCorps-VISTA volunteers. During a two-year engagement process, Mercy Corps gained deep understanding of residents’ strong desire to invest in real estate. The organization also learned about the barriers involved, including residents’ skepticism about their financial capacity and the realities of restrictive securities laws.
It was also important to tailor the investment platform to residents’ needs. Orrick, a law firm with offices in Portland, provided Mercy Corps with pro-bono assistance navigating securities laws for unaccredited investors (people who earn less than $200K and have a net worth below $1M). To mitigate risk, Orrick implemented a new type of direct-pay-letter-of-credit from Northwest, a regional bank; this approach insulated the investment platform from having to register with the US Securities and Exchange Commission (SEC) and the State of Oregon and enabled residents—the investors—to withdraw their funds at any time without penalty and without fear of losing their principal.
Once the CIT’s path had been cleared, the focus turned to mandatory financial education for residents, to help them make informed investment decisions. Mercy Corps paid community leaders to teach classes in goal planning, budgeting and investment risks and returns. These classes were taught in five languages.
In November 2017, Mercy Corps opened the investment platform to residents of four southeast Portland zip codes. A total of 345 residents bought shares and started making monthly investments. Since then, Mercy Corps has become owner and sole operator of this platform, covering all costs to operate it in perpetuity at no cost to investors.
In sum, the Portland CIT empowered residents—especially low-income renters, who are often shut out of real estate ownership—to invest in their community. By transforming their desire to own assets into an alternative investment vehicle, the project unleashed their capacity to build individual wealth while revitalizing their neighborhood’s brick-and-mortar small businesses.
Residents are not only investors but also owners of Plaza 122 and have become de facto “ambassadors” who frequent the shops and encourage friends to do so as well. Their active interest in keeping the area vibrant benefits the tenants—all of which are small businesses. Residents helped organize a multicultural market day and patronized a new immigrant-owned café to help it get established. This synergy between owners and tenants is a unique outcome of CIV community ownership structure.
Community investment vehicles like the Portland CIT are a proven alternative to traditional economic development strategies. They enable residents to take part in revitalizing the small businesses around them, creating wealth and maintaining jobs.
Beyond Portland, in Albany’s South End neighborhood, the Capital Region Community Investment Trust is developing a CIV to rehabilitate The Pommer—a nineteenth-century, multi-story brick building—to revitalize several small businesses. Furthermore, cities across the U.S., including those in Louisiana, New York, Minnesota, Michigan, Texas, Oklahoma, and Washington, are also exploring the CIV model.
This is an ideal moment to explore the viability of CIVs in Massachusetts’ post-industrial cities. The state already offers the infrastructure needed to support this work: a robust ecosystem of community organizers, foundations, CDFIs and impact investors, lawyers, adult basic education teachers, and nonprofit real estate developers—and, most importantly, residents eager to play a greater role in revitalizing their communities.
To learn more about community investment vehicles and other community development finance tools that support revitalization while expanding resident ownership, please contact André Leroux at aleroux@massinc.org.
Carlos Espinoza-Toro is a Director in the Community Wealth Building Practice Area at Enterprise Community Partners, Advisors. As part of a multidisciplinary Advisors team, Carlos is currently supporting North Adams, MA and Pittsfield, MA to advance economic development efforts in the areas of workforce and small business development and downtown revitalization. Prior to Enterprise Carlos supported economic development efforts in Lawrence and Boston. He lives in Boston’s Jamaica Plain neighborhood