The Art of the Deal: Negotiating Community Benefit Agreements
Development is local. Even if your project complies with zoning, political opposition can kill it (or delay it to death). A Community Benefit Agreement (CBA) is a legally binding contract between a developer and community groups that secures support in exchange for specific amenities or commitments.
What Goes into a CBA?
CBAs are flexible. They can include anything the community values and the developer can afford. Common terms include:
Common "Asks"
- Local Hiring: Commitment to hire X% of construction workers or permanent staff from the local zip code.
- Affordable Housing: Exceeding statutory minimums (e.g., 25% instead of 20%) or deeper affordability (30% AMI units).
- Public Space: Building a park, community center, or upgrading a local playground.
- MWBE Contracting: Setting goals for Minority and Women-Owned Business Enterprise participation.
Why Sign One?
Why would a developer voluntarily increase their costs? Certainty.
In exchange for these benefits, the community groups agree to publicly support the project at Planning Board hearings and Council meetings. They agree not to sue. This "peace treaty" allows the project to move forward quickly, saving months or years of carrying costs.
The Negotiation Process
Successful CBAs are built on trust and transparency. Start early. Don't wait until the night before the hearing to talk to the neighbors.
- Identify Stakeholders: Who are the real decision-makers? The Ward Councilperson? The neighborhood association president? The local clergy?
- Listen First: Ask what they need before you tell them what you're building.
- Underwrite the Ask: Every benefit has a cost. Run it through your pro forma. If it kills the deal, be honest and explain why.
Build Consensus
I help developers navigate the political landscape and structure CBAs that are financially feasible and politically effective.
About the Author
Ryan Goldfarb is a real estate development advisor. He specializes in community relations and political strategy for complex development projects.