Jump-Starting Rural Community Development Projects: Lessons Learned
In an effort to address both the supply- and demand-side barriers of rural project development, the Richmond Fed partnered with rural-facing organizations to launch the Rural Investment Collaborative™ (RIC). A core strategy of the RIC is the Community Investment Training, which helps rural leaders jump-start development projects for their communities.
Cohort members, after graduating from the four-month training program, become part of an alumni network with opportunities to apply for additional resources. To date, the program has trained 42 leaders, and external partners have awarded $389,000 to support the development of their projects across the region. The Richmond Fed's community development team has learned some early lessons from the 2024 and 2025 cohorts.
Early Community Investment Training Lessons
The Community Investment Training is a people-based, place-based, and project-based strategy. Since the program launched in 2024, we have learned more about the people who lead projects in rural areas, the unique assets different places offer, and the types of projects that are best positioned to benefit from the training.
Lesson #1: Rural leaders wear multiple hats, which can limit available time and understanding of how to finance projects. More populous areas often have a dedicated person or people to advance community and economic development projects. In small towns, this work is often done by passionate volunteers or people with multiple responsibilities. For example, one participant was the executive director of a foundation, the mayor, and a small business owner. Therefore, investing in rural communities requires investing in these dedicated people.
Because rural leaders have so many responsibilities, time is a limiting factor. Dedicated time for proposal development, for example, can be a barrier for smart and motivated individuals who want to get critical projects started to help their communities thrive. In an ever-changing funding landscape, these individuals may also lack up-to-date knowledge about community development finance and ways to secure multiple forms of investment for projects. Unfortunately, many training programs are targeted at people who already have a background in community development finance or who can dedicate larger amounts of time to professional development.
Lesson #2: Success starts with building on strengths. From the Appalachian Mountains to the Eastern Shore, the participants proposed projects that built on local assets. For example, one project sought to restore a historic structure at the gateway to a national park that focuses on history and cultural heritage. Another was developing a training center for hospitality workers because a cruise ship was beginning to use a nearby port.
One of the things we've learned is that the type of community asset is less important than how the asset is leveraged. Asset-based community development starts by encouraging the community to leverage what they already possess: natural resources, infrastructure, relationships, skills, etc. By focusing on assets, the community can begin to take action while continuing to build local capacity. Building on local assets can have a sustainable community benefit and is much more energizing than starting with a focus on needs and deficits. Even if the project details change, the community can pivot instead of looking for a new external agent to solve problems.
Lesson #3: Some types of projects are best served by participation in the Community Investment Training. Main Street revitalization, tourism infrastructure, and workforce housing are three common project types for program participants. One small town was working on modernizing an inn that was the only lodging opportunity in their community. Another project was removing dilapidated housing and renovating or constructing new workforce housing. The project themes that have arisen likely have more to do with the Community Investment Training having attracted and selected projects that involve tangible property rather than the need for or merit of other project types.
The projects that benefited the most from the training needed multiple types of capital and had the potential for generating revenue. Main Street revitalization, tourism infrastructure, and workforce housing projects have clear opportunities for loans, tax credits, private investment, and revenue generation. Some of the other projects, like community centers, were able to incorporate revenue-generating building uses like shared workspaces, leased space for partners, and service fees. Both economic and community development focused projects can successfully leverage the training if they are open to revenue generation and capital investments beyond grants.
Lesson #4: A clear vision for the project that is shared across multiple segments of the community is important. One of the projects that has made the most progress involves a close partnership between the town administration, a local foundation, and a nonprofit executive who went through the training. Another project closely involved the local hospital, municipal leaders, and a community organization. There were also situations where the project leader had a clear vision, but they ran into challenges because stakeholders from key sectors were not champions of the project.
Beyond having a clear vision for a specific project, some communities had a shared vision for leveraging their assets through several projects. Community and economic development plans can help a community ensure that its projects meet the best use of structures for a broader community goal. The plans can also lay out a pipeline of complementary projects that contribute to the community's brand and goals. For example, a community with a thriving arts scene may need to incorporate dining, lodging, and other amenities to see the benefits of its attractions. Mapping out and telling the full development story creates a more compelling vision and investment opportunity.
Lesson #5: "Location, location, location" is a real estate mantra for a reason. Participants must identify and work on a real community project during the training — and location matters. The project "locations" for participants roughly fit into three groups. First, some of the participants already owned or, at least, had some form of site control. Several projects involved Main Street buildings that had already been purchased or a retired school building that had been purchased or donated. Second, a few of the projects were proposing new construction on undeveloped land that could involve different locations — i.e., site flexibility. Two examples of this included a mixed-use housing development and a homeless shelter that could be developed in multiple locations. The third group involved a specific building for which the participant did not have site control. A few projects wanted to redevelop the location they were leasing or were interested in a specific property without much certainty that they could secure it.
We've learned that all three location groups can find value in the training, but the location type matters for how deeply the learning can be applied and how quickly the project can progress. The projects with site control were able to develop specific business plans and outline development phases specific to that structure. New construction projects were also able to develop site plans and proposals that could be adjusted based on the shape or size of the lot with limited reworking of the proposal. The final group that did not have flexibility in the location and did not have site control faced more challenges. In some cases, the property became unavailable, and project plans could not be readily adapted to fit other real estate available in the community. Participants who lost their site were able to take what they learned and pivot to a new project or make significant changes to their proposals to fit other locations. While any of these can be seen as a success, the projects with the most clarity and control were the best positioned to apply for predevelopment technical assistance, such as architectural renderings, engineering studies, or historic building studies.
Conclusion
There are many reasons to invest in rural communities. Small towns have local leadership that are willing to roll up their sleeves to turn ideas into action. There are unique places with assets that can be leveraged for the benefit of the local community and visitors. And there are investment worthy projects that can become investment ready. However, money often flows to the places it has gone before.
The Richmond Fed is working with partners to reduce barriers to community readiness for investment. Early lessons suggest it is possible to open the pipeline so that investment can flow to new people, places and projects. To improve access, we'll continue learning how to support leaders who wear multiple hats, how to build on community assets, which types of projects are the best fit, ways communities can develop a clear vision, and how to balance project readiness with access to the training program. Developing creative solutions together will be a continuous learning process, and we are grateful to partner with leaders and rural-serving organizations who are also dedicated to seeing rural communities thrive.
Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.
