Neighborhood malls are more than places to shop. They are mini-downtowns, where you might check your COVID status, get your taxes done, or grab a coffee with a friend. Mega-malls are collapsing because of online competition, but smaller malls, those filled with mostly local businesses that anchor thousands of neighborhoods in America, are surviving because they serve as vital community centers, like the water wells in traditional villages. These “third places” are the hearts and lungs of our communities.
Our featured interview in this issue is with John Haines, who has pioneered the concept of community investment trusts (CITs) to save neighborhood malls. As you’ll read, these are very carefully structured ways for committed impact investors and nonprofits to stabilize a neighborhood by localizing ownership of a mall. Their first CIT, launched in Portland, Oregon, seven years ago, has successfully paid local shareholders (many low-income) 7% dividends each year and doubled their share price. Now they are replicating their work across the United States.
Paying subscribers will also find our latest listings of local stocks and funds you can invest in. If you’re not a paying subscriber and like our work, please click one of the buttons below. It will cost you less than a Starbucks coffee every month.
— Michael Shuman, Publisher
A Paid Subscription Gets You:
✔️ News Links
✔️ In-Depth Interviews
✔️ Latest Listings of Local Investment Opportunities
✔️ Monthly In-Person Meetings with Michael Shuman
✔️ Notable New Resources
✔️ Partner News & Voices
✔️ Events
✔️ Job Listings
MS: John, thanks for talking with us today. Before we dive into your current work, I’d like to learn a little more about your background. You were the executive director of Mercy Corps Northwest for 15 years. Tell us a little about Mercy Corps and how your work there shaped your interest in community investment.
JH: Since 1979, Mercy Corps has been a nonprofit based in Portland, Oregon, working globally in 40+ countries facing crisis, conflict, and economic collapse. In 2002, they hired me to initiate a domestic version of their work in the Pacific Northwest, focusing on economic development for low-income communities. At that point, I had come from a banking background at two banks in Portland, started a loan fund in Trenton, New Jersey, and served as an advisor under Chemonics International to the Czech Republic’s State Environmental Fund. I helped Mercy Corps Northwest establish a wide range of programs in Oregon and Washington: business training, lending, matching savings grants (IDAs), incubating farming skills in refugees, preparing women in both states’ correctional facilities for reentry and entrepreneurship, and organizing a felon-led, high-volume Reentry Transition Center for the formerly incarcerated in Portland.
As we were scaling our investment model nationally, we decided to separate the community investment trust (CIT) work from Mercy Corps in early 2015. We became an independent nonprofit entity, CIT Holdings, Inc., and operate through a fiscal sponsor, Possibility Labs.
MS: The conventional understanding of community investment trusts is that they allow a community to buy local real estate over time. A big purchaser makes the deal, and gradually, residents buy that purchaser out. Is that right?
JH: Not exactly. The community investors buy out the equity (40%) of the commercial property value from impact investors. This is important: the model is an equity shift, not a capital raise. Community investors, therefore, are owners from the first month they make an investment ($10, $25, $50, or $100).
We listened to renters, the working poor, and refugees, and designed the CIT to fit their needs. Among them: Grassroots investors should be able to make low-dollar monthly investments that fit a budget. They should be supported through education on goal planning, budgeting, and investing. The investment should provide dividends annually. The long-term share price should be adjusted as the mortgage is paid down and the property value changes. Investors should receive ongoing downside risk protection, meaning they are guaranteed not to lose everything. And there should be enough liquidity so investors can cash out at any time without loss. (Investors who leave early, however, may forgo year-end calculated dividends and share price increase.)
MS: So what’s your underlying theory of change?
JH: We want to link wealth building with community ownership. And we want to show that it’s possible to do this without depending on legislation, subsidies, or entanglements of any level of bureaucracy. With our pilot CITs, we have built out a platform to be the backbone for nonprofits nationwide to build their own CIT projects.
We actually support CIT efforts across the country right now. We support feasibility studies with three to four organizations in various cities at a time. This process, which takes about four months, shares all we have learned from community engagement and mapping, property selection, capitalization strategies, legal structures, and investor training using our proprietary “Moving from Owing to Owning,” peer-led curriculum.
MS: The first model you initiated—and the one that certainly captured my attention—was in Portland, where you live. Residents in a low-income neighborhood are now gradually becoming the owners of a shopping center. How did that deal come about?
JH: Mercy Corps NW bought a 1962-built, 29,000 square-foot commercial-retail property for $1.2 million with $450,000 down payment under an LLC, before the ultimate owner, East Portland CIT Corporation, was formed. Then we transferred the LLC ownership to the corporation. The $450,000 came from Mercy Corp NW and an impact investor, whom we paid 2% and 4%, respectively. We then offered 45,000 shares at $10 per share to residents of select zip codes. We found a bank that provided a mortgage and a Direct Pay Letter of Credit, which stands as financial insurance for the amount of the total shareholder stock value, updated annually. This is underwritten by the bank as a line of credit alongside the mortgage.
MS: Tell us about the Portland model from the standpoint of investors. How exactly does a community member become an owner? And what’s the cost?
JH: Investors must live in one of four zip codes surrounding the property, have a tax ID number, and take a peer-led course, “Moving from Owing to Owning,” which covers goal setting, budgeting, and the risk-and-return of investments. They sign up on our portal with a commitment for that year to invest a minimum of $10 and a maximum of $100 per month. Then they resubscribe annually at a new share price, calculated by the mortgage reduction and up to 50% of the change in value of the property. Over the past 7 years, the share price has grown from $10 to $20.21 per share. (See our Case Study: Community Investment Trust.)
MS: I’m curious about the legal structure you’re using. Are you formally structured as a trust? And what are the legal hurdles you need to clear for grassroots investors to be able to participate?
JH: The CIT is not a trust. We use the name to suggest the similarity to REIT—a Real Estate Investment Trust. We are like a mini, localized REIT without the tax advantages and with low-income investors. The CIT itself is a state-registered C Corporation named East Portland Community Investment Trust.
Each CIT uses a provision in the 1933 Securities Act—the 3(a)(2) exemption—that allows the stock offering to be made to unaccredited investors, if the shares are guaranteed by a bank through a Direct Pay Letter of Credit (a credit-backed structure sometimes used in municipal finance to enhance bond underwriting). This Letter of Credit is in place at all times, should all investors cash out at once. Our target is low-income investors to serve the purposes of wealth building or financial inclusion. The CIT is both a family investment and a localized community investment.
MS: I understand that the next big project is in Dallas. Tell us about it.
JH: One of four CITs likely to launch in 2026 is in South Dallas, led by St. Philips, a private school and community center with housing and a community development arm. The institution has been widely trusted in the neighborhood for over 80 years, which is a key for us in choosing a replicator. They are pursuing what we refer to as a “necklace” of smaller properties, each 3,000 to 8,000 square feet.
MS: Where else might we see CITs popping up?
JH: Albany (New York), Omaha (Nebraska), and Minneapolis (Minnesota) will also launch in 2026. The CIT can thrive anywhere where there is a population of eager first-time community investors and a trusted nonprofit to oversee the operations of the CIT. (See our 2025 CIT Progress Overview.)
MS: If I were to start a CIT in my own community, what are the basic criteria–in scale, location, market, financing, etc.—I should be looking for? And how do I enlist your services to get the project done?
JH: Most important is a trusted lead nonprofit to oversee the CIT, properties in the range of $1 million to $5 million, a low-income community in which to invest, a bank to provide financing and the Direct Pay Letter of Credit (which, again, acts as the legally required security for investors), and a strong long-term funder network to seed and support the operations.
We engage with potential replicators through a feasibility study, and then we coach them. They create their own plan and their own local implementation team. We charge $50,000 for the package of feasibility sessions and resources, access to our CIT network Community of Practice, and support for our team.
MS: You’ve now been working at this for seven years. What are the indicators of success you are proudest of?
JH: The Portland pilot proved that low-income people can and will invest locally, even without subsidized matches. We have delivered annual dividends averaging 7% for each of the seven years, and doubled the share value. We have shown that local commercial real estate is a motivating investment that knits its commercial and nonprofit tenants into the surrounding community. Most investors are low-income and have never invested before. The majority are renters and women. We can see that the CIT inspires investors to vote, volunteer, and build relationships. Finally, we have established that business and nonprofit tenants do better and gain visibility when, in our case, 350 families own and visit the property. It starts with People and Place, and grows with Property, Profit, and Belonging.
MS: Finally, are you an investor in your shopping center?
JH: I don’t live in the zip code for the Portland project, but one of our team members does, and she invests.
