CEDAM Blog

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Arts & Culture Helping Michigan Communities

In a recent blog post, we introduced creative placemaking as a positive outlet to understand, interact and connect with our communities through arts and culture, otherwise known as the creative sector. To further dive into the benefits of the integration of arts & culture into communities, I attended the Creative Convergence on March 19 at Eastern Michigan University hosted by the Arts Alliance and partners working to leverage and promote the creative sector.

The Creative Convergence

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The road to vibrant communities relies on the intersection of Michigan’s creative, economic development, education, environment, health, government, philanthropic, placemaking and tourism sectors. The creative sector is at the forefront of the next phase of Michigan communities, with opportunities to strengthen the economy with big social impacts. Thought leaders and innovators from across the country led sessions devoted to describing best practices, common challenges and potential solutions to attract jobs, talent and offer residents a creative place to live.

Success Story Highlights Include:

  • Requiring a percentage of construction and development costs to be allocated for public art that is innovative and thought provoking.
  • Partnering with an environmental policy issue to pass legislation establishing a steady revenue source dedicated to the creative sector.
  • Strengthening a city’s brand and marketing campaign to establish cultural destinations.
  • Establishing an educational platform for creative individuals to learn skills and give back to their communities and spark innovation
full report: http://www.creativemany.org/creativestatenonprofit/

Click to view the full report.

The Creative Sector Helps Communities

From the perspective of a community finding and articulating their voice, arts and culture helps to express values, build bridges and find ways to connect with one another. The arts help support local businesses, stimulate job growth and drives tourism.

Proof in the Numbers

  • Michigan arts & cultural organizations welcomed 25,785,806 visitors, as reported by the Creative Many 2015 nonprofit report. That is enough to fill Comerica Park 618 times.
  • The Michigan creative community had $595,362,649 in direct expenditures in fiscal year 2012.
  • There are 25,900 jobs in the creative industry in Michigan with $199,690,556 in salaries and $15 million in payroll taxes.
  • Research done by the University of Pennsylvania has demonstrated that cities with a high concentration of the arts have more social cohesion, higher civic engagement, higher child well-being and lower poverty rates. (data source: Americans for the Arts)

It’s clear that supporting the creative sector in your community is an advantageous pursuit for the people within it and those you hope will visit. How does your community support arts and culture?

Missed the Creative Convergence? The Detroit Public Television’s recording from the day is available on the Arts Alliance website.

 

 

Delray Neighborhood, Detroit

Delray resident Scott Brines points at a house in the neighborhood. “This house should be white.”

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The house is located near a metal processing plant, one of many different industries that at this point have practically consumed the Delray neighborhood. Scott looks at the rust-tinted house. “People have been breathing in that fine metal dust for years and years.”

The scene is from the mini documentary Living with Industry: Detroit, Michigan, recently released by Community Development Advocates of Detroit (CDAD).

Anyone who knows Detroit realizes Delray doesn’t represent every area of the city – especially not places that are flourishing and the neighborhoods far from the factories – but it does make for a depressing caricature of a dying neighborhood. Historically the area was zoned mostly as commercial despite the fact it was then heavily populated by residents. As industry grew, the waterfront disappeared and the neighborhood became more isolated from the rest of the city many chose to leave. The residents who remain today do so because it’s their home. That, or they don’t have the resources to move. Considering what people know about the effects of heavy industry on health, on the health of their children, who would stay if they truly had a choice?

delray2Another neighborhood resident shows a picture her daughter drew of car exhaust clouding over their home. The local Reverend says the area has the highest rate of asthma in a City that already has a rate 1.5x that of anywhere else in the state. Addition of a new bridge to Canada will result in demolition and relocation of 700 residents. Those left will breathe in twice the amount of car emissions from increased traffic.

But what would this riverfront neighborhood look like if, before all those industries located there, they implemented Community Benefits Agreements? If every one of the industries contributed directly to the neighborhood in the form of jobs, investment, or amenities? This gets to the argument of the video: without Community Benefits Agreements, residents may see none of the benefit and all of the cost of living near large footprint industry. Without an Agreement in place, the end result is Delray.

Residents today continue to seek fair treatment and improved quality of life through organized groups like the Southwest Detroit Community Benefits Coalition.

The film is available online at https://youtu.be/912_5FjcO1E.

People & Places: Part 2 (of 4)

CEDAM’s national partner NACEDA, along with several other organizations, hosted the People & Places Conference in Washington D.C. March 4-6 bringing together community-based organizations from every corner of the country to showcase the effectiveness, resolve and passion of those working daily to improve lives in America’s most challenged neighborhoods. This was an opportunity to share what’s working in your community, inspire one another and raise your voice on behalf of the community that you serve. Thanks to NACEDA, we were able to provide scholarship assistance to four CEDAM members to attend. Over the next few weeks, we will hear from each of those members about their experiences at the conference in this blog series.

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The second in the four part series is by Denise Paquette who works with the Allen Neighborhood Center in Lansing.

People & Places

by Denise Paquette

On March 6, I attended the People & Places Conference in Washington D.C. There, I participated in the Thriving People Sessions, focusing on healthy and age-friendly communities.

Healthy Communities

The Healthy Communities Kickoff began the day featuring panelists from the Mission Economic Development Agency, Community Catalyst and the Federal Reserve Board of Governors. Discussions touched on the social determinants of health and healthy communities, as well as the effect of the Affordable Care Act on funding and the role that nonprofit hospitals can play in the improvement of a community’s health. There was also a discussion about how the health people in abutting zip codes can be vastly different. An example was that in California the average age of death can vary by as much as 10 years! There is a public campaign to let residents know about this inequality, with the goal of effecting policy.

The panelists shared sources for data regarding the social and economic determinants of health. These sources include Community Connect (which maps data), Federal Reserve’s “Policy Maps,” Community Catalyst, Green Living Institute, Lincoln Land Institute, Hilltop Institute and the Wilder Foundation.

Age-Friendly Communities

The second session was Age-Friendly Communities with panelists from East Bay Asian Local Development Corporation, National Community Reinvestment Coalition (NCRC), AARP Foundation and National Center for Creative Aging.

Creative aging, or flourishing across the spectrum of aging was an interesting point of discussion. To put it in perspective, we did an exercise to consider aging to look like. A presentation followed about people who are aging in community, participating in artistic and cultural activities and are active members of their communities. This visualization tool helped us all understand that reality is far different from perception, and that aging doesn’t necessarily take form in an isolated retirement community or by living alone.

There is a trend of communities, nonprofits and faith-based communities taking over the traditional family role in caring for the aging. Health and human service agencies are addressing long-term care and the economics of the poor aging. With 10,000 people turning 65 every day, there is a need to foster age friendly lifestyles, for both human and economic reasons. There is evidence that creative aging increases health and reduces health issues as well as depression.

An important concern relates to housing and cost of housing for aging, a discussion led by the AARP Foundation described. 50% of those over 50 years old are paying more than 30% of their income for housing. The majority (90%) of this aging population wants to remain in their homes, or in age in place as it’s described. However, in order to do so, they must be in compliance with the aging in place criteria, with only 1% of housing nationwide accomplishing this. Fortunately, the AARP’s Housing Solution Center offers a variety of programs, and assistance in foreclosure prevention is one example that can help seniors be in a better position.

The NCRC discussed finance issues that affect elders. Specifically, 29% of older adult households are at economic risk, and 78% are financially vulnerable. $2.9 billion in elder financial abuse annually – this number is suspected to be lower than actual, due to the large number of unreported cases where friends and family are the perpetrators. Additionally, one-third of older adults say that they could not come up with $2,000 if there was an emergency, a scary statistic.

Age-friendly banking principals include training bank personnel in fraud prevention, customizing financial products and series such as view only accounts (so that another person can look at the account, but not access it) and no penalty accounts. Increasing accessibility by branches, hours and simple technology. Age-friendly banking is also beneficial to aging in place – examples include CAPABLE, a program in Baltimore that combines home repair with occupational and pain management, and ESOP Senior Property Tax Loan Program, which leverages private funds to loan seniors up to $5,000 for property tax payment assistance (so homes are not lost due to property tax arrearages).

Finally, the East Bay Asian Local Development Corporation discussed the agency’s strategic plan based on the social determinants of health. As mentioned earlier, place has an effect on health. The agency focused on a 1 ½ mile corridor, with a goal of making it an age-friendly corridor. At either end of the corridor, the neighborhoods had gentrified. The agency conducted a community assessment, developed leadership, trained and engaged residents in civic advocacy and offered mini-grants to residents. In a two year time frame 43 leaders were trained, 225 individuals received services, and $7,000 was awarded to mini-grant recipients.

Lessons learned included:

  • Value of being present in senior housing center – even if people don’t participate in a class that is being held in a common area, as they are in the common area and are hearing what is being discussed.
  • Program barriers are usually also age friendly barriers (location of services, times of day, etc)
  • Intergenerational and integrated programs offer more to the seniors

Additional thoughts from the session:

  • Banking is a BIG deal
  • Intergenerational development includes housing, libraries, banks, etc
  • Neighbors as caregivers – this can be a way for neighbors to be employed, and provide services to those aging in community.
  • PACE – (Program of All-inclusive Care for the Elderly) is a Medicare and Medicaid program that helps people meet their health care needs in the community instead of going to a nursing home or other care facility.

Overall, this session was inspiring and gave me ideas to share with a group of senior women who feel that they cannot age in place in their current homes, but do want to age in the neighborhood. I am going to share the information that I learned at the session, to help them as they start to make decisions on how they want to proceed.

People & Places: Part 1 (of 4)

CEDAM’s national partner NACEDA, along with several other organizations, hosted the People & Places Conference in Washington D.C. March 4-6 bringing together community-based organizations from every corner of the country to showcase the effectiveness, resolve and passion of those working daily to improve lives in America’s most challenged neighborhoods. This was an opportunity to share what’s working in your community, inspire one another and raise your voice on behalf of the community that you serve. Thanks to NACEDA, we were able to provide scholarship assistance to four CEDAM members to attend. Over the next few weeks, we will hear from each of those members about their experiences at the conference in this blog series.

Banner with partner logos

The first in the four part series is by Rosa Robinson who serves as a Michigan Foreclosure Prevention Corps Member at Elder Law in Lansing.

People & Places

by Rosa Robinson

When I attended the first People and Places conference in Washington, DC, I had no idea what to expect. The 2.5 day conference was comprised of sessions on neighborhood/economic development, gentrification, racial justice and building small businesses. Individuals from practitioners to elected officials from across the country attended the event to network and learn effective community building strategies.

I attended sessions that addressed head on the disparities in neighborhood development such as substandard/unaffordable housing, racial profiling, and limited entrepreneurial opportunities. Strategies were also discussed. The strategies included advocacy work, forming coalitions, reframing public policy, creating affordable housing and the need to change the political environment. The conversations were thought-provoking and at times spirited. The conference showed me that this epidemic is real and it affects everyone. Fortunately, there are people who recognize that and are fanatical about seeking justice for underrepresented communities. It was evident that even though strides have been made to help communities thrive, we still have a long way to go.

Creative Placemaking in Michigan

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Hiawatha, the World’s Largest Indian in Ironwood, Michigan

If you could bring anything to your neighborhood, what would it be? Are arts and culture a part of your vision to improve quality of life, attract business and make your community livable and memorable? If so, consider creative placemaking and the funding and resources below as a way to achieve your goals!

What Is Placemaking?
Michigan is a leader in the national placemaking movement to address years of disinvestment, declining economies and thoughtless strip malls affecting neighborhoods. People want to live in places that feel special to them, have things to do, jobs, transportation and diversity. Placemaking is a strategy to create these livable places by bringing out the unique assets of a community and filling in any asset gaps.

Creative Placemaking
Creative placemaking is a type of placemaking that focuses on the integration of arts and cultural activities through comprehensive community planning. Typically a development plan includes land-use, transportation, education, economic development, housing and

Miners Memorial Mural in Ironwood, Michigan

Miners Memorial Mural in Ironwood, Michigan

infrastructure, but alone these elements do not necessarily get at the heart of what makes your community special.

Including arts and culture in a development plan creates an opportunity to interact with identity, culture and history and thereby the distinct character of a community. Arts and culture encourages people to express themselves, try new things and participate. Excellent examples of this include Art Prize in Grand Rapids, the rotating

sculpture display in Hastings chosen by community members, inclusion of arts and culture in the Flint Master Plan and the Sugar Hills Arts District in Detroit. The National Endowment for the Arts features creative placemaking initiatives nationwide on their website.

Houghton

Houghton, Michigan

Supporting Creative Placemaking in Michigan
Creative placemaking builds opportunity-rich, resilient communities that attract business development, tourism and inspire people to move there and be more successful. Think about where your family chooses to vacation, where your kids take field trips and where you spend your time, either for business or personal reasons. Do you live in or near a place that has those features?

How can some of those choices play into the overall design of the community you choose to live in, and what do you need to do to build the partnerships, education and funding surrounding these plans to increase the effectiveness and success?

REO Town branding 5

Lansing, Michigan

Collaborative efforts are imperative for any amount of success. Organizations or communities should always engage with similar organizations, neighborhood groups, municipalities and other partners based on the specific attributes of the project or plan.

Funding Opportunities
The National Endowment for the Arts program Our Town is specifically designed to advance creative placemaking efforts. They offer grants toward creative placemaking projects and a variety of other educational resources. ArtPlace America is a national collaborative made up of a variety of foundations and funders, and works to advance comprehensive community planning and the arts. They also have a variety of grants available, and while they are currently focusing on key geographic areas, there are other opportunities regularly available. The Creative Many is a 501c(4) membership organization in Michigan that works to advance the creative sector. It is a great place for resources and education.

Wait and See
Creative Placemaking efforts will continue to grow in Michigan and across the nation. With such rich history and diverse assets in Michigan, we look forward to seeing many wonderful things.

Lansing SAVEs For the Future

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Earlier this year 365 kindergarten students in the Lansing School District received a seed investment in their future. Each student was automatically enrolled in an education savings account by the City of Lansing.

Lansing SAVE (or Student Accounts Valuing Education) is the first universal, automatic education savings platform in Michigan, a joint initiative of the City of Lansing, the Lansing School District and Michigan State University Federal Credit Union. Moving forward, every entering class of kindergarteners at LSD will be enrolled in education savings accounts.

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Kindergarteners on Lansing SAVE launch day

You can watch (and hear!) the excitement of the kindergarteners on launch day when they heard they were each getting an account to help them continue school beyond high school graduation. Lansing SAVE is designed to harness that excitement and give kids and their families a tangible way to save and plan for the costs of college and other postsecondary opportunities. Students, parents and other family and friends can deposit into students’ accounts any time at MSUFCU branch locations, online, by mail or direct deposit. What’s more, students will receive in-school financial education and parents will be linked to financial empowerment services in the community, such as free financial counseling and free tax assistance.

Opting kids into education savings accounts became a priority when research found students with dedicated education savings are four times more likely to attend and complete a post-secondary degree. This finding is especially important for low income students, as currently less than one in ten will complete a degree by age 26. In contrast, about a third of low income students with college savings complete a degree.

Lansing SAVE follows a national trend of local and state governments automatically investing in student’s post-secondary education through seeded savings accounts, starting in 2010 when the City of San Francisco launched Kindergarten to College. Since then several state and local governments have followed suit, including Nevada, Maine and Cuyahoga County in Ohio.

The opt-out vs. opt-in structure of this new trend of education savings programs is a critical component. Many opt-in programs have take-up rates of 10% or less. While people may have the best intentions, life gets in the way. Creating an automatic enrollment structure removes this barrier and ensures programs touch nearly every child.

CEDAM hopes Lansing SAVE is just the beginning of community-based education savings platforms in Michigan. Already, the Barry Community Foundation in Barry County has stepped up to lead a similar, county-wide education savings platform to launch in Fall 2015. CEDAM provides technical assistance to both Lansing and Barry County for these initiatives and is looking to help new communities create their own education savings platforms.

If you’re interested in bringing this model to your community, please contact Megan Kursik at kursik@cedam.info.

Save the Date – August 5, 2015

CEDAM will host the second annual Michigan Financial Empowerment Summit on August 5, 2015, to focus on education savings platforms and feature Jose Cisneros, Treasurer of the City and County of San Francisco, as our keynote speaker. Registration will be available soon.

 

 

The National Housing Trust Fund

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The Gateway Senior Apartment project in Fremont, Michigan. The building was repurposed from an old abandoned school into affordable housing for Michigan seniors.

Part of the Housing and Economic Recovery Act, the National Housing Trust Fund (NHTF) became law on July 30, 2008. The NHTF is a federal program for collecting and distributing dedicated funds as a block grant to the states, District of Columbia, Puerto Rico and the U.S. territories. The purpose of the NHTF is to increase and preserve the supply of housing, principally rental housing for extremely low income households.

The NHTF was to receive .042% of its start up funds from Fannie Mae and Freddie Mac. However, funding was suspended when the 2008 banking crisis hit and was not lifted until January 1, 2015. On December 11, 2014, FHFA Director Mel Watt sent letters to Fannie Mae and Freddie Mac informing them he was terminating the temporary suspension of the allocation the companies are to make to the NHTF. The companies were directed to begin setting aside the required funds in FY2015 and each year thereafter.

In accordance with the NHTF formula, funds will be distributed to states based on the following:

  • Shortage of rental properties affordable and available to extremely low income (ELI) and very low income (VLI) households
    • ELI is considered to be less than 30% of area median income
    • VLI is considered to be between 30% and 50% of area median income
  • Number of ELI and VLI renter households paying more than 50% of their income for rent and utilities
  • Priority is given to ELI households

The amount of money that each states gets will depend on the individual state’s affordable rental housing market. However, each state and DC will receive a minimum of $3 million. Moreover, states must choose a state agency to administer its program, and it can be administered in the form of loans, grants, interest subsidies, and equity investment. The money must be committed within two years and spent within five.

NHTF is majorly focused on ELI households. In fact, when there is less than $1 billion in funding, 100% of the funds must benefit ELI. When there is more than $1 billion available than a minimum of 75% must benefit ELI and the other 25% can be allocated to VLI households.

NHTF law requires strict guidelines:

  • At least 90% of a state’s NHTF money be used to produce, preserve, rehabilitate, and operate rental housing
  • Up to 10% may be used for homeowner activities
  • 75% of a state’s NHTF used for rental housing benefit ELI households, or households with income below poverty level
  • Limits to 25%, the amount of a state’s NHTF used for rental housing to benefit VLI households
  • No more than 10% may be used for homeowners
  • The money may be used to help first-time homebuyers with down payment and closing cost assistance

Furthermore, households must meet the following requirements in order to be eligible for NHTF funds:

  • Household income at or below VLI
  • Be first-time homebuyer
  • Have homeownership counseling
  • Use as principal residence
  • Home must be occupied by an income-eligible for at least 30 years
  • Grantee has options if home is sold before 30 years

Allocations will be based on:

  • Geographic diversity
  • Extent rents affordability
  • The amount of time the apartment will remain affordable
  • The merit of the project
  • Applicant’s ability to obligate money and carry out projects in a timely way
  • Extent project will use non-federal funds

Generally, NHTF funds are designed to help those who are in ELI households. For more information, visit the website here.

Housing Trust Funds in Michigan

The Michigan Housing and Community Development Fund (MHCDF) was established in 2008 but it currently has no dedicated funding. One of CEDAM’s top priority policy goals is to find and secure dedicated funding for the Michigan Housing and Community Development Fund. Over the next few years, much of our energy will be devoted to developing and maintaining a stable funding source in order to allow the MHCDF to meet the housing and community economic development needs of Michigan neighborhoods and communities.

Read CEDAM’s blog post about the MHCDF: Funding Housing: A Look at the Michigan Housing Trust Fund and watch Episode 15: MHCDF of the Bright Side Television Show to understand more about how it works and some of the projects that are a direct result of the program.

3 Free Ways to Get Ahead This Tax Season

Whether you have disposable income or or are living paycheck-to-paycheck, there are many legitimate resources available to help you lower debt and increase savings. Below we have detailed three FREE ways to improve your financial situation in 2015.

1. Participate in a local Show Me the Money Day event

MoneyDay2015LoctionsHeld in 15 communities across Michigan in January and February, these are free community events that connect Michigan residents with free financial education and community resources to help people keep more of their hard earned money in their pockets. Event activities can include free tax preparation, Affordable Health Care enrollment, homeownership workshops, budgeting, financial coaching, food, prizes and more!

Visit ShowMetheMoneyDay.org for a full list of event locations.

2. Get Your Taxes Done for Free

VITA or TCE (Tax Counseling for the Elderly) sites provide free tax preparation by IRS-trained and certified volunteers. The free internet-based tool myfreetaxes.com allows tax payers to prepare their own taxes and includes the ability to access assistance over the phone. To locate a tax assistance site in Michigan, or connect with volunteer assisted self-preparation tools, visit MichiganFreeTaxHelp.org or dial 2-1-1. When scheduling an appointment, please be sure to take note of all required documentation that you will need to bring with you.

FinancialEmpowermentLoctions3. Make an Appointment at a Financial Empowerment Center

Michigan has four Financial Empowerment Centers that offer one-on-one professional financial counseling free of charge. Services include budgeting, debt reduction, understanding credit and more. Visit the Michigan Communities for Financial Empowerment website to discover more about each location.

We can all use a little help, advice or some tips to get ahead. With so many obstacles or unforeseen expenses, it can feel overwhelming, but it is possible to get out of debt, feel more financially secure and maybe even go on a vacation! These simple tools can help you plan for that future. Make 2015 your year to get ahead.

National Disappearance of CHDOs due to HOME

Recently CEDAM attended a national summit for community economic development associations. One of the roundtables focused on HUD’s HOME program and the 2013 HOME rule change that has resulted in mass disappearance of CHDOs across the country.

Summary of HOME Rule Change State Impacts [PDF]

The conversation covered problems states are facing with the HOME rule change, a “Super CHDO” as a potential solution and the direction national HOME policy advocacy should take. Present at the table are representatives from CED associations across the country.

Illinois – The rule change has resulted in CHDOs disappearing, mostly because of the lack of access to operating support. Many CHDOs are very small and are board driven, so they use consultants to carry some of the work. Without operating support, the CHDOs can’t hire consultants, so they cease to exist.

Michigan – We have no recertification process. Unlike other states [like Illinois and Texas], once you apply you are then a CHDO forever.

Illinois – Another problem is that CHDOs that are larger and don’t depend on the operating support from HOME can’t expand to cover new service area. HUD says that if the organization wants to be certified as a CHDO in that new area, they need to work there for at least a year before they can apply. That is at the top of our list for action: to get that requirement relaxed.

Georgia – We have CHDOs that are serving other counties. Are they going to have this problem with getting certified in new areas?

Illinois – It won’t apply to any CHDO that is already certified for an area. It’s only going to apply to CHDOs that want to expand now or in the future. They will need to have a presence in any place they want to be certified in for at least a year prior to applying for CHDO status there.

We’ve found in our efforts to talk about these issues, if we can tell the story of an individual person or organization, it’s more effective.

National – Then there are two things we should address today: talking to HUD about the changes we would like made, and if nothing is going to change, how to work with what we have now.

Ohio – The impacts are different around the country. In Ohio, the HOME rule change will dismantle our CHDO existence completely. At one point in time we had 64 CHDOs. Now we have 3. We had thousands of dollars in grants and now that will be gone.

Indiana – We haven’t had any input from our members on this. At this point, the HOME rule change hasn’t been an issue for us. Like in Texas, the CHDOs started being certified on a project-to-project basis.

South Carolina – Same here. Many CHDOs are not seeking recertification. All of our members have just resigned to the fact that they either can still get the certification or they can’t.

Texas – The organizations here that continue to be CHDOs either have to raise their own money to do the next project or collaborate. A lot of private developers have been able to do it, but for the most part many have been backing away from community development.

A Texas CDC – I am a CHDO, and I’ll say that there won’t be any new CHDOs. We’ve been doing CHDO work for years. Those who can continue to still do it will, but it’s going to be hard. Our organization has been certified for about 14 years.

Ohio – One thing that will get congressional attention is when the smaller CHDOs can’t use their 15% of funds and it gets sent back.

Illinois – It’s a double edged sword. If they think that the money isn’t spent because there are no projects to do, then they will just take the funding away thinking it’s not useful anymore.

The rule that was a killer for us was the rule saying PHA (Public Housing Authorities) CHDOs could no longer use their PHA staff for CHDO work.

Michigan – We have no idea how many CHDOs there are. In Detroit we haven’t heard anything about how many there are either. Plus we have the issue that the CHDOs that go out of business, we don’t know because we don’t hear anything from our membership about it. Our current issue is that we simply don’t have organizations with CHDO status and the capacity to use the funding.

Washington DC – In DC we haven’t heard anything from our members either. Many of them are focused on local issues. I looked up how many we have. I thought we had 8 and we only have 5. Our conversations involve the loss of operating funding due to the HOME rule change. The lack of CHDO dollars play into the overall lack of operating support.

National – The gut reaction from advocates in our industry right now is to play defense. Our fear is that HOME will be eliminated completely. It’s not likely, but it could, and every year congress nips off more funding from HOME. So it could go away completely at any time. To stick with the advocacy side, money going back to DC is a bad sign. We don’t want that. So do we want to continue playing defense, or do we just want to quit advocating here and take our chances?

Pennsylvania – One of our staff people brought up the Washington Post article. It was in 2010 and it still hurts: the article about bad CHDOs and how HOME is a stained program. That’s still harming our efforts to make changes. It’s an uphill climb within HUD itself because this program is viewed as Congress hates it, it got bad press, etc.

In the end I feel like we can’t let this program go because we’re not getting more funding. If it goes away, it’ll be gone and there will be nothing new to replace it.

Ohio – With the current political leadership, it’s going to be difficult to hang on to.

National – There’s a HOME coalition in DC that has about 17 organizations that participate in it. That’s pretty small. It’s NCSHA (National Council of State Housing Agencies). They play very defensive, go to the same senators every year, put up the benefits, don’t talk about what needs to be changed. There is openness though to changing things and being more bold, because the rule change is killing CHDOs.

Ohio – My understanding is that HUD’s legal department is very opposed to this rule and still is. I’m not sure of what the rationale is, but I’ve heard from three different sources that it’s an issue for them, perhaps because the rule change affects certain communities more than others (rural for example).

National – Okay, now say that the rule stands as it is. What do we do?

Illinois – We are looking at finding other sources for CHDO operating support. The idea is to create a Super CHDO. Each person on this organization’s board would be one of the former CHDOs, and together they would be able to hire one staff person at this Super CHDO to handle CHDO work. Instead of five or six organizations each developing a project and all of those being sent to the HFA, the Super CHDO would send one that is very strong.

All of our CHDO organizations agreed and all sent a memorandum to do this. The issue has been that this new organization can’t hire a staff person until a year of operation according to the HOME rule change. So we are looking to find the private capital to hire someone to staff the Super CHDO.

National – The politics of that are just fascinating. How did you get all of them to work together?

Illinois – In Rockford, organizations were able to put their individual concerns aside for the greater good. That’s why it’s so important to find the capital to make this happen. The organizations need to be rewarded for what they did.

Michigan – What are the demographics of Rockford? Dying industrial city, sure, but this makes me think of Flint, where the CHDOs have all closed up but there’s a possibility for them to rally together to keep going in this way.

Illinois – They all share an interest in bringing these funds to their community to improve it.

So if you know of anyone interested in funding this really collaborative idea, let us know!

Washington DC – How many units? That’s the key question. How many units would you develop?

Illinois – We can’t tell you that today. At the current point there won’t be any units built, if we can’t get this off the ground. With the HOME rule changes and the impact on CHDOs, if people won’t take a chance, there will be no units built.

Ohio – And five units in a rural area is a big deal! I don’t know if HUD looks at it that way, but it really matters in a rural area.

Illinois – We’re dealing with that also, especially since the same effort to 5 in a rural area creates 57 somewhere else.

National – So we need to be more creative than we used to be, and play less defense. We will look into CHDOs being able to expand to new areas. We will be cognizant of how much money is going back to DC. If money is being sent back let us know.

 

Great Lakes Capital Fund (GLCF)This article is made possible by the Great Lakes Capital Fund. Thank you for sponsoring our attendance at the national NACEDA Summit in San Antonio, Texas so we can bring these best practices back to Michigan and our members.

Auto-Title Lending: What it Means for You

Marketed as a quick and easy solution when you are in a money pinch, auto-title loans are a type of predatory lending that uses the borrower’s car as collateral. Lenders assess the value of the car when determining the loan, however, the customer’s ability to repay the loan is not taken into account. The repayment period can vary between 10 days, a month, or longer and interest can run as high as a 300% APR.  Furthermore, lenders make about $2 billion worth of loans while customers pay more than $4 billion in fees making the auto-title loan market about the same size as the market of payday loans. The Center for Responsible Lending reports that the average borrower renews their loan 8 times and on a $500 loan, this average customer will pay back $650 in interest over eight months; the principle borrowed will be in addition.  Additionally, they estimate that 1 in 6 borrowers incur repossession fees on top of loan fees.  If a customer’s car is repossessed then how could they get to work or get groceries or take their kids to school? These quick and easy loans are only quick and easy in perpetuating a debt trap for customers worsening their financial situation.

Michigan is one of 29 states that do not allow auto-title lending. However, their legality was jeopardized when Senate Majority Leader Randy Richardville and Representative John Walsh proposed bills that would add a loophole to the state’s 1917 Pawnbrokers Act. Under the proposed bill, Detroit News describes that pawnbrokers could add a 20 percent monthly usage fee for vehicles, meaning that a 12-month, $1000 auto title loan would cost the borrower $2760 in interest, on top of the original $1000 borrowed. The APR would eventually total out to be 276% and endanger Michigan’s must vulnerable citizens. In a state were there is very limited access to public transportation in the urban, rural, and suburban areas, repossession of a car would be devastating.

CEDAM circulated a letter signed by more than 50 organizations opposing the bill. Even the state pawnshop industry was not on board with the bill. Although the bill has been killed, it is expected it will be brought up again next term – maybe in another form.

To help identify and prevent predatory auto-title loans, the Center for Responsible Lending provides the following information:

How to identify an auto-title loan

  • High annual interest rates
  • Quick due date
  • Car used as collateral
  • Debt trap

Protect yourself from these high interest rate loans:

  • Pay attention to the APR
  • Look at all options and alternatives
  • Keep a savings account
  • Stay clear from all predatory loans
  • Avoid forced arbitration clauses
  • Advocate for a 36% cap on interest rates

Solutions to auto-title lending:

  • Ask family and friends for a loan
  • Look into other alternatives such as banks and credit unions
  • Ask for an advancement payment from your employer

**Information taken from Center for Responsible Lending and Detroit News