No More Poor Door


As demand for housing continues to rise in more economically emerging areas, public and affordable housing continues to dwindle, soon becoming a thing of the past. In an attempt to curb this crisis Mayor Bill Deblasio has commissioned the development of 80,000 new affordable units in NYC over the next 10 years, but this hasn’t come without its fair share of problems. One of these problems has been the “Poor Door”, separate entrances for affordable housing recipients in market rate building in NYC, which began to cause widespread outrage among residents and city leaders. This problem stems from indirect policies that allow developers to have multiple entrances on developments that feature a variety of housing options-like condos and rentals in the same building. What has been more difficult than managing the bad publicity, is finding a clear cut solution to the problem. Market-rate buildings in high priced cities typically offer concierge service, entertainment rooms, and breathe taking views, amenities that are not necessarily requested by affordable residents or even expected. So, how do meet your affordable housing goal of creating 80,000 new units, a large amount that will need to be developed alongside market-rate development, while ensuring market-rate residents get the amenities they pay for without offending affordable residents. This is the question that has many stumped.

There are solutions, one being offsite development. This would require developers to still develop the same amount of affordable units, and likely more than they would have developed in their market-rate buildings, but at another location. This would remove the economic totem pole that is mixed-income development, and in condo developments avoid some of the economic issues that have resulted from escalating common fees and a minority of affordable owners at risk of getting priced out.

Aside from policies, cities like New York and even Washington, DC use a variety of tax breaks and subsidies to encourage more affordable development, often times providing tax relief or allowing the developer to build more square feet then typically allowed. Many developers prefer to develop the affordable units offsite, because it allows them to maximize profits at the most desirable locations. Gary Barnett, the founder and president of Extell development in NYC says, that affordable developments incorporated in market rate buildings means “giving away” the most valuable units. “We wouldn’t be able to do affordable,” he said. “It wouldn’t make any financial sense.”

While there is some backlash to this approach, most affordable housing supporters agree that the development of affordable units is much more important than where they are located as long as the alternate location is reasonable, and hopefully close by. “It’s so important to build as much affordable housing as possible, and you always have to compromise,” said Carol Lamberg, co-chairwoman of the New York Housing Conference, an affordable housing coalition. “I just think the need is so great, you don’t need a fancy lobby.” Currently, the New York city council is working on past policies that have allowed the “Poor Door” to exist. “It’s such a visual separation,” Assemblywoman Rosenthal said. “It gets at people when they see two separate doors. It’s no longer theoretical. It looks and smells like discrimination.” While New York works to add its 80,000 units of affordability through private developments so the city can remain home to individuals from all walks of life, the District of Columbia already has policies in place requiring the development of affordable housing in all new developments. The city can also use government owned land for increased affordable development. We continually need to find ways to creatively maximize our production and provide quality affordable housing in as many neighborhoods as possible.

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No Refuge For The Homeless

 

Homelessness has steadily risen throughout the United States. While many of the District’s homeless population have found refuge on the streets, even this is becoming increasingly difficult. In many places being homeless is now a crime, possibly being arraigned or imprisoned for simple standing, sitting, or sleeping in the wrong areas.

While there are many laws specific to homelessness, many laws affecting the homeless population are often hidden or blended in with other laws. Park or public area curfews are often used to regulate the homeless population. In high-priced cities like the District of Columbia where affordable housing options are in high demand, there simply aren’t enough places for the homeless to go.

Recently, in March of 2014 a homeless man in New York died due to the criminalization of the homeless. A former war veteran, he was imprisoned for trespassing because he was unable to find shelter. He was sent to Rikers Island because he was unable to post the $2,500 bail set for him; he was place in a hot cell and ignored for days “basically baking him to death”.

Since 2011 there has been a great increase in the laws affecting the homeless, even prohibiting individuals from feeding the homeless. As homelessness continues to steadily rise in the District we must begin implementing creative solutions to solve this crisis. Would you be able to survive if there was no place to go and you could be jailed simply for asking for help? There are many better solutions than these and we should start looking at them.

 

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Surburban Flight

It’s no secret America is economically segregated. The current tradegy in Ferguson, Mo has shed a light on a greater problem in our country, the economic stratification of our nation. This issue is much deeper than the tragedy that is the death of 18 year old Mike Brown. It has shed light on a long list of systemic issues and policy failure that have contributed to what Aaron Wiener of the Washington City Paper calls, The Suburban Poverty Shift. Historically, many policies were put in place to stagnate the wealth accumulation of people of color. One of those primary policy decisions being redlining practices restricting African American from building wealth during key wealth building periods in American history. Wiener references in his article a Brookings Institute study focused on the shift in wealth in the Ferguson area. The unemployment rate in the St. Louis suburb increased from less than 5 percent in 2000 to more than 13 percent in 2010-2012. For residents who do have a job, real earnings declined by a third. The poverty rate doubled. On the surface these changes are a result of urban revitalization, the return of more affluent white individuals back to cities. But if a closer look is taken, the discriminatory policies that forced people of color to remain in cities as renters, while their white counterparts were able to build wealth and assets in the suburbs are the direct cause of some of the disparities we see today. In the District of Columbia many of the same economic disparities facing Ferguson, Mo are present here, but a booming economy provides the city the resources to make a difference by providing affordable housing options to help the District’s lower-to-moderate income residents. Supporting the production of affordable units as well as the support and increase funding for affordable housing programs such as HPAP (Housing Production Assistance Program) and LRSP (Local Rent Supplement Program) is the first step in addressing the District’s economic disparities.

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Housing At The Hebrew Home

 

There are two new DC developments recently in the public eye that could provide a boost to the city’s affordable housing stock. On Tuesday, August 12th Councilmember Muriel Bowser and District residents from Columbia Heights and the Petworth areas came together to discuss the future of 1125 Spring Road NW, the old Hebrew Home. The old Hebrew home and its adjacent building will become new forms of housing of around 200 units, and the conversations being had are to determine what kind. Currently, the community is divided. Many residents would like to see the land used to produce more needed affordable housing, with different ideas of what kind of affordable housing and for whom, while other residents support more market-rate development.

The following night in the Park View neighborhood, developers presented plans for development at the nearby Alsco textile factory located on Lamont Street NW. Architectural Firm Eric Colbert and Associates proposed a plan to transform the site into 225 residences. Regarding the Alsco project, Colbert say “We definitely are going to provide some affordable units”, which most likely will be at least the 8% affordable unit set-aside required by DC’s Inclusionary Zoning (IZ) laws.

The difference between these projects is that the Hebrew Home property is District owned, while the Alsco space is privately owned. The Hebrew Home project presents a much larger opportunity to provide needed affordable housing for District residents at all income levels. Colbert says the development team will meet the IZ requirements and perhaps exceed them, providing some units for people making less than 60% of the area median income and some for people making less than 80%. However, a large portion of the needed affordable housing is for District residents making 50% of the area median income or less.

As emerging areas like Petworth continue to get more expensive and longtime residents are pushed out, the District needs to be as savvy as possible with the public land in those areas – providing as much quality, affordable housing opportunities as possible.

 

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Homeless Hangover

In a recent recently released by the DC Fiscal Policy Institute the District of Columbia has not made the necessary steps needed to adequately prepare for this year cold season for the city’s homeless population. Follow last winter’s homeless crisis mayor Vincent Gray worked to implement a plan called 500 families in 100 hundred days. The group tasked with moving forward on this plan has done a great job locating suitable apartments, finding 450 of the 500 they were looking for. The issue is families are not being moved into these units at a fast enough rate. It program planned to move 100 families per month, when in actuality only about 55-60 families have been moved out of shelters per month. This lack of coordination and disparity between the proposed program and actual action will cause a short fall that will contribute significantly to the troubles coming this winter.

According to the report, since 2010, the number of families with children in emergency shelter during the annual count has grown from 326 to 907. If the issues of last year, converge with this coming winter’s challenges, with being addressed adequately the District will have a true homeless crisis is on its hands. DC general, the city’s largest homeless shelter is already facing its fair share of problems, but these numbers solidify that it will be a full capacity this winter. The District department of human services will also have less funds to work with FY15, creating a perfect storm scenario. DHS will spend over $9 million on motels this year using federal carryover dollars, but those funds are not likely to be available in FY 2015. Once those carryover funds are used, the DHS budget for FY 2015 contains no funding for motels and only funding for 150 families at DC General throughout the winter. Without solid planning these issues will only continue to snowball.

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Credit Unions To The Rescue

For many Americans who face financial hardships, banking is simply out of the question due to poor customer service and outrageous fees. In its place, credit unions have been filling the void, offering a more personal banking experience and fewer fees. These practices have significantly contributed to the rise in credit union membership. According to Mike Schneck, chief economist for the Credit Union National Association, credit union membership has risen by 2.9%, adding 2.85 million new members. It was the largest increase in more than 25 years. Research has shown that this growth isn’t due to individuals leaving the banks, but the large population of individuals who simple can’t participate in basic commercial banking. Many individuals are excluded from traditional banking because they don’t meet the banks’ criteria, don’t have enough money, or may not make enough transactions in a month. These fees and requirements exclude many low-to-moderate income individuals who don’t have the money to spare, or meet the requirements to hold these accounts. Citi Bank, for example, charges their checking account holders $10 a month unless they maintain $1500 in their account or receive at least one direct deposit per month - for many people these simply aren’t options.

About 72% of nation’s 50 largest credit unions currently offer free checking to their customers, according to Bankrate’s 2014 Credit Union Checking survey. As for banks, that number dropped from 76% in 2009 to 38% in 2013. This news is also very enlightening because of the recent actions by large financial institutions to attempt to clean up their images. Bank of America and JP Morgan Chase are just two of the big banks that have developed products and educational tools specifically designed for lower income individuals.

While high fees and requirements are a large issue, they represent a much larger problem – a lack of equitable banking. A responsible banking ordinance would begin changing that by leveraging city funds for community investments by the District’s financial institutions. This ordinance would provide an incentive for community development from large institutions - a simple solution to a very critical issue.

 

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Free Market Frenzy

All across the District of Columbia, affordable rental units, subsidized by government programs or tax credits, will expire from their contracts requiring them to remain affordable.

This issue recently caught public attention when the Museum Square Apartment complex was suddenly set for demolition, giving its residents an ultimatum, pay $250 million for the building or move. This decision has recently been reversed, due to public disapproval and an attempt at emergency legislation from Councilmember David Catania.

There have been a host of ways the District government has gone about subsidizing the development of affordable housing, but one of the most popular has been the Low Income Housing Tax Credit program. According to the U.S. Department of Housing and Urban Development, one-third of all rental apartments constructed between 1987 and 2006 took advantage of these tax credits. Apartments subsidized through this program must keep their rents under a specified level for 15 years.

Although the Museum Square issue seems to be resolved, it has shed light on the much larger issue of expiring contracts all over the city. This may not be a big issue for all LITHC subsidized building owners, but for those in emerging areas market rate prices are just too enticing to pass up. Over next five years, 45 properties will reach the end of their mandated 15 years of affordability. These include the 224-unit Rockburne Estates in Buena Vista (expiring next year), the 406-unit Columbia Heights Village along 14th Street NW (expiring 2017), and the 422-low-income-unit Capitol Park Plaza in Southwest (expiring 2018).

The District has tools like TOPA (Tenant Opportunity to Purchase Act) to help tenants purchase their building if the owner decides to sell. However, other tools are needed to help tenants in LITHC buildings be able to afford to stay in their buildings or elsewhere if the owner decides to not renew the LITHC status for another 15 years. As the District changes, we need to create more creative and nimble policies that ensure hard-working District residents are not financially squeezed out of their homes, communities, and lives.

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Debt- The New American Past TIme

According to new studies produced by the Urban Institute, Americans are in debt – a lot of it. The average adult American with a credit file has an average of $50,000 in debt, and more than one third of those Americans, about 77 million, have had at least some of those debts in collection last year. The report is based on data from TransUnion, one of the three major credit reporting agencies. For a debt to be passed on to a collection agency, it must be more than 180 days past due. This report also revealed that geography played a major role in identifying where the larger indebted individuals live. The national average for debts in collection was $5,178.

When looking at the study, metro areas with higher density have significantly higher debt levels. This is understandable because the cost of living (housing and necessities) tend to be more expensive, also these areas typically have a higher concentration of college graduates; meaning more mortgage and student loan debt. However, these forms of debt are typically considered “good” forms of debt, because homeownership is an asset and studies have shown that higher education usually leads to increased earning potential over a lifetime. When mortgage based debt was removed, the maps painted a very different picture: the majority of heavily indebted, in collection debt was in the southern region of the country. This suggests these areas do not have access to the same amount of resources and opportunities as the rest of the country, requiring individuals to take on more consumer debt.

Twelve states have debt delinquency rates above 40%, and eleven of those states are in the south. Large amounts of debt and debt delinquency are extremely difficult for individuals to manage, usually leading to a drop in a person’s credit score, lack of access to credit, and can even restrict employment opportunities.

Counseling and training continues to one of the most effective measures for helping individuals not only understand, but manage and tackle their debt. Manna’s Homebuyer Club, a program that provides various forms of credit counseling and homebuyer education, is a great example of a program that meets people where they are, and empowering them along the road of success.

 

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Fairness For Fastfood

This past weekend, over 1,200 fast food workers gathered together to coordinate their efforts for increased pressure on raising the minimum wage. The conference, which was held in Chicago, was attended by low wage workers that have worked for companies, some over a decade, but have seen very little to no increase in their wages. One of these workers, Cherri Delisline, a single mother who earns $7.35 an hour after 10 years as a McDonald’s cashier in North Charleston, S.C. said “I get paid so little money that it’s hard to make ends meet, and I’ve had to move back in with my mother.”

The actions by these fearless workers have paid great dividends so far.  In their most recent strike in mid-May, workers walked out at restaurants in 150 cities nationwide, with solidarity protests held in 30 countries. They cite these efforts as key factors in the passage of a bill in Seattle that would raise the wage to $15 an hour, as well as similar bills that will be introduced in Chicago and San Francisco.  These movements have not come without their fair share of opposition – business groups all over the country oppose this. However, these are the same companies, like McDonalds, whose CEOs makes double in one day what the average employee does annually. In order for families to be able to build wealth and have access to opportunities like higher education and generational wealth building, they must share in the gains produced by their productivity. If everyone works hard for the profits, but only a select few at the top reap the rewards, the cycle cannot be sustained, nor is it equitable. Nothing less than a fair and living wage is acceptable for those who dedicate themselves to their work.

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Banking for the Unbanked

Some banks are trying to clean up their public image, and it seems very low-income individuals are the targeted beneficiaries. Typically forgotten and underserved, large financial institutions have recently begun creating financial services and products geared towards helping individuals with troubled finances that were being squashed by predatory bank overdraft fees. These programs and products are not financially beneficial for these institutions, but for banks who played significant roles in creating the Great Recession, an increase in public approval may be just as valuable.

Mike Mayo, a banking analyst at the brokerage firm CLSA states “This is good for the customers and good for the banks’ images…Banking still ranks among the worst industries in the public’s opinion.” Banks have even gone a step further; some of the larger financial institutions such as Bank of America, JP Morgan Chase, and American Express have physically shadowed low-income individuals in order to develop products and educational tools that will actually work for them and be more beneficial than using a pay day lender.

Some individuals are skeptical of these actions by the banks, the low-income individuals being targeted now are the same individuals who were targeted for subprime lending. This could also be a part of the banks’ long term strategy: bringing lower income individuals into the fold now, while hoping to be able to offer lines of credit and other profitable banking services later. Regardless of intention these financial institutions have been receiving praise from regulators, and we should support these changes and push them to do more.

These actions from the banks stress the importance of Responsible Banking Ordinances. Having a local legislative measure to encourage and ensure community reinvestment is key to the development of all eight wards of the District. Bruce Murphy, KeyBank head of corporate responsibility says this about the current surge in responsible activities by financial institutions: “Being the right thing to do has a short shelf life.” We should not let responsible banking be a fad for banks, but an ongoing focus and goal. A Responsible Banking Ordinance would help ensure that.

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