Budgeting for Democracy
How one community is campaigning for greater resident control of public resources.
-
-
Let The People Decide
Transformative Community Development Through Participatory Budgeting in Canada
-
Following the Money Trail
Chicago's community organizations are learning to actively engage in the local budgeting process to fund neighborhood improvements.
-
Planning Beyond the Project
Neighborhood planning allows CDCs to move beyond housing development and become community catalysts.
-
Building Trust
The challenge of 9/11 brought Chinatown's organizations, long riven by deep-seated differences, together to plan for recovery.
-
Managing the Message
Telling Stories that Support Affordable Housing
-
The Politics of Poverty
Can John Edwards make fighting poverty a winning platform?
-
Say NO to Wal-Bank
"Wal-Mart":http://www.walmart.com/, the largest retailer in the world, has become the retail corporate poster child for unscrupulous behavior. And now they would like to be a poster child for the banking industry “ or at least for the industrial banks. Earlier this year, Wal-Mart took another stab at entering the world of banking by applying to the "FDIC":http://www.fdic.gov/ to become an industrial loan company (ILC). Simply to process credit card/debit transactions and electronic checks, they say. However, this is the fourth time Wal-Mart has tried to get its foot into the door of commercial finance. It tried to buy an Oklahoma-based thrift in 1998, tried to partner with a Toronto-based bank in 2001 and tried to buy a California ILC in 2002. It was blocked in each case, by Congress, the federal "Office of Thrift Supervision":http://www.ots.treas.gov/ and the California legislature, respectively. Applying to become an ILC is just Wal-Mart's latest strategy. Unlike other banks, ILCs fly under the radar of federal regulating agencies and are exempt from rigorous regulatory oversight procedures, including safety and soundness examinations that ensure taxpayer deposits are not endangered. The federal Community Reinvestment Act (CRA) states that banks have "continuing and affirmative obligations to help meet the credit needs of the local communities in which they are chartered." The act also established a regulatory regime for monitoring the level of lending, investments and services in low- and moderate-income neighborhoods that have been traditionally underserved by lending institutions. For special purpose banks, such as industrial loan companies, this might include affordable housing loans, low-income housing tax credits or investments in organizations that finance small businesses. However, to avoid these solemn legal responsibilities to communities, Wal-Mart originally requested to be exempt, or rather opt out, of its CRA obligations. Under pressure from advocacy groups, Wal-Mart has since decided to abide by CRA regulations. It is doing so only in response to widespread media coverage of fair lending activists' protests against its exemption request. Its grudging acceptance of CRA suggests that Wal-Mart will try to engage in only minimum levels of compliance and reinvestment. It also speaks to the lack of understanding that community banks, intermediate-size banks and even big banks have about community reinvestment. Rather than accepting its obligations to meet the credit needs of all the communities it reaches, Wal-Mart initially promised to "serve the needs of the unbanked and underbanked residents of the Salt Lake City Metropolitan Statistical Area by participating in financial education programs." "It's ludicrous for the world's largest retailer, applying to get a banking charter, to try to limit its community reinvestment duties to a single county in Utah," says Matthew Lee, executive director of "Inner City Press/Fair Finance Watch":http://www.innercitypress.org/. "To some degree Wal-Mart's bogus CRA plan is part of a larger story about the loopholes in Community Reinvestment Act enforcement, including kid gloves treatment of industrial loan companies. [But] Wal-Mart's many claims about its application and potential benefits [in] its late-filed March 31, 2006 CRA Plan are laughable. Wal-Mart's application should be denied." If "Citigroup":http://www.citigroup.com/ or "Bank of America":http://www.bankofamerica.com/ attempted to fulfill their community obligations solely through financial education programs, imagine the response of federal regulators and the American public. It would never be tolerated. Regardless of the impact of the programs, financial education would never be able to replace the access to credit and capital which CRA obligates banks to provide. A broad array of full banking services and products should be made available to everyone, not just the well heeled in communities, but to those who are working up the economic ladder as well. The "National Community Reinvestment Coalition":http://www.ncrc.org/ believes that an ILC of Wal-Mart's size would pose significant threats to low- and moderate-income communities, small businesses, community banks, American taxpayers and the U.S. banking system. There's no evidence that a company with Wal-Mart's history would promote community reinvestment or economic development through its CRA outreach. Moreover, the bank would not base its lending decisions on sound underwriting criteria. Instead, it would favor Wal-Mart's retail side and cut off credit for its competitors. The bank would also be tempted to finance speculative and risky ventures by its retail side. With a bank the size of Wal-Mart, the end result would be a significant reduction in credit for independent small businesses. Finally, it is our belief that Wal-Mart has little intention to have simply a limited bank charter. Rather, since it has tried on three other occasions, the intent is to become a full-fledged bank. Given their business model, which drives competitors out of the market, we think this will be bad news for traditionally underserved people.
-
The Second Storm
"The New Homeless: The Affordable Housing Crisis on the Gulf Coast" A short video on the evictions crisis Nine months after Hurricane Katrina ravaged the Gulf Coast, low-income families face a harsh new reality “ the threat of mass evictions and a shortage of affordable rental housing. According to a recent survey, the storm destroyed or rendered uninhabitable over half the subsidized housing in coastal Mississippi, some 2,600 units. Fifty-two percent of tenants who lost their apartments were living below the median household income before the storm. Now, poor tenants face skyrocketing rents and illegal evictions. As a public interest lawyer working on the Gulf Coast, I have witnessed hundreds of people forced out of their homes for nonpayment during the months following the disaster and hundreds more illegally evicted so their landlords could raise the rent. Over 450 families in southern Mississippi that received "FEMA":http://www.fema.gov/ trailers as temporary shelter also received eviction letters. Without adequate shelter, Katrina survivors fear they will become the new homeless. A jarring example of an illegal eviction occurred last October at Edgewood Manor, a federally subsidized apartment complex in Gulfport. After Katrina, 52 families living at Edgewood Manor were completely abandoned by the property manager. The management company informed the "Department of Housing and Urban Development":http://www.hud.gov/ that the building had been destroyed by the storm. Meanwhile, residents were left behind without roofs, running water, trash pickup, and, in some cases, basic plumbing. Christine Brice, a North Gulfport resident, witnessed some of the children of Edgewood Manor starting a fire in a bucket in order to keep warm, while others relied on gas stoves to heat their apartments. On top of these deplorable conditions, tenants lived in fear of a mass eviction. Security guards told residents that the apartment gates would be welded shut, blocking any re-entry into the complex. On the residents' behalf, the "Lawyers' Committee for Civil Rights":http://www.lawyerscomm.org/ and the "Mississippi Center for Justice":http://www.mscenterforjustice.org/ forced the landlord to cease eviction threats and allow tenants to return to Edgewood Manor. Legal advocates continue to work to ensure that the necessary repairs are made and that tenants are not needlessly displaced from their community. Another attempt at mass eviction occurred on New Year's Eve in downtown Gulfport. Seventy-two families were nearly forced to vacate one of the few apartment complexes that survived the storm surge on the coast. The residents of Watersmark, many of whom are low-income and hold Section 8 housing vouchers, received a written notice that they would be evicted on December 31 because the apartments created public health concerns. Yet city officials had recently inspected the complex and concluded that the minimal storm damage posed no threat to residents' health and safety. I met a family of five living in an undamaged unit at Watersmark, desperately looking for a new apartment before Christmas. The next day, I saw an Internet listing for available rental units at Watersmark beginning January 1, a day after all the tenants would be forced to leave. Legal action stopped the evictions, but the majority of the tenants had already moved out. The absolute number of people facing potential homelessness is staggering: Across the Gulf Coast, an estimated 22,000 rental units that had been affordable to extremely low-income people were lost or damaged after the hurricane. Without adequate legal representation and housing alternatives, hurricane survivors trying to rebuild their lives after the storm will continue to face a riptide of barriers.
-
Jane Jacobs’ Radical Legacy
Sometimes a book can change history. Books often influence ideas, but only rarely do they catalyze activism.
previous issues Summer 2006
Departments
Editor's Note
Organize!
Book Review
Access
National Housing Institute
