Aldermen Should Protect Current Language Of Board Bill 227

By Sal Martinez, CBN Board President (representing CBN’s Board of Directors) and Executive Director of North Newstead Association

The Community Builders Network of Metro St. Louis (CBN) recognizes that the City of St. Louis is facing a sizeable opportunity to invest in the economic development of our region through a proposed ballot initiative for a 1/2 cent sales tax increase. The current proposal dedicates funding to the varied aspects of economic development, including neighborhood revitalization, expansion of MetroLink, safety, workforce development, and infrastructure improvements. CBN must emphasize the importance of retaining this comprehensive use of funds for economic development in Board Bill 227 (BB227).

CBN has members carrying out neighborhood revitalization in over 50 neighborhoods throughout north, central, and south St. Louis. These practitioners have commended the neighborhood revitalization aspect of BB227 for employing best practices for improving our communities. This source of funding and approach toward neighborhood revitalization is critically important as federal funding for housing and community development has been cut over the past ten years and state support and distribution of tax credits continues to be uncertain. Between 2003-2014 alone, the city lost 49 percent of its Community Development Block Grant funding and 61 percent of its HOME funds when adjusting for inflation.

The current details of the sales tax proposal include language for a percentage allocation dedicated to neighborhood revitalization that is supported by the many organizations and businesses within CBN. Earmarking expenditures to percentages is crucial to ensure that investment in all the core issues of economic development in the City are maintained for years to come. Furthermore, changes in language that do not specifically identify a percentage allocation of funds could result in CBN not supporting the bill.

Increased investment in community development and neighborhood-based planning allows more dollars to be leveraged by the private sector into helping families and communities thrive. Without the support and leveraging power of protected revenue streams, St. Louis will continue to face tough decisions on how to support economic and community development with shrinking federal and state resources. CBN urges the Board of Aldermen and the Ways and Means Committee to protect the current language of BB227 with regard to the percentage allocation of funds and the ongoing support for neighborhood revitalization in comprehensive economic development.

As a regional association of nonprofit community building organizations, banks, foundations, government agencies, and businesses that support building strong neighborhoods in our region, we at CBN believe that strong neighborhoods help to build a stronger and more competitive regional economy. We appreciate the Board of Aldermen considering ways to increase support for our City’s neighborhoods and community-based economic development.

***

Sal Martinez has established himself as a force in the comprehensive revitalization of the St. Louis region. Martinez, who received his Bachelor of Science degree in Urban Education in 1994 from Harris-Stowe State College, was employed by the college as Neighborhood Services Coordinator from 1996-1998. During his tenure at College, Martinez served as a liaison to many local social service and non-profit agencies. These experiences had a profound effect on Martinez, as he developed a keen interest in assisting in the rebuilding of St. Louis’s many disinvested neighborhoods.

Since then, Martinez has spent years working with St. Louis-area efforts to develop and promote mixed income and affordable housing, innovative economic development, historic revitalization, and safety, security, and health programming for residents. He has served as Executive Director of the Grand Rock Community Economic Development Corporation, the Vashon/Jeff-Vander-Lou Initiative, and Community Renewal and Redevelopment, Inc. In January of 2017, Martinez was appointed as the Executive Director of the North Newstead Association (NNA). The NNA (which recently merged with CRD) is recognized as a community development corporation and has developed over 180 units of affordable housing in addition to promoting a number of human development initiatives for families residing in North St. Louis City.

Martinez has served two terms with the St. Louis Housing Authority Board of Commissioners; during his first, he was elected as the Board’s youngest-ever chairman. He serves on several advisory boards and committees designed to increase minority (MBE), women-owned (WBE), and Section 3 business and workforce participation on both publicly and privately funded construction projects, and is the co-founder of the Minority Contractor Initiative (MCI), which provides training, capacity building and technical assistance to St. Louis-region MBE/WBE/Section 3 construction firms. Martinez is also a long-time member of the Hispanic Chamber of Commerce.

Martinez has received numerous community service awards from regional and national organizations, including the Human Development Corporation; Alpha Kappa Alpha Sorority, Inc.; Alpha Phi Alpha Fraternity, Inc.; Better Family Life; Zeta Phi Beta Sorority, Inc.; Metro Sentinel Journal; Senior and Disabled Services Committee; St. Louis Argus Newspaper; Employment Connection; St. Louis Housing Authority; Community Asset Management Company; Dr. Martin Luther King, Jr. Holiday Committee; and the East-West Gateway Coordinating Council. He also has received the Harris-Stowe State University Distinguished Alumni Award. Martinez serves on the boards of several civic organizations, including the Community Builders Network, Central Patrol Business/Police Association, Civil Rights Enforcement Agency, North Grand Neighborhood Services, Inc., the City of St. Louis Community Jobs Board, and the City of St. Louis MBE/WBE Advisory Board.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

Measuring the Benefits of the City’s Tax Incentives

By Otis Williams, Executive Director of the St. Louis Development Corporation (SLDC)

This column was originally published in the St. Louis Post-Dispatch.

The City of St. Louis, under Mayor Francis Slay’s direction, commissioned an independent study of all incentives offered throughout the city as a checkup to our progress and to monitor the results of incentivized projects.

It was done in an effort to reinforce our chief goal as the city’s economic development agency, which is to support and cultivate sustainable economic and financial growth—both of which need to be equitable and sufficient to provide enough jobs and opportunities for our residents, while also supporting the fiscal health of our government bodies.

The incentives study was conducted to show us what we’re doing well and where we can improve. Together with the Board of Aldermen, we are focusing on those improvements and dedicated to implementing the study’s recommendations, which include: a more quantitative decision-making process for awarding incentives; a more solid connection between incentive use and a citywide development plan; and better data collection and tracking afterward to help better inform future decision making.

To that end, we are moving forward with three interrelated goals. First, we will refine and build upon the quantitative decision-making process, which will help ensure that we are investing in projects that strengthen the city and wouldn’t happen otherwise.

Second, we are committed to using incentives to advance equity. Although incentive allocation ultimately follows the market (we can’t incentivize projects that don’t exist), we are raising the bar for projects in stronger, more stable neighborhoods, while making it easier to get more help out to distressed parts of the city.

Third, St. Louis Development Corp. will continue to recommend the appropriate incentive package to the Board of Aldermen to depoliticize the incentive process, which is designed for—and has resulted in—strengthened neighborhoods and the attraction and retention of city residents, who shop and eat in the city and pay sales and earnings taxes.

We already have developed and implemented a sophisticated system that measures the direct financial costs and benefits to the city, schools and other taxing bodies. However, we are measuring more than just the financial aspects of projects. We also are assessing projects by their contribution to quality, walkable urban design and opportunities provided to our minority and lower-income residents.

Beginning in early 2017, we will implement the first part of our online database and incentive tracking system. And, by the end of this year we will commence a community-driven, citywide economic development plan, which will take about a year to complete and will then drive future use of development resources, including incentives.

Similar to the report, I also want to clarify some misunderstandings of how incentives work.

Value-capture incentives like tax increment financing and tax abatement do not reduce the city’s existing revenue. These redevelopment tools freeze property tax revenues at their pre-development levels—which owners must continue to pay—while helping to fill the capital gap needed to successfully invest in our city. These property owners must also pay for permits and hire contractors—all of which generate additional revenue.

The city then captures the subsequent growth in tax revenue when the abatement expires. These subsidized projects would not happen without financial assistance and thus the city would be in identical fiscal positions with or without the incentive, for the duration of the incentive period. In fact, once the abatement expires, the city is in a stronger position by reaping a larger contribution to our tax rolls, because of that incentive.

While growth in the city is both measurable and strong, I caution that we still have work to do to retain and grow our population. Incentives have played a large part in resuscitating neighborhoods and slowing the population slide, especially in neighborhoods that were in poorer condition a decade ago, such as The Grove, Tower Grove South, Fox Park, Shaw, McKinley Heights and now north of Delmar with the North Sarah development project. Old North, Hyde Park and Arlington Grove also are seeing greater growth.

All of these neighborhoods have been supported by tax-abated homes and projects that would not have been completed otherwise. As a result of the stabilization and growth that we have seen, the city has been able to reduce the length of the abatement period necessary to ensure that a project happens. The use of both TIFs and abatements has declined. And now on the heels of a major construction boom and sustained growth among many of the city’s neighborhoods, we are at a juncture where we can become more surgical in our approach to allocate them.

We are encouraged by the renewed interest in the use of public incentives, and we are committed to being good stewards of these vital tools to use them for the betterment of our city.

Otis Williams is the Executive Director of the St. Louis Development Corporation (SLDC). Williams leads the agency’s economic development activities City-wide, aimed at bringing people, jobs, and investment to the City. Prior to joining SLDC, Williams served over 28 years in the U.S. Army and retired at the rank of Colonel. Since coming to St. Louis in 1998, Williams has served as a Senior Project manager, Director of Major Projects, and Deputy Executive Director for the St. Louis Development Corporation. In those positions, Williams had a leadership role in several multimillion-dollar development projects that are revitalizing the City’s downtown and neighborhoods.

Williams previously served three years on the National Board of Directors of the Society of American Military Engineers. He was the 1997 recipient of the National Black Engineer of the Year Award for Government Service; received the Better Family Life in Excellence Community Service Award (2014); was selected by the Community Development Administration (CDA), City of St. Louis as the 2015 Executive Director of the Year; was honored with the Joe Rinke Owner Award by the St. Louis Construction Cooperative at the Eighth Annual Construction Awards Luncheon (August 2015); received the 2016 J.H. Poelker Levee Stone Award from Downtown STL, Inc.; and received the 2016 Governor’s Award for Career Service in Economic Development. He is a registered professional engineer in the District of Columbia, and is a member of the International Council of Shopping Centers, the Urban Land Institute, and other professional and social organizations.

Williams is a native of Covington, Georgia and is married to the former Gwen Smith of St. Louis. They have two adult daughters.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

Wanted: Development Policies for a More Equitable St. Louis

By Andrew Arkills, Data Analyst and Community Leader

In May of 2016, the City of St. Louis released a detailed report on tax incentives. Since then, we have seen few proposals for more equitable policies. For all the talk of applying racial equity lenses to systems, somehow, St. Louis’ development policy continues to escape serious examination.

Let’s not sugarcoat things:

Over the past 15 years, the City’s development community has been awarded billions of dollars in city, state and federal tax subsidies and incentives. The result? More racial segregation and an accelerating trend toward neighborhood-level income segregation. Recent analysis shows that 72 percent of these subsidies went to developments in the Central Corridor, where we are seeing another incentive-fueled development boom. St. Louis Development Corporation (SLDC) is doling out obscene amounts of tax abatement for posh, non-university-owned dormitories for children of wealthy families. Meanwhile, thousands of families with kids who are working multiple jobs to get through community college, UMSL or a trade school are subsidizing them.

Just north of Delmar, there is now an unbroken line of high-poverty census tracts stretching from the river to Wellston. This is new. Concurrently, many Central Corridor neighborhoods are becoming wealthier and whiter. These things are not unrelated. As long as our city continues down an outdated path of “trickle down”-style development policies, these outcomes will continue to be entirely predictable. As Bob Lewis (President of Development Strategies) said in 2014: “It’s other people’s money. You might as well ask for it.”

Why should this matter for those in the community development sector?

Why would many development companies or lending institutions look to much of north or south St. Louis for non-Low Income Housing Tax Credit (LIHTC)-fueled opportunities when they know they can get massive subsidies to build luxury high-margin apartments, condos and retail in higher-income neighborhoods? Our city’s development policy encourages exclusionary developments. For smaller rehabbers that understand the system, “spot blight”-enabled abatements similarly encourage targeted rehabbing in neighborhoods that already have healthy markets, which is the opposite of the policy’s stated intent.

What is TeamTIF?

TeamTIF is a group of residents that have come together to counterbalance the status quo concepts driving our city’s development policy and to help revitalize a movement to enact the community development recommendations of the Ferguson Commission. TeamTIF believes we need real change. We also believe that equitable development is in the city’s long-term economic best interest.

At a basic level, TeamTIF believes that the City can and should be asking for more when negotiating with developers. Projects are offered TIF, abatement, and site-specific, “developer-driven” special taxation districts that inflate developers’ bottom lines. As a result, developers demand continually higher development fees (a.k.a. profits). Meanwhile, our city’s debt rating is being downgraded, and ratings agencies cite these sweetheart deals as a reason. This raises our city’s lending costs, which are largely passed on to homeowners and renters in the city’s northern and southern wings. There seems to be little concern for the social costs of our current development policies. TeamTIF believes that SLDC has abdicated its fiduciary responsibility to the vast majority of our citizenry.

The City seems unwilling to learn that if our goal is to drive equitable development, building lots of higher-end housing in the Central Corridor hasn’t been a winning strategy. These no-strings-attached deals have increased neighborhood-level economic and racial segregation patterns, and there is no rational reason to believe that will change.

TeamTIF believes we deserve both better negotiators and better strategies. Central to this will be incentive-linked Inclusionary Zoning and stronger safeguards against unnecessary tax abatements in areas with higher property values and/or lower poverty rates.

How Would Incentive-Linked Inclusionary Zoning Work?

If a sizable multifamily development is being built, we need to tie Inclusionary Zoning requirements to incentives. You can build your 250-unit building with aid from the City, but in return, you must set aside units for various levels of affordability. If we are to effectively combat growing economic segregation, this is the only option left to the City. If current developments had Inclusionary Zoning requirements, we could be creating affordable housing units in neighborhoods where we want to integrate lower- and moderate-income families.

A growing number of cities are instituting incentive-linked Inclusionary Zoning requirements, and not just coastal real estate hotspots. Fellow “Rust Belt” city Pittsburgh appears close to adopting incentive-linked Inclusionary Zoning. Even as far south as New Orleans, they are considering these ordinances. We should join them.

By instituting Inclusionary Zoning and a stricter approval process for the “spot blighting” system, we will begin to de-incentivize inequitable development practices. As businesspeople, developers look for the easiest money available, which is currently tax-subsidized development projects that are marketed to higher-income families. If we are to see more broadly shared prosperity, we must both pass an Inclusionary Zoning ordinance and remove incentivizing systems that grant developers abatements in the neighborhoods where they would already be turning a decent profit anyway.

In the wake of #Ferguson, many in our metropolitan area have recognized that building a more equitable St. Louis remains central among the challenges facing our region. We should not let this historical window pass us by. If we do not adopt reforms during the current construction boom, we will have missed a great opportunity. Who knows? Maybe we’ll even save the City’s credit rating in the process.

Andrew Arkills is a data analyst and community leader, with a professional focus in supply chain and logistics. His community work is focused on neighborhood leadership and advocacy, where he pushes for more racially equitable, transparent, and responsible government. He has a BA in Psychology from Purdue University and an MBA from Saint Louis University. Andrew works for a large, local non-profit healthcare organization in St. Louis. He is the current President of the Tower Grove South Neighborhood Association, and has also served as Treasurer of that organization.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

A Holistic, Community-Based Approach to Health: Addressing Toxic Stress and Trauma

By Heidi B. Miller, M.D

Dr. Heidi Miller is a primary care physician and policy advocate who has focused her career on assuring high quality, trauma-informed, equitable access to healthcare for our most vulnerable patients. She trained at Yale University and Harvard Medical School and completed her residency in Internal Medicine at Harvard’s Brigham and Women’s Hospital. She serves as a primary care doctor at Family Care Health Centers, a Federally Qualified Health Center in St. Louis. Dr. Miller is also the Medical Director for the Gateway to Better Health Program, which serves 20,000 uninsured patients via the St. Louis Regional Health Commission, an organization that has also spearheaded the Alive and Well STL initiative to reduce the community-wide impact of toxic stress and trauma.

Dr. Miller consults for the St. Louis Integrated Health Network and the Siteman Cancer Center’s Breast Cancer Partnership. She was appointed by the Missouri Governor to the Oversight Committee for Medicaid, served on the Missouri Medical Home Collaborative Steering Committee that oversaw the state-wide implementation of the Patient-Centered Medical Home model, and has been invited repeatedly to testify to the Missouri House and Senate Committees on health policies. Dr. Miller was recognized by the St. Louis Business Journal as one of its “40 Under 40” honorees.

In addressing health issues, too often we focus on individual behaviors, such as eating unhealthy food or neglecting to take prescribed medication. This can lead us to blame people for their poor health. But many individuals experience toxic stress and trauma that powerfully shape the choices they make. We need a more holistic, community-based approach to health.

In medicine, universal precautions are used as a means to ensure the safety of both our patients and staff. We wear gloves while drawing blood for all patients, regardless of which patients have contagious conditions. Medicine is not alone in this approach—all industries utilize safety measures: hard hats in construction zones and flashers for truck drivers carrying wide payloads. These universal precautions are a good start at protecting the well-being of those we serve and those providing the service, but we need to consider these as just the beginning if we’re going to address toxic stress and trauma in our community.

Physicians traditionally learn to take the human body and break it down into organ systems, tissues, and cells. However, when we only look at a single piece, we lose sight of the larger puzzle—the whole. For example, the customary approach for a patient with diabetes is to test for elevated blood sugar levels and write a prescription for insulin to correct the imbalance. When we merely focus on balancing blood sugar levels, however, we can overlook a much larger medical concern, such as debilitating stress. To support the overall health and well-being of patients, the entirety of a person’s body and experiences must be considered, not just a single symptom or laboratory test.

After enduring a detailed history and physical examination, some patients may seem inattentive when their clinician explains their diagnosis and provides guidance on how to take their medications, what foods to avoid, and what lifestyle changes to make. In these instances, false assumptions could be made about patients simply not caring about their own health. Through a lens of toxic stress and trauma, however, we can appreciate that much more is happening in this moment. Possibly this patient is concerned about finding the means to pay for their medications, worried that with everything else going on in their lives that there is no time to take care of themselves, or scared of what the future may hold.

Too often we see a behavior—the customer that’s yelling at the service representative or the cousin who always drinks—and we assign judgement based on that behavior. When simply focusing on the behavior, one may easily assume that a person is bad or deviant. If we reduce a person to the sum of his or her behaviors, we fail to see the person as a whole and fail to acknowledge the toxic stress or trauma the individual has experienced.

To best serve patients and support our fellow community members, we have to stop thinking, “What’s wrong with you?” and instead ask “What happened to you?” By changing the question, we acknowledge that the behavior of an individual, much like the symptom in a patient, is part of a larger story. If we want to effectively make change in our community, we need to change the question in each and every interaction we have.

Alive and Well STL, an initiative of the St. Louis Regional Health Commission, is working to build this dialogue. Challenge yourself: next time you think, “What’s wrong with you?”, consider instead “What happened to you?” Notice if this changes how you feel about the situation. Notice if your understanding of underlying toxic stress or trauma affects how you respond.

If you want to learn more about how you can get involved in making St. Louis a more supportive place to live, please visit Alive and Well’s website: www.aliveandwellstl.com.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

Pooled Purchasing: Leveraging Economies Of Scale For Efficiency And Impact

By Constance Siu

Constance Siu is Master of Social Work candidate at the Brown School of Social Work at Washington University in St. Louis concentrating in Social and Economic Development (Domestic). Prior to attending the Brown School in 2015, she lived in Kansas City and worked at a child development center. Constance graduated from Beloit College in Wisconsin with a B.S. in Biochemistry and a minor in Philosophy. Upon graduation, she plans to pursue a career in community development in St. Louis.

Community building organizations, simply put, are having a difficult time sustaining themselves financially. Not only are many unable to support themselves for an extended period of time on reserves alone, but many are operating on a deficit. With fewer funding streams supporting operational costs as many foundations move to a more issue- or place-based approach, there is a need for organizations to start thinking more strategically and collaboratively about the future in order to survive and thrive.

The need to collaborate at an operational level drove the Community Builders Network to look for ways to support their members in this area, giving way to the inception of the Professional Services Support Program. Modeled after a similar program in Cincinnati, Ohio, the Professional Services Support Program borrows the basic value proposition from companies like Costco where members access items and services in a pooled manner allowing for discounted rates.

Sounds simple, right? Well, that’s because it is! However, for such a simple model, it isn’t as widespread in the nonprofit realm as you might think—especially since a model such as this has immense benefits for its participants.

Even for St. Louis, this idea is not a particularly innovative one. The Chesterfield Cooperative has already been practicing this model through their bulk rock salt purchases. Working with Beyond Housing and the Chesterfield Cooperative, the 24:1 Community was able to join the Cooperative, resulting in a 40 percent decrease in rock salt costs. With that success, the same collaborative approach was taken with trash collection as smaller communities got to piggyback off larger trash contracts, which again cut costs drastically.

By working together and pooling together their collective weight, not only are smaller groups able to leverage their newfound economy of scale for cost reduction, but doing so also allows for increased operational efficiency and effectiveness.

A simple example of this is in office supplies and printing. Often overlooked as a significant operational expense, as a $20 stapler may not seem like a big difference compared to a $15 stapler, most organizations currently either order these items online or make emergency trips to regular retail stores, costing organizations precious time and human capital as people are doing things that are not mission-centered. By participating in a pooled purchasing program, not only can organizations have a personal account manager take care of their office supplies and printing, but it can also save them those $5 increments that will add up over time.

Over the last few weeks, as I’ve worked on establishing this program, I’ve realized that the benefits of the Professional Services Support Program are so much more than the cost savings that nonprofits can gain. Arguably more important is that participation in pooled purchasing will increase professionalism, efficiency, and the ability to attract financial support from nontraditional funding streams, such as banks and private foundations.

One area where nontraditional funding streams can be leveraged to support a pooled purchasing program would be in accounting. Instead of trying to fit budgeting into the busy day-to-day schedule of running an organization and relying on basic budgeting knowledge probably gained from either a budget 101 course at some point or from balancing our own checkbooks, nonprofits can take advantage of professional accounting services. Not only does this add a sense of professionalism and credibility to their finances, but it also introduces another layer of control as another set of eyes are added to the mix. With a more transparent and professionally managed budget, potential funders will be able to see that organizations they are supporting have more fiscal controls and understand where each dollar is going and how effective each dollar is in terms of mission fulfillment. This makes these organizations safer and more trustworthy investments.

All in all, by collaborating and purchasing services and goods in a pooled manner, organizations can increase their transparency to funders and gain a better understanding of their operational costs, allowing for more funds and time to be spent on mission-fulfilling activities.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

All Low- and Moderate-Income Areas Are Not Created Equal

By Mike Eggleston

This article was originally published in the Federal Reserve Bank of St. Louis’s quarterly newsletter, Bridges.

Mike is a Senior Community Development Specialist with the Federal Reserve Bank of St. Louis. In this role, he provides financial institutions, community based organizations and government entities tools to effectively address community development issues affecting economically vulnerable individuals and communities. Mike serves on the Board of Directors at the Incarnate Word Foundation.

There are stark disparities in consumer credit in low- and-moderate-income (LMI) neighborhoods across United States metropolitan areas (MSAs), and their full impact on residents’ access to opportunity is not currently accounted for under the Community Reinvestment Act (CRA). Consider George, who lives in Montgomery, Alabama, and Francine, who lives in Madison, Wisconsin. Both live in an LMI neighborhood, where the median income is 80 percent of the average median income in the metro area or state. Each is looking to buy a car, to reduce their commute time to work and to allow them more child care options for their young children.

Like many in his neighborhood, George has poor credit. As a result, he is not able to secure financing from a financial institution to buy a car. Francine, however, is among the vast majority of people in her neighborhood who have good credit—so she has no trouble securing a car loan from a bank.

This story plays out among MSAs across the country in over 200 areas where data is available. Boulder, Colorado is on one end of the spectrum, where 35.9 percent of the population in LMI neighborhoods is credit constrained: that is, they have poor, fair, or no credit history. On the other end in Memphis, Tennessee, nearly eight out of every 10 people in LMI neighborhoods are credit constrained. This disparity has big implications for both neighborhood residents and the regulated financial institutions that serve them, thanks to the obligations these institutions face under the Community Reinvestment Act (CRA).

Before going further, it’s worth noting some additional observations. LMI neighborhoods where residents have better credit tend to have a larger percentage of white occupants. They are usually located in the East, West, and parts of the upper Midwest, and tend to have relatively low poverty rates. LMI neighborhoods where residents with poor credit predominate tend to have a larger share of African-American occupants. They are usually located in the South and tend to have relatively high poverty rates. In fact, among the ten MSAs where people living in LMI neighborhoods have the poorest credit, the average poverty rate is 68 percent higher than the average poverty rate of the ten MSAs where people living in LMI neighborhoods have the best credit. Jackson, Mississippi, Shreveport, Louisiana, and Montgomery, Alabama all fall into this category.

In sum, the credit profiles of people living in LMI neighborhoods across the country vary significantly. Why should that matter? There are at least two groups for whom this matters a great deal.

A good credit profile can be the make-or-break detail that determines someone’s ability to get a mortgage, car loan, or student loan. It can also be a factor in whether someone can rent an apartment, in how much insurance costs, and in securing employment. In short, good credit can signal whether someone’s financial situation is on the right track. This can be especially powerful for someone living in an LMI neighborhood, where opportunities to improve life circumstances can be scarce. That’s why many nonprofit organizations throughout the country—sometimes in partnership with bank representatives—work with people to improve their credit profiles. It’s also why some community-based organizations (like Justine Petersen, headquartered in St. Louis) view credit as an asset.

Depending on their size, regulated financial institutions are required to comply with the CRA by meeting certain thresholds for investments, loans, and service in LMI neighborhoods. Currently, the credit profile of a bank’s assessment area—which may include an entire MSA or just part of it—is not weighed as a factor when determining whether a bank is meeting CRA obligations. But maybe it should be. As the data illustrates, a bank operating in Madison, Wisconsin will have a much easier time finding qualified borrowers in LMI neighborhoods than a bank in Memphis, Tennessee. A bank operating in both metro areas must work twice as hard to find qualified borrowers in Memphis.

This raises important questions about the appropriate role of the CRA in promoting fair and impartial access to credit in underserved communities. Should extra weight be given to loans and investments made in LMI areas where more people are credit constrained? How can the CRA’s service test better encourage credit building in LMI areas where more people are credit constrained? Can other measures, such as the poverty rate, complement area median income to select CRA target populations?

For the first time, consumer credit data for LMI areas in 200-plus MSAs is publicly available via the Consumer Credit Explorer, thanks to Equifax and the Federal Reserve banks of Minneapolis, New York and Philadelphia. Using this data, researchers will soon be able to better understand why LMI neighborhoods in one MSA have drastically different credit profiles from LMI neighborhoods in other MSAs. Until that is sorted out, LMI neighborhood residents like Francine in MSAs such as Madison, Boulder, and San Jose will have a much better shot at accessing credit—and opportunity—than LMI neighborhood residents like George in MSAs such as Montgomery, Memphis and Jackson.

Data: FRBNY Consumer Credit Panel/Equifax Data (12/1/2015), tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

Immigrants Can Help to Revitalize Inner Cities in the 21st Century

By Cyril D. Loum

Cyril D. Loum is the Executive Director of Caring Ministries, Inc. (CMI). He has been actively involved in working with the development of the St. Louis community since the beginning of 2011, after he graduated with a bachelor’s degree in Political Science from the University of Missouri-St. Louis. In 2011, he served as a Federal Intern for the First District of St. Louis while attaining his second bachelor’s in Communication. In 2014, Cyril proceeded to earn a Master of Arts in Legal Studies and became a certified paralegal.

In recent years, many immigrants and refugees have been moving to the United States to be part of the American Dream. The American Dream that “every U.S. citizen should have an equal opportunity to achieve success and prosperity through hard work, determination, and initiative” has changed our communities, especially our inner cities. Our inner cities now have large concentrations of immigrants who contribute to the success of many of the most economically vibrant U.S. cities. In response to this trend, Caring Ministries, Inc. (CMI) was established to reinforce the positive trends of immigrant influxes to revamp inner-city communities.

The process of establishing strong communities with immigrants and Americans starts with building strong relationships with various neighborhood leaders. Immigrants need to have conversations about the safety of neighborhoods and school systems. Other issues that the immigrant population faces are the necessary demands from extended family members living abroad and the fragmented family unit.

To build vibrant immigrant communities, you need a holistic approach that addresses social, spiritual, physical and economic needs. For immigrants, the social aspects include tight-knit neighborhood associations. Immigrants see these neighborhoods as a kind of extended family, which they can depend on for assistance in times of need. This social aspect helps the families relate to their community, while giving them the opportunity to build new relationships. Often coming out of an oral tradition, immigrants understand intuitively the idea that “it takes a village to raise a child.”

One of the ways these bonds are established is through shared faith. Regardless of origin country, immigrants entering the U.S. usually identify themselves as spiritual people. When dealing with the immigrant population, one difference from Americans is that they are open to talking about their faith. As we work on these communities, we have noticed that the sentimental feelings of spirituality within the immigrant population and community developers can build a sense of trust.

Next, when dealing with the physical nature of neighborhoods, we need to build communities where shopping centers and bus lines are in close in proximity to homes. This is important because most immigrants are accustomed to having local community grocery stores, schools, places of worship, parks, and other community amenities close to their homes. Many immigrants moving to the U.S. were already homeowners. The housing culture of immigrants is based on the idea that homeownership enables families to pass on tangible resources to the next generation. Immigrants are not commonly accustomed to apartments. Perhaps this is the cause of minor ghettos in St. Louis. Nevertheless, homeownership is difficult for immigrants in the United States, because they use a different method of homeownership from their country of origin. In the U.S., we use financing through banking institutions, and the approval of financing is based on credit scores. In their country of origin, immigrants often used the sole capital of an individual to either build or purchase their homes. However, when given the opportunity in the U.S., immigrants want to become homeowners.

Economically, immigrants want to live in communities where the job market is strong and homes are inexpensive. These two specifics give immigrants the opportunity to achieve the American Dream by using their willingness to work hard to achieve the necessary things that make them comfortable. Jobs are very important to this population. They are willing to put in the time and effort once their financial needs are met. Immigrants are generally frugal in their financial lifestyle. In fact, this population believes in saving and helping people in need, who then can turn around and assist them some day. Immigrants might be seen as a demographic that is struggling financially, but once acquainted with the financial system, they become some of the most financially secure people in our society. This is why some of the most vibrant inner cities are highly populated by immigrants.

I encourage individuals working in community development to think about immigrants as a valuable resource for building vibrant communities.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

Crystallizing A Multi-Faceted Approach To Community Development

By Sylvester Brown, Jr.

This column was originally published on the author’s blog.

Sylvester Brown, Jr. is a writer, community activist and the executive director of the Sweet Potato Project, a St. Louis-based program dedicated to teaching at-risk youth entrepreneurial skills through agriculture and product development. 

On Friday, September 9th, I was awarded the 2016 MLK Legacy Award for “Outstanding Service in the Community.” About four other individuals were also honored during Beloved Streets of America‘s first annual MLK Legacy Dinner. It’s always nice to be recognized for trying to do something positive, but for me, the true reward was the event itself and the realization that I am a part of a game-changing group with unrecognized potential.

I have to be honest: I’ve been besieged with doubt about the Sweet Potato Project (SPP). Our mission is basic but powerful. For the past five years, we’ve been working with at-risk teens to show them how to become self-sufficient and make money in their own neighborhoods. Students plant produce on vacant lots, and after harvesting they turn produce into products.

Simple, right?

Our bigger mission is to help low-income people gain access to vacant lots, grow food and develop ways to sell through farmer’s markets, direct delivery or by selling food-based products like our sweet potato cookies. If hundreds of poor folk are growing and thousands are buying from local urban farmers, we have a shot at creating a real economic engine in North St. Louis.

Powerful, right?

Well, not so much—at least not for SPP. Our funding has decreased significantly within the past two years. Our students made it through the summer, with the help of a few individuals who hosted fundraisers for us. However, it’s become painfully obvious that we can’t continue operating with a tiny staff and limited funds on a shoestring budget.

So that was the sort of funk I was in when I arrived at the MLK Legacy Dinner. The real reward that evening came in the form of inspiration through the activities of other awardees and some extraordinary ordinary people I know who are also striving to enact social and economic change in the black community.

My reward that night was the crystallization of a major multi-faceted approach to community development. After accepting my award, I asked the audience to dream with me. Imagine a vibrant and refurbished MLK (Beloved Streets of America), I said, where people own homes (Better Family Life); with dozens of black-owned storefronts (the Center for the Acceleration of African-American Business) in an area like the University City Loop where art and culture is part of the neighborhood’s fabric (Portfolio Gallery and Education Center); where economically empowered landowners grow food that supplies the entire region (the Sweet Potato Project).

I was also reminded of the five or so food-related entities already working in the Greater Ville area on or near MLK Boulevard. St. Louis University was recently awarded a USDA grant to help fund these agencies. SPP is a part of that collaborative. Project plans include a food market, industrial kitchen to develop “value-added” food products and more urban farms in the area. If more funds were directed to these entities and organizations recognized at the Beloved Streets event, we’d have a huge swath of MLK in North St. Louis dedicated to empowering low-income youth and adults, job creation, home and land ownership and small business growth—which can all lead to neighborhood safety and sustainability.

There are basically two obstacles that impede this grand vision. First, as Malik Ahmed noted after he and Deborah received their awards, black organizations must collaborate, strategize and go after funding as a collective. The second challenge is the lack of vision among politicians, city planners, nonprofit funders and corporations. St. Louis leaders seem to have one model for community development: “Let’s give these rich guys and powerful entities millions upon millions in state, local and federal tax breaks and public money and, hopefully, their success will trickle down to people in poor communities.”

Politicians have exuberantly signed off on developments such as the $16 million failed attempt to keep the Rams in St. Louis along with the billion dollars to build them a new football stadium. Then there’s Paul McKee’s Northside Regeneration project, which will receive up to $390 million in tax-increment financing. The estimated $2.1 billion Cortex District and the $1.75 billion National Geospatial-Intelligence Agency’s headquarters are all buoyed by tax incentives, deferred taxes and public money.

This is all well and good, I suppose, but if we’re leveraging the city’s tax base for the rich, implementing gentrification in North St. Louis and short-changing public schools dependent on tax dollars, shouldn’t a fraction of the public money go to sacrificing, struggling black organizations that are dedicated to empowering residents, educating young people and building businesses within the most disadvantaged and ignored areas of our city?

When it comes to sharing public money and investing in the black community, we’re up against a decades-old, stubborn, segregationist mindset in St. Louis. Still, I have hope. Can politicians—particularly black and progressive politicians—simply call for a time-out on doling out dollars to the rich and powerful? Can’t they insist on a little quid-pro-quo for their loyalty and demand that elitist city planners include black organizations in the mix? If those of us dedicated to enacting real, people-centered change worked together, perhaps we can help introduce a new template for development that actually empowers people to do-for-self economically.

These things and more are the fruits of an award that emphasized the potential rewards right here, today, within our midst.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

St. Louis Needs More Cross-Community Conversation

By Kevin McKinney

Kevin McKinney is the Executive Director of the St. Louis Association of Community Organizations (SLACO). He has eighteen years of experience in housing and urban development. Prior to joining SLACO, Kevin spent nine years as Mayor and a member of the Board of Aldermen in Jonesborough, Tennessee and three years serving in leadership roles for the Shaw Neighborhood Improvement Association in St. Louis. Since 2003, Kevin has been the owner of Housing 202 Ltd., serving as a consultant for faith-based and non-profit organizations in Missouri and nationwide. He has been involved with the development of eight senior housing facilities and two housing developments for persons with disabilities. Kevin has been named one of the St. Louis Business Journal’s “40 Under 40,” won the Centurion Award for Outstanding Contribution in Human Rights, and completed the FOCUS St. Louis Impact St. Louis Leadership Program. He and his wife Kimberly are residents of the Shaw neighborhood. Kevin is a board member of the South City YMCA and the Friends of Tower Grove Park and serves as the 1st Vice President of the Garden District Commission.

Could the contention and turmoil that surfaced as a result of Ferguson locally and in cities like Cincinnati and Dallas nationally result in opportunities to bridge the racial divide? In order to move forward and build a stronger community, I believe it is imperative that we learn to appreciate each other regardless of zip code.

Many have addressed the problems we have hearing and understanding each other across the St. Louis region’s many boundaries. St. Louis is highly segregated along race lines and fragmented in its sense of community identity. These barriers limit our access to common frameworks that might otherwise help us relate to each other and talk across community borders.

I believe a new program from the St. Louis Association of Community Organizations (SLACO), Neighborhoods United for Change, can help bridge these divides. SLACO has partnered with CREA (the Civil Rights Enforcement Agency of the City of St. Louis) and the City’s Neighborhood Stabilization Team to build a robust platform for discussing racial and social equity. Doug Bram, winner of the “250 Ways to Improve Your Neighborhood” contest (as voted by participants in the 2014 SLACO Regional Neighborhood Conference) originated this idea before it was advanced by then-Executive Director of SLACO, Nancy Thompson. SLACO has a history of inclusiveness—we specialize in providing opportunities for neighborhoods to learn from and network with each other to create a desirable urban environment. SLACO’s 30 member neighborhoods represent over 33 percent of the City’s population.

Neighborhoods United for Change will allow people to interact across invisible community lines. Participants from one SLACO community will tour another St. Louis neighborhood to gain insight about its strengths, successes, and challenges. Residents from one part of the city will have a chance to see how fellow St. Louisans from other neighborhoods live. The program provides a platform for members of our community to meet one another, visit the places they call home, learn about their everyday experiences firsthand, and grow to understand each other more completely. It creates an opportunity for people to connect based on similarities, while reinforcing mutual respect for differences.

The program’s kickoff events, which start this month, will pair two neighborhoods for tours, lunch, and conversation. SLACO member neighborhoods Princeton Heights, Forest Park Southeast, West End, Tower Grove East, Holly Hills, Lewis Place/Visitation Park, Fairground, West Pine/Laclede, Tower Grove Heights, and Shaw will be participating, along with non-SLACO member neighborhoods Bevo Mill, Jeff-Vander-Lou, College Hill, and Baden. Pairs of neighborhoods will plan and execute the events together with support from SLACO, CREA, and the Neighborhood Stabilization Team.

After the kickoff, SLACO, facilitators, and partners will support activities that broaden and build on the relationships developed by the paired neighborhoods. We aim to enrich recurring activities with a new element: the chance to see one’s own area through someone else’s eyes.

We need more programs that encourage this type of meaningful connection and tap into shared growth potential. At the end of the day, no matter where we live, we’re not that different from each other. We all want similar things for our community: the option to live in a welcoming, safe neighborhood; access to good jobs; high-quality schools for our children; and the chance to pursue opportunities and increase the standard of living for our families. Neighborhoods United for Change will encourage participants to form friendships along common lines like these. We can all help build a better St. Louis by cultivating more cross-community conversation.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

The REAL Rental Housing Issue

By Alan Mallach

This column was originally published in the National Housing Institute’s Rooflines blog.

Alan Mallach is a senior fellow at the Center for Community Progress in Washington, D.C. A city planner, advocate and writer, he is nationally known for his work on housing, economic development, and urban revitalization, and has worked with local governments and community organizations across the country to develop creative policies and strategies to rebuild their cities and neighborhoods. A former director of housing and economic development in Trenton, New Jersey, he currently teaches in the graduate city planning program at Pratt Institute in New York City. He has spoken on housing and urban issues in the United States, Europe, Israel, and Japan, and was a visiting scholar at the University of Nevada Las Vegas for the 2010-2011 academic year. His recent books include A Decent Home: Planning, Building and Preserving Affordable Housing and Bringing Buildings Back: From Vacant Properties to Community Assets, which has become a resource for thousands of planners, lawyers, public officials, and community leaders dealing with problem property and revitalization issues. He is a member of the College of Fellows of the American Institute of Certified Planners, and holds a B.A. degree from Yale University.

We know a few things about the majority of very low-income renters: they live in private market housing, not tax credit projects or public housing. They receive no housing subsidies. They are paying far more than they can afford for what is too often substandard housing in distressed neighborhoods.

These statistics are well known, but we don’t think about them as much as we should, and often lose track of the human toll behind them.

Evicted by Harvard scholar Matthew Desmond tells that story. It’s a twofold issue: the most fundamental problem is that the economics of what poor people live on—from public assistance or low-wage jobs—are inadequate to afford what it costs to create or provide minimally decent housing. The 25th percentile rent in the United States—the low-end median rent, where one-fourth of the units rent for less and three-fourths rent for more—is $670 per month, which requires an income of $26,800 to afford. Even the most self-sacrificing landlord can’t pay off a mortgage, pay taxes and maintain a rental unit in decent shape for what a poor family can consistently afford to pay.

The second problem is that our political system has failed to address this issue in a meaningful way. Instead, we have a sort of lottery system in which only a lucky few get housing vouchers. Poor tenants, whose incomes are both low and highly unpredictable from one month to the next, live like refugees in a revolving door of substandard housing, dangerous neighborhoods, rent arrears, doubling up, evictions, and forced moves almost on a yearly basis.

Millions of people are evicted each year, and millions more move involuntarily without waiting for a formal eviction proceeding. Without a stable place to call home, these families live in a constant state of social and economic instability, with their children moving from school to school. This perpetuates the multigenerational poverty that characterizes many inner city neighborhoods and frustrates efforts by CDCs and others to build strong, cohesive neighborhood organizations and stable neighborhoods.

In response, the community development field tends to focus on building tax credit housing. But a recent HUD study has raised tough questions about what tax credit housing means in this context. Although tax credit rents are set at what a tenant at 50 percent of the Area Median Income (AMI) can afford, most tenants have much lower incomes: 45 percent have incomes below 30 percent of AMI, and 19 percent between 30 and 40. Unlike public housing rents, LIHTC rents are not adjusted to family incomes. This means two things: first, many LIHTC tenants make ends meet by using a Section 8 Voucher to make living affordable. Although the HUD data is hard to interpret, at least 36 percent of all LIHTC tenants appear to have a voucher or some other form of rental assistance. An educated guess is that at least one out of every three vouchers in circulation is being used in a tax credit project.

Second, of LIHTC tenants who do not have a voucher, more than 60 percent are paying over 30 percent of their gross income in rent and suffering from precisely the cost burden that affordable housing is supposed to prevent. This probably represents a better option for most than private market housing—the quality of housing is likely to be higher, and in very high-cost areas, tenants’ cost burden may still be less than it would be on the private market. The point, though, is that LIHTC housing is not a solution. What can be done?

This should be the focus of national advocacy efforts. The National Low Income Housing Coalition has done great work, but it is not enough. Rather than advocating for more vouchers, we should look more closely at how to best fill the gap between what poor tenants can afford and what it costs for the private market to provide decent housing—and build a broad coalition around it.

How could we best meet these needs? Over 40 years ago, President Nixon proposed a guaranteed annual income for every American family. Would putting more money into people’s pockets help them find decent housing with fewer market distortions than the Section 8 program? Alternatively, could vouchers become more property- (not project-) based, with a competitive model in which landlords could compete for vouchers based on price and quality? I’m sure there are other models worth examining as well.

In the meantime, this is a critical issue for any organization trying to build stronger neighborhoods. Tenants in private market housing, most of them low- or very low-income, make up half or more of the residents of most lower urban neighborhoods. We must look at how the community development field can better support tenants in private market housing. We have a decent although patchy network of organizations to help homeowners keep their homes, but nothing I’m aware of to help renters keep their homes. Change is long overdue.

Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.