February 1999-------------Volume 9, Issue 1

Table of Contents

Battles on Community Reinvestment Heating Up
Clinton-HUD Budget Announced
New Effort To Increase Low Income Housing Tax Credit
NORWOOD NEWS: Local Day Care Providers Band Together

Battles on Community Reinvestment and Housing Heat Up

For more than 20 years, the Community Reinvestment Act (CRA) has been one of many tools used to preserve and improve the Bronx and other communities around the country. CRA is under attack in Congress right now. Ironically, strong arguments have been made by community organizations over the years that CRA is in fact not tough enough. With the advent of mega-financial institutions, the argument for a stronger CRA should be reinforced. Instead, Senator Gramm and others are successfully putting supporters of CRA on the defensive with wild accusations.

CRA: Why is it still important?
Twenty years ago (in the early days of CRA), we felt like we were dragging funders kicking and screaming into each deal. Now, there are a number of banks looking to make loans; there are unregulated private mortgage companies around with loan money. So, why is CRA still significant and why should anyone even consider expanding it as opposed to limiting it?

Without CRA, the money that is available now will not continue to be available. At some point, the economy will tighten up and our communities will be the first that are cut off from all this current cash.

Even with CRA currently, many of the people controlling approval of loans have less and less of a sense of the community part of CRA. They are very conscious of the investment part of CRA and can whip their Texas Instrument calculators out in a blur to explain why the rent needs to increase a couple more dollars here and a couple more dollars there and then stare at you blankly when reminded that these couple of dollars might be more significant to people making less than the calculator holder

Without a stronger CRA, the banks that have tried to build CRA into their main business will not have the legislative mandate they need to maintain their commitment. It will be a matter of time until a lender’s Board or investors or new merger mates push the CRA business out arguing that it is eroding the profit margin.

Even with CRA currently, it is difficult to get the attention of decision-makers in some of the larger financial institutions to focus on communities’ needs. It is already difficult to track down the subsidiaries and other related entities of some of the larger banks. We recently experienced a situation where a bank was unable to confirm or deny that it held a mortgage on a property because they could not be sure that one of their related companies may have made the mortgage.

Current Situation on CRA
The Financial Modernization Bill that failed last session has been resurrected and that combined with the appointment of a new chair of the Senate Banking Committee, Phil Gramm, guaranteed that there would be a new assault on the Community Reinvestment Act. The Financial Modernization legislation which could legalize mega-mergers across financial sectors and the crossing of banks into other financial trades will offer enemies of CRA the opportunity to attack the legislation.

The Low Income Housing Coalition reports that in a letter to the President, Senator Gramm wrote, "What’s not at issue is the CRA as passed in the l970’s with its intention that banks make capital available to people in the communities where they are located. What is at issue is an unsavory practice in which protesters file official complaints under CRA regulations and pursue them until they are paid by the banks to stop protesting….That’s extortion and it’s wrong." The Center for Community Change anticipates that Gramm will introduce legislation to make it punishable by a year in jail and penalties for banks and organizations that use CRA to coerce banks into giving money in exchange for their organizations’ silence on banking applications. So far as we know, there has been no specific examples provided by the Senator to illustrate this problem. Through UNHP's years of community development work with banks, we’ve never heard of such a situation.

Speak up Now
Gramm’s version of a Financial Modernization bill will be presented shortly and the Low Income Housing Coalition reports that he hopes to have the Senate Banking Committee vote on the bill on March 3rd.

The House Banking and Financial Services Committee has already held hearings on CRA and Financial Modernization and has scheduled a vote on March 4th.
Organizations that utilize and benefit from the Community Reinvestment Act need to contact their Congressional representatives now to protect the Community Reinvestment Act and talk about the need to protect and expand CRA.

For up to the minute information, check the following web sites, www.nlihc.org | www.communitychange.org | www.ncrc.org

Back to Top.

Clinton-HUD Budget Announced

The President’s proposed housing budget calls for an increase of $2.5 billion from last year’s budget. Under the plan, 100,000 rental vouchers would be available. The Center for Community Change reports that among the new certificates 25,000 would be targeted for welfare to work, 42,000 for families with worst case housing needs and 18,000 new vouchers for the homeless.

The Low Income Housing Coalition reports that the House Committee is holding hearings on the housing budget on March 10 and 11.

Back to Top.

New Effort to Increase Low Income Housing Tax Credits

Representative Johnson of Connecticut is re-introducing legislation to increase the cap on the Low Income Housing Tax Credit. Rep. Johnson’s bill calls for increasing the per capita limit on tax credits for the first time since the legislation was enacted. The legislative proposal called for raising the cap from $1.25 per capita to $1.75 per capita and indexing it to inflation in the future. The President has proposed increasing the cap, but has not supported indexing the cap.

In the last session, a majority of both houses co-sponsored the legislation, and yet it failed t. This year however, he called for an increase of barely 1 percent in aid to schools and sought to back away from a 1997 agreement that called for several years of spending increases to make kindergarten and universal pre-kindergarten available in every community. Under the Governor’s plan, New York City’s schools, with 38 percent of the state’s public school students, would get 12 percent of the additional aid.

We anticipate devoting a larger section in the March issue of Notes to the state budget, the status of the welfare windfall and new state housing money proposals.

Back to Top.

Battles on Community Reinvestment and Housing Heat Up
For more than 20 years, the Community Reinvestment Act (CRA) has been one of many tools used to preserve and improve the Bronx and other communities around the country. CRA is under attack in Congress right now. Ironically, strong arguments have been made by community organizations over the years that CRA is in fact not tough enough. With the advent of mega-financial institutions, the argument for a stronger CRA should be reinforced. Instead, Senator Gramm and others are successfully putting supporters of CRA on the defensive with wild accusations. CRA: Why is it still important? Twenty years ago (in the early days of CRA), we felt like we were dragging funders kicking and screaming into each deal. Now, there are a number of banks looking to make loans; there are unregulated private mortgage companies around with loan money. So, why is CRA still significant and why should anyone even consider expanding it as opposed to limiting it? Without CRA, the money that is available now will not continue to be available. At some point, the economy will tighten up and our communities will be the first that are cut off from all this current cash. *Even with CRA currently, many of the people controlling approval of loans have less and less of a sense of the community part of CRA. They are very conscious of the investment part of CRA and can whip their Texas Instrument calculators out in a blur to explain why the rent needs to increase a couple more dollars here and a couple more dollars there and then stare at you blankly when reminded that these couple of dollars might be more significant to people making less than the calculator holder Without a stronger CRA, the banks that have tried to build CRA into their main business will not have the legislative mandate they need to maintain their commitment. It will be a matter of time until a lender’s Board or investors or new merger mates push the CRA business out arguing that it is eroding the profit margin. Even with CRA currently,* it is difficult to get the attention of decision-makers in some of the larger financial institutions to focus on communities’ needs. It is already difficult to track down the subsidiaries and other related entities of some of the larger banks. We recently experienced a situation where a bank was unable to confirm or deny that it held a mortgage on a property because they could not be sure that one of their related companies may have made the mortgage. Current Situation on CRA The Financial Modernization Bill that failed last session has been resurrected and that combined with the appointment of a new chair of the Senate Banking Committee, Phil Gramm, guaranteed that there would be a new assault on the Community Reinvestment Act. The Financial Modernization legislation which could legalize mega-mergers across financial sectors and the crossing of banks into other financial trades will offer enemies of CRA the opportunity to attack the legislation. The Low Income Housing Coalition reports that in a letter to the President, Senator Gramm wrote, "What’s not at issue is the CRA as passed in the l970’s with its intention that banks make capital available to people in the communities where they are located. What is at issue is an unsavory practice in which protesters file official complaints under CRA regulations and pursue them until they are paid by the banks to stop protesting….That’s extortion and it’s wrong." The Center for Community Change anticipates that Gramm will introduce legislation to make it punishable by a year in jail and penalties for banks and organizations that use CRA to coerce banks into giving money in exchange for their organizations’ silence on banking applications. So far as we know, there has been no specific examples provided by the Senator to illustrate this problem. Through UNHP's years of community development work with banks, we’ve never heard of such a situation. Speak up Now Gramm’s version of a Financial Modernization bill will be presented shortly and the Low Income Housing Coalition reports that he hopes to have the Senate Banking Committee vote on the bill on March 3rd. The House Banking and Financial Services Committee has already held hearings on CRA and Financial Modernization and has scheduled a vote on March 4th. Organizations that utilize and benefit from the Community Reinvestment Act need to contact their Congressional representatives now to protect the Community Reinvestment Act and talk about the need to protect and expand CRA. For up to the minute information, check the following web sites, www.nlihc.org \| www.communitychange.org \| www.ncrc.org

Clinton-HUD Budget Announced
The President’s proposed housing budget calls for an increase of $2.5 billion from last year’s budget. Under the plan, 100,000 rental vouchers would be available. The Center for Community Change reports that among the new certificates 25,000 would be targeted for welfare to work, 42,000 for families with worst case housing needs and 18,000 new vouchers for the homeless. The Low Income Housing Coalition reports that the House Committee is holding hearings on the housing budget on March 10 and 11.

New Effort to Increase Low Income Housing Tax Credits
Representative Johnson of Connecticut is re-introducing legislation to increase the cap on the Low Income Housing Tax Credit. Rep. Johnson’s bill calls for increasing the per capita limit on tax credits for the first time since the legislation was enacted. The legislative proposal called for raising the cap from $1.25 per capita to $1.75 per capita and indexing it to inflation in the future. The President has proposed increasing the cap, but has not supported indexing the cap. In the last session, a majority of both houses co-sponsored the legislation, and yet it failed t. This year however, he called for an increase of barely 1 percent in aid to schools and sought to back away from a 1997 agreement that called for several years of spending increases to make kindergarten and universal pre-kindergarten available in every community. Under the Governor’s plan, New York City’s schools, with 38 percent of the state’s public school students, would get 12 percent of the additional aid. We anticipate devoting a larger section in the March issue of Notes to the state budget, the status of the welfare windfall and new state housing money proposals.

Norwood News: Volume 12, No. 5
Local Day Care Providers Band Together: New Grassroots Network Stresses Training, Targets Bureaucracy...by Jordan Moss
Evelyn Nieves hoped the day care provider's license she received in September 1997 from the New York State Department of Health (DOH) was her ticket off welfare. But for months the phone never rang, even though the Fordham Bedford mom had registered as a provider with the city's BEGIN (Begin Employment Gain Independence Now) program, which technically is supposed to match the mothers in the city's welfare-to-work program with day care providers like Nieves. Eventually, Nieves, who was a home health aide until an accident sidelined her, had some success with a flier she posted all around her neighborhood, and now she cares for a couple of 2-year-olds in her apartment on East 196th Street. She's not completely off welfare yet -- she still gets Medicaid and food stamps -- but now she can see the light at the end of the tunnel. Many others aren't so lucky. When University Neighborhood Housing Program (UNHP), a local non-profit, held a meeting to assess the needs and problems of family day care providers last April, an astounding 50 women showed up. Sitting in a circle in thlt of the ongoing decline in the city's welfare and food stamp rolls, and NYC's high unemployment rate (consistently more than twice the national average). Nearly 40% of the city's approximately 1,100 emergency food programs responded to this year's survey, including 100 respondents in the Bronx. The survey reported that: Requests for emergency food assistance in New York City grew by 24% from January 1997 to January 1998. Among the food pantries and soup kitchens reporting, 74% said that over the past year demand for food had increased. Fully 83% noted that more food was needed in their communities to meet the needs of the hungry. The number of people who were hungry and unable to get the meals at food pantries and soup kitchens totaled nearly 59,000 in January alone. Children comprised 56% of those turned away, while the elderly accounted for 12%. Food rationing grew from 1997 to 1998. Half of all programs said they had given out smaller amounts of food during the past year in order to avoid turning others away. A third said they limited how often people could come for food. The two most common reasons for widespread hunger cited by emergency provides were "cutoffs of food stamps and welfare benefits" (76%) and "public benefits that were too low" (74%). Public benefits have become increasingly difficult to get in New York City. The declining in the City's caseload may be due to an increase in denials to needy New Yorkers resulting from the Guliani administration's restrictive practices. Recently, the city drew intense scrutiny from federal officials for Guliani's program of "diverting" people for applying for food stamps and Medicaid upon their visit to the local welfare office. The New York Times reported that early in November, city welfare workers began the practice of delaying Medicaid and food stamp applications until an applicant's second visit to the welfare office. (Federal law requires them to be handed out without delay.) According to the Welfare Reform Network, the city's percentage of public assistance applications which are rejected has doubled from 27% to 54%, and case closing for alleged non-compliance with workfare rules have increased from less than 15,000 a year to over 80,000 a year. The survey founded that despite the efforts of 1,100 emergency food programs in New York City, thousands of people were still unable to get food when they went to a soup kitchen or pantry. While the city has provided virtually no data on the success of its workfare participants' transition to full-time, living wage jobs, there seems to be an abundance of evidence of rising hunger. To obtain a copy of the report, Rationing Charity: New York City Struggles to Cope with Rising Hunger, contact the NYC Coalition Against Hunger at (212) 227-8480.

Norwood News: Volume 12, No. 5

Local Day Care Providers Band Together: New Grassroots Network Stresses Training, Targets Bureaucracy...by Jordan Moss

Evelyn Nieves hoped the day care provider's license she received in September 1997 from the New York State Department of Health (DOH) was her ticket off welfare.

But for months the phone never rang, even though the Fordham Bedford mom had registered as a provider with the city's BEGIN (Begin Employment Gain Independence Now) program, which technically is supposed to match the mothers in the city's welfare-to-work program with day care providers like Nieves. Eventually, Nieves, who was a home health aide until an accident sidelined her, had some success with a flier she posted all around her neighborhood, and now she cares for a couple of 2-year-olds in her apartment on East 196th Street. She's not completely off welfare yet -- she still gets Medicaid and food stamps -- but now she can see the light at the end of the tunnel.

Many others aren't so lucky.

When University Neighborhood Housing Program (UNHP), a local non-profit, held a meeting to assess the needs and problems of family day care providers last April, an astounding 50 women showed up. Sitting in a circle in thlt of the ongoing decline in the city's welfare and food stamp rolls, and NYC's high unemployment rate (consistently more than twice the national average). Nearly 40% of the city's approximately 1,100 emergency food programs responded to this year's survey, including 100 respondents in the Bronx. The survey reported that:

Requests for emergency food assistance in New York City grew by 24% from January 1997 to January 1998.
Among the food pantries and soup kitchens reporting, 74% said that over the past year demand for food had increased. Fully 83% noted that more food was needed in their communities to meet the needs of the hungry.
The number of people who were hungry and unable to get the meals at food pantries and soup kitchens totaled nearly 59,000 in January alone.
Children comprised 56% of those turned away, while the elderly accounted for 12%.
Food rationing grew from 1997 to 1998. Half of all programs said they had given out smaller amounts of food during the past year in order to avoid turning others away. A third said they limited how often people could come for food.

The two most common reasons for widespread hunger cited by emergency provides were "cutoffs of food stamps and welfare benefits" (76%) and "public benefits that were too low" (74%). Public benefits have become increasingly difficult to get in New York City. The declining in the City's caseload may be due to an increase in denials to needy New Yorkers resulting from the Guliani administration's restrictive practices. Recently, the city drew intense scrutiny from federal officials for Guliani's program of "diverting" people for applying for food stamps and Medicaid upon their visit to the local welfare office. The New York Times reported that early in November, city welfare workers began the practice of delaying Medicaid and food stamp applications until an applicant's second visit to the welfare office. (Federal law requires them to be handed out without delay.) According to the Welfare Reform Network, the city's percentage of public assistance applications which are rejected has doubled from 27% to 54%, and case closing for alleged non-compliance with workfare rules have increased from less than 15,000 a year to over 80,000 a year.

The survey founded that despite the efforts of 1,100 emergency food programs in New York City, thousands of people were still unable to get food when they went to a soup kitchen or pantry. While the city has provided virtually no data on the success of its workfare participants' transition to full-time, living wage jobs, there seems to be an abundance of evidence of rising hunger. To obtain a copy of the report, Rationing Charity: New York City Struggles to Cope with Rising Hunger, contact the NYC Coalition Against Hunger at (212) 227-8480.