Archive for November, 2012

Rural housing gap continues to widen

The Daily Yonder posted an insightful piece this week about dwindling federal aid for housing, and the disparity faced by rural areas in particular when it comes to receiving adequate aid. With the “fiscal cliff” discussions going on now, housing aid could be cut even further, making the gap between rural and urban and suburban areas even deeper.

Housing aid programs that have been in place since the 1930s were established to ensure that all Americans can have a safe and affordable place to live. These range from mortgage and construction loan programs to housing vouchers and public housing projects. Throughout this history, however, rural areas have not received enough aid to match needs:

In 1980, in a report entitled “Ways of Providing a Fairer Share of Federal Housing Support to Rural Areas’” the federal Government Accountability Office (GAO) reported: “The distribution of Federal housing support …has not been consistent with relative need.”

Three decades later, in “Options for Optimizing the Federal Role in Rural Development,” the GAO reported improvement in rural housing since the 1930s, but noted that the condition of rural housing  “still lags somewhat behind that of urban housing….”

15 percent of rural counties are housing stressed and 30 percent of rural Americans live in overcrowded housing. The wait list for programs like USDA’s “502 direct” loan program, which provides very low rate loans for low- and moderate-income borrowers  is already 25,000 families each year. Looking ahead, these conditions will likely worsen if a fiscal deal includes more sever funding cuts. For Fiscal  Year 2013, the House and Administration are recommending a 27 percent cut in funding, after a 30 percent cut that occurred between 2004 and 2012. Other housing programs also face an uncertain future.

We have already blogged about the growing inequality, especially the divide between rural and urban areas, that has characterized this economic recovery (here, here, and here). Reducing– or, in some cases eliminating–  funding for housing programs would be further exacerbate this problem. We need Congress to come up with a deal to avoid the fiscal cliff; however, the deal that is struck must incorporate a long-term vision for the economic success of all communities. Housing is, as the article points out, the right of every American family.

 

 

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November 30, 2012 at 11:23 am

Organizations help families avoid foreclosure

Today we share some of the good work that organizations across the country are doing to keep families in their homes. Marketplace reports on the efforts of the Resurrection Project, Self Help Federal Credit Union, and Boston Community Capital to buy underwater mortgages in order to help families avoid foreclosure.

The Resurrection Project teamed up with Self Help to purchase $60 million of troubled mortgages in Chicago, after a community bank had failed. The plan is to modify these 1,100 mortgages and help borrowers keep their homes. Boston Community Capital had started doing this kind of work back in 2009, and has helped over 300 families in Massachusetts with great success.

In North Carolina, the Federal Reserve Bank of Richmond reports that the foreclosure rate increased between June 2011 and June 2012, from 2.5 percent to 2.8 percent. Housing prices declined 1.5 percent in the second quarter of 2012, and since 2009 have depreciated by 12 percent. The map below, which is as of June 2012, shows that many counties in the state have foreclosure rates that are much higher than the average.

Clearly there are still many homeowners who are struggling with maintaining their mortgages. As Raul Raymundo of The Resurrection Project told Marketplace, keeping families in their homes is not only good for those individuals, but good for communities as a whole:

There’s a direct correlation between a foreclosed home and violence increasing. And there’s also a direct correlation between a foreclosed home and property tax levies being lost.

NeighborWorks has published a report called “Seven Ways Foreclosures Impact Communities,” which include increased crime, reduced municipal revenue, neighborhood blight,  and displacement of families. As the report says, “Not only are people losing homes, but also communities are suffering economically, physically and socially.”

Purchasing mortgages to help families stay afloat and keep their homes is one way to make sure that communities already hard hit by the financial crisis do not continue to lag  behind as the nation’s economy recovers. These households are the building blocks of our communities. The destabilization caused by massive foreclosures will continue to be a challenge for years to come. The work being done now by groups like the Resurrection Project, Self Help, and Boston Community Capital is an important part of the solution.

November 29, 2012 at 11:09 am

Small businesses speak out about “fiscal cliff”

As we get closer to the end of the year, we will be hearing more and more about the impending ‘fiscal cliff’– when the Bush-era tax cuts for the wealthy will expire, and when ‘sequestration,’ or across the board spending cuts, will kick in on January 1, 2013. A few days ago, we had posted our OpEd from Sunday’s Greensboro News & Record about the fiscal cliff and small businesses. A few weeks ago, we highlighted local business owners who had also spoken out in support of letting the tax cuts expire.

More small businesses are joining the discussion. Samia Bahsoun, a small business owner from New Jersey, contributed a column to NJ.com, making the case, as we did, that what small businesses need are people who can afford to spend their money on buying what they need and want locally:

When people have more money in their pockets, they shop locally, eat out, get their nails done, buy kids clothes or shoes, buy extra presents for the holiday season, etc. When small businesses thrive, the community as a whole thrives and unemployment goes down. We all win.

She also discusses the importance of programs that provide vital services to families– such as Medicare and Social Security.

These programs are also a foundation of our middle class and of a healthy customer base for small businesses. Every dollar taken out of the pockets of our seniors is a dollar they can’t spend in their local economies and local small businesses. Congress needs to put meaningful revenue options on the table so we can strengthen these programs, not cut them.

President Obama has also turned his attention to small businesses during this debate, particularly after receiving some criticism that small businesses had been excluded providing their input. Yesterday he sat with small  business owners from across the country– four of whom had signed on to a letter by Businesses for Shared Prosperity encouraging the elimination of the tax cuts. As the letter states:

As businesses owners, none of us hire more employees simply because someone gives us a tax cut. We hire more employees when our customers demand more of what we have to sell. When a teacher, firefighter or construction worker building public infrastructure loses his or her job, many of us also lose a customer.

Locally, small business owners will be gathering on Saturday (December 1) for a press event on ending the tax cuts for the wealthiest Americans. it will be at 11am at Entrinsik, Inc in Raleigh (7501 Creedmoor Road, Suite 102). And on Sunday, Allan Freyer from the Budget and Tax Center will be on WRAL-FM (101.5) explaining more about the fiscal cliff and solutions for addressing the federal deficit that increase revenue and avoid the potentially devastating spending cuts.

It’s encouraging that more voices are contributing to the dialogue about important federal programs and policies that not only impact small businesses, but communities as a whole. Small  businesses do not operate in isolation– they are an integral part of their communities, and what impacts their neighbors impacts them too.  Families and small businesses across the nation can not afford another recession. We need to find solutions that encourage economic growth and shared prosperity for the long term.

 

November 28, 2012 at 12:02 pm 2 comments

Infographic on income inequality in NC

The Center on Budget and Policy Priorities and the Economic Policy Institute have released infographics illustrating the growing income inequality at the national level and within states. The infographic for North Carolina is posted below, and here are some of the takeaways of their analysis:

  • Nationally, in 2010 the average incomes of the wealthiest households were 8 times greater than incomes of the poorest households, and 2.7 times greater than incomes of middle households.
  • While incomes of the bottom fifth of households declined 6 percent between the late 1990s and mid-2000s, the top fifth of households saw their income rise by almost 9 percent. The middle fifth of households saw a modest increase of 1.2 percent during this time.
  • In North Carolina, the poorest 20 percent of households saw their incomes drop 3.7 percent, while the richest 20 percent saw their income increase 5.5 percent between the late 1990s and mid-2000s.
  • North Carolina is 17th among states with the highest income inequality.

November 27, 2012 at 9:52 am 1 comment

Small Businesses Can Handle Taxes; Need is Stability

Below is an Opinion piece from The Support Center’s President/CEO Lenwood V. Long, Sr. from today’s Greensboro News & Record:

We’re hearing a lot about the “fiscal cliff” and the consequences of allowing the tax cuts for the wealthiest Americans to expire. Small businesses have been thrown into the ring, with claims in the media that they will be dealt a detrimental blow if the tax cuts expire. But those of us who work with small businesses every day know that the vast majority of small businesses will not be harmed at all, and that taxes are not among the top concerns of small businesses.

Instead, what we need are policies to support a strong and growing middle class, which can create demand for the goods and services that our small businesses provide. This, in addition to expanding access to capital, is what drives business expansion and job creation.

Most small businesses do not report their income as personal income — and of those that do, only a small number will be impacted by higher tax rates on income over $250,000. According to the Center on Budget and Policy Priorities, only 1.4 percent of small businesses would be affected if these changes took effect. 

Extending these tax cuts on the rich will only benefit the very wealthy — not the restaurants, bakeries, corner stores, salons and other mom-and-pop shops that we work with on a daily basis. The truth is that these are the economic engines and job creators in communities across the country, particularly in the underserved communities we work in. Over the past 20 years, small firms have accounted for 60 to 70 percent of job creation in the U.S. 

A survey by the Main Street Alliance found that, by far, small businesses are concerned about weak consumer demand. We work with small businesses in underserved communities, and our borrowers echo this concern. With persistent high unemployment — particularly in the many rural, under-resourced communities across the state — many families continue to face financial and economic hardships, which means that they cannot participate fully in their local economies. 

The policies and programs that support working families will not only help improve their quality of life, but also help to support the small businesses in their communities.

Investments in our working families are investments in the long-term health of our economy. The Congressional Budget Office and Moody’s Analytics have shown that safety-net programs that help lift people out of poverty are a much more efficient use of our resources. But with the looming fiscal cliff, the future of these programs is uncertain. 

The $109 billion cuts in 2013 alone mean significant and devastating cuts to job training, workforce development, education and child care programs, among others. These are the programs that support families and help create healthy communities. Without healthy communities, small businesses would not be able to succeed.

Most of the claims about the dangerous impacts of the expiration of the tax cuts on small businesses do not resonate with the reality on Main Street. If they expire, everyone — including small businesses — will continue to receive tax cuts on their incomes below $250,000. 

We should focus on putting policies in place that uplift those who continue to struggle with economic hardships, and those communities that remain underserved and are in need of economic development.

Small businesses are an important part of these communities. When their fellow citizens succeed and find financial and economic stability, so do they.

Lenwood V. Long is president and CEO of  The Support Center in Wake Forest.

November 26, 2012 at 2:50 pm 3 comments

Reflecting on the fight against hunger on the eve of Thanksgiving

As we head into Thanksgiving weekend, many of us are anticipating a celebrating with our family and friends by sharing a special meal and taking the time out of our busy lives to spend some quality time together. Many of us will spend this evening in crowded supermarkets securing last-minute ingredients and making preparations. As we look forward to the holiday, and particularly as we think about what we are thankful for in our lives, it is important to take a moment to reflect on the millions of families who will not be able to afford a Thanksgiving meal, let alone meet their nutritional needs on a daily basis.

For many of these families, Thanksgiving would be just another day of hardship if it weren’t for the volunteers and organizations working on this holiday to provide a warm meal, supplies and food, and helping hand.   In North Carolina, 17 percent of households are “food insecure,” meaning that they cannot meet their nutritional needs because of a lack of access to food or lack of resources. Food Banks and other hunger-fighting organizations around the state work year round to alleviate this problem, but on holidays like Thanksgiving and Christmas they also work to make these days special for everyone. Here are just a few of the efforts going on around the state:

  • Durham Rescue Mission will be hosting its Annual Thanksgiving Community Dinner tomorrow, where they will also be giving away warm clothes and groceries.
  • Interfaith Food Shuttle’s 6th annual Turkey Takeout took place on November 16. They distributed 500 turkeys and thousands of pounds of vegetables, greens, rice, bread, and pumpkin pies to 25 agencies that will distribute these foods to families in need.
  • Ingles Markets and MANNA Food Bank kicked off their 20th annual Ingles Giving Tree at Asheville Mall this week, which is a Christmas tree made of 10 tons of stacked non-perishable food items. They will be taking donations to MANNA and Ingles will match donations for the rest of the year, up to $25,000.
  • The Community Foundation of Greater Greensboro will host its 24th Thanksgiving dinner for the homeless, hungry, housebound, and elderly poor. They serve 4,000 meals each year.

Distributing food to families in need is a vital component of improving access to food that these organizations and Food Banks provide. Many hunger relief efforts have also begun to incorporate healthy and fresh local foods in their efforts, connecting local small farmers with consumers who would otherwise not have access to healthy foods. This is a step toward an integrative approach for creating a sustainable, equitable  accessible food system in all communities. In order to truly relieve the problem of access to food, especially healthy foods, stakeholders from across the spectrum– producers, distributors, retailers, educators, policy makers, etc– need to work collaborate across sectors.

As we enjoy our meals tomorrow and the companionship of our loved ones, take a moment to think about those who are struggling and how we can make our state a more equitable and just place. To all our readers, The Support Center wishes you a very Happy Thanksgiving!

November 21, 2012 at 9:28 am

This Saturday (11/24) is Small Business Saturday

This Saturday, November 24, is Small Business Saturday— a shopping holiday started and promoted by American Express in between the traditional Black Friday and, now, Cyber Monday. Nationally, 80 percent of the businesses that are planning to participate expect a year-over-year boost in sales. The News & Observer reports that many small businesses in the triangle area are also gearing up for big sales.

Not only does Small Business Saturday mean promotion for small businesses, but it also means assistance from American Express with marketing through a variety of means, including social media. And as a further incentive for consumers, American Express card holders will get a $25 credit if they spend at least $25 at a small business.

The News & Observer highlights the role that small businesses play in the economy:

“If the county is going to recover at a faster pace, it is going to do so because of the success of small business owners,” Krugman [American Express spokesperson] said. “If they are successful, they will expand. They will create more jobs, and everyone benefits from that.”

Smaller retailers return a total of 51.1 percent of revenue to the local economy, while national chains, such as Barnes & Noble and Target, return an average of 13.6 percent of revenue within the market that hosts the store, according to an impact study by Civic Economics of Austin, Texas. The research firm compared the economic impacts of independent, locally owned businesses in Raleigh with major national chains.

The Small Business Saturday website allows you to search for participating businesses in your area. Durham’s Sustain-a-Bull campaign will also be promoting local businesses and special deals on its website. The Shop Local Raleigh holiday campaign will also be promoting local businesses and will also have a local holiday shopping guide.
So, in the midst of getting your big ticket deals on Black Friday and Cyber Monday, take some time out to get to know and support the small businesses in your area. Small businesses are are job creators, as well as community and wealth builders in so many communities across North Carolina and across the country. Efforts like Small Business Saturday get away from all the political rhetoric and get to the real work of uplifting and supporting these vital local economic engines.

 

November 20, 2012 at 9:00 am

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