Posts by Author: Jared Brey

Crowdfunding and Opportunity Zones Joining Forces in Philadelphia Project

The revitalization of Golaski Labs, seen in the center here, promises 40,000 square feet of mixed-use space plus 39 residential apartments meant to be affordable for existing residents of the surrounding neighborhood. (Photo courtesy of Small Change)

The project will be big: 40,000 square feet of mixed-use space with a restaurant from former “Top Chef” contestant Sylva Senat, a co-working space and business incubator, and a new home for a landscape architecture firm that specializes in green roofs. Plus, its 39 residential apartments are meant to be market-rate affordable — leased at a monthly rate that people who live in the surrounding Northwest Philadelphia neighborhood can afford without a rental subsidy.

To raise the $7.2 million necessary to build the project out, Mosaic Development Partners could have gone the simple route, says Gregory Reaves, principal and managing partner of the Philadelphia-based firm. The project, called Golaski Labs, wouldn’t have been difficult to finance, and Mosaic probably could have done it with a single investor, Reaves says. Instead, the firm has developed a complex financing structure that will take advantage of New Markets Tax Credits, a small portion of equity offered through the crowdfunding service Small Change, and capital raised through the new Opportunity Zones tax incentive created as part of the Tax Cuts and Jobs Act passed at the end of 2017.

With major concerns still looming that Opportunity Zones may result in projects that do not benefit — or worse, cause displacement from — the economically-distressed communities that the incentive is meant to benefit, the designation of Opportunity Zones appears to be making project financing easier for Mosaic, Reaves says. When the Opportunity Zones designations were announced, most of the projects that Mosaic had in the pipeline fell within one of the zones, according to Reaves. That includes Golaski Labs.

Opportunity Zones allow investors to avoid some taxes on capital gains income by investing them in projects or businesses located in low-income areas designated by states earlier this year, although it’s a federal tax incentive. So far, as Next City has recently covered, the program has generated significant interest from experienced investors, with stock ownership in companies, real estate, or even works of art they’re looking to sell — thus generating capital gains income. Only capital gains income is eligible for the tax benefits of Opportunity Zones.

“The problem with that is that you’re now getting very sophisticated investors coming in at the Opportunity Zone level, and where you’re going to struggle is with getting equity at the small investor level,” Reaves says.

Mosaic set up the equity portion of the Golaski Labs deal like a sort of race. Participants can invest in one of two entities set up by the company. Accredited investors — a term from the Securities and Exchange Commission meaning annual income of at least $200,000 ($300,000 for jointly-filing couples) in each of the past two years or a net worth of at least $1 million — can invest a minimum of least $5,000 of capital gains income into an Opportunity Zone fund. Meanwhile, anyone over the age of 18 can invest a minimum of $500 in a separate entity through Small Change. The whole offering will move forward if Mosaic raises at least a combined $100,000 through either fund.

With 28 days to go, the project is just shy of its $100,000 minimum crowdfunding goal on Small Change. Reaves says the firm turned to crowdfunding as a way to create opportunities for small-time investors, hopefully including some from the neighborhood, to buy into the project.

“Our business is built around going into disenfranchised neighborhoods and creating communities where people feel that they are not being disenfranchised from the new things that are happening,” Reaves says.

In carrying out a variety of new development and rehab projects around Philadelphia (including this one covered by Next City), Mosaic has tried to drum up investments from small-time investors before, particularly among communities of color and other communities that are not well-represented in the investor classes, according to Reaves. But the response was “very low,” he says.

Reaves says the firm had underestimated the “educational effort” that’s required to make people who aren’t experienced investors comfortable with buying into development projects. Small Change has a system in place to collect very small investments, making the barrier to participation lower, and hopefully inviting more “nontraditional” investors in.

“Being a for-profit developer, we’re creating what we think are not only gestures about how to bring community together, but also vehicles by which the communities can participate in what we’re doing,” Reaves says.

Small Change has closed nine offerings to date, says founder and CEO Eve Picker, raising between $95,000 and $300,000 per project. The group assesses projects’ viability, but doesn’t make any determinations about which investments are “worthwhile” from a financial standpoint. It is required to include risk disclosures by the Securities and Exchange Commission.

As a crowdfunding platform, Small Change is different from Kickstarter or IndieGoGo in that it offers actual investments with an expected financial return, though there’s also the risk of investors losing their money. Small Change isn’t the only crowdfunding platform to offer investments connected to Opportunity Zone tax incentives — as Next City has previously reported, Fundrise is seeking to raise a $500 million fund to invest in multiple properties through the new tax incentive program, with two properties already in its Opportunity Zone portfolio.

The minimum investment across the Small Change platform is $500. The anticipated return on a $1,000 investment is $2,737 after seven years or $3,096 after ten years. For every project it lists, the site also includes an index of characteristics like walkability, affordability, green features and other urbanistic considerations.

“Our Small Change Index is designed to show investors what socially responsible acts each developer is taking, in regards to how it meets the needs of the neighborhood,” Picker says. “The great thing about crowdfunding is that it’s up to investors to decide.”

For now, Mosaic is marketing the crowdfunding directly to potential investors the partners know and hoping the word spreads out to those investors’ networks, Reaves says. They’re hoping to drum up investment especially from people of color and women. For future crowdfunding offerings, Reaves says they may set up a bigger marketing budget. Their goal with crowdfunding is to expand the community of people who can see a direct benefit from real estate development. And their goal with projects like Golaski Labs is to create spaces that will improve communities while remaining accessible to the residents that already live there.

“We consider the highest and best use to be the use that people in these communities can actually afford to live in without a public subsidy,” Reaves says.

 

Charlotte’s Plan to Teach Itself How to Make Green from Being Green

One of four bronze statues at the intersection of Trade and Tryon streets, also known as Independence Square, in downtown Charlotte, N.C. (AP Photo/Chuck Burton)

Charlotte is a “carrot” city rather than a “stick” city, says Amy Aussieker, executive director of the nonprofit group Envision Charlotte, a public-private partnership with a mission of investing in economic growth and environmental sustainability initiatives.

San Francisco is a “stick” city. While the city has undertaken a range of efforts to reach that goal, some of the most important have been regulatory: It was among the first cities to ban plastic bags, for example; and since 2009, composting and recycling have been mandatory. Largely as a result, 80 percent of the city’s waste is diverted from landfills, a higher rate than any other city in the country, and a key metric that helps land the city consistently atop rankings of the “greenest” in the United States.

According to Aussieker, Charlotte doesn’t pass a lot of environmental regulations because the state lawmakers in Raleigh could swoop in an overturn them at will. That’s left the city looking for other ways to achieve zero-waste goals.

“You can mandate composting in San Francisco,” Aussieker says. “You cannot mandate it here. So it’s a totally different implementation process in a city that doesn’t do policy.”

Within that context, Aussieker’s organization commissioned a report called “Circular Charlotte: Towards a Zero Waste and Inclusive City.” Authored by Amsterdam-based consulting firm Metabolic, the report notes that only 11.5 percent of waste materials are recycled or composted in Charlotte each year. The high rate of landfilling has negative environmental impacts in the form of carbon emissions, but also constricts economic potential, the report suggests.

Charlotte’s wasted materials have around $111 million in pure scrap value, according to the report, and could support around 2,000 jobs if more were recycled. If the 145,000 tons of plastics currently landfilled every year were recycled instead, the city could generate $35 million in revenue and avoid using more than 950,000 barrels of oil annually.

To jumpstart waste-reduction initiatives, the city has to date invested $2.5 million in an “Innovation Barn,” which will serve as an incubator for businesses that fall under the umbrella of the “circular economy.”

“We see this as more than an environmental program,” says Victoria Johnson, director of Solid Waste Services for the City of Charlotte. “We believe this has the ability to brand the City of Charlotte as a place for innovation. We also see it as an opportunity to advance economic opportunity, entrepreneurship and generate revenue. These are all priorities for the project.”

To illustrate the potential for circular economy investments, Metabolic included five “business cases” in the report, including a closed-loop textiles chain for linens at local hospitals and hotels, a circular chain for recycled concrete and glass, recycling food waste for livestock feed, a “Materials Innovation Lab” for upcycling waste products, and an incentive system that would give Charlotte residents discounts on certain local products for meeting recycling goals.

The business cases were based on the city’s “most problematic material flows” and conversations with stakeholders in those supply chains, says Metabolic Founder and CEO Eva Gladek. The firm included proposals that could be executed quickly to demonstrate the potential value of circular economy initiatives, she says.

“A good example is the nearly 150,000 tons of food waste generated by Charlotte households and small businesses,” Gladek says. “One solution is to feed food waste to black soldier fly larvae, which in turn can be pressed into pellets to feed North Carolina’s poultry farms — the strongest agricultural industry in the state.”

Even if just a third of that food waste could be diverted in that way, it would save the city $1.65 million in fees related to landfill dumping, and could save 97,000 tons of carbon dioxide equivalent emissions a year, the report says.

Envision Charlotte started in 2010 with an effort to reduce energy use in commercial buildings in the city, eventually succeeding in getting target buildings to lower consumption by 19 percent, according to Aussieker. Charlotte is a “banking town,” she says, and environmental initiatives there are focused on the triple bottom line of social, environmental, and economic benefits.

The innovation barn is expected to be up and running next summer. Envision Charlotte will move in its offices, alongside a zero-waste restaurant with a teaching kitchen, and operate alongside the business startups that will be invited into the incubator. The group commissioned the report to get businesses and residents thinking about the potential benefits of more circular economic models.

“How do we take the low-hanging fruit in our waste and do something with it?” Aussieker says. “And then secondly, how do we look at the companies that are already here and get them to be more circular?”

 

Boston Unveils Plan For Resilient, Inclusive Waterfront

(Credit: City of Boston)

Even at current sea levels, a flood with a one-percent annual chance of occurring in South Boston could impact 60 buildings and around 1,000 people, causing up to $140 million in damage. With an expected nine inches of sea-level rise by the 2030s, the same flood could impact 2,500 people and do $1.2 billion in damage. By 2070, when the sea level is projected to rise by as much as 40 inches, more than 40,000 people would be exposed, and the flood could do more than $8 billion worth of damage. ​

And that’s just South Boston.

Last week, Boston Mayor Martin Walsh announced the broad outlines of a plan to knit together climate-change adaptation strategies along 47 miles of waterfront to create a “Resilient Boston Harbor.” The plan involves creating elevated landscapes to manage flood waters along the waterfront, protecting residents and businesses further inland while providing more public access to the harbor.

The harbor plan follows the city’s Comprehensive Resilience Plan, released last year. The comprehensive plan lays out a broad definition of resilience, envisioning a city that can respond to its “most serious shocks, such as extreme weather events, and [its] chronic stresses, such as economic inequality and aging infrastructure.” It aims to make racial equity a priority in all of the city’s efforts, prioritize community-led planning, create “intergenerational wealth-building opportunities” for all of the city’s residents, and connect Bostonians with climate-resilient infrastructure.

Christopher Cook, the city’s Chief of Environment, Energy and Open Space, says the primary aim of the resilient harbor vision is to unify a series of neighborhood-level plans that are already underway. Specific projects include adapting buildings for expected sea-level rise, creating elevated berms — a type of raised barrier, restoring natural salt marsh areas, renovating parks, and creating new public spaces, with programming to serve a range of communities.

“As we move into these resilience projects, we’re not interested in just creating wonderful waterfront playgrounds that are playgrounds for the rich,” Cook says.

The plan includes efforts to preserve some existing affordable housing near the harbor, with the potential to create new affordable housing as part of mixed-use redevelopment projects at a few key sites in the waterfront area, Cook says.

“Those projects that have the most opportunity to either enhance or solve for socially vulnerable populations, those have to be invested in first,” he says.

The mayor’s choice of venue to announce the resilient harbor plan—his annual speech to the Greater Boston Chamber of Commerce—was strategic. During the speech, Walsh announced that the city would commit 10 percent of all new capital budget to resilience projects. But it will also need much more money to carry out all of the planned interventions. The city is applying for a pre-disaster mitigation grant from FEMA, Cook says, and seeking investments from philanthropic foundations as well. And it hopes that some waterfront property owners will expand their resilience investments beyond their own buildings to help protect the entire landscape.

“The waterfront is an amalgam of public, private, and institutional landowners,” says Kate Orff, founder and principal of SCAPE, the landscape architecture firm hired to help create the unified harbor plan. “So what’s key about this is, I think the mayor is trying to get in front of the change process, inspire those conversations and try to get the public and the private sector in alignment and working towards a shared goal.”

By the time SCAPE was hired, a lot of climate planning had already been done at the neighborhood level. The firm’s job was to synthesize those plans —“Water doesn’t follow neighborhood boundaries,” says SCAPE principal Alexis Landes — and create a unified vision for resilience at the scale of the harbor.

“We are kind of providing this glue or a fabric that pulls these things together,” Orff says. “What we’ve heard from many in the Boston area is that neighborhood-based planning and the strength of Boston’s neighborhoods is an incredible asset, and neighborhoods themselves are quite strong, but looking to the future there has to be more connective tissue that pulls the neighborhoods together.”

The firm’s illustrated maps show the waterfront highlighted with bright green where elevated landscapes are envisioned, and tracked with pink lines to show new paths to public waterfront access. Earlier this month, an exhibit opened at the Boston Public Library pairing works of contemporary with maps of Boston throughout the city’s history. The maps show an unfolding reinvention of the city, Orff says, and she hopes the harbor plan makes a contribution to that process.

“We were hoping that these drawings would be read in that same vein,” Orff says. “Helping to create an imprint and a perception change in the minds of Bostonians to be able to help forge this new relationship with the water and each other, and really kind of set that new template for a change process.”

 

What Happens When Affordability Restrictions Expire for Half a Million Homes?

(Credit: NLIHC/PAHRC)

As rents continue to rise more quickly than incomes across the U.S., cities have become increasingly focused on affordable housing: How to pay for it, where to put it, and how to keep it from disappearing.

Hundreds of thousands of affordable units created under one of the biggest federal housing programs ever could start disappearing soon, in a manner of speaking. According to a new report from the National Low Income Housing Coalition and the Public and Affordable Housing Research Corporation, nearly half a million units created with Low Income Housing Tax Credits (LIHTCs) could be lost in the next ten years.

Most LIHTC (“ly-tek”) units are required to remain affordable for 30 years, the report notes. The LIHTC program was created in 1987, and the affordability requirements have started to expire on the first funded units. Between 2020 and 2029, more than 485,000 units will reach year 30, and could become unaffordable to low-income residents — including their existing tenants — without additional subsidy, the report says.

Some units in highly desirable neighborhoods could quickly be converted to market-rate rents, while many more units in neighborhoods with lower demand could start to physically deteriorate without additional capital for rehabilitation. The situation sets up a seemingly difficult choice, the report says: Reinvest in existing affordable housing to keep people housed or invest in new affordable housing to give low-income residents a chance to leave segregated, low-opportunity neighborhoods. But the choice is a false one, the authors say.

“Really, what we need is more resources for preservation,” says Andrew Aurand, vice president for research at the National Low Income Housing Coalition and a co-author of the report. “Short of that, we have to make these types of decisions about where it makes sense to invest for preservation and where it makes sense to invest for new development.”

“It’s not really a tradeoff,” adds Keely Stater, director of research and industry intelligence at the Public and Affordable Housing Research Corporation. “We can do both if we have the right resources.”

The authors of the report, called Balancing Priorities, ranked neighborhoods on spectrums of both desirability and opportunity. Owners of LIHTC units in highly desirable neighborhoods would have a greater incentive to convert them to market-rate rents, the report notes, while owners in the least desirable neighborhoods would have a harder time accessing money for improvements. The authors created an “opportunity index” that measures how well each neighborhood ranks in terms of “access to amenities thought to provide pathways for economic mobility.” That includes access to jobs, educational opportunities, transit, and a healthy environment.

The report shows that 42 percent of LIHTC units reaching year 30 in the next decade are located in neighborhoods that rank “very low” in terms of desirability, while 5 percent are in neighborhoods ranked “very high.” In terms of opportunity, 29 percent of expiring units are in neighborhoods ranked “very low,” with 12 percent in neighborhoods ranked “very high.”

“I think, at the very least, it’s going to require an extensive amount of planning and pulling together resources and communities working together to figure out their strategy for what to do when these units expire,” Stater says.

Cities are starting to develop affordable housing strategies that prioritize preservation as well as new production. In some cases, the work of protecting affordability for LIHTC units is already being done. For example, in 2016, Community Development Trust partnered with YES Housing Inc. of New Mexico to preserve 262 units of low-income housing in Albuquerque, Las Cruces and Roswell. Some of the units had been renovated using the LIHTC program in 2000, and the transaction allowed YES Housing to maintain ownership of the properties while providing capital for improvements.

Community Development Trust, based in New York City, is a rare combination of being both a federally-certified CDFI (community development financial institution) and a real estate investment trust, more commonly known as a REIT. While the Trust does make loans, as a REIT it can also take partial ownership stakes in properties in exchange for cash that can be used for renovations to preserve properties and maintain their status as affordable.

Brian Dowling, chief investment officer for the Community Development Trust, says the group tries to partner with other mission-driven groups when making investments in low-income and senior housing. In many cases, Dowling says, groups like his would have an easier time structuring deals to preserve housing if they could access relatively small subsidies from either state or local governments — something on the order of $10,000 to $30,000 per unit.

Local approaches are also in progress. In New York City, as Next City reported last year, a cadre of mission-driven, nonprofit affordable housing developers banded together to create the Joint-Ownership Entity, a new kind of nonprofit real estate trust but not quite a REIT, with preservation of existing LIHTC properties as one of its primary strategies.

In a section on recommendations for changes to the LIHTC program, the NLIHC/PAHRC report suggests that the program could require mission-driven nonprofits to be part of the ownership structure for LIHTC properties. It also suggests that new LIHTC production could be targeted in high-opportunity neighborhoods. And it recommends increasing investment in other programs, like housing vouchers, to give tenants access to more existing housing supply.

“Beyond LIHTC, we also need a fully-funded voucher program, because if we had that, it does a couple of things,” says Aurand. “First, it gives renters mobility. With a voucher, they could afford a rental unit in the private market up to a certain payment standard, so it gives them more mobility. Also, if vouchers are available, it provides tenants who are currently in a subsidized building some protection.”

Aurand and Stater both said they’ve been encouraged by attention to the housing crisis at the federal level, including proposals from senators Kamala Harris, Elizabeth Warren, and Cory Booker (though both stopped short of endorsing any particular proposal.) They hope that the report will lend some hard evidence to the growing national recognition of the issue.

“I definitely think cities and states are stepping up and trying to think about how to make the necessary investments,” Stater says. “It’s just that the problem is so huge. The scale of the problem really requires a huge federal investment.”

 

The Lingering Effects of Youth Experiencing Disconnection

The prevalence of disconnected youth varies widely by state. (Credit: Social Science Research Council)

For young people, spending any significant length of time out of school and unemployed between the ages of 16 and 24 can have long-lasting impacts on employment prospects, income, homeownership, and health. The effects of that type of “disconnection” are worse the longer the disconnection endures. And the disadvantages compound over time.

That’s according to a new report from Measure of America, a program of the Social Science Research Council, called “Two Futures: The Economic Case for Keeping Youth on Track.” The report is the first to follow a cohort of what the group terms “disconnected youth” or “opportunity youth” over the course of about fifteen years. Researchers monitored the “life trajectories” of disconnected youth at stages five, ten, and fifteen years after their experience of disconnection.

The difference in outcomes between connected and disconnected youth is slighter in their teens and early twenties, but grows much greater as they approach middle age, the report concludes. On average, after about 14 years, youth who stay “connected” earn about $31,000 more than their disconnected peers. They are also 45 percent likelier to own a home, 42 percent likelier to be employed, and 52 percent likelier to report good or excellent health.

“The reason why we look at youth disconnection is that it can be a real bellwether for the health of the community, and it really correlates with well-being for the overall community,” says Rebecca Gluskin, deputy director and chief statistician at Measure of America and a co-author of the report, which was funded by the Schultz Family Foundation.

There are around 4.6 million disconnected youth in America, according to the report, meaning nearly 12 percent of people between the ages of 16 and 24 are neither working nor in school. The rate of disconnection varies widely by geography and race; more than a quarter of Native American youth are disconnected while less than 7 percent of Asian American youth are disconnected, for example.

As the report notes, disconnected young people are more likely to be poor, have dropped out of high school, or have parents with low levels of educational attainment. They’re also likelier to have a disability, be mothers, and be institutionalized. Neighborhoods with high rates of youth disconnection are also likelier to have been affected by racial segregation and high unemployment while having higher populations of older generations who also experienced disconnection during their own youth, the report says.

The report also measures the cost of youth disconnection to society as a whole. If all disconnected youth were “reconnected” to jobs or education, the federal government would be able to collect an additional $55 billion in tax revenue, or around $11,900 per individual. At the local level, investing in disconnected youth could mean an extra $150 million in annual revenue for a city like Atlanta or an additional $610 million for a city like L.A., the report says.

“It’s not only an important social issue but, what this report is saying is, we’re paying for the investments we’re not making today,” Gluskin says.

Karen Pittman, the co-founder, president and CEO of The Forum for Youth Investment, says the Measure of America report provides hard evidence to support investments in programs that help young people at all age ranges — not just the earliest interventions.

“The fact that young people who are disconnected from schools or the labor market don’t do as well as young who stay connected in that 1-24 range — that’s not news. We know that,” Pittman says. “But the idea that the extent of the gap between the connected and the disconnected gets greater 15 years out — that is news. They don’t catch up. It’s a lingering effect.”

To address the rate of youth disconnection and help more young people find employment education, the report recommends that employers should listen and responded to the views of young people, and create training programs and policies that are geared toward at-risk, first-time workers. It also recommends that businesses can set data-driven goals, and help support workforce development efforts in cooperation with schools, philanthropies, financial and health systems, and the criminal justice system.

Pittman says that people between the ages of 16 and 24 need fairly concrete things in order to stay connected to job and education opportunities: child care, health insurance, housing, predictable work schedules. So it makes sense to recommend listening to what young people say their needs are, Pittman says.

“The voices of young people themselves has really been what’s powered this movement,” she says.

Measure of America hopes the report will help build a case for investment in disconnected youth.

“The point of this report is to show that this group of young people are really a resource that can be tapped for both the economy and … for communities, providing strength and resilience,” Gluskin says. “And they shouldn’t be seen as a cost, because it’s really a missed opportunity if we don’t reengage them.”

 

Creating Space for the Next Generation of Baltimore’s Community Leaders

Sylvester Pridget, looks out of a barbershop window with his 14-month-old daughter, Shanetta, watching a march to City Hall in Baltimore on Saturday, May 2, 2015, the day after charges were announced against the police officers involved in Freddie Gray's death. The events surrounding Gray's death eventually led to the creation of the new Baltimore Children and Youth Fund, which recently made its first round of grants. (AP Photo/David Goldman)

By one count, there are close to 1,700 young people in Baltimore who are homeless: Under the age of 25, not in the custody of a parent or guardian, and without a regular place to sleep at night.

On a normal day, between 40 and 50 of them stop by the Youth Empowered Society Drop-In Center, according to executive director Blair Franklin. They come to the center, which is partially run by formerly homeless youth, for food or a change of clothes, Franklin says. Or bus tokens. Or a shower. Or a place to do laundry, charge a phone, or take a nap. Or get health services in the van that parks out back every week. Some come to find a therapist, or a lawyer who can help with expunging criminal records.

“First and foremost we’re like a safe space,” Franklin says. “Young people tell us what they need and want and we work toward fulfilling that.”

In addition to providing basic services to its visitors, the YES Drop-In Center tries to invest in leadership capacity-building among the homeless youth that use its services, Franklin says.

“We live in a world that does not pay attention to young people and often sees them as without agency and without choice and value,” Franklin says. “[But] we see folks kill it when they are given the space to say what should happen and then participate in that change.”

It’s organizations like the YES Drop-In Center that are among the first grantees of the Baltimore Children and Youth Fund, created by the Baltimore City Council in defiance of a veto by former Baltimore Mayor Stephanie Rawlings-Blake.

As Colorlines reported in August, the fund was pushed into existence in the wake of the protests surrounding the death of Freddie Gray, with City Council President Bernard C. “Jack” Young leading the charge. The goal of the fund was to not just support programs that help young people in Baltimore, but to upend the way grants for community-serving goals are distributed.

In its first round of awards, 84 grantees split $10.8 million in funds.

“I would argue it’s probably the most diverse portfolio of any grantmaking organization in the city,” says Dayvon Love, director of public policy for the Baltimore-based Leaders of a Beautiful Struggle, “a grassroots think-tank which advances the public policy interest of Black people.”

The group’s co-founder, Adam Jackson, was co-chair of a task force appointed in 2017 to develop the Baltimore Children and Youth Fund’s grantmaking structure, built around the values of racial equity, intergenerational leadership, community ownership, and collective decision-making.

Love says that Leaders of a Beautiful Struggle wanted to upend the typical grantmaking process. Too often, he says, highly professionalized, white-led nonprofits are positioned to get grants meant to address problems in disadvantaged black and brown communities. Community-based organizations often don’t have the connections to get access to those same resources, Love says.

“And it undermines the ability for black-led organizations in our communities to do the work,” Love says. “Really, the purpose of our role was to try to structure the youth fund in a way to flip that dynamic so that grassroots organizations could compete on an even playing field with traditional nonprofit organizations, but also do so in a way that could elevate [community-based] organizations.”

With its $230,000 grant from the Baltimore Children and Youth Fund, the YES Drop-In Center will be able to hire a dedicated youth leadership advocacy coordinator, Franklin says, and put more resources into direct assistance for homeless youth in the former of flexible housing assistance and eviction prevention, among other services.

Aside from the YES Drop-In Center, grantees include the National Great Blacks in Wax Museum, the Baltimore Child First Authority, Wide Angle Youth Media, and the United Workers SB7 Youth Corps — which plans to build on an organizing program that helped stop a trash incineration from being built, as Next City has covered.

City Council President Young, who was not available for an interview, had been pushing to create more funding for youth programs for years before the death of Freddie Gray helped galvanize support for the fund, according to the report in Colorlines.

“Part of it is that a lot of young people just don’t have things to do,” says Love. “There’s been a disinvestment over the past 20 to 25 years or so in funding related to programming for youth and, at the same time, an increase in funding for things like police and public safety and corrections.”

The task force wanted to support programs in the city that would give black and brown youth opportunities to envision futures that are rarely depicted in popular media, Love says. And it wanted to support a range of community organizations with small and large grants that would help them build organizational capacity, in addition to supporting the youth-oriented work they were proposing. That required creating an atypical grantmaking process. To sift through the $75 million in grant requests from 487 applicants, a “Grant Proposal Review Panel” was convened with community representatives and not just professional grant reviewers, Love says.

“What that does is it makes sure that it’s not just relationships driving who gets dollars,” Love says. “It’s a very honest assessment of the program that’s before them.”

 

What if Cities Stopped Giving Away School Dollars to Finance Development

Students at Amqui Elementary School in Nashville, Tenn., watch a broadcast of President Barack Obama delivering a speech on the importance of education in 2009. (AP Photo/Mark Humphrey)

The explosive growth of Nashville over the last half-decade has lately been tempered by a few tough challenges.

Like most American cities, Nashville is facing a critical shortage of affordable housing. Unlike most cities, its former mayor, Megan Barry, resigned under a scandal in March. Then in May, voters overwhelmingly rejected a $5.4 billion transit plan that proponents hoped would transform the Nashville metro area for the better, reducing congestion and creating better mobility options for pedestrians, bicyclists, and bus and train commuters. The same month, the new mayor, David Briley, released a budget that included no cost-of-living increases for Nashville’s public school employees.

Partially in response to the budget shortfall, Nashville Metropolitan Council Member Bob Mendes proposed a solution: Leave the school district’s revenue out of tax increment financing (TIF) deals that the city makes with developers.

A typical TIF deal in Nashville freezes property taxes at a certain level on a parcel that’s set for development and allows the developer to divert the appreciating portion of the tax assessment to pay back construction loans. That means the school district, which collects about 40 percent of property tax revenue in the city, ends up with less money than it would have under an unsubsidized deal. Last year, the Metropolitan Development and Housing Agency (MDHA), the city agency that administers Nashville’s TIF deals, diverted almost $10 million of would-be revenue away from the school district, according to a report in The Tennessean.

Mendes, who has served on the council for three years, says he believes he had the votes to pass the bill last week, but he agreed to hold off bringing the legislation up for a vote. In exchange, the city and MDHA agreed to make no new TIF deals until at least next summer, when a committee is expected to wrap up a comprehensive study of Nashville’s TIF program and make recommendations for its improvement. Mendes also sponsored the legislation to create the committee.

“My feeling is that there’s an important place for tax increment financing in how we run the city, but yet almost everybody hates it,” Mendes says. “My opinion is if we put more sunlight on exactly what deals are being done and why, then people would have a better opinion of it, and we’d have a more nuanced approach.”

Mendes says the MDHA and TIF deals are largely insulated from the political process in its day-to-day administration. Deals are made between MDHA officials and developers and then brought to the council for approval.

Officials with MDHA and the Mayor’s Office of Economic and Community Development did not respond to interview requests. Both bodies have two appointees each on the seven-member TIF study committee, with city council appointing the other three.

“So far, the people who’ve been appointed hit a spectrum of development people, city finance people, and I’m assuming the council is going to pick some community advocate people, and it will be balanced,” Mendes says.

Greg LeRoy, executive director of Good Jobs First, which tracks economic-development subsidies, says cities everywhere should consider keeping schools’ portion of property-tax revenue whole when making TIF deals.

“Education is the best way out of poverty, and therefore, good schools are necessary for equitable economic development,” LeRoy says. “You’re shooting yourself in the foot if you’re under-funding your schools in the name of economic development.”

Beyond that, LeRoy says, employers are attracted to places with good public schools, because that’s usually the first consideration for young employees when they’re considering where to move.

“To us, shielding school funding goes hand in glove with good economic development because K-12 education is the cornerstone of our nation’s workforce development system, and because it’s critical if you expect to attract good employers,” LeRoy says.

Last month, the Lincoln Institute for Land Policy released a report called Improving Tax Increment Financing for Economic Development looking at a number of studies on the impact of TIF programs in various cities. It notes that, while TIF districts are only meant to capture the increased tax assessment that wouldn’t have existed without the development, in practice they capture value that would have appreciated in the normal course of time. It recommends that states allow school districts to opt out of TIF deals, and that local governments should make more information about TIF deals publicly available.

Mendes also helped pass TIF-related legislation in 2016 in response to reports that the MDHA was ending up with some tax revenue that should have been going to the city’s general fund, according to The Tennessean.

“I think there’s a pretty widespread feeling, even among people who are hardcore, downtown business-type folks, that some of what we’ve done with TIF over the last 10 years when the city has been booming is maybe not the ideal usage,” Mendes says.

 

Thinking Bigger about How to ‘Keep Austin Affordable’

A city hall rally held by the Keep Austin Affordable coalition in June 2018. (Credit: Keep Austin Affordable)

It started with a more modest proposal.

In 2016, recognizing both the city’s strong financial position and a litany of critical investment needs, the Austin City Council appointed a Bond Election Advisory Task Force to develop a list of projects worthy of funding. Affordable housing was a priority, along with work related to flooding, transit, parks, libraries, and mobility. Katy Zamesnik and Carla Steffen, the two city staffers charged with helping the Task Force develop its proposal, say the total needs assessment ran to about $3 billion. As a starting point for discussion, they whittled that down to around $640 million, with around $85 million dedicated for housing.

Over months of discussion and a series of community meetings, the proposal grew. In the spring, the task force made a bond recommendation to the city council that included $161 million for affordable housing. But by that point, a bigger movement had taken hold.

“We went all in on $300 million,” says Madeline Detelich, a co-chair of the housing committee for the Austin Democratic Socialists of America, which joined a range of advocacy groups to push for the biggest housing bond in the history of the city. They made buttons and stickers reading “300 or Bust,” Detelich says. “It really raised the limits of what people thought was possible.”

Eventually, the city council settled on a proposal that would dedicate $250 million for affordable housing as part of a larger $925 million bond referendum that voters will face in November. The housing proposal — Proposal A — is the largest investment voters will see on the ballot. If approved, most of the money would be split between land acquisition for future affordable housing development and a rental assistance program, with $28 million each for affordable homeownership and home repair programs.

The proposal follows on previous housing bonds in 2006 and 2013 worth $55 million and $65 million, respectively. The success of those earlier bonds, plus the continued tightening of the housing market due to the city’s growth, has created an opportunity to ask voters for a much bigger investment, advocates say.

“In the past, the city has succeeded in getting voter approval for 50- and 60-odd-million-dollar housing bonds and those have done extremely powerful work, but not at a great enough scale to address our affordable housing deficit, our segregation issues, and the displacement that’s occurring in our communities,” says City Council Member Gregorio Casar, who helped lead the push for a bigger housing bond in 2018.

Austin is hoping to create 135,000 new housing units in the next ten years, according to a Blueprint written by the city’s Department of Neighborhood Housing and Community Development. The city is currently facing a shortage of 45,000 units for residents earning less than 60 percent of median family income, according to the Blueprint. Casar says the lack of affordable housing is a threat to economic diversity in Austin, which is the very thing he says so many Austinites value most about the city.

“If we don’t step up and fight for our community, then we’d be taking that for granted,” Casar says. “We know that the path we’re on is a scary path, where we could become a city just for the wealthiest among us.”

While the city has been developing the bond proposal, another task force has been charged with creating a set of anti-displacement recommendations aimed at chipping away at racial segregation in the city, as Next City has reported. If it’s approved, the largest portion of the housing bond — $100 million — will be dedicated to acquiring land for future affordable housing development. Those acquisitions will be targeted in areas that are likely to face gentrification in the near future, says Austin Mayor Steve Adler.

“We find that if you wait too long, then the price of land goes up and providing long-term affordability and mixed-income housing becomes really expensive,” Adler says. “You have to get out in front of gentrification.”

Adler admits that even a $250 million bond won’t match the full scale of the affordable housing need in Austin. But he and other proponents note that cities in Texas aren’t able to rely on help from the state or federal governments to address many of their challenges.

“If we had no bond at all it would be catastrophic,” says Nora Linares-Moeller, executive director of HousingWorks Austin, a nonprofit advocacy group became the “steward” of the Keep Austin Affordable bond slogan in between the 2013 and 2018 elections. “We are moving in the right direction. Everyone is talking about it.”

Detelich acknowledges there are limits to the bond solution, especially when compared to a more radical vision of fully public housing that many of her fellow party members hold dear. But she’s especially excited about the land acquisition portion of the proposal. And in door-to-door campaigning, members have found renters to be especially receptive to supporting the bond, because the problem it’s trying to solve is so obvious.

“It looks like it’s going to pass, and we’re hopeful that when it does, it doesn’t just pass but it passes with 70 percent or 80 percent support,” Detelich says. “We’re just really excited to get those results in and see what we can do with that. If everything goes according to plan, and this bond ends up being really popular, we’re hoping we can take that back to the city and say, ‘This is an issue that people are really concerned about and willing to put real money toward. So let’s keep going with this.’”

 

The Student Voice is Back Where It Belongs in Philadelphia

Despite losing official representation in their school system's governance seventeen years ago, Philly students never stopped speaking out. Here, about a dozen students lock arms outside Philadelphia's school administration building Wednesday, April 17, 2002, forming a human chain and refusing to allow anyone inside. The Philadelphia School Reform Commission, at the time set to announce which companies and nonprofit groups will be given control of some 75 schools in the district, decided to postpone the meeting for two hours and move it to another building several blocks away rather than make a forced entry. (AP Photo/Brad C. Bower)

Philadelphia’s Home Rule Charter makes it perfectly clear: “There shall also be a non-voting student advisory member of the Board of Education and alternate appointed by the Board from among the students enrolled in the Philadelphia public schools.”

And yet for the last seventeen years, while Philadelphia’s public schools were governed by the state-controlled School Reform Commission, students have had no formal representation in the school system’s governance. With the restoration of local control, that’s about to change. Philadelphia’s nine-member Board of Education held its first post-School Reform Commission meeting in July. And in September, it introduced its two new student members: Julia Frank and Alfredo Praticò, both 17-year-old high school seniors selected from more than 50 applicants.

Though they won’t have a vote on official Board of Education business, the students say it’s their goal to keep the Board’s work grounded in the interests and concerns of the student body.

“The perspective of the student is, we see what works and we see what doesn’t work,” says Praticò. “And we’re there to advocate for the things that do work.”

Praticò, who says he plans to study economics or political science in college, and Frank, who is considering biochemistry, intend to act as intermediaries between students and the board. They say they’re developing a schedule of in-person meetings with students at various schools, and working to establish online forums for students to air grievances and share ideas.

“The general plan is to hear ideas from students and think about the best way we can serve them and implement them,” Frank says.

“It’s still kind of in the draft phase,” says Praticò.

Philadelphia School Board President Joyce Wilkerson says that under the School Reform Commission — of which she was also a member — students were able to testify at public meetings, which gave them some voice in the process. But having student representatives on the board will enable board members to “penetrate deeper and get a broader view of what their concerns are.”

“It’s going to be interesting to see,” Wilkerson says. “I think they’ll probably be using media in a way that we don’t, because we’re old fuddy-duddies. I’m excited about it. We’re not trying to micromanage them.”

Wilkerson says the applicants were screened by a panel that included students, the Mayor’s Office of Education, the Superintendent’s office, and others. To be eligible to apply, students had to be in their junior or senior year of high school, maintain at least a 2.5 GPA, and provide recommendations from a teacher or principal, among other qualifications, Wilkerson says. She believes the restoration of student voices to the District’s governing body is part of a broader push to establish public trust.

“I think one of the huge downsides of the School Reform Commission was that the district became so isolated form the constituents it served,” Wilkerson says. “People became very focused on their child — if they could get their child in an advantageous situation. There wasn’t that broader community of concern for public education in Philadelphia. I see this as another step to reconnecting with the community that we serve.”

In 2014, SoundOut, a nonprofit group focused on student involvement in school affairs, released a report showing that 25 states allow student representatives on district school boards, while 14 states specifically ban their involvement. Adam Fletcher, the founding director of SoundOut, says that young people benefit from being involved on school boards, and so do the organizations they’re serving.

“In turn, adults get a sense of effectiveness and a real sense of camaraderie and partnership with young people when they’re involved in decision-making,” Fletcher says. “So school boards basically become better for having these roles.”

Student representation on school boards falls on a spectrum of effectiveness, Fletcher says. Students are sometimes included for mere tokenism purposes, or they play the role of informants or consultants to the board, or in some cases, they have had actual voting positions.

Lately, school boards have been trending toward including more student voice in their work, Fletcher says.

“What’s happening in Philly right now is super awesome,” he says. “[But] what Philly’s doing is actually catching up.”

The key question is whether student involvement actually helps school districts achieve better educational outcomes. Fletcher says there’s no concrete evidence that it does or does not. But the prospect of improving the educational environment — giving more students a better chance to achieve what they want to achieve — is the reason Frank and Praticò are willing to invest their time in their new roles.

“If we see that there are better ways that the School District could achieve that task, no doubt we are going to be talking about it,” Praticò says. “We are going to be bringing it up in meetings.”

Frank and Praticò say they’ll encourage students to continue attending public board meetings and testifying about their concerns. And they hope their presence on the board will help integrate those concerns more deeply into the district’s work.

“It’s kind of counterintuitive to have the people who make the policies not be in communication with the people who are affected by the policies,” says Frank. “Regardless of specifics, just having communication is going to always be beneficial.”

 

The Complex Realities of Private Dollars for Public Spaces

(Photo by Tony Webster)

Earlier this month, the Policy Advocacy Clinic at the UC Berkeley School of Law released a report reflecting three years of research into business improvement districts (BIDs) in California, entities that collect assessments from business owners or property owners in a defined area to pay for special services.

The conclusions were damning. The report, titled “Homeless Exclusion Districts,” suggests that BIDs “use their power and resources to advocate for anti-homeless policies and to support policing practices that exclude or drive out homeless people,” as the clinic put it in a press release. The growth of BIDs “correlates strongly” with the increase of laws like those that ban sitting or lying down on the sidewalk during certain times of day, the report says. It tracks instances of individual BIDs policing homeless people or coordinating with police to confront people living on the street. And it found in a survey that more than 80 percent of BIDs identified “panhandling and loitering” as an important safety and security concern.

“There’s a fundamental philosophical issue [with BIDs], which is that the presence of homeless people is an issue in the neighborhood,” says Shelby Nacino, a 2018 Berkeley Law grad who helped write the report.

The researchers began working on the report after the Western Regional Advocacy Group, a coalition focused on homelessness and poverty issues on the west coast, reported that homeless people in its orbit said they were being affected by the presence of BIDs, Nacino says. In addition to the survey, researchers conducted interviews with BID representatives and people living on the street, and they filed public records requests seeking information on BIDs’ advocacy work around homelessness.

The report is critical of how some BIDs access public money to engage in policy advocacy work. BIDs are quasi-public entities, but they are typically funded privately, collecting assessments from property owners or business owners who must vote to approve the creation of the BID. In some cases, though, BID assessments apply to municipal or public buildings, thereby accessing taxpayer money. The report found that public buildings accounted for an average of 16.8 percent of the total assessment in eleven case-study BIDs in Berkeley, Chico, Sacramento, Chico, San Diego, Los Angeles, and San Francisco.

“I think if business people and property owners want to take over our neighborhoods, they should do it on their own dime,” says Paul Boden, executive director of the Western Regional Advocacy Project. “I don’t believe that public space is best controlled by private enterprise. I don’t believe that the only role of cities is to earn money for corporate America.”

In San Francisco, BIDs are authorized under two laws from 1989 and 1994. Both allow for the creation of special services districts, but the 1989 law allows assessments only on business owners, while the 1994 law allows assessments on all property owners in a certain area, with the money to be used for a broader array of services. Some newer BIDs are called “Community Benefits Districts,” or CBDs, though they are authorized under the same laws.

Some BID representatives reject the characterization of their work presented in the report.

“We all understand that this population that lives on the street are our neighbors as well,” says Andrew Robinson, executive director of The East Cut CBD in San Francisco. “They live in the community and we are not in the business of wanting to move somebody who needs service somewhere else.”

Robinson says the East Cut CBD doesn’t experience an “antagonistic relationship” with people living on the street the way the report describes. And he says the group doesn’t engage in policy advocacy. In fact, Robinson says, the report unfairly conflates most BIDs’ work with the Union Square BID in San Francisco, even though that group is a 501(c)(4) nonprofit, and most BIDs are 501(c)(3) nonprofits, restricted from political lobbying.

The Union Square BID also boasts on its website of addressing some 20,000 sit/lie law violations and 1,700 cases of “aggressive panhandling in 2017. Robinson says The East Cut CBD only calls the police when it feels like someone is a threat to others.

“The reality of the situation on the ground, I think, is something much more nuanced, complex and not captured at all in that report,” says Fernando Pujals, director of communications for the Tenderloin Community Benefit District in San Francisco. “I think the report, from what I’ve seen, is trying to make a leap to causation where there’s correlation.”

Both Robinson and Pujals say that they want to improve their neighborhoods for the people living on the street as much as for the property owners who pay the assessments. Many BIDs say they hire people living on the street for certain jobs and try to help others find services.

“At the end of the day what CBDs offer is really a lot of connectivity in the public space,” Pujals says.

But for Boden, of the Western Regional Advocacy Project, most BIDs are just paying lip service to helping the homeless, when they really just want them out of sight. Boden thinks BIDs only exist to tidy up downtowns and create more wealth for a select few. The groups that do engage in policy advocacy work should spend less time worrying about street-level quality-of-life issues and more time pressing for investment in permanent, affordable housing for the homeless. Simply referring a homeless person to a shelter is an empty gesture, for example, he says.

“Homeless people know where the fuckin’ shelter is,” Boden says. “The shelter waitlist is over 1,200 names long.”

 



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