Posts by Author: Zoe Sullivan

Financing the Future of Cooperative Low-Income Housing

A low-income limited equity cooperative on West 139th Street, Manhattan. (Photo by Oscar Perry Abello)

In the late 1970s and early 1980s, New York City went through a devastating financial crisis. Buildings in neighborhoods across the city were essentially abandoned by their landlords. In some cases, tenants banded together to take over managing their buildings. Clusters of such buildings emerged in some neighborhoods, including Manhattan’s Lower East Side, East Village, and Harlem. The city created the Housing Development Fund Corporation program, offering reduced property taxes to cooperatively-owned buildings reserved for low- and moderate-income residents, known as limited-equity cooperatives.

In a limited-equity cooperative, members buy a share in the development, which gives them the right to occupy one of the units. Members pay monthly fees to cover maintenance expenses and participate in decision-making around building management. To ensure that limited-equity cooperatives remain affordable, shares have restricted resale values and members must also fit income limitations. This arrangement can make limited-equity cooperatives more accessible to lower-income households than community land trusts or other affordable housing models. A recent study from the National Housing Institute found that 90 percent of inclusionary housing programs involving owner-occupied housing use some form of shared equity to preserve the affordability of units.

In the decades since many cooperatively-owned buildings were established, maintenance issues have piled up. For limited-equity cooperatives, it has proved especially difficult to find financing options because of their income restrictions and the relatively small sums involved, according to Harley Seligman at the National Cooperative Bank. Seligman recently negotiated a $300,000 mortgage and a $100,000 line of credit to enable the residents to carry out needed maintenance for a “small” 7-unit limited-equity cooperative in the East Village.

The City of New York still offers a range of financing options for limited-equity cooperatives and other low-income housing, but Seligman says the agreements can be cumbersome to combine with other financing. The city loans also require that buildings be up-to-date on water and sewage fees and property taxes, which isn’t always the case for buildings that are full of low-income homeowners. (Next City previously reported on a loan program to help low-income cooperatives pay off those debts.)

For conventional cooperatives, sales to new co-op owners can typically provide cash to help cover any major outstanding building-wide maintenance issues. But because limited-equity cooperatives restrict resale values, sales to new co-op owners don’t provide a large enough cash influx to cover most maintenance needs. The National Cooperative Bank — which itself is cooperatively-owned — has been one of the few private financing sources available for limited-equity cooperatives. Last year, the bank made $32.4 million in loans to 12 limited-equity housing cooperatives around the country.

“It’s about economies of scale,” says Andy Reicher, who runs the Urban Homesteading Assistance Board, a New York City nonprofit that has provided property management training to co-op members since the 1970s. “It’s difficult for a lot of lenders to make much smaller loans of under a million dollars, [typically] a few hundred thousand dollars, that oftentimes limited-equity co-ops need.”

The scale challenge is even more apparent at the co-op unit level. Since limited-equity cooperatives house low-income households, most financial institutions have been reluctant to make loans to help aspiring members purchase a share. Units left vacant after someone moves out, or after someone passes away, mean money left on the table that could help pay for building maintenance needs.

“Over the past several years as we surveyed co-ops and spoke with co-op practitioners across the country, the need for small share loans for limited-equity co-ops was nearly universal,” says Reicher.

The nonprofit and the bank have joined forces to fill in the gap. At the end of October, the National Cooperative Bank announced that it was extending a $3.7 million line of credit to HomeOwnership Lending, LLC, a subsidiary of Urban Homesteading Assistance Board. The line of credit will allow HomeOwnership Lending to offer loans of at least $10,000 for 15-year fixed-rate terms to prospective limited-equity cooperative members earning between 30 and 165 percent of area median income — the eligible income band for NYC’s Housing Development Fund Corporation program. HomeOwnership Lending will also make loans to the buildings.

Reicher notes that the new partnership dovetails with Freddie Mac’s “Duty to Serve” plan. As Next City covered previously, both Freddie Mac and Fannie Mae have commitments to supporting shared equity housing as part of their congressionally-mandated Duty to Serve plans. Lenders like HomeOwnership Lending can sell their loans to Freddie or Fannie — getting back the loan principal and a share of the total interest, allowing them to make another share loan right away instead of waiting to get paid back over the 15-year loan term. (Known as selling loans on the “secondary market,” it’s the main way that Freddie and Fannie work to incentivize the private sector to make loans for specific purposes.)

“Freddie Mac is rolling out a product to encourage lending to [limited-equity cooperatives],” Reicher says, while also noting that Fannie Mae is working on a similar initiative. Seeing these institutions move into this niche, he said, “begins to provide some confidence to lenders that they can make these loans.”

For Reicher, the benefits of cooperatively-owned housing go beyond stable, affordable homes. For him, co-ops mean “practicing democracy at home,” which then expands to the larger community.

“Surveys have shown that there’s less crime and fewer drugs than in surrounding neighborhoods, that housing satisfaction is high, that co-op members tend to vote more than other people in their neighborhood, that they’re engaged in civic affairs,” Reicher says.


New Cleveland Fund Will Acquire Businesses and Sell Them Back to Workers

Cleveland's Evergreen network of cooperative businesses today announced a new fund to buy-out retiring small business owners and transfer their businesses into employee-ownership. (Credit: Democracy Collaborative/John Duda)

Tameka Thomas had returned to society after a five-year prison sentence, and a month after her release, she landed a job with Evergreen Cooperatives in Cleveland with help from a re-entry transition program.

“I thought it was going to be really, really hard to find employment when I came home,” Tameka Thomas says. “I am so thankful for Evergreen for giving me a second chance and for believing in me and just trusting in me and just giving me the opportunity to prove to everyone that even though I made a mistake, that mistake doesn’t define me.”

While Thomas was grateful for the job when she landed it, she didn’t realize that she had found herself in a cooperative business — that is, a business where the workers collectively own the business, make major management decisions and share in the profits.

“You understand the importance of filling these orders that we have, as opposed to coming to work and ‘Why do we have to push out a thousand scrips? Why do we gotta do that?’” Thomas says. “Becoming an owner-operator, you know: if we don’t meet this quota, we don’t get paid. If we don’t fill this order, we lose customers. So, you just tend to have a different outlook.”

She thrived in the environment, and is now a department supervisor. “I started out on the production floor, and I worked my way up,” Thomas says.

Evergreen Cooperatives launched in 2008 to create living-wage jobs in seven low-income Cleveland communities. Instead of trying to lure corporations offering low-wage jobs, the coalition behind Evergreen Cooperatives aimed to catalyze worker-owned businesses with the idea that low-income residents could be trained for the jobs created. Currently, Evergreen employs more than 250 people at three core businesses: an industrial laundry, an urban greenhouse, and an energy-efficiency contractor. The laundry recently took on the Cleveland Clinic as a client, as Next City previously covered.

Now, however, the organization is looking to expand via a different pathway. Today, Evergreen Cooperatives announced the launch of the Fund for Employee Ownership, an investment fund aimed at supporting the conversion of existing businesses to cooperative or Employee Stock Ownership Plan (ESOP) models.

As it did with the original Evergreen network, the nonprofit research and advocacy group Democracy Collaborative is supporting the launch of the Fund for Employee Ownership. The fund will leapfrog the start-up process, explains Jessica Rose, chief financial officer at the Democracy Collaborative. Typically it can take many months, even a year or more, to train employees before they’re prepared to purchase a business from its existing owner. The Fund offers to buy-out owners when they’re ready to sell or retire, and then get to the hard work of converting to employee ownership.

“We’re excited about the opportunity to accelerate that process of developing more employee-owners,” Rose says.

The businesses that undergo conversion will be professionally managed but employee-governed. “One hundred percent worker-owned, one worker, one vote basis,” Rose says. “The workers will be participating in meaningful decisions: what management to hire; how to deal with profit; board governance.”

Joining the Evergreen network will also allow companies to economize by sharing back-office support, Rose explains, and to benefit from a team that “knows what it takes to run a participatory business.”

The change in strategy from starting new businesses to converting existing ones, Rose says, aims to acknowledge the fact that the baby-boomer generation is retiring. “That opportunity is a national story,” Rose says, acknowledging that while the Fund currently is focused on Cleveland and northern Ohio, the vision is to develop a model other communities can implement.

Employee-ownership has other champions among those focused on helping millions of business owners think through what to do as they consider retirement — a phenomenon that could have major consequences for cities.

One of those champions is Andy Manchir, who provides exit planning services for business owners looking to retire. He also trains other exit-planning professionals on ESOPs. Before working on exit-planning, Manchir worked for Fortune 500 companies. Now, his company has an ESOP. “We kind of practice what we preach that way,” he says.

“I like how [employee ownership] gives a good opportunity for business owners while at the same time for rank-and-file employees who work with them and for them. That’s what gets me fired up about this,” Manchir says of ESOPs.

“What that does is it really kind of forces savings in a way our current plan doesn’t do for folks,” he adds. “So many people are going to retire without retirement plan savings. It’s just bad policy for the country.” Manchir says that ESOPs provide a way to address that shortcoming.

Manchir notes that there are tax incentives for ESOPs, and that organizations such as the Exit Planning Institute, which trains exit planners around the country, are making efforts to spread awareness of worker-owner models for retiring business owners.

“There’s a ton of closely-held businesses out there that employ the majority of Americans,” Manchir says. “Those are the owners that really have to be looking out for ‘well, how am I going to transition as I get close to retirement?’”

Indeed, around six million operating companies are privately-owned in the United States, representing around $30 trillion in sales. According to U.S. census data, baby boomers aged 54 to 72 own 63 percent of these companies. Those baby boomer-owned businesses represent roughly $10 trillion in wealth poised for transition, according to the Exit Planning Institute.

Manchir, like Thomas, also sees employee-ownership as an incentive to work hard and perform well. “On average, there’s good academic research that shows the employee-owned business outperforms the traditionally-owned business,” he says. “There’s lower turnover rates in an employee-owned company. They grow a little faster, so therefore these things become more successful businesses.”

Back in Cleveland, Rose is already finding a receptive audience among the area’s business owners.

“We’re focused on industries that employ the kinds of workers we are looking to target,” Rose says, namely low-income people often with barriers to employment such as a criminal record.

The Fund’s first investor has put in roughly $5 million of concessionary debt, Rose says, describing that as “patient capital.”

“If we hit our job-creation metric,” Rose explains, the investor will be able to convert that loan into equity in the converted business — and the workers can buy back that equity over time.

“There’s a smaller market in the impact space of those types of investors, and we’re hoping that we can partner with more, but our ambition is that this can be at or near market rate [returns],” Rose says.

Around the country, more and more investors are indeed becoming interested in the worker cooperative market as a place where they can earn some financial return while also making a difference.

Although some businesses have already begun discussions with the Fund for Employee Ownership about conversion, Rose explains that succession issues prevent her from disclosing their names.

“It seems to really make a difference to people when you can look them in the eye and say we’re going to take care of the people,” Rose says of those early discussions.


Leveraging the Sun to Help Reduce Racial Inequality in Minneapolis

Color-coded maps like this one of Minneapolis were created by the Home Owners Loan Corporation, a former federal agency created in 1933. The maps reflected the existing beliefs of banking and real estate industries that neighborhoods where people of color and immigrants lived were too risky for lending, and thus shaded or outlined in red, giving rise to the term “redlining.” The influence of these real estate and lending patterns is still felt in cities today, even 50 years after the Fair Housing Act of 1968. (Credit: Mapping Inequality)

Jamez Staples grew up on the north side of Minneapolis, a predominantly African-American community. In the aftermath of the 2008 financial crisis, a college course led Staples to volunteer on a solar energy project in the Virgin Islands. That trip prompted him to imagine how solar energy could transform his community in decidedly not-tropical Minnesota. The state’s 2013 Solar Jobs Act gave him and his community some incentives and tools to make it happen.

So Staples founded Renewable Energy Partners. “The intent of me starting the company was to employ people in the solar energy industry,” he says. “But it just so happened that because nobody really knew how to do it, we had to train people.”

Five years later, Staples says his company has half a dozen solar energy projects in the works. One of those projects involves installing solar panels on a building Staples took out a private loan to purchase. That building once housed a state workforce center. Staples’ vision is to transform it into a solar jobs training center that is accessible to the low-income communities of color.

After speaking with elected officials and not finding the support needed to make the project happen, Staples went ahead on his own. Asked why he was willing to take such a big personal gamble on the project, Staples says that while the decision may not have been easy on a personal level, it was clear within his bigger vision.

“I feel like this is the multiplier effect here that will ultimately spur the change to make sure that people from this community — as well as other economically challenged areas — will have the ability to participate in the clean-energy economy,” he says.

“There are a lot of people who are really interested in going into this field,” says Virginia Rutter, the Minnesota point person for Solar United Neighbors. “I think we’ve been adding a lot of jobs, but there just aren’t enough trained electricians, especially out in Greater Minnesota.”

Clean-energy job growth outpaced overall job growth in the state between 2016 and 2017. An existing training facility sits about 45 minutes by car from downtown Minneapolis, but Rutter said that having training accessible to people’s homes and near mass transit routes is “really needed.” She calls Staples’ planned training center, “fantastic.”

“When I got into the industry, I realized that the training wasn’t accessible, so I said ‘we need to bring the training into the community,’” Staples says. He also hopes his venture can be about even more than just training people how to install solar panel systems — that it can be a launching point for many different types of careers in sustainability as the sector grows.

A 2017 report found Minnesota to be the second worst state in the nation in terms of racial inequality. Keith Mayes, a professor of African American Studies at the University of Minnesota told CBS News that employed African-Americans receive very low wages. High School graduation rates are also an issue. Students of color in Minnesota graduate at a rate of approximately 70 percent, while nearly 90 percent of their white peers graduate, according to data from the Minnesota Department of Education.

Staples thinks career-focused technical education can make a difference. At five times the size of a similar training facility in Rochester, MN, Staples estimates that, once operational, his training hub should be able to serve at least a thousand people per year. Along with solar installation training, Staples said the facility will also likely offer courses in drone technology, green infrastructure, virtual reality and robotics.

Meanwhile, last year the city of Minneapolis agreed to purchase 20 percent of the power produced by a Renewable Energy Partners solar installation on the roof of North High School. That project should produce 1 Megawatt per year, and it will connect to a local microgrid. When the installation is finished next year, the North High project will not only produce energy but also offer a way for students to begin learning the technical aspects of solar energy production.

“I’m a multiplier guy,” Staples says. “We have some of the worst disparities. So, how do we leverage this asset, which is right in the heart of the community, and bring training for various sustainability careers into the urban core, which could use it the most.”


Plugging California’s Renters into Energy Efficiency Programs

An Energy Star label is shown on an oven at an appliance store in Mountain View, Calif. (AP Photo/Paul Sakuma)

Andrew McAllister leads energy-efficiency solutions for California’s Energy Commission. The urgency of his work became even more apparent earlier this month, with the report from the Intergovernmental Panel on Climate Change (IPCC) issuing a dire call to action: humanity has roughly 10 years to slash greenhouse gas emissions if it is going to stave off a 1.5 degrees Celsius — 2.7 degrees Fahrenheit — temperature increase by 2050.

The IPCC’s greenhouse gas emission reduction targets are steep — humans must reduce greenhouse gas emissions by 45 percent within the next 12 years while also hitting a target of zero net emissions by 2075. No one means of reduction will be enough. Reducing automobile emissions, or emissions from food production, especially meat — these are just some of ways to help meet those kinds of targets.

For McAllister, one means of reducing emissions is top of mind, a means that has the added benefits of boosting incomes for some low-income households and creating tens of thousands of new jobs: funding energy-efficiency improvements for multi-family rental properties across California.

“Multi-family is a large piece of our overall housing in the state, and it’s disproportionately low-income,” McAllister says. “It’s a big lift, no doubt. We are talking significant resources.”

But McAllister acknowledges that, so far, the state has merely “scratched the surface” of the energy-efficiency modifications that could be done to rental properties. These homes, he says, represent “a large part of the energy-efficiency solution that we cannot afford, in the long-term, to ignore.”

Another timely report dives into just how much potential impact there is beneath that surface. Produced by the Natural Resources Defense Council and a number of other organizations working with the Energy Efficiency for All campaign, the “Plugging Into Savings” report shows how California can take a significant step towards ambitious emissions reductions goals by investing in energy-efficiency improvements for multi-family rental properties.

“We need every household to be getting 30 percent minimum of energy efficiency savings to meet our climate targets,” says Maria Stamas of the Natural Resources Defense Council. “This report shows that is cost effective and possible.”

The report specifically examines California’s Energy Savings Assistance Program, which provides energy-efficiency upgrades at no cost to households earning up to 200 percent of the federal level — about $49,000 a year for a family of four as of 2017. Roughly 13 million Californians now qualify for the Energy Savings Assistance Program, a third of whom live in multi-family rental housing, meaning they live in buildings of at least five units. The program costs an annual $375 million, funded by a surcharge on all customers of privately-owned electric utilities across the state.

But despite its wide potential reach, the program only serves approximately 300,000 residents each year, and multifamily tenants have not always participated at levels representative of their proportion of the population, the report finds. Out of its $375 million annual budget, the Energy Savings Assistance Program currently only spends about $20 million a year on energy-efficiency improvements for households in multi-family housing, according to the Plugging Into Savings report.

There are multiple reasons that the program has historically underserved eligible customers in multi-family properties, according to the report. There’s the disconnect between owners and renters depending on who pays for an efficiency measure upfront versus who benefits from the utility bill savings — if landlords pay electric bills, tenants don’t get the cost reduction benefits of buying LED light bulbs or from energy-efficient refrigerators and other appliances. Not to mention, more than half of California’s low- income population does not use English as their primary language, which makes those customers harder to reach for most efficiency programs.

“If you want to speak big picture,” says José Torres of the California Environment Justice Alliance, “it’s important to ensure that these resources get to low-income folks and environmental justice communities. And more often than not, those folks are going to be renters.”

Low-income renters tend to bear a higher cost burden for energy-inefficient buildings and appliances, according to Torres. “It makes sense for us to invest in places where people are having trouble paying their bills, but also in places are also going to be impacted the most [by extreme weather],” Torres says.

Even for the households it does reach, Stamas says, the program “tends to skim the surface of what’s possible in a household,” by sticking to modifications such as light bulbs and faucet aerators.

“The program isn’t offering very efficient hot water heaters, which are one of renters’ main sources of bills,” Stamas explains. “It’s not offering [energy-efficiency modifications] that could really make a difference.”

The report still ranks switching to LED light bulbs as having the biggest impact on reducing electricity usage. Some of the other recommendations include supplying residents in multi-family housing with advanced power strips that can sense when rooms are empty, reducing power drawn from the wall socket; providing eligible households with high-efficiency set-top cable boxes; and of course the high-efficiency gas water heaters.

The report calls for the Energy Savings Assistance Program to spend at least $90 million a year for ten years on energy-efficiency improvements in multi-family housing, starting in 2021. If the suggestions in the report are adequately funded, the report estimates that California’s Energy Savings Assistance Program could quadruple its energy savings compared to projected performance under the current program parameters.

More concretely, the report’s recommendations could result in an estimated $136 million to $200 million in annual utility bill savings, and 520,000 fewer annual metric tons of carbon emissions — the equivalent of taking 100,000 passenger cars off the roads for one year.

Through a survey of energy-efficiency industry employers in California, the report estimates a higher level of funding for the Energy Assistance Program would also lead to the equivalent of 6,000 or so full-time jobs created per year on average from 2018 to 2031. McAllister notes there are already roughly a half a million workers and counting in California’s clean energy industry.

At least some additional funding is already on the way for energy efficiency in multi-family housing. In addition to the existing the Energy Savings Assistance program, which primarily covers improvements within housing units, in 2016 the California Public Utilities Commission mandated that the state’s privately-owned utilities develop a new program valued at $80 million annually to improve energy efficiency in the common areas and entire buildings themselves of rent-restricted affordable housing, which includes many multi-family buildings across the state.

Ensuring that the entire population is able to participate in clean energy and energy-efficient technologies will “take bold effort,” McAllister says. “We absolutely will not succeed, and we certainly will not be able to consider the outcome a success if we have not brought along the least among us.”


The Sun Could Power a Path into the Middle Class in Wisconsin

(AP Photo/John Raoux)

Wisconsin is usually associated with cheese (or beer) not sunshine. Yet the southwestern part of the state has been targeted for the largest solar energy installation in the Midwest.

The Badger Hollow Solar Farm is slated to contain as many as 1.2 million solar panels over a 3500-acre expanse. The project is being developed by Invenergy, a private company focused on developing renewable energy sources. The vast area required for the solar farm means locating it in a rural area makes the most sense. Yet much of the workforce needed to build and then maintain the farm will likely have to come from nearby urban communities.

That is where Wisconsin Regional Training Partnership (WRTP)/BIG STEP and the International Brotherhood of Electrical Workers (IBEW) are stepping up to discuss strategies with Invenergy. BIG STEP stands for “Building Industry Group – Skilled Trades for Employment Program.” If it works, workers could parlay jobs related to the construction of the solar farm into new, higher-paying careers in construction or electrical work. Cities like Washington, D.C., are already making attempts to use sustainable energy jobs to do just that.

WRTP/BIG STEP is a Milwaukee-based non-profit organization dedicated to connecting people to family-sustaining jobs, according to its website: “WRTP/BIG STEP helps under-employed, under-served, and under-represented individuals succeed in well-paying careers while exceeding industry’s workforce needs.”

The organization currently serves roughly 3,000 people each year. It is the largest workforce development organization in the Milwaukee area. In 2015, minorities accounted for 80 percent of WRTP/BIG STEP’s job placements. In that year, the organization placed 621 people into jobs. On average, those individuals were earning less than $10 per hour prior to WRTP/BIG STEP’s training and job placement assistance. The average wage after going through WRTP/BIG STEP was $18.59.

“What we’re really hoping is to see this as a transitional employment opportunity,” says Mark Kessenich, President and CEO of the WRTP. “They get the job and we can continue to tutor them for an apprenticeship opportunity or other careers within the electrical trades. Or, if they’re interested in the installation work and not the electrical trade, maybe they want to go into manufacturing work with higher-skilled fabrication.”

Setting up the Badger Hollow solar panel fields will demand approximately 200 workers, he said. Those entry-level jobs will pay roughly $16/hour, comparable to market rates, Kessenich says.

John Bzdawka handles business development in the Midwest for the IBEW. He cautions that the contract hadn’t been awarded yet, but says the union would do what it could to win it.

Bzdawka explains that while transportation could be an issue for workers community from surrounding urban areas, such as Madison, the IBEW always prioritizes local labor first.

“We’ve reached out to the community colleges — Madison Technical College, Southwest Technical College, UW Platteville,” Bzdawka says. “And we also talked to the high schools and Midwestern Renewable Energy Associates may have some members in the area who are interested in doing solar work.”

“Maybe we’ll have a bus pick people up at the community colleges and drive them out to the site,” he says, acknowledging that the project is still some six months away from beginning, so many of the details are still being worked out.

Kessenich notes that WRTP “tries to use employment to [level] the playing field” in terms of racial disparities. A 2017 report from the Center on Wisconsin Strategy (COWS) found that the state is one of the three worst in the country for economic disparities between black and white households.

Due to the large number of entry-level positions, Bzdawka sees the Badger Hollow project as a unique opportunity to provide an entry point for a people interested in construction trades or alternative energy. One of the upsides he sees to the project is that in a region where farmers have been hard hit by falling commodity prices, renting land to the solar farm offers a way to ensure not only a regular income but also that the land can stay in the family.

“I’ve been to a lot of different public meetings and there’s always huge opposition whenever ‘eminent domain’ is said, people always cringe. People come with pitchforks and torches,” Bzdawka said. “You don’t really see that at solar meetings.”

The Badger Hollow project will have the capacity to produce 300 megawatts of power, which would make it one of the biggest solar farms in the country not located in California or the southwest. Madison Gas & Electric and Wisconsin Public Service, which is based in Green Bay, will both purchase power from Badger Hollow.


The Hidden Powers of Composting in Baltimore City

Composting units at the Filbert Street Community Garden in Baltimore. (Credit: Filbert Street Community Garden)

Marvin Hayes tells a story about a time he was clinging to a tree for dear life, twenty feet above the ground during a ropes course at Outward Bound.

“I was terrified from heights. A young guy from Baltimore City, from Sandtown-Winchester. Never had really been out camping or rock anything like that,” says Hayes.

Hayes made it halfway but couldn’t get beyond that. So, he says, after about two hours, people helped him get down. The experience stuck with him though, and he made a deal with his school counselor that if he passed all his classes, the school would send him back to try the course again.

“That course turned into about five courses. I wind up getting an internship with Outward Bound, being a counselor,” Hayes recalls. He’s been working with youth ever since. In his latest endeavor, he’s been working with youth for the past year as part of the Baltimore Compost Collective to turn food scraps into “black gold” — compost.

“What’s so special about our program is an opportunity to work with youth to transform them and give them a skill,” says Hayes, who runs the compost collective and is the youth supervisor.

The Baltimore Compost Collective works by gathering food scraps from residences in Baltimore’s Curtis Bay, Federal Hill, Riverside Park, and Locust Point neighborhoods and composts the material at the Filbert Street Community Garden in Curtis Bay. It employs local teenagers and trains them in workforce skills, food access programming and community-scale composting. The compost they create gets used by the Filbert Street Community Garden to grow fresh produce. The collective was modeled on BK ROT, a Brooklyn, N.Y.-based composting service.

The Baltimore Compost Collective developed as a partnership between United Workers, a local community development and worker justice organization, and the Institute for Local Self-Reliance (ILSR), a national nonprofit organization that provides research and technical assistance.

“Our mission, essentially, is promoting a homegrown economy,” says Brenda Platt, ILSR’s co-director.

The group’s website says that it aims to keep political and economic power “as close to the people as possible, and ensuring that communities have the responsibility and authority to make the decisions that impact their lives.”

“In our ‘Composting for Community’ initiative,” Platt says, “our lens is how can we keep these community assets — food scraps, yard debris — circulating in the local economy?”

Often, Platt says, cities create infrastructure to remove compostable materials from the communities that generate them, transporting them to a large, centralized facility someplace far away. ILSR advocates a decentralized approach.

“We’re one of the only national groups really promoting a distributed infrastructure for food-waste recovery that supports community,” Platt says. As a result, the group has been advocating at the statewide policy level for solutions that can develop infrastructure to accommodate the local collection of organic waste such as food scraps.

The group also created a hierarchy diagram that aims to help people recognize what waste can be captured and re-used locally while building community. For example, human food scraps can be used to feed backyard chickens or composted for use in a garden.

The compost collective’s work has turned out to be particularly prescient. In early September, Baltimore was selected as one of two national pilot cities for a food waste reduction project launched by the National Resources Defense Council and the Rockefeller Foundation. The United States wastes an estimated 40 percent of its food each year; under the new project, the Baltimore pilot food waste reduction initiative aims to reduce commercial food waste by half while decreasing residential waste 80 percent by 2040.

The Baltimore Compost Collective work offers a tested model to help achieve that goal in Baltimore while also making progress on other fronts. Composting can enrich soil for food, and, according to ISLR, it can also reduce the pollutants in stormwater by 60-95 percent — an important consideration in Baltimore where storm runoff flows into the Chesapeake Bay. Not to mention the work opportunity, skills growth for youth and face time with mentors like Hayes.

Anthony Walton, 19, is one of the youth working with Hayes. The two met when Walton was 14, but he soon moved with his father to California. When he returned to Baltimore, he got into trouble and was sentenced to community service. He called Hayes, who shared the phone number for the executive director of the community organization where the two had met a few years earlier.

“A lot of people don’t get a second chance at all, so I knew I needed to take advantage of that,” Walton says.

Anthony Walton (front, center) and Marvin Hayes (rear, right) and other community members representing the Baltimore Composting Collective at a September 2018 event announcing the city's new food waste management initiative. (Credit: Institute for Local Self-Reliance)

Before he started with the Baltimore Compost Collective, Walton says he knew nothing about composting.

“I love to learn things, and I’m a very hands-on person, so I thought it’d be something I’d like to do,” he says.

The work, Walton says, has transformed him. “It’s crazy how Mr. Hayes always says ‘We don’t just save food, we save youth’, and that’s in a way what he did with me,” Walton says.

Walton says that chopping up materials for composting helps him to calm himself. “It’s changed the way I eat, too,” he adds. “I think of it as, ‘if it’s not compostable, why should I put it in my body?’”

“Composting has been very good to me,” says Walton, who now lives in a 2-bedroom house that he shares with his girlfriend and step-daughter.

Hayes aims for the program to impact many more people.

“These small-scale food scraps can turn into a large-scale operation and not only save the food scraps from going into the incinerators and to the landfills, but it can create opportunities for youth, for ex-offenders,” says Hayes. “It can create opportunities for anybody who wants to learn a skill with composting, agriculture and lead Baltimore, ultimately, towards zero waste.”


Learning to Cope with Stormwater in New Orleans

The Rosa Keller Library Branch in New Orleans models key stormwater management features the rest of the city could use. (Photo by Infrogmation of New Orleans)

The Rosa Keller branch of the New Orleans public library system is a living example of nascent efforts to more effectively manage stormwater in New Orleans, with its “rain gardens” aimed at capturing and slowing down heavy rains. The rain gardens are actually deep pots, some three feet deep and several feet across, that sit in the front of the library. Living in them: plants that thrive in watery environments like irises and cypress trees.

Stormwater is a particularly vexing issue in the city, where the soil contains a high percentage of clay. That means instead of absorbing water, the ground tends to shunt rainfall elsewhere. When heavy rains hit, as they are doing more frequently, it can overwhelm the city’s fragile drainage and pumping system and cause widespread flooding. Thousands died in Hurricane Katrina when the city’s levee protection system broke, but even unnamed storms are creating flooding hazards in the city.

But measures like those at the library, designed to hold water, or at least slow it down on the way to the city’s drainage systems, can touch some raw nerves.

“A lot of people have PTSD from Hurricane Katrina and other floods and hurricanes … the idea of saying ‘no we want we want to keep water on your property’ just freaks people out,” says Colleen Butler, who chairs the research and policy committee of the Water Collaborative of Greater New Orleans.

The collaborative grew out of the Dutch Dialogues fostered by New Orleans architect David Waggoner, which also sparked the creation of the Greater New Orleans Urban Water Plan.

“There was a growing organic network of people who became aware of and concerned about urban water management in post-Katrina New Orleans,” Nathan Lott, director of the collaborative, says of the group’s inception. “Especially after repairing the levees and shoring up the hurricane risk-reduction system, there was the question of ‘what are we going to do with all the rain that falls inside this bowl that we’ve repaired? We’ve built a better bowl, but it still fills up with rain.’”

The collaborative brings together a diverse group of people. Some, like Butler, who has a Ph.D. in biology from Tufts University, are professionals focused on environmental management issues. Others, Lott says, are business and community leaders who see how water issues affect their friends, families and livelihoods.

The group brings a pro-active mindset to New Orleans’ water challenges.

“I originally was doing ecology and conservation biology … I really wanted to save the world,” Butler says. “But with that, it was kind of disappointing because you mostly study how species are going extinct and how environments are falling apart. And I wanted to really be on the front of preventing those problems rather than just studying them after they’ve already happened.”

As intense storms threaten to overwhelm storm drainage systems in communities across the nation, New Orleans’ water collaborative offers one model for local engagement around urban water issues.

Lott says that over the past three years, the landscape for the group’s work has shifted dramatically. Now, instead of doing community education about stormwater management, which local not-for-profits have stepped into, it focuses primarily on policy issues. It has also dealt with the “growing pains” of a young organization, for example, debating whether to remain an informal network or to formalize the structure; whether to adopt more top-down or horizontal decision-making processes as a group.

“The multi-disciplinary network adds value,” Lott says. “Our role is evolving from less of a voice in the wilderness for this stuff to more of a coordinator and advocate for what’s at the leading edge.”

Restoring trust in the city is part of the advocacy challenge. In the aftermath of Katrina, former city official Jeff Thomas says leaders made serious mistakes in how they handled the issue.

“Early redevelopment conversations were being done mostly by civic and business leaders who had the time and mandate to do so, whereas a lot of New Orleans was still not back in the city. And when they were, they were digging mud out of their houses and rebuilding,” says Thomas, describing the dynamic in the city in the initial months after Hurricane Katrina. Thomas worked with the New Orleans city government on community development issues and environmental policy after the storm.

Some of the ideas that came out of these discussions, Thomas says, “were wildly simplistic and unrealistic and some were more thoughtful and accurate. Somewhere in between was the presentation of a green dot.”

In post-Katrina New Orleans, the “green dot,” a digital mapping tool that was ostensibly used to identify areas that could be developed as green space to absorb heavy rains, became seen as the epitome of cynical, top-down management that would displace long-time residents and businesses. After resident outcries, the city discarded the green dot and any plans around it.

Although rain gardens like the one at the library demonstrate that progress is occurring, Butler says that there are still significant challenges. Money represents one of those hurdles.

“A lot of what we’ve done so far has relied on federal grants, which is great that that’s available, but that’s not a sustainable way forward,” Butler says. “It’s really expensive to deal with 64 inches of rain in a year no matter how smart you do it. It’s really expensive and because we haven’t invested in our infrastructure for the past many, many years, it’s really an uphill climb.”

Thomas agrees. “I think by some estimates there’s $250 million in large-scale green infrastructure projects that are in the design phase throughout the city and some of that a rather large neighborhood scale,” he says. “[Some are] first-of-their-kind concepts in terms of United States. But they’re not yet real. I think, tellingly, they’re also all reliant on disaster funding federal disaster money. So we still haven’t figured out a way to localize the origins of these concepts, to say nothing of how to pay for the maintenance of that.”

Echoing Thomas’s thoughts about sustainable funding, Lott says that the group is working with some suburban parishes, to encourage “looking beyond the current round of federal grant funded projects to how will we do policies locally that create sustainable long-term funding sources for municipal green infrastructure.”


Why Bay Area Residents Want Their Governments to Get into Banking

An Occupy Oakland encampment in 2011. (AP Photo/Paul Sakuma)

Ten years after the most recent financial crisis, some argue we have learned nothing, but a movement across the country to establish public banks shows how some have taken its lessons to heart.

Inspired by North Dakota’s century-old public bank, Oakland is joining with its neighbors — Richmond, Berkeley, Alameda County — to explore how they might establish a regional public bank, meaning a bank that would be co-owned by the four local government bodies, which would serve the public in a way many feel privately-owned banks have not.

Meanwhile, statewide, California has a coalition of cities interested in establishing locally-accountable, ethical banks owned by government bodies, known as public banks. Now, Oakland joins San Francisco, Los Angeles, Seattle, Portland, Philadelphia, and New York City along with New Jersey and Michigan in the quest to establish socially-responsible, government-owned financial institutions that can fulfill public missions.

“The various issues related to banking problems in our communities are interrelated,” says Rebecca Kaplan, at-large member of Oakland City Council. “Part of the motivation for why we need a public bank comes from this work around banking discrimination.”

Before being elected to office, Kaplan worked in the City Attorney’s office on predatory lending issues.

“People were told they were going to pay two percent interest, and they would show [the borrowers] calculations about how little per month they were going to have to pay,” she recalls from her time at the City Attorney’s office. But the paperwork hid in the footnotes how this rate would increase dramatically over time, she says, “And this was done to thousands of people in Oakland — disproportionately to people who did not speak English, who were given documents in English to sign, including widows being targeted in their moment of vulnerability.”

The Wells Fargo fake accounts scandal was another blow to the banking sector’s credibility. The Friends of the Public Bank of Oakland underscore that one of the project’s main goals is to divest from Wall Street given its support for the fossil fuel industry.

The Federal Reserve Bank of St. Louis estimates that about $458 billion in deposits come from state and local governments. State and local pensions systems, meanwhile, account for nearly $4 trillion in investments. That means public banks holding these assets would have substantial financial clout, although those figures are just fractions of the overall banking system’s $12 trillion in deposits and $17 trillion in assets.

YaVette Holts, founder and executive director of the Bay Area Organization of Black-Owned Businesses, known as BAOBOB, agrees that support for a public bank comes from frustration with injustice.

“People came together after Ferguson to think about what we could do to take our money out of this system and keep it in our communities,” says Holts. Those conversations, she says, led to the birth of BAOBAB. When she learned about the public bank initiative, Holts says it was clearly a natural fit.

“[A public bank] would create a resource of funding that would be accessible to our constituents for major things like buying a home or starting a business,” says Holts.

“In light of the gentrification that’s going on,” she adds, Oakland needs to, “step up and help the populace with something like this.”

After reviewing and releasing a public bank feasibility study, the Finance and Management Committee of Oakland City Council voted on Sept. 11 to forward the matter of establishing a public bank to the full council.

Cathy Jackson-Gent, whose firm, Global Investment Company, drafted the feasibility study, told Next City that two of the challenges facing the project include the financing for the institution and the risks posed by the local cannabis industry.

Although cannabis is now legal in California, it remains a narcotic under federal law. Jackson-Gent explains that the feasibility study had recommended that the bank not engage with the cannabis industry because of the risks associated with this discrepancy between state and federal law.

“On the federal level, cannabis is an illegal substance, and so any associated cash transactions are considered money laundering on a federal level,” says Jackson-Gent.

The California Growers’ Association and the U.S. Department of Treasury did not respond to requests for an interview for this article. Nor did Harborside, a large marijuana dispensary based in Oakland.

To minimize the risks associated with taking deposits from the cannabis industry, one approach Jackson-Gent describes would be to create two different banks: one focused on full retail service and the other a state-chartered “infrastructure bank” that would serve the cannabis industry exclusively.

While cannabis brings some sticky issues to the table, financing the bank itself is another critical issue to address. Paul Pryde, formerly the chief consultant to the U.S. International Trade Administration on loan guarantees, is now a member of Friends of the Public Bank of Oakland.

“You’ve got to find ways to do this without stretching Oakland’s budget,” Pryde says, explaining how the public bank can’t become a competing budget item with existing city services.

“One way to do it is to get capital from other state or local organizations that have interests aligned with your own,” Pryde says. He points to California’s Air Resources Board, which has approximately $1.5 billion in annual income from cap and trade auctions.

Pryde also explains how the initial influx of capital from local government owners would only need to be a fraction of the public bank’s full capacity to lend and invest in communities.

“Under current banking rules, for every 10 dollars in [loans and other investments], it has to have a dollar in capital [from its owners],” Pryde explains. “If you put a dollar into the public bank, it can make ten dollars’ worth of financing for renewable energy and other projects.

“This hasn’t been approved by the regulators,” Pryde cautions. “But they’re ideas that I think worth exploring mainly because they have to potential to bring in significant amounts of money without stretching local budgets.”


An Unusual Coalition in Boston Helps Save Homes from Foreclosure

Triple-decker buildings in Boston. (Photo by Piotrus)

One day in early Summer 2012, a man yelled up to Alma Chislom from the front porch of her triple-decker apartment building, the style so common in the Boston area.

“The man on the porch asked if he bought the house, if we would want to stay,” says Chislom. She had moved just a few months earlier to the Park Street apartment after dealing with a landlord who didn’t pay the water or heating bills. “So here I am again thinking we’re going to be homeless,” she says.

Chislom wasn’t alone in this situation. As the subprime mortgage crisis and subsequent recession dragged on, particularly in poorer neighborhoods, buildings languished in various phases of foreclosure, leaving homeowners as well as tenants in limbo — easy picking for investors looking to flip entire blocks or neighborhoods into luxury housing. Tenant organizers in Boston began to see the foreclosure crisis as a new front.

Lisa Owen was one of the people at City Life/Vida Urbana who eventually helped Chislom stay in her home.

“We had a pretty major campaign that started with the big banks but ultimately ended with a demand directly to FHFA [the Federal Housing Finance Association], and Fannie Mae and Freddie Mac, which ultimately were the largest mortgage holders, to say ‘stop displacing people and do principal reduction for all of these homes that were under water,’” Owen says.

The situation brought together an unusual group of allies. The Coalition for Occupied Homes in Foreclosure, or COHIF as it’s known, includes members such as City Life/Vida Urbana, Boston Community Capital, Harvard Legal Aid Bureau, Greater Boston Legal Services, the Greater Four Corners Action Coalition, the Archdiocese of Boston’s affordable housing development arm, the Massachusetts Association of Community Development Corporations, and others.

“It is probably the only place that I know of where radical housing advocates and more mainstream policy advocacy folks in the housing world, non-profit developers, for-profit developers, financiers, and city agencies all come together to deal with this [foreclosure] crisis and what has turned into now a displacement crisis for renters and owners,” says Owens.

The key, she says, is that even if members of the group might have opposing positions on other issues, everyone saw the benefits of stabilizing communities against foreclosure.

“Bank tenants” is the term Owen says the coalition developed to refer to the homeowners who were fighting to stay in their homes. In some cases, elderly people with significant medical costs couldn’t afford mortgage payments even after winning reductions in the principal owed. In other cases, there were not enough work hours available for younger people to cover mortgages for elderly or sick relatives.

“We were fighting for homeowners to stay in their homes, but what we found was that there was a subset of folks who … could not afford to buy back their homes, even at the reduced prices,” Owens explains. “We had to find another entity to buy those homes.”

Finding no other willing partners, the coalition morphed from an advocacy organization into an affordable housing developer.

“The [original] idea was to get a [community development corporation] to purchase the properties,” Owen said. “That didn’t happen. COHIF ended up creating new financial pathways to acquire and renovate these properties [itself].”

One of the coalition members, Boston Impact Initiative (BII), largely grew out of the coalition’s work.

“We do what we call ‘integrated capital,’” says Boston Impact Initiative co-founder Deborah Frieze, “Meaning we put equity, debt and grants out into the world.”

Boston Impact Initiative limits its grantmaking to just three, Boston-area organizations, one of which is City Life/Vida Urbana. In keeping with its model, the group also invests in COHIF so the coalition can purchase the properties it wishes to save from foreclosure. It closed on a second round of investment in COHIF this summer.

The coalition’s transition from tenants’ rights organizing to becoming a landlord presented challenges. Maureen Flynn worked as COHIF’s Executive Director from 2012 until she began working with the City of Boston’s Department of Neighborhood Development.

“It’s a tough transition, and we spent a lot of time working on individual cases that were very difficult and presented tensions within the organization,” Flynn says. Dealing with these situations, she says, helped reinforce the group dynamic.

“We were so firmly on the ground with our members, everyone was able to be reasonable and understand the different points of view,” she says.

This capacity to engage in real discussions has helped the group evolve and cultivate the trust that has been essential to its survival and success so far, saving… .

“Folks took a gamble on us,” Owen says. She points to the way Boston’s only existing land trust, birthed by the Dudley Street Neighborhood Initiative, stepped up and acted as COHIF’s guarantor, allowing the group to purchase its initial four properties.

Over this past summer, COHIF was working on its second transition — from affordable housing developer to community land trust. Owen sees this as an essential move towards creating and maintaining affordable housing in the Boston area over the long-term.

For Chisolm, instead of imaging herself homeless, now the potential of a community land trust offers the prospect of a legacy she can pass on to her children and grandchildren.

“We’re already like a community,” Chislom says. “We can help each other. We can build each other up. We can reach out to other people.”

Participating in managing the land trust means an opportunity to make decisions about how to run that community.

“[I say] this is for you,” says Chislom, referring to her children. “You guys can grow it and stay here and run the house.”


Nearly 30,000 in Albuquerque Ask for More Democratic Elections

Albuquerque City Hall

In Albuquerque’s last mayoral race, in 2017, just 350 donors accounted for 75 percent of the total campaign contributions. “So, it was a small number of donors who controlled the outcome,” says Eric Griego, executive director of the New Mexico Working Families Party.

Griego is working to make sure more people have a voice in a more democratic election process in the New Mexico city — at a time when local officials are making decisions about an important resource in the drought-susceptible city: water. He is part of a coalition that collected 28,000 signatures calling for a ballot referendum on a proposal called Democracy Dollars. The program would create $25 vouchers that residents would receive and be able to “donate” to the candidate of their choice in local elections.

Despite organizers far exceeding the 19,450 signatures needed, as of now, voters won’t see Democracy Dollars on their next ballot. In mid-August, the Bernalillo County Board of Commissioners voted not to put forth the measure in November.

A more diverse electorate might change outcomes of future real estate deals. Developers have invested heavily to create a bedroom community called Santolina outside the city of Albuquerque. There, 38,000 planned homes would use an estimated 12 million gallons of water per day. The impact of that water usage has been debated in the community and on the Board of Commissioners for years.

An investigation by New Mexico In Depth found that businesses tied to real estate development are spending their money on local elections with an eye to influencing zoning and land use laws. Griego sees the vote to keep Democracy Dollars off the November ballot as incumbents protecting their interests.

“The chairman of the county commission is a very close ally of two of those city council people who were opposed to creating this system,” Griego says.

Steven Michael Quezada, the Board’s chair, did not respond to emailed questions about his decision to vote against placing the referendum on the ballot or about his financial relationship with businesses associated with the Santolina development. In 2016, the Albuquerque Journal reported Quezada’s campaign received $25,000 worth of indirect support from a local political action committee thanks to contributions from supporters of the project.

According to Griego, Democracy Dollars could help challenge longtime incumbents and give more insurgent candidates a chance.

With the Board’s rejection, organizers like Griego and Andrea Serrano of Olé, a local organization dedicated to economic and social justice, are looking at the possibility of advancing the issue via a mail-in referendum ballot next year.

Candidates running for the New Mexico Supreme Court and the Public Regulation Commission in New Mexico have access to public funding for campaigns. The city of Albuquerque put its own public campaign financing law in place in 2005. All three mayoral candidates in 2009 tapped public money. But a United States Supreme Court decision in 2011 restricted the matching funds element of Albuquerque’s law.

In the next mayoral election, 2013, Mayor Richard Berry was re-elected and used only private funds that, New Mexico In Depth reports, “significantly exceeded funds of his publicly financed competitor.” Last year, only one candidate, current Mayor Tim Keller, accessed public funding, but his campaign also received substantial private donations. One thing that distinguished Keller in last year’s mayoral race, however, was his opposition to the Santolina development.

Local activists have seen a marked interest in testing a program like Democracy Dollars. As the temperatures heated up in Albuquerque this summer, so did the local political scene. “Extraordinary,” is how Dede Feldman, a former state senator, described the response when she and others were collecting signatures to put Democracy Dollars on the ballot.

“This was one of the hottest summers we’ve ever had. But people were out on the streets. Out at polling places throughout the city. That gave us a good start,” Feldman says. She says political rallies, such as one in support of keeping families together at the U.S. border, also offered opportunities to speak to residents and gather signatures.

Feldman says that Santa Fe and Las Cruces in New Mexico, and Austin, Texas, are also looking at using their home-rule charters to set up programs similar to Democracy Dollars. Seattle tested the Democracy Voucher Program in 2017. An analysis of that initiative found that nearly nine out of 10 voucher users had never before contributed to a local campaign. Nonetheless, the report found, “residents of neighborhoods that are lower income or have a majority non-white population continue to be under-represented among contributors to candidates for local office.”

“The idea is that rather than convincing a small set of large donors to support a campaign, the candidate instead would have to talk to a lot of Albuquerque residents, who’d have $25 each to give,” Feldman explains. She says that the program aims to encourage participation in politics from people who aren’t already engaged.

“Giving people a $25 voucher would bring new people into the system, and it would also encourage them to vote because now they have a dog in the fight,” Feldman says.

Part of the issue, says Serrano of Olé, is that voter turnout doesn’t reflect Albuquerque’s demographics.

“In the last municipal election, only 25 percent of the electorate were people of color,” Serrano says. “Whereas Albuquerque is a city that is 63 percent people of color. And only 3 percent of the electorate was age 18 to 24.”

The county commission’s decision to not bring the measure to voters, in spite of the popular support the idea has generated, has been a deep disappointment for organizers.

“Democracy Dollars in and of itself is about public financing,” Serrano says. “But when you talk about democracy reform, what you’re looking at is creating democracy that is once again for our communities, where you’re restoring faith and trust in our electeds. Because oftentimes, anecdotally, what we hear from people, ‘Why should I vote? It doesn’t matter.’ So, Democracy Dollars is a step towards that public accountability and really restoring trust among our communities.”


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