Summary of Wealth Building Conference March 30-31, 2003 Convened by: Collins Center for Public Policy and Delray Beach CRA
Overview The South Florida Wealth Building Conference, held on March 30-31, 2003, was a two-day conference that gave community leaders across the South Florida region an opportunity to discuss revitalization in South Florida. It was also developed to foster the participation and financial gains of community residents in the revitalization of their neighborhoods. The first day of the conference consisted of an opening session and tour of revitalization areas in Delray Beach and City Place in downtown West Palm Beach. The morning of the second day consisted of presentations from national speakers on the issues of regionalism, building community capacity, and fostering information sharing. The afternoon focused on three wealth building tools presented in case study format. The wealth building tools discussed were community land trusts, cooperative housing and individual development accounts. The following report summarizes the presentations given on day two of the conference. In day two’s opening session, Rod Petrey, President of the Collins Center, described the Center’s efforts to facilitate economically realistic, environmentally sound, and socially equitable development at its first smart growth demonstration site, Overtown. The Collins Center has organized the Overtown Civic Partnership and Design Center (OCP) as a cross between the original CDC concept, settlement house, and design center to serve as Overtown’s advocate, help level the playing field, and foster community building in the neighborhood. The Collins Center has also utilized the South Florida Land Trust as a means to purchase and secure strategic land sites in Overtown for future development and to leverage private investment. All of these strategies are a part of the Collins Center’s Neighborhood Smart Growth Tool Kit. A key component of the Collins Center’s efforts in Overtown is introducing the community to wealth building tools so that existing residents will engage in equity sharing and position themselves to gain from the prosperity of their revitalized neighborhood. Such wealth building tools include individual development accounts, land assembly banking, transit related mortgages, homeowner preparation and continuing assistance, and cooperative ownership.
Morning Presenters Leah Kalinosky, Project Coordinator, National Neighborhood Coalition. Ms. Kalinoksy spoke of the importance of neighborhoods and community groups at a regional level. Many issues that affect neighborhoods cannot be solved at the neighborhood level. Community groups can only be connected to the region through coalition building, better policy, better tools, increased resources, and access to the facts that allow them to take action. For more information on the National Neighborhood Coalition: http://www.neighborhoodcoalition.org/smartgrowth/
Karen Stokes, Smart Growth Project Coordinator, Development Training Institute (DTI). DTI came into existence because the founders believed there was a need to change the way people were being educated about community issues and to bridge institutions. Karen Stokes discussed how the group trains community groups to move from a block-by-block fix-up mentality to efforts that produce more comprehensive change. For more information on the Development Training Institute: http://www.dtinational.org/
Angela Glover Blackwell, President, PolicyLink. The keynote speaker for the conference was Angela Glover Blackwell of PolicyLink. Ms. Blackwell spoke about the importance of knowledge transfer and connecting people to resources. Some of these resources are embodied in PolicyLink’s online equitable development tool kit, and its publications, “Building Regional Equity -The Framing Paper,” and “Resident Ownership.” Equitable development requires an expansion and integration of people and place based systems. These systems must be connected and cannot be looked at separately. Ms Blackwell spoke of the principles of equitable development by giving examples of successful efforts throughout the country where there is meaningful participation from the community.– People in such communities have a voice in implementation, monitoring, and ownership. She touched upon tools such as resident ownership mechanisms and value recapture trusts. PolicyLink’s publication, “Sharing the Wealth,” discusses them in more detail. A few examples: Market Creek Plaza – A 20 acre commercial and cultural center located in the most racially diverse and under-served neighborhood in San Diego, California. There is a partnership between the Jacobs Center for Nonprofit Innovation and the residents to improve the physical place while connecting residents to tangible benefits. Residents were initially hired to conduct surveys and later an inter intermediary was brought in to address connecting residents to additional opportunities. B.I.G. Wash, Washington, DC. – The establishment of B.I.G. Wash is an example of residents becoming business owners and sharing their ownership with their neighbors to maintain sustainability of the business and generate wealth in the community. Burlington Community Land Trust (BCLT)- The BCLT is funded by a municipality to maintain housing affordability and asset-building opportunities in Burlington, Vermont. BCLT gains control of land by purchasing housing and securing land through private donation. BCLT sells the housing structure while retaining the ownership of the land. Owners get 25% of the equity in their homes. Ms. Blackwell concluded with a discussion about federal and state policies and their impact on communities. She mentioned that development patterns have thwarted inclusion of all types of communities and that there is a need to understand how federal policies shape regional initiatives and shape cities. For more information on PolicyLink: www.policylink.org
The Tools Case Studies (Key Points) Community Land Trusts – Presented by John E. Davis, Partner and Co-Founder, Burlington Associates in Community Development. Community Land Trusts (CLT) are nonprofits that aggressively purchase land. Most of the development is used for affordable housing. Key Features of a CLT: Nonprofit-tax exempt Dual Ownership Leased Land Perpetual Affordability Perpetual Responsibility Community-Base Resident Control Tripartite Governance Expansion Acquisition Flexible development Formula driven price to give the homeowner his/her fair share of equity CLTs can be created from scratch as an independent nonprofit organization, but communities can also utilize an already expansive network if one exists. Variations to CLTs include: Not every CLT uses the same equity formula Different choices are made in terms of responsibility and intrusiveness of CLTs control over property owners Some CLTs are neighborhood-wide, while others are citywide or countywide Taxes that CLTs face differ from state to state In the Burlington case study, Mr. Davis spoke of the support of the Burlington CLT. The Burlington CLT currently has 2200 dues paying members. Every bank in Vermont supports the work of the CLT. On average, CLT homeowners have received on average $6000 in equity in resale after 5-7 years. For more information on the Burlington Community Land Trust and the Burlington Associates in Community Development: http://www.burlingtonassociates.com/aboutus.html Housing Cooperatives – Presented by Doug Kleine, Executive Director, National Association of Housing Cooperatives. Mr. Kleine gave a brief overview of cooperative housing and the two major types: limited equity cooperative housing and market rate cooperative housing. The difference is that limited equity cooperatives have controlled resale prices for the shares in the cooperatives. With a market rate cooperative, there is no control in the resale. In cooperative housing: Members own a share, not real estate.
Half of the nation’s cooperatives are mid and high rises, while the other half are townhomes 50% of cooperatives can be found in New York City and other cities such as Washington, Pittsburgh, and San Francisco There is a single mortgage on the building The borrower is the organization Cooperatives conduct the background checks of potential cooperative members-not a lender There are usually lower property taxes Cooperatives can include a variety of groups such as the elderly and disabled They can mix income groups in a superior way that other housing initiatives cannot
In recent decades, cooperatives have generally failed to adjust to the social changes of the 70s and 80s. In order for a cooperative to be successful, it must have an impact around the surrounding community and it can’t just sell low rent; the idea of the community must be sold as well. For more information on Housing Cooperatives and National Association of Housing Cooperatives: http://www.coophousing.org/
Individual Development Account (IDAs) Presented by Rene Bryce-Laporte, Corporation for Enterprise Development IDAs are specialized savings accounts that permit low-income people to save money through the use of private and public funds and matching funds. It is a tool for building assets. IDAs can be used for post-secondary education, microenterprise, start-up, home purchase, home repair, retirement, and possibly vehicle purchases. Mr. Bryce-Laporte gave a detailed presentation on how an IDA is organized and should be managed. Among some of the key points to establish an IDA are: Negotiate special features of IDA with the financial institution There should be no minimum balance, and possibly a waiver of fees Match rates should be determined based on rate of assets in the area At the end of each statement period, account holders should receive two account statements – one with deposit amount, one with match amount Must be sure to have procedures so that money goes to permissible uses Establish procedures that protect against fraud Ensure that account holders get best deal possible Practitioner will need partners, such as training and education partners, financial institutions to deliver quality IDA sites should provide: o Financial management training o Asset-specific training o Staff support – can be costly o Recruitment – can be challenging because IDAs can appear to be too good to be true. It is helpful to have an existing relationship with potential account holders.
In terms of funding, both private and public sources of funding should be sought and utilized. A practitioner should think of reasons for potential funders to support the program. Funding will also be needed for operation costs such as staff, training, and demonstrations. For more information on the Corporation for Enterprise Development and Individual Development Accounts: Mr. Bryce-Laporte PowerPoint presentation can be found at: www.sfrrc.net
For additional information on community wealth building tools that may be utilized by your community, please visit the Collins Center for Public Policy at www.collinscenter.org