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Archive for the ‘financial crisis’ Category

The narrative surrounding the foreclosure crisis of the past year has tended to focus primarily on the foreclosure of homes that were owned by the people who lived in the them.  This article shifts the focus to the rental properties that have been foreclosed upon.  Many of the tenants of these rental properties do not have very high incomes (which is one reason they have to rent instead of own a home) and after the foreclosure they are usually left without a home and do not have very much to fall back on.  People like Yolanda James will burn through the resources they have left until they eventually become homeless.

The article also highlights how rental property foreclosure disproportionately affects communities of color which already have been devastated by economic and racial inequalities for decades.  It also calls for a rethinking of the “ownership society” ideal which the federal government tends to put the majority of its funding into.  Affordable and secure rental housing is crucial for low income families and individuals who do not have the ability to put up the money to own a home yet.  Any effort to end poverty and homelessness must incorporate this type of housing into its plan.

Foreclosure Crisis Hits Poor Renters Hard: Evicted Families Have to Fight to Live Together

By Michelle Chen, ColorLines. Posted May 26, 2009.

Last fall, Yolanda James and her three children were lost in their own city. After foreclosure had forced them from their South Los Angeles apartment, they ran into closed doors at every turn. Aid agencies offered referrals to other offices, but no relief, and neither the shelter system nor the city’s high-priced housing market had room for them. James burned through her welfare money to pay for motel rooms and later resorted to sleeping with her children in their car.

“I was, like, two or three different people at one time,” she recalled. “I had to get on the grind, to hustle, to make sure my kids–when they get out of school, I could feed them, or I could take them somewhere to shower and bathe for the next day.”

(more…)

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PPG’s 2009 Forum on Restoring Progressivity and Fairness in our Tax System.

Ron Deutsch, Executive Director, New Yorkers for Fiscal Fairness, will be speaking.

Tuesday February 17th at 4:00 pm

Cornell ILR, 237 Main Street, 12th floor


Please RSVP to ppgbuffalo@gmail.com asap.  Thank you to those who already signed-up.

Flier

Join the campaign for Fair Share Tax Reform!

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The National Low Income Housing Coalition released a statement the other day concerning the lack of funding for affordable housing.  The economic recession will hit low-income families and individuals who can barely afford the already high fair market rents hard and could put thousands of them out on the street.  This article also refocuses our attention on the root cause of homelessness: poverty.

February 5, 2009

For Immediate Release: February 4, 2009

For More Information: Sheila Crowley 540-907-2993 (cell); sheila@nlihc.org

Statement from Sheila Crowley, President, National Low Income Housing Coalition, on Senate passage of $15,000 homebuyer tax credit

“If the country can afford to subsidize over a million families no matter what their income to buy new houses, surely we can afford to prevent a huge increase in the number of people who lose their homes altogether and become homeless.”

This evening, the U.S. Senate adopted an amendment to the pending American Recovery and Reinvestment Act of 2009 that will give every homebuyer this year, no matter his or her income, a $15,000 tax credit. The cost is $18.50 billion. The amendment did not include an offset, so the cost is added to the total cost of the bill. The amendment passed by voice vote without a single Senator raising an objection.

Yet, the same Senate has not included any funding in the bill that will produce a single new unit of housing that is affordable to the poorest families in the country. The Senate bill does not capitalize the National Housing Trust Fund to build and rehabilitate rental homes that are affordable to low wage workers, the unemployed, the disabled, and the elderly. Nor does the Senate bill provide funding for housing vouchers that would help low income families afford to rent existing housing in the market.

Both items have been sought by advocates for low income people to prevent a surge in homelessness due to the foreclosure crisis and the recession. The two items together would cost $13.60 billion, and provide 400,000-500,000 poor families with decent homes they could afford. Any increase in unemployment causes the poverty level to rise. One in ten people who are poor will lose their homes unless steps are taken to prevent them from becoming homeless. An unemployment rate of 9% is predicted to result in at least new 800,000 people, including children and seniors, becoming homeless adding the existing homeless population.

The bill does include $1.5 billion for emergency housing assistance for people facing homelessness, an important element to a homelessness prevention strategy. But permanent affordable homes are required to assure housing stability for the lowest income households.

Capitalizing the National Housing Trust Fund is also an economic stimulus; housing construction and remodeling are labor and material intensive, thus creating jobs, increasing the sales of building and home decorating goods, and generating new state and local tax revenue. The construction of each new multi-family rental unit produces 1.16 new jobs and every $100,000 spent on home remodeling produces 1.11 new jobs.

If the country can afford to subsidize over a million families no matter what their income to buy new houses, surely we can afford to prevent a huge increase in the number of people who lose their homes altogether and become homeless.(emphasis added)

I strongly urge the Congress to reexamine its spending plans in the Economic Recovery bill in light of this expensive tax cut and do more to help those who are hurt the most by the economic crisis. It is simple fairness.

The National Low Income Housing Coalition is dedicated solely to achieving socially just public policy that assures people with the lowest incomes in the United States have affordable and decent homes. www.nlihc.org

http://www.nlihc.org/detail/article.cfm?article_id=5788&id=48

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This article from MSNBC covers a major problem facing non-profits offering supportive services/shelter to homeless individuals: funds for their operations are being cut as demand for their services increases.  The current economic crisis has prompted state and federal officials to cut non-profit funding to close budget deficits.  At the same time it has pushed larger numbers of hard hit working class families and individuals to seek supportive services and shelter as jobs, wages, and benefits are being cut.

Providers to the poor try to stretch meager resources to meet growing need

John Brecher / msnbc.com
By Kari Huus
Reporter
msnbc.com
updated 2:14 p.m. ET, Fri., Jan. 30, 2009

SEATTLE – As snowstorms blew into this Northwest city and the economy iced over in December, the occupants of a shelter nestled among industrial buildings on the north side prayed for divine intervention.
“We were hoping for the Christmas miracle,” says Glen Dennis, 41, who was working his way through a residential drug-treatment program at the CityTeam Ministries shelter. Dennis and the other 11 guys in the long-term program —dubbed the “disciples” — also worked each day to prepare for some 50 to 60 overnight shelter guests, and dish up free hot meals to about 100 people. “We kept doing what we were doing, and hoped someone would come by and drop off a big check.”

But the check did not come — even after a coalition of other shelters, nonprofits and local churches tried to pull together a rescue package to keep the shelter open. On Dec. 27, CityTeam Ministries, based in San Jose, Calif., closed the Seattle facility — leaving scores of people to seek food, shelter and sobriety elsewhere. For Dennis, who had been free of crack cocaine for nearly 11 months, the upheaval led to another painful relapse out on the streets.

“It’s a real loss,” says Herb Pfifner, executive director of the Union Gospel Mission shelter in downtown Seattle. “We’re all scrambling to try to handle the growth of homelessness because of the economic situation …  and then the closing of another mission adds more pressure.”

The CityTeam closure is a piece in the expanding problem of homelessness across the nation: Shelters and related services for the homeless are facing funding shortfalls as the downturn takes its toll on state budgets and corporate donations. And while individual donors in many cases are keeping up gifts — or even digging a little deeper for charities that help with urgent needs like food and shelter — the service providers say they are faced with a rapidly growing demand from people losing jobs and homes in the economic crisis.

Less funding, more demand
“A downturn in (overall) funding in this case is accompanied by a surge in demand, so a homeless shelter, food pantry, or job-training program is going to feel it first,” says Chuck Bean, executive director of Nonprofit Roundtable of Greater Washington, in the District of Columbia. “Even if they have 100 percent of their budget compared to last year, they now see a 50 percent surge in demand. Then (they) get into the tough decisions: Do you thin the soup, or shorten the line?”

Even as census-takers fan out in cities across the country this week in an attempt to count homeless populations, advocates and experts point to a bevy of evidence that homelessness is rising and will continue to, most notably among families with children.

Shelters across the country report that more people are seeking emergency shelter and more are being turned away. In a report published in December, 330 school districts identified the same number or more homeless students in the first few months of the school year than they identified in the entire previous year. Meantime, demand is sharply up at soup kitchens, an indication of deepening hardship and potential homelessness.

“Everything we are seeing is indicating an increase,” says Laurel Weir, policy director at the National Law Center on Homelessness and Poverty. “And homelessness tends to lag the economy. So we’re probably seeing the tip of the iceberg here.”

In the foreclosure crisis, the people being displaced from homes won’t likely be on the street immediately, explains Michael Stoops, director of National Coalition for the Homeless.

“The people who have lost homes or tenants in homes that were foreclosed … have downsized, and if that doesn’t work they will move in with family and friends,” says Stoops. “After a while, they will move into their RV in a state campground. The next step is a car. And the worst nightmare for a working, middle-class person or even a wealthy person who has never experienced homelessness is knocking on a shelter door.”

Services teeter on brink
As the case of Seattle’s CityTeam shelter illustrates, many nonprofits serving the poor are working on a shoestring, even in better times. Seattle-area donations to the shelter had to be supplemented from general funds, said Jeff Cherniss, chief financial officer of CityTeam, which operates shelters and food programs in five other U.S. cities.

“We were hoping (the Seattle shelter) could become self-sustaining,” says Cherniss. CityTeam Ministries, a Christian organization funded by donations from individuals, corporations and churches, kept the Seattle facility afloat with help from its general fund for most of a decade, but the 2008 crisis prompted them to retrench.

Every major source of funding is under pressure in the current environment: Charitable foundations — which rely on corporate profits for their seed money and investments to preserve and build those funds — have been forced to pull back grants after taking a massive hit as corporate earnings faltered and stocks plunged.  The National Council of Foundations recently estimated that philanthropic foundation endowments have lost $200 billion in value during the economic crisis.

A few of the largest foundations have, despite losses, promised to maintain or give at higher levels in the face of the crisis. The Bill and Melinda Gates Foundation this week said it would increase its giving to 7 percent of its assets from 5 percent. And the John D. and Catherine T. MacArthur Foundation announced three gifts totaling $34 million to help homeowners in Chicago avoid foreclosure and keep renters in homes.

Still, the casualties are mounting. Among them: Atlanta nonprofit Nicholas House, which closed a shelter for families in mid-January so it could safely keep other housing services open. Nearly all corporate donors gave to the organization at lower levels this year, says Dennis Bowman, executive director of the 26-year-old agency. The final straw came when a corporate donation ended, and was not renewed.

“It was directly because of the economy — the business has suffered in this economy, and so can’t provide the funding, which was well over $100,000 a year,” says Bowman.

The organization is scrambling to find other options for the 12 families — 45 people in all — who lived there, by squeezing them into other parts of its own programs or openings with other nonprofit programs.
In Washington, D.C., where Fannie and Freddie had been the largest corporate donors, dozens of organizations were up in the air as government auditors reviewed the corporations’ records, including their charity operations.

Linda Dunphy, executive director of Doorways for Women and Families, a shelter program that has been receiving funding from Freddie Mac since 1996, says the takeover of the mortgage company threw a promised $300,000 grant into limbo.

Meantime, Doorways watched other substantial corporate donations drain away — including some $50,000 that had been coming through an annual walkathon from financial companies Morgan Stanley and Merrill Lynch.

Fortunately, when the review of Fannie and Freddie’s charitable operations ended in late December, the Freddie Mac grant came through for Doorways, averting the need to shut down a family shelter — for the next six months, at least. “But then we face a whole new fiscal year, and our concerns about what is going to happen at (Freddie Mac Foundation) and whether they can continue to keep giving at the level they have been giving,” says Dunphy.

The Alternative House for homeless mothers in northern Virginia was not as lucky. Freddie Mac had been giving $35,000 to $60,000 a year to this nonprofit. The Freddie Mac money was spent on providing developmental assistance for the babies, who are often behind because of their chaotic beginnings. Last week, Judith Dittman, who runs the program, got word that the funding was cut.

States awash in red ink
Up to now, another major source of funding for nonprofits providing homeless services came from state budgets. But entering 2009, at least 45 states faced budget deficits, according to the Center on Budget and Policy Priorities, which estimates combined state budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 at more than $350 billion. The trend bodes very badly for programs that benefit the poor and homeless. The leading example of state budget problems is California, which has eliminated funding for emergency housing assistance this year as it struggles to pare its $40 billion deficit.

In Ventura County just north of Los Angeles, the cut of about $60,000 delivered an immediate blow to three homeless operations. The largest, a winter shelter run by St. Vincent de Paul that provides beds for 100 people, was forced to cut 30 nights from its schedule.

“Because they operate on a shoestring, it’s a significant hit to them,” says Karen Schulkin, program coordinator for homeless services in the county. “The winter shelter at the National Guard Armory can only stay open for the number of days they have funding for.”

Local government funding often provides seed money for nonprofits, who leverage it to drum up foundation money and other donations. So, according to Bean of the Nonprofit Roundtable of Greater Washington, the local deficit — about $1.5 billion in the case of D.C. and surrounding areas — could present an even bigger problem than the uncertainty over the future of Fannie Mae and Freddie Mac Foundation.

“This will put a huge strain on the ability to invest in the safety net. …The challenge for a lot of nonprofits is that local government support will be down, foundations will be down,” says Bean. “The question will be what happens with individual donations.”

To be sure, out of the crisis come tales of inspired giving as communities scramble to raise new funding. The town of Danville in southern Virginia rallied to reopen a shelter that closed at the end of December after 15 years in operation.  A drive prompted a $20,000 anonymous gift, which was more than matched by dozens of other local contributions. By Jan. 22, the money and a new director were in place to reopen the 20-bed shelter—offering some reprieve, at least, in a town with an estimated 150 homeless.

“The people of Danville … opened up their hearts and pocketbooks with $23,100 in matching funds,” reports Pastor Donnie Anderson of the Riveroak Church of God, who spearheaded the fundraising. “We are so grateful! The shelter is open as House of Hope and is ready for any who may need a warm place to stay and hot meals to eat.”

http://www.msnbc.msn.com/id/28916152/

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David Robinson over at Buffalo News wrote this article a couple weeks back about the thousands of jobs that the region has lost in the last couple  months and the thousands more that will be lost in the coming months.  Keep in mind that the loss of a job was one of the most common reasons cited for homelessness in Buffalo.
01/25/09 07:06 AM
BUFFALO’S BUSINESS

So much for all the talk about the Buffalo Niagara region being a good place to ride out the recession.

While it took about nine months longer to hit here than it did across the country, thanks to our stable but subdued housing market, the steep decline we’ve weathered since September proves that when the national economy turns sour, there’s no place to hide.

“It took a long time for the recession to arrive in Western New York,” says John Slenker, the state Labor Department’s regional economist in Buffalo.

And arrive it has. The region in December endured its biggest monthly job loss since March 2002, when Western New York still was mired in the last recession. The December job losses were so severe — 7,600 positions vanished from December 2007 to December 2008 — that the region now has fewer jobs than it’s had in any December since 1995.

Even Slenker, whose job it is to put together the monthly employment data for the region, was surprised by the severity of the December decline. “This was a larger downturn than I was expecting,” he says.

But this is an economy that’s being wracked by fear, in addition to the fallout from the housing bubble, the vice-like credit crunch and the overall economic malaise it’s creating.

Consumers aren’t buying, fearful that their jobs might be in jeopardy or their pay might be cut, if it hasn’t been already. Companies aren’t investing as much and looking to save money wherever they can.

Executives are thinking a lot like Timothy

T. Tevens, the president and chief executive officer at Columbus McKinnon Corp. The Amherst material handling equipment maker’s sales have started to weaken, with revenues slipping by 5 percent, excluding an October acquisition. New-order bookings slowed at a “mid-to-high single-digit” pace, he said.

So Columbus McKinnon has been cutting back, trimming 200 jobs in the final three months of 2008. And Tevens is poised to pull the trigger on even deeper cuts this quarter if the slowdown continues. “That’s what I consider to be an initial cut,” he says.

Another 200 jobs could be slashed. Hiring and wages could be frozen. The company match on worker’s 401(k) plans could be in jeopardy. Health benefits could be reduced. Several plants are being looked at for consolidation.

It’s like that all over. “Most businesses are looking at their sales and they’re also looking at the general economy,” Slenker says. “They’re saying ‘Where can we tighten our belt? Even if we’re doing well, we’re going to cut back because we don’t know what the future holds.’ ”

That’s why Slenker expects the local job losses to worsen in January.

Canisius College professors George Palumbo and Mark Zaporowski expect the cost-cutting to spread to local governments, which so far have been reluctant to scale back even as the region’s population keeps dropping.

That could mean reduced services, lower pay for government workers and possibly fewer agencies operating in the region, the professors say in a recent report on the local economy. And they continue to stress that economic development efforts need to focus on initiatives that make the region more productive and competitive, such as by reducing energy, regulatory and transportation costs.

Still, Slenker says workers shouldn’t give up hope if they lose their jobs. More than 20 percent of the companies surveyed by the Labor Department last month said they hired new workers in December, often to replace employees who left their jobs.

“There are still going to be opportunities,” Slenker says. “You’ve just got to look harder.”

drobinson@buffnews.com

http://www.buffalonews.com/145/story/559521.html

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Charity Vogel of the Buffalo News wrote this excellent piece about the choices and sacrifices people living in poverty need to make.



Rose Cannon goes to the supermarket on her $14. But she doesn’t get far.

“I get a gallon of milk, a loaf of bread and some eggs,” she said. “That’s it. Nothing. You get nothing for $14.”

If you’ve looked at a grocery shelf lately, you know that’s true. Prices seem to increase weekly, even on basics like bread and milk. The cart full of stuff that used to cost $100 now costs – well, maybe it’s better not to dwell on that.

That’s the impact you’re feeling.

Now imagine for a minute what it’s like to deal with those prices when you’re poor.

Cannon knows all too well. She’s 54, hampered by poor health, and past her working days due to a stroke she suffered in 1991 and a back injury that led to painful arthritis.

Now, Cannon finds herself dwelling in a strange country called poverty.

In Buffalo, that makes her one of multitudes. Nearly one in three adults in the city is poor; almost 43 percent of children live in poor homes. It’s one of our most debilitating problems, and the most intractable.
Cannon knows all that, but it doesn’t make her daily life any easier.

Take her food stamps: $14 worth.

That’s her monthly allotment from the county. The reason she gets so little is because she owns a few things the government deems not mandatory for someone in her situation. Like a dog and cat, cable TV and the older Chevy Impala she drives.

Cannon, a longtime community volunteer who ran for Common Council in 1999, receives $660 a month in disability income. That, combined with the money her learning-disabled daughter, Rose, gets, goes to cover the mortgage on their Lovejoy home, utilities, debt payments, gas, the car and insurance, food and incidentals.

But Cannon pays a price for her choices.

When she petitioned for more food assistance, a state hearing determined that the amount she gets is fair. Her choices on voluntary spending, the state ruled, shouldn’t factor in.

So it came down to this: The cat or the frozen chicken dinners. The TV or the yogurt. The car or the coffee.
These are the kinds of tough choices people living in poverty in our city grapple with every day. It’s not something that would enter the minds of most of us who aren’t poor – that by holding onto your car keys, you can’t eat roast beef this month.

The poor of our city are real people. They’re not symbols, and they’re not statistics. They live and breathe and manage their own checkbooks and schedules. They lead complicated lives, just like the rest of us; and they have both fine points and flaws.

Like it or not, they are individuals, making individual decisions.

Cannon’s made hers. As she enters the later phase of a life pocked by hardship, she doesn’t want to lose the few remaining things that make it livable. The pets she dotes on. The car she sees as a necessity, since she can’t walk far or fast.

“You have to survive,” said Cannon, her green eyes softening, “no matter what.”

I don’t know whether Cannon should get more than $14 in food stamps, although it seems a pitifully small sum.

But I do know that if we want to understand – and maybe solve – the problem of poverty in our city, we need to see clearly how the system works for those who live in it.

And so: Which would you choose? The cable or the cottage cheese?

Poverty strips a lot away from those who endure it. It’s hard to blame someone who wants to hang onto the final few shreds of what makes her a little bit like the rest of us, still.

cvogel@buffnews.com

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Some are blaming the current financial crisis on the poor.  This is not only wrong but offensive.

Newsweek has a good article outlining the attacks and placing the blame where it belongs.

Daniel Gross
Newsweek Web Exclusive
Oct 7, 2008 | Updated: 12:58 p.m. ET Oct 7, 2008

We’ve now entered a new stage of the financial crisis: the ritual assigning of blame. It began in earnest with Monday’s congressional roasting of Lehman Brothers CEO Richard Fuld, and continued on Tuesday with Capitol Hill solons delving into the failure of AIG. On the Republican side of Congress, in the right-wing financial media (which is to say the financial media), and in certain parts of the op-ed-o-sphere, there’s a consensus emerging that the whole mess should be laid at the feet of Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration. The CRA, which was amended in the 1990s and this decade, requires banks-which had a long, distinguished history of not making loans to minorities-to make more efforts to do so.

The thesis is laid out almost daily on The Wall Street Journal editorial page and in the National Review. Washington Post columnist Charles Krauthammer provides an excellent example, writingthat “much of this crisis was brought upon us by the good intentions of good people.” He continues: “For decades, starting with Jimmy Carter’s Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac-which in turn pressured banks and other lenders-to extend mortgages to people who were borrowing over their heads. That’s called subprime lending. It lies at the root of our current calamity.” The subtext: if only Congress didn’t force banks to lend money to poor minorities, the Dow would be well on its way to 36,000. Or, as Fox Business Channel’s Neil Cavuto put it: “I don’t remember a clarion call that said: Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster.”

Let me get this straight. Investment banks and insurance companies run by centimillionaires blow up, and it’s the fault of Jimmy Carter, Bill Clinton, and poor minorities? (more…)

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