Federal Policy + Community Development: Experts Look at Ways to Fuel a Transformative Recovery
LISC hosted a policy conversation this week to discuss initiatives that are critical to the well-being of families and communities, especially as the country begins to emerge from the pandemic. Practitioners and policy leaders weighed in on the ways that federal programs fuel robust community investing and underpin efforts to close persistent gaps in health, wealth and opportunity throughout the country.
If there was one overriding sentiment during LISC’s wide-ranging webcast this week on federal policy, it was this: even amid hopeful signs, the pandemic is not over—especially not for families and communities hit hard by its economic impact.
The lingering effects of COVID-19 are still limiting opportunities and growth in American communities. And that means federal policies focused on recovery are as vital today as emergency relief efforts were a year ago—especially for Black, Indigenous and People of Color (BIPOC) communities that have been disproportionately affected.
The event featured two segments. The first was a conversation between Robert Rubin, LISC’s board chair and former secretary of the U.S. Treasury, and Brian Deese, the director of the White House’s National Economic Council. This was followed by reactions and further discussion with a panel of community development practitioners, led by Lisa Glover, Interim LISC president and CEO.
“You have a pandemic sitting on top of a series of epidemics,” said Bill McKinney, executive director of the New Kensington Community Development Corporation in Philadelphia, pointing to not only the recent health crisis and recession, but the deep scars left by decades of systemic racism.
He said the need for community-focused capital “is almost the level of a Marshall Plan,” and added that “all of the different programs that exist at the federal level are critical to where we are going, as well as different partnerships with private industry as well.”
Deese said the Biden administration has been working to address the most damaging effects of the crisis, while also recognition deeper, long-standing challenges and laying the groundwork for equitable recovery and growth.
He noted, for instance, how dramatically the lack of child care has impacted labor force participation over the past year. “It has been particularly devastating for Black and Hispanic mothers. It’s just striking in terms of the degree, and we know why,” he said, pointing to constraints on both the availability and affordability of quality child care.
“So, as we come out of this crisis, we have a lot of work to do to make up that ground. It is good for the economy if we can free parents up to participate to their full extent in the labor force, and a lot of [the administration’s] proposals are geared at trying to get at that problem.”
Many small businesses, likewise, are struggling to recover from months of lost income, said Matt Josephs, LISC senior vice president for policy. He applauded new small business policies that are specifically designed to pick up where emergency relief programs left off.
They include the Community Navigators program at the Small Business Administration, which helps connect business owners in underserved communities to resources; the reauthorization of the Minority Business Development Agency, which could be made more robust and reach more entrepreneurs of color in the upcoming legislative session; and the Economic Development Administration (EDA), which has $3 billion in new funding to invest in businesses and commercial corridors.
Josephs said these are critical funds that should prioritize investments in BIPOC and other underserved urban and rural communities in order to maximize their impact.
“Anything at all that develops resilience and upward mobility for individuals and for business growth is really important,” agreed Donna Duvin, executive director of the International Rescue Committee in San Diego. “Microenterprise funding is critical to building out small businesses,” she added.
Ellis Carr, president and CEO of Capital Impact Partners in Arlington, Va., stressed how important it is to leverage public and private resources to break down barriers to intergenerational wealth, particularly in communities of color. That includes designing private-sector financial products that bring equity and other forms of capital to underserved communities as well as bolstering federal programs, like the CDFI Fund, to help fuel vital activities.
“The needs of communities change, and to have flexible dollars to be able to react to those changes is imperative,” he said. “I’m a staunch believer that we need to continue to advocate for dollars for the CDFI Fund.”
The presenters also noted the clear connections between the stability of local housing and that of businesses, workers, families and communities. It is of growing concern as moratoriums on evictions and foreclosures are lifted at the end of July, with the potential for millions of households to be affected.
“We have a set of very vulnerable people, particularly in rental housing,” said Deese. “So, we are working really hard to use the rental assistance that we have to work with local community groups to get that assistance out to renters most at risk. That is happening here and now.”
The administration is focused on longer term housing challenges as well, he said, looking at both the supply and demand sides of what has been an ongoing affordable housing crisis. Legislative opportunities for impact include the Affordable Housing Credit Improvement Act, which expands the Low Income Housing Tax Credit to support 2 million additional affordable rental homes; the Neighborhood Homes Investment Act, which will help build and rehab 500,000 single-family and rental homes; and work on exclusionary zoning and harmful land-use proposals that make it difficult to develop affordable housing that connects people to jobs and opportunities. A commitment to fair housing enforcement overlays all of those efforts, he added.
“Keeping real people and real families at the front of those conversations is critical for our decisionmakers and policymakers,” noted Duvin. “We work with people every day who are concerned about future of their families and how they can stay in their homes as the eviction period is lifted.”
Josephs echoed the importance of rental subsidies to help people catch up on their back rent and make landlords whole. And he also urged a focus on affordable homeownership, noting that the Neighborhood Homes Investment Act could help fill the “value gap” between the cost to develop housing and the prices at which those homes can be sold so they are affordable to households with moderate incomes.
“Promoting homeownership is a way to build wealth of the workers of our area,” stressed Rose Garcia, executive director of Tierra Del Sol Housing Corporation in Las Cruces, N.M., which develops housing and promotes economic opportunity along the southern U.S. border in New Mexico and West Texas.
“The high cost of homes has escalated in the last two years. We’re being very cautious and trying to keep the costs down, both homeownership and multifamily,” she said, adding that it is a growing challenge as building costs rise. She urged continued federal support for affordable housing, including HUD programs like the Self-Help Homeownership Opportunity Program (SHOP) which supports development of affordable single-family homes, “because this is to sustain the workforce of the important economic drivers of the country.”
Robert Rubin also spoke of the economic impact of community investments, noting that the country’s inability to deal with “the replication of poverty through generations” is not only a moral failure but one that impacts social costs and productivity.
“These are public investments with a very high rate of return,” he said. In fact, LISC provided more than $2 billion in support for underserved urban and rural communities last year, “and none of that could happen without federal programs,” he added.
“I am cautiously optimistic, with an emphasis on both cautious and optimistic,” Deese said, of the opportunity to promote the connections between social gains and economic growth. “The evidence on the impact of poverty and inequality on growth is compelling, and the empirical evidence has gotten stronger over time.”
He suggested that the popularity of the American Rescue Plan, which is expected to increase incomes for the lowest 20 percent of wage earners and cut child poverty in half, shows progress in how the country thinks about this work.
“Ultimately, I do think that coming out of this pandemic and focusing on the universalistic benefits of making targeted government investments, we’ve got as good a chance as we’ve had at any time in the last generation or two of making these arguments stick.”
You can watch a replay of the full session, The Federal Policy Landscape for Community Development: A Perspective from the White House and Practitioners, and read more about policy efforts related to housing, economic development, education, family income and wealth-building, health and safety in LISC’s Policy Priorities 2021-2022.