Anne Stuhldreher: All Publications, Events and Press

Prepared Testimony of Anne Stuhldreher for the Los Angeles Committee on Jobs and Business Development

Elizabeth Wu — Tue, 17 Nov 2009 14:30:00 -0500

We Need to Fix How We Measure Poverty

Erin Drankoski — Tue, 13 Oct 2009 11:19:00 -0400

From climate change to redistricting, New York City Mayor Michael Bloomberg and Gov. Arnold Schwarzenegger have teamed up on a number of issues. It's time to add another to the list -- updating the antiquated and misleading way we measure poverty.

It may seem like an odd concern for the Republican duo. But Bloomberg took the lead on the issue last year when conditions in New York City were similar to those California faces today: The economy was down; need was rising; and public resources were constrained.

'FinancialCorps' Would Fill Big Need

Cecille Isidro — Fri, 17 Apr 2009 13:30:00 -0400

A bill to dramatically increase national service by expanding AmeriCorps hits President Obama's desk soon. While he's at it, we hope he will consider creating a different kind of corps -- a volunteer financial services corps to put quality financial advice within the reach of every American.

Traditional Lending Goes Mainstream

Cecille Isidro — Wed, 08 Apr 2009 08:35:00 -0400

A whopping 44 percent of Mission District residents don't have low credit scores. They have NO credit scores. Without them, the only loans they can get are the loans no one wants - those with pricey interest rates and harsh terms. And if doors to affordable credit seemed closed to these consumers before the financial meltdown, they're slammed shut now.

Traditional Lending Goes Mainstream

Cecille Isidro — Wed, 08 Apr 2009 07:35:00 -0400

New America Foundation and AARP Praise City of LA's Support of a Portable Retirement Savings Proposal

Elizabeth Wu — Tue, 31 Mar 2009 15:09:00 -0400

Contact: Liz Wu
510-295-9859 (m)
wu@newamerica.net

FOR IMMEDIATE RELEASE -- March 31, 2009

Los Angeles, CA -- Today, Los Angeles City Council unanimously passed a resolution in support of AB 125, state legislation reintroduced by Assemblyman Kevin De Leon (D-Los Angeles) to give California workers access to a low-cost, professionally managed retirement account.

How Judges Might Help Troubled Homeowners

Cecille Isidro — Tue, 31 Mar 2009 10:37:00 -0400

Remember fieldtrips? All 535 members of Congress should take one this week to Room 675 of the County Courthouse in Philadelphia. Doing so would bust some myths surrounding the "cram down" legislation – now stalled in the Senate – that would allow bankruptcy judges to reduce payments on troubled mortgages.

New America Foundation Commends Mayor Villaraigosa on Launch of "Bank on LA" Program

Elizabeth Wu — Tue, 24 Mar 2009 12:35:00 -0400

Los Angeles, CA - Today, Mayor Villaraigosa announced he would launch "Bank on LA," an initiative to help working Angelenos without bank accounts open starter accounts and take their first step into the financial mainstream.

A Better Measure of Poverty Needed

Cecille Isidro — Wed, 28 Jan 2009 13:19:00 -0500

The tanking economy is putting local governments in a double bind. As the ranks of the poor and jobless swell, authorities have dwindling funds to help them. Incredibly, officials in San Francisco and other cities can't even prioritize who to help because they don't know who their poorest citizens are. The problem lies with an obsolete federal measure of poverty that will only make hard times harder in San Francisco until it's changed. Mayor Michael Bloomberg has spearheaded just such a revolution in New York City, allowing officials to better

New America Foundation Commends Governor Schwarzenegger and California Mayors for the Launch of "Bank on California"

Communications — Fri, 12 Dec 2008 15:00:00 -0500

Sacramento, CA -- The New America Foundation today commended California Governor Arnold Schwarzenegger and California mayors for the launch of "Bank on California," an initiative to help working Californians without bank accounts to open starter accounts and take their first step into the financial mainstream.

Thank You, Sarah Palin

Cecille Isidro — Fri, 14 Nov 2008 13:02:00 -0500

Pay to Learn is Working in New York

Cecille Isidro — Wed, 15 Oct 2008 08:35:00 -0400

Los Angeles philanthropist Eli Broad has probably never met Soledad Moya, an eighth-grader at Middle School 302 in the South Bronx. But both are big believers in an approach that has people wringing their hands and wagging their fingers: paying students to perform on standardized tests. Moya's school is a 45-minute subway ride from the Manhattan hotel where Broad took the stage at last month's Clinton Global Initiative to announce a $6-million grant to help launch EdLabs -- an initiative at Harvard University to advance innovations in public schools.

EdLab's first order of business is to determine if Spark -- the pilot financial incentive program at Moya's school and 58 others in New York City -- leads to concrete improvements in academic achievement. Seventh-graders can earn up to $50 a test -- for 10 assessment tests throughout the year. There's a similar program for fourth-graders. The money goes into a bank account that only the student can access. The better you do, the more money you earn, up to $500 a year for seventh-graders. The idea is to make school tangible for disadvantaged kids -- short-term rewards that are in their long-term best interest.

Is it working? That depends on whom you ask.

Pundits and some in the media say Spark is bribing kids; they should love learning for learning's sake. But if you talk with those actually participating in the pilot program -- the students, administrators and teachers -- you hear something different.

Moya said she wasn't a "studying kind of" person before the awards. Now she and her friends like to look in the dictionary and memorize words and their definitions, and they ask their teachers for more practice tests. Even though she's not eligible for the awards now that she's in eighth grade, she's still studying harder before tests, she said. "Once you get started with something, you keep doing it."

The changes she saw in students like Moya caused Lisa Cullen -- a literacy and social studies teacher at the school -- to go from skeptic to supporter: "I saw how it takes away the uphill battle you have trying to get students to study for tests." She saw a definite increase in students' excitement, enthusiasm and effort.

That's no small feat when test-taking ranks low on the priority list of students whose lives are crammed with adult responsibilities, Cullen said. "The ideal would be for every kid to love learning, but that's impossible in today's world." One of Cullen's students is 10 minutes late every day because she takes two subway trains and a bus to get her little brother to school. She then has to watch him after school until her mom gets back from her third job. "She and all my students are so stressed all the time."

Principal Angel Rodriguez believes the Spark incentives will get the biggest results with the most challenging students -- whom he calls "the bottom third." Rodriguez said virtually all of his students struggle with poverty, and many live in one of the 18 nearby homeless shelters. "I can't tell you how many times I've had parents in my office that are high on heroin or crack, or reek of alcohol," he said.

Despite these challenges, test scores rose substantially last year for seventh-graders at the school. Rodriguez thinks the Spark incentives were a big factor. The percentage of seventh-graders meeting the state standards for English-language arts rose 12 points over the previous year's scores. For math standards, the gain was 15 percentage points.

Rodriguez has no patience for the critics. "Thank God my father didn't listen to them," said Rodriguez, who grew up a few blocks from the school. "He had to use what he had to motivate me." He would tell Rodriguez he could get a new pair of Converse sneakers if he got a 90 on an upcoming test, Rodriguez said. "Guess what I got on that test?"

Parents at the school feel the same way. "Not one parent complained," Rodriguez said. "One hundred percent said, 'Sign me up.' "

Spark's creators have been fielding calls from all over the country, but surprisingly not from California. That's too bad. California has one of the country's widest achievement gaps. That's because, according to a new report from UC Berkeley, unlike in most states, the majority of California's public students are from lower-achieving groups -- Latinos, African Americans and English-language learners -- or the "bottom third," whom Rodriguez thinks Spark will help the most.

EdLab's evaluation of Spark will come out in 2009. California educators should look beyond the rhetoric and examine this approach. We can't afford to dismiss it outright. As Rodriguez said, "What price do you place on a seventh-grader whose lack of motivation is leading to failure?"

Kids' Accounts Warrant Debate

Cecille Isidro — Thu, 22 Mar 2007 22:38:00 -0400

Governor Schwarzenegger was cheered when he recently talked about post-partisanship in Washington, D.C. But the post-partisan waters don’t run deep back home in California. Two state senators who just crossed the aisle to forward a creative solution to a pressing problem are getting more grief than glory.

Senator Darrell Steinberg, D-Sacramento, and Robert Dutton, R-Rancho Cucamonga, held a press conference on February 28 to introduce their bill to create a California Kids Account for every newborn. The goal is to encourage parents to start saving early for their children’s future and, in the process, build the whole family’s financial know-how. This bill is essential to equip the next generation with the expertise and tools they’ll need to gain a middle class foothold in a society where employers and government play a smaller caretaking role.

But the vision and purpose of this bill was twisted almost exactly backward by the political bombardment that followed the press conference.
Here’s how the accounts would work: California would deposit an initial $500. The money couldn’t be touched until the child turns 18. Then it could only be used to pay for college, technical training, to buy a home or invested in a retirement account. Parents, relatives and the child could make regular contributions to grow the nest egg

The $500 deposit isn’t a giveaway. It’s an investment.

But the bloggers and talk-radio junkies went ballistic. Before the bill could get a fair hearing, they wrongly slapped three labels on it, calling it: 1) socialist 2) big government and 3) an illegal-immigrant magnet. It’s this last one that Dutton’s office got over 1,000 calls about. Their office was so overwhelmed that they dropped off the bill.

There’s a long list of democrats -- including U.S. Senators Hillary Clinton and Chuck Schumer -- with their own Kids Account proposals. But the Kids Account isn’t a Democrat or Republican idea. It’s an American one.

And big government? Kids Accounts grow out of the reality that the era of big government is over. Kids Accounts recognize the growing responsibility families have to manage their own health, education and retirement needs. That’s especially tough when you start with no assets to your name, the situation for a quarter of white kids and more than half of blacks and Latinos. Kids Accounts give all kids a head start. From the day they’re born, we’ll start to grow more savers, investors and owners, and fewer people who are dependent on the state.

The most ridiculous beef with the proposal is that Kids Accounts would encourage illegal immigration. The notion that prospective parents will enter California so that, 18 years later, the child will have limited access to $500, is absurd. Moreover, every child born in the United States is a U.S. citizen, not a second-class citizen.

Finally, what can California expect if this bill becomes law? We can look to Great Britain. Great Britain launched a version of KIDS Accounts, called the Child Trust Fund, for each of the 700,000 children born in the U.K. every year, beginning in September 2002. As a result, the percentage of those who electronically deposit monthly savings in bank accounts for children has since doubled. And the amount being saved each month is up 60 percent. Preliminary analyses show the greatest savings increases amongst low-income families. Projections show most children will reach 18 with a financial springboard of more than $18,000.

Kids Accounts aren’t cheap. They’d run about $280 million a year. But let’s put that number in perspective. Last year’s infrastructure bonds had a $37 billion price tag. Those bonds are costing us about $1.8 billion a year in interest. If we can pay people $1.8 billion a year in interest, we can invest 15% of that amount in kids, our most precious infrastructure.

Kids Accounts ask us to look at our world in a new way, so the bill naturally demands a legitimate and vigorous debate. Unfortunately, political attacks can stifle a policy debate. But they can’t stop the future from coming.

On Taxpayer-Funded Savings Accounts

Cecille Isidro — Mon, 12 Mar 2007 00:32:00 -0400

Even though California is being modeled as the birthplace of post partisanship, ideological divisions still run deep in the political process. Two state senators who just crossed the aisle to forward a creative solution to a pressing state problem are getting more grief than glory.

Sens. Darrell Steinberg, D-Sacramento, and Robert Dutton, R-Rancho Cucamonga, held a press conference two weeks ago to introduce their bill to create a California KIDS Account for every newborn. The goal is to encourage parents to start saving early for their children’s future and, in the process, build the whole family’s financial literacy. This bill would help to equip the next generation with the expertise and tools they will need to gain a middle-class foothold in a society where employers and government play a smaller caretaking role. But the vision and purpose of this bill was twisted almost exactly backward by the political bombardment that followed the press conference.

Here’s how the accounts would work: The state would deposit the initial $500. The money couldn’t be touched until the child turns 18. Then it could only be used to pay for college, technical training, to buy a home or be invested in a retirement account. Parents, relatives and the child could make regular contributions to grow the nest egg. Churches and community groups could, too. If $50 a month goes into the account -- something experience in the United States and around the world shows is possible -- the kid’s got $17,000 by the time he turns 18 or $30,000 by the time he’s 30.

However, the bloggers and talk-radio junkies went ballistic. Before the bill could get a fair hearing, they wrongly called it 1) socialist 2) big government and 3) an illegal-immigrant magnet. It is this last one that Dutton’s office got more than 1,000 calls about. His office was so overwhelmed, he dropped off the bill.

Let’s address these assertions. Socialist? Would you call Rick Santorum -- the former conservative U.S. senator from Pennsylvania -- a socialist? In Washington, he was the lead author of the federal bipartisan KIDS Account proposal. Listen to what he said: "Does it not make sense to give young Americans the opportunity to have a head start in life, enabling them to have security in the long run? By making every young person an investor, KIDS Accounts will expand opportunities, encourage self reliance, promote savings and give every family a personal stake in America’s economy." Other Republican leaders, including U.S. Sens. Jim Demint (R-SC), and Jeff Sessions (R-AL)., also have accounts proposals (called Portable Lifelong Universal Savings or PLUS Accounts).

Or how about that bastion of socialism, the Heritage Foundation? It says: "Modest programs . . . such as KIDS Accounts can make the American Dream realizable to millions who are currently excluded because they lack the means to save."

Thre’s also a long list of Democrats -- including U.S. Sens. Hillary Clinton and Chuck Schumer of New York -- with their own KIDS Account proposals. But the KIDS Account isn’t a Democratic or Republican idea. It’s an American one.

Our country has a robust history of making investments that allow people to build wealth. For instance, 25 percent of Americans can trace part of their family wealth back to the Homestead Act, which provided 160 acres of land to anyone who was willing to live and work on the land for more than five years. KIDS Accounts would aim to democratize access to financial assets. They would be the Homestead Act of the 21st century.

And Big Government? KIDS Accounts grow out of the reality that the era of big government is over. Most people already realize that the state and your employer aren’t going to automatically take care of your health care and retirement. You will.

KIDS Accounts recognize the growing responsibility families have to manage their own health, education and retirement needs. Because so many kids -- a quarter of white kids and more than half of blacks and Latinos, according to studies conducted by Brandeis University professor Thomas M. Shapiro -- are born with no assets to their names, KIDS Accounts give them a head start. From the day they’re born, we’ll start to grow more savers, investors and owners, and eventually have fewer people who are dependent on the state.

The most egregious beef with the proposal is that KIDS Accounts would encourage illegal immigration. First, every child born in the United States is a U.S. citizen. And second, the money in this account couldn’t be accessed until the child turns 18. For someone deciding if they should enter the United States illegally, it’s hard to believe their decision would be swayed by an investment account that their future child couldn’t access for almost 20 years.

Finally, what can California expect if this bill becomes law? We can look to Britain. Britain launched a version of KIDS Accounts, called the Child Trust Fund (CTF), for each of the 700, 000 children born in the United Kingdom each year, beginning in September 2002. As a result, the percentage of those who electronically deposit monthly savings in bank accounts for children has doubled. The average amount being saved each month by an individual has risen 60 percent since 2002, according to CTF officials. Preliminary analyses show the greatest savings increases among low-income families, and families at all income levels are participating. Projections show most children will reach 18 with a financial springboard of more than $18,000.

This idea is also being piloted right here in San Francisco by the nonprofit EARN. More than 1,400 San Franciscans -- with average yearly incomes of $21,000 -- are saving about 5 percent of their income each month toward long-term goals.

KIDS Accounts aren’t cheap. They would cost the state at least $270 million a year. But let’s put that number in perspective -- it’s less than 0.5 percent of our state’s budget.

This is a bill that asks us to look at our world in a new way, so it naturally demands a legitimate and vigorous debate. Unfortunately, political attacks can stifle a policy debate. But they can’t stop the future from coming.

Against Gentrification

Cecille Isidro — Sun, 21 Jan 2007 08:56:00 -0500

Marcel Diallo is at war. It’s a war he thinks he has about 18 months to win. As he walks the sidewalks of a neighborhood known as "the Bottoms" in West Oakland, he points out his enemies with a spoon, between dips into a pint of strawberry soy ice cream.

There are the punk rockers, who thought they’d found an industrial neighborhood where no one would mind their loud parties. There’s "the Indian cat and his partner from Palo Alto," who got a deal on one of the neighborhood’s many Victorians. There’s the "speculator" -- a white guy in a white pickup -- who regularly cruises the streets to see what’s for sale.

Diallo is racing against the gentrification clock to create an enclave of all things African American -- black homeowners, black-owned cafes, galleries, boutiques and mom-and-pop shops. He’s even got a name for this vision -- the Village Bottoms Cultural District.

"The Chinese got Chinatown, the Latinos got the Fruitvale and the Mission. We want our equivalent," said Diallo. "The only way that black people are going to be all right and not on the brink of revolution and wanting to burn this s -- down is if we have our own place that we feel like is ours," he said.

It’s not just for blacks, said Diallo. "Everybody needs a black cultural district. Just like everybody needs a Chinatown."

In the past few years Diallo has gone from an always-broke poet and musician to the majority owner of homes and lots along Pine Street -- the heart of the envisioned cultural district. He’s transformed the group of eclectic black artists he hangs out with into a collective that is slowly moving into the neighborhood. About 15 of these 30ish artsy African Americans have bought houses. They and Diallo recently opened the Black New World -- a performance venue -- and the Cornelia Bell Gallery. A Soul Food Co-op, Modupe’s Afro-soul and Vegetarian Restaurant and the Ghetto Flowers Boutique will soon follow. They’re buying homes and starting businesses by pooling their resources and stretching financially. They also help each other with construction, painting -- it’s an urban barn raising of sorts.

They’re working with -- not against -- a man who would seem to be their arch-enemy: developer Rick Holliday, whose Central Station Development will bring up to 1,500 new residences to the neighborhood. To Diallo, the new neighbors will bring shoppers and patrons for the envisioned cultural district.

They hope to create a place like Harlem in the 1920s and ‘30s, said Eesuu Orundide, a painter and sculptor who recently moved to the Bottoms.

Is this a utopian vision? Yes. What form will it ultimately take? Hard to say. To some, Diallo’s a visionary. To others, he’s a racist and all talk. But the collective has momentum. And its members are moving forward in their own self-help, grass-roots way, with little help from community organizations, city government or foundations. Their approach is low on precaution and high on a belief in the power of art to transform people and places.

"The edge that artist types have on the average Joe is that they’re more open to believing in magic," said Diallo. "Only an artist could look at a scrap yard and see a future cultural district."

The Glory Days

The formal name of the neighborhood around Pine Street is Prescott. But it’s known in the black community as the Bottoms. It’s surrounded by the West Oakland BART station to the south, the frontage road to Interstate 880 to the west, Mandela Parkway to the east and 16th Street to the north. It has a beachfront feel because it’s so close to the bay; a nonstop breeze washes over the old Victorians that dot the neighborhood. Drive through the Bottoms day or night, and you’ll see people sitting on their porches and congregating on the sidewalks. The main businesses seem to be corner liquor and convenience stores. About 30 percent of the housing in West Oakland is subsidized. The predominately black community has a median income of about $25,000.

It wasn’t always this way, said Marcus Johnson, a 40-year resident of the area. He remembers when nearby Seventh Street was hopping with social clubs and music venues such as Forty-Niners, where his aunt tended bar. You could get Texas barbecue or Louisiana catfish at black-owned businesses. His sister often babysat for the kids of Sly and the Family Stone when they played at Esther’s Orbit Room or the Continental Club. Oakland bands such as the Whispers and the Ballads played there too.

Johnson’s favorite time of the week was Saturday night at 11, when his grandmother would send him out on his bike to Seventh Street to track down his sister, who always missed her curfew. The streets were bustling with African Americans who worked in the nearby naval shipyards, rail yards and other manufacturing plants.

Diallo remembers, too. He rifles through a shoe box full of tattered photographs of his "party girl aunties" getting ready to go out for an evening on Seventh Street. In one, they have on go-go boots and hot pants.

The good times didn’t last. The jobs that had fueled the local black middle class dried up. The West Oakland BART station, built in 1971, ran right through Seventh Street. Several business owners had their properties seized by eminent domain. The rest soon left. Middle-class African Americans that could leave, did. More fled when the crack cocaine and violence later hit the neighborhood.

Since 2000, Oakland has lost between 18,000 to 34,800 African Americans. Whites now slightly outnumber blacks in the city for the first time, based on estimates from the U.S. Census. The exodus is fueled by rising crime and home prices.

"All I want is for the neighborhood to go back to how it was when I was growing up," said Diallo.

A Coalescing of Resources

In front of 924 Pine St. -- described by members of the collective as "the Office" -- there’s a small wooden sign attached to a rusty metal spear that says "Nganga Diallo’s House of Common Sense." Although Diallo has been called a poet, artist, community activist and the unofficial Mayor of West Oakland, he prefers "Nganga." It’s Congolese for "Magic Maker," he said.

The quickest way to get your mind around his vision for the Village Bottoms Cultural District is to walk one block up to the corner of 10th Street. Orundide and two other artists -- Githinji Wa Mbire and Keba Konte -- spent a few months painting a mural on the 10-foot high corrugated tin fence that surrounds a former scrap yard on the first lot Diallo bought. They imagined the colorful storefronts they hope will soon line Pine Street. All are bustling with black patrons in traditional African garb who shop for tomatoes, sip wine at the cafe and flip through magazines.

This vision began to form when Diallo returned to Richmond after finishing his bachelor’s degree. in philosophy at Cal Poly in 1995. "I started out majoring in business, but it was way too bland," said Diallo, who was the first in his family to go to college. (One brother is in prison. Another was "shot in the head" while pushing his newborn son down the street in a stroller.)

Diallo frequented the poetry readings that were just starting in coffee houses throughout Oakland. "This was pre-slam," he explained. People would get up and do rehearsed riffs. "Then Marcel would get up there and take it to the level of church," said Letitia Ntofon, his partner. "He’d testify."

Diallo and others decided they needed their own venue. In 1998, they opened the Black Dot Cafe on East 14th Street in the San Antonio neighborhood of Oakland. It barely fit a small stage, a few tables, a piano and some couches. "But we would regularly cram 60 people in there," remembers Kele Nitoto, a percussionist who lived in a loft in the back. They had weekly poetry nights, plays, jam sessions and cooking and drawing workshops for neighborhood kids. Every Sunday afternoon they’d hold "congregations." "It was basically dancing like crazy outside and we’d cook up waffles inside," said Nitoto.

Two years later, they were evicted, said Diallo. Their landlord would have sold them the building for $20,000 but they couldn’t pull the funds together. They lost their lease and had to move five times over the next five years, according to Diallo.

Diallo and his friends were fed up. "We decided we had to own something," said Diallo. "Anything."

Diallo, Ntofon and their friend Tiffany Golden went to an Alameda County auction of tax-defaulted properties in 2000. Diallo scraped together a few thousand dollars from his performances; Ntofon and Golden threw in some money, too. Together they had $7,800.

They bid on the only thing they afford -- an abandoned corner lot on Pine and 10th streets. Bidding started at $2,500. "I went head to head with a white guy" said Diallo. "Everyone in the place knew he probably had more money then me. But I ‘vibed’ him and stared him down." The other bidder backed out and Diallo and his friends got the property for $7,500. The whole place started cheering, said Diallo.

The lot was covered with junk that reached 8 feet high in some places. Rusted-out cars and tires were everywhere. The former owner, an old man named Jenkins, had long since abandoned it. Diallo brought his grandmother to see the lot. She leaned down and picked up an old address book. The first entry, she said, was an address and phone number for Laura Agnew, her mother. "It was meant to be that you own this," she said.

Then came a big break. His great-aunt sold him her North Richmond home that was about to be condemned by the city, asking just $1,000. Diallo and Nitoto tore the house down by hand. Diallo was unsure what to do with the lot for a few years until he went to Nigeria to visit Ntofon’s parents. He said his great-grandfather appeared to him there in a dream, telling him to sell the house and use the money to "save" the Bottoms in West Oakland. Diallo listed the lot for $80,000 on Craigslist and sold it for $85,000

Around the same time, Diallo read in the newspaper that Holliday had bought 30 acres adjacent to Pine Street. "I called him up and said ‘Yo Rick, this is Marcel. What are you doing in my neighborhood?’ " The call began a six-year dialogue between the two men. Diallo wants African Americans to have the first crack at buying the lofts. Holliday agreed to work with Diallo to identify African Americans who can be "founding buyers" and buy at a discount. They’re talking about co-developing some retail spaces along Pine Street.

Holliday said he advised Diallo to buy whatever he could in the surrounding neighborhood for the cultural district, and that prices were only going to go up. Diallo used his $80,000 to start buying and selling properties -- with the goal of accumulating land for the cultural district and helping his friends buy houses.

Diallo first started going down to the Alameda County office building and researching other vacant lots in the neighborhood. He’d identify the owners and track them down. He bought one lot for $3,000 and another for $5,000.

He knocked on doors all around the neighborhood and asked people to give him the right of first refusal to buy their house, if and when they decided to sell. He’d try to persuade them "not to be so greedy" and sell it to him for $25,000 or $50,000 less than market value to help "the cause." His charm and people’s fear of his quick tongue served him well.

Records show that Diallo owns three lots along Pine Street, the warehouse that he converted into the Black New World, and three other homes. He says that he collaborated with others to buy or gain control of up to 10 more. "Now we own the whole neighborhood," he says on the Black Dot Cafe Web site.

Until recently, Diallo believed he only had a limited window to buy as prices escalated, and that meant taking risks. He has used a lot of sub-prime and interest-only loans, and was able to refinance out of some of them. He has sold other properties that appreciated. Right now, home prices in the neighborhood have flattened out and Diallo has slowed down his real estate activity. Holliday said he cautioned Diallo not to over-extend himself.

Once the collective members saw that Diallo could buy, they thought that they could, too. Orundide teamed up with another family to buy a home together. "We see Asian folks doing it all the time," he said. "Why not us?" They bought a five-bedroom home on 11th Street for around $500,000. His 5-year-old twins have a playmate in the other couple’s 4-year-old son.

Nitoto and his fiancee Raheemah Muhammad bought a four-bedroom fixer-upper on 14th Street for $515,000. "We couldn’t afford it at first," said Muhammad. Diallo advised them to buy the house and the money would come, she said. They quickly found a young family to rent out the downstairs and a poet friend to rent a room in their upstairs flat. Muhammad got a raise at her biotech job and Nitoto took a job as a security guard at Pier 39. Nitoto spent three weeks cleaning it and Muhammad was still disgusted when she first walked in the door. Now it’s a sunny upper flat with hardwood floors. The front room has a piano they got for free and several shelves packed with the fantasy books they both enjoy.

"We’re still poor but we have the house," said Muhammad.

Living and Being Real

Experts disagree as to whether or not the families and Diallo are doing the right thing to stretch and buy properties.

"I see them as having more control and more choices," said anti-poverty activist Maurice Lim Miller, who got to know some collective members through his nonprofit, the Family Independence Initiative. "They didn’t have a lot to begin with so they don’t have a lot to lose."

It all depends on the financing, said George McCarthy, a program officer at the Ford Foundation who funds programs to broaden home ownership in the United States. With adjustable-rate mortgages, if interest rates go up, the loans can be a "ticking time bomb" for borrowers who suddenly face increased monthly payments they can’t afford, he said. The buyers in the Bottoms should be OK, said McCarthy, since their property values will likely go up when the Central Station Development comes in.

For now, the buyers are enjoying the neighborhood, holding backyard barbecues and going to events at the Black New World. Black nationalist poet Amiri Baraka recently drew 150 people there. Golden, a writer, read from her screenplay "First Born" another Saturday night.

Nitoto often sits in front of his house and holds impromptu drumming classes for neighborhood kids. The dealer who hangs out on the corner even joined in, said Nitoto. "You could see people driving by all slacked jawed, saying, ‘That’s the guy I get my stuff from,’ " Nitoto laughed. "He was drumming and all hippied out."

Orundide tells a similar story. When he painted in his temporary studio space at 10th and Wood -- two houses down from the home where Oakland Mayor Ron Dellums grew up -- he thought he’d be "an undercover artist." But kids kept coming in and he’d give them a small painting. "They’d come back and ask "Can I get one for my brother?’ " said Orundide. A few kids now bring their paintings to Orundide.

"These are my kids," said Muhammad of the neighborhood children. "I’m not going to leave them here to the drug dealers and pimps. They don’t need people to come in here and be all goody-goody to them and then leave at the end of the day. They need people to come here to live and be real."

"We have so many youngsters who don’t see themselves in a good light," said Nancy Nadel, who represents West Oakland on the City Council and is supportive of Diallo and his vision to create a black cultural district. "This can only be a positive thing."

Lisa Servon, a professor at the New School for Social Research in New York City, says it also makes economic sense for cities to promote "culturally authentic economic development."

"Cities are starting to look like suburbs," said Servon. "If they want to remain competitive, they need to lift up what’s already there and differentiate themselves." City governments can do a lot to support these cultural districts, said Servon. They can implement zoning restrictions that keep big-box retailers out and indigenous businesses in, and provide special financing and supports for first time entrepreneurs and home buyers.

The next year will be a busy time for Diallo and the collective. A few of the businesses are ready to go. Others still need financing and space. All will need significant foot traffic that isn’t there right now. In December, the collective started "First Fridays," where the first Friday of each month the Black New World, Nganga Diallo’s, and the Cornelia Bell Gallery will be open Friday evenings.

Diallo will need institutional investors and technical development expertise, according to Carol Galante, president and CEO of the nonprofit BRIDGE Housing, which is developing 100 affordable rental units in the Central Station development.

But even when Diallo starts to go mainstream, he’ll still rely on "juju" -- his word for magic. Visitors to the Yerba Buena Center for the Arts "Sampling Oakland" exhibit last fall may have seen the collective’s joint installation, called "A Shrine to the Anti-Gentrification Gods of West Oakland. May They Protect Us From the Invaders." The collective members gathered dishes, nails, records, broken glass -- anything they could find in the Bottoms’ streets and vacant lots -- and glued them to 6-foot-high wooden letters that spelled out "OAKLAND." Visitors could dial a number and hear a pre-recorded message from Diallo:

If you are residing in a gentrifying neighborhood and/or can be considered a gentrifying force, beware. The spirits of the anti-gentrification gods bottled up in the text of this shrine may be unleashed upon you. If I was you, I would leave an offering.
If you are a longtime resident in a gentrifying neighborhood, this shrine if for your protection. Leave an offering and be blessed.

Savings Programs for Working Families

Cecille Isidro — Thu, 18 Jan 2007 01:13:00 -0500

When the California Working Families Policy Summit convenes Thursday in the Sacramento Convention Center, a familiar list of topics -- child care, after-school programs, cash assistance -- will dominate the agenda. These critical programs help families get by. What will be missing are bold proposals to help them get ahead.

The California Center for Research on Women and Families is sponsoring the summit for legislators and their staffs, administrative officials and other civic leaders to discuss public policy issues for this legislative session. Many important safety nets are already in place to support California’s working families. But we haven’t been as good at creating ladders to help them climb out of poverty for good. To do that, we need to help all families build assets -- such as savings to fund college for their kids and to buy homes. People don’t spend their way out of poverty; they save and invest their way out.

The common reply is that nobody, especially low-income people, can manage to save in high-cost California. Not true. Pilot efforts around the state are proving that lower-income people will take advantage of financial tools and incentives -- just like middle- and upper-income people -- if they’re given the opportunity.

Take the Assets for All Alliance in San Jose. A group of community organizations is partnering with Citibank to offer Individual Development Accounts. They target working-poor parents and offer them a dollar-for-dollar match for money the parents put in restricted accounts. The savers are offered money management classes and financial advisers. More than 1,700 families -- with average median incomes of $24,000 -- have saved more than $2.3 million in the Silicon Valley since 2000.

Families are allowed to save for up to three years with the matching funds. Five thousand other families are saving in similar pilot programs throughout the state. With assets, those families now have economic air bags in case anyone gets laid off or has a medical emergency.

Sound expensive for government? Consider that the federal government already spends more than $300 billion a year through the tax code to reward people who buy houses, save for retirement and college, and invest in businesses. Ninety percent of these tax benefits go to households earning more than $50,000 a year, or roughly those families in the top half of the income scale.

Democrats and Republicans are coming together in the Legislature to pursue a range of like-minded proposals to help people build savings and assets. Some of the ideas:

Help "un-banked" Californians open bank accounts since 28 percent don’t have them.
Get rid of outdated rules that prevent welfare recipients from building savings.
Give tax credits to lower income people to buy their first home.
Start all Californians on a path of saving from the day they are born by opening a Kids Account for investment at birth -- the boldest idea of all.

The spirit of these policies is nothing new. Our country has a robust history of making investments that allow people to build wealth. For instance, 25 percent of Americans can trace part of their family wealth back to the Homestead Act, which provided 160 acres of land to anyone who was willing to live and work on the land for more than five years. And the GI Bill returned up to $12.50 to our country for every $1 that was invested.

A 21st century version of the Homestead Act would aim to democratize financial assets. Can California lead the way? Let’s hope that’s discussed Thursday at the California Working Families Policy Summit.

The People’s IPO

Cecille Isidro — Tue, 02 Jan 2007 04:22:00 -0500

“Every time I go to Market Creek with my kids now, they say ‘We own this,’” says Bevelynn Bravo, a mother of four who lives in a struggling San Diego neighborhood known as the Diamond. Bravo recently took part in a first-of-its-kind initial public offering (IPO), purchasing 25 shares in the Market Creek shopping center at $10 per share. Market Creek Plaza’s developer, the Jacobs Center for Neighborhood Innovation (a foundation), had previously partnered with teams of residents to conceive, design, and plan the new shopping center. Now the foundation is pioneering what it calls a “community development IPO” to meet residents’ new request -- a chance to own a piece of Market Creek Plaza.

Most IPOs target high-net-worth people. This one is aimed at area residents whose median income is $35,000. The IPO opened in July and will close at the end of December. Market Creek Partners will sell shares to 450 people who live, work, or volunteer in the Diamond. Investors need only $2,000 in net worth or annual income and can invest from $200 to $10,000.

As a group, these resident shareholders can claim up to a 20 percent stake in the company. The Jacobs Center will own 60 percent of the company, and the Neighborhood Unity Foundation will own the remaining 20 percent. By 2017, the Jacobs Center plans to retire its shares so that Market Creek will be completely owned by residents and the Unity Foundation, which residents control. Until that time, community residents will be first in line for any profits. Resident investors will also each have one vote -- regardless of how little or much they invested -- to elect a nine-person advisory board.

“Jacobs is showing that you can do commercial development and have community stakeholders be owners,” says Heather McCulloch, principal of Asset Building Strategies and author of Building Assets While Building Communities. “People have been talking about building community ownership since the sixties, and Jacobs actually did it.”

Creating a new kind of IPO wasn’t easy, however. Neither was educating people who’ve never invested before. But community groups and foundations across the country are closely watching this IPO, wondering if something similar would work in their communities.

A Rainbow at Death’s Corner

The Jacobs Center and many of the Diamond’s 80,000 residents want more than financial returns from the IPO. They hope it will spur residents to control how their neighborhood develops. The idea came about after residents inventoried neighborhood properties and realized that outsiders owned the most neglected ones. The Jacobs Center first worked with residents to determine the mix of stores they would like in Market Creek Plaza, which sits at an intersection previously known as the “Four Corners of Death.” Residents called for a grocery store, coffee shop, bank, and even an outdoor amphitheater that seats 500. They chose a brightly painted rainbow exterior, accented with portraits of neighborhood leaders and tile mosaics, all by local artists.

Residents now hold 60 percent of the jobs. So far, most of the stores are reaching or exceeding their sales targets.

Having taken a piece of blighted land and partnered with residents to turn it into something valuable, the Jacobs Foundation wanted to “recycle it back to the people who live there,” says Jennifer Vanica, the foundation’s CEO. But the mechanisms to conduct an IPO restricted to community residents didn’t exist. Vanica and the residents weren’t dissuaded. “You get the biggest innovation when you work around obstacles,” she says -- of which there were no shortages. Over a five-year period, a team of 125 Diamond residents, Jacobs Center staff, and lawyers submitted 35 drafts of the IPO to the California Department of Corporations. At first, the department claimed the IPO was too risky for the community investors because Market Creek Plaza wasn’t yet completed or fully leased.

Two years later, after the shopping center was built and stocked with vendors, the department again denied the IPO proposal -- this time because some of the riskier ventures, such as allowing community entrepreneurs to open restaurants and stores, dampened the property’s value.

The Jacobs team added additional properties, but the department still rejected its application. The IPO’s targeted investors -- Diamond residents -- didn’t meet the department’s “sophisticated investor” test, which usually means having an income of $200,000, according to Vanica. Residents countered that the state would let them buy any amount of lottery tickets, which have a much lower probability of return. Eventually the department agreed on what Vanica calls the “10-10-10” rule: Residents would be able to invest up to 10 percent of their income, or 10 percent of their net worth, for up to $10,000.

Educating Investors

Once the IPO was approved, Jacobs staff members and resident-partners had to educate first-time investors about investing in commercial real estate. The team first turned the 200-page Market Creek prospectus into a 20-page illustrated executive summary. Pictures and graphs answer questions such as “What is equity?” and “How does the payout work?”

The team then made sales pitches to residents who had been prescreened for eligibility to participate in the IPO. The pitches included a tour of Market Creek Plaza, dinner, and a 90-minute interactive presentation. So far, 85 percent of the residents who have attended the pitches have decided to become investors. More than 750 people are interested in investing. To date, people have invested an average of $1,000. Half have invested less than $500, which suggests that the Jacobs Center is meeting its goal of making half of the resident-owners first-time investors.

In mid-September, Jacobs launched a final push to attract neighborhood investors with billboards and buttons that say “Are you in?” A resident came up with the slogan.

Patience and Time

Nearly 1,000 community groups and investors have toured Market Creek Plaza. Many ask whether Jacobs’ community engagement and ownership mechanisms are too labor-intensive and expensive for other community groups and foundations. Victor Rubin doesn’t think so. Rubin is the director of research at PolicyLink, which is evaluating the IPO. “Involving residents in the design and planning doesn’t take deep pockets,” said Rubin. “It just takes patience and time.”

The Jacobs Center originally bought the 20-acre Market Creek Plaza for $4 million in 1998. At one point, Jacobs had borrowed $30 million against its portfolio to develop the plaza. They’ve since taken out a $15 million, 3 percent loan made possible by New Markets Tax Credits, which were introduced by the federal government in 2000 to spur economic development in lower-income communities.

Other foundations are trying to follow the Jacobs model. The Casey Foundation, for instance, plans to develop 32 acres in a low-income community in Atlanta. Gail Hayes, Casey’s Atlanta civic site coordinator, says: “We don’t have a vision for the property. We’re going to ask the residents what their vision is.” The organization is still considering whether to offer a community development IPO.

Market Creek Plaza isn’t out of the high-risk phase, however. “We are still learning about how to convert people to shop in their own neighborhood, and how to bring the rest of San Diego to Market Creek Plaza,” says Vanica. Although residents could end up losing money on their investments, Jacobs absorbed the biggest risks before it invited in community investors.

To Bravo, the risks seem worthwhile. “It was hard to give up $200 and not spend it at Wal-Mart,” she says. “But now I have something to leave my kids besides memories."

Governor Schwarzenegger Signs Bill Making It Easier For CalWORKS Recipients to Save

Communications — Tue, 03 Oct 2006 10:00:00 -0400

SACRAMENTO, CA – Governor Arnold Schwarzenegger has signed legislation to encourage CalWORKS recipients to build money management skills and savings for their long-term financial security. The bi-partisan legislation, authored by Assembly Members Lynn Daucher (R-Brea) and Juan Arambula (D-Fresno), will allow CalWORKS recipients to save in restricted accounts (i.e., IRAs) without jeopardizing their benefits. Also, the bill will allow California counties to offer money management classes as an allowable work activity for CalWORKS recipients.

“This bill is an important first step,” said Anne Stuhldreher, of the New America Foundation, a co-sponsor of the bill with the Asset Policy Initiative of California. “People don’t spend their way out of poverty. They save their way to a better life.”

Currently, recipients stand to lose their benefits if they accumulate more than $2,000 in savings. AB 2466, which was signed last Friday, will take effect Jan. 1, 2007. Specifically, the bill will exclude the principal and interest in a 401(k) plan, a 403(b) plan, an IRA, a 457 plan, a 529 college savings plan, or a Coverdell ESA from consideration as property when determining eligibility for CalWORKS, the state’s assistance program for low income families. Studies have shown that lower income people can and will save toward long-term goals, if provided with opportunities to do so.

“Too many California families have too little in savings,” said Stuhldreher. Over two-thirds of all California counties are home to households with asset poverty rates of over 25%. These “asset poor” families do not have enough cash reserves or equity in their home or businesses to meet basic needs for three months during a period of joblessness, health emergency, divorce, or other unexpected financial hardship.

Programs to encourage long-term savings are being piloted throughout California and the nation. Studies have confirmed that money management classes can help welfare recipients save more, improve their credit, and open bank accounts to stop relying on check cashing outlets. An estimated 28 percent of California families do not have bank accounts. Recent analysis by the Brookings Institution found that 50% San Francisco Blacks and Latinos don’t have bank accounts.

This summer, Governor Schwarzenegger signed a bill to make it easier for California tax filers to save their state income tax refunds. AB 2439, sponsored by the New America Foundation and the Asset Policy Initiative of California, allows Californians to “split” their tax refund and send it to two accounts, enabling people to split their refund into “money to spend” and “money to save.” Research has shown that this change will spur people—including low income people—to save more of their hard-earned refunds.

“We have a lot more work to do to make sure our laws help low income Californians to build the savings they need to exit poverty for good,” said Stuhldreher. New America plans to work with lawmakers next year to develop legislation that ensures Californians won’t deplete their long-term savings to qualify for short-term assistance such as CalWORKS. Other states—including Virginia, Ohio, and Colorado—have enacted similar reforms.

The New America Foundation, based in Sacramento and Washington, is a nonprofit nonpartisan policy institute that aims to bring new voices and ideas into the policy debate. The Asset Building program of the New America Foundation aims to broaden the ownership of assets in the United States, giving all Americans, especially low income people, a stake in the economy and the means to get ahead.

Invest $500 in Every NY Newborn

Cecille Isidro — Fri, 18 Aug 2006 00:08:00 -0400

To his credit, Mayor Bloomberg challenged his anti-poverty commission to think boldly. Well, how’s this: Every poor New Yorker should have the opportunity to build wealth.

Imagine your life without any assets -- without a bank account, investments, savings, a home, an education, a nest egg for retirement or any money to pass on to future generations. Feels pretty insecure, doesn’t it? Turns out that such "asset poverty" is higher in New York than in any other state in the nation.

Now imagine the lives of 1.7 million poor New Yorkers if they suddenly had the opportunity to build real wealth. Research shows that those with assets -- even small amounts -- are more likely to send their kids to college, take good care of their homes, be healthy and stay married.

New York City should be the first in the U.S. to set up an investment account for every newborn child. Automatically at birth, the city should create a "New York Kids Account" for each of the nearly 125,000 kids born in the five boroughs every year. The accounts should be seeded with $500 for all kids and an additional $500 for the 56% of them who are low-income.

After-tax contributions, up to $1,000 a year, would be permitted. In fact, the accounts could serve as magnets for parents, extended families, churches, corporations, foundations and others to contribute. Good behavior -- such as good grades and community service -- would be rewarded. Low-income kids also could have their savings matched, dollar for dollar.

New York’s unparalleled financial sector could manage the accounts with modest or no fees, and New York City schools could offer financial education around the accounts, making financial education more meaningful than it has ever been.

Combining a modest amount of government seed money, $20 a month in extra personal savings and the magic of compound interest, a low-income kid could accumulate $21,000 by age 18. The funds could be used, then or down the road, for approved uses like higher education, investment, buying a first home, starting a business or (eventually) retirement.

At a price of about $100 million a year, New York Kids Accounts wouldn’t be cheap. But there’s no inexpensive way to eradicate long-term poverty. In fact, Kids Accounts -- now a reality for all newborns in the UK, under a program called the Child Trust Fund -- should prove to be as cost-effective as any other proposed solution under the sun.

And if the commission ultimately yields more savers, investors, owners, entrepreneurs and taxpayers -- and fewer residents depending on the city, state, charities and others for their livelihood and well-being -- we will all be better off.