Feds Accused of Selling Out Neighborhoods to Wall St. Firms
Aljazeera America Fault Lines Blog - September 9, 2014, by Mark Kurlyandchik - In September 2010, the federal government got into the business of selling delinquent home mortgage loans...
Aljazeera America Fault Lines Blog - September 9, 2014, by Mark Kurlyandchik - In September 2010, the federal government got into the business of selling delinquent home mortgage loans, which are at least 90 days past due, to the highest bidder. The program was instituted to help the Federal Housing Administration (FHA) rebuild its cash reserves, which were wiped out by a wave of loan defaults.
In the first two years of the program, the FHA sold 2,000 loans in six national auctions. In September 2012, it expanded its loan pools under the newly named Distressed Asset Stabilization Program, or DASP, selling more than 3,000 loans in the first auction. The FHA also introduced a second stated objective of the program to help stabilize neighborhoods by creating a new category of loans tied to geographic areas hit hardest by foreclosures with mandates that purchasers service them in a manner that stabilizes surrounding communities.
Two critical new reports on DASP admit that the program is helping the FHA avoid having to hit up taxpayers for more money. But they question the sincerity of any efforts to protect neighborhoods plagued by foreclosures, pointing out that a whopping 97 percent of the loans have gone to private, for-profit investors, including hedge funds, mutual funds and private equity firms. And approximately just one out of 10 of the loans sold have achieved a neighborhood stabilization outcome.
“These are companies that put the financial gains of their shareholders first and community stabilization second—or I would say it's not even necessarily a priority for them,” says Connie Razza, co-author of a report by the Center for Popular Democracy and the Right To The City Alliance, which came out today.
Razza’s group sent a petition to Julian Castro, who recently took over the Department of Housing and Urban Development (HUD), the cabinet agency that houses the FHA, asking him to stop selling loans under the DASP until the program’s implementation could be strengthened and refocused on communities.
When the FHA was created in 1934 to stimulate a lifeless housing market buried in the depths of the Great Depression, the U.S. was a nation of renters—with only 40 percent of Americans owning their homes. The FHA was able to help boost that percentage by offering affordable mortgage insurance to approved lenders who made loans to high-risk borrowers with relatively low down payments. By 2004, nearly 70 percent of Americans were homeowners.
During the recent housing crash, with private lending drying up, the share of FHA-backed loans skyrocketed, rising from a reported 2 percent of all mortgages in 2006 to nearly a third in 2009. Those loans kept housing prices from going into free fall, but a wave of defaults plundered the FHA’s mortgage insurance fund. So, in 2013, it took a $1.7 billion taxpayer bailout to stay afloat.
So far, nearly 100,000 non-performing loans have been sold through DASP, netting the FHA $8.8 billion.
According to a report released last week by the Center for American Progress, only about 11 percent of the loans sold through DASP are now considered “re-performing.” Another 22 percent were either allowed to do a short sale or the home was surrendered in exchange for loan forgiveness. A third of the loans were turned around and sold to other buyers. The final third went into foreclosure.
Bidders who want to acquire neighborhood stabilization loans are required to achieve one of several outcomes that help homeowners and surrounding communities on at least half of the loans they purchase: getting the loans to re-perform, renting the home to the borrower, gifting the property to a land bank or paying off the loans in full. Through May of this year fewer than 18,000 of the FHA loans have been sold through neighborhood stabilization pools, compared to more than 73,000 that have no strings attached.
"In its current form, the DASP is unnecessarily undermining the very mission of HUD by selling loans to some of the same reckless actors who caused the financial crisis."
Connie Razza, Center for Popular Democracy
Instead of getting loans to re-perform, many of the companies buying up the loans may be looking to convert the distressed assets into rental properties. Since the housing crash, Wall Street-backed groups have bought up an estimated 200,000 single-family homes across the country to convert to rentals. As housing prices rise and foreclosures become less common, housing advocates worry that these firms have turned to non-performing loans as a way to increase their housing stock.
For instance, the private equity firm Blackstone, which has recently become the largest owner of single-family rental homes in the country, is a 46-percent owner of Bayview, the company that has won the second-highest number of DASP loans. According to one report, the delinquent notes are sold to the highest bidder without considering past performance metrics at getting the loans to reperform.
Further, allowing the vast majority of the loans to fall into the hands of high-bidding corporate investors—rather than defaulting—keeps many of the properties they’re tied to from going through the typical foreclosure process. As a result, the FHA might actually be diverting housing stock from first-time homebuyers, the very group it was formed to serve 80 years ago, said John Husing, chief economist at the Inland Empire Economic Partnership in San Bernardino, California.
Aljazeera America Fault Lines Blog - September 9, 2014, by Mark Kurlyandchik - "In its current form, the DASP is unnecessarily undermining the very mission of HUD by selling loans to some of the same reckless actors who caused the financial crisis," Razza and her co-authors write in their report.
The reports contend that HUD should be tracking bidders' track record for good outcomes and taking that performance into consideration. They also criticize HUD for a lack of transparency when it comes to making information about what happens to these loans available to the public. Further, they call for boosting the size and ratio of loans sold through the Neighborhood Stabilization Outcome pools and increasing access for non-profits in the bidding process.
“Community development financial institutions and other non-profits have been trying to participate,” Razza said. “They've only won 2.5 percent of the loans and are really shut out because HUD is running the program as a straight auction.”
Representatives for HUD did not respond to specific questions about the program, but offered this statement: “For purchasers, the program is an opportunity to acquire assets at competitive prices with the flexibility to service the assets while providing borrowers an opportunity to avoid costly foreclosures. The program is meeting financial goals as the amounts offered for these assets are steadily rising as volume has increased in recent years.”
Where investors used to pick up non-performing loans in the program for an average of 40 to 50 cents on the dollar, the most recent sale in June had an average of more than 77 cents. The bidding war was reportedly the most contested yet, with the entire pool going to one investor, private equity firm Lone Star Funds.
“I think that as demand for these loans grow, it builds a stronger case for FHA to ask buyers to do more for the communities they’re buying in,” said CAP report co-author Sarah Edelman. “We want to see loss-mitigation requirements on all of the loans sold.”
Source
Arizona protesters arrested at Flake’s D.C. office in health care rally
Arizona protesters arrested at Flake’s D.C. office in health care rally
WASHINGTON — As calls of “Trumpcare kills” and “health care is a human right” echoed through the halls of Capitol office buildings Monday, Lauren Klinkhamer stood quietly in Arizona Sen. Jeff...
WASHINGTON — As calls of “Trumpcare kills” and “health care is a human right” echoed through the halls of Capitol office buildings Monday, Lauren Klinkhamer stood quietly in Arizona Sen. Jeff Flake’s office and told staffers, “I don’t want to die.”
The Tucson resident fears she would be among the 22 million Americans, and as many as 400,000 Arizonans, who would lose health care under a bill the Senate is considering to replace the Affordable Care Act. For Klinkhamer, who said she suffers from 16 chronic conditions, losing her coverage would be a death sentence.
Read the full article here.
Study: Latino and Immigrant Workers More Likely To Die in Construction Falls
WNYC – October 24, 2013, by Mirela Iverac - In New York, the majority of those who die working in construction are Latinos and immigrants, according to a new report from the Center for Popular...
WNYC – October 24, 2013, by Mirela Iverac - In New York, the majority of those who die working in construction are Latinos and immigrants, according to a new report from the Center for Popular Democracy.
Between 2003 and 2011, 74 percent of the people who died after a fatal fall while working at construction sites were Latinos and other immigrants.
Pedro Corchado, injured while working in the Bronx in 2008, said, “I was basically up on the ladder, and the ladder collapsed on me. I fell about 11 feet or so to the concrete floor. I suffered neck and lower back injuries that will be with me the rest of my life.”
Corchado spoke in Astoria, in front of a site where earlier this year a construction worker died after he fell through the floor.
Authors of the report say that Latinos face more risk because they often work for non-union contractors.
Source
Home care workers rally in New Haven around terminated employee
Lara was joined by more than a dozen supporters Wednesday, organized by the Working Families Party, which has been advocating for a $15-an-hour wage, paid sick days and predictable schedules for...
Lara was joined by more than a dozen supporters Wednesday, organized by the Working Families Party, which has been advocating for a $15-an-hour wage, paid sick days and predictable schedules for this group of employees.
Management at Family Care VNA & Home Care at 495 Blake St., where Lara worked for more than three years in a 28-year career, called police to keep the protesters away from its office. The protesters continued to march on the sidewalk leading into the parking lot where the company is located.
After about an hour, Lindsay Farrell, state executive director for the Working Families Party, Julio Lopez of Make the Road, which is part of the Center for Popular Democracy, and Lara approached New Haven Officer Scott Durkin, who was standing outside the care agency’s office.
Durkin passed on a petition to management signed by more than 9,000 people asking that Family Care VNA & Home Care meet with Working Families to discuss workplace protections for its employees.
“I am here today because on Aug. 3 I got terminated for exercising ... freedom of speech. I was searching for a better workplace for my co-workers, for those who are afraid to speak, because this is their only source of income to maintain food on the table and a roof over their kids’ heads,” Lara said.
The longtime certified nursing assistant has been on panels with U.S. Rep. Rosa DeLaura, U.S. Sen. Chris Murphy and Thomas E. Perez, secretary of the U.S. Department of Labor, talking about the conditions that CNAs face.
Lara said she never mentioned her employer, but spoke generally about the industry and the need for a pay upgrade, benefits and schedules they can count on.
“I believe that no human being should be treated like animals, because that is what they treated us like, paying us $10 an hour. We are a big asset to the company and if not physically fit ... how can we go out there and do our jobs?” Lara asked.
“What I am searching for is justice for me and so many other workers that do the same job as I do,” she said to the crowd.
Lara said this all began when she took off two days for emergency surgery for her gallbladder on Feb. 26. Her doctor recommended she stay out of work for two to three weeks.
A message seeking comment was left with Donna Simmons, a human resource specialist at Family Care.
Lara said she ended up back in the hospital because she returned to work too early. On May 22 and June 3, she had additional surgeries for an abscess on her breast for a total of eight days missed for health problems.
Lara said she put up with the $10-an-hour pay because “I like what I do and I enjoyed working with my patients and I didn’t want to leave them hanging.”
She said after the last surgery, her hours were cut from 54 hours a week to 14 hours, putting her behind on her rent and bills.
Lara said the firing not only hurt her financially, but “has taken away what I like and what I enjoy, which is working with people.” She said she is collecting unemployment compensation.
Lara said she feels that she was being punished for taking time off “to take care of my physical health.
She said when she was terminated, management alleged that she had used profanity in front of a client, but Lara said that was not true. She said they told her at that meeting Aug. 3 that she was being fired for “bashing the company.”
Lara said Lou Mangini, who works on constituent concerns in DeLauro’s New Haven office, has been in touch with her.
The letter from Working Families to Rita Krett, who is listed as the owner of the company, said Lara’s firing was “unacceptable and immoral.”
It promised to escalate its support of Lara and other workers if the company doesn’t improve conditions.
Allentown School Director, Others Rally for Education Funding Boost at Sen. Pat Browne's Office
The Express-Times - March 11. 2015, by Precious Petty - Pennsylvanians on Wednesday rallied in cites across the commonwealth and urged state legislators to put people first.
A...
The Express-Times - March 11. 2015, by Precious Petty - Pennsylvanians on Wednesday rallied in cites across the commonwealth and urged state legislators to put people first.
A dozen Lehigh Valley residents gathered outside Sen. Pat Browne's West Hamilton Street office in Allentown. They chanted "Listen up, Pat Browne" and displayed signs printed with the message "We rise," sometimes drawing shouts or honks of support from passersby.
Keystone Progress organizer Nicole Matos led demonstrators as they called for an education funding boost, a higher minimum wage, equal pay for women and increased Medicaid spending. Similar rallies occurred all morning and afternoon in Jim Thorpe, Pittsburgh, York and five other Pennsylvania cities, she said.
Matos, of Stroudsburg, said too many of the state's elected officials are making decisions that advance corporate interests while exacerbating inequality, hurting low-income and minority families, damaging the environment and weakening the nation's democracy.
National Day of Action rally on March 11, 2015 A National Day of Action rally was held March 11, 2015, outside Sen. Pat Browne’s office in Allentown.
Allentown School Board member CeCe Gerlach said more than 1,300 students have dropped out of city schools over the last three years and inadequate education funding is contributing to the problem.
"They've dropped out, partly, because our class sizes have increased. They've dropped out because we don't have enough textbooks all the time. They've dropped out because the teachers aren't able to pay each student the amount of individual attention that they require," said Gerlach, who was among the demonstrators.
"They've dropped out because many of them need jobs because their families, who are working at minimum wage, can't afford to pay their rent."
She said Browne has gone to bat for Allentown schools before and she's hopeful he'll step to the plate again this budget season.
"He's come through for the Allentown School District in the past," Gerlach said. "I'm hopeful he'll come through for the Allentown School District now."
Keystone Progress in a news release said the organization staged rallies outside the offices of legislators whose recent actions undercut public education. Browne, along with other Republican Senate leaders, sent school superintendents a letter advising them not to count on getting the education funding that's part of Gov. Tom Wolf's budget proposal.
A staffer at Browne's office declined comment about the rally, which was timed to fall on the National Day of Action.
Keystone Progress joined with National People's Action, Center for Popular Democracy and USAction to mark the day and send the message that it's time for legislators to put people and the planet first, the release says. People in 23 states participated in rallies and other events.
Source
New On-Call Scheduling Inquiry Spurred by Nine Attorneys General
04.13.2016
NEW YORK – The Center for Popular Democracy’s Fair Workweek Initiative commended the nine Attorneys General from California, Connecticut, the District of...
04.13.2016
NEW YORK – The Center for Popular Democracy’s Fair Workweek Initiative commended the nine Attorneys General from California, Connecticut, the District of Columbia, Illinois, Maryland, Massachusetts, Minnesota, New York, and Rhode Island for expanding a probe into the retail industry’s use of unpaid on-call shifts and other harmful scheduling practices.
Today, New York Attorney General Eric Schneiderman announced a round of letters was sent to 15 retailers, including Forever 21, American Eagle Outfitters, Uniqlo, Aéropostale, Payless ShoeSource, Coach, and the Disney Store, inquiring about each retailer's use of on-call shifts, which can require workers to be available for work without a guaranteed shift and report to their job with just a few hours notice. The practice poses a potential violation of state reporting pay laws, which require employers to give workers minimum pay even when a shift is cancelled or shortened. Some states without reporting pay laws, such as Maryland, Minnesota and Illinois, signed onto the letter to express concern about the impact of last-minute on-calling scheduling on the well-being of workers and their families.
This inquiry follows a similar one launched by Attorney General Schneiderman last year. The first round of letters prompted six retail brands including the Gap, Victoria’s Secret and Abercrombie & Fitch to end on-call scheduling – impacting more than 250,000 workers. This new regulatory action by additional Attorneys General speaks to growing concerns about the harm that erratic hours inflict on workers and their families.
The Fair Workweek Initiative works with policymakers, workers and grassroots coalitions across the country to ensure that workers have the hours they need to thrive. New scheduling protections were implemented in San Francisco and Santa Clara County last year. This year, work hours bills are on the radar in Seattle, Washington, DC, Connecticut, Massachusetts and Minnesota, while San Jose is pursuing the first-ever ballot measure addressing hourly workweeks with a provision that would provide part-time workers the opportunity to work additional hours. The efforts are drawing the attention of national media around the country.
Workers, policymakers, advocates and researchers are available for interview through the Fair Workweek Initiative.
Carrie Gleason, Director of the Fair Workweek Initiative, released the following statement:
“Over the past year, workers have been speaking out about the struggles caused by increasingly unpredictable hours. On-call shifts make it hard to find childcare, see a doctor, or care for family members. Workers should not have to choose between living with dignity and getting enough hours to put food on the table. It is heartening to see more and more policymakers and regulators take action to address a crisis affecting millions of Americans.”
In Connecticut, Julio Lopez, Lead Organizer at Make the Road, also released a statement:
“Providing reliable schedules enables workers to reach their full potential, letting them thrive in today’s changing economy. We will continue to put the heat on employers until schedules across the industry are reliable and fair.”
In Illinois, Katelyn Johnson, Executive Director of Action Now, also released a statement:
“On-call shifts wreak havoc on the lives of hardworking people across the country. We are glad that these Attorneys General are responding to the voices of millions who have asked for more reliable schedules that let them plan their budgets and their lives.”
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www.populardemocracy.org
The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda
www.fairworkweek.org
The Fair Workweek Initiative, anchored by the Center for Popular Democracy and CPD Action, is driving the growing momentum to restore a workweek that enables working families to thrive.
Contact:
Asya Pikovsky, apikovsky@populardemocracy.org, 207-522-2442
Anita Jain, ajain@populardemocracy.org, 347-636-9761
Scarlett Johansson, Her "Avengers" Co-Stars And The John Gore Organization Raise $500,000 For Puerto Rico Hurricane Relief Efforts
Scarlett Johansson, Her "Avengers" Co-Stars And The John Gore Organization Raise $500,000 For Puerto Rico Hurricane Relief Efforts
"We are deeply grateful to Scarlett Johansson, Kenny Leon and everyone involved in the production of this play for stepping up and contributing their talent to help towards the equitable and just...
"We are deeply grateful to Scarlett Johansson, Kenny Leon and everyone involved in the production of this play for stepping up and contributing their talent to help towards the equitable and just rebuilding of Puerto Rico," explained Xiomara Caro, Director of New Organizing Projects for the Center of Popular Democracy and coordinator of Maria Fund. "This event demonstrates the importance of collective solidarity and responsibility and how powerful it is when we come together to help our communities."
Read the full article here.
Simplify Investments to Keep Them Clean
New York Times - May 11, 2014, Room for Debate: Connie Razza - Public pensions are under threat from outright fraud as well as the financial sector’s drive to generate higher profits for itself,...
New York Times - May 11, 2014, Room for Debate: Connie Razza - Public pensions are under threat from outright fraud as well as the financial sector’s drive to generate higher profits for itself, regardless of the cost to our communities. The public can take simple steps to eliminate this danger. Investments should be put in index funds, which typically outperform actively managed portfolios. A recent comprehensive study of the performance of state pension funds found that the 46 state funds studied could save $6 billion in fees annually, while achieving returns as good or better than their actively managed portfolios. Most privately managed pensions already pursue indexing strategies, through vehicles like Amalgamated Bank’s LongView Funds, and successfully secure strong retirement savings for participants. Public pension funds should index a significant portion of their funds under management to save billions while still generating first-rate returns.
Index funds outperform managed portfolios. Relying on them would save on fees and avoid underhanded behavior.
These funds would also save significant amounts in management fees by hiring talented in-house investment managers for significant portions of actively managed pension assets.
Any investment should be presented in plain language in a standardized, easy-to-read template, so trustees and pension participants know exactly what the product does, how it makes money and what its fees and risks are. Like cell phone agreements, all fees should be disclosed up front. Like credit card bills, actual returns and long-term, historical performance should be clearly presented. Oversight of fiduciaries should be bolstered and any who violate their responsibility to retirement funds should be pursued legally. When the State Employees Association of North Carolina hired a pension forensic investigator, they found that the state treasurer Janet Cowell had invested $30 billion in illegal, high-risk funds, causing $6.8 billion in losses. A more robust standing oversight body could have prevented much of that improper investment. The state should aggressively prosecute both pension trustees and private investment managers who put their own benefit above the interest of pension participants. More eyes on the management of retirement assets would help ensure responsible investment strategies and management. Creating a publicly managed pool of retirement funds would invest more residents in pension management, while ensuring that fewer workers would find themselves insecure in retirement. And, increased pension funds make possible more diverse, responsible investments for the actively managed portions of the funds. For instance, funds can take a decisive role in infrastructure investments that will both improve their communities and provide steady, long-term returns.
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New Report Details Fundamental Flaws in Long Island Workforce Housing Act
For Immediate Release: May 14, 2015
Contact: Ricardo A. Ramírez, rramirez@populardemocracy.org, 202-464-7376
Read the report here: /documents/long-island-workforce-housing-act-report-2015-05112015pdf
Seven years after New York State passed landmark legislation to increase affordable housing on Long Island, a new report finds that not only does the affordable-housing crisis persist, but the legislation has fundamental flaws that prevent it from paving the way to affordable homes for Long Island’s families.
The Long Island Workforce Housing Act, enacted in 2008, sets affordability too high for working families, has loopholes for developers, and doesn’t require that towns report relevant information to the state, according to the report, commissioned by the Long Island Community Foundation and written by the Center for Popular Democracy, a national group dedicated to equity issues.
“There is much more work to do before our state and local laws foster a community where all working families can find affordable housing,” said Amy Carroll, Chief of Staff of the Center for Popular Democracy, who released the report. “While the Long Island Workforce Housing Act was a first step to tackle the crisis of affordable housing on Long Island, the data is clear: Seven years later, the difficult housing market is failing to provide options for Long Islanders who need affordable housing – from seniors to young professionals and working families. Worse still, the lack of affordable housing exacerbates segregation in the region, and disproportionately impacts Long Island’s working families, residents of color, and immigrant communities.”
“This truly is a crisis -- Long Island is losing large employers to other regions that are more hospitable to employers and workers,” said David Okorn, of the Long Island Community Foundation. “We’re failing to meet the needs of our elders, young professionals and working families, and Long Islanders continue to live in segregated communities.”
“After fighting for affordable housing in Garden City for more than 10 years, NYCC members know that blatant discrimination is alive and well on Long Island,” said Diane Goins, President Long Island Chapter New York Communities for Change. “When the Long Island Workforce Housing Act was passed, many low- and moderate-income residents in Nassau and Suffolk hoped that it would lead to more inclusive, mixed-income communities. CPD’s report clearly shows that this law is flawed and has failed to provide real affordable housing in our communities on Long Island, continuing the pattern of segregation that has plagued us for decades.”
"As the Assembly sponsor of the original version of this legislation, I fully support efforts to examine whether the Long Island Workforce Housing Act is working and helping Long Island families. The Center for Popular Democracy has put forth recommendations that should be considered as more efforts are needed to tackle the shortage of affordable housing on Long Island," said New York State Comptroller Thomas P. DiNapoli.
“Long Island’s housing policies, by design and by default, have failed to meet the housing needs of diverse populations; diverse racially, by income levels, by family composition, and the like,” said V. Elaine Gross, president of ERASE Racism. “Regrettably, the Long Island Workforce Housing Act has not been the hoped for solution. Now is the time to reject housing policies that concentrate poverty and segregate racially, and create policies that support racially and economically integrated communities where all residents can thrive.”
“The Act may have caused some municipalities to become more aware of their housing needs; however, it did little to stimulate the creation of affordable homes on Long Island as was its stated intent,” said Jim Morgo, Suffolk County’s first Commissioner of Economic Development and Workforce Housing. “Revisions in the law and especially state incentives would help additional municipalities meet the varied housing needs of low- and moderate-income Long Islanders.”
“Developers are ready to be part of the solution to address Long Island’s affordable housing crisis. Our members are eager to build quality, affordable homes,” said Mitch Palley, CEO of the Long Island Builders Institute. “We need local governments to work with us to change the zoning and other regulatory barriers that stand in our way.”
The report highlights significant flaws in the Act that have hampered its implementation and stresses that fixing these problems requires state policymakers to reimagine public policies that truly ensure access to affordable, quality housing for working families and foster diverse, mixed-income communities.
Flaws with the Long Island Workforce Housing Act:
Sets affordability too high and out of reach for working families in Long Island, targeting families making $140,000 per year.
Includes loopholes, such as allowing developers to build affordable units off-site, that could exacerbate racial segregation
Includes no requirements that towns keep or report information about affordable housing construction to the state to facilitate analysis of compliance with the Act;
Includes no enforcement mechanisms to allow residents or the state to hold towns or developers accountable for violations and no public education on its requirements; and
Has significant drafting and technical problems that complicate interpretation and application of the law
The report urges leaders in Long Island and New York State as a whole to take a comprehensive, holistic approach to tackling the crisis of affordability. Recommendations include:
Requirements and/or incentives for jurisdictions to accommodate their share of the regional affordable housing need;
Targeting affordability for families across the income spectrum, including those at 50% of area median income and below;
Promotion of inclusive, mixed-income communities, and steps for municipalities to affirmatively further fair housing goals;
Investment in high-poverty areas to ensure revitalization, and protections against displacement of existing low-income communities; and
Effective government oversight and enforcement, including adequate record-keeping and reporting by local governments about their efforts to address affordability and fair housing issues.
Read the report here: /documents/long-island-workforce-housing-act-report-2015-05112015pdf.
About LICF:
Since 1978, the Long Island Community Foundation has been the home of charitable Long Islanders who share a passion and commitment to improve their communities. LICF supports an array of effective nonprofits that help make Long Island a vital and secure place to live, learn, work, and play, while building permanent resources for the future. The Foundation has made more than $150 million in grants from hundreds of funds established by individuals, families, and businesses. LICF is a division of The New York Community Trust, one of the country’s oldest and largest community foundations. To learn more about LICF, go to www.licf.org.
About the Center for Popular Democracy:
CPD works to create equity, opportunity and a dynamic democracy in partnership with high-impact base-building organizations, organizing alliances, and progressive unions. CPD strengthens our collective capacity to envision and win an innovative pro-worker, pro-immigrant, racial and economic justice agenda. For more information, go to www.populardemocracy.org.
Liberals turn to Fed in populist push
Left-leaning groups and lawmakers are taking their populist economic fight to the Federal Reserve, as they seek to exert new influence over key monetary decisions and a pair of vacancies at the...
Left-leaning groups and lawmakers are taking their populist economic fight to the Federal Reserve, as they seek to exert new influence over key monetary decisions and a pair of vacancies at the central bank.
The Fed has faced heavy criticism from the right for years, but the other side of the aisle is now beginning to publicly push the institution for preferred policies. With Congress and the White House seemingly set to butt heads for the next two years, left-leaning community and labor groups are turning to the Fed in an attempt to get an economic policy boost for middle- and working-class Americans.
“In the face of the fiscal side not being really a realistic option to promote an economic recovery, the most important economic policymaker in the United States is the Federal Reserve,” said Shawn Sebastian, policy advocate for the Center for Popular Democracy.
And after successfully driving President Obama to nominate Janet Yellen to lead the Fed, some Senate Democrats are again pressing the administration about openings at the central bank. Sens. Elizabeth Warren (D-Mass.) and Joe Manchin (D-W.Va.) are vocally calling on Obama to nominate tough-nosed Wall Street watchdogs to fill out two board spots that often are filled by academics or economists.
The resurgence of left-leaning interest in the Fed’s operations further complicates the bank’s efforts to remain above the political fray. The Fed has weathered years of criticism from the right, which argues its unprecedented foray into monetary stimulus after the recession was a recipe for disaster.But now, with the Fed preparing to finally dial back years’ worth of quantitative easing, it’s the other side that is airing concerns. This time, the worry is that the Fed could tighten policy too quickly, even as millions of Americans still are looking for work or grappling with stagnant paychecks.
“I have been concerned for some time that when the Federal Reserve began to tighten policy that they would be subject to considerable pressure from people who don’t want them to do that,” said Donald Kohn, a former Fed vice chairman now with the Brookings Institution.
A host of left-leaning groups, including the AFL-CIO and the Economic Policy Institute, have joined forces to take a populist message directly to the Fed. The groups have protested a central bank powwow in Jackson Hole, Wyo., and have held public protests outside the institution’s headquarters in Washington.
The leftward push on the Fed follows those groups notching a major victory at the central bank in 2013. With Obama reportedly favoring economic adviser Lawrence Summers to replace the outgoing Ben Bernanke as head of the Fed, Democrats on and off Capitol Hill embarked on a concerted campaign to get Yellen nominated for the top job instead.
Democratic lawmakers took the rare step of publicly advocating for Yellen, then the Fed’s vice chairwoman, before a nomination was made, effectively announcing opposition to Summers in the process. Though Obama defended Summers in public, he ultimately deferred to that pressure and nominated Yellen for the job.
Now, Warren and Manchin are hoping to exert more influence, calling on Obama to fill two openings at the seven-member board with tough supervisors who “have a demonstrated commitment to not backing down when they find problems.”
Fed governors are given a 14-year term, so if those two find success on that front, the end result could be a considerable shift in how the central bank operates as a financial regulator. And any new voices would likely receive an open hearing from Yellen, whose background is as an economist, not a regulator.
“My impression is that Chair Yellen is running the system by consensus in a considerable way, she consults widely,” said Kohn.
Since taking the job, Yellen has made a concerted effort to place the Fed’s deliberations within the context of the working class. One of her first acts as the Fed’s new leader was to address at a Chicago event how the central bank hoped to boost jobs, and she has agreed to meet with left-leaning protestors to hear their concerns.
But Yellen’s openness to those new voices is leaving some unsettled.
“There’s a trend here that’s pretty clear and pretty concerning,” said Steven Lonegan, director of monetary policy at American Principles in Action, which advocates for tighter Fed policy, including a return to the gold standard.
“You can’t start manipulating the value of our money because you have a specific political agenda,” he added.
But these new advocates argue the Fed has always been subject to politics. Sebastian argued that Fed officials and those that track Fed policy skew heavily from corporate and banking interests, leaving a “Main Street” voice out of the picture.
“Every person carries political baggage,” he said. “All we’re trying to do is have that conversation reflect reality.”
But even the people behind the new leftward push on the Fed acknowledge advocacy of the publicly mysterious institution is somewhat novel. Conservative criticism of the Fed has been around for years, first helmed by former Rep. Ron Paul (R-Texas), but a more liberal effort for influence has not been seen in decades.
“This is a new space for us,” said Sebastian. “We don’t know what the effect of this type of engagement will be.”
Source: The Hill
3 days ago
3 days ago