Partners (Number 3, 2006)

Vol. 16, No. 3, 2006


CLTs Keep Housing Affordable

Keeping Pace in a Changing Environment

EITC Boosts Local Economies

Split Refunds Link Tax Time to Savings

Banking the Unbanked on Both Sides of the Border

Bringing HBCUs Back to Their Communities

CDFI Investing Made Easy with CARS

Post-Katrina Housing Woes Challenge Residents and Planners

Spotlight on the District—Alabama and North Florida



Spotlight on the District

Statewide collaborative promotes financial stability for individuals and families

In light of diminishing national savings rates and the widening gap between rich and poor, state wealth-building programs are more important than ever. According to CFED's "Assets and Opportunity Scorecard," which gave Alabama an overall "D" grade, the state has room for improvement.

CFED ratings for Alabama were as follows:

  • 47th in household net worth development programs;
  • 48th in households with zero net worth;
  • 50th in households with checking accounts;
  • 49th in households with savings accounts;
  • 50th in bankruptcy rate.
Coalition responds to dismal data
With this dismal data in mind, a small group of nonprofits, financial institutions, colleges and bank regulatory agencies met last year in Livingston, Ala., to discuss the possibility of creating a statewide IDA (Individual Development Account) coalition.

The group initially envisioned an IDA pool for nonprofits to access in their wealth-building programs for low- and moderate-income individuals. However, they soon realized that many other strategies could be useful in asset building, and the group broadened its structure to form the Alabama Asset Building Coalition (AABC).

AABC is a statewide collaborative that promotes financial stability for individuals and families. By facilitating savings, financial education and other wealth-building programs, the coalition aims to create an economic foundation that will make it possible for under-served residents in Alabama to reach their highest potential. Directed initially by a steering committee, AABC will establish a formal board of directors under a nonprofit with IRS 501(c)(3) status.

AABC's partners include 23 nonprofits, 6 financial institutions, 2 foundations, 4 private companies, 2 city governments, 4 colleges and universities, and 4 government and bank regulatory agenciesÑincluding the Federal Reserve Bank of Atlanta.

In terms of funding, the United Way of Central Alabama (UWCA) requested and received on behalf of AABC over $600,000 in grants from the Department of Health and Human Services through the Assets for Independence Act. With matching funds from financial institutions, foundations, employers and local city governments, total IDA program funds have reached $1.2 million.

Unique structure eases bank burden
This IDA program is unique from many in not burdening its financial institution members with cumbersome recordkeeping. Instead, UWCA administers the program and handles accounting, working directly with the coalition members.

Banks participate largely by creating and servicing individual savings accounts. Once individual savers reach their goals, they are awarded a matching grant portion. Typical savers' goals are home purchase, college education or small business investment.

AABC programs are up and running, and IDA accounts are being opened daily. AABC also provides financial education (including the FDIC Money Smart curriculum), IRS educational programs for the Earned Income Tax Credit and the Child Tax Credit, and free income tax preparation services through IRS Volunteer Income Tax Assistance (VITA) sites.

This article was written by Michael Milner, regional community development director in the Atlanta Fed's Birmingham branch.

Disaster Recovery Training in Florida

Since the 2004 hurricane season, eight hurricanes have ravaged Florida, leaving a trail of unprecedented damage in most regions of the state. Local governments have not only been called upon as first responders in these disasters; they also serve as a critical link for low- and moderate-income citizens to access disaster recovery resources and mitigation tools for future events.

To foster dialogue about these issues, the Florida Community Development Association hosted the first statewide disaster recovery training in Florida for local government housing agencies, community development professionals and nonprofit organizations this November in Orlando.

Designed to provide the tools for local government and nonprofit organizations to access federal, state and private resources for recovery, long-term mitigation and sustainability, the conference also highlighted best practices and lessons learned during the eight disaster events.

Disaster Housing Chief Roy Dunn speaks at training session.

Experience with disaster informs planning
The keynote speaker at the workshop, Disaster Housing Chief Roy Dunn with the state of Florida's Emergency Response Team detailed lessons learned during previous disasters. He described ongoing planning at the state level to provide sustainable housing resources in a post-disaster environment and emphasized the importance of collaboration among all levels of government. According to Dunn the fundamental insight emerging from ongoing recovery efforts in Florida is that all levels of government must work closely together alongside private and nonprofit sectors, coordinating their efforts to assist disaster victims.

Intergovernmental partnerships in housing recovery, local government best practices, volunteer coordination, FEMA Public Assistance Programs, housing preservation and hazard mitigation were among the session topics at the workshop. Business recovery and the role of financial institutions in recovery were also discussed, as well as initiatives in the insurance industry to include local government in responding to insurance issues among low- and moderate-income homeowners.

Disaster recovery will continue to be a critical issue in our state, and another recovery workshop is scheduled in 2007. Providing affordable, sustainable housing after emergency housing services are discontinued remains key to the economic health of the community and the region. By assisting in the coordination and facilitation of this conference, the Jacksonville Branch of the Federal Reserve Bank of Atlanta's Community Affairs program demonstrates a part of the Fed's commitment to disaster recovery efforts in the Sixth District.

This article was written by Janet Hamer, regional community development manager in the Atlanta Fed's Jacksonville branch.