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Pay day for Gutierrez

U.S. Representative Luis Guiterrez’s new Pay Day Loan Reform Act has the same name as a bill he introduced last year, but  “the two bills are the opposite sides of a coin in terms of the protections and reform they offer consumers,” writes Karen Harris at the Shriver Center’s blog.

“Last year’s legislation would have placed severe limits on unfair payday loans.  This year’s bill, however, essentially condones the payday lending model and, if enacted, will effectively stop the progress that has been made at the state level to curb usurious lending.”

Harris says the protections Gutierrez is touting in his new legislation “have not worked” when they’ve been tried at the state level. Noting that Gutierrez maintains that the influence of the pay day loan industry limits the possibilities of reform, Harris suggests the congressman “return the campaign contributions [he’s taken from pay day lenders] and see if his previous good sense and reasoning on these issues returns as well.”

New Welfare Rules Called Counterproductive

The proposed tightening of federal rules on workforce participation by TANF recipients could undercut successful local programs that move welfare recipients into well-paying jobs, advocates say.

Local groups including the Heartland Alliance, the Chicago Jobs Council, and the Sargent Shriver National Center on Poverty Law are submitting comments this week on new regulations proposed by the U.S. Department of Health and Human Services after TANF was reauthorized in February.

With city and state support, the Chicago area has emerged as a leader in transitional jobs programs which, in contrast to “work-first” approaches, provide a continuum of services to address multiple personal employment barriers and use real work experience to transition to permanent jobs, with high success rates, said Melissa Young, coordinator of the National Transitional Jobs Network at the Heartland Alliance. The new rules would limit access to supportive services and cut back on the number of training opportunities, she said.

New limits on vocational education would restrict programs at the Community Assistance Program, which customizes training for TANF clients based on job requirements provided by prospective employers, said Sheryl Holman. And increased paperwork and monitoring requirements would reduce the time her staff can work with clients, she said. CAP trains TANF clients and others at five South Side locations.

The new regulations would also make it harder for employment services working under the federal Workforce Investment Act to serve TANF clients, said Rose Karasti of the Chicago Jobs Council.

The HHS proposal ignores the lessons of the first ten years of TANF – that entry-level employment is not a bridge out of poverty, but that welfare recipients can succeed with the proper support, said John Bouman of the Shriver Center. “The focus needs to be on reducing poverty,” he said.

Preserving Affordable Housing – South Side, West Side

As private and nonprofit developers on Chicago’s West Side undertake the largest rescue of troubled subsidized housing in the nation’s history, other community organizers are meeting to develop proactive strategies for low-income housing with subsidies nearing expiration.

[About 300 community activists – half of them tenants in buildings facing loss of their subsidies – attended the Chicago Rehab Network’s South Side Affordable Housing Summit on June 3 at King High School.]

Nearly three fourths of the 12,400 low-income units covered by rental subsidy contracts and mortgate assistance on the South Side could be lost in the next three years, said Leah Levinger of CRN.

The summit will focus on preservation tools including new state legislation which requires tenant notification when owners decide to end subsidies and gives tenant associations first option to purchase the property.

Logan Square Neighborhood Association organizers will discuss their recent victory using the law to save 54 units of project-based Section 8 housing.

In Woodlawn, the Student Tenant Organizing Project has blocked owners who sought to scare tenants into moving — counting on their ignorance of possible legal recourses — so they could convert subsidized buildings to condos “illegally,” said Della Moran. Tenants in several buildings there are now organizing so they can act to save affordability when contracts do expire.

Meanwhile the West Side’s Lawndale Restoration, the largest project-based Section 8 complex in the city, is being salvaged by a diverse group of developers, ranging from major nonprofits to local mom-and-pop landlords.

In late 2004 city inspectors found 1800 code violations in 100 buildings (with over a thousand Section 8 units) operated by Lawndale Restoration, after a car crash caused a partial cave-in at one building. The U.S. Department of Housing and Urban Development began foreclosure proceedings against Lawndale Restoration, planning to “voucher out” tenants by shifting subsidies from the housing units themselves to vouchers carried by tenants.

Housing advocates consider project-based subsidies to be more stable and note that many voucher holders end up in poor housing in segregated neighborhoods.

Lawndale tenants organized by ACORN and represented by the Shriver Center on Poverty Law sued HUD, demanding that project-based subsidies be maintained. ACORN also brought tenants to meet with top HUD officials in Washington.

“Tenants fought tooth and nail for long-term subsidies,” said Marty Shaloo of ACORN Housing.

They were helped when Congress passed the Shumer Amendment to last year’s HUD appropriation, requiring the agency to show that housing would be available for tenants vouchered out of Section 8 buildings.

Then the city stepped in, working with the Community Investment Corp., a nonprofit that helps independent landlords provide affordable housing, to assemble 23 developers and transfer title to them.

Developers agreed to keep housing affordable and are eligible for up to $40,000 per unit in HUD rehab grants. All the units will keep their project-based subsidies for two years, and 400 units will get 20-year Section 8 contracts. ACORN is co-developing about 250 of those units.

Tenants wanted more units covered by long-term contracts, but getting as many as they did was “a huge victory” given HUD’s policy of shifting subsidies from projects to vouchers, said Shaloo.

At this point many Lawndale tenants are taking a wait-and-see attitude, said Kaitlyn Johnson of ACORN, which has organized tenants throughout the developments.

“They’ve been screwed around so long they don’t know what to believe,” said developer Sel Dunlop. Dunlap is redeveloping an 8-unit building and is one of a number of Lawndale developers meeting together to coordinate efforts.

“The conditions are very bleak and they’ve been that way for years,” said Richard Townsell of Lawndale Christian Development Corp. LCDC is taking on 79 units in 13 buildings with plans to help some tenants purchase their homes.

Developers have been meeting with tenants, and one has organized a bus tour of her current properties. “We put a face on the company they’re dealing with and let them know how the buildings we own are maintained,” said Johnnie Heron, who is acquiring 69 units in three buildings.

“The idea is to provide a quality of housing residents have never enjoyed before,” said Dunlop, who hopes for a “spillover effect” improving the “culture of our community.”

They’ll also bring stability to a neighborhood increasingly beset by real estate speculation by providing a place for longtime low-income residents to remain — the goal of housing advocates across the city.

Children’s Savings Accounts Proposed

The founder of the asset-building movement and Pennsylvania’s director of financial education will speak at the Federal Reserve Bank of Chicago, 230 S. LaSalle, on Wednesday, May 3, at a policy briefing and luncheon launching a statewide campaign to establish Children’s Savings Accounts.

Professor Michael Sherradan of Western University of St. Louis, the leading proponent of the asset-building movement, will speak at a 9 a.m. policy briefing, and Hillary Hunt, director of Pennsylvania’s new Office of Financial Education, will speak at an 11 a.m. luncheon program following the briefing.

The events are sponsored by the Illinois Asset Building Group to launch a campaign of advocacy and grassroots outreach aimed at introducing legislation in Springfield next year to establish CSAs. The accounts would be seeded by initial grants by the state and designed to build life-long assets through private-market accounts, with matching funds for lower-income families and age-appropriate financial education, according to Dory Rand of the Sargent Shriver National Center on Poverty Law.

IABG members have conducted grassroots research and on asset-building around the state, and the Shriver Center has piloted a CSA program at Mayo Elementary School, 249 E. 37th — a college savings and financial education club, with 75 students participating. The center co-chairs the IABG along with the Heartland Alliance.

Heartland has sponsored asset-building programs in its work with immigrants and with public housing relocatees, said Gina Guillemette.

The “wealth gap” between black and white Americans is much higher than the income gap, but Rand said even low-income working families are able to save, particularly with automatic deductions.

She expects funding for CSAs to be an issue, but notes that that they reflect “basic American values” — “that everyone should have an opportunity to go to college, start a business, buy a home, or save for retirement.” Similar proposals in Washington, D.C., have won bipartisan support, she said.

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