Research Paper Community Development

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Discussion Papers

The following discussion papers examine issues of affordable housing, community and economic development, financial education, and consumer credit and payments that affect low- and moderate-income people and communities.

Borrower Credit Access and Credit Performance After Loan Modifications
(625 KB, 46 pages)

While the preventive effect of loan modifications on mortgage default has been well-documented, evidence on the broad consequences of modifications has been fairly limited. Based on two unique loan-level data sets with borrower credit profiles, this study reports novel empirical evidence on how homeowners manage their credit before and after receiving modifications. The paper has several main findings. First, loan modifications improve borrowers’ overall credit standing and access to credit. Modifications that provide principal reduction, rate reduction, or greater payment relief, as well as those received by borrowers not in financial catastrophe, lead to a larger improvement in borrowers’ credit rating than others. Second, loan modifications lead to a slight increase in borrowers’ debts, primarily on home equity line of credit (HELOC) accounts and auto loans. Third, borrowers’ performance on nonmortgage accounts, however, has not been negatively impacted by modifications. This study demonstrates that interventions designed to improve household balance sheets could have a direct and sizable impact on borrower financial outcomes. 

Residential Migration, Entry, and Exit as Seen Through the Lens of Credit Bureau Data(426 KB, 36 pages)

We analyze a large, nationally representative anonymized data set of consumers with a credit report from 2002 to 2010. This is a period that encompasses a boom and bust in consumer credit. Using census data, we classify consumers into four categories of relative neighborhood income and find that, over time, the number and proportion of consumers with a credit report fell in low- and moderate-income neighborhoods and rose in higher-income neighborhoods. Population trends evident from census data explain only a portion of these changes in the location of the credit bureau population. In most instances, the primary driver reflects residential migration from relatively poorer neighborhoods to ones with relatively higher incomes. Patterns of entry into or exit from the credit bureau population were correlated with the credit cycle, as well as with relative neighborhood income, resulting in slower sample growth in low- and moderate-income neighborhoods during periods of credit contraction. These results are interesting in themselves, but they are also important for interpreting empirical results estimated from credit bureau data.

FHA Lending: Recent Trends and Their Implications for the Future(9.08 MB, 62 pages) 

This paper examines borrower characteristics over the course of the previous decade, a period in which the FHA experienced both a sharp decline in its market share and lending volume as the subprime segment expanded and a subsequent reversal of fortune as it emerged as one of the major supports of the housing market in the wake of the subprime collapse. The report provides information on trends in borrower cohorts along such dimensions as first-time homebuyer status, income, and FICO score; examines variations across regions in overall lending trends and borrower characteristics; considers what borrower patterns in post-subprime years may suggest about the nature of the FHA borrower pool going forward; and draws on the paper’s empirical findings to identify factors that policymakers might consider in evaluating how different proposals for the evolution of the housing finance sector might affect the nature of FHA lending.

Building Sustainable Ownership: Rethinking Public Policy Toward Lower-Income Homeownership(568 KB, 35 pages)

Based on a review and assessment of the literature on the costs and benefits of homeownership, provides a framework for public policy toward lower-income homeownership through an analysis of how those costs and benefits are affected by the homebuyer's income. Makes the case that public policy and resources should be directed less toward maximizing the number of lower-income homeowners and more toward maximizing the quality and stability of the homeownership experience for lower-income owners; offers a series of specific policy recommendations to that end.

Subprime Lending Over Time: The Role of Race(971 KB, 26 pages)

Analyzes the racial gap in subprime mortgages over time. The study estimates a portion of the gap that cannot be attributed to such characteristics as income, credit score, loan amount, degree of documentation, denial rate, residence in a minority tract, and debt-to-income ratio. It concludes that the unexplained portion suggests that bias in mortgage lending cannot be ruled out.

Economic and Social Impact of Introducing Casino Gambling: A Review and Assessment of the Literature(661 KB, 34 pages)

Reviews and assesses the existing literature on the potential economic impact of introducing casino gambling into a community or region, first by discussing the casinos’ effect on economic activity and growth within a community or region, and then by exploring their effect on government revenues. Also discusses the literature related to the economic impact of social costs widely associated with gambling, such as increases in crime, bankruptcy, and problem gambling.

Affordability and Availability of Rental Housing in Pennsylvania

Can be found in the Special Reports section of the website.

Alternative Financial Service Providers and the Spatial Void Hypothesis (3.8 MB, 33 pages)

Examines the use of alternative financial service providers (AFSPs) such as check-cashing outlets and pawnshops in Philadelphia, Montgomery, Delaware, and Allegheny counties. Also explores whether these providers are disproportionately serving minority and low-income areas.

Alternative Financial Service Providers and the Spatial Void Hypothesis: The Case of New Jersey and Delaware(936 KB, 18 pages)

Continues the use of the spatial void hypothesis methodology to analyze the location of alternative financial service providers, such as check cashing outlets and pawn shops, in New Castle County, Delaware, and Atlantic, Mercer, Monmouth, and Passaic counties in New Jersey. Also explores whether these providers are disproportionately serving minority and low-income areas.

Alternative Financial Vehicles: Rotating Savings and Credit Associations (ROSCAs) (749 KB, 31 pages)

Describes how ROSCAs work and discusses the benefits that accrue to ROSCA participants and some of the costs they incur. Of particular interest is the introduction of a partial data set collected from a local ROSCA, which offers a glimpse of the capital costs ROSCA participants face and which could ultimately be contrasted with the capital costs faced by borrowers at mainstream financial institutions.

Financial Resources for the Environment: The Unsuccessful Attempt to Create a Private Financing Intermediary for Brownfield Redevelopment Projects (2.06 MB, 38 pages)

Analyzes an unsuccessful attempt to establish a financing intermediary for the development of environmentally contaminated property (commonly known as brownfields) in Pennsylvania. The proposed intermediary was called Financial Resources for the Environment.

Home Ownership Education and Counseling: Issues in Research and Definition
(109 KB, 31 pages)

Assesses existing research on the effectiveness of home-ownership education and counseling and opportunities for future research.

How to Spend $3.92 Billion: Stabilizing Neighborhoods by Addressing Foreclosed and Abandoned Properties(326 KB, 27 pages)

Gives guidance on the best use of funds appropriated by the Housing and Economic Recovery Act of 2008 for the purpose of assisting states, counties, and cities in their efforts to stablize hard-hit neighborhoods. The discussion paper was written by Alan Mallach, visiting scholar at the Bank.

The Impact of Housing Rehabilitation on Local Neighborhoods: The Case of the St. Joseph's Carpenter Society(2.92 MB, 25 pages)

Presents the results of a Philadelphia Fed study that analyzes whether the community development efforts of a nonprofit in Camden, NJ, have an effect on local neighborhoods.

Preserving Multifamily Rental Housing: Improving Financing Options in New Jersey (645 KB, 44 pages)

Summarizes the obstacles to financing small multifamily rental properties in New Jersey and makes recommendations for policies to address this credit need.

Preserving Multifamily Rental Housing: Noteworthy Multifamily Assistance Programs(289 KB, 34 pages)

Describes noteworthy multifamily-assistance programs around the country, including mortgage-insurance, secondary-market, technical-assistance, and tax-abatement programs. Produced by the Federal Reserve Banks of New York and Philadelphia.

Community Reinvestment Act

This discussion paper provides evidence on the effects of the Community Reinvestment Act (CRA) on the mortgage market in the aftermath of the Great Recession. The study is accompanied by a practitioner’s summary, which provides applied findings for the community development practitioner audience.

“Don't Know What You Got Till It’s Gone” — The Effects of the Community Reinvestment Act (CRA) on Mortgage Lending in the Philadelphia Market
(817 KB, 33 pages)

The Community Reinvestment Act (CRA), enacted in 1977, has served as an important tool to foster access to financial services for lower-income communities across the country. This study provides new evidence on the effectiveness of CRA on mortgage lending by focusing on a large number of neighborhoods that became eligible and ineligible for CRA credit in the Philadelphia market after 2014. The CRA effects are more evident when a lower-income neighborhood loses its CRA coverage, which leads to a 10 percent or more decrease in purchase originations by CRA-regulated lenders. Lending institutions not subject to CRA can substitute approximately half, but not all, of the decreased lending by CRA lenders. The increased market share of nondepository institutions in previously CRA eligible neighborhoods, however, was accompanied by a greater involvement in riskier FHA lending. This study demonstrates how different lenders respond to the incentive of CRA credit and how the use of metropolitan division median family incomes can generate unintended consequences on CRA lending activities.

A Practitioner’s Summary: The Effects of the Community Reinvestment Act (CRA) on Mortgage Lending in the Philadelphia Market
(9.37 MB, 20 pages)

This report summarizes major findings from the discussion paper “Don't Know What You Got Till It’s Gone” — The Effects of the Community Reinvestment Act (CRA) on Mortgage Lending in the Philadelphia Market for a community development practitioner audience.

Gentrification and Residential Mobility:

The department has released a series of discussion papers on gentrification and residential mobility. Detailed descriptions and the full studies are available below:

The Consequences of Gentrification: A Focus on Residents’ Financial Health in Philadelphia(597 KB, 40 pages)

There have been considerable debate and controversy about the effects of gentrification on neighborhoods and the people residing in them. This paper draws on a unique large-scale consumer credit database to examine the relationship between gentrification and the credit scores of residents in the City of Philadelphia from 2002 to 2014. The authors find that gentrification is positively associated with changes in residents’ credit scores on average for those who stay, and this relationship is stronger for residents in neighborhoods in the more advanced stages of gentrification. Gentrification is also positively associated with credit score changes for less advantaged residents (low credit score, older, or longer term residents, and those without mortgages) if they do not move, though the magnitude of this positive association is smaller than for their more advantaged counterparts. Nonetheless, moving from gentrifying neighborhoods is negatively associated with credit score changes for less advantaged residents, residents who move to lower-income neighborhoods, and residents who move to any other neighborhoods within the city (instead of outside the city) relative to those who stay. The results demonstrate how the association between gentrification and residents’ financial health is uneven, especially for less advantaged residents.

What Have We Learned About the Causes of Recent Gentrification?(678KB, 24 pages)

Since 2000, strengthening gentrification in an expanding section of cities and neighborhoods has renewed interest from policymakers, researchers, and the public in the causes of gentrification. The identification of causal factors can help inform analyses of welfare, policy responses, and forecasts of future neighborhood change. The authors highlight some features of recent gentrification that popular understandings often do not emphasize, and they review progress on identifying some causal factors. However, a complete account of the relative contribution of many factors is still elusive. The authors suggest questions and opportunities for future research.

Gentrification and Residential Mobility in Philadelphia(610 KB, 50 pages)

Gentrification has provoked considerable controversy surrounding its effects on residential displacement. Using a unique individual-level, longitudinal data set, this study examines mobility rates and residential destinations of residents in gentrifying neighborhoods during the recent housing boom and bust in Philadelphia for various strata of residents and different types of gentrification. We find that vulnerable residents, those with low credit scores and without mortgages, are generally no more likely to move from gentrifying neighborhoods compared with their counterparts in nongentrifying neighborhoods. When they do move, however, they are more likely to move to lower-income neighborhoods. Residents in gentrifying neighborhoods at the aggregate level have slightly higher mobility rates, but these rates are largely driven by more advantaged residents. These findings shed new light on the heterogeneity in mobility patterns across residents in gentrifying neighborhoods and suggest that researchers should focus more attention on the quality of residential moves and nonmoves for less advantaged residents, rather than mobility rates alone.

A Practitioner's Summary: Gentrification and Residential Mobility in Philadelphia(3.0 MB, 28 pages)

This summary of the report Gentrification and Residential Mobility in Philadelphia provides applied findings appropriate for a community development practitioner audience.

Gentrification Measure

This Excel file provides data for our gentrification measure for the city of Philadelphia based on the Census 2000 tract definition, which identifies the tracts that were gentrifiable in 2000 and their various gentrification categories during the 2000-2013 period.

Home Mortgage Appraisals

The department has released a series of discussion papers on home mortgage appraisals. The first paper of the series, released in June 2014, focuses on the pattern of appraisal bias in the Third Federal Reserve District. The second paper, released in August 2014, focuses on the impact of the Home Valuation Code of Conduct on appraisal and mortgage outcomes nationally. Detailed descriptions and the full studies are available below:

  • The Impact of the Home Valuation Code of Conduct on Appraisal and Mortgage Outcomes(708 KB, 36 pages) 

    The accuracy of appraisals came into scrutiny during the housing crisis, and a set of policies and regulations was adopted to address the conflict-of-interest issues in the appraisal practices. In response to an investigation by the New York State Attorney General’s office, the Home Valuation Code of Conduct (HVCC) was agreed to by Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency. Using unique data sets that contain both approved and nonapproved mortgage applications, this study provides an empirical examination of the impact of the HVCC on appraisal and mortgage outcomes. The results suggest that the HVCC has led to a reduction in the probability of inflated valuations, although valuations remained inflated on average, and induced a significant increase in the incidence of low appraisals. The well-intentioned HVCC rule made it more difficult to obtain mortgages to purchase homes during the housing price crash, possibly exacerbating the fall in prices.
  • The Pattern of Appraisal Bias in the Third District During the Housing Crisis(569 KB, 28 pages)

    Appraisers have often been criticized for the inflated home values that were more prevalent during the housing boom, as well as overly conservative valuations during the housing bust. However, little research has been done to help understand how appraisal valuations respond to rapidly changing local market conditions and regulatory environments. This study provides an empirical examination of the pattern of appraisal bias during the housing crisis in the Third Federal Reserve District. Based on a unique transaction-level appraisal data set, this study evaluates how the lack of market activity, the concentration of foreclosures, and the increased use of appraisal management companies, as well as other factors, impact the incidence of low appraisals during the crisis. This study further examines the possible challenges created by low appraisals on the access to mortgage credit.

Find out when information for community development publications and events is released.

Federal Reserve Bank of Philadelphia
Community Development Studies & Education Department
Ten Independence Mall
Philadelphia, PA 19106-1574

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Working papers provide in-depth analysis of new community development issues from practitioners and scholars.


Staying at Home: The Role of Financial Services in Promoting Aging in Community - Volume 2016, Issue 05

Posted September 19, 2016

Older adults are indicating a desire to live and grow old in their own homes and communities. Yet there are often numerous barriers and threats to aging in community, as many communities lack a comprehensive community model. With a focus on financial institutions and utilizing the concept of Age-Friendly Banking, this paper explores the economic security of older adults and ways to improve older adults’ ability to live safely in their own homes and communities as long as possible.

Taking Stock of New Supermarkets in Food Deserts: Patterns in Development, Financing, and Health Promotion - Volume 2016, Issue 04

Posted August 12, 2016

Across the U.S., neighborhoods face disparate healthy food access, which has motivated federal, state, and local initiatives to develop supermarkets in “food deserts.” Differences in the implementation of these initiatives are evident, including the presence of health programming, yet no comprehensive inventory of projects exists to assess their impact. Using a variety of data sources, this paper provides details on all supermarket developments under “fresh food financing” regimes in the U.S. from 2004-2015.

Boosting the Power of Youth Paychecks: Integrating Financial Capability into Youth Employment Programs - Volume 2016, Issue 03

Posted May 9, 2016

This paper summarizes the results of the first-ever quasi-experimental design study of a youth financial capability initiative seamlessly integrated into a youth workforce development program.

The Emerging Economic Geography of Single-Family Rental Securitization - Volume 2016, Issue 02

Posted January 21, 2016

This working paper uses data culled from presale reports from the first wave of rental-backed securities to analyze and describe the emerging trend of single-family home rental (SFR) securitization. Authors provide a basic overview of the market, showing the number and market value of single-family homes involved in these new financial products, produce one of the first maps of the phenomenon, and examine data on the accessibility of SFR securitized homes to Section 8 tenants.

Best Practices in the Design and Implementation of Learning Communities - Volume 2016, Issue 01

Posted January 12, 2016

Over the past decade, national foundations and the federal government have designed many multisite initiatives that seek to address complex social problems. These initiatives have spanned fields, from criminal justice to early childhood education to community development and health. In addition to providing sites with funding and technical assistance, a number of these initiatives have included some type of cross-site convening within the design, often referred to as “learning communities.” The findings in this report emerge primarily from interviews with 15 individuals who have had experience in designing and implementing learning communities and communities of practice and individuals involved more broadly in the field of interorganizational learning.


Understanding the Crowd, Following the Community: The Need for Better Data in Community Development Crowdfunding - Volume 2015, Issue 07

Posted December 28, 2015

Crowdfunding has emerged as a popular way to raise money online for a wide range of projects, and the community development field has the potential to benefit from the practice. This paper makes the case that in order for community development crowdfunding to reach its potential scale, and to involve the full range of potential stakeholders, better standards of data reporting and collection need to be established.

Weathering the Great Recession: A CDFI Case Study in Patient Capital - Volume 2015, Issue 06

Posted September 1, 2015

This working paper looks at the lending performance of one CDFI, the Low Income Investment Fund (LIIF), through the Great Recession. Its authors argue that LIIF’s success weathering the downturn—relative to similarly-sized banks—is the direct result of a “patient capital” approach to portfolio management unique to the CDFI industry.

Gentrification, Displacement and the Role of Public Investment: A Literature Review - Volume 2015, Issue 05

Posted August 24, 2015

Scholarly interest in the relationship between investment and displacement dates back to the 1970s, in the aftermath of displacement related to urban renewal. More recently, a new wave of scholarship examines gentrification, primarily in strong market cities, and its relationship to public investment, particularly in transit. The results of these studies are mixed, due in part to methodological shortcomings. A primary finding looking across the literature is that there is a need for a new methodology to analyze displacement risk.

Leveraging the Power of Place: Using Pay for Success to Support Housing Mobility - Volume 2015, Issue 04

Posted July 28, 2015

Families who use housing vouchers to move from areas of concentrated poverty to better-resourced neighborhoods have been shown to experience higher earnings and improved health. Housing mobility programs increase the effectiveness of housing vouchers by providing education and support to voucher holders facing barriers to such “opportunity” moves. This working paper proposes using a Pay for Success financing mechanism to increase investment in housing mobility programs based on the hypothesis that health care savings stemming from a positive mobility outcome—specifically related to diabetes and obesity— are sufficient to pay the entire cost of the mobility program. The authors draw on a unique dataset and use a dose-response model to produce four potential health savings scenarios that vary the expected effect timing (when health actually improves). Even the most conservative scenario generates sufficient projected health care cost savings to pay for the housing mobility program’s costs within a ten-year timeframe.

Pathways to System Change: The Design of Multisite, Cross-Sector Initiatives - Volume 2015, Issue 03

Posted July 21, 2015

Over the past few years, there has been significant growth in the number of multi-site, cross-sector initiatives to improve communities and the lives of their residents. Through a comprehensive literature review, interviews with key project evaluators and funders, a recap of a December 2014 roundtable discussion, and the authors’ significant expertise, this report provides detailed descriptions of “what works” and “pitfalls” in its analysis of design elements and project parameters of both past and current multisite initiatives. In addition, the paper provides insights into the design and implementation of place-based efforts for community development practitioners, financial institutions, and other organizations, such as healthcare payers, who are involved in site-specific initiatives seeking to improve the economic well-being of low-income residents.

Building a Cross-Sector Coalition: Sustainable Communities for All and CA’s Cap-and-Trade Program - Volume 2015, Issue 02

Posted April 8, 2015

Why should community developers care about cap-and-trade and what do carbon emissions have to do with low-income households? As it turns out, the fields of environmental sustainability and community development have significant overlap, particularly in the area of transit-oriented development, where issues of affordability, equity, and displacement converge with concerns such as vehicle miles traveled and greenhouse gas (GHG) emissions.

Adopting Age-Friendly Banking to Improve Financial Well-Being for Older Adults - Volume 2015, Issue 01

Posted January 16, 2015

This paper explores age-friendly banking products and services that better protect and preserve the assets of an aging population. In order to examine the unique financial needs and increase the financial well-being of low-income older adults, the California Coalition for Rural Housing (CCRH) partnered with the National Community Reinvestment Coalition (NCRC) to conduct an intensive study of over 400 low-income tenants living in subsidized senior housing. CCRH and NCRC recommend that banks develop more affordable banking products for seniors on fixed-incomes, assist customers in applying for public benefits, proactively address financial abuse and fraud, and provide in-person customer service and better early retirement planning. Financial institutions can incorporate these recommendations into the development of effective Age-Friendly Banking initiatives.


Understanding Community Development Needs through the CRA Performance Context - Volume 2014, Issue 02

Posted December 8, 2014

Community development efforts to revitalize low- and moderate-income neighborhoods should begin with an appropriate understanding of the needs and opportunities present within these communities. This sentiment is especially true of banks looking to fulfill their Community Reinvestment Act (CRA) obligations. A truly responsive and innovative CRA program should begin with the “performance context,” or knowledge about the bank’s local markets, including the needs of the community as well as the opportunities that exist within the local network of resources and organizations. This paper attempts to demystify the performance context and establish its strategic value to the CRA process. It explores new opportunities for strengthening the performance context as a community development tool, from the perspective of both bankers and regulators.

Long-term Cost Effectiveness of Placing Homeless Seniors in Permanent Supportive Housing - Volume 2014, Issue 01

Posted July 28, 2014

This paper demonstrates that the greatest reduction in health care costs after placement in supportive housing is seen among chronically homeless adults and seniors who are frequent users of the health care system. Employing data from Mission Creek Apartments, a senior affordable housing project in San Francisco with 51 units reserved for homeless seniors, the researchers estimated savings to Medicaid and Medicare from avoiding placing these seniors in a skilled nursing facility of $9.2 million over 7 years. Their findings support the conclusion that permanent supportive housing can be a highly cost-effective placement option for homeless seniors exiting skilled nursing facilities, particularly as they approach the end of life, and points to the importance of this housing option for managed care organizations that are increasingly taking on the financial responsibility for the health care of this population.


Lessons on Cross-Sector Community Development: The Las Vegas Healthy Communities Coalition - Volume 2013, Issue 7

Posted December 17, 2013

The Federal Reserve Bank of San Francisco, in partnership with the Robert Wood Johnson Foundation, launched the “Healthy Communities” initiative in 2010 to explore how the health and community development sectors can collaborate. A regional meeting took place in Las Vegas in January 2012, which led to the formation of the Las Vegas Healthy Communities Coalition (LVHCC), a collective impact initiative with a mission to “foster collaboration and coordination across multiple sectors and stakeholders, to generate healthy outcomes for all Southern Nevadans.” This report details the formation and progress of LVHCC, which is still in the early stages of development. Unlike other case studies, which often report on an initiative’s success after many years of careful planning and implementation, this study aims to provide a candid look at the challenging and emergent nature of cross-sector collaboration in progress. It is meant to shed light on specific challenges and lessons that have been learned in Las Vegas thus far in order to help other communities that have embarked on their own community collaboratives.

CRA Collaboratives and the San Joaquin Valley - Volume 2013, Issue 6

Posted November 29, 2013

California’s San Joaquin Valley is one of the nation’s most impoverished areas. Recent developments such as the foreclosure crisis and the Matosantos decision have heightened the Valley’s needs, and there is also evidence that the Valley is beginning to garner more attention from financial institutions and federal regulators. These developments create an opportunity for community-based organizations (CBOs) and financial institutions to work together in a mutually beneficial way. This paper describes how stakeholders have successfully collaborated to increase reinvestment in other locales, with lessons learned for the San Joaquin Valley. The results show that CBOs and financial institutions can improve conditions in the region and banks can still make a profit.

Comparative Advantages: Creating Synergy in Community Development - Volume 2013, Issue 05

Posted September 9, 2013

The goal of this paper is to provide insights and tools to help community development practitioners, policymakers, funders, and other stakeholders better understand how to maximize the effectiveness and impact of different types of organizations at the local and regional level. Understanding your comparative advantages is critical to addressing complex community development initiatives from foreclosure prevention, to sustainable energy, to urban education, to job creation.

The New Family Philanthropy: Investing for Social and Environmental Change - Volume 2013, Issue 04

Posted August 20, 2013

The impact investing marketplace is gaining traction—investment vehicles now span asset classes, infrastructural improvements are enhancing transparency and investor confidence, and social enterprise is maturing with a new generation of entrepreneurs. On the investor side, industry growth is being driven by large institutional investors such as public sector pension funds, banks, and private foundations. Today, we are also seeing a growing movement by families who seek to realize their core values, and effect societal change, through their family assets.

Increasing Financial Capability among Economically Vulnerable Youth: MY Path - Volume 2013, Issue 03

Posted March 11, 2013

This report provides research findings from two different phases of “MY Path,” a financial capability initiative that provides employed disadvantaged youth with peer-led financial education trainings, a savings account at a mainstream financial institution and incentives to set and meet savings goals. The initiative is operated by Mission SF Community Financial Center (Mission SF), a nonprofit that strives to promote financial security and catalyze economic mobility for lower-income households. In 2011-12, Mission SF began testing MY Path by delivering its suite of services to ten youth development agencies participating in San Francisco’s largest youth employment program, the Mayor’s Youth Employment and Education Program (MYEEP). Based on lessons learned from the MY Path pilot, Mission SF implemented program adjustments for the second iteration of the program (MY Path Year Two) and conducted further research to understand the impact of these changes. By the end of MY Path Year Two, the 197 participants had saved a total of $134,323 in their restricted MY Path savings accounts. The individual amounts saved over the course of MY Path ranged from $5 to $1,590, with an average of $682 (SD = $321). The median amount saved was $679. This is a significant increase over the average of $507 saved by participants in MY Path Year One (t(196) = 7.64, p < .001).

The Subprime Crisis in Suburbia: Exploring the Links Between Foreclosures and Suburban Poverty - Volume 2013, Issue 02

Posted February 12, 2013

In this brief, we provide an overview of patterns of subprime lending, as well as trends in foreclosures and REOs, in suburban communities compared to inner-cities. We also explore the relationship between foreclosures in suburban areas and the increased suburbanization of poverty. We find that the vast majority of foreclosures–nearly three out of four (73.1 percent)—have been in suburban areas, and that suburban neighborhoods with higher rates of poverty are more likely to experience higher foreclosure rates. This is of concern because the mechanisms for addressing the challenges associated with concentrated foreclosures can be more difficult to implement in suburban areas; suburbs may have smaller local governments, fewer nonprofits, and a more dispersed urban form, making it difficult for cities or nonprofits to administer programs or for residents to access them. Because the distribution of foreclosed homes has significant implications for the long-term stability of suburban neighborhoods, increased resources and attention should be devoted to developing foreclosure responses that take into account the capacity and access challenges that are unique to suburban neighborhoods.

From Cashing Checks to Building Assets: A Case Study of the Check Cashing/Credit Union Hybrid Service Model - Volume 2013, Issue 01

Posted January 7, 2013

This case study examines the pilot effort of Community Trust Prospera (CT Prospera), a division of Self-Help Federal Credit Union, to combine the accessible services of a check-casher with the longer-term depository and lending relationship opportunities of a mainstream financial institution.


Navigating Uncertainty and Growing Jobs: Considering Small Employer Firm Resilience During Challenging Economic Times - Volume 2012, Issue 06

Posted December 1, 2012

How have certain small employer firms demonstrated resiliency despite ongoing economic uncertainty? This study considers the organizational capabilities of small employer firms operating in low- and moderate-income (LMI) census tract areas.

Impact Investing for Small, Place-Based Fiduciaries: The Research Study Initiated by the United Way of the Bay Area - Volume 2012, Issue 05

Posted December 1, 2012

Most fiduciaries of institutional funds (public-defined benefit plans, endowment funds, and quasi-private/public foundations) for many reasons have been reluctant to adopt Impact Investing, Social Responsible Investing (SRI), or Environmental, Social and Governance (ESG) factors in their investment policies and philosophies. Primarily, such social impact factors are deemed to be limiting to the opportunity set of investments and therefore imply a financial return that is potentially substandard. This paper is the result of a challenge to identify if and how a model portfolio could be built for a small, place-based endowment fund, like that of the United Way of the Bay Area (UWBA), and whether our stock and bond investments could be aligned with the mission to reduce poverty in the San Francisco Bay Area without deviating from our fiduciary responsibilities.

Building a Robust Anti-Poverty Network in the Bay Area - Volume 2012, Issue 03

Posted September 1, 2012

The geography of race and class in the San Francisco Bay Area has shifted dramatically over the last decade, and suburban poverty is on the rise. The need for social services has grown in communities outside of the urban core, outpacing the abilities of anti-poverty organizations to provide assistance. Using eastern Contra Costa County as a case study, this paper outlines some of the challenges for the current anti-poverty network in suburban locales, and lays out a framework for building capacity to better meet the needs in these urban fringe areas.

Money Savvy Youth: Evaluating the Effectiveness of Financial Education for Fourth and Fifth Graders - Volume 2012, Issue 02

Posted July 1, 2012

While there are studies on the impact of financial education on teens, there is a lack of research on programs targeted at elementary school-aged youth. To address this gap, we evaluated the effectiveness of Money Savvy Youth (MSY), a financial education program for fourth and fifth graders, developed by the East Bay Asian Local Development Corporation. MSY training was delivered in the classroom once a week over the course of five weeks during the 2011-2012 school year, and targeted a diverse and primarily low-income student population attending public schools in the Oakland Unified School District in Oakland, California. Based on pre-test, posttest, and follow-up test analyses, we found that students who participated in the MSY program demonstrated an increase in financial knowledge and self-reported positive financial behaviors.

Credit Unions, Community Development Finance, and The Great Recession - Volume 2012, Issue 01

Posted February 1, 2012

Community development credit unions (CDCUs) have a long history of serving low-income and minority markets. They played an important role in the founding and leadership of the Community Development Financial Institutions (CDFI) Coalition, which successfully advocated for the establishment of the CDFI Fund and has monitored and supported the CDFI Fund throughout its history. Yet, the role of credit unions in the CDFI movement is often overlooked. The term, “CDFI” is frequently understood by researchers and policymakers to mean CDFI loan funds, the unregulated institutions that dominate the ranks of institutions certified by the CDFI Fund. This working paper explains the critical role that CDCUs play in community development and examines their financial performance through the Great Recession.


Improving Evaluation and Metrics in Youth Financial Education - Volume 2011, Issue Special Report

Posted July 1, 2011

The Federal Reserve Bank of San Francisco, the Take Charge America Institute at the University of Arizona, and the Federal Reserve Bank of Minneapolis invited a small group of researchers and practitioners to discuss how to improve the evaluation and metrics of youth financial education programs. The meeting focused specifically on youth — which we defined as individuals under the age of 25 – in an effort to distinguish this effort from others that have discussed financial education research more broadly. The goal for the meeting was to help create a research agenda that would move the field towards the development of clearly defined outcomes for youth financial education, metrics for capturing ROI, and quality standards for curriculum and delivery that would serve as “best practices” for educators seeking to offer effective financial education interventions.

A New Way to Talk About Small Business: The Time Has Come for a Common Language - Volume 2011, Issue 02

Posted February 1, 2011

There is a steady call for policies and programs to help small business lead the charge in hiring more workers and helping to restore prosperity to areas that have been hurt by the recession. To be successful, however, it is time for academics, policymakers, investors, community leaders, and business owners to have a more fruitful discussion about what small business actually needs. Such a discussion is imperative now, during a time of financial crisis, but it is also necessary if we are to help move the sector forward in the coming years. In this paper, we are proposing that we adopt a common language based on a new small business taxonomy that can make this conversation more productive by bridging the communication gaps between various stakeholders. In an effort to create that common language, support policy creation, and enhance future discussions, this paper lays out a a system of policies and programs – a support structure – for small business using a simple taxonomy of small-business categories based on revenue. Ideally, this will lead to more efficient models for small business growth, including much needed job growth as the nation emerges from the recession.

Urban Sustainability and Community Development: Creating Healthy Sustainable Urban Communities - Volume 2011, Issue Special Report

Posted February 1, 2011

Increased urbanization has also led to many challenges for urban residents. In the United States, land use and zoning, transportation and infrastructure, lack of affordable housing, and disinvestment have severely affected the quality of life of poor urban populations. Despite these challenges, opportunities do exist to make economically disadvantaged urban communities more sustainable, livable, and healthy. This working paper discusses the challenges facing urban communities and then considers the opportunities that exist to develop sustainable urban communities given our current economic climate.

The New Way Forward: Using Collaborations and Partnerships for Greater Efficiency and Impact - Volume 2011 , Issue 01

Posted January 1, 2011

This paper uses seven short case studies of nonprofit housing and community development organizations to explore three different collaborative strategies that increase their efficiency and impact. These case studies include both recent and long-standing partnerships in affordable housing, community development finance, neighborhood stabilization, and transit-oriented development. It concludes with recommendations based on the examples, including effective strategies for successful innovation, collaboration, and partnership formation.


Health-Care Policy as Urban Policy: Hospitals and Community Development in the Postindustrial City - Volume 2010, Issue 10

Posted December 30, 2010

This paper seeks to explore urban hospital policy, its history, and, in particular, the contradictions, challenges, and opportunities that it poses for community development in U.S. cities. Are urban hospitals a largely overlooked resource for urban economic development that can provide a ladder of long-term upward mobility for impoverished inner-city communities? Or are urban hospitals an anchor that has been dropped into sand, and that may be swept away by the winds of the healthcare crisis that has begun to storm across the United States?

Sought or Sold? Social Embeddedness and Consumer Decisions in the Mortgage Market - Volume 2010, Issue 09

Posted December 27, 2010

This research paper explores how mortgage market channels interacted with localized social networks to shape loan outcomes for historically disadvantaged borrowers. How did borrowers decide on their choice of lender? What loan products were they offered, and how knowledgeable were they about their loan terms? Were loans in lower-income and minority communities “sold or sought?” To answer these questions, the paper relies on in-depth interviews, local data on mortgage lending and foreclosures, and analysis of the institutions and marketing practices in two communities that represent the two faces of the mortgage crisis in California: an older, predominantly minority neighborhood with an older housing stock (Oakland), and a fast growing suburban area characterized by new construction (Stockton). This research can inform the policy debate around consumer protection regulations and fair lending laws, as well as help local practitioners such as homeownership counselors understand how borrowers access and make decisions about mortgage credit.

Who Receives a Mortgage Modification? Race and Income Differentials in Loan Workouts - Volume 2010, Issue 07

Posted December 22, 2010

Loan modifications offer one strategy to prevent mortgage foreclosures by lowering interest rates, extending loan terms and/or reducing principal balance owed. Yet we know very little about who receives loan modifications and/or the terms of the modification. This paper uses data from a sample of subprime loans made in 2005 to examine the incidence of loan modifications among borrowers in California, Oregon and Washington. The results suggest although loan modifications remain a rarely used option among the servicers in these data, there is no evidence that minority borrowers are less likely to receive a modification or less aggressive modification than white borrowers. Most modifications involve reductions in the loan’s interest rate, and an increase in principal balance. We also find that modifications reduce the likelihood of subsequent default, particularly for minority borrowers.

Charter School Tax Credit: Investing in Human Capital - Volume 2010, Issue 08

Posted December 1, 2010

This working paper considers how two existing policy tools–investment tax credits and charter schools–could be combined to raise operating funds for charter schools that successfully close the poverty-related academic achievement gap. Some charter schools have succeeded in dramatically improving low-income student performance (those run by KIPP, Achievement First, and the Harlem Children’s Zone, for example). However, these successful schools differ significantly in type and approach. As a result, it is difficult to identify a single, or combination of variables in any one charter that, if replicated, would produce the same results across the public school system. This working paper acknowledges the difficulty of so-called “silver bullet” school reform replication and considers an alternative: cultivating a diverse array of education approaches using tools developed by the community development finance industry over the last 30 years.

The Community Reinvestment Act and Small Business Lending in Low- and Moderate-Income Neighborhoods during the Financial Crisis - Volume 2010, Issue 05

Posted October 4, 2010

Over the last three years, the financial crisis and ensuing recession have led to tectonic shifts in the availability of credit, especially for small businesses. Data show that the number of loans to small businesses has dropped from 5.2 million loans in 2007 to 1.6 million in 2009. This trend is of significant concern to policy-makers, particularly given the important role that small businesses play in the US economy. Making credit accessible to small businesses, therefore, is seen as a critical component of economic recovery. Despite this policy focus, however, few studies have documented recent trends in small business lending, and even fewer have focused attention on the implications of the reduction in credit for small businesses in low- and moderate-income neighborhoods.

In this paper, we seek to address this gap by examining trends in small business lending in low- and moderate-income (LMI) neighborhoods by large banks regulated under the Community Reinvestment Act (CRA). We find that there is a strong relationship between the boom and bust housing market cycle and patterns in small business lending, both over time and over space. While small business lending expanded rapidly between 2003 and 2007, this expansion was uneven, and neither LMI communities nor neighborhoods with a high percentage of African American residents appear to have benefited as much as other areas from the boom. Since 2007, small business lending has contracted significantly, particularly in areas that have also seen contractions in the housing sector. Our results show significant spillover effects of the mortgage crisis into small business lending—for the economy as a whole as well as for LMI areas in particular. Our findings suggest that in order to reverse the cycle of disinvestment in neighborhoods hit hard by foreclosures, we need to address the small business sector as well as housing.

Enhancing New Markets Tax Credit Pipeline Flow - Volume 2010, Issue 06

Posted October 1, 2010

In a new Community Development Working Paper from the Federal Reserve Bank of San Francisco, author Kevin Leichner examines New Markets Tax Credit (NMTC) performance during the Great Recession and provides recommendations for maintaining deal flow to support the NMTC project pipeline and overcome financing gaps. Between 2002 and 2009, the Federal government allocated $26 billion worth of NMTC to support community development projects. Based on new data from the respondents to a Winter 2010 Center for Community Development Investments survey as well as three case studies, NMTC stakeholders are finding their NMTC portfolios are outperforming other investments. At the same time, however, their responses also indicate that the Congressional expansion of the program, with larger annual allocations, may exceed the ability of the NMTC industry to provide high-quality investor-backed projects. As a consequence, investor demand for the tax credits has been falling, resulting in lower investor pay-ins and reduced impact in low-income communities. Based on survey responses, case studies, and industry literature, the paper concludes with recommendations for strengthening the program and stimulating demand.

The Current Landscape of the California Housing Market - Volume 2010, Issue 03

Posted September 1, 2010

California’s housing market has been severely affected by the foreclosure crisis. The state’s high foreclosure rate has also contributed to neighborhood destabilization in many communities, resulting in negative spillover effects such as price declines and increased crime and blight. In light of these rapid changes in the housing landscape, this report provides a current “snapshot” of California’s housing market in the wake of the foreclosure crisis. It presents historical trends as well as current data on foreclosures, home prices, and affordability, and also considers the state’s future housing needs. Given the state’s sheer size and dramatic regional variation, the report also digs down into conditions at the regional and county level. The study hopes to inform stakeholders from across the state and help in the development of a strategic response to the drastic changes that have taken place in California’s housing market over the past few years.

Strengthening Financial Education in California: Expanding Personal Finance Training among Youth - Volume 2010, Issue 02

Posted May 1, 2010

The Effects of the Real Estate Bust on Renter Perceptions of Homeownership - Volume 2010, Issue 01

Posted April 1, 2010

After almost a decade of strong price appreciation, the housing market fell into a steep decline in 2007. By 2008, foreclosure filings on owner-occupied homes were surpassing record levels. Due to the housing downturn, fewer renters may aspire to own a home, which could have lasting implications for neighborhoods and household asset building. This study analyzes the impact of the housing downturn on renters’ intent to purchase a home, their perceptions of the risks and benefits of homeownership, and their interest in information and advice concerning homeownership.


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