Housing and child care lead local investments
Easing the path for the poor to participate and prosper in the economy may be the most important thing the United States could do to compete with China and India in a global marketplace.
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That is the point former U.S. Treasury Secretary Robert E. Rubin made to a group of about 100 people at a recent celebration marking the 15th anniversary of the Local Initiatives Support Corporation Rhode Island chapter. Rubin is chairman of the national LISC board.
Since 1991 Rhode Island’s LISC has invested more than $150 million to help build 4,000 affordable homes and apartments in the state, said Barbara Fields, senior program director of the nonprofit. LISC also helped build 450,000 square feet of commercial space.
The organization has raised about $20 million from private companies and foundations, such as Bank of America, Citizens Bank and the Rhode Island Foundation, she said. The remaining $130 million came from the federal government through the national LISC.
“We are a national organization with a local focus,” Fields said. “We provide the financial resources and the technical know-how to help create affordable homes and rebuild communities. We do this by raising local money, leveraging national resources and investing in local people.”
An average home LISC helps fund costs from about $100,000 to $150,000, she said. To qualify for such housing, most families must earn less than 80 percent of the area’s median income – which in Providence is about $64,000 for a family of four.
LISC also raises funds to help build and renovate child-care centers, she said. LISC provides stipends to AmeriCorps members working in communities providing counseling to potential homebuyers. The organization creates partnerships between police departments and communities to address crime control strategies.
All of LISC’s initiatives share a common goal of revitalizing blighted neighborhoods, Fields said. And by creating a base line of affordable housing, access to child care and safe neighborhoods, LISC believes that its clients will be freed up to participate in the economy and develop their potential.
“The bottom line is LISC is a bridge, a vehicle for corporations and foundations to get their money into the neighborhoods,” she said.
About 80 percent, or $122 million, of Rhode Island LISC’s investments funded low-income housing projects, according to LISC statistics. Among the ways that Fields said LISC invests in local communities is by serving as a broker for the monetizing of low-income housing tax credits. Through a subsidiary, the National Equity Fund, LISC arranges for investors to buy the tax credits from developers, who use the capital to create or upgrade housing.
The rest of the money LISC raises goes to grants and loans for nonprofit developers such as the Woonsocket Neighborhood Association.
Rubin said the work LISC does will be critical to the success of the United States in a global market because it is an economic strategy already being implemented in India and China – two countries Rubin described as “powerful, powerful” competitors.
“If we don’t meet that competitive force then it can be a source of great difficulty for us,” Rubin said, “as these countries continue to empower their populations to become more effective economically.”
On recent trips to India, Rubin said, every meeting with business leaders featured the topic of “equipping the poor” as a mode of ensuring economic growth. “Bringing the poor into the economic mainstream,” he said, “they view it as an economic imperative.”
In order for community development to become an economic imperative here, Rubin said, “there has to be a far broader understanding of how important this is to all of us.”
Fields asked attendees to call the state’s legislators and urge them to put the state’s first housing bond on the ballot. The bond would create $75 million to invest in affordable housing.
“We’re supporting this because it will jump-start the building of affordable housing in the state,” she said. “We believe this is a smart investment. … It’s not a magic bullet. It’s not the only thing we could do, but it’s an important step.”
