Bringing immigrants into the mainstream banking fold

New immigrants have a great deal to gain from using the U.S. banking system and so do local communities and businesses.

Local efforts to help immigrants save and become financially literate promote stable neighborhoods and contribute to the economic vitality of the community. In Rogers, Ark., financial literacy programs not only created a wider customer base for local banks, but ensured that immigrant employees at the local poultry processing plants were more likely to settle permanently in the town, ensuring the plants kept a stable workforce.

There are several obstacles that lead many immigrants to avoid banks—language barriers, lack of banking experience, distrust of banks. As a result, many immigrants choose to pay excessive fees for check cashing and money transfer services thereby routinely becoming targets for thieves due to large amounts of cash kept at home.

Cities that want to develop financial literacy programs for immigrants face some challenges, such as overcoming language and cultural barriers to reach sometimes insular communities. The good news is that there are many guides and established programs that offer great ideas for building a program from scratch. Community-based organizations (CBOs), immigrant service providers and local banks can offer insight and advise cities on creating appropriate curricula. There are also many free resources available to help get started. Appleseed offers several guides and reports on the topic and the FDIC provides instructional materials in seven languages at no cost.

Another option cities might consider is tailoring an existing financial literacy program to reach immigrant communities. Many cities already operate financial literacy workshops for youth or low-income residents. Immigrants can be encouraged to participate in these programs and, again, working with CBOs and immigrant service providers is a great way to develop a plan to reach this audience.

NLC’s recent Municipal Action Guide Financial Literacy Programs for Immigrants includes more information about the importance of “banking the unbanked” and details about existing programs.

To Seek, to Find and Not to Yield

It seems there are no experts at the World Urban Forum. Government ministers, scholars from prestigious universities, and career practitioners of urban development all profess limited knowledge at best. The sentiment is refreshing.

At WUF the days are a quest in search of ideas and solutions. In the awful heat of Rio, rooms are full of eager workshop participants. Presentations go forward with or without air conditioning; mostly without. Adolpho Carrion, the White House urban affairs chief, gamely discussed economic development strategies well into the early evening despite the heat.

Genuinely enough, the Americans have come to learn too. Regardless of rank or prior experience every U.S. speaker whether from HUD or State or local government acknowledged that they did not have all the answers and that they were impressed by the outpouring of information available from one end of the conference venue to the other.

And so the ideas flow. The mayor of Alicante, Spain launched the 100 Cities Initiative. Rather than focusing on best practices, the aim of this effort is to identify “living practices;” those which offer a holistic and forward looking approach. A website will soon be available and a conference will be convened next April.

On a more concrete level the ECOPASS program in Milano, Italy is a congestion pricing scheme to reduce vehicle emissions. Cars and trucks moving within the center city at peak hours pay fees. New public transport systems offer commuters alternatives.

Kyoto, Japan has a city planning process that literally involves every citizen. Neighborhood centers facilitate communication among and between residents. Guidelines for renewal efforts are adopted by consensus.

The Loading Dock in Baltimore, Maryland is a nonprofit that serves as the state clearinghouse for salvaged surplus building materials. Diverted from landfills, the supplies are made available at minimal cost to those who could not normally undertake building repairs or upgrades using traditional retail store supplies. 

People are proud of what they have accomplished, often against terrible odds. They share what they can and absorb the possibilities put forth by others. The joy of community is palpable. Margaret Mead was right.  You should never underestimate the power of a small group of committed people to change the world. And there is one thing for certain; the world is in need of change.

NYC Taxi Cabs v. Sustainability?

Washington Post columnist Neal Peirce wrote of the Green Taxis Act, a measure that would help cities like New York, Seattle, and Boston make a complete switch from a fleet of standard taxi cabs to hybrid vehicles. 

Without the financial backing of Congress, cities face strong opposition from fleet owners, who would need to replace all of their standard vehicles with hybrid vehicles costing several thousand dollars more apiece.  It could take several years before up-front costs of purchasing a hybrid vehicle are returned in the form of fuel savings.  But the fleet owners would never see those savings, because drivers purchase their own fuel.  Fleet owners would simply be subsidizing the drivers’ fuel savings.  Business-savvy fleet owners are left wondering: Why should my company be forced to “take one for the green team”?  Why not mandate hybrid city vehicles or buses?

“Greening” all 13,000 of New York City’s taxi cabs is a dream that remains unfulfilled.  But in early 2008, EnviroCAB, a new, privately-owned, all-hybrid cab company, put a fleet of 50 hybrid taxis on the road in Arlington County, Virginia.  EnviroCAB claims to be the first carbon-neutral fleet in the U.S., because it purchases carbon offset credits, which replace traditional energy sources with clean energy, essentially negating the carbon emissions the hybrid vehicles produce.  

While it’s great for cities to shoot for the stars—greening entire fleets of cabs—it clearly isn’t possible without significant funding from the already over-extended federal government.  So, maybe Arlington has the right idea: a sort of “dress for the job you want” approach.  Start small: use 50 green and white clearly-labeled hybrid taxis on local roads to remind people that this is but one element of a comprehensive effort to be green.

Yes, Arlington has the added advantage of a high-income, highly-educated, transit-reliant population with a strong commitment to sustainability, and 50 carbon-neutral taxi cabs may only be a drop in the bucket for reducing countywide carbon emissions.  But it’s possible that the county is becoming green by acting green.  Small amounts of “green” are being injected into many aspects of Arlington’s local government—EnviroCAB, Arlington’s Car Free Diet, WalkArlington, and the Green Home Choice Program.  This may have a stronger, longer-lasting effect on sustainability efforts, with greater support from business owners who do not feel that their industry has been singled out to bear the financial burden of a city’s commitment to go green.

A Common Language

The translation service companies are very busy on this first day of the 5th World Urban Forum. Portuguese, Spanish, English and French are the dominant languages spoken but there are others too numerous to count which can be heard on the panels and in the corridors. 

Interestingly enough, the words “municipal” and “local” vary little from language to language. That’s the first thing you notice about the events at WUF.  Despite the number of people present from around the world there is a common language among these “locales,” among these “municipalists.”

Yes the tongue is different from leader to leader, from participant to participant. But the language, when discussing livability, sustainability, community, mobility, inclusivity and humanity is the same. 

Pick a spot on the globe and you can easily identify the issues that divide people. Here in Rio it’s all about the issues that unite people and which demand collective attention. 

Solutions require a common understanding of a problem. The folks here at WUF understand one another. In a real sense, they speak the same language. That bodes well for the cities and regions that are at the center of this conference.

I have high-speed, do you?

A recent Washington Post[1] article reported that almost 40 percent of Americans do not have high-speed Internet access at home.

What is most interesting about the 40 percent statistic is that, even in places where broadband is available, not everyone subscribes to it.  While some urban households just don’t have the adequate computer components, a whopping 38 percent say they just don’t need it or are not interested.  Twenty-six percent say it’s a cost issue.  That is over 50 percent of people who have access to broadband and choose to not take it.  This contrasts greatly with rural areas where the issue is more a lack of availability.

Both are serious concerns for this country.  For those rural areas, we need a better technological infrastructure in place to get our citizens “online.”  It’s an equity issue and it’s an economic development issue.  And for those who have it but just don’t use it, it’s a matter of showing them what they could do with access in their homes.

Larry Strickling[2], head of the National Telecommunications and Information Administration (NTIA), said showing people “what they are missing” is what will really encourage potential users.  It’s not just a tool for entertainment and to communicate with people, but a tool to help increase professional and academic development, access to jobs, and information that is otherwise difficult to obtain.

FCC chairman Julius Genachowski[3] admits that despite some of the financial and technological advances that have been made, the United States’ broadband system is still not as vibrant and it could be.  In 2008, the Organization for Economic Co-operation and Development ranked the United States in 24th place in broadband speeds, whereas countries like Japan and Korea fared much better.[4] Congress and the Administration are focusing some of their discussions on connection speeds, which I think is valid.  We have to have an idea of what to work towards.  But most people don’t really care about that now.  What they care about is the value of a tool that makes getting information easier.  After that, they may or may not pay more for how fast they can get that information.  But until then, if they don’t know what they are missing, they just don’t know.


[1] http://www.washingtonpost.com/wp-dyn/content/article/2010/02/16/AR2010021602019.html

[2] http://www.ntia.doc.gov/about/bio_strickling.html

[3] http://www.fcc.gov/commissioners/genachowski/biography.html

[4] http://www.oecd.org/document/54/0,3343,en_2649_34225_38690102_1_1_1_1,00.html

For Inspiration and Innovation

People who care about cities and urban regions are gathering in Brazil. By the thousands they are coming from every corner of the globe to the 5th session of the World Urban Forum.

At a reclaimed harbor-side venue that not so long ago was a haven for crime and poverty representatives from cities, national governments, grassroots organizations, foundations, universities and a host of others will intermingle for five days.

For any veteran of the WUF experience there are two main reasons to participate – inspiration and innovation. Even a brief look at the 80-plus page program book will fulfill any expectations for thoughtful and compelling information. The full scope of workshops, debates, thematic general sessions, roundtables and exhibits do justice to the name of the gathering.  This is truly the world’s forum for urban matters.

The U.S. government has fielded a strong delegation lead by Secretary of Housing and Urban Development Shaun Donovan. And for the first time in memory, there is a local government leader as part of the official national delegation from the United States. The President of the National League of Cities, Mayor Ron Loveridge of Riverside, Calif., will be a leading voice for American cities.

Those of us who are immersed in the workings of cities and urban regions, especially from highly developed nations like the United States, go to WUF armed with case studies, research papers, global contacts and a desire to offer the best of our experiences. But we come home just like everybody else, inspired by the true wealth that the world has to offer, and with a briefcase full of innovative examples that can be applied to our own circumstances.

Head-Turning Appeal for the Modular Home

There is a lot to love in a 7,200 square-foot French Country-style house. At a price of $2.5 million one would expect the symmetrical beauty of roof dormers and expansive patio doors, plus the latest in energy efficiency gadgets like geothermal heat pumps. But the extra bonus in this lovely home in Bethesda, Maryland is that it went from box to complete exterior in 32 hours.  The six bedroom, six-and-a-half-bath house arrived in 21 neatly packed boxes from a factory in State College, Penn.  The McMansion has gone modular!

Custom modular is what it’s called now. It bears as little resemblance to the double-wide trailer as a Lexus crossover does to Henry Ford’s Model-A.  Modular homes continue to be a very small percentage of the national home-building market but with construction time at about one-half that of a stick-built house and a price break of about 15%, growth is expected. Architects of reputation are teaming with manufacturers to design Georgians, Federals and Mediterraneans on the latest in computer-assisted drafting tables.

 New owners could not be happier. As for neighbors along York Lane in Bethesda, and in developments with names like Greenwich Forest, Phillips Park and Edgemoor, they are becoming converts, if grudging ones, to the manufactured home.

 To be sure, not everybody is happy. For some folks there is nothing quite so satisfactory as a muddy building lot strewn with housing debris for 18 months, with timbers exposed to the elements and a Jiffy-John ensconced behind the one remaining tree. How’s that for curb appeal!

 The high-end market aside, manufactured houses get buyers into homes faster and at lower costs. Stock designs and factory precision help to keep costs down. At a time when employment in manufacturing is falling, foreclosed and abandoned homes are being bulldozed and middle income families can’t get a mortgage loan, manufactured houses looks more and more line a winner.

Are Municipal Incentive Prizes the Wave of the Future?

Incentive prizes have provided very large cash payments to innovators who solve specific problems.  They leverage private entrepreneur’s investment in advancing technology and services. “Incentive Prizes-Tools for Governments” in Searcher reports how government is using incentive prizes to pay only for results while stimulating private sector investment exceeding the size of the purse.

Two cities offered incentive prizes.  New York City sponsored NYC Big Apps, which was described as “a software application challenge in keeping with New York City’s drive to become more transparent, accessible and accountable.”  Washington, D.C. sponsored the Apps for Democracy – Community Edition which looked for the “best community platform for submitting 311 service requests to the city” in 2008 and 2009. 

Both projects were designed to spur new software development without the complications of writing requests for proposals, sorting through competitive bids, selecting and awarding a contract, and managing the contract.  They were able to bypass the many problems and costs of that whole process while saving a tremendous amount of time.

Washington, D.C. moved one step further in offering the DC Apps Store, a site that provides both government developed and individual or corporately developed software applications.  The apps promise to provide real time bus locators, information about locations and costs of parking meters, customized walking tours for visitors, and a vacant property locator.

While these are exemplary projects, and there are probably many others across the country, how will municipal governments sustain them over the long term?  Most of the apps are for only one device such as an Android phone or iPhone, so where is the incentive to make the apps available on other platforms?  Will the local government step-in to provide the other versions?

The apps that have been developed through the incentive prizes will have a broader impact, possibly for better or worse.  They will raise citizens expectations for the kinds of additional services that cities provide.  This will require the city to maintain all of the databases and GPS locators as well as follow-up on 311 service requests.  There will be ongoing budget implications.  So cities that adopt incentive prizes need to be sure to plan for the future implications of the winning services and programs.

FCC Gives Cities A Preview of Broadband Plan

During a meeting of local elected officials, Blair Levin, executive director of the Federal Communications Commission, Omnibus Broadband Initiative gave a sneak peak at the soon to be released National Broadband Plan. “Broadband is the common medium this country uses…’ he said during the meeting, underlying the need for a stronger technological infrastructure that would ensure affordable access to increase economic development and job growth.

The plan, due out on Tuesday, March 16, doesn’t seek to be a set of rules so much as a set of recommendations to consider. While the plan won’t address all issues, one key message is its support of deployment. Instead of concerning themselves with regulations and pricing models and rights of way issues, local governments should be identifying what their needs are and then setting goals to achieve those needs. Even if it means creating their own networks if there isn’t adequate service by existing providers.

Mr. Levin finished his presentation understanding that not everyone is going to love this plan. It’s not going to fix all problems in terms of local broadband agendas. And even if it did, there are financial and political obstacles for locals that could prohibit a robust broadband plan. But like the creation of an interstate highway, there had to be a starting point to get to where we are now. This is our starting point.

Municipal Bankruptcy – A Story in Search of a Trend?

NLC is receiving a lot of media inquiries about the prospect of cities filing for Chapter 9 bankruptcy.  It’s not surprising that the chattering classes are agog about cities going under.  It’s a grabber of a headline: “City X Files Ch. 9!”  The problem with this story is that the numbers just aren’t there to back it up.  It’s a story in search of a trend.

Here’s the facts.  According to the USCourts.Gov website  “The first municipal bankruptcy legislation was enacted in 1934 during the Great Depression…Congress enacted a revised Municipal Bankruptcy Act in 1937, which was upheld by the Supreme Court (1938). The law has been amended several times since 1937…The purpose of chapter 9 is to provide a financially-distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts.”

Since that time, there have been approximately 600 municipal bankruptcy petitions filed.  That is 600 filings among all municipal corporations, which includes municipal governments (approximately 19,000 according to the U.S. Census), towns (16,000), counties (4,000), taxing districts (too many to count), municipal utilities, and school districts.  In short, the incidence of municipal bankruptcies is beyond rare.  

Amid the declining fiscal conditions facing many municipalities it’s likely that a few more will file for Ch. 9 in the next couple of years, or may at least raise bankruptcy as an option.  But, these Ch. 9 cases will continue to be exceptions.  Fiscal stress will be a factor, for sure.  But, in most instances, peculiarities of the specific jurisdictions will be what pushed them over the edge into bankruptcy.  The Orange County, California bankruptcy of 1994 was driven by a risky investment pool, political fragmentation, and voter animosity about taxes (for more, see When Government Fails by Mark Baldassare).  More recently, the Vallejo, California bankruptcy filing was driven by efforts to curb a longer-term structural imbalance problem that is the result of a declining economic base and public safety contracts that are significantly out of alignment with the city’s budget realities.   

The most recent inquiries we’ve received have all been in response to the city of Harrisburg, Pennsylvania raising the prospect of filing for Ch. 9.  But, here again, the story isn’t the underlying fiscal condition of the city.  The fiscal challenge they face is that they built an incinerator plant with overly optimistic scenarios for having the plant online and revenues that the plant would generate. 

The danger of the recent attention to municipal bankruptcy is that it might engender a lack of confidence in the solvency of municipal finances and debt, triggering changes in credit market behavior that add to the fiscal challenges cities are already facing, in which case the story becomes the trend?