This is a budget the Commerce Department submitted. 161 BILL NO. 000344
One of the areas you said you shifted funds away from Neighborhood Development Grant Program to is a Targeted Neighborhood Support Grant Program. Can I ask a question for the record why are CDCs receiving different levels of support in that program? Why are six groups receiving 50 to 70 thousand dollars, and three other groups receiving 130, 130, and 300 thousand?
Some organizations came in and requested additional funding support. Some of the higher funding levels -- let me finish.
No. One organization is receiving $20,000 more than they received last year. The other organizations have all maintained the same level. The question is historically why are there six groups receiving roughly $50,000, one was increased by $20,000, partnership CDC, and three other groups receiving $300,000, $130,000, and $130,000?
That's higher level funding goes to organizations that have been in the 162 BILL NO. 000344 system a little longer. The smaller grant monies are going to people to basically hire one individual to provide corridor support, which is something that, you know, when you were in the Commerce Department you helped to commit and put through. To extend this outreach to ensure that Community Development Corporations are involved, then they put commercial revitalization process of -- with the city.
For those six groups that I brought in under that program -- and I will name them, The Partnership CDC, Universal Community Homes, Greater Germantown Housing Development Corporation, the CDC of Group Ministries, HASAE, and Allegheny West -- I would say not only were they considered to be more effective organizations, but they were also required to have private matching funds, unlike the organizations receiving more money. Why are all the organizations not required to provide matching resources, particularly those organizations receiving more public resources?
I don't have an answer 163 BILL NO. 000344 for that right now.
And the organization receiving the most resources, $300,000, not required to match any of that, also filed for bankruptcy a few years ago; is that not true?
The organization receiving the most amount of money, and not required to provide any matching funds, receiving six times the amount of money of those other organizations, the six that I brought in, also filed for bankruptcy recently; is that not true?
The Neighborhood Action Bureau is the one that you mention, and that has --
That is not the one I did mention; that is the one I referred to.
It is the one you referred to; I'm sorry. It has received a largest amount of money, at $300,000. They requested additional funding last year, they requested additional funding this year. We said no, we have capped them. Clearly that is a large amount of 164 BILL NO. 000344 money to be going to one neighborhood-based organization. But the Administration, the current Administration, the prior Administration, feels that the organization does an extremely valuable job in that community.
That's still not acceptable to me. Of the six groups I brought in, excluding Universal Community Homes, five are Philadelphia Plan Partners, automatically leveraging a quarter million dollars in private investment a year. The rest are -- all six groups are provided support of Philadelphia Neighborhood Development Collaborative, private sector support from banks, corporations, and foundations. Why is two-thirds of the money going to three organizations without any requirement for matching funds?
Thank you. Anyone can answer this question, as to, Mr. Hankowsky, Mr. O'Toole, what is the status 165 BILL NO. 000344 of the Neighborhood Development Fund? Not the Neighborhood Development Grant Program, but the Neighborhood Development Fund.
First, my name is Bill Hankowsky. I am the President of the Philadelphia Industrial Development Corporation. The status, Councilman, is, as you know from your past experience, we set it up a few years back. And we, I will use the term, set aside dollars that we targeted for that to get out on the street and fund a series of projects, which we did, and most of which, I think I can generally say, were successful, occurred and happened. Currently we do not have dollars available, dollars that are, I will use the term, targeted for or set aside. And as projects come to our attention, we generally look at either the availability of the Community Development Block Grant Program income, the revolve dollars that we have available. Or in past years, the immediate past years, there were economic stimulus dollars under a category called Neighborhood Development that were 166 BILL NO. 000344 available to do that, and we also looked to use that source. And, actually, what we are in the midst of right now is sort of reviewing the availability of those dollars. There were some past allocations that may not now proceed, and it may be wise to, I will use the term, reallocate the dollars.
Do we need to recapitalize the Neighborhood Development Fund at all?
Well, I think it would be -- my sense is that historically it has been a successful program, it has been a valuable tool particularly to the CDC-based groups who were sponsoring various neighborhood-based projects. I would love to recapitalize it. And as you are pointing out in your questions now and previously in this hearing, as other Councilpeople, I think we are all basically in the scenario where we are making allegation decisions among various demands.
And how much do you think it should be recapitalized with? 167 BILL NO. 000344
I would actually have to think about that before I would just throw a number out. I would be happy to get back to you.
Thank you very much. Are there any further questions? Thank you very much.
Certainly. We would now like to call Lee Capkin, Ph.D., Housing Consortium for Disabled Individuals. What we would like to do is try to ask the groups to testify, is to try to keep to three minutes. We realize that certainly that didn't happen at the beginning. And that the process is when the Director comes, then Council has the right to interrogate him, and we have no control over that. We are trying to provide an opportunity so that everybody can get on and get on quickly so that we don't have you here until 10:00. But we certainly in no way mean to 168 BILL NO. 000344 offend anyone. We appreciate all of your patience. We appreciate your coming and we appreciate your love for your community. Good afternoon.
My name is Lee Capkin, and I am the Executive Director of the Housing Consortium for Disabled Individuals. Councilwoman Blackwell, President Verna, other members of City Council, thank you again for the opportunity for me and our organization to testify on behalf of the preliminary consolidated plan for Year 26. We wish to emphasize at the outset that we appreciate the hard work that has been done by all of the city housing agencies on behalf of people with disabilities. We need equally to emphasize, however, that there is an expanding housing crisis facing people with disabilities in this city, and that more and more people with disabilities face overlapping disabilities and many problems of life 169 BILL NO. 000344 associated with low incomes, as well, and that is making the situation harder for these people. We want to indicate our support for the Home Ownership Counseling Association of the Delaware Valley and the Pennsylvania Federation of Housing Counselors, who you will probably hear from later on. As a housing counseling agency, we know of the hard work of these organizations and what they have done to help develop positive and enriched profile for housing counseling and what it can mean to the community and the people the housing counselors serve. I want to highlight the need in this city for fair housing ordinances to be strengthened, so that people with disabilities and all other protected classes under the Fair Housing Act will be able to take advantage of services that could be available to help them from the Philadelphia Human Relations Commission. At this point the city's ordinance is not substantially equivalent to the federal ordinance, and, therefore, it requires that people of all classes that may be discriminated against go 170 BILL NO. 000344 to the state and to the federal government directly for relief. I want to use the rest of my time simply to talk about the city's Adaptive Modifications Program. Most members of City Council by this time probably know that it is one of the most valuable programs that exists in terms of housing for people with disabilities in Philadelphia. And it has tremendous accomplishments to its credit. But there continues to be a waiting list of over 800 people for the services. And the program is tremendously underfunded relative to the need that there is out there. Let me just highlight a couple of things quickly so you can understand the importance of the program. In relation to home ownership, it is well known that the 10,000th person or household of low income took advantage of the city's home ownership counseling program and was able to move into a new home of their own. Well, if people with disabilities who lack wheelchair access to their present homes are 171 BILL NO. 000344 forced to relocate, they would be forced to move into a shrinking rental market of accessible housing, and by and large they could not take advantage of home ownership opportunities in Philadelphia because the homes in question largely are not wheelchair accessible and the people being of low income would not be able to afford the standards of most of the home ownership programs. It has been said that most people with disabilities are getting by somehow while they wait for adaptive modification services. Well, this is true, but they are getting by with limited help, perhaps less than competent help, and being highly dependent, rather than the self-sufficient status that they would like to obtain or at least preserve if they already are in that situation. It is a highly important program, and we are aware that the past Administration was not able to commit to increased funding. We hope that the new Administration will be able to. It is a very important program. We had the pleasure, more broadly speaking, of serving on Mayor Street's Housing 172 BILL NO. 000344 Policy Transition Committee.
And that committee produced a number of very important recommendations for both people with disabilities and the broader low- and moderate-income community. We hope that City Council Members have had a chance to see those reports and will have a chance to act on them. In conclusion, I once again want to thank City Council for the opportunity to come and talk to you today, and to invite your calls to our agency, which you have felt free to make in the past. And we are available to serve constituents from all of your districts, and we want to be of whatever help we can. Thank you very much.
Thank you very much. Thank you for your fine work. Gloria Guard, PEC. While she is coming forward, as many of you know, this is the oldest homeless agency serving people in our state. I am proud that she is from West Philadelphia, and applaud all of her efforts over the years. 173 BILL NO. 000344
Gloria Guard, People's Emergency Center. And my written testimony was submitted last week, so I believe Council Members have that. In the interest of time, those of you who are not familiar with PEC can read a detailed description of the organization in that written testimony. And, thanks to Councilwoman Blackwell, you know a little bit about what we do. We have a number of comments today on the plan, one general and several more specific. And I will try to be brief. My general comment is that the plan budget shows a substantial decrease in resources from the Commonwealth. And I have heard testimony earlier today on this point that reveals a $915,000 decrease from DCED, as well as $148,000 decrease from DPW for case management. 1 million 174 BILL NO. 000344 cut in state funding in these critical areas. We urge the city to address this issue with the state. Specifically I have comments in three sections: Homeless and special needs housing being one, the second the intersection between homelessness and Welfare reform, and finally broader community revitalization. Let me start with homeless and special needs housing. In this environment, when Welfare reform is likely to significantly increase the number of homeless families, and with the overwhelming demand for public housing, those two items have created a log jam in the homeless service system. So we believe the city needs to place the highest priority on addressing the issues of housing for the homeless, particularly for families transitioning from Welfare to Work. We recommend OHCD for recommending that the city continue its recent practice of a specific setaside for homeless and special needs housing, and we urge City Council to once again support this. 175 BILL NO. 000344 That setaside has had a tremendous and positive impact for PEC and the people we serve in terms of assured new housing units for the homeless. Specifically, we have taken over 100 vacancies and turned them into housing units in the Councilwoman's district. The impact of these designated funds was enhanced because OHCD simultaneously instituted a planning and funding cycle, which makes it very easy for local nonprofits and service providers to get the needed funding they need from multiple sources. We are pleased that OHCD seems to recognize the link between addressing homelessness and improving public house, as reflected in the chart on . That link must be emphasized. We realize that since 1993, OHCD has made the improvement of Philadelphia's public housing system one of their six top priorities. And we recognize this as important progress. However, given that access to public housing is the only way out of homelessness for most of our clients, we strongly urge OHCD and PHA to 176 BILL NO. 000344 consider creative and effective ways to partner to increase and expedite access to public housing for the homeless. Some preliminary ideas are a more formalized relationship between PHA, OHCD, and the Housing Committee of the Blueprint To End Homelessness; a significant commitment on the part of PHA to make access to public housing for the homeless a priority; and some additional ways that might be considered would be an RFP to award Section 12 8 project-based certificates to CDBG-funded homeless housing projects, or to think about a creative approach to working with homeless service organizations with strong development capacities so that they can convert vacant PHA-owned properties in their communities into homeless housing with the ACC operating subsidy attached. We commend OHCD for trying to address the issue of continuing to reserve funds which will remain unspent for extended periods of times. And we believe that their plans to review all of the prior years' funding commitments for housing production ventures at the beginning of the Year 25 and to evaluate the likely need for obligation or 177 BILL NO. 000344 expenditure of that funding is an essential one.
As a result of this evaluation, we hope that OHCD considers shifting unspent funding into special needs housing programs and also into other categories; such as, the Basic Systems Repair Program. The second area I would like to talk about is the intersection between homelessness and Welfare reform. The plan talks a lot about the devastating impact of Welfare reform and the result in increased demands on city services. The proposed strategy maintains that CDBG and home funding for critical housing community development needs, and it does not divert any specific funds for Welfare reform. The plan states that the city has taken a number of steps to lessen the impact, including increasing spending on homeless services, health centers, and human services. This is very positive, but there are more ways that the city can use limited CDBG funds to help lessen the impact of Welfare reform. We believe that one such project that 178 BILL NO. 000344 the city could enter into is one developed by PEC called Families First in the 3rd District. We have requested $300,000 to be used towards the construction of Families First, which is a multi-service center for families moving from Welfare to Work. It is connected to all of the special needs housing in the neighborhood for the very same homeless families. Families First would house a job opportunity business skill program, which would enroll 150 to 300 women annually through employment preparation, counseling, and jobs training programs. It would also include a 140-child child care center available and open to children of mothers who are being impacted by Welfare reform. And as a model, this is the only place in the city that we know of that will have job training and child care on the same site. In addition, it will have a culturally competent healthcare preventive service center for the women and children who are there. One of the most interesting parts of this project is that we have secured 100 percent of 179 BILL NO. 000344 the operating funds and are now only looking for the bricks and mortar funding. We urge the city to provide that gap funding. And, last, I would like to just speak just a few points about broader community revitalization. We support OHCD's decision to provide renewal funding for the Model Block Program under PNHS. And we want to include the Model Block approach and PNHS on Green Street in our neighborhood. That will help fix the facades of current residents who live there, homeowners with money that otherwise would not be available to them because this is not new housing. We are pleased to see that Lancaster Avenue corridor from the 4000 block to the 4600 block is one of the 38 areas designated to participate in PCDC's Targeted Neighborhood Commercial Area Program. This is also the area in which we work. And we believe that the security Rebate Program, Uniform Facade Repair Program, and TNCA Acquisition Program are very useful tools for 180 BILL NO. 000344 achieving the objective of enabling businesses to remain to and to expand in those areas, while providing the needed goods and services that our residents need and want. An important complement to PCDC's activities would be to expand the University City Special Services District up Lancaster Avenue in tandem with the expansion of the Targeted Neighborhood Commercial Area Program. In closing, we feel very strongly that the administration, with John Kromer's leadership at OHCD, has made a truly significant impact on the landscape in Philadelphia. In PEC's neighborhood alone, which is a very small one, nearly $13 million has been used to restore formerly vacant and abandoned properties and lots into much needed new housing units, vibrant and beautiful playgrounds and tot lots and gardens. This kind of radical neighborhood transformation would not have been possible without CDBG funds, and those funds would not have been available had the special needs housing not been a specific category of funding.
We recognize the hard work that went 181 BILL NO. 000344 into preparing this plan and hope that our recommendations will be given careful consideration. Thank you.
Thank you very much. Are there any questions from members of the committee or members of Council? Thank you very much, Gloria. Ben Dugan, Powelton Village Civic Association. Again, an excellent group in West Philadelphia. They do a fine job in Powelton and we applaud your leadership.
Thank you very much. Councilwoman Blackwell, I am Ben Dugan, President of the Powelton Village Civic Association. I am here today to request $15,000 as a block grant for the Community Education Center, which is at 3500 Lancaster Avenue. With your permission, I will just read our short request here. The Powelton Village Civic Association is requesting a block grant $15,000 to 182 BILL NO. 000344 support renovations to the side yard of the Community Education Center so that this currently unutilized space can become a functional and attractive site for children and adults attending programs at the community center. The community education center is a nonprofit cultural and community center located in the Powelton Village neighborhood of West Philadelphia. Founded in 1973, its mission is to promote interaction among people of diverse backgrounds through cultural and educational programs, serving the residents of West Philadelphia and artists citywide. CDC services include varied and low-cost programs for children; an after-school summer camp and performance series; and diverse cultural events for adults, the New Edge Performing Artists Residency Program, jazz workshops, and concerts, feminists' film video series, and new world theater series, as well as classes and workshops. The CDC is located in a former Quaker meeting house and school currently owned by the 183 BILL NO. 000344 Redevelopment Authority at leased to the CDC. This property includes an extensive side yard, approximately 30 feet in width, and the length of a city block, which could serve as a play space for children in the after-school program and park space for adults attending the many cultural events, as well as for neighborhood residents. However, this space is currently undeveloped and made inaccessible by an 8-foot-high chain-link fence. The CDC is initiating a major campaign, capital campaign, to fund a number of external improvement projects. To kick off this campaign, the CDC proposes to develop the side yard into a park/playground, which would enhance the CDC's role as a public gathering place. The PVCA is requesting funds to support this project which would benefit the appearance and community life of our neighborhood and the entire West Philadelphia region. The CDC proposes to develop the front portion of the yard, approximately 30 by 40 feet, as a pocket park, with benches and landscaping. The 184 BILL NO. 000344 rear portion of the lot would be maintained as lawn and play space. We envision three major components to this project. Number one, replacement of the chain-link fence with gated wrought-iron fencing, which would permit access from Powelton Avenue and be consistent in appearance with the iron fencing in front of the CDC building. This we estimate would cost $6,500. Number two, we would like to establish a sitting area with surfacing and benches. We estimate that would cost $4,500 for consultation fees, materials, and labor. And the third item is landscaping, which we estimate would cost $4,000 for architects' fees, purchasing plants, and labor. That's all I have to say.
Mr. Wingfield? I didn't see him today. Charles Wingfield. While we have Taylor Frome and Angel 185 BILL NO. 000344 Rodriguez, Dana Taylor-Jones, and Jose Valequez come up from YouthBuild Charter School, let me announce that we will break from 2:00 to 3:00. We will try to get in everyone before. And, if not, we will take that break and come back. That's from 2:00 to 3:00, so everybody understands. Thank you so much for your patience and the excellent, excellent job that you do. Please identify yourself for the record and begin.
Good afternoon, Councilwoman Blackwell and honorable Members of City Council. My name is Taylor Frome. I am here today as a Founder and Former Executive Director of the YouthBuild Philadelphia Charter School. I am also here to introduce Angel Rodriguez, who is YouthBuild's new Executive Director and one of our graduates, Danatay Jones. Unfortunately, Jose Valequez was not able to make it today. We are here to provide an update on the status of YouthBuild and the support we receive from you through the Office of Housing and Community 186 BILL NO. 000344 Development. With this support, we have been able to provide the YouthBuild training to more than twice as many youth as any other city in the United States by supplementing the monies we receive from HUD. We are finishing our eighth year as a YouthBuild program and your third year as a charter school. Our school combines individualized academic education with on-the-job training and construction. And students spend half their time at the construction sites and the other half in classrooms. All of our students are former high school dropouts who have decided that they want to get their lives together. This year 200 students enrolled at our two school sites, one in North and one in South Philadelphia, and we expect close to two-thirds of them to graduate this June. During the year, they completed the rehabilitation of 11 houses in North, South, and Northwest Philadelphia. 187 BILL NO. 000344 Danatay is here to represent all of the students who will be graduating this month with high school diplomas. They are busy on their portfolio presentations, which are one of the graduation requirements that our students have. YouthBuild has over 500 other graduates and has built 45 houses for low-income families in Philadelphia. Over 70 percent of our last three graduating classes have gone on to full-time jobs or continued their education. OHCD has supported us by exceeding or matching our HUD YouthBuild grant each year and by subsidizing the housing construction our students do. Danatay Jones is a YouthBuild alumnus. She will talk to you about her experience in YouthBuild.
Thank you and good afternoon. My name is Danatay Jones. And I originally dropped out of high school to work to help support my family. My parents had just got a divorce, 188 BILL NO. 000344 which caused us to relocate from Virginia to North Philadelphia. After working, I realized that I needed to go back to school to get my diploma. At YouthBuild I realized that I was a good student and also that I liked the school work. The teachers at YouthBuild make sure that every student keeps up and they also make sure that they show that they care. I believe that everyone should get the same education that I received at YouthBuild. After my June graduation last year, I came back as a full-time AmeriCorps intern, and I have been mentoring the 2000 class of YouthBuild through volunteer work at the Philadelphia Food Bank and with seniors at Gray's Manor. I have also applied to Howard University, where I plan on majoring in communications, and I am still waiting to hear from them. And I want to introduce Angel Rodriguez, our Executive Director.
Thank you very much for your nice testimony. 189 BILL NO. 000344 (Applause.)
Good afternoon, Council Members. My name is Angel Rodriguez, Acting Executive Director of YouthBuild. We would like to thank OHCD and City Council for their support on behalf of the many young men and women in Philadelphia who need a second chance. YouthBuild Philadelphia has been a grantee of the city's Office of Housing and Community Development for seven years now. During this time we have combined housing revitalization with economic and job development initiatives to help low-income people attain and retain jobs. As Taylor mentioned earlier, nearly 500 young adults will have graduated from our program by June, and 95 percent of them will have earned their high school diploma. For the 2000-2001 school year, YouthBuild will enroll another 200 out-of-school youth from a number of districts in the city. OHCD has proposed to continue to support the YouthBuild program for the 2000-2001 190 BILL NO. 000344 year, with operating support of up to a million dollars and development subsidies provided on a project-by-project basis through neighborhood-based home ownership production funds. Unfortunately, this represents a funding cut of $200,000, a gap we will work to fill from other sources so we can maintain the same level of enrollment as last year. These CDBG funds have been vital to us as we work to leverage other funding resources for our program. For the past six years, we have used CDBG funds to leverage federal, state, and private monies, including an increasingly competitive YouthBuild grant from the U.S. Department of Housing and Urban Development. The development subsidies provided through neighborhood-based home ownership production funds last year will be used to allow students in the 2000-2001 class to rebuild 14 abandoned houses in three sections of the city. We are grateful for the support we have received from the city. It has allowed us to address two of the city's most critical issues; 191 BILL NO. 000344 first, undereducated youth and, second, abandoned housing. Our program design provides a way for mobilizing at-risk youth to become a positive work force reversing urban blight. The benefits of our program are tangible and encompass the entire community. We still have to reach the capacity to enroll larger numbers of young adults. Each year we are able to enroll less than a third of the students that apply to our program. Continued support from the city is crucial to us, as we serve increasing numbers of at-risk youth in Philadelphia and continue to rebuild communities one block at a time. Thank you.
I just want to add that I have applications here. So that if anyone knows a young man or a young woman who has dropped out of school.
Yes, we would love to have those applications. Sergeant At Arms, please 192 BILL NO. 000344 get them. Councilman Ortiz.
Yes. Of the 500 graduates -- and I know that some of the work has been done very well and very good, I have seen some of the work that you have done -- but do you have any data as to how many of those 500 graduates have attained a union card in the building trades?
To date, I think we have only one graduate who is a full journeyman in the union, and it's bricklayers. And this --
The majority of the 500 graduates, they are minorities; right?
Almost all of our graduates are minorities. And I have to say that to 30 19 percent of our graduates do pursue work in the 20 construction trades. 21 We found it very difficult to get our 22 graduates into the unions, and then to keep them in 23 the unions. 24 Because we find that they are not 25 able to get steady enough work, once they do get 193 BILL NO. 000344 into union apprenticeship, in order to maintain themselves while they are advancing in the union. And because of their lack of seniority, and whatever else is going on in terms of them getting work, I don't even -- I don't always recommend that they pursue working in the union at this point, because our graduates all need steady work.
Are we listening to this here? Do you hear that? Out of 500 graduates who work and graduate with building trades skills and electricians, bricklayers, out of 500 graduates in the last few years, and they are all minorities, only 1 has obtained their union card. Don't we find that somewhat strange?
I think, Councilman, that maybe if we contacted, we interceded and talked with our union people, maybe we can help them. Because they do a fine job. And I think that maybe that's where we can provide some help.
I should clarify, we have about a dozen who are in apprenticeship level. But in terms of journeyman level, only one has exceeded 194 BILL NO. 000344 that, exceeded apprenticeship.
All the money that we spend in this city, minority kids cannot find jobs in those areas. I think it is about time we started asking some real questions.
Thank you. We are going to have Joanne Jackson, ACDC, and then we are going to have Jeff Ordower and Mary Curry. Thank you very much. You do an excellent job. And thank you again, Ms. Jackson. We tried not to make you wait. Last time I remember you waited about eight hours. So we do try, and we appreciate the work that you do. Again, thank you very much. And after that will be Ed Schwartz. Ed, are you still around? Thank you. Please identify yourself for the record.
I am Joanne Jackson, Executive Director of Advocate Community Development Corporation. Jannie Blackwell, I guess it is a Member of City Council, ACDC is very pleased to be 195 BILL NO. 000344 here today. We support the goals of the plan for Year 25. We are specifically very pleased that two RFPs will be issued in the current year, one for planning and acquisition for home ownership and one for rental housing. We are also pleased that RDA and OHCD will continue the Home Ownership Rehabilitation Program, HRP, and that OHCD is continuing the Home Ownership and Housing Preservation Programs. This year we are looking forward to working with RDA and OHCD on the rehabilitation of seven houses on the north side of the 1600 block of Diamond Street. These are houses that were designed by Frank Furness. We will be working with Friends Rehabilitation, and we think that this will provide a significant improvement to our neighborhood. But in order to do rehabilitation on the scale that we would like to, and to effectively communicate to fight blight in our North Philadelphia neighborhood, we would like to see OHCD and RDA issue housing RFPs on a more regular basis. We are also looking forward to 196 BILL NO. 000344 becoming a part of the HRP. ACDC has not been a part of this program in the past. In the next two weeks we will buy our first house. And we feel that this program has the potential to do much in neighborhoods such as ours where we have many stable blocks that are marred by one or two vacant properties. However, because of the size of many of the houses in our neighborhoods, and because many of them have suffered from fires or have been abandoned for some time, in many cases we have difficulties getting additional money in order to participate with HRP, which was designed for moderate rehabilitation. We would like to see that program we worked. So that these houses on otherwise stable blocks, and may be three stories tall, have had a fire, could also be rehabilitated under this program. We were pleased to see the continuing of the Home Ownership Programs, the weatherization, major repairs, because there is a real need for this in our area. And we are going to work to make this information more available to some people in our 197 BILL NO. 000344 neighborhood with fixed incomes and are older. In addition to the projects that I have mentioned, we are also restoring the rectory at the Church of the Advocate. This will become the offices for not only ACDC, but for Art Sanctuary. We are building a playground for children five years old and younger; we are sponsoring Diamonds for Children 2000, a series of cultural events for children in Diamond Park; and we are developing a plan for the blocks facing Duckery Elementary School. At ACDC we feel that we are working hard to reduce blight and make our neighborhood a more desirable place to live. We are doing this with very little city funds. But we would like to see more comprehensive planning involving City Council Members, city agencies, and CDCs, as we all work together to reduce blight. This wasn't a part of my presentation, but I wanted to address Councilwoman Tasco's comments about the amount of time it takes city to convey properties to nonfor-profit. This is a major problem. 198 BILL NO. 000344 In over our 32-year history it is embarrassing to admit how many times houses that were once slated for rehabilitation had to be demolished because of the time it took our organization to obtain title. Thank you.
Thank you very much, Ms. Jackson. Jeff Ordower and Mary Curry, ACORN. Good afternoon. Please identify yourself for the record and begin your testimony.
My name is Mary Curry, and I live in West Philadelphia. And good afternoon, Councilwoman Blackwell and committee members. I am a member of ACORN and a victim of predatory lending. I own my house outright, but needed a home equity loan for some much-needed repairs. I received an additional loan for UC lending at an 8 percent rate, interest rate, and I made my payments on time. And later on I needed to consolidate some additional debt with UC lending, offering to 199 BILL NO. 000344 refinance my original loan. They refinanced my entire loan at 11.33 percent interest. In addition to that, I now pay for home insurance through my loan, and payments have grown to $519 per month. Thousands of other low income, moderate income people have similar stories to tell on a whole variety of predatory lending practices. My loan payments are almost one half of my total fixed income. My original loan, the first loan that I had, was at 8.9 percent, but is now 11.33 percent. I urge the City Council to support the amendment which will be introduced by Councilwoman Tasco and will restrict some predatory lending practices. While the ordinance may not help my situation, it will help others that may not fall in this predatory lending situation. And I thank you.
My name is Jeff 200 BILL NO. 000344 Ordower, and I am the Office Director of ACORN. And I just wanted to add a couple of facts that have led to the epidemic of high-cost subprime loans, or predatory lending, in Philadelphia that I think are very useful to the committee and to Council. The first fact which points to the epidemic, the increase in predatory and high cost subprime lending, is that in Philadelphia neighborhoods in which minority residents make up more than 50 percent of the population, receive 13 percent of the conventional purchase loans made by 14 only the top ten subprime lenders, the top ten 15 high-cost lenders, compared to only 4 percent of the 16 conventional loans made by all other lenders. 17 In other words, six times more loans 18 were made in communities of color by predatory 19 lenders than conventional loans were made just by 20 the top ten subprime lenders. 21 In addition, low- and moderate-income 22 neighborhoods received a four times greater 23 percentage of conventional loans from the top 24 subprime lenders than from all other lenders. And then we also did a study which 201 BILL NO. 000344 will be released with Councilwoman Blackwell and other members of Council a couple weeks ago focusing on the impact of subprime and predatory lending in one neighborhood in southwest Philadelphia, in the Kingsessing neighborhood. And we found out that between 1992 and 1998, subprime lending in the Kingsessing neighborhood in two census tracks in Southwest Philadelphia had increased by 4,800 percent. In that same time period, foreclosures have increased by 93 percent. Of the foreclosures for which records were available, where we could identify the original lender, 79 percent of those foreclosures came from nonbank lenders; in other words, subprime lenders. We are happy to answer any and all questions about predatory lending and the impact of Councilwoman Tasco's amendment. Thank you very much to the Councilwoman and the Finance Committee for your time.
Thank you very much for your work in this area. It is really, really commendable. 202 BILL NO. 000344 Are there any questions from members of the committee or other members of Council?
I don't have any questions. I just have a statement that points to the fact that the reason we are going to propose the amendments, while it will not help the average citizen, we are trying to focus in on at least the funding that's coming out of the city dollars. Councilwoman Blackwell is working on other initiatives that will hopefully lead us to dealing with all Philadelphians, with ACORN, in terms of Council resolution and other activities. So it is an area that is quite important to all of us. And we have been working with Michelle Lewis, who will testify, who is from the Northwest Housing Counseling Service, on establishing and holding town meetings around the city to educate people about protecting themselves against this kind of thing. So it is an issue that we want the Housing Counseling Services to address and focus in on how we protect city dollars. So thank you very much for your testimony. 203 BILL NO. 000344
Is Ed Schwartz here, Institute for Civic Values? Steve Culbertson, the CDC of Frankford Group Ministry? And next will be Michelle Lewis, about whom the Councilwoman just spoke, to further address the whole issue of predatory lending and counseling. Good afternoon. Thank you for your patience. Please identify yourself for the record and begin.
Good afternoon. My name is Sloane Folks. And in my capacity as the Director of Economic Development for the Community Development Corporation of Frankford Group Ministries, Community Development Block Grant funding has been --
You have to speak into the mike and slow down, please.
I'm sorry. Community 204 BILL NO. 000344 Development Block Grant funding has been an essential tool in the economic development and revitalization of the Frankford community. The division of economic development of the CDC of FGM primarily serves the 19124 zip code areas, Census Track 292 through 302 and 307 through 319, and has benefited greatly from the infusion of Community Development Block Grant funding into our community. CDC FGM's economic development strategies is one components of a holistic approach for community improvement and self-determination that also includes our real estate development, housing counseling, targeted neighborhood initiative, and work force development programs. Our economic developments program has developed a comprehensive strategy to improve the economic vitality of the Frankford community. This approach includes the following: In March 1999, through the Department of Commerce, we received a grant for over $30,000 that has been utilized for both economic developments and work force initiatives. This enabled us to leverage 205 BILL NO. 000344 additional dollars and to begin bringing the work force department to scale. Since then, with this funding, we were able to higher an additional counselor and to upgrade our equipment and to offer services to our youth. This has meant for our clientele and community and increase in responsive services, the ability to address their individual needs on a timely basis, connectedness within the labor market, and the ability to successfully meet our mission of preparing people to thrive in the job market. But mostly it has increased the economic makeup of Frankford and has opened doors for people to a more comfortable life. It also includes a business development and training program which assists new entrepreneurs as well as established businesses in the developments and growth of their enterprises. An SBA loan intermediary status, meaning we assist prospective borrowers in the development of their business plan and loan packaging, was submitted to the SBA for prequalification and the possibility of 206 BILL NO. 000344 SBA-guaranteed loans from lenders. A monthly health start business program, a ten week home daycare training initiative, a national trust for start preservation designated Main Street Program, the Frankford Main Street Program, which is one of only a handful of pilot programs in urban business districts around the country. Frankford Main Street focuses on the revitalization of the business corridor through approving the five-point approach to economic revitalization. These points include organizational development, marketing, promotional activities, design, streetscape implementation, quality of life and economic restructuring for the business corridor. The Frankford Special Services District, which is a privately directed municipal authority, is charged with the responsibility to provide the Frankford Business Corridor with complementary sidewalk sweeping services and safety ambassadors who act as the eyes and ears for the police on Frankford Avenue, as well as providing a 207 BILL NO. 000344 welcoming presence to visitors and shoppers. CDBG funding has allowed each of these initiatives to begin or maintain delivery of services to the Frankford community and has contributed to the following increase in these growth indicators since 1996: A net increase of new businesses, the creation of 230 new permanent jobs in the community, retail vacancy is down from a high of close to 45 percent to less than 20, and private sector investment in the Frankford Avenue Business Corridor is more than $4 million. As has been demonstrated, the use of Community Development Block Grant funding has been a critical stimulus in the economic development and commercial revitalization of the Frankford community, as well as instrumental in the creation of a more livable and enduring community.
I would like to introduce my colleague, Suzanne McQuillan, our Director of Real Estate. MS. SUZANNA McQUILLAN: Good afternoon. My name is Suzanna McQuillan, and I am Director of Real Estate Development for the Community Development Corporation of Frankford Group 208 BILL NO. 000344 Ministry. The CDC works to revitalize the Frankford section of Philadelphia through home ownership development, commercial corridor revitalization, mortgage counseling, and job training and placement. Since 1996, we have rehabilitated 29 abandoned or empty homes and sold them to first-time homeowners earning no more than 80 percent of the median income using the subsidy provide the by the Community Development Block Grant funds. We have 11 more homes in our development pipeline, which will be completed by the end of this year. In addition, we have developed 28 homes using new construction and are in the process of constructing 15 additional new homes. Community Development Block Grant funds were instrumental in the development of our new construction and have provided the grant subsidy for crucial predevelopment and development activities; such as, acquiring land, conducting environmental studies, site clearance, closing costs, and actual construction. 209 BILL NO. 000344 Without the partnership of the Office of Housing and Community Development and the Redevelopment Authority and the CDBG funds that they provide, we would not have been able to develop these 83 homes in the Frankford community and 83 first-time homeowners would not exist in the City of Philadelphia. In 1999, our Mortgage Counseling Department provided home purchase education for over 400 families and placed 290 families in homes. This number translates to over 11 and a half million dollars in mortgages citywide. Through our agency, the city has also assisted 400 families to receive closing cost assistance that is vital for them to purchase their first home. Your endorsement of the Community Development Block Grant and the Year budget is 20 crucial to revitalizing Philadelphia's 21 neighborhoods. We urge you to support this 22 program. 23 Thank you very much for your time. ) 25
Thank you very much. 210 BILL NO. 000344 Michelle Lewis, Northwest Counseling Service. Sorry for the delay. I see your request to testify at 10:30. It is a little later than that. We tried.
Dennis Murphy, he is next, Homeownership Counseling Association. Thank you.
In fact, Madam Chairwoman, I'd like for Denis Murphy to join me, to testify immediately after me, and Khalil Walker from the Housing Association of Delaware Valley, as we are all part of a coalition of housing counseling agencies. So we felt we would save you time, too.
My name is Michelle Lewis, and I am President and Chief Executive Officer for Northwest Counseling Service. Northwest Counseling Service provides real estate and housing counseling services. And we have built our backbone around providing those services for the last 18 years in the areas of pre 211 BILL NO. 000344 and post purchase, pre and post rental, reverse mortgage counseling, mortgage delinquency and default, and housing consumer education among some other things that we do as what's known as a superagency. As you know, and we have talked about in the past, the City of Philadelphia is leading the charge around the country in terms of meeting that home ownership goal that President Clinton had at 67.5 percent. And I think that we have long past that, and so we need to all pat ourselves on the back at what we have done in Philadelphia to create home ownership. And that's been the focus for the last eight years in the City of Philadelphia. And why I think that it has been well worth it, because it has increased the city's tax base and a whole host of other benefits have come with home ownership. But it doesn't stop there. There is no question that we need to do more. We need to, as Councilman Nutter mentioned earlier, we need to do more with existing homeowners. 212 BILL NO. 000344 We need to help homeowners get through the maze of refinancing, seniors with reverse mortgages, home improvement, and those sorts of things. There is no question that I think we have to place a lot more emphasis on that. And I think that the counseling agencies do everything that we can in this area, but we probably need to spend some more time doing that. And also the Councilman mentioned services to the people that meet an income guideline that's -- the federal guidelines, and even above going into middle income. I do want to mention that there are some restrictions in the CDBG budget which restrict counseling agencies from providing services beyond the limits in terms of those income guidelines. But those of us that are HUD certified, and that's a certification that is provided through HUD, are required to service anyone that walks in the door regardless of net worth. And we do that on a day-to-day basis, all year-round, so that people technically that could be worth $2 billion could come into the office 213 BILL NO. 000344 and get services, and we do provide those services. We don't regularly get people that have a net worth of 2 billion, you understand. And we don't necessarily --
And we don't necessarily encourage it because they can do more for us than we can probably ever do for them. But, nevertheless, we do provide those services. There are a couple of concerns that I have. At Northwest Counseling Service, we have been studying over the last eight years the delinquency levels for some of the loans that have happened. And we have been studying in particular those that we consider early defaults, people that fall behind prior to -- or within a year after closing on a loan. And the figures are startling. They are up as high as about percent at this time, at 21 least in the studies that we have done. 22 Now, that takes into account the 23 roughly 5,000 people that we get in our office on an 24 average basis each year. But, nevertheless, it is a 25 huge figure. 214 BILL NO. 000344 We had done another study back in 1995 and '96 which told us that even though we had had, of the loans that we looked at that had come through our office, we had a less than 2 percent denial rate in terms of people getting mortgages. Which on its surface we all said, "This is absolutely wonderful. " On the other hand, we saw that 11 percent of those people were people that the 12 counselors didn't necessarily think were ready at 13 that time. 14 And what that meant was that we 15 weren't saying not to buy, but we were saying maybe 16 wait a little longer, save a little more, or buy a 17 little less. 18 However, our hands were somewhat tied 19 because many of these people still got loans from 20 what ACORN talked about earlier, and which has been 21 a major concern for us, and that is predatory 22 lenders that have been plaguing our communities. 23 And this has become a phenomenon that's just huge. 24 And we, in the last couple of months, we teamed up with Councilwoman Tasco, who really was 215 BILL NO. 000344 leading the charge in this area in terms of fraud prevention, which includes predatory lending scams in connection with reverse mortgages, and all kinds of other predatory acts that are happening in our communities. While we took that show on the road in combination with HUD and the City of Philadelphia, to really go around and educate people in the neighborhoods about these practices and what's been happening, and we gained support from many of the -- from the Council Members around the city, Councilwoman Blackwell in particular supported us in an effort over in West Philadelphia that was, in fact, one of our largest groups. And we were targeting seniors only because seniors are a big target of this. But we're not stopping there. We are going to do this with all consumers all over the city. And we have plans to do just a number of these, as Councilwoman Tasco had said. And I absolutely want to be the forefront in supporting the efforts of both Councilwoman Blackwell and Councilwoman Tasco in their efforts to prevent this. 216 BILL NO. 000344 One other thing before I get too long-winded, because I want my colleagues to be able to have some words. While we saw an increase in the number of delinquencies that happened around the city, the other thing that -- there actually was a decrease in the number of delinquencies that were attributable to home repairs. And that's been a significant -- a good thing. We have seen a decrease there. Where prior to that I would say about 72 percent of early defaults came as a result of people getting in the homes where there were repairs necessary. And those repairs by and large created them -- a delinquency which made them fall behind in their mortgages. We have seen a decrease in that. And I think that a big part of that decrease can be attributable to the city's settlement assistance grant program, when it added on the inspection component. And I know that it drove the numbers down in terms of the numbers of people that we have been able to help through the program. But obviously it is helping on the other end in terms of 217 BILL NO.
000344 keeping people stable and maintaining home ownership. And so that's a program that we also support continuing. That is facing a threat at this time due to the HUD regulations regarding the lead-based paint requirements that HUD has imposed, which maybe my colleagues can talk about a little bit more. There are a lot more adept at that whole side of things that I am, but I do want to mention that. One last thing. I said one last thing a few minutes ago, didn't I? All right. This is last. The counseling agencies really provide the backbone of maintaining these neighborhoods. We help to financially stabilize residents one by one, which create a macro effect in the city that can lead to financial stability among the neighborhoods and ultimately the health and welfare of the City of Philadelphia. Let us continue to do that. There is a nationwide effort. I sit on a board called the American Homeowner Education and Counseling Institute, of which I am very proud 218 BILL NO. 000344 to be a member of that Board, because the Board is made up of companies that are larger than life, some of the largest companies in the world. Some of these companies pay $140,000 a quarter to sit on this Board. You know they don't have me there for my money. And their effort is to create a nationwide curriculum and certification process for counselors all over the country, and this is a very aggressive effort which I support in general. However, there is one component of it that I am not necessarily in favor of, and that is that the certification process allows lenders and allows real estate agents and others to provide real estate and housing counseling to consumers, while practicing what they do. My thing is, I don't have a problem with the person holding themselves out to be anything in the world. I myself am a real estate broker. But I think when I made the decision to practice in the area of housing counseling, I decided that I couldn't find a way that I could do this without a conflict. 219 BILL NO. 000344 And I am just very concerned that if we don't continue to fund the counseling agencies at this level, the grass-root level, the nonprofits that provide this, we are going to be overwhelmed. They are already overwhelming us in money, but we will be overwhelmed in the community by people that are providing advice and information to people, and these are the same people that are providing these predatory loans. I just have a real concern about that. And I just want to end by saying, that's why I absolutely support keeping the housing counseling dollars, at minimum, at the level that they are, continuing to fund the Settlement Grant Assistance Program. And I am done. Thank you so much. )
Mr. Murphy, Denis Murphy, Homeownership Counseling Association. Do you have something to add?
So thank you for giving us this opportunity to testify today. And also accommodating our request to testify together.
My name is Denis Murphy. I am the Board President of the Homeownership Counseling Association, or HCA. HCA is made up of nonprofit 6 agencies in the five-county area. 14 of these 7 agencies are funded by OHCD to provide housing 8 counseling. 9 In addition to serving on the Board 10 of HCA, I work every day as a housing counselor in 11 South Philadelphia for United Communities. 12 So the question would be, what is 13 housing counseling and why does it make sense for 14 the city to continue to invest in counseling in the 15 way that it has been done in the past? 16 At my home agency, United 17 Communities, we help 90 to 100 families every year 18 buy a home. 19 Those who participate in our program 20 come from all different backgrounds, both 21 economically and ethnically. And they are all 22 united by one thing, which they really want to buy a house. For us counseling means working with these families over time so that they can become 221 BILL NO. 000344 homeowners and hopefully so they can use home ownership to get ahead. Most of those who come to us for the home buyer programs couldn't qualify for a mortgage and aren't ready. We sit with these families and help them do the detailed work of establishing the track record that a lender would require for them to get a mortgage. For many of us our buyers this means paying off bad credit from the past, building a good credit history, and saving money. None of this is easy. And many of those who have bought homes through our program would tell you they couldn't have do done it without the assistance of housing counseling. And I am very proud to say that earlier today there were many home buyer families who came in at 10 o'clock that you may have noticed. So that's very impressive to me as a housing counselor, that they see our valuable our work is. And, also, we had -- for National 222 BILL NO. 000344 Home Ownership Week, we were giving out fliers. And it was great for me to see many of my old clients who were walking through City Hall courtyard saying how important it is the work that we do. Counseling, however, is much more than just getting people a mortgage. Many of our buyers don't even know that sales prices are negotiable or they don't understand that the buyer has to check out the house ahead of time and inspect it for problems. The realtors and the mortgage lenders that buyers interact with often don't have the time to educate buyers and they often are commissioned salespeople. The counselor often is the only person able to provide valuable objective information. And I want to echo Michelle's comments talking about the program she was referring to, and how I think the quality of the work that we do as counselors is much different than that of people in the private sector because we are very much pro consumer. And that also has a real impact as 223 BILL NO. 000344 far as the predatory lending goes. And I am going to mention that later. Home ownership is a powerful motivator. And when families successfully complete counseling, they often make changes and pick up skills that make them more likely to succeed. " So that's kind of our goal as counselors, is to really get people to take ownership of that big life decision of buying a house. Unlike the realtor or the lender, it is our job to work with buyers so that they see their decision to buy a home in terms of larger goals. Many of us also provide counseling to homeowners in danger of losing their homes in foreclosure. For most families who experience a serious financial crisis, it would be impossible for them to successfully negotiate a workout plan with 224 BILL NO. 000344 their lender without the help of their counselor. Counselors assist homeowners in applying for emergency mortgage assistance and they work with lenders and homeowners to work out repayment plans. This work is extremely demanding and time consuming.
With the great successes that we have had here in Philadelphia promoting home ownership, it is critical that we fund counseling so that a counselor will be there for those homeowners who happen to get into trouble. Housing counseling touches virtually every neighborhood of the city and it reaches a huge range of people with a wide range of incomes. As Michelle mentioned, many of us do see middle-income buyers. And the great thing is that the support that OHCD has given us allows us to have the core staff who are funded to provide counseling. And then when those middle-income people come through the door, we are there to point them in the right direction, too. So one thing I noticed is, in the city's plan and also in the city's publications, 225 BILL NO. 000344 they talk about numbers for the Settlement Assistance Program. And I think the numbers in terms of families affected by counseling is even greater because many of our buyers don't receive the grant. Many of our buyers are over income or for other reasons may not receive that grant. So although the category of housing counseling may sound vague, the results of counseling are very tangible and widespread. Since the against of the Settlement Assistance Program, over 10,000 families have received assistance from the city towards closing costs. Even more important is what Michelle had mentioned, which is the way that housing counseling has helped her revive the sales market in many neighborhoods by bringing home ownership to new groups of people and it has helped bring new mortgage lenders to the table. So when dollars are scarce, why does it make sense for the city to continue to fund housing counseling at current levels? Counseling is -- the first reason is, 226 BILL NO. 000344 counseling is extremely cost effective. For example, for 120,000 the city is able to fund a counseling program in South Philadelphia that reaches roughly 400 families and results in 90 to 100 new homeowners per year. Other counseling that helps families avoid foreclosure helps the city save potential costs if the property were to remain vacant. Another why reason it is wise to support counseling is, OHCD's support of housing counseling leverages settlement assistance dollars from noncity sources of grant money, such as the state and the Federal Home Loan Bank, and it leverages a huge amount of private mortgage dollars. Community groups that provide counseling have collabaorated with mortgage lenders and then also with insurance companies to get them to bring their dollars into our neighborhoods, too. Counseling can play a key role in fighting blight. As we know, Philadelphia has an aging homeowner population, and counseling is key for readying the young people of the city to move into their places and to buy homes. Homeowners 227 BILL NO. 000344 provide tax revenue for the city. Counseling also promotes other programs that provide incentives for people to buy in the city, rather than moving to the suburbs. So we worked with a lot of lenders that have targeted programs that reward for people investing in the city. Housing counseling puts home ownership within reach for groups with special needs; such as, disabled people and people who speak English as a second language and might have a more difficult time buying a home. And then, lastly, I would like to re-emphasize the point of strong housing counseling promotes a more consumer protective environment in neighborhoods. And that's going to be key in the future to fighting predatory lending, as we have an established network of counseling agencies with capacity to work with home buyers and with homeowners who have a very pro consumer orientation. And for many of us on the pre-purchase end, we are the strongest force in 228 BILL NO. 000344 neighborhoods for bringing in low-interest-rate mortgage programs. So I would like to echo Michelle's points and also ACORN's points. So thank you for giving me the opportunity to testify today.
And please show your commitment to home ownership for Philadelphians by preserving the level of funding for counseling in Year 26. Thank you.
Just before you start, I just have a question. Michelle mentioned and you have mentioned the fact that you have counseled people who don't qualify under the income guideline. Can't you charge them a sliding fee? Can't you charge a fee for counseling?
That actually is something that we have talked about a lot. And I think that that's something that we might have to clarify with OHCD. At our agency, we have actually counseled those people for free. And then I guess 229 BILL NO. 000344 their work has been -- in a sense, some of these people have been paid for by the private support we get from lenders. But that's a good question. And I think that agencies would probably need to address that with OHCD.
May I answer that for a second? There is also a restriction that is actually somewhat vague that is regarding the HUD certification, and that --
Yes. The HUD certification, those of us that are HUD certified, are required not to charge a fee. Now, there is some discussion in Washington right now about revising that. But at this point, those of us that are HUD certified are not really allowed to charge a fee directly for the counseling service.
That's a political question. All you have to do is talk to your local Congressman, they will just change the 230 BILL NO. 000344 rules right away.
Good afternoon, Council Chair Blackwell and Councilwoman Tasco. My name is Khalil Walker, and I am the Program Director of the Housing Association Information Program. The Housing Association Information Program is the direct services counseling subsidiary of the Housing Association of Delaware Valley, Anthony Lewis, Managing Director. HADV -- and this is where I throw in our acronyms. Please stop me. If I talk housing jargon, feel free to ask me to clarify. HADV is the oldest housing advocacy organization in the country, founded in 1909 with the -- born on the premise of eliminating racism and discrimination in the field of housing for all individuals. Currently, in terms of publications 231 BILL NO. 000344 and activities that we are doing at the Housing Association of Delaware Valley, we have the region's only housing magazine, In Phil Magazine, which takes on a wide array of topics relative to housing and analyzing market trends and dynamics. HADV also has helped public housing tenants nationwide to become managers of their developments, as well as with Southwark become the first in the nation to be owners of their development. Southwark, in conjunction with public/private organizations, are owners of their development. But I am area here today to talk about housing counseling, and that's my baby. Like Michelle and Denis said, all of the above. I mean, those are really tough acts to follow. Some issues that I would like to talk about are, I would like to pose a question to the Chair. And that is, how many working poor and fixed-income individuals can afford a three- to four-bedroom apartment in the City of Philadelphia? Well, I will answer it for you. None. 232 BILL NO. 000344 If you take a minimum-wage-earning family that may have transitioned off Welfare by way of Welfare to Work, or just a hard-working family that does not have the benefits of skills and education to compete in this high-tech world that we live in, they're often faced with making decisions relative to housing. They cannot afford to have a three- or four-bedroom apartment to rent. So, as a result, they have to make decisions that affect their quality of life; decisions like two, three, or four jobs. And we have clients that we can document that work many, many jobs just to stay afloat. These families are often on the brink of homelessness. They have to sometimes forego eating nutritional food to pay the rent. And that increasingly, with the housing market doing well by all -- in all sectors, housing rents in Philadelphia are going up. The corresponding wages are not keeping up with the rents, which is forcing our clients to come up with more and more innovative ways to just maintain their households. Well, this is where housing consumer 233 BILL NO. 000344 education component comes in that the housing counseling organizations provide. We look at the wide human services network, we look at the employment training opportunities, we look at available employment activities, and we help our clients with budget counseling so that they can stay in their homes, help stabilizing their families, and help stabilizing the communities, a very important issue in terms of our low and very low income renters in the City of Philadelphia. Also in terms of consumer education, my colleagues did talk very much about predatory lending. Well, I would like to say, with the proper use of consumer education, not only can we system the tide of rising predatory lending practices, but we can also talk to our lending community and ensure that urban contemporary lending practices come out of these kind of situations, so that we can prevent predatory lending and squash it where it exists. Working in conjunction with Council and state legislators, we can come up with a 234 BILL NO. 000344 standard procedure where we can hold these lenders accountable for their actions and monitor our communities so that we make sure that the viability of our communities are there.
And, finally, I would like to say that your help is desperately needed in maintaining the funding for housing counseling. While I can clearly demonstrate, as my colleagues, a need for increased funding, certainly we should at least be funded at the current levels because we are doing everything with nothing. Thank you very much. And this concludes my testimony. )
Thank you very much. I thank everyone for their patience. And after Councilwoman Tasco's remarks, we are going to break for an hour.
I just heard you talk about maintaining the funding level. Are you scheduled to be cut?
We hope not, knock on wood. 235 BILL NO. 000344 But in the budget, your funds are there for your program; right?
Yes. Yes, Councilwoman. And from what I understand, the markup at the federal level, there may be a possible cut of about 295 million. A VOICE: That's next year.
Absolutely. And we are talking about Year 26, which is what we are trying to address here. The states were preserved at their current levels. And given the need, the increasing need -- because the clients that we see are not enjoying the prosperity to the degree that the other sectors of the community are.
Their lobbying side is strong in the private sector. So you all would have to lobby your federal representatives stronger for the dollars not to be cut, and join other national organizations which are lobbying to prevent the cuts in the Community Development Block Grant. I know national League of Cities is 236 BILL NO. 000344 working very hard to fight the proposed cuts in the funding.
We are sorry for the delay. We will continue so that we can get you in and out before it storms again. For all those Councilpersons who are in their offices, the Finance hearing on the Community Development Block Grant application is continued. Is Dennis Pollard here? Dennis Pollard. Blaine Bonham? Thank you. And while you are coming forward, I would note that Greater Philadelphia Urban Affairs Coalition left their testimony; Ms. Hersch was here also; Charles Reeves and the Committee of Concerned Citizens for Grays Ferry; Kevin Spicer, same organization; and Neysa Williams, same organization, that is Committee of Concerned Citizens Grays Ferry. 237 BILL NO. 000344 We promised them that their testimony would be considered as if they had read it in person. So those persons have had to leave. Thank you. Please identify yourself for the record and present your testimony.
My name is Bitrai Roy, and I am with the Pennsylvania Horticultural Society's Philadelphia Green Program. And I am here on behalf of Blaine Bonham, who could not be here regrettably. Good afternoon, Madam Chair. Philadelphia Green has been a budget item in the city's Year application to HUD. This is 15 specifically for Philadelphia Green. 16 This CDBG funding that we receive 17 from OHCD provides us with the ability to leverage 18 city funding to attract a wide range of public and 19 private support. 20 With significant grants from local 21 and national funders, we have been able to leverage 22 this funding, as well as along with proceeds from 23 the Society's Philadelphia Flower Show. 24 We have accomplished much throughout 25 the city, especially in low- and moderate-income 238 BILL NO. 000344 neighborhoods. Over the past year, Philadelphia Green helped develop over new greening projects 5 across the city, as well as provided assistance to 6 nearly over 200 existing sites. 7 Through our training programs, we 8 reach a wide range of city residents. One such 9 example is our Tree Tenders For Teachers. Through 10 this training initiative, Philadelphia-based 11 educators are trained in horticultural and develop 12 lesson plans that help their students beautify and 13 improve their neighborhoods. 14 The School District of Philadelphia 15 has embraced the Tree Tenders Teachers concept as a part of its mandated community-based service learning projects. Since the program began in 1998, nearly 200 teachers have been trained, reaching over 5,600 students. Our work with the city's neighborhood parks is now a citywide support system for friends groups. In the past two years, the project has expanded to include 24 parks throughout the 239 BILL NO. 000344 city. Our work at parks such as Carroll Park, Gorgas Park, Vernon Park, and Malcolm X have helped these groups clean, green, arrange programming, attract city and community investments, and increase userships of their parks. Philadelphia Green continues its targeted neighborhood greening efforts, working with CDCs, such as Frankford Group Ministries, Association of Puerto Ricans on the March, Greater Germantown Housing Development Corporation, and New Kensington CDC. OHCD has been the main funder of our work with New Kensington to create and implement a vacant land management program in the New Kensington community. To date, the program has affected over 540, or about 50 percent, of the neighborhood's unmanaged vacant lots. With involvement of public and private stakeholders, Philadelphia Green undertook a comprehensive vacant land management study which was completed in April of this year. This study makes recommendations for 240 BILL NO. 000344 the adoption of a realistic, cost-effective system through which all of the city's vacant land is maintained until appropriate long-term uses for each parcel is found. The findings of the study were incorporated into the Blight Elimination Subcommittee's report on urban blight to the new Administration. Philadelphia Green proposes to continue this work with city government, community-based organizations, and other stakeholders to develop this management system both at the city and at the neighborhood levels. This funding that we receive from OHCD is crucial to our continued success in greening Philadelphia's neighborhoods, and we ask that you support this allocation. On behalf of PHS and its Philadelphia Green Program, I would like to thank Council for your past and continued support of our greening initiatives.
Thank you very much. Thank you. Thank you for your testimony. Susan Klein, Director of Housing, 241 BILL NO. 000344 Philadelphia Corporation of Aging. Vivian Van Story, Community Land Trust. While they are coming forward, let me note that Sandy Salzman, New Kensington, also left her testimony, and it will be considered as if it were read here in person into the record. Good afternoon. Thank you for your patience. Community Land Trust Corp. Thank you. Please identify yourself for the record.
Good evening, esteemed Council Members. My name is Vivian Van Story, and I am Executive Director of Community Land Trust Corporation. I have served the organization in my North Central Philadelphia neighborhood, which is bound on the north by Cecil B. Moore neighborhood and on the south by Francisville Community. For more than ten years, I have become -- I have come before you today to seek your assistance in helping to ensure the long-term visibility of my neighborhood by assisting us with acquisition and rehabilitation of vacant lots and abandoned properties within the community. 242 BILL NO. 000344 It is our goal to rehabilitate these properties so that they can provide home ownership opportunities for working families. Currently the value in the area are significantly below those in surrounding areas. With financial assistance from the city, we can begin to make steps over the next five years that will lead to increase in property value by lending to increase private secular investments in the area. There are about 100 houses in my neighborhood that I would like to preserve and rerenovate over the next five years. Unless these homes are rerenovated, they will become cancer in an area and help to destabilize the area and further reduce property value and sale prices. We would like to start with the renovation of eight vacant properties in the area. Renovations of these strategically located properties, 1828, 1830, 1832 Girard Avenue, 1800, 1809, 1812, 1840, and 1842 Master Street, would serve as a catalyst to help soar other development in the area and supplement the work that the city 243 BILL NO. 000344 has supported in other plans to support in nearby communities. The Office of Housing and Community Development proposes a continuing home ownership development in the lower North Philadelphia area as a part of Homes in North Philadelphia initiatives. Rerenovation of eight above-mentioned properties, coupled with preservation and upkeep of open space, which has been long over -- which has long been our forte would not only help to stem the tides of abandonment in the area. In addition to helping to stem the tides of abandonment, would also support the important work that begun -- is being done by the city in the home ownership zone in Cecil B. Moore area which immediately abuts my neighborhood. Renovation of vacant homes in my neighborhood is critical, in that it would also help to supplement the second phase of the home ownership zone with -- which will include sites on Bouvier, Master, Montgomery Avenue, and the west of the sink Ironwork site, from 19th to 20th Street on Harlan to Sharswood, Jefferson Street. It would also help to support Poplar 244 BILL NO. 000344 Nehemiah venture in the Master Street Year 2000 development. Thus, as you see, the activities that I am proposing to undertake presently is logical extension of the work that the city has already initiated in previous years, as well as the work it proposes to undertake in the Year consolidated 9 plan. 10 The area abound by Master on the 11 north, 20th on the west, Girard and the south, and 12 Broad on the east is critical to the success of the 13 city's revitalization efforts in the Lower North 14 Philadelphia. 15 With minimal financings and technical 16 assistance, my organization stands ready to 17 undertake much-needed preservation work in the 18 area. 19 I would like to introduce Evelyn 20 Feeney, our Office Manager. Thank you. 21
My name is Evelyn 24 Feeney. I am office manager as well as a resident 25 in the community for over 30 years, and a six-year 245 BILL NO. 000344 block captain. During Year 26, we are requesting funds for redevelopment and development activities so that we can acquire the first eight critical buildings and begin their modernization. Additionally, we are requesting funds during Year so that we can develop a 9 comprehensive neighborhood revitalization plan that 10 would enable us to undertake the following planning 11 activities that would lead to a more large-scale 12 revitalization initiative: Establish a current 13 database for information related to the housing 14 stock, demographics, land use, economic and human 15 services needs of residents of the target area on 16 which to base the master plan activities; create a 17 vehicle of effective participation by neighborhood 18 stakeholders in a development implementation of a 19 shared vision for the neighborhood; create a 20 blueprint for action in the form of a five-year 21 comprehensive revitalization strategy which 22 addresses the physical, economical and social needs 23 of the community; develop a project of the financial 24 costs and component of implementation plan and a 25 strategy for raising necessary private and public 246 BILL NO. 000344 capitals over a multi-year and multi-phase implementation period; create a document that would articulate the visions and strategies so as to form the basis of a campaign to secure the necessary political and financial support to launch the redevelopment efforts; conduct a market study of the area to determine needs for various services; conduct an assessment of the abilities of supportive services in the area; to develop a comprehensive community and supportive services program to address these needs; acquire through negotiation purchases art in conjunction with the City of Philadelphia eminent domain, donor-taker, sheriff's sales, vacant property Review Committee; undertake any environment reviews required to implement a specific development project; identify potential investors for participation in the financing of specific projects; and prepare applications for financing as needed to ensure that the adequate funding is available for each designated project. I would to thank you for this opportunity to speak with you today. And I look forward to working with you to improve the lives of the residents in our neighborhood. 247 BILL NO. 000344
Thank you very much. Rick Sauer, Philadelphia Association of CDCs. Theresa Youngblood, Northern Liberties Neighborhood Association. Nora Lichtash, Women's Community Revitalization Project. Mary Francis Davis, Greater Philadelphia Urban Affairs Coalition, they left their testimony. Farah Jiminez, Mount Airy USA. Ernestine McCall, Grandparents As Parents. Is there anyone else who would like to testify and whose name I have not called? Because that is the last person on our list for today. Good afternoon. Thank you for your patience. Again, we are sorry to have held everyone up.
Good afternoon. I am representing Ernestine McCall, who couldn't be here because of illness in her family. Ernestine McCall is the Director of GAP, which is an acronym for Grandparents As 248 BILL NO. 000344 Parents. I am Eileen Brown, her Assistant Director/President. So it reads a little different than the paper the. She is a grandparent raising six grandchildren, and I am also. First of all, GAP is a nonprofit community-based organization founded over four years ago. Across the United States, in every neighborhood of the city, thousands of grandparents live with and raise their grandchildren. You probably know family members or friends who do the same. We are white, Hispanic, black, Asian, rich, and poor, though GAP members mostly are poor. We are usually very good at what we do. We save the city, state, United States government, lots of money which may have been spent on foster care, social service agencies, homeless shelters, and in many other ways by taking our grandchildren in. In fact, the little research done on us shows that our grandchildren fair very well compared to the alternative. 249 BILL NO. 000344 So every day we juggle the challenge of getting old with the challenge of raising young people, usually on very little money. However, because of our grandchildren, we are not allowed in HUD-funded housing for the elderly. Because of our age, on the other hand, we are not likely to qualify for a mortgage for a house big enough to hold us and our kids. Sometimes we get thrown out of our one-bedroom apartments because they can't accommodate our kids. So I am here today to request that funding be set aside to help us develop housing for the thousands of other grandparent-led families. We have been working with Councilman Darrell Clarke and Jeanette Mentz of OHCD who have been very supportive. We have also been supported greatly by Senator Shirley Kitchen, Legislator Roseitta Youngblood, and also Legislator Andrew Carne. We have submitted a proposal to OHCD for a small start-up grant to build our capacity and help us find out where poor grandparent-led families 250 BILL NO. 000344 are in the city and what type of housing and services they need. We are working with the firm of Diamond and Associates/OMG, and the firm has recently won a grant from the William Penn Foundation to help us. This is the end of the speech that you have up there. But I passionately want the City Council to understand that even though we have the Association for the Aging and we have other things for the aging, this is another issue. This is a phenomenon that is like a growing silent cancer, that is going all through our country. There is over 4 million grandparents raising grandchildren according to the census. For for every one that they know that's raising a grandchild, there are probably ten that will not let theirselves be known. And in this office of GAP, we started out as a support group, but we also ending up advocating for the rights of grandparents. We have many people that come to us that have had to leave the buildings that are made 251 BILL NO. 000344 where elderly people can go and retire because there is no room for their families. In all this new development going on and housing going on in Philadelphia and senior citizen complexes, everything is for first-time home buyers. There is no room for grandparents and grandchildren. And we are on a limited income, and it is not sufficient enough to do what we need to do. So this type of building will be very important to the community, will be very important to grandparents and children at-large. And our motto is to help a child keep a child. So once again I thank you for hearing what is said, and I hope you keep us in mind. That this building, or building of this nature, is very necessary. And we are in -- we are located in the Church of the Advocate. We are in North Central Philadelphia.
But, once again, this is not a North Central problem; this is a problem that's getting to be, actually, nationwide. And we are pretty sure 252 BILL NO. 000344 that Philadelphia can step up to the bat and make a change. Thank you.
Thank you very much. Again, is there anyone else here to testify? We are now asking all Councilpersons who are on this committee if they would return to chambers for a vote. We finished our testimony and we are ready to move on and vote this out of committee. (Short recess.)
Let me thank everyone for coming back to the chambers. And we wanted to conclude our hearings; however, there are some questions about various issues. Let me ask Mr. Kromer if he would come forward, and ask other members of the committee, if you have any questions, what we will do is continue this hearing until tomorrow morning at 9 o'clock. But we want to give both sides an opportunity to know what information is requested, 253 BILL NO. 000344 so that when Mr. Kromer comes back, he will have the information you need. So at this point we want to certainly open the floor for further questions. Councilman Nutter was right here and he said he had spoken with Councilman Kenney, they were not prepared to vote yet because they wanted additional information, I suppose, to questions raised earlier. And would you like to raise any other questions now, so that they can prepare for tomorrow, Councilman Nutter?
And I don't know to what extent this may or may not have been covered this afternoon. What does OHCD do to protect people from predatory loan companies?
Do they accept any responsibility at all? 254 BILL NO. 000344
OHCD's primary activity to prevent consumers against predatory lenders is the Housing Counseling Program, which is staffed by trained counselors who have received specialized training on the issue of predatory lending. So that's our best defense against predatory lending. And I think it is a very important defense now at a time when that issue is clearly a concern and a problem in Philadelphia and elsewhere.
Well, I guess it is clearly a concern because apparently it has not been as effective. I'm sure the counselors do everything they can do, but apparently something more is needed.
Do you police? What happens if a complaint is brought to you that somebody has been victimized by a predatory loan?
Well, there are authorities to whom those complaints are referred. And there are two such complaints 255 BILL NO. 000344 that I received last week, in fact, that I have asked the Law Department to look into and refer to the appropriate authorities. I don't know of any instance in which an individual or a family counseled through our program ended up being victimized by a predatory lender. Certainly if I did hear a complaint along those lines, I would see to it that the complaint was addressed.
Well, we don't know what being "addressed" means. Apparently there is, I understand, substantial evidence that numbers of people are being victimized, and very frequently the victims never complain because of circumstances.
I don't know of a single instance in which an individual or a family counseled through our program, which has served thousands of consumers, has been victimized by a predatory lender. And I think that's an indication of how effective the counseling programs are.
If you knew of a 256 BILL NO. 000344 company that was engaged in the practice of predatory loans, would you be able to bar that company from doing that?
We do more than that. We follow up with the Law Department and the District Attorney.
Well, that doesn't necessarily mean anything, because then they have to make judgments.
And prosecutors have prosecutorial rights to make a determination whether this is the kind of case, you know, that takes up their time, you know, or shouldn't because of pressure of other business.
It potentially has a little more teeth by a potential disbarment by the city's housing agency. We would do that, as well. First and foremost we would report to the authorities for followup.
Okay. I'm not saying okay. I'm saying okay meaning I am ending the question at this point. 257 BILL NO. 000344 I just wanted to raise that because I think there is a very severe and serious problem out there to which this amendment addresses, I think, quite effectively.
To what extent do the counseling agencies monitor or, I guess, investigate the lending sources on these mortgages?
They evaluate lending sources and the terms of financing in every instance. And they advise consumers about the pros and cons of each mortgage lending opportunity that can be considered.
So if someone is going to -- do the counseling services walk them through the mortgage process?
Well, you know, we are going to make some proposals in terms of at least doing something in the city. Because we don't control the interest rate that these companies charge; that is a federal and state issue. 258 BILL NO. 000344 But certainly we have some responsibility to protect people who we work with and who receive city funding, to give them some assurance that they are not going to be duped in the process.
Well, let me make two points, if I could. Number one, I know of no instance in which any counselor funded through our program has failed to protect a consumer from a predatory lender. Secondly, I read the amendment just briefly, and others who know more than I will need to do that. But if this amendment becomes part of our plan, I will guarantee you that administrative costs will increase. Because we currently do not have the staffing for the very detailed monitoring process that's called for here. Now, if we are being asked to monitor and develop a monitoring plan, we would like to do that, in concert with the agencies that have recommended it and with our other housing counseling agencies. 259 BILL NO. 000344 But if we are to be legislatively locked into this approach, I guarantee you administrative costs will go up substantially. And I'm not sure that we can fulfill the intent of the amendment in any case.
Well, you have until we come back tomorrow. I think you ought to sit down with the agencies who have sought to meet with your organization for some time to work through this process.
Let me be clear. I have been very open and very collaborative with the housing counseling agencies. I have met with them on two occasions this year to talk about the Year program. 18 And this issue has not been raised by 19 ACORN. This proposal was not sent to me in 20 advance. The ACORN organization -- 21
Well, we just 22 got it ourselves yesterday. Our technical staff 23 worked on it in City Council. 24
Well, I can tell you, if 25 we are going to be collaborative, we have got to be 260 BILL NO. 000344 serious about collaboration. And I am going to have to meet not only with ACORN, but with the other counseling agencies whose working lives would be influenced by this. I'm not going to agree to a proposal that one group has prepared without consulting anyone else. If we're talking collaboration we're going to have to get together and scrutinize this and discuss it and report back to you on the results of that. And that's what I commit to do. But it will not be done tonight, and it will not be completed by tomorrow morning. And I am not responsible for the fact that that cannot be accomplished by tomorrow morning. The people who put together this proposal, without notifying me and without notifying the other counseling agencies who would be affected by it, have that responsibility. We will work with you and with other Council members and with ACORN and with counseling agencies in good faith. But we expect that good faith to be returned by those who support this 261 BILL NO. 000344 proposal.
Well, just let me say this for the record, that the amendments have been prepared by the technical staff at my request. And Council can always amend an ordinance based on how it feels that the ordinance 8 should go. And sometimes we are able to collaborate and sometimes we are not able to collaborate.
So what we would like for you to do is look at this, and we will ask the Law Department to review it, and we will take it from there. And we don't have to pass on this budget tomorrow, either.
We can take the time to have you collaborate with your counseling services and come back with your recommendation.
Thank you, Madam Chair. 262 BILL NO. 000344 Mr. Kromer, for the purposes of trying to move through this process -- and I am also trying to be as cooperative as possible -- but I would like to get direct information and answers to these information requests prior to voting on the CD Year plan and budget. 8 The first is, as I asked for earlier 9 today, I would like a listing by your office 10 breaking out the Year 26 plan in accordance with the 11 eligibility criteria as laid out in the Code of 12 Federal Regulations related to CDBG program. 13 I would like to see how your budget 14 matches up with the individual categories, and what 15 the projects are, and how much they cost, and where 16 are they located. 17 In accordance with that, we had 18 discussion earlier today, and I would like your 19 response and your proposal to the issue of the 20 equitable or more level funding across the city and 21 across districts in a total fashion, not necessarily 22 program by program. 23 But when you get to the final column, 24 and it says this is all the money, I'd like to see 25 how the $69 million is spent across the city, and 263 BILL NO. 000344 that there be some leveling in comparison to the distribution of low- and moderate-income people throughout the city. I'd like you to provide us with either a chart or a list or some comparison -- this is the second request; the other was an add-onto the first -- to get to this issue of the difference between the HUD definition of low and moderate income and what the income eligibility criteria are in accordance with the HUD regulations that you made reference to in the CD Year plan, I believe, as 13 approved March 9 of the Year 2000, and who would be 14 covered, or what areas would be covered by census 15 track, and which areas are only covered as it 16 relates to Bill No. 1029-AA. 17 And I would like to be able to see 18 the difference that the more restrictive low and 19 moderate income definition creates and what 20 populations are not being served as a result of the 21 restrictive definition, as compared to who would be 22 served under the HUD regulations. 23 The third request is, I would like to 24 see a request from Housing for some level of 25 additional city funding for administration or 264 BILL NO. 000344 program delivery costs as it relates to the CDBG program, the $29 million that is presently in the budget for administration and program delivery costs. In addition, I would like the name and the position and the department that the person works for of every person who is covered by the $29 million.
It is for the program delivery and for the administration costs, the entire $29,703,000. I want to know every person, in every department, in every agency that gets one dime out of those two line items.
Fourth request is what, if any, steps can be taken to seek any relief or financial strategies related to the now present $13.5 million in annual payments, or repayment, of principal and interest for the HUD 108 loans that we 265 BILL NO. 000344 have now outstanding as a result of the pursuit of the policy to put HUD 108 loans into housing. I think you and I had a short discussion not too long ago about some of the options that may be available. That may or may not help us in this. But we talked about securitization and we also talked about portfolio sale. Lastly, I would like to know what your proposal is in response to the issues that were raised by a number of Council Members earlier today about expanded funding for programs that relate to preservation and maintenance activities. For instance, it is my understanding that the BSRP program is facing a possible cut in funding, or will potentially be impacted or will be impacted by new regulations related to Title 10 and the lead abatement requirements for any projects undertaken by the BSRP program. In conjunction with that, I would also like to know what your suggestions and ideas are solely related to the CDBG program -- not to veer off into the city's Capital Program -- with regard to infrastructure and streetscape improvement projects throughout the city that are eligible for 266 BILL NO. 000344 funding through CDBG guidelines. I would also like to know what your suggestions or recommendations are for additional funding with regard to the Model Blocks Program or any similar programs where there is a partnership between the city, possibly a community-based organization, and organized communities for some partial payment for those kinds of activities. And, lastly, I would like to know, I'd like to have in writing, what your recommendations are for areas that want to access the CDBG program, but are not active CDCs and may be more in the category of community-based organizations or civic organizations who do not normally get involved in construction or rehabilitation activities, and generally have no 18 interest in being involved in those activities, and in many instances don't necessarily need significant activity in that particular area. They may have a house or two, but they are not trying to build 40.
As soon as you are able to provide that information to the Chair, I would greatly appreciate it. 267 BILL NO. 000344 But those are the concerns and interests that I have. And I can think of no more appropriate time than to deal with those issues right now, while we are dealing with this budget. And certainly my decisions with regard to the Year budget will be a function of 8 your response to those issues. 9
Okay. I think there is 10 one comment or question on one of the requests. 11 Excuse me. 12 Thank you. 13
Is there 14 anything? Are you going to ask me a question? 15
I just wanted to 25 say, I think there is a person here I think who 268 BILL NO. 000344 would like to be heard on the question of predatory loan discussion we had a minute ago, and I ask that he be permitted to testify.
But I think he wishes to respond to some of the statements Mr. Kromer made. And that will help clear the record for tonight, so we have a balanced picture.
All right. Come forward. We will yield to Mr. Cohen's request. We usually don't have one witness come back again, but we will yield. And after that, we will continue our hearing until 9 o'clock tomorrow morning.
My name is Jeff Ordower, and I am the Office Director for Philadelphia ACORN. Thank you very much, Councilwoman Blackwell, for allowing us to retestify. I just wanted to respond very quickly to a couple of Mr. Kromer's statements. OHCD really does have a very difficult job. And we appreciate all the work that 269 BILL NO. 000344 they do in ensuring, as best as can be done, solid, you know, stellar loan counseling, home buyer education for low and moderate, in addition to all their other functions for low- and moderate-income Philadelphians. However, on the issue of predatory lending, there are a couple of statements that are worth responding to. On the issue of trying to contact and meet with OHCD about predatory lending, ACORN contacted Mr. Kromer's office back in February seeking a meeting to discuss predatory lending. It was only -- it was not until yesterday that we were able to meet with anyone who had some authority to talk about loan counseling. On the second point that Mr. Kromer makes about the onerous requirements involved in OHCD's monitoring under Councilwoman Tasco's amendment, that's simply -- we think that that's something that OHCD should be doing. We have revised it. They are not responsible for monitoring all loans in the City of Philadelphia. What they are responsible for under this amendment is monitoring all loans that use city 270 BILL NO. 000344 money. And we think that that's justified. If they are spending money, then they should know and it should be known whether or not that loan is a high cost or predatory loan. The third issue, which is also very important, is that I have again reconsulted just on the phone with the director of our sister organization, ACORN Housing Corporation, and that the program is in fact structured so that both ACORN Housing Corporation and other loan counseling agencies in many cases have to give predatory loans access to the settlement grant money. In other words, if a lender refers a client to a loan counseling agency, with the given loan product and given fees and rates, the agency -- unless the client changes their mind and asks for a different product, the agency is required, or the loan counseling agency has to send that client back to the lender. So that client could, in fact, be receiving a predatory loan that is city funded. And that ACORN Housing Corporation and other loan counseling agencies do have cases of predatory loans using settlement grant money and other funds, public 271 BILL NO. 000344 funds. So thank you very much. I don't know if there are any questions. But those are the three responses we have to Mr. Kromer's points.
Are there any comments from members of the committee or other members of Council? Thank you very much. Then this hearing will be recessed until 9 o'clock tomorrow morning. (Public Hearing adjourned at 5:14 p.m.) - - - 272 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, June 6, 2000, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COMMITTEE ON FINANCE _____________________________________ DEBRA A. WHITEHEAD, RPR