Breaking Ground - November 2001

House Bill Protects Predatory Lenders Not Homeowners

Predators, Banks Win; Poor Lose

HB 386 Sample Letter

How to Contact...and COHHIO Staff

Costs of Predatory Lending...

COHHIO Membership

House-Senate Conferees Agree on HUD Budget...

Over 1,400 Endorse the National Affordable Housing Trust Fund Campaign

Good News From Washington, Good Work, Shelter Plus Care Supporters!

HUD Awards More Than $604 Million in Housing Assistance for Low-Income Elderly

COHHIO Awarded $100,000 for Work on Predatory Lending...

HUD Awards Millions to Help People With Disabilities Find Housing

Earned Income Credit Kits Available

Columbia Park Residents Fight for Their Homes

Three Biggest Financial Challenges for Nonprofits

2001 HHS Poverty Guidelines

Join Other Ohioans in Attending the Ending Homelessness Conference for People with Mental Illness and/or Substance Use Disorders

COHHIO Youth Empowerment Program (YEP) Successes

Energy Assistance Programs

Save the Date - COHHIO Conference

Resources

 

House Bill Protects Predatory Lenders Not Homeowners
By Bill Faith, COHHIO Executive Director and Kathy Tefft-Keller, AARP Ohio State Director
Ruth Morgan worked hard her entire life. She raised her family and was very active in her community in Urbancrest, south of Columbus. After many years of saving and hard work she finally realized the American dream and bought her own modest home. But that dream turned into a nightmare.

Four years ago she had a small mortgage balance left on her home of about $8,000. It was tight living on her Social Security of just over $600 a month, but she was getting by. Then she was swindled by a home improvement company that installed new siding on her home she did not want or need.

The company "arranged" for a home equity loan to pay for the siding, but between high fees, high interest rates and numerous other equity stripping techniques, she ended up owing more than $46,000. The lender not only included her $8,000 mortgage at a much higher rate, but even stuck in an earlier $15,000 no interest city home repair loan which did not have to be repaid unless she sold her home. She could not keep up with all the payments, so the lender recently foreclosed on her, threatening to take the only asset she had - her home.

Ruth Morgan, who recently passed away at 88, was just another victim of predatory lending.

Predatory lenders target specific groups, usually low-income, minority and elderly homeowners who have built equity in their homes, with high-pressure marketing. They often mislead the borrowers and charge excessive up front fees on the loan and will take secret commissions from loan funders (yield spread premiums) to sign up borrowers at high interest rates. Predatory lending practices include frequent loan flipping, balloon payments, excessive origination fees, prepayment penalties, single premium credit life insurance, and lending without regard to benefits to borrowers or the ability of the borrower to repay the loan.

Unbelievably, most of these predatory lending practices are legal in Ohio. Consumer advocacy groups have asked the legislature to protect Ohio's homeowners but most predatory lending legislation has run into resistance and stalled in committee.

Worse yet, in October, the Ohio House passed a proposal, House Bill 386, that all but guarantees that predatory lenders will roam unchecked in Ohio for at least the next two-and-a-half years. The plan should be named the "Predatory Lenders Protection Act." Its passage in the House was a win-win for predatory subprime lenders in Ohio and now goes to the Ohio Senate, which will take it up soon.

 

Since there are no effective laws to protect homeowners from home equity loan sharks, cities such as Dayton, Cleveland and Cincinnati have passed or introduced anti-predatory lending measures in an attempt to protect their citizens. If passed, the House plan would put a stop to these measures. The plan prohibits cities from taking any action to regulate the financial services industry, by establishing the state's preemptive power.

This is premature. State preemption of local ordinances only makes sense if the state has adequate consumer protection laws against predatory lending in place. It may be reasonable to suggest that the state, not cities, is in the best position to regulate predatory lending, provided that the state has adequate laws to protect homeowners. But the plan doesn't offer any state protection while preempting cities from taking action.

Rather than offering any new protections, the House plan simply calls for a committee to come back with recommendations by the end of 2003. At that time, legislation would have to be proposed, debated and - maybe, someday -passed.

Meanwhile, of course, local jurisdictions would be subject to the state's preemptive power when it comes to regulating predatory lenders. Under the cynical guise of investigating the impact of predatory lending practices, well-financed lending industry lobbyists managed to effectively squelch any action on this issue prior to 2004.

Industry officials contend that the recently updated Ohio Mortgage Broker Law goes a long way towards addressing predatory lending. However, the Ohio Mortgage Broker Law does little more than require brokers to obtain a license in order to do business (honorable or not) in the state. Even the law's lead sponsor testified that the purpose of that legislation was not to address predatory lending.

The state of Ohio needs to restore integrity and fairness to home mortgage lenders and put a halt to the predatory lenders who prey on susceptible homeowners.

It's time for the Ohio Senate and the governor to stop the proposal backed by the Ohio House. Let's not give unscrupulous lenders a long-term license to strip home equity from vulnerable homeowners, like Ruth Morgan, who work their whole lives to achieve the American dream.

 

What Can You Do?
1. Send letters to your State Senators urging them to oppose HB 386. You can use the sample letter on the next page. Also encourage them to pass anti-predatory legislation.
2. Send letters to your State House members expressing your disappointment for the passage of HB 386, and encourage them to pass anti-predatory legislation.
3. Contact your local media and tell them about predatory lending practices occurring in your community and write letters to the editor.

For more information, contact COHHIO at 614/280-1984.


Predators, Banks Win; Poor Lose
Up against the State's well-heeled banking lobby, supporters of Dayton's "predatory lending" ordinance didn't have a chance.

Dayton has adopted rules that would make it more difficult for shady lenders to take advantage of people looking to capitalize on the equity in their homes. Predatory lenders mortgage naive borrowers to the hilt, and they're a national, well-documented problem. It's only because the state has chosen not to confront the bad guys that Dayton acted. But legitimate bankers say the regulations set a bad precedent. What if every city adopts its own banking rules, they complain.

Last week the Ohio House heard the bankers' pleas and passed legislation to keep cities out of the banking-regulation business. But lawmakers did next to nothing to protect consumers. (The legislation calls for a commission to study the problem for two long years.)

Cities would be happy to defer to the state if the state would offer meaningful protection. Predatory lending is a problem mainly in cities and in poor communities, where education levels tend to be relatively low. Offending lenders make deals legitimate bankers wouldn't try with more-informed consumers. If lenders did succeed with predatory tactics on people of means, there would be a law against those tactics.

The victims in this controversy are not honest bankers. The victims are the poor. It's shameful that lawmakers could be so confused.

Reprinted with permission - Dayton Daily News, October 22, 2001.

 

*Sample Letter to Ohio Senate*
Honorable ...
Ohio Senate
Statehouse
Columbus, Ohio 43215

Dear Senator ...:

I am writing to ask you to oppose H.B. 386 which is currently pending in the Senate. Instead of protecting homeowners, this bill all but guarantees that predatory lenders will go unchecked for at least the next two-and-a-half years. The bill, would be a win-win for predatory lenders doing business in Ohio.

Loans become predatory when lenders target specific groups, usually low-income, minority or elderly homeowners with equity in their homes, with high pressure marketing, charge excessive fees, frequently refinance or “flip” the loan, and often mislead the borrower. Unfortunately, most predatory lending practices are legal in Ohio.

[USE A LOCAL EXAMPLE OF A VICTIM, IF YOU KNOW A SPECIFIC STORY]

Predatory lending not only has a devastating impact on individual homeowners but can help to destabilize neighborhoods as foreclosures rise. Some predatory lenders use equity stripping techniques targeted to homeowners who have been assisted by local community development initiatives designed to increase homeownership and help existing homeowners make needed home repairs. Even some homeowners assisted by charitable efforts such as Habitat for Humanity have become victims of predatory lending.

In the absence of state law to adequately protect homeowners, some cities have passed or introduced anti-predatory lending measures in an attempt to defend their citizens. On its face, it may be reasonable to suggest that the State, not cities is in the best position to regulate predatory lending provided that the State has adequate laws to protect homeowners. Since this has not yet happened, H.B. 386 is premature.

The bill sets up a Predatory Lending Study Committee, to develop a report with recommendations by the end of 2003. Then legislation would have to be proposed, debated and maybe someday passed. This unnecessary delay tactic only serves to continue predatory lending for the foreseeable future.

I am confident that a legislative remedy to predatory lending practices can be crafted without stopping legitimate sub-prime lending which offers those with blemished credit an opportunity to have access to needed funds.

If H.B. 386 is enacted, it will essentially give a license to unscrupulous lenders to continue to strip the home equity from vulnerable homeowners, who work their whole life to realize their American Dream.

I appreciate your consideration of this issue.

Sincerely,

 

 

 

How to Contact... & COHHIO Staff
NATIONAL
National Coalition for the Homeless. Hotline:
202/775-1372 or www.nationalhomeless.org.

National Low Income Housing Coalition
www.nlihc.org

President Bush
1600 Pennsylvania Ave NW, Washington DC 20500; 202/456-1414; 202/456-2461 (fax)
president@white house.gov

Senators Voinovich & DeWine
United States Senate, Washington, DC 20510
Voinovich - 202/224-3353; 202/228-1382 (f)
Voinovich - voinovich@voinovich.senate.gov
DeWine - 202/224-2315; 202/224-6519 (f)
DeWine - senator_dewine@dewine.senate.gov

Representatives
United States House of Representatives
Washington, DC 20515; 202/224-3121

STATE
Governor Taft
77 S. High St., Columbus, Ohio 43215
614/466-3555; 614/466-9354 (fax)

Ohio Senate
State House, Columbus, Ohio 43266-0604
614/644-5466 (fax-R); 614/644-1982 (fax - D)

Ohio House of Representatives
77 S. High St., Columbus, Ohio 43215
614/644-9494 (fax)

Legislative Directories are available by contacting us: COHHIO - 35 E Gay St, Ste. 210,
Columbus, OH 43215-3138; 614/280-1984; 614/463-1060 (fax); www.cohhio.org.

 

Newsletter of the Coalition on Homelessness and Housing in Ohio (COHHIO) November 2001 • Volume 6 • Issue 10. Editor: Susan Francis

COHHIO is a coalition of organizations and individuals committed to ending homelessness and to promoting decent, safe, fair, affordable housing for all, with a focus on assisting low-income people and those with special needs.

COHHIO Staff
Bill Faith, Executive Director; Pam Argus, Associate Director; Rebecca Bartholomew, AmeriCorps Program Coordinator; Kevin Blackledge, Youth Empowerment VISTA, Susan Francis, Communications Coordinator; Janet Holcomb, Administrative Assistant; Jowana Jenkins, OCRP VISTA; Cathy Johnston, Advocacy Coordinator; Angela Lariviere, Youth Empowerment Coordinator; Jill Russ, Section 8 Project Coordinator; Mary Scott, AmeriCorps Program Support Administrator; Rick Taylor, Housing Policy Director; Ande Ucubagabriel, Finance Director; Kurt Weidner, AmeriCorps Leader and Spencer Wells, Tenant Outreach Coordinator. 35 E. Gay St., Suite 210, Columbus, Ohio 43215-3138; 614/280-1984; 614/463-1060 (fax); cohhio@cohhio.org; http://www.cohhio.org.

 

 

Costs of Predatory Lending...
According to a recent report published by the Coalition for Responsible Lending in North Carolina, predatory lenders cost homeowners in this country an estimated $9.1 billion on an annual basis. This estimate is based upon components of the following three predatory lending practices:

Equity Stripping–Predatory lenders charge borrowers exorbitant fees, which are routinely financed into the loan. These costs result in substantially higher payments while the loan is outstanding and are stripped directly from the equity of the home when a borrower refinances or sells his or her house. At the loan level, equity stripping occurs when borrowers are sold loans that (1) finance credit insurance, (2) require exorbitant up-front fees, or (3) include prepayment penalties on subprime loans. They estimate that financed credit insurance costs $2.1 billion each year, exorbitant fees costs $1.8 billion each year, and prepayment penalties cost $2.3 billion each year.

Rate-Risk Disparities–Predatory lenders charge borrowers a higher rate of interest than their credit histories would indicate is justified–either by the lender’s or its affiliate’s own underwriting criteria. In fact, one recent study used sophisticated statistical modeling to show that 100 basis points of all subprime lending (and presumably much more for predatory lenders) could not be explained by credit risk. We estimate that total excess interest costs 600,000 families $2.9 billion each year.

Excessive Foreclosures–Predatory lenders make loans without regard to a borrower’s ability to repay. Consequently, homeowners struggling to make payments under the combined weight of excessive fees and high interest rates often pay the ultimate price–the loss of their home. Perhaps of even greater concern is the pending wholesale loss of neighborhoods of homeowners, particularly in African-American communities. While this report discusses foreclosures, it does not attempt to quantify the costs.

For additional information or to obtain a copy of the report, please visit the Coalition for Responsible Lending’s web page at: www.responsiblelending.org or contact their office at 919/956-4400.

 

 

Coalition on Homelessness and Housing in Ohio Membership

Name
Organization
Address
City, State, Zip
Phone, Fax, County
Individual: _____ $35 (Regular) _____ $75 (Benefactor) _____ $250 (Sustainer)
_____ $10 (Low-Income) _____ Fee Waiver Requested
Agency (according to budget):
_____ $35 ($100,000 or less) _____ $75 ($100,001 - $250,000)
_____ $125 ($250,001 - $500,000) _____ $200 ($500,001 - $1 million)
_____ $250 ($1 million-$1.5 million) _____ $300 (over $1.5 million)
Please send your tax deductible check to COHHIO at 35 E. Gay St, Ste. 210, Columbus, Ohio 43215.
Thank you for your support!

 

 

House-Senate Conferees Agree on HUD Budget...
After rescheduling the Conference Committee several times over the past couple of weeks, members of the House and Senate finally reached consensus on the Fiscal Year 2002 appropriations for the Department of Housing and Urban Development (HUD). The Shelter Plus Care (S+C) renewals were fully funded (see related article in newsletter), but as for the OTAG/ITAG project, the results were not as positive. Because of an apparent violation of a law relating to appropriations and budget authority (the Anti-Deficiency Act) by the Office of Multifamily Assistance Restructuring (OMHAR), funds that HUD has under contract with nonprofit and tenant groups working with tenants in project-based Section 8 buildings through OTAG and ITAG grants may not actually be available for disbursement. In spite of an effort to add $15 million to the budget in an attempt to correct this mistake, Conferees opted for a different approach. It appears as though the “fix” could end up in the Department of Labor/Department of Health and Human Services appropriations bill, which also happens to be where Mark-to-Market reauthorization ended up. This is by no means a comprehensive assessment, and frankly, the details will change before all is said and done. If you would like additional information on the OTAG/ITAG situation, contact Jill Russ at COHHIO at 614/280-1984.

Beyond the aforementioned issues, here is a brief run-down of FY 2002 spending:
• Increases the Department of Housing and Urban Development (HUD) $1.8 billion over FY01, bringing FY02 funding to $30 billion;
• Housing for the nation’s elderly (Section 202) is funded at the President’s request of $783 million, $4 million above FY01;
• Disabled Housing (Section 811) is funded at $241 million, $29 million above FY01 and $23 million above the President’s request;
• The Housing Certificate Fund, which fully funds Section 8 renewals and tenant protections, is increased $1.7 billion over FY01, bringing FY02 funding to $15.6 billion. Includes $144 million to fund 26,000 new Section 8 vouchers;
• Modernization for public housing is funded $2.84 billion, $157 million below FY01 and $550 million above the request;
• Severely distressed public housing (HOPE VI) is funded at $574 million, the same as the President’s request and FY01 level;
• Public Housing Operating Subsidies are funded at $3.5 billion, $110 million above the request and $253 million above FY01. These additional resources are provided instead of providing funding for duplicative programs under the Public Housing Drug Elimination Programs which receives no funds as requested;
• Homeless programs are funded at $1.123 billion, including full funding to renew Shelter Plus Care contracts, the full amount requested; 
• Housing Opportunities for Persons with AIDS (HOPWA) is increased to $277 million, $19 million above last year and the same as President’s request; 
• The Native American Block Grant is funded at President’s request $649 million, the same level available last year;
• The Community Development Block Grant (CDBG) is funded at $4.34 billion;
• Community Development Financial Institutions (CDFI) is increased $12 million over the budget request, bringing FY02 funding to $80 million, $38 million below last year’s level;
• The Office of Federal Housing Enterprise Oversight is funded at $27 million, $5 million above FY01 and the same as the President's request;
• Neighborhood Reinvestment Corporation is funded at $105 million, $15 million above FY01 and $10 million above the budget request;
• Includes language as requested to create a new Adjustable Rate Mortgage program in FHA; and
• Includes language as requested increasing the statutory loan limits for FHA multifamily programs.

 

 

Over 1,400 Endorse the National Affordable Housing Trust Fund Campaign
The National Affordable Housing Trust Fund Campaign is working for the establishment of a National Affordable Housing Trust Fund to build and preserve 1.5 million housing units for the neediest households over the next 10 years.

The National Low Income Housing Coalition is asking any organization to sign on if you support the following:

dedicating billions of dollars in new federal resources to
establish a DEDICATED source of revenue (a Trust Fund)
to BUILD and PRESERVE affordable RENTAL housing
mostly for the lowest income Americans.

If you haven't already, please sign on to the National Affordable Housing Trust Fund Campaign. If you've already signed on, thank you! Please encourage your local government to pass resolutions in support of the National Affordable Housing Trust Fund Campaign. A list of Ohio endorsers is on the next page.

A full policy proposal is available at www.nhtf.org


SIGN ON SHEET

Name of Organization
Name of Primary Contact
Mailing Address
City, State, Zip
Email, Phone

_____ Check here if you would like to be contacted to help out with the campaign.

Please mail, fax or email to:
National Low Income Housing Coalition
1012 14th Street, NW, Suite 610, Washington, DC 20005
email: kim@nlihc.org fax: 202/393-1973 phone: 202/662-1530

 

Endorsers:

ACCESS, Inc.
Akron/Summit Community Action Agency
Akron Area Association of Churches
Akron Area Board of Realtors
Akron Community Health Resources
Akron Health Department
Akron Metropolitan Housing Authority
Akron Planning Department
Alpha Phi Alpha Homes
American Home Buyers
Amethyst
Area Agency on Aging
Avondale/Walnut Hills Redevelopment Foundation, Inc.
Bank One
Barberton Area Community Ministries
Battered Women's Shelter
Catholic Commission
Catholic Social Services
Charter One Bank
Christmas in April
Cleveland/Cuyahoga County Office of Homeless Services
Cleveland Neighborhood Development Corporation
Coalition on Homelessness & Hsg in Ohio
Columbus City Council
Community Action Harmony House
Community Health Center
Community Legal Aid
Community Shelter Board
Community Support Services
Corp. for Ohio Appalachian Development
Crossroads
Daybreak
Diocesan Social Action Office of Cleveland
Dominion
East Akron Neighborhood Dev't Corp.
Emergency Assistance Services,
Catholic Charities
Emmanuel Community Care Center
Fair Housing Advocates
Fair Housing Contact Services
Famicos Foundation
Family & Cmty Services - Portage County
Family Services
Fifth Third Bank
First Grace Hunger Program
Firststar Bank
FirstMerit Bank
Forest City Residential Group
Founders Path
Friends of the Homeless
Greater Akron Cmte for Better Housing
Greater Cincinnati Coalition f/t Homeless
H.M. Life Opportunity
Habitat for Humanity
Homebuilders Association of Greater Akron
Housing Network
Humility of Mary Housing
International Institute
Interfaith Hospitality Network of
Greater Cleveland
Jireh Development Corporation
Key Bank
League of Women Voters
Legacy III, Inc.
Licking County Coalition for Housing
Local Initiatives Support Corporation
Lorain County Task Force for the Homeless
Metropolitan Strategy Group
Mosyjowski & Associates Engineers
National City Bank
Nazareth Housing Development Corp.
NCS of Barberton
Neighborhood Development Corporations Association of Cincinnati
Neighborhood Properties
New Home Development
North Coast Community Homes
North River Development Corporation
Northeast Ohio Coalition for the Homeless
Ohio Savings Bank
Over the Rhine Housing Network
Partnership for Lincoln Area
Neighborhoods
Portage Area Transitional Housing
RESTOC - Race Street Tenants' Co-op
S&L Properties
SAFE LANDING
Salvation Army PASS Program
Second National Bank
Sisters of Mercy Regional Community of Cincinnati
Snyder & Snyder Realty
Summit County Children's Services Board
Summit County Department of Community and Economic Development
Summit County Housing Trust Fund
Summit Housing Development Corporation
Summit Twin Oaks Realty
The Contact Center
The Drop-In Center
Third Federal Savings
Tri-County Independent Living Center
University Park Neighborhood Association
Veterans Services Outreach Referral
Program
Volunteers of America Crossroads
Volunteers of America - Ohio River Valley
W.O.M.E.N.
Westside Council of Block Clubs
Westside Neighborhood Development Corp.
WINGS Enrichment Center
YWCA of Columbus

 

 

 

Good News From Washington, Good Work, Shelter Plus Care Supporters!
Thanks to all from Ohio who wrote, called, faxed and visited their Congressperson, in unison with others across the country. As a result of the hard work, full funding for Shelter Plus Care renewals are included as part of the Homeless Assistance Grants, as passed by the conference committee. This victory equals $100 million in funding for renewals and is expected to benefit many areas of Ohio.

The full text of the conference report (which includes both the bill language and a joint explanatory statement prepared by the staff of the conference committee) is in the November 7 Congressional Record, available on the Thomas web site (thomas.loc.gov). "Considering where we were after the House bill came out, and the mounting pressures to avoid new spending, this is a real triumph, thanks to everyone who has worked so hard. This year's campaign goes down as a textbook example of how people who care about an issue can get results in Washington, even if their "constituency" is not rich or powerful", says Steve Berg of the National Alliance to End Homelessness.

The Conference Report will now be voted on by the House and Senate, and with no amendments allowed, passage is expected. It will then go to the President for his signature, which is also expected.

 

 

HUD Awards More Than $604 Million in Housing Assistance for Low-Income Elderly
Housing and Urban Development Secretary Mel Martinez announced more than $604 million in housing assistance for the nation’s low-income elderly. This means it will be easier for almost 7,600 low-income senior citizens to find affordable, decent and safe places to live.

The assistance is going to non-profit groups in 43 states and Puerto Rico to create more that 6,000 federally subsidized apartments under HUD’s Section 202 Program for senior citizens.

“Our senior citizens should never have to worry about being able to afford a safe and decent place to live,” Martinez said. “The money that we awarded today is one way we can give back to a generation of Americans who have given us so much.”

In addition to funding construction and rehabilitation projects to create the apartments, the HUD grants will subsidize rents on the apartments for five years so that residents will pay only 30 percent of their income as rent.

To be eligible for the assistance a household must be classified as “very low income,” which means an income less than 50 percent of the area median. Nationally , this means an income of less than $18,375 a year.

HUD provides two forms of Section 202 funds to non-profit groups:
- Capital advances. This money covers the cost of developing the housing. It does not need to be repaid if the housing is available for occupancy by very low-income seniors for at least 40 years.
- Project rental assistance. This money covers the difference between the resident’s contribution toward rent and the cost of operating the project.

Of the 21.4 million households headed by older persons in 1999, the most recent data available, 19.7 percent were renters, according to The American Housing Survey for the United States: 1999. The median family income of older renters was $12,566. The Survey also notes that 6.8 million elderly households paid more than they can afford - defined as more than 30 percent of their income - for housing. Others live in housing that is either substandard or fails to accommodate their physical limitations or needs for assistance.

The HUD report, Housing Our Elders: A Report Card on the Housing Conditions and Needs of Older Americans, identified four serious challenges to elderly housing conditions in the U.S.: adequacy, affordability, accessibility and appropriateness.

Some 384 groups applied for the Section 202 assistance and 157 received grants, totalling $604 million. Ohio received $27.7 million in funding. The following agencies received funding: NCSC Housing Management Corp., Canton; Catholic Charities Facilities Corp., Cleveland; National Church Residences, Columbus; Lutheran Social Services of Central Ohio, Columbus; Cortland Affordable Senior Housing, Cortland; Warren County Community Services, Deerfield; Marysville Housing, Marysville; Lutheran Homes Society, Oak Harbor; and AHEPA National Housing Corp., Toledo.

 

 

COHHIO Awarded $100,000 for Work on Predatory Lending...
Earlier this month, COHHIO was awarded $100,000 through the U.S. Department of Housing and Urban Development’s (HUD’s) Fair Housing Initiative Program (FHIP). The project will provide education and outreach activities targeted specifically at addressing barriers to fair housing choice, such as mortgage lending discrimination and abusive or predatory mortgage lending practices, to traditionally underserved populations, such as the elderly and low-income minority homeowners in the State of Ohio. By conducting these activities and providing support to community organizations and service providers, the applicant will work to address these barriers and bring about more equality in the housing market. The applicant will also develop materials that can be used in outreach to cooperating mainstream financial service institutions. COHHIO would also like to congratulate the following organizations, who received FHIP awards: The Cuyahoga Plan of Ohio, Inc., Cleveland - $249,992 - Private Enforcement Initiative (PEI); Homeownership Network Services, Columbus - $99,871 - Education and Outreach Initiative; Columbus Urban League - $100,000 - Education and Outreach Initiative; Fair Housing Resource Center, Painesville - $185,199.54 - Private Enforcement Initiative (PEI); and Fair Housing Center, Toledo - $100,000 - Education and Outreach Initiative.

 

 

HUD Awards Millions to Help People With Disabilities Find Housing
Housing and Urban Development Secretary Mel Martinez announced nearly $150 million in grants that non-profit groups will use to create approximately 1,600 affordable homes for people with disabilities.

“This funding which may be used to construct new housing, or acquire or rehabilitate existing housing will help ease the housing frustration of very low income people with disabilities across the country,” said Martinez. “We are firmly committed to making more housing units available nationwide to very low income people with disabilities.”

The housing, most of which will be newly constructed, typically is small apartment buildings for no more than 18 people, group homes for three to four people per home, or condominium units. Residents will pay 30 percent of their income for rent and the federal government will pay the rest.

The grants are awarded under HUD’s Section 811 program, which provides housing for households with one or more very low-income individuals, at least one of whom is at least 18 years old and has a disability, such as a physical or developmental disability or chronic mental illness. The term “person with disabilities” also includes two or more people with disabilities living together, and one or more persons with disabilities living with one or more live-in attendants. The program allows persons with disabilities to live independently in their communities by increasing the supply of rental housing with the availability of supportive services.

To be classified as “very low-income,” a household income cannot exceed 50 percent of the area median income. However, most households that receive Section 811 assistance have an income less than 30 percent of the area median. Generally, this means that a one-person household will have an annual income of about $11,025, and two-person household will have an income of about $12,600.

HUD provides the funds to non-profits in two forms:
- Capital advances. This is money that covers the cost of developing the housing. It does not need to be repaid as long as the housing is available for at least 40 years for occupancy by very low-income people with disabilities.
- Project rental assistance. This is money that goes to each non-profit group to cover the difference between the residents’ contributions toward rent and the cost of operating the project.

A total of 248 groups applied for funding, with 139 groups in 40 states receiving the grant funding. Ohio received $7,574,200. The following agencies received funding: Wood County Village, Bowling Green; Judson Village Retirement Community, Cincinnati; Jewish Community Housing, Cleveland Heights; Community Health Center, Cuyahoga Falls; Transitional Living, Hamilton; Mercy Outreach Ministries, Northwood; Ottawa Residential Services, Port Clinton; and Community Health Center, Stow.


Earned Income Credit Kits Available
Earned Income Credits (EIC) can make a real financial difference for low income workers. Help is available to you to make the EIC information accessible to the clients you serve. The Center on Budget and Policy Priorities has the most recent Earned Income Credit Campaign Kit for 2001 available for organizations wishing to promote the EIC within local communities. Helping Workers Boost Their Paychecks, A Guide to Earned Income Credit Outreach Strategies may be found at www.cbpp.org (under the last subject listing at the bottom-center of the page, click on the Earned Income Tax Credit Campaign Kit 2001.) For further information, contact the Center on Budget and Policy Priorities, 820 1st Street, NE, #510, Washington, DC 20002, 202/408-1080.

 

 

Columbia Park Residents Fight for Their Homes
Mike Foley with the Cleveland Tenants Organization has been working with Columbia Park residents to keep their housing affordable. Their story follows.

In July of this year, residents of Columbia Park, in Olmsted Township, on the far west edges of Cuyahoga County, began contacting Congressman Kucinich regarding the new owner of the property. One of the major problems with the new owner was their intent to enact a severe rent increase. A staff member from Kucinich's office met with over 60 Columbia Park residents. They related the problems they were having with the new management including a reduction of staff and an average rent increase of 18 percent.

This rent increase simply puts housing out of reach for many of the residents. Columbia Park has 1,060 manufactured homes and the average age of the residents is 76. The sole income for most of the residents is social security.

The next resident meeting at Columbia Park had over 500 participants. Resident after resident expressed their utter frustration and sadness, at already having to make hard decisions with their limited income. Many were already unable to pay for all the current necessities of life, plus prescriptions for medicine. Adding the huge rent increase on top of this, left the residents in dire circumstances.

The residents created the Columbia Park Home Owners and Tenants Association and developed the following goals: 1) Immediately seek ways to reduce the new rent increase; 2) Ensure that the park will be kept as affordable manufactured housing for the long term; and 3) Attempt to remove or change the current owners and replace them with an entity either made up of or approved by the residents.

At this point, Columbia Park management refused to allow the tenants to meet in the social hall. Another location was found and another meeting was held, with Congressman Kucinich in attendance, that attracted over 1,100 residents.

A three-prong strategy was developed to gain attention for the residents’ demands. The three steps were: 1) Residents agreed to initiate a rent strike based on the contention that there were duties under the Ohio Revised Code which the owner was not complying with, and that the rent increases, were, as a matter of law, unconscionable; 2) Residents, along with the Olmsted Township Trustees, including potential Gubenatorial Candidate Tim Hagan, and Congressman Kucinich approached the County Commissioners about taking the property through Eminent Domain. The Commissioners reacted positively to the request, and have hired a company to conduct an appraisal as a first step in the process; and 3) The residents felt, that short of Eminent Domain procedures occurring, the residents themselves should develop the capacity to purchase the park, if a deal could be negotiated.

In September 2001, over 500 of the Columbia Park households began the largest rent strike in Ohio's history. Congressman Kucinich, with over 75 of the residents, personally delivered the rent checks totaling over $145,000 to the Berea Municipal Court. In October, another 270 joined the rent strike to bring the current total up to 786 households engaged in the rent strike, amounting to over $370,000. A trial is currently set for late November to determine whether the rent increase was legally unconscionable.

It is unclear at this point how this action will turn out. The residents and their advocates are asking the Courts to make new case law in this area. They are also asking the county to engage in an eminent domain practice which it has never done before - Taking property to preserve affordable housing. There is potential for some significant victories in terms of affordable rents and county action.

On the other side, the Columbia Park owners, a partnership from New York, have significant resources available to them and have hired both a strong local law firm and a public relations specialist.

The battle certainly is not over. If you would like additional information, or would like the support the Columbia Park residents efforts, please contact Mike Foley at the Cleveland Tenants Organization at 216/621-1571.

 

 

Three Biggest Financial Challenges for Nonprofits
Delena Wilkerson is executive director of the Chicago-based Nonprofit Financial Center (NFC), which strengthens communities by enhancing the financial stability of nonprofits and the management capability of their staff. In a recent interview she suggested the following areas of focus for nonprofits wishing to attain financial stability.

Working Capital
The least planned for, but most likely to occur event in the operating cycle of a nonprofit is a cash flow shortage. It’s vitally important for nonprofits not to address those shortages by using staff paychecks to pay the rent, or not paying the landlord altogether, or forfeiting their future by not making payroll taxes in a timely manner to the IRS. Nonprofits should have 90 days of cash operating reserve in the bank, unencumbered and readily accessible (e.g., not tied up in a CD). Because the 90-days’ worth can be a challenge, an alternative is a combination of cash (at least 45 days’ worth) and a line of credit (45-60 days).

This working capital is designed to cover short-term needs such as when a donor’s pledge is late or contract payments are deferred to a future period. These are timing issues that all businesses and nonprofits have to address, and they’re part of any normal business operating cycle. The exception is the extremely rare situation when a nonprofit has every dollar it needs at the beginning of its fiscal year! I’m not talking in this situation about having monies available to cover a deficit; that’s a separate matter.

Operating Reserves
One of the best demonstrations of good stewardship that a board can offer is establishing operating reserves to protect the long-term position of the institution in its care. This is the crux of a board’s fiduciary responsibilities. Operating reserves serve a dual purpose: (1) they buy time by covering disasters like a fire or the loss of a major donor; and (2) they cover what I call “going out of business with dignity.” In other words, they give the nonprofit enough time to transfer clients to other agencies. If you’re a social service nonprofit, your first priority should be to protect the people you serve; remember, the community didn’t just hand you this right. Revenues also give employees time to find gainful employment - this, I consider justice - since some accommodation needs to be made to help them in this transition.

There also needs to be enough money for the CEO/executive director and the chief financial officer to cover legal bases such as corporate filings, the sale of assets to liquidate debt, or the transfer of assets to another 501 (c)(3) nonprofit. One of the keys of going out of business as a charitable nonprofit is that all debt gets accommodated somehow. This can take about a year, so you must have adequate operating reserves.

Strategic Financial Planning
The third challenge is strategic financial planning which ties back to the purpose of your operating reserves. Most nonprofits have strategic plans, but most are incomplete because they don’t include financial position objectives and they don’t identify sources for the monies required to initiate whatever expansion the plans might include.

When a nonprofit is expanding into another geographic area or broadening its level of service because there is agreement that this work is mission critical, it needs to do so in a way that is not tied to the will of donors. If people in the county next to you are completely without needed services, you may not be able to wait to provide them until a funder agrees with you on the priority. Operating reserves allows you to self-fund your organization’s values and provide you with control over your own future. One of the mistakes we make is building our budgets and our operations around the will of donors instead of the will of the institution.

Article excerpted in the Ohio Association on Nonprofits newsletter, Ohio Nonprofits, from a longer article in the July/August 2001 issue of Common Ground, from the North Carolina Center for Nonprofits.

 

 

2001 HHS Poverty Guidelines
The Department of Health and Human Services (HHS) poverty guidelines is one version of the U.S. Federal Poverty Measure. The guidelines are issued each year in the Federal Register. The guidelines are a simplification of the poverty thresholds for use for administrative purposes - for instance, determining financial eligibility for certain federal programs, such as Temporary Assistance for Needy People (TANF).

The poverty guidelines are sometimes loosely referred to as the “federal poverty level” (FPL).

 

Size of 48 Contiguous
Family Unit States and D.C. Alaska Hawaii

 

1 $8,590 $10,730 $9890

2 $11,610 $14,510 $13,360

3 $14,630 $18,290 $16,830

4 $17,650 $22,070 $20,300

5 $20,670 $25,850 $23,770

6 $23,690 $29,630 $27,240

7 $26,710 $33,410 $30,710

8 $29,730 $37,190 $34,180

For each additional $3,020 $3,780 $3,470
person, add

 

Source: Federal Register, Vol. 66, No. 33, February 16, 2001, pp. 10695-10697.

 

Join Other Ohioans in Attending the Ending Homelessness Conference for People with Mental Illness and/or Substance Use Disorders
More than a dozen people from Ohio plan to attend the Ending Homelessness Conference in Washington, D.C., December 5 - 8, 2001. The group includes mental health supportive housing providers, Mental Health Board staff and consumers. Please contact Pam Argus at COHHIO, 614/280-1984, to connect with the Ohio group at the conference if you are attending. The brochure for the December national training, “We Can Do This! Ending Homelessness for People with Mental Illness and/or Substance Use Disorders”, is now available online at http://www.prainc.com/nrc/.

The event will take place December 5-8, 2001 at the OMNI Shoreham Hotel in Washington, D.C. and will feature whole and half-day training institutes and workshops focusing on the housing, treatment and support needs of people with mental illness and/or substance use disorders who are homeless. Attendees will hear representatives from national homeless advocacy groups and local service programs discuss the latest policy developments affecting housing and services, as well as strategies for building coalitions to end homelessness among individuals with mental health and/or substance use disorders.

 

 

COHHIO Youth Empowerment Program (YEP) Successes
Over the course of the YEP program currently and formerly homeless youth in Ohio have been able to gain input and have successes in the following areas:

• Interviewing and surveying over 700 children youth for input in identifying issues and designing the YEP program.

• The creation of 6 local and one statewide youth councils (Cleveland, Akron, Kent, Revenna, Columbus and Cincinnati)

• COHHIO provided over 1300 hours of leadership training to YEP members and other homeless youth residing in area shelters.

• YEP youth presented 225 hours of community presentations to local, state, national and international groups.

• YEP members organized and accomplished 846 hours of community service.

• COHHIO made it easy for YEP members to communicate with members throughout the state by:
- Providing 30 youth with lap top computers
- Creating a YEP list serv
- Creating a YEP website: http://tripod.members.com/yep2001

• We were successful in gaining input from and creating partnerships with over 100 youth serving agencies and organizations.

• YEP youth were successful in engaging in 214 hours of advocating for the needs of homeless youth.

Through our efforts YEP youth have been successful in:

• Gaining an increase in funding for education programs for children and youth.

• Creating the first ever state law that protects a homeless child's right to an education.

• Creating a statewide plan with Head Start to provide better services to the homeless.

• Negotiating a plan with the Ohio Campus Compact to start the process of creating policies that require better services and outreach to homeless and low-income students.

• Working with the Ohio Department of Development to change state shelter policies that discriminate against teenage boys.

• Creating a partnership with the United Nations to gain input into youth policies on an international level.

• Gaining youth representation on several local homeless and housing coalitions.

For more information, contact Angela Lariviere at COHHIO at 614/280-1984.

 

 

Energy Assistance Programs
The Ohio Department of Development (ODOD) offers several programs to help low-income Ohioans pay their utility bills and improve the energy efficiency of their homes.

Home Energy Assistance Program (HEAP)
HEAP is a federally funded program designed to assist eligible low-income Ohioans with their winter heating bills. Your HEAP benefit consists of a credit on your account each year. You will receive a voucher if you are a customer of a rural cooperative, municipal utility, use bulk fuel, or have a master metered account. If your household has a member who is age 65 or older and/or a member who is totally and permanently disabled, the household will be evaluated for an increased benefit.

HEAP Emergency Crisis Program (E-HEAP). The Emergency component of HEAP is administered by local delegate agencies throughout Ohio. E-HEAP assists households whose primary source and/or necessary secondary energy source (usually electricity) have been disconnected, are threatened with disconnection, or who have less than a ten-day supply of bulk fuel. Households are eligible to receive E-HEAP funds to restore or continue their utility services.

Percentage of Income Payment Plan (PIPP)
PIPP is a special payment plan that requires eligible customers to pay a portion of their household income each month to maintain utility service. PIPP protects customers from disconnection of service, as long as they follow the programs rules about monthly payments. However, the customer remains responsible for any unpaid balances on their bills. All gas and electric companies regulated by the Public Utilities commission of Ohio (PUCO) must offer this plan to their customers. If you are eligible to participate in HEAP, you are also eligible to participate in PIPP. PIPP customers must pay 10 percent of their monthly income to the company that provides their primary heating source, year round. During the winter months, customers must pay 5 percent or 3 percent, depending on income, to the company that provides their secondary heating source. PIPP is not available to customers of rural electric co-ops, municipal utilities, or users of delivered fuel.

Home Weatherization Assistance Program (HWAP)
HWAP is a federally funded, low-income residential energy efficiency program that reduces the energy use of qualified households throughout the state. HWAP services include attic, wall and basement insulation; blower door guided air leakage reduction; heating system repairs or replacements; electric baseload measures which address lighting and appliance efficiency, and health and safety inspections and testing. Services are based on the structure and energy use of the home. HWAP is administered locally by community action, social service, and local government agencies.

Universal Service Fund (USF) Targeted Energy Efficiency Services
The Universal Service Fund is monies set aside as a result of electric utility restructuring for use in a variety of assistance programs. The Targeted Energy Efficiency Services program provides consumer education and measures to reduce the household's electricity use. It is available to PIPP eligible Ohioans. Services provided will be based on electric usage, PIPP arrears, and an analysis of electric efficiency. This program is available after October 2001. Local authorized providers have not yet been identified.

 

Energy Assistance Programs Income Guidelines 2001 -2002

INCOME DEFINITION
Household income is defined as the gross income of all household members, except wage or salary income earned by dependent minors under 18 years of age. Head of household and spouse may never be considered as minors. Gross income includes wages, interest, annuities, pensions, social security, retirement, company-paid disability, public assistance, Supplemental Security Income (SSI), alimony, child support, unemployment benefits, Workers' Compensation, and any other indirect income such as utility allowances. For weatherization services, households that received assistance from Temporary Assistance for Needy Families (TANF), HEAP, or SSI during the preceding 12 months are income eligible.

2001- 2002 INCOME GUIDELINES

Size of Household Total Gross Household Income
1 up to $12,885
2 up to $17,415
3 up to $21,945
4 up to $26,475
5 up to $31,005
6 up to $35,535
7 up to $40,065
8 up to $44,595

For households with more than 8 members, add $ 4,530 per member.

QUESTIONS?
- If you have questions about HEAP or PIPP call HEAP’s Toll-free number at 800/282-0880.
- If you have questions about E-HEAP, contact the local provider in your area. A list of providers can be found at www.odod.state.oh.us/cdd/ocs/caamap.htm or by calling the toll-free number listed above.
- If you have questions about HWAP, please contact the local provider in your area. A list of providers can be found on the Internet at www.odod.state.oh.us/cdd/oee/providers.htm or by calling 614/466-6797.
- If you have questions about the USF Targeted Energy Efficiency Services, call 614/466-6797. A list of providers is available at www.odod.state.oh.us/cdd/oee.

ENERGY SAVINGS TIPS
The Office of Energy Efficiency can also provide information on low or no cost activities that will reduce the energy used for heating or cooling. Contact OEE for more information at 1-866-SAVNRGY. The ODOD's web address is www.odod.state.oh.us. The Community Development Division's Energy Help website can be accessed from ODOD's home page by clicking on the Energy Help icon or directly by typing www.energyhelp.odod.state.oh.us. Information provided by the Ohio Department of Development, Community Development division.

 

Save The Date

April 22-24, Columbus Marriott North

COHHIO's 2002 Annual Conference

COHHIO staff is busy planning for the 2002 conference. Please watch future issues of the newsletter or the web page for registration information.

 

 

Resources
PUBLICATIONS
Fair Housing Act Design Manual, originally published in 1996, has been revised and re-published, with a new Preface, by HUD's Office of Fair Housing and Equal Opportunity. To assist designers and builders in meeting the accessibility requirements of the Fair Housing Act, the manual provides comprehensive information about accessibility requirements that must be incorporated into the design and construction of housing covered by the Act. The Act's requirements apply to a broad range of housing units-buildings with four or more units built for first occupancy after March 13, 1991, both privately owned and publicly assisted, and regardless of type of ownership (sale or rental). To order the manual, visit HUD USER web site at www.huduser.org/publications/destech/fairhousing.html.

JOBS
Community Relations Director, Community Shelter Board, Columbus. Senior staff position who is responsible for working to increase public support for ending homelessness consistent with CSB's Ends policy. 1) Increase the public awareness and support of CSB's mission, programs, and projects. Serve as a liaison between CSB, the media, community partners, partner agencies, and the general public. 2) Manage CSB's public policy advocacy. Serve as a liaison between CSB and public officials (local, state, and federal). Organize activities to effectively involve current/formerly homeless persons, CSB partner agencies, CSB trustees, and local supporters in CSB's advocacy efforts. This position will work closely with the Executive Director and senior staff to develop an overall community relations plan, to consult regularly on strategic and tactical actions, and to share in external communications. For more information about CSB, go to www.csb.org. Reply to: CSB, 67 Jefferson Avenue, Columbus, Ohio 43215.

OTHER
Workers Compensation Premium Savings. COHHIO is now accepting applications for admission into the COHHIO/Frank Gates Workers Compensation Group. By being part of the group, you can save hundreds or thousands of dollars on your workers compensation premiums. By submitting a simple form to Frank Gates, you can find out how much you can save in the program. After reviewing your savings potential, you can then decide if you would like to be in the group. Don't delay in requesting the simple form as the deadline for admission into the program is November 30. For more information, contact Al Gardner of Frank Gates at 614/793-8000 or Susan Francis at COHHIO at 614/280-1984 or susanfrancis@cohhio.org.

(614) 280-1984 Voice
(614) 463-1060 Fax

cohhio@cohhio.org