[Watch] Economic Insights from Lower-Income Communities: Findings from the 2024 Community Perspectives Survey

Sydney Diavua

Good afternoon and welcome to Connecting Communities. Thank you for joining us for today’s webinar, Economic Insights from Lower Income Communities, Findings from the 2024 Community Prospective Survey. I’m Sydney Diavua, Assistant Vice President of Community Development at the Federal Reserve Bank of St. Louis and I will serve as your moderator for today’s session.

I would now like to take the time to introduce our speakers for today. Michael Butchko, the Vice President of Business Intelligence for NeighborWorks, where he provides NeighborWorks America and the NeighborWorks network with cutting edge technology and data visualization experts to communicate national and local impact.

Violeta Gutkowski, Associate Economist in the research division at the Federal Reserve Bank of St. Louis. She contributes to the writing of the Beige Book and reports on regional economic conditions to the bank staff and president.

Melissa Johnson, Managing Director of State Strategies for the National Skills Coalition, where she leads the organization’s efforts to advance workforce policy solutions at the state level.

Frank Woodruff, Executive Director for the Community Opportunity Alliance, where he shapes policies, fosters collaboration, builds organizational capacity, and produces cutting edge research to advance a field of community and economic development.

Before we get started, let’s move to slide five where we can take care of a few housekeeping items. The views expressed during this session are those of the speakers and are intended for informational purposes. They do not necessarily represent the views of Fed Communities or the Federal Reserve System. Microphones have been muted. Please use the Q&A feature throughout the session to submit questions. We promise to get to as many of them as possible during the Q&A portion of this presentation.

Let’s keep the conversation going and engage with us on X, formerly known as Twitter, using the hashtag #connectingcommunities and visit FedCommunities.org for a variety of community development articles, resources and data across the Federal Reserve system. And finally, this session will be recorded, and the presentation, video, and podcast will be available on FedCommunities.org within two weeks of this event.

I would now like to turn the presentation over to my St. Louis Fed colleague Violeta Gutkowski. Violeta, the floor is yours.

Violeta Gutkowski

Thank you, Sydney. So let me start by giving you a background of the survey. So starting in 2020, the Federal Reserve system began conducting surveys to better understand the impact of COVID-19 pandemic on low- and moderate-income communities. While we’re no longer under a pandemic lower income and under-resourced communities continue to face obstacles that may hinder the full participation in the economy. In April of this year, we have implemented a national survey to learn about the economic conditions of LMI communities as well as to uncover the needs and capacity of entities serving them.

We had 937 responses from non-profit organizations, financial institutions, government agencies, and other community organizations which all served LMI communities. We hope that this unique and timely information will help equip decision makers with key insights for developing approaches to foster economic security in LMI communities.

So moving on to our first slide on key findings. Overall respondents reported poor economic mobility conditions for LMI populations. The survey covered several important factors affecting LMI communities such as health, education as well as internet access. However, in the interest of time, I will only focus on two key areas affecting economic mobility, which are labor and housing.

I encourage you all to read the reports to learn more about all other conditions overall on various different aspects which are very important affecting LMI communities, which I won’t be covering today.

So employment conditions were good due to people’s ability to find work. Yet income was not enough. Also, housing was among the worst performing indicators with no improvement in outlook for the rest of the year. As one respondent noted, severe housing, overcrowding, high costs and unstable living arrangements make it difficult to maintain steady employment, focus on education or improve economic stability. With respect to entities, we found that there was overall good ability to serve despite high demand and rising expenses. We found that funding or fundraising was the top challenge affecting organizations and about 60% of entities reported steady or improving financial health.

So now let’s move on to the next slide please, about economic mobility. Economic mobility in the survey refers to whether respondents see conditions for all various factors that contribute to economic mobility leading to movement upwards or downwards. The survey question was not intended to measure whether economic mobility was occurring, rather whether we are interested in this measure as an overall understanding of economic conditions of LMI communities. So over half of respondents reported that conditions at the time of the survey were favoring downward economic mobility and those conditions had worsened over the past year.

Respondents were mixed on what they expected economic conditions or economic mobility to be for the next year. Almost one-third of respondents said that employment was the most important factor contributing to upward mobility. However, one of the respondents noted, and I think this is a great statement, “There is plenty of access to jobs, and there is some upward wage pressure, but housing costs are going up faster than wages.”

The overall sentiment on housing was strongly negative for almost half of survey respondents. However, housing showed up as both a positive and a negative factor as many respondents stated that they were seeing some improvements in the housing situation. So now let’s move on to the labor market. The next slide please.

Conditions for finding work were neither good nor bad for 43% of respondents. For the rest, conditions for finding work were more negative than positive. Job quality conditions overall were a little bit worse with 50% of respondents indicating that they were poor to very poor conditions. One quote really illustrates these challenges. “Finding work may not be difficult, but finding work that pays a living wage is very challenging, especially for individuals without education.”

In April, respondents largely expected jobs to remain widely available and wages to continue to increase over the following 12 months. However, wages were not anticipated to rise to a level that would put workers in a better financial situation with most respondents rating wages as the largest negative contributor to job quality in the next year.

Similarly, respondents noted several factors that posed significant barriers to employment, including lack of affordable childcare, background checks and drug testing, skill and credential requirements, and the cost of transportation. Also, several respondents noted that lack of digital skills was also a significant barrier to entering the workforce. For example, one of the quotes we have from the survey was that as this person said, all applications are done online and some LMI populations do not understand how to use computers or do not have access to digital tools necessary to apply.

So now let’s move on to the slide on housing, which is the next one please. Of the survey topics, respondents were more pessimistic about conditions for housing, particularly rental housing, and very few said that they were expecting a positive change in housing over the next year. Most survey respondents indicated poor housing conditions for both renters and homeowners and that conditions had worsened over the past year.

In April of this year, more than half of the respondents that were asked about the rental situation indicated that they expected further deterioration of the rental conditions with rental prices and insufficient supply of affordable or subsidized units as the main challenges. As one respondent noted, “Affordability continues to worsen.” Developer-led investments continues to focus on high-end housing and “Many eviction prevention and subsidy programs are now ending.”

With respect to home ownership, approximately 40% of respondents expected conditions to continue to worsen, with cost of housing was one of the major concerns. One of the respondents noted that there were no homes below $200,000 unless they needed substantial repairs. Additionally, maintenance costs such as insurance, repairs, property taxes, utilities were also a concern for those who were already homeowners.

Now let’s go to the entities slide please. Understanding the health of entities serving LMI communities is also crucial as these entities provide vital services to LMI communities and they’re critical part of the infrastructure that promotes economic resiliency and mobility. Overall, entities reported positively in terms of their ability to serve communities. However, they also reported considerable challenges related to fundraising, meeting community demand for services and rising expenses.

While a majority of entities reported that they were able to serve their communities, only one third of entities said that they were able to fully meet demand for services. So now I’m going to walk you through these three main challenges, but I’m going to start by the least top challenge let’s say, and I’m going to end with the major issue. So let’s move on to the next slide please.

In April of this year, almost 85% of respondents indicated that their entities had experienced increased expenses since April 2023. The top challenges that entities expected to continue to affect expenses over the next year are higher compensation such as wages and benefits, higher input costs, goods and services, and non-labor overhead costs such as the cost of the office, property, insurance and utilities. Next slide please.

So relative to April 2023, 80% of respondents noted that demand for services had increased with half of them stating that demand had significantly increased. Higher demand placed additional pressure on entities ability to meet those needs.

Relatedly, about one third of entities were able to meet most of their demands in the past year. Respondents noted that a combination of lack of funding, increasing demand and lack of staff and volunteers have had an adverse impact on their ability to meet demand. I do want to note that changes in levels of staffing in the past year have been mixed across entities. While some mentioned that they had no major issues related to staffing, others noted that there were not enough resources to create new openings or positions. Others indicated that their staff wellbeing such as physical and mental health, stress and burnout had been an important factor affecting their staff. Next slide, please.

The results for changes in revenue compared to 2023 were mixed across respondents. Given that sources of revenue can differ across entities, we asked survey respondents about their top three sources of revenue and changes in revenue relative to a year ago in those specific sources.

Government funds represented the top source of revenue for 46% of respondents followed by fee for services and foundation funds. Across all sources of revenue, except donations, more entities reported an increase than a decrease in revenue. For those entities for whom credit and loans was their top source of revenue. They have seen an increase in this resource over the past year. However, for entities heavily relying on donations, either individual or corporate, about 40% indicated a decrease. And in particular for those for whom donations were their top source of revenue, more than half of responding entities mentioned that donations had decreased in the past year.

When we ask entities about the overall financial health, more than 40% of respondents described it as steady with no changes expected for the year to come. Another 32% indicated that they were facing some stress and that they were trying to find efficiencies to save money, and only 9% of entities were under a lot of stress and having to cut positions or programs.

So moving to my last slide, to sum up entities responding to the 2024 Community Perspective survey reported poor economic conditions for LMI populations, noting that housing costs were increasing more rapidly than wages. With respect to entities, they reported good ability to serve communities despite challenges such as high demand, rising expenses, and funding and fundraising not keeping up with these costs. I am looking forward to hearing that the experts present today to relay the survey funding to what they see that it’s happening on the field. Thank you.

Sydney Diavua

Thanks for that overview, Violeta. And now I’d like to invite our panelists to come onto screen. And as they’re coming onto screen, we’ve got a few polling questions to help us to learn a little bit about our audience and what has drawn you to this webinar. So you’re going to see our first poll appear on the screen. What type of organization do you work for? So the options are government, financial institution, non-profit, private industry, public-private partnership or other.

And it looks like we’ve got a number of financial institutions as well as non-profits joining us today on the call, about 35 to 31% and then 24% are government. Thanks for helping us know who’s in the room. And now we’d like to understand a little bit more about what brings you to today’s webinar. So from your perspective, which sector currently poses the most concern for low-to moderate-income communities? The options are housing, employment, credit access, personal finance, health, education, or other. So I’ll give you all a moment for that one. And it looks like housing is quickly topping the list of top concerns with 86% of respondents.

And so we have one more poll and it’s “From your perspective, how would you categorize the financial health of organizations serving low- to moderate-income communities?” Excellent, good, adequate, or fragile? So we’ve got responses coming in, and it looks about 45% of the room sees it as fragile, about 35% is adequate and only around 20%, 22% on excellent or good. That’s really helpful for us to understand what perspectives you’re bringing to this conversation and how we can leverage the survey and our panelists to understand what are the conditions in lower/moderate-income communities and for the organizations that are serving them.

So Melissa, Michael, Frank, thank you all for joining us today. Really excited for this conversation as well as to have you all as experts in the field to just help us understand what the survey means and how we can better interpret the results. I first want to just start with doing some introductions and learning more about you and your organizations. But also after you introduce yourself, you can tell us what are your reflections on the survey findings, some early high level reflections you have, and how do the survey findings compare to what you have seen or are seeing. So Michael, could I start with you? Tell us a little bit about yourself, your role at NeighborWorks and how did the survey findings reflect what you’ve seen?

Michael Butchko

Absolutely. Thanks Sydney and good afternoon, everyone. First, a word about NeighborWorks America for those who are unfamiliar, the NeighborWorks network, which we support is comprised of 246 of the top community development organizations nationwide. They provide housing solutions, very topical for today, in all 50 states, D.C., Puerto Rico and on tribal lands. And we, NeighborWorks America provide the network with flexible funding, capital technical assistance and training, data analysis and trends, which is what I and my team do at NeighborWorks America. And then organizational health monitoring.

In terms of how the survey findings hit me, I feel like the business intelligence team sits within our corporate strategy and impact division. And for the last few years as we’ve been giving presentations about market conditions and how our network is meeting the moment we’ve been labeled as giving depressing presentations, depressing data. And this is both sobering but also heartening to see that, in Violeta’s presentations, housing conditions were poor with no improvement in outlook.

To me, that’s a very bleak but also accurate statement that we’re seeing. And there’s one stat that I want to share before we hear from our fellow panelists, which is 85% said that conditions for rental housing were poor or very poor. But one of the stats that we use is that since 2021 nationwide, more than 4 million rental homes with rents lower than a thousand dollars a month have been lost. And so to me that is perfectly consistent with the findings and with the pressures that both renters are feeling, and also nonprofit housing organizations are feeling in these current conditions.

Sydney Diavua

Thanks, Michael. That’s helpful to hear and it is sobering information, but it is helpful to hear that it is aligning with what’s happening with rental housing. Melissa, what about you? Tell us a little bit about your work with National Skills Coalition and how does the survey findings match up with what you’re seeing?

Melissa Johnson

Sure. Thank you so much for having me. As you said, my name is Melissa Johnson. I’m the managing director for State Strategies and National Skills Coalition. And for those of you all who are not familiar with us, we work to change state and federal skills policies to expand access to skills training so that more people have access to a better life and more local businesses see sustained growth. How do we do that? We do that through analysis and technical assistance, broad-based organizing, targeted advocacy and communications.

So getting back to that analysis, I would say that the survey results are in line with some of the analysis that we’ve seen. The survey results point to slightly more positive ratings when it comes to employment and education. I noted in particular the strong uptake of adult education programs. That’s consistent with polls that we’ve recently commissioned that show that support for skills training remains uniformly high among voters across educational levels, across economic status. And we’ve also seen in upcoming state specific polls a willingness among the majority of people to participate in skills training. So that’s one thing I highlight.

The next thing is that also consistent with observations in our work is the gaps in human services, the concern about personal finances and the factors in the survey where respondents noted several barriers to finding employment, including that lack of affordable childcare and the cost of transportation.

And we once again, we have polling to show that people support increased funding for supportive services to help them finish skills training and education programs. And we’ve also have heard this for years from partners across the state who have seen the need for more support services so that people can persist and complete in skills training and education programs. And many of our partners are working on state policies and federal policy change to that effect.

And then last, I’d be remiss if I didn’t touch on the digital skill piece as well. There was concern about the struggle with technology literacy or digital skills even as there’s this increased connectivity because of recent federal investments. So that’s something that we share that concern and we’ve seen that as well. And we’ve been working with partners to make sure that states are expanding access to digital skills as a part of digital equity plans that they’ve been required to do. So those are the main things that I’d highlight.

Sydney Diavua

That’s helpful. Thanks Melissa. And now Frank with Community Opportunity Alliance. You all have engaged in similar analysis through the grounding values and research work. So can you tell us a little bit about your background, your work, and then how do these findings compare to what you all have observed?

Frank Woodruff

Sure, yeah. Thanks Sydney. Hi everybody. Frank Woodruff with the Community Opportunity Alliance, formerly NACIDA. We rebranded about six months ago if you’re familiar, but we’re a field building organization for community development organizations nationally. We work to connect the dots among a field that can be sometimes fragmented at the national level among funders, policymakers, and others.

And one thing we do is to work to nurture the identity of the field, as you alluded to Sydney. And our research project that we’ve undertaken the last few years has identified about 6,000 community-based development organizations in the United States, of which as I read the results of the Fed survey is a subset of the LMI-serving organizations that were surveyed by the Fed. But this is a field that produces about 90,000 units of rental housing a year, about 15,000 of new units of affordable homeownership a year.

And so my reaction, I guess I’ve been with the organization for about 15 years, so I’ve been here a minute, and my reaction to the results of the survey where people are pointing out that housing is a problem, I guess is like we welcome you to the club. We’ve been seeing it for a little over a decade. We have a big tent and we’re happy that you’re here.

So as part of that study, I cited some numbers from it, but one thing that really surprised me was the last survey question that you asked Sydney, where you asked about the financial health of, sorry, the webinar’s participants perception of financial health of LMI-serving organizations. About 45% of the participants today thought the field was fragile, at least among the 6,000 community-development organizations. This data is a little bit dated. It’s from 2018, so it is old.

But that 45, 50% number being fragile, I hear that a lot anecdotally, and frankly it’s just not true. Our research, at least among community development organizations says about 20% of the field is fragile. And that’s not the perception, that’s analysis that we’ve done based on 990 tax filings. And that is comparable to the nonprofit field as a whole. In terms of what percentage of them are fragile.

And I think that may have changed somewhat over the last five years since the information we have is dated. But I would bet my mortgage that it hasn’t changed all that much. And so I think that’s a perception that we need to push against that the field of community development anyways is financially unhealthy or fragile in this case. And that even for the organizations that would be classified as fragile, that being financially fragile in any given year is not the same as not being productive. It’s not the same as not being impactful. So I think there’s some myths in there that we could push against.

Sydney Diavua

Thanks, Frank. And I want to come back to that a little bit later because that is interesting that the research you’ve done is saying that it’s truly 20% based on 990. So what is driving that perception a little bit more? So we’ll come back to that one. I do realize we’ve started just talking about the survey, but there’s some things we could do to help explain a little bit more about what we’re discussing. And one of that is when it comes to housing. So we got a question in the chat that I’d love to bring Michael on and talk about. You mentioned that we’ve lost, what is it, 4 million rental housing units. Can you tell us what does it mean to lose rental housing units?

Michael Butchko

Yeah, that was a little bit too wonky to start. Just dove right in there. So those are units that since 2021 have been taken out of service for lower income populations. Why? They may have moved to market rate. They may have become short-term rentals. It’s very difficult to say, but we do know that as demand for that type of housing has increased supply has dramatically increased. And I think to Frank’s point about the perception of the industry versus where they are, I want to echo that as loudly as I can.

When I saw the results of the survey itself, 60% of the organizations feel like they have a good ability to serve their communities. I feel like that’s about right. And I feel like frankly that’s also based on the particular day that they’re having. When you think about nonprofit organizations and that just a myriad of challenges that they are facing in trying to provide services to their communities. So I do want to, like I said, echo that, plus one that, because while there’s this significant increased demand for services, I do feel like organizations are absolutely meeting the need right now as all of these various things are being thrown at them or they’re experiencing them based on the housing market.

Sydney Diavua

So it could be when they took the survey, just what pressures they may have been experiencing that day. Frank, what else do you think could be informing the perceptions and what’s informing how nonprofits are seeing the market for how they are able to support themselves as well as serve their clients?

Frank Woodruff

So I think one challenge within community development that we’re trying to put forward is a challenge related to race of the leader of the organization. I think there are systemic barriers to leaders of color, at least within community development. Again, within our research, within community development, we identified, I think there’s seven metrics like cash on hand, assets, debt to income, etc. that are common to real estate development. Across the field, organizations led by a person of color do worse on every single metric. That by definition is an inequitable system, and that’s a system we, including me and Michael and others like that system we’ve helped create throughout our careers, and we can do better. So I think that’s an issue.

And the other is around resource concentration. According to our research, 80% of the resources that go through those 6,000 organizations, 80% of the resources go to 20% of the organizations. And in a field where organizations represent places as a place-based institution, you’re leaving behind a lot of communities and a lot of places by concentrating resources among the largest organizations.

And I think those organizations maybe are, I would question I guess the Fed and the producers of the report, how well distributed was the size of organizations who responded to the survey because there’s a lot of government money reported in the survey, which tends to favor larger organizations or larger organizations tend to have an easier time accessing these resources. And I also see some pessimism around individual donations. That caught my attention. I was surprised by that in the research. So I think all those things are contributing to a perception that’s just off about the organizations and what they do.

Sydney Diavua

Thanks, Frank. Melissa, I want to bring you back into the conversation, especially because in addition to workforce housing was one of the sectors where we saw a bit of the most pessimism in the survey, but also some opportunity and people seeing like, “Hey, we can access training, we’re seeing some more growth in this sector.” And so I wanted to talk to you a little bit about nearly half of respondents did expect the ability to find work to improve. So what is your work saying about that? What are you hearing from how you’re connecting with states and what can inform that finding?

Melissa Johnson

Yeah, I think, like you were saying, the job market is very tight. People can in most cases find employment. We’re still hovering around what a lot of economists call full employment. And that explains the survey results showing that continued comfort with the availability of jobs and that contributing to perception of positive economic mobility.

At the same time not to be a Debbie Downer or to put a little rain on this positive outlook, I saw in the results people saying, “Yes, the job market is tight and I’m dealing with these rising prices and the cost of living including in housing and in the cost of services like childcare.” So to me that heightens the need for supportive services. And so those are just some factors that I would say contribute to that finding.

Sydney Diavua

So to the three of you all this is a survey and while information is great, we also need to know how to utilize this information. So what are some recommendations that you all would make to service providers and nonprofit organizations on how they can utilize the information in this survey in their work or to inform planning? How would you recommend folks use it? Frank, can I go to you since you’ve had some experience in this?

Frank Woodruff

Yeah, I know the question Sydney, because in our research too, a long time colleague of me had this saying about research that you want it to be useful, obviously also want it to be used. And so what I would say is, again, I come back to the finding about individual donations, and one way an organization could use trends about where resources are coming from is in their own kind of fundraising and development plans. If you are an organization that is seeing that you are getting fewer, getting less revenue from individual donations, don’t necessarily blame yourself. That is a larger trend that’s happening across the nonprofit sector, especially for those nonprofits that suit LMI people in places. So I do see some utility there for some of the revenue trends for organizations and how they can better target their development strategies.

Sydney Diavua

Melissa, how could workforce development organizations or state partners or intermediaries use the information from the survey to help understand and improve workforce conditions?

Melissa Johnson

Yeah, I think data is always good, and I will own of course my bias coming from a policy organization. So when I look at survey results like this, I see a number of indicators of what’s going well and then also where there are gaps that need to be filled in terms of possible pain points for people. And not only in terms of there might not be as many pain points and accessing jobs, but it looks like there might be pain points for folks in terms of wanting to progress in their careers and earn higher wages. So what are the policies that folks can advocate for, including organizations that participate in this survey? How can they contribute to a broader advocacy agenda to address some of those gaps via policy? That’s what I was thinking.

Sydney Diavua

And Michael, more than 60% of respondents reported that housing conditions have worsened over the past year. And so this is a really important issue that we’ve seen from the survey. So how would communities and housing organizations be able to use the results to be responsive to what we’re seeing in housing?

Michael Butchko

Yeah, I think we’re in this critical moment. I’ve been in this field now for almost a quarter of a century, and it’s always struck me how difficult it can be to talk about housing when it’s something that we all experience. And now we have these pressures, and this is why I was saying earlier, sobering yet heartening.

The heartening part of this is that more people than ever can relate to the pressures around housing affordability. And when housing affordability is not within reach, just the margins that it can put populations on, right? When it comes to increases in child care, increases in transportation costs, increases in insurance costs, which we’ve not yet touched on, but it used to be homeowners, you get in a home, this is your payment forever. Now when you get your annual insurance adjustment, here’s your new policy premium. That is an unexpected expense. And it just keeps pushing people both their perception that things are worse than they have been, but also it is a reality.

So my coaching to both the NeighborWorks network and to folks that are using this data is to use it. It is a great measure at a point in time that says we’re at this critical juncture for housing, we need to do more, we need to provide more, and we need to help people find safe, decent, affordable housing that they can also remain in for as long as they wish to.

Sydney Diavua

Thanks. So we’ve talked a bit about what the current landscape is. We’ve talked about how do we utilize this data. I’d love to talk a little bit about then what are some solutions, how can we explore some solutions to what we see out there? And so Michael, I’ll start with you since you’re already primed, what are some of the solutions that you put forward to respond to what we’re seeing around housing? What’s NeighborWorks thinking through?

Michael Butchko

We are thinking through a variety of solutions. We’re thinking through new and different sources of capital. We know that our NeighborWorks network has tens of thousands of units ready to come online. And our hope is that as long-term partners step up, but also potentially new partners that can be new homes for individuals. We’re also thinking about the importance of education and counseling, both for home buyers and renters.

This is a critical moment for people to understand what it means to be a homeowner and what are the responsibilities and what are the challenges of that. Also, post-pandemic and in the middle of the pandemic, we saw an increased demand for rental housing counseling, which really was not its own industry or at least a broad industry within housing and community development. And again, I think it just speaks to the opportunity now to meet customers where they are and to find new partners who are hearing about these challenges and who are willing to step up and provide the resources that are needed to solve some of these housing issues.

Sydney Diavua

So meeting people where they are and partnerships, I think that’s something that probably all of us would highlight. Melissa, what does this look like for our workforce? What are some of the solutions that you all are thinking about at the National skills Coalition?

Melissa Johnson

Sure. So as part of our work at National Skills Coalition, we also support several state-based coalitions who are also working on skills policy at the state level. And as I mentioned before, many of them have advocated for expanded access to supportive services. So right under housing, cost of child care, cost of transportation are a concern for folks. So our Georgia Coalition for example, they’re research and advocacy efforts recently paved the way for $9 million in additional funding for child care in this recent legislative session. And our Massachusetts coalition has been in the same place where their research and advocacy has paved the way for a much bigger investment in child care in the hundreds of millions of dollar range funneled through their estate.

And then our Michigan Coalition, kind of going back to what I started with around funding for wraparound support so that people can complete training to get into a higher wage job. Our Michigan coalition recently, their research and advocacy helps pave the way for $7 million in wraparound supports for folks who are completing education and training there, including child care, transportation, and food.

So those are examples of the solutions that we’re thinking about, but of course we’re always thinking about new and different solutions because as we’ve seen through the survey, there’s a lot of different needs out there.

Sydney Diavua

So I’m hearing a little bit of a theme. One is capital and really thinking differently about the capital that’s being put towards services. But I also hear a lot about providing some of those supports that keep people in the workforce like child care, wrap around services or even housing, which Michael is doing. Frank, what are some of the solutions that you all are talking about?

Frank Woodruff

In one word, supply, for housing, anyways. As I look through the lens of how to fix the housing crisis in the United States, and I look it through the lens of policy, for example, certainly at the federal level, even at the state level. I look at potential solutions through the lens of is this supporting demand, or is this supporting supply for housing? And I’m not saying that supply is the only solution because there are things that need to be done on the demand side, certainly for equitable mortgage availability, and similar.

But not nearly as much attention has been paid to the supply side of where affordable homeownership opportunities are created and rental opportunities are created. And we got to fix that. Because I did see a question about living wages in the chat. And living wages are incredibly important to be able to afford child care. When it comes to housing more wages threatens at least in some places, and increasing more and more places to drive up rent and prices further without it being matched by a corresponding amount of supply. So I think that’s one thing that I think is really important.

But I don’t think creating more housing supply is quite as simple as some say that it is just simple as build baby build. I do think one of the barriers to increasing supply is NIMBY-ism and zoning. And one way to combat that is through community development. Organizations such as in the NeighborWorks affiliates or in the broader community development field that we reach are quite deft and adept at navigating local support and or opposition to housing of any kind. And so any kind of housing solution on the supply side that’s put forward has necessarily I think would be most efficient and effective and impactful if it prioritized community development as part of that approach.

Sydney Diavua

Thanks, Frank. So we have a lot of questions that have come in from the audience and I’m excited about them because it’s going to help us to unpack some of the things we’ve talked about a little bit more. And so Frank, the first question is for you. If not fragile, what is the right word for the gap between LMI organizations, financial status and the LMI survey findings of poor funding access and options? So if organizations aren’t fragile, what is the right word?

Frank Woodruff

If I understand the question, I guess what I would say is what I would do with the findings from this survey and certainly with the findings from our research, is to use our research to get your foot in the door to say this is a field that I’m a part of field of organizations that is productive and overall financially healthy. And I wouldn’t let people get away with, even if you aren’t financially healthy in any given year, any organization can have a bad year.

Being financially healthy or not, it’s not the same as being big or large by budget. Small organizations can be very healthy and large organizations can be unhealthy. And it’s certainly not the same as saying whether you are impactful or whether you are accountable to the community that you are serving. Those are not the same things. And I would use our information certainly and the information from the Fed to help make that point. I would make that point to resource holders and those that are looking to invest in your organization.

Sydney Diavua

So it sounds like it’s a bit of untying the notion that financial health could mean that an organization is not being impactful, that they can be being impactful to the community. It’s just thinking differently about how they’re describing financial health?

Frank Woodruff

Don’t let someone not give you a grant because you have a bad financial year. And that happens far too often from private land and public. Don’t let that stop you and don’t let anyone else stop you because of it.

Sydney Diavua

Great. So Michael, we have a question about housing. One of the participants is hosting an event for local home ownership counselors and leaders to pursue professional development and certifications. So what key insights from the survey should be top of mind to help root their development work?

Michael Butchko

Yeah, that’s a great question. I feel like this industry, again in my time, has evolved so swiftly because the conditions in communities have changed so swiftly. Many of us remember the foreclosure crisis in the late 2000s, and one of the things we saw there was that as folks would go through foreclosure, they still had housing options at the end of that. There was still rental housing that existed and was affordable. Not to say foreclosure isn’t terrible. It is.

We’re in a new space now where the need for rental counseling pops up. And so anyone in this industry welcome, we desperately need you, please stay. But also be prepared for the next challenge because it will come up. And organizations we saw in our network, when the pandemic hit, they were called to provide services and provide services in areas that were not their normal places of work. They stepped up because no one else was. And so just that adaptability and that hunger to continue to learn and to improve. The work is going to be hard and sometimes it will not be particularly rewarding, but do not let that stop you from joining an industry that is absolutely making a difference.

So I saw that question. It was just super excited for those folks and hopefully they can battle through what’s going on in the homeownership market to find satisfaction in the work that they do because it does exist.

Sydney Diavua

Yeah, let’s continue to build the field, right? Let’s bring more and more people in, but let’s also build our skills and think about what are all the skills we’ll need to adapt to our changing environments. So we got an early question in, so thank you to our audience members who submitted some questions early through registration. And this one is about if you can talk about the prevalence of disabilities and how that’s affected labor force participation and LMI communities. How has the relationship between poverty, disability and work changed in recent years? So Melissa, I’m going to pitch that one to you. What’s the impact of disabilities on labor force participation?

Melissa Johnson

So that is a huge question, so I’m going to just touch on it a bit. I will say, even though I’m not sure that the Fed survey, this particular Fed survey touched on people with disabilities that we’ve seen that the labor force patient rate for people with disabilities has historically been much lower than for people without disabilities. And there are of course a number of factors to that. And at the same time we’ve also seen, once again with my policy hat on, states not take particular advantage of funding streams like vocational rehabilitation funding, funding streams that are available to help provide assistive technology supportive services for people with disabilities to fully participate in the labor force.

So that is something that of course we’d like to see more of to close that gap because getting back to where we started, we’re in a very tight labor market. We of course have always needed all participation from everyone, but this is especially important right now. So anything that states and the federal government can do to make the policy environment more conducive for truly full participation in the economy is the direction that we need to go in. So I hope that answers just a small piece of that huge question.

Sydney Diavua

No, that’s helpful and that’s helpful to think about. How does that factor into the survey? Violeta, I’m going to bring you on for a really specific question about the survey. And we received a question. Were there no positive economic markers at all? Can you tell us a little bit about that part of the survey?

Violeta Gutkowski

Sure. Thank you for bringing up that question. Yes, there were a lot of actually positive things in the survey. So the first one I’ve already mentioned was employment. So respondents overall largely expected labor market to remain strong over the next year. And as I mentioned, labor market is actually one of the most important drivers of economic mobility. Also in small businesses, we’ve seen that despite identifying high interest rates as a challenge, small businesses respondents were generally optimistic about the prospects of overall the year, saying that there were available grants and technical assistance and also that the softening the labor market could also contribute to that.

With respect to education, respondents saw a strong uptake of skill and credentialed programming for adults and they expect conditions for other education to continue to improve. Also in internet and technology, while overall internet access was rated as pretty poor, they expected conditions to improve, things had been improving and were expected to continue to improve.

So there were a lot of positive things in the survey itself, and even for home ownership that came up as a big deal of a negative situation. There were positive factors affecting home ownership such as availability of down payment assistance, ability to get financing for purchase, as well as availability of homes for purchases in certain areas. So there is a bright side of everything. I was just highlighting the big two areas that the survey covered just in the interest of time.

Sydney Diavua

Thanks, Violeta. And so as we’re moving towards the close, I do have one more question for our panelists. So Melissa, Michael, Frank, what do you anticipate conditions will look like in the near future? And if you’ve got any thoughts on the opportunities and challenges for communities and what you think it will look like in the near future? So Melissa, I’ll start with you.

Melissa Johnson

Great. Glad we had the chance for this question. It gives me a chance to also agree with something Frank was saying earlier around the need to both work on all of these housing solutions. So glad that there are organizations led by folks like Frank and Michael who are working on all of these housing solutions at the same time that we’re working to increase people’s incomes because we cannot work on just one facet of these problems.

And I think that there’s opportunities, of course, once again, policy hat on, with new legislatures that will be coming into session in the new year, new governors starting in some states. So there’s an opportunity to use this data to educate these policymakers and to bring them along on certain policies. And getting back to what Violeta was saying around the optimistic outlook around the internet access, part of the reason why folks may be optimistic is that we have all of this infrastructure and clean energy funding and digital connectivity funding, expanding broadband access funding coming to states right now via the federal government. And there’s an opportunity, huge opportunity to channel portions of that funding to workforce development and work supports. So I see those as huge opportunities.

Sydney Diavua

Thanks. Michael, how about you? What do you see for the near future and what are the opportunities?

Michael Butchko

Really quick, I think the level of sophistication of the community development field generally is as great as it’s ever been, and I think that that means it’s well positioned to embrace and deal with the challenges of the current housing market. I would be off-brand if I didn’t offer one troubling or worrisome thing, which is that we are seeing just incredible increases in rental housing insurance, in terms of premiums, inability to get coverage that truly has nothing to do with a loss history of properties or organizations. That will only continue to aggravate the cost of rental housing going forward for low- and moderate-income populations. That is a concern, but again, I’m heartened by the field’s ability to adapt over the last decade and find solutions where it didn’t appear that any existed.

Sydney Diavua

Thanks, Michael and Frank, 60 seconds. What do you see for the near future and what are the opportunities?

Frank Woodruff

Well, I would say the opportunity is right in front of us. Again, to tie it back to the results of the Fed survey, housing up there is a big challenge. At the same time, it is a huge challenge, getting to be more of a challenge, but it’s also top of what’s on the political agenda right now. So that’s a big opportunity. And I just want to put a little red siren on my head and have smoke come out of my ears about what Michael said about the insurance challenges. As big of a proposal as you could ever push through the federal government to increase housing supply and support buyers and renters, the cost of insurance can undercut the whole thing, and the whole thing can come coming down if we don’t solve the insurance challenges.

It is particularly acute in some parts of the country, but we’re finding actually very, very recently that it’s much more pervasive. This is not just a coastal thing, it’s not just an inflation thing. And it is not just cost. Organizations because they serve poor people are getting denied insurance. My organization was canceled because we did community development. Was the letter our insurer sent us. And if you cannot insure your organization, you cannot get a loan of any kind for anything. So we cannot solve. So that is a big threat and I just wanted to double, triple, quadruple down on that.

Sydney Diavua

Thank you for that and thank you for calling that to our attention. So I just want to thank our speakers for providing insightful information and engaging our audience and attendees. Thank you for spending your valuable time with us today. Before we end the session, we do have a few requests, so please complete the survey. We’ll send it to you immediately after today’s event so we can improve and continue to bring you timely and relevant topics.

Today’s session will also be available on YouTube and the Connecting Communities website in about two weeks. Please visit Fed Communities at fedcommunities.org to access additional articles, resources, and data about community development across the Federal Reserve. Follow us on social media. We’re on LinkedIn, X, Instagram, and Facebook. And don’t forget to subscribe to the Fed Communities newsletter by clicking the About Us tab and then click subscribe.

This session, including the slides, will be available and featured in our next newsletter and will be available on our website within two weeks of today’s event. Finally, check out recordings of previous Connecting Communities webinars on fedcommunities.org, and also check back periodically for more Connecting Communities events. Our next event will be held on October 10th on Exploring the Possibilities of Investing Now for Prosperous, Sustainable Neighborhoods. Thanks again for joining us today for Connecting Communities, and we hope to see you again soon.