Federal Reserve Banks across the country collect anecdotes from contacts and hone in on concerns for Federal Reserve Beige Book summaries, published eight times each year. Historically, insights about conditions affecting low- and moderate-income communities have come from the perspective of businesses. Several Reserve Banks began including “Community Conditions” and “Community Perspectives” sections last fall. These sections provide insight into local changes through direct accounts of nonprofit and community leaders and workforce professionals serving lower-income people. Here are some takeaways from the September 2023 Beige Book, which was prepared at the Federal Reserve Bank of Kansas City and based on information collected on or before August 28, 2023.
Please note that the Beige Book summarizes comments received from contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
“Community contacts reported that rising numbers of asylum seekers were increasing the need for the provision of social services and education across the District. Pressures were particularly pronounced on New York City’s emergency shelter system. The number of individuals seeking shelter in New York City has nearly doubled in a year due to growing numbers of migrant families. The logistics and budget implications of providing migrants housing, social, and education services have been challenging for policymakers and community organizations in the District.”
– New York Fed, Federal Reserve 2nd District, Community Perspectives
“Nonprofits noted increased demand for their services. For example, one entity providing mental health and addiction treatment services received 50 applications for just two openings in the program, with wait times as long as nine months. Several nonprofits said that hiring and retaining staff had been particularly challenging, and one large community service provider reported that it was 40 workers shy of its desired staffing level of 170. Contacts cited three primary reasons for the hiring challenges. First, pay rates among nonprofit entities were not competitive with those in the for-profit world. Second, limited childcare and transportation options were more likely to adversely affect workers in the nonprofit sector. Third, funders often earmarked dollars for the provision of services without earmarking accompanying funding for overhead. For example, donations to food banks were often reserved for the purchase of food, but not for the overhead associated with getting the food to those in need. One contact noted that what was needed were unrestricted funds to cover operational costs, including those for staffing.”
– Cleveland Fed, Federal Reserve 4th District, Community Conditions
“Contacts serving low-income communities described economic conditions as largely unchanged to slightly declining. Capital and credit deployment to small businesses slowed due to rising borrowing costs and tighter underwriting standards. Lenders and investors expect an increase in small business capital availability with the roll out of federal programs like the State Small Business Credit Initiative. On the consumer side, several finance and credit contacts noted that delinquency rates for automobile loans and some credit card accounts rose slightly, and elevated auto delinquencies among lower-income populations are anticipated going forward. Contacts also noted that demand for food and housing assistance remained higher than pre-pandemic levels.”
– Atlanta Fed, Federal Reserve 6th District, Community Perspectives
“Community, nonprofit, and small business support contacts reported little change in economic activity from a robust level. State government officials saw slowing growth in tax revenues and a small increase in demand for unemployment insurance. Some small business lenders noted a slowdown in loan demand, which they attributed to economic uncertainty. Nonprofit contacts continued to experience challenges with wage competition from private sector employers, as well as an increase in other operational costs. Nonprofit organizations also said high demand for services was straining efforts to respond to elevated levels of food insecurity.”
– Chicago Fed, Federal Reserve 7th District, Community Conditions
“Housing providers faced more difficulty building new, and maintaining existing, affordable rental properties because of substantial increases in financing and insurance costs. In Colorado, property insurance premiums reportedly rose as much as 30-50 percent over the last year, due in part to increased weather-related claims. Contacts reported some optimism in being able to help low- and moderate-income households with homeownership, using state and philanthropic funds for down payment assistance and rate buy downs. However, evictions and foreclosures continued to rise, and recently reached or exceeded 2019 levels across District states. A non-profit in Kansas City noted calls for housing and utility assistance were up 21 percent and 12 percent, respectively, over the previous six months and up 30 percent from 2019 levels.”
– Kansas City Fed, Federal Reserve 10th District, Community Conditions
“The scarcity of affordable housing remained the most pressing issue for lower-income individuals, according to community nonprofits. High rent and costly utilities were pricing residents out of their current living situation. Contacts lamented that high construction costs pose a major challenge for affordable housing developers building more stock. One nonprofit serving senior adults said inflation coupled with a reduction in SNAP benefits has put food insecurity as the top threat to seniors, which is a change from the usual top threats of isolation and difficulty accessing healthcare.”
– Dallas Fed, Federal Reserve 11th District, Community Perspectives
“Housing affordability, homelessness, and food insecurity continued to challenge communities across the District. Temporary housing shelters and food banks saw increased demand in recent weeks, especially from older adults. In particular, demand for services was highest in areas impacted by wildfires and other severe weather events in Hawaii and California. Nonprofit organizations reported challenges meeting the demand for behavioral health and substance misuse services. Several contacts highlighted ongoing consolidation among nonprofit organizations due to chronic labor and funding issues.”
– San Francisco Fed, Federal Reserve 12th District, Community Conditions
Visit the September 2023 Beige Book report for a full national summary and more information about economic conditions from each Reserve Bank, including labor markets, financial services, real estate, and more.
