Community Development

Top 6 Things You Need To Know About Underemployment Right Now

This article originally appeared on LinkedIn Pulse.

Anybody who has ever logged on to LinkedIn knows there’s a difference between the job you want, and the job you have. Some are fortunate to have both, while others know that sometimes we have to work in unideal conditions to make ends meet. If you’re one of millions of Americans who has been able to find a full-time job, you know these realities all too well.

Help Wanted sign on window

Today in America, there are more than six million of our neighbors who would like to find that full-time job, but thus far have been relegated to working part-time instead. Over the past decade, more and more Americans have found themselves in this predicament. One of the more difficult things that these Americans are finding is that they often remain in poverty, even as they work full-time. 

In fact, the research tells us that the poverty rate for folks who work part-time while aspiring to work full-time is just about the same as the poverty rate for folks who have no job at all. Roughly 1-in-5, or 19% of part-time workers are living in poverty. The rate of poverty is the same for unemployment Americans. Meanwhile, less than 4% of full-time workers live in poverty.

Seeing that part-time workers are just as likely to be living in poverty as those who are unemployed, my colleagues and I at the Federal Reserve Bank of San Francisco set out to better understand this trend. We wanted to better understand what drives involuntary part-time employment and how it impacts people. Is it a temporary trend or here to stay? And how can more people who want to work full-time secure full-time jobs?

Through conversations with employers as well as the many non-profits and government agencies who serve these part-time workers, here’s what we learned:

1. Housing, transportation, and child care play critical roles in allowing workers to secure and retain employment.

Barriers to full-time employment lay not only in the availability of full-time jobs, but also in access to affordable housing nearby, transportation, and child care.

In Phoenix, Arizona, residents raised the issue of limited job availability in low-income neighborhoods and the lack of public transportation, which limits access to jobs in the broader region. Locals in the California counties of Ventura, Marin, and Napa, as well as in Honolulu, Hawaii, stated that the high cost of child care kept many potential workers out of the labor force because it’s more cost-effective to not work and take care of a child than to work part-time.

2. Rising business costs (e.g. employee benefits, health care, workers’ compensation insurance, and minimum wage hikes) and increasingly competitive markets are contributing to the increase in part-time jobs.

Economists now believe that the steady rate of involuntary part-time employment may have more to do with changes in the way workplaces operate, rather than solely the rise-and-fall of employment dynamics that tend to accompany recessions. As we spoke with employers throughout the western states, many shared they increasingly hired part-time in order to reduce overhead cost—wages (especially in light of minimum wage increases) and employee benefits, such as health care and workers’ compensation insurance. One participant from the public sector in Fresno, California, stated that her agency “chose to hire two part-time employees rather than one full-time employee because they could get a lot more hours of work for cheaper with two part-time employees due to much lower cost of benefits.” 

Employers also shared the benefits of added flexibility in hiring part-time, since they can increase and decrease hours as the need for workers waxed and waned. According to a Community Development Financial Institution (CDFI) that offers technical assistance to small business owners in California’s Central Valley:

“Part time employees provide more flexibility to the employer—[they] can increase or decrease hours more easily, move schedules around more easily if someone is out sick or is a no show, or if business needs increase or decrease.”

Employers spoke about lean profit margins, global competition, the need to be efficient, uncertainties in their markets, and the automation of work necessitating fewer workers. One of the biggest industries in California’s Central Valley is agriculture, and some employers I spoke with there stated labor costs have increased significantly over the last several decades, driving employers to hire fewer workers and invest in more machines and technology. 

3. Workers are concerned about exceeding income thresholds for social service benefits (the “cliff effect”) which may impact their employment choices. 

People assume that a part-time job is better than no job at all. But for many, working part-time means receiving less public assistance dollars for critical safety net needs as workers might find themselves financially worse off. A member of the community in Jefferson County, Oregon, shared a similar concern: 

“We frequently work with families who are grappling with the loss of benefits and the risk in taking a job that may be insecure, seasonal, or low-wage. There is little desire to risk [giving up] even limited public benefits for work that is only part-time or seasonal.”

4. Increasing household expenses are exacerbating financial challenges for low-income individuals, forcing many to take multiple part-time jobs or engage in the “shadow economy.”

Locals in all the areas we visited cited stagnant wages, limited opportunities for full-time work, and higher household costs as the forces driving many to take multiple part-time jobs or pursue cash-based or unlicensed businesses in the “shadow economy.” 

In Hawaii, people we spoke with noted an increase in the number of residents engaging in bartering and unlicensed entrepreneurship. In the Central Valley, some immigrants feared deportation and therefore stayed within the cash economy, such as holding frequent garage sales and selling items at swap meets for income. Many regional discussions included the proliferation of part-time Uber/Lyft drivers and similar “gig economy” activities. To help address the high cost of living in Ventura County, workers are selling products on Etsy and eBay, participating in multi-level marketing, renting out rooms through Airbnb, and trying to monetize any other assets they have.

In discussing potential solutions to address underemployment, voices across the Western states unanimously agree there is no “silver-bullet” to solve the complex and interrelated nature of the underlying issues. Instead, we heard a call for holistic solutions that integrate across the identified challenges. Specifically, people we spoke with agreed that critical next steps must address the interrelated nature of housing, jobs, transportation, and child care, as well as and a need to examine public assistance programs to mitigate the potential impacts of the cliff effect.

5. Integrated solutions are needed to address the interrelated challenges of housing, jobs, transportation, and child care. 

People we spoke with shared a desire to see approaches that integrate across land use planning, investment, and state and local policy to expand the availability of affordable housing near major job centers, transit, and child care. Such expansion can help connect low-income workers to regional employment and provide added stability. California’s Cap and Trade Program, for example, aims to reduce greenhouse gas emissions and has allocated funds for the State-wide development of affordable housing near transit, making it easier for low-income residents to live in opportunity-rich areas near public transportation. 

On a smaller scale, in Fresno, California, the City Council adopted an ordinance to legalize the placement of “tiny homes” on residential lots in order to increase the supply of affordable units. Other cities and the State of California streamlined the process for homeowners to build and rent out accessory dwelling units or “granny units.” Programs to help families ensure housing stability, such as Keep Your Home California, were cited as important resources for helping people maintain job stability.

We also heard about the importance of family-friendly workplace policies to address child care expenses and challenges. Examples include consistent work shifts, on-site child care options, paid maternity and paternity leave, paid sick time to care for a sick child, and improved accommodations for lactating mothers.

Increased partnerships between employers and transit van-pool services may create solutions for employers and workers—and could even create business service opportunities for small businesses. In California, a van-pool program for farm workers—CalVans—is partially funded by State grants, while other van-pool programs are privately funded by employers, employees, or a combination of both.

6. Examining public assistance programs is needed to mitigate the potential cliff effect. 

Since underemployed workers may be more likely to be reliant on public assistance, people we spoke with stressed the importance of examining public assistance programs to mitigate unintended consequences, such as disincentives to work. In many regions, locals suggested that income-qualifying programs should not be based on volatile incomes and should allow workers to continue to receive assistance until they are permanently employed full-time and have reached some level of financial security. This subject is particularly relevant in light of recent federal, state, and city minimum wage hikes that may impact households receiving public assistance.

Although many of the solutions that emerged from our conversations were focused on federal and state policies, one local opportunity is the development of cross-sector partnerships. Connecting across sectors that often work in silos—workforce development, affordable housing, transportation, education, child care, and health–leads to greater efficiencies and better outcomes for the people that need it most.

The rise of underemployment necessitates innovative solutions that both strengthen family financial stability in the near term and expand career pathways for the future. What innovative solutions are you seeing in your community?

Interested in learning more? Read The Rise in Underemployment: Supporting the Needs of Low-Income Workers.

Overcoming Homeownership Challenges in Rural America: Lessons from Alaska

With its stunning landscape and rich culture, Alaska is known as the “The Last Frontier.” But the real “frontier” begins outside populated areas like Anchorage, Fairbanks, and Juneau where decent, safe, and energy-efficient housing becomes scarce.

The challenges are significant. High transportation costs due to the vast distances between villages, lack of roads, harsh temperatures, and a shortage of remote construction workers all contribute to high construction costs. According to Alaska’s Department of Transportation, about 82 percent of Alaska’s communities are not connected by roads. And according to the Alaska Housing Finance Corporation’s statewide assessment, Alaska’s overcrowding rate is twice the national average, with the greatest severity in rural areas, and nearly 20,000 Alaska homes would receive a one-star energy rating, indicating a need for replacement or deep retrofit. 

Another challenge is the old, poorly designed existing housing stock. These homes are expensive to heat and have poor ventilation, resulting in widespread mold and residents with respiratory illnesses. And many homes in Alaska’s rural areas are not designed for harsh winter weather.

To answer this call for housing, the Federal Reserve Bank of San Francisco partnered with other Alaska-focused agencies to convene a forum to assess rural Alaska’s existing housing stock and discuss current and prospective initiatives to build more housing. From this forum comes the Alaska Rural Homeownership Resource Guide that captures what we learned about both the challenges facing and the solutions that show promise for rural Alaska. The guide discusses the stark need for decent housing stock in rural Alaska against the backdrop of many challenges. It was presented at a recent affordable housing meeting as a living document due to the need for more suggestions on how we can improve housing stock in rural Alaska.

Assuming there will never be sufficient grant funding to meet the growing housing needs, efforts are underway to reduce housing construction costs and increase energy efficiency, while identifying ways lenders can make safe and sound mortgages on the properties. One example highlighted in the guide comes from the Cold Climate Housing Research Center (CCHRC) and its construction innovations that provide significant energy savings to homeowners. Learnings include shipping trusses in one piece to save building time, which is crucial in areas with very narrow construction seasons, and substituting metal studs for wooden studs to lower freight expenses without sacrificing durability. 

Still, getting a mortgage in rural Alaska can be tough. Given the relatively small population in remote parts of Alaska, appraisers have difficulty finding comparable properties. A village’s cash and subsistence economies can also make it difficult to qualify borrowers. These economic realities have caused housing construction costs to exceed market values, making it difficult for lenders to make loans on the properties without any subsidies. Government direct and guaranteed lending products with low or no down payment requirements are available to mitigate risks to lenders and provide an alternative to borrowers.

Innovative building techniques and creative financing are part of the solution to increasing housing stock and closing the funding gap in rural Alaska. Housing practitioners in other rural parts of the country could take note of Alaska’s innovations and help make homeownership available in areas previously thought to be impractical.

For more on what we learned by analyzing rural housing challenges and opportunities in Alaska, read the Alaska Rural Homeownership Resource Guide.

CDFIs and Nail Salons: A Partnership to Improve the Health of Low-Income Workers

We value bringing unlikely partners together to find creative solutions, which is why we’re excited to share a new partnership that explores the role of community development finance in improving the health of low-income nail salon workers. As a series of articles by the New York Times revealed, many nail salon workers face harsh working conditions that include long hours, below minimum wage pay, and severe health impacts resulting from prolonged exposure to toxic chemicals, which include cancer, miscarriages, lung diseases, and other ailments.

Here in California, Asian Health Services, a community health center in Oakland’s Chinatown, had seen these persistent health problems among Vietnamese manicurists over the past decade and formed the California Healthy Nail Salon Collaborative in 2005. One of the group’s efforts is the Healthy Nail Salon Program, which incentivizes nail salon owners to prioritize the health of their workers through both education and the implementation of safer products and practices. This recognition program, first established in San Francisco, has now been adopted by Alameda, Santa Clara and San Mateo Counties and the City of Santa Monica.

One of the most immediate ways to improve the health of nail salon workers is the use of mobile source reduction ventilation systems that improve air quality. As part of the program, participating local governments offer a limited number of rebates for salon owners to purchase these ventilation systems, but funds are often limited. The upfront costs of such ventilation systems are also a barrier to salon owners, many of which are immigrants who may have language barriers, limited credit history, and lack access to traditional small business financing.

As the SF Fed and Asian Health Services examined the issues, it became clear that community development financial institutions (CDFIs) could play an important role in expanding access to capital in order to improve the health of low-income salon workers. We reached out to Opportunity Fund and Working Solutions, two CDFIs with strong track records in providing microloans to low-income individuals, and explored opportunities for collaboration. As a result, the SF Fed, Asian Health Services, the California Healthy Nail Salon Collaborative, Opportunity Fund, Working Solutions, and the counties of San Mateo, Alameda, and San Francisco launched a pilot microloan program in November 2016 to provide the capital and resources needed for nail salons to become Healthy Nail Salons, with funding from an Environmental Protection Agency problem solving grant.

The team will develop and pilot a program that offers small business loans in the range of $2,600-$5,000 for up to 15 salons and that serves as a scalable model for expanding the Healthy Nail Salon movement—all while improving the health of nail salon workers, expanding access to credit, and strengthening small business sustainability.

Breaking the Generational Curse of Incarceration

While the topic of incarceration and reentry is most often focused on the individual who is serving time or being released, the impact of incarceration is not limited to the individual. Over half of the 2.3 million inmates in the United States are parents of children under age 18. For the one in 28 children in the United States with a parent behind bars, this incarcerated person is a mother or father.

A recently published report by the Annie E. Casey Foundation outlines the social, economic, and emotional impacts on children with incarcerated parents and suggests several evidence-based investments and interventions to address these overwhelmingly adverse effects. For example, stigma and shame are often invisible but nonetheless significant burdens these children carry, especially younger children. To help them understand and face these emotional burdens, Sesame Street recently added a new character named Alex whose father is incarcerated.

Regardless of how we feel about incarceration as a method of punishment for crime, it is important to calculate the compound effect it has on future generations and the broader community. There are many neighborhoods where more money is spent incarcerating young people than on preschool, public education, and economic development to create jobs and opportunities. A spatial data visualization report written by Columbia University shows the concentration of criminal justice investment of a million dollars for single blocks in some U.S. cities.

Reentry is a community development opportunity. According to the Annie E. Casey Foundation report, “The high-poverty neighborhoods that are home to many kids and families dealing with incarceration lack quality affordable housing, access to jobs, good schools and key resources.” The lack of investment in these core factors for economic and social success results in neighborhoods that are structurally impaired by the intergenerational disadvantage of incarceration and poverty.

The good news is every sector–public, private and philanthropic–can support the successful reintegration of formerly incarcerated persons. It goes beyond the critical investments and financial support of the programs and organizations working directly with this population.

On a personal level, anyone can challenge his or her own negative perception of someone with a criminal record and be reminded that many people deserve a second chance. In so doing, we as a society can prevent future generational losses represented as poverty, economic stagnation and social isolation and instead reap the positive dividends of economic mobility and cultural richness that define America.

What can we do?

Reentry Solutions: People, Programs and Policy will provide a forum to learn more about the work being done and what remains for effectively reintegrating men and women back into communities and families. In addition to the more traditional interventions such as housing, workforce development and health, attendees will learn about efforts to dampen the negative consequences on children, create resilient community conditions that support reentry, and, most importantly, be inspired by firsthand testimony of men and women who are working to break the generational curse of incarceration. Join us to be part of the solution!

Investing to Reduce Economic and Racial Disparities

“…Physical and economic health are inextricably linked. Prosperity is like a Jenga tower: Take one piece out and the whole thing can fall. And since well-being is the sum of a host of intertwined factors, finding a path to economic mobility and success means addressing them all.”

John Williams, President of the Federal Reserve Bank of San Francisco, in “The Health of Nations” delivered February 10, 2016.

Since the publication of Investing in What Works for America’s Communities, where leaders serving low-income communities voiced a clear call to work across sectors, the SF Fed and the community development field as a whole have embraced this idea that addressing the intertwined challenges that contribute to poverty requires an equally comprehensive approach. John Williams, President of the Federal Reserve Bank of San Francisco, affirmed this idea by stating that economic mobility and well-being requires working together across multiple disciplines in his recent speech to community development practitioners and investors at the National Interagency Community Reinvestment Conference. Risa Lavizzo-Mourey, President of the Robert Wood Johnson Foundation, followed President Williams and told the audience that bankers are some of the most important health workers in the country. To address the disparities of health, where life expectancies can be as large as 25 years depending on where one lives, bankers can more intentionally invest in the social determinants of health through opportunities such as affordable housing closer to public transit, day-care centers, and access to fresh foods, to name just a few examples.

SPARCC - Strong, Prosperous, and Resilient Communities Challenge.

Rooted in this theme of bettering lives through improvements in all contributing factors, the Strong Prosperous and Resilient Communities Challenge (SPARCC) is a response to accelerate how cities can work together to tackle health, environmental, and racial disparities to improve economic opportunities for all people. With billions being invested annually by banks and other financial institutions in low-income communities through the Community Reinvestment Act (CRA), ensuring that these investments make differential impact is even more critical as income inequality grows. With the $90 million from SPARCC that will be available for the winning sites, the SF Fed, in partnership with Enterprise Community Partners, the Low Income Investment Fund, and the Natural Resources Defense Council, aspire to support new models of how cities and regions can work to understand the underlying causes of economic and racial disparities and empower people and leaders to invest in more effective ways. 

With generous support from the Ford, Kresge, and Robert Wood Johnson Foundations, SPARCC will work with the ten invited regions—Atlanta, Chicago, Denver, the San Francisco Bay Area, Los Angeles, Memphis, New Orleans, Philadelphia, Pittsburgh, and Seattle/King County—through the end of the year to ultimately select six winning sites. SPARCC supports the Federal Reserve’s mission of strengthening the economy by ensuring that all communities can reach their economic potential.

For the latest SPARCC announcements, please visit

Americans have a new way to start saving: Introducing myRA

The millions of Americans without access to a retirement savings plan through work now have an easy way to start saving. The U.S. Department of the Treasury’s myRA (my Retirement Account) gives people a simple, safe, affordable path to retirement by breaking down common barriers to saving.

7 ways myRA benefits users

  1. myRAis a Roth IRA which offers certain tax advantages1
  2. It costs nothing to open an account, and there are no fees
  3. Users contribute an amount of choice ($2, $20, $200 – whatever fits the budget!)1
  4. myRAcarries no risk of losing money
  5. There are no minimum balance requirements
  6. The account safely earns interest2
  7. Users can withdraw the money they put in without tax and penalty2

Once a myRA user has accumulated some savings, they can transfer or roll over their myRA to a private-sector Roth IRA – at any time – to continue the savings journey. Accounts can be funded directly from paychecks, checking or savings accounts, or federal tax refunds.

Visit the myRA website to learn more, including stories of how businesses are already sharing the program with employees. For service providers, businesses, and tax professionals that want to share this program with their networks, Treasury also offers toolkits to help spread the word.

The value of saving

The American economy is only as reliant as the American household. Examine the systemic causes of financial insecurity and learn about emerging solutions in What It’s Worth: Strengthening the Financial Future of Families, Communities and the Nation, a new book published by the SF Fed and CFED.

What if saving could start with the first paycheck? Explore findings from the first quasi-experimental design study of a youth financial capability initiative seamlessly integrated into a youth workforce development program. The program, MyPath Savings, supports low-income working youth to bank, save, and build their financial confidence through a comprehensive model that includes financial education, goal-setting, and non-custodial accounts.

Financial insecurity affects every facet of life. In the SF Fed’s 2015 annual report, What We’ve Learned…and why it matters, SF Fed Community Development’s David Erickson and Laura Choi sit down with President John Williams to discuss the fragility of American household finances and how to get more families on the road to economic opportunity.

1. Annual and lifetime contribution limits and annual earned income limits apply, as do conditions for tax-free withdrawal of earnings. Limits may be adjusted annually for cost-of-living increases. To learn about key features of a Roth IRA and for other requirements and details, go to

2. Withdraw interest earned without tax and penalty five years after your first contribution if you are over age 59 1/2 or meet certain other conditions, such as using the funds for the purchase of your first home. *Accounts earn interest at the same rate as investments in the Government Securities Fund, which earned 2.04 percent in 2015 and had an average annual return of 2.94 percent over the ten-year period ending December 2015.

Boosting the Power of Youth Paychecks: Integrating Financial Capability into Youth Workforce Programs

Laura Choi
Senior Research Associate, Community Development, Federal Reserve Bank of San Francisco

“At my school, they talk a lot about the future, but nobody ever talks about how we’re supposed to pay for it.” These insightful words came a local teen in San Francisco who recently participated in MyPath, a youth financial capability initiative aimed at low-income youth earning their first paychecks.

Financial capability experts have long discussed the importance of the “teachable moment,” and for this young person, along with the 20.3 million young people who worked this past summer, that moment came in the form of receiving a paycheck. For many lower-income youth, these first paychecks represent an important opportunity to get youth into the financial mainstream, avoid costly predatory financial services, and establish positive financial behaviors and attitudes. The SF Fed, in partnership with MyPath and Eastern Washington University, recently hosted a convening and released a working paper that presents the results of the first quasi-experimental design study of a youth financial capability initiative seamlessly integrated into a youth workforce development program.

MyPath Savings supports low-income working youth to bank, save, and build their financial confidence through a comprehensive model that includes financial education, goal-setting, and non-custodial accounts. MyPath provided technical assistance and training to prepare nonprofit youth employment programs to implement MyPath Savings, as well as to the financial institution partner, Self-Help Federal Credit Union, to ensure the accounts youth received were aligned with MyPath’s Youth Banking Standards.

The study included 375 low-income young people ages 16-21 years old participating in youth workforce and employment programs operated by ten nonprofits in partnership with San Francisco’s Department of Children, Youth and their Families. Participants were assigned to one of two treatment groups, or a comparison group, and received a range of interventions:

Comparison Group:
  • 1 hour workshop on fringe financial products
Standard MyPath:
  • 1 hour in-person workshop
  • Supported enrollment into two accounts
  • Direct deposit
  • Support setting a personal savings goal
  • Three online, interactive financial education modules
MyPath Plus Coaches:
  • 1 hour in-person workshop
  • Supported enrollment into two accounts
  • Direct deposit
  • Support setting a personal savings goal
  • Three online, interactive financial education modules
  • 2 hours of Peer-led Group Coaching

Both Standard MyPath and MyPath Plus Coaches participants experienced increases in youth banking and saving outcomes and significantly improved confidence in their ability to carry out basic financial tasks compared to the comparison group, with no statistically significant differences between the two treatment groups in those areas. Both models prove equally effective in producing youth financial capability outcomes, including:

  • 97 percent of youth participants enrolled into safe youth-friendly accounts.
  • 100 percent set a personal savings goal, using a MyPath Savings contract.
  • 96 percent met their savings goal.
  • Youth in treatment groups were three to five times more likely than those in the comparison group to have increased confidence to carry out basic financial behaviors, including saving, budgeting and smart spending.
  • Youth saved on average 34 percent of their income, for an average of $329 each, amounting to a total of $66,500 in savings across all participants.

Four Key Lessons:

  1. Both models increase youth financial capability, including banking, saving, and money management outcomes. Adding peer led group coaching workshops boosts financial knowledge gains, and is best suited for longer programs or those with more capacity to provide additional financial capability programming.
  2. Blending in-person and online education provides an effective mix of scalability and impact. Technology can help scale programs, while the in-person activities cement learning and action.
  3. Young people bank and save when given the opportunity, but need youth friendly accounts in order to do so. The high take-up and account enrollment rates reflect the strength of using the MyPath Youth Banking Standards with partner financial institutions to reduce youth barriers and maximize enrollment.
  4. Youth workforce staff and settings differ from classroom settings and require different curricula. MyPath Savings’ action-based curriculum is tailored for youth workforce and employment staff and settings: It is shorter and designed to give youth earning their first paychecks a positive experience banking and saving for the first time.

To learn more about the MyPath initiative and details on the research study, read Boosting the Power of Youth Paychecks: Integrating Financial Capability into Youth Workforce Programs.

Link Social Mission with Private Enterprise to Develop Better Affordable Homes

Kristin Siglin
Vice President of Policy, Housing Partnership Network

Would housing policy in the United States benefit from a greater emphasis on institutions that combine deep social mission with strong business acumen? A recent Housing Partnership Network (HPN) paper explores the benefits of such an approach, drawing on lessons learned through the International Housing Partnership (IHP), a collaborative of more than 175 nonprofits from Australia, Canada, the U.K., and the U.S. that collectively operate one million affordable homes. Since the collaborative’s founding in 2003, IHP knowledge exchanges have refined our thinking about innovative models that have the potential to better leverage private sector resources to deliver affordable housing. In our paper, we investigate models of this kind in the U.S. and the U.K., and observe that the British and American affordable housing systems both rely on hybrid public-private, social enterprise–based partnerships that work well in both countries, but in different ways.

For instance, in the U.K. the relatively significant scale and capacity of nonprofit housing associations stems in large part from the Large Scale Voluntary Transfer policy, which over the past 30 years has transferred subsidized housing to new management entities enabled to access private capital in order to make needed repairs. British housing associations have been able to improve the national housing stock and serve more people due to these efficiencies of scale.

The U.S. system also includes elements of public-private partnership. The primary capital source for affordable housing development in the U.S. is the Low Income Housing Tax Credit (LIHTC), which raises private capital from investors who receive credits against their tax liability for project-based investments in affordable housing.

While both systems have served as key affordable housing tools in their respective countries for decades, the particularly innovative impact of Large Scale Voluntary Transfers on the U.K.’s affordable housing stock reveals opportunities for the U.S. to build on its system’s current successes to deliver affordable homes more efficiently. IHP discussions and investigations of both models in our paper suggest five key policy changes drawing on the example of the U.K.’s Large Scale Voluntary Transfers that could enhance the capacity of mission-oriented U.S. housing providers to further leveraging public-private partnerships to develop affordable homes:

  1. Expand the Capital Magnet Fund.
    The Capital Magnet Fund competitively awards grants to nonprofit lenders and qualified nonprofit housing organizations, with a mandatory minimum 10:1 leverage ratio. The Fund has proven to be a uniquely effective tool for leveraging public funds to attract private investments for housing in low-income communities.
  2. Prioritize preservation.
    As resources for affordable housing development shrink, it is critical to preserve the existing stock of safe, decent affordable housing and ensure that it is managed efficiently for the long term. It can be more cost-effective to rehabilitate aging U.S. Department of Housing and Urban Development (HUD) program-assisted properties under new nonprofit management. 
  3. Use a portfolio model for multifamily housing preservation.
    HPN recommends a shift toward portfolio finance for aging HUD-assisted and LIHTC properties. Policies should enable mission-oriented housing providers to acquire and preserve multiple affordable housing properties more cost-effectively by packaging several properties into one financial transaction.
  4. Make housing a platform for improving communities and building assets for residents.
    High-performing housing nonprofits can also link affordable housing development to broader programs of community and individual improvement because of their scale. Social enterprises can advance opportunity for low-income people because they combine excellence in housing development with an extensive network of relationships with social service providers.Holistic community development is easier for organizations with resources and reach. 
  5. Improve access to affordable homeownership.
    Social enterprises also can efficiently deliver homeownership as well as rental housing. Proven approaches to affordable homeownership—including nonprofit acquisition and rehabilitation and rent-to-own programs—have been shown to be effective in both the U.S. and the U.K. and should be expanded.

Combining the nonprofit mission with private business discipline can generate more affordable housing and lead to more effective management of such properties for the long term. Innovations like these are particularly important now because three quarters of Americans who are income-eligible for housing assistance currently do not receive it, often because there are not enough stable, affordable, and livable units available to meet the housing needs of low-income Americans. The success of the U.K.’s Large Scale Voluntary Transfers reveals that more effectively leveraging private funds to develop, preserve, and operate affordable homes can help to speed up the process and increase and improve the stock available to those who need it. Through our work in the International Housing Partnership, we will continue to identify and highlight similar models that have proven effective in improving and expanding the stock of affordable homes in their countries of origin and could hold promise for future stable housing in neighborhoods around the world. 

Kristin Siglin is Vice President of Policy at the Housing Partnership Network, a business collaborative of the nation’s leading housing and community development nonprofits and a top-rated community development financial institution (CDFI).

How Hospitals Can Help Heal Communities

Ted Howard
President of The Democracy Collaborative

Tyler Norris
Vice President for Total Health Partnerships at Kaiser Permanente

Cincinnati Children’s is one of the best pediatric hospitals in the country—in a city where the infant mortality rate is double the national average, with an infant dying once every three days. 

The Johns Hopkins medical center is an internationally renowned research institution—but in Baltimore’s poorest neighborhoods, life expectancies are on a par with those in failing countries like Yemen. 

 Cleveland is home to the world-class Cleveland Clinic—but the average male resident of the nearby and largely African-American inner city neighborhood of Hough can expect to live, on average, 24 years less than a man in the largely white suburb of Lyndhurst, eight miles due east. 

The list goes on and on—many of America’s finest multi-billion-dollar healthcare institutions make their home in communities beset by poor health outcomes and racial and economic disparities.

Nonprofit hospitals and health systems can no longer accept such disparities as facts of life. Clinical treatment and research, while vitally important, are simply insufficient to ensure the health of the communities they serve—because poverty is the single largest contributing factor to poor health outcomes. That means a hospital that takes its health mission seriously needs to understand its responsibility to leverage its economic activity for community benefit whenever possible in partnership with others in its community.

As part of a $3 trillion sector that commands 18% of the US Gross Domestic Product (GDP), hospitals and health systems have annual expenditures of $780 billion and an estimated $500 billion in their collective investment portfolios. With such financial clout, these institutions can be a powerful force for revitalizing and rebuilding the economies of America’s hardest hit communities: even shifting a relatively small percentage of their purchasing and investments could have an impressive impact.

Encouragingly, such a shift seems to be underway, with leading US health systems developing strategies for more inclusive local hiring, more intentional systems of local procurement, and more targeted use of their investment capital to drive transformative local economic development. (In the fall of 2016, the Democracy Collaborative, with the support of the Robert Wood Johnson Foundation, will be releasing a series of toolkits designed to highlight the emerging best practices in each of these key areas.)

The not-for-profit integrated health care system, Kaiser Permanente, is redirecting its enormous procurement dollars to support sustainable local agriculture, address the health impacts of climate change through massive renewable energy projects, and purchase more than $1.5 billion annually from minority- and women-owned firms. It is calling this approach “total health,” working in partnership to begin to utilize all of its assets to maximize the physical, mental and social well-being of the members and communities it serves.

In Detroit, Henry Ford Health System is working to localize its supply chain, recognizing the tremendous impact it can have on bringing vitality back to Detroit. In Cleveland, University Hospitals has launched “Step Up to UH,” a targeted employment pipeline strategy connecting residents of low-income neighborhoods to good jobs. San Francisco-based Dignity Health, the nation’s fifth largest health system, has established a $100 million low-interest loan fund to develop affordable housing, provide job training, and build wealth in underserved neighborhoods.

These and other hospitals and health systems are “going local” not only because it is simply the right thing to do, but also because it makes the most sense for their mission and their bottom line. By going “upstream” to tackle the underlying social determinants of health in poor communities, hospitals and health systems can produce increased, measurably beneficial impacts on population and community health. Over time, this can reduce preventable demand on the health care sector, lowering costs and making care more affordable.

Recent and forthcoming policy changes amplify the case for hospitals to rethink how they spend, hire, and invest.  In Maryland, a closely watched “all-payer” system of Medicare reimbursement replaces the fee-for-service model with one in which hospitals receive a pre-agreed share of available funds—meaning that moving the needle on economic inequality translates, through a reduction in patients, to a more stable bottom line. Nationally, under the Affordable Care Act (ACA), non-profit hospitals are now required as a condition of retaining their tax-exempt status to assess the health needs of their communities—and detail their plans for addressing those needs.

For their own sake, and the sake of the communities they serve, hospitals need to move beyond narrow notions of corporate social responsibility and toward a future where the targeted use of their economic activity has the power to transform lives and neighborhoods. With such a shift beginning across the country, there’s reason to believe that hospitals will be able to help heal America’s communities.

Ted Howard is the President of The Democracy Collaborative and Tyler Norris is the Vice President for Total Health Partnerships at Kaiser Permanente. Howard and Norris authored the new paper “Can Hospitals Heal America’s Communities?”

Supporting Cross-Sector Teams through Designing Effective Learning Communities

Beth Siegel
President, Mt. Auburn Associates

Over the past decade, national foundations and the federal government have designed many multisite initiatives that seek to address complex social problems. These initiatives have spanned many fields, from criminal justice to early childhood education to community development and health. In addition to providing sites with funding and technical assistance, a number of these initiatives have included some type of cross-site convening within the design, often referred to as “learning communities.” Evidence suggests that, when addressing complex problems, the common learning mechanisms in a field, such as traditional conferences, are not effective. Learning communities provide an opportunity to learn and network but with a more deliberate focus on knowledge exchange, team building, and innovation.

While there is extensive literature concerning organizational learning that is relevant to the design of multisite learning communities, including research on “communities of practice,” there is limited literature on best practices in the design of learning communities where multiple stakeholders involved in place-based initiatives are brought together. To fill this gap in the field, the Robert Wood Johnson Foundation asked Mt. Auburn Associates to research how learning communities have been designed, the challenges that have been faced when implementing this work, and what have been some of the best practices in terms of building team cohesion, strengthening the capacity of the stakeholders involved in the work, and sparking new and creative thinking.

With limited literature on the subject, we turned to the experts who have designed learning communities. These interviews revealed many common elements in the design of the learning communities as well as best practices to address implementation challenges.

Interviews found diversity in terms of the goals of the work; some learning communities emphasize peer learning, while others emphasize building strong cross-sector teams. Regardless of the emphasis, however, there was consensus among the interviewees that the goals of the work must be clear and that elements of the design, such as whom to invite and how to structure convenings, must be aligned with those goals. For example, if building cross-sector teams is a goal of the work, having an individual in the role of “team” leader or “champion” and developing both customized support and set responsibilities for this person is important. To achieve this goal, it is also critical that there is some consistency in the team over time. If cross-team peer learning is one of the goals, designers must make sure there is enough commonality across the teams convened that they are able to learn from each other.

Aligning Goals and Design

Goal Who Attends Design Elements
Building Cross-Sector 
Teams Assigned team leader

Consistent core team
Sufficient team time during convenings

Focus on action project at home

Community Coach

Sufficient focus on “how”

Communities of Practice for leads

Cross-Team Learning Sufficient commonalities across teams in terms of role & level of authority

Each community has a peer

Working on similar problems, systems, or results
Sufficient informal time – receptions, etc.

Site Visits

Sufficient focus on strategies

Sub-groups based on common interests

Effective networking platforms
Catalyzing Innovation Diversity in terms of perspectives and roles

Working on similar problems, systems, or results

Open and trusting environment

Use of design labs/innovation labs

Specialized physical environment
Field Building Working on similar problems, systems, or results Use of documentarian

Staffing for policy and best practices reports

Communication and knowledge dissemination strategy

One commonality across all types of learning communities is creating a format and “culture” that encourages honesty and supports risk taking. This helps to create a safe place and level of comfort both within and across teams. Methods for building this safe place include having enough informal time, including receptions and networking time during the meetings, to support personal and professional interactions; encouraging honest feedback and exploring the learning in failure; including work sessions on having honest or difficult conversations as part of the convening; and utilizing design thinking and innovation labs that encourage risk taking and experimentation.

Another area of wide agreement across many of those involved in designing learning communities is the need to balance team time, peer exchanges, and external experts. In particular, while many learning communities include outside experts who make a presentation or an “inspirational” speech, most interviewees felt strongly that this practice should be minimized and that expertise should emerge from within the group. While the initial meetings may devote more time to outside experts or faculty, as the work evolves, much of the convening should be devoted to team time and cross-team sharing.

While the convenings are important platforms to learning, building a learning community can involve other activities that strengthen cross-site relationships and promote knowledge exchange. For example, site visits, learning circles focusing on specific issues or strategies that are of interest to subgroups, and other real-time platforms such as conference calls, video conferencing, and webinars, can all contribute to the outcomes. Similarly, experts agreed that assigning a coach to each community involved and/or to the team leads, providing small grants for experimentation, and providing rapid TA during learning communities and at home are best practices that add significant value to the overall work.

As collective impact and other forms of cross-sector collaboration become the norm to address a wide range of community challenges, learning communities provide a critical opportunity for the stakeholders in these collaboratives to meet away from home, to focus their attention on “how” to work together more effectively to make a difference in their communities, and to learn from their peers who are working on similar challenges. As this platform becomes a more important component of the work, it is critical that those sponsoring learning communities are more deliberate about learning from best practices and ensuring that the time spent provides significant value to those attending.

Read Best Practices in the Design and Implementation of Learning Communities for more details about the findings from the literature review and interviews.

Beth Siegel is the president of Mt. Auburn Associates. Over the past decade, she has led the evaluation of a number of multisite initiatives that have involved the use of learning communities. She has particular expertise in the design and evaluation of complex system change initiatives.