CDFI Economic Development

1
CDFI Economic Development Housing Hot Zone Study

• Client Northeast Community Federal Credit Union
• Presented By Laura Ajello, Melodie Bounds
  David Carcia

San Francisco State University
Senior Seminar Spring 2003
2
Outline

• Introduction
• Objectives
• Research Methods
• Findings
• Recommendations

3
TeamSFSU Urban Studies Department
INTRODUCTION

• Laura AjelloSenior, land use emphasis
  Internship SF City Planning Department,
  Northwest Team
• Melodie BoundsSenior, land use emphasis
  Internship Alameda City Planning Department
• David CarciaSenior, policy analysis emphasis
  Internship AC Transit

4
Community Investment Relationships
INTRODUCTION
5
Client BackgroundCommunity Development Financial
Institution
INTRODUCTION

• Northeast Community FCU
• Formed in 1981
• A non-profit, member-owned, federally insured,
  community development credit union
• Promotes community development to
  low-incometarget populations through equity
  investments, development services, and loans
• Currently serves San Franciscos Chinatown and
  Tenderloin neighborhoods

6
Problem Statement
INTRODUCTION

• Low-income populations in
• San Francisco
• Have limited access to federally insured,
  regulated financial services
• Are forced to rely on informal finance mechanisms

7
Objectives

• Northeasts Goal
• Promote economic revitalization in underserved
  communities
• Obtain federal grants to pursue their mission
• To expand existing field of membership, including
  Visitacion Valley and SOMA
• Team Deliverables
• Determine the extent of predatory lending
• Identify distressed neighborhoods in need
  ofNortheasts services
• Provide client with statistical analysis to
  justify futureCDFI funding

8
Research Methods

• Literature Review
• Data Collection and Analysis
• Primary Data Northeast membership loan records
  
• Secondary Data US Census SBC Yellow Pages,
  November 2002 ed.
• GIS Mapping with ArcView 3.2
• Geocode predatory lender locations
• Geocode Northeast membership addresses
• Geocode Northeast loan distribution
• Map race income variables

9
Findings

• Hot Zone
• Membership
• Predatory lenders
• Outstanding loans
• Race and income data

10
What is a Hot Zone?
FINDINGS

• CDFI Fund has established various programs and
  incentives for CDFIs to engage in economic
  investments in targeted distressed communities
• Qualified CDFIs are encouraged to apply to these
  programs to obtain either financial assistance
  (FA) and/or technical assistance (TA)
• CDFI funds must serve poor neighborhoods, as
  required by law
• E.g. CDFI funds are not permitted for credit
  union operating expenses or program administration

11
Investment Area Qualifications
FINDINGS
12
Northeast Membership
FINDINGS

• Membership is open to anyone who lives, works,
  orhas associational ties in the area within
  Chinatown, Tenderloin, North Beach, and Nob Hill.

13
Map of Current Branches
FINDINGS
14
Membership Map
FINDINGS
15
Predatory Lenders
FINDINGS

• Pawn shops and check cashing stores serve as
  non-traditional lenders
• Check cashing user fees range from2.35 to 15

16
Predatory Lenders
FINDINGS

• SBC Yellow Pages lists 20 pawn shops and 40 check
  cashing businesses in San Francisco.

17
Predator Map
FINDINGS
18
Predator Map-6th Street
FINDINGS
19
Membership Predators
FINDINGS
20
Northeast Member Loans
FINDINGS

• 196 total outstanding loans, totaling 7.2
  million dollars
• 27 car loans
• 44 personal loans
• 10 1st mortgage loans (approximately)
• 1st mortgage loans account for approx. 60 of the
  total lending dollars

21
Northeast Loan Distribution
FINDINGS
22
Current Field of Membership Western SOMA Loans
FINDINGS
23
Visitacion Valley Loans
FINDINGS
24
Western SOMA Census Tracts
FINDINGS
25
Visitacion ValleyCensus Tracts
FINDINGS
26
Racial DistributionPercentage SOMA V. Valley
FINDINGS
27
Racial DistributionPercentage Visitacion Valley
FINDINGS
28
Median Family IncomeWestern SOMA
FINDINGS
29
Median Family Income Visitacion Valley
FINDINGS
30
Percent PovertyWestern SOMA
FINDINGS
31
Percent PovertyVisitacion Valley
FINDINGS
32
Percent Unemployment Western SOMA
FINDINGS
33
Percent UnemploymentVisitacion Valley
FINDINGS
34
Median Rent BurdenWestern SOMA
FINDINGS
35
Median Rent BurdenVisitacion Valley
FINDINGS
36
Recommendations

• Expand into Western SOMA (1st Choice)
• Conduct a rent burden analysis on the block
  group level in both study areas
• Expand into Visitacion Valley (2nd Choice)
• Consider a more comprehensive study of
  unregulated financial service institutions

37
Thank You
Client Northeast Community Federal Credit
Union Presented By Laura Ajello, Melodie Bounds
David Carcia
San Francisco State University
Senior Seminar Spring 2003