As Historic Election Looms, LIIF Reiterates Commitment to Equitable and Impactful Investments

Low Income Investment FundNovember 2, 20200 Comments

In the final days before voting in the historic 2020 elections comes to a close, LIIF is pausing to acknowledge the gravity of this current moment in our nation’s history. Over the last several months, the COVID-19 pandemic has illuminated the life and death consequences of systemic inequality, with Black and Latino communities suffering the biggest share of COVID-19 cases and death. We are also suffering from a simultaneous economic recession which disproportionately impacts communities of color.

Although these disparities are not new, the level of harm tearing through our most vulnerable communities is astounding and devastating. And as Congress and the White House continuously fail to provide much-needed stimulus support to struggling Americans, the outlook for relief can feel shockingly bleak.

Fortunately, we do know what is needed from our elected officials to move forward. We need a bold commitment to racial equity at the highest levels of our government. We need unprecedented public investment in the basic amenities that help communities thrive, like affordable housing and early care and education (ECE). And we need to elevate community development financial institutions (CDFIs) as critical players in driving larger systems change.

Commit to Racial Equity

History has repeatedly proven that systemic racism and unjust lending practices will persist unless we consciously and explicitly require different and more equitable outcomes. However, recent actions at the federal level have fundamentally undermined the federal government’s obligation to advance racial equity. Most immediately, LIIF urges the Administration to reinstate HUD’s 2015 Affirmatively Furthering Fair Housing (AFFH) Rule – a critical tool to advance fair housing and desegregate communities – and halt the Office of the Comptroller of the Currency’s (OCC) harmful Community Reinvestment Act (CRA) rule which reduces a bank’s obligation to serve its low-income communities.

The federal government must also pursue new strategies to advance racial equity in the financial services sector. Capital consistently follows the easiest and most profitable path, which often excludes the smallest and minority-owned businesses. The Small Business Administration’s Paycheck Protection Program (PPP) is the most recent example of government reliance on existing market mechanisms that fail to reach historically underserved communities. To more equitably distribute resources, CDFIs should have access to a portion of federal resources to ensure that small and minority-owned businesses are not left out.

Invest in Affordable Housing and Early Care and Education

Our country was already facing a severe shortage of affordable rental housing and high-quality ECE centers prior to the pandemic, and these challenges have now been amplified for millions of households. Recent research from the National Council of State Housing Agencies (NCSHA) indicates that U.S. renters will owe up to $34 billion in past-due rent by January and more than 8 million renter households could face eviction by January 2021. Further, research suggests that the pandemic could result in the permanent loss of nearly half the nation’s supply of child care slots.

LIIF urges Congress and the Administration to enact at least $100 billion in federal rental assistance, in addition to a national moratorium on evictions, to ensure individuals can stay safely and stably housed during this public health crisis. And to incent long-term investments to grow the supply of affordable rental housing, we support enacting the Affordable Housing Credit Improvement Act to strengthen and expand the Low Income Housing Tax Credit, the nation’s most productive tool for developing and preserving affordable rental housing.

We also urge Congress and the Administration to provide at least $50 billion to stabilize the child care sector since our nation’s long-term economic recovery is dependent on parents’ ability to access reliable and affordable child care. As we look to long-term rebuilding, LIIF strongly supports Representative Katherine Clark’s Child Care is Infrastructure Act, which would invest $10 billion in our nation’s child care infrastructure with resources dedicated for CDFIs to provide technical assistance support to ECE providers.

Elevate CDFIs as Drivers of Systems Change

CDFIs are an important facet of the financial services system. We provide expertise in raising and assembling capital from multiple sources, both public and private, and deploying it to finance impactful but complex projects where they are most needed. CDFIs also ensure that targeted community development investments are nested with broader, place-based strategies that integrate amenities like child care facilities, community health centers, housing for people with disabilities, and healthy food providers and systems.

LIIF supports bold investments in the Treasury Department’s CDFI Fund to ensure CDFIs have the resources necessary to take our work to scale. We urge Congress and the Administration to grow the CDFI Fund to $1 billion annually, up from an average of $250 million in recent years, so that CDFIs can access consistent equity to grow, strengthen their balance sheets, and inject more capital into underserved communities.

As the world waits to see the outcomes of the November 3 elections, LIIF is pausing to recognize that our nation faces several crises but also an opportunity for transformation. All of us have a role to play in advancing an equitable recovery and long-term community resiliency. We believe our government should provide leadership that centers equity, opportunity and well-being. We urge everyone to come together in solidarity; to center Black and Latino people, those most deeply impacted by historical and current inequities; and rebuild our economy and create a more equitable, just society for all.

 

Unprecedented times require unprecedented voter turnout. This year, more than ever, it’s important to make a plan for how you’ll make sure your vote is counted. Go to vote.org to find out your voting options in your state.