Inspiring Residents to Engage with Local Government

Thanks to a new outreach effort, residents of Cambridge, Mass., are finding it easier to influence government.

Dante Ramos wrote at the Boston Globe, “Something unusual happened in Cambridge the other night: There was a public meeting about capital budgeting, and yet somehow there was electricity in the air.

“Last year, Cambridge set aside $500,000 for one-time projects, solicited 380 proposals for how to use it, and set up a series of committees to winnow them down. Residents age 12 and up could choose among the 20 best pitches. More than 2,700 Cantabrigians voted, either on paper or online, and scores of people crowded a room at the Cambridge Senior Center Tuesday to await the results.

“Before the announcement, people posed for photos in front of display boards touting their favorite projects: laptops for a community learning center, free Wi-Fi in several locations, and more. Finally, assistant city manager Louis Depasquale produced forms identifying the winning projects — the top six vote-getters, which were then read out Oscar-style. Residents put a higher priority on 100 new trees, a $320,000 public toilet in Central Square, and $7,000 worth of books for children learning English than, say, on a $350,000 amphitheater in a park.

“The initiative, known as ‘participatory budgeting,’ echoes Boston’s Youth Lead the Change program, now in its second year, which enlists residents age 12 to 25 to decide how to spend $1 million annually in youth-oriented capital projects. These efforts don’t just provide street-level information about what residents want. They also provide something that communities throughout the Boston area badly need: an easy path into civic affairs for young people, new arrivals, and longtime residents who simply feel left out.” More here.


Bay State Banner Features Boston Fed Research

My Boston Fed Regional & Community Outreach colleague Ana Patricia Muñoz is getting a lot of attention for her recent in-depth study on the Color of Wealth in Greater Boston. The paper breaks down asset accumulation by race, ethnicity, and country of origin. The disparities are dramatic. Callie Crossley featured the research on her WGBH TV show Basic Black, and Ana Patricia will be on CityLine (WCVB, Channel 5) Sunday at noon.

Here is a summary from “Black Politics on the Web” and the Bay State Banner, a newspaper that covers African American issues in Massachusetts.

“America is suffering from a substantial wealth gap. A small number of residents control a disproportionate amount of the nation’s wealth. With the publication of The Color of Wealth in Boston report, the issue of wealth disparity took a shocking twist. This study by the Federal Reserve Bank of Boston found that while white households in Boston had a median wealth of $247,500, African American households averaged close to zero.

“This was not a measure of household income. It was, rather, a tally of the assets that households had accumulated over the years with their income, less the amount of outstanding debt. The list included liquid assets, bank accounts, stocks, IRAs and homes. On the debt side were student loans, medical and credit card debt and home mortgages. U.S. blacks were short on the asset side and long on the debt side.

“The study performed a significant service by distinguishing the data of U.S. blacks, Caribbean blacks, Cape Verdeans, Puerto Ricans, Dominicans, other Hispanics and Asians. It was not the objective of the study to analyze the reasons for the failure to accumulate assets. However, size of family income is a great predictor of asset growth. Whites in Boston had a median family income of $90,000 compared to only $41,200 for U.S. blacks in Boston.”

More from the Fed here and from the Bay State Banner here.


The Importance of Housing

A new How Housing Matters website offers searchable research and news on a range of housing topics. The interactive portal, created by the Urban Land Institute with support from the MacArthur Foundation, emphasizes “the connection between housing and better educational opportunities and outcomes for children; stronger foundations for family and community economic stability; and healthier individuals and neighborhoods.”

An example of what you can find at the site is the post “When Housing is Affordable, Families Spend More on Child Enrichment.”

“A July 2014 research brief, based on the paper ‘Housing Affordability and Investments in Children‘ by Sandra J. Newman and C. Scott Holupka, builds on the growing understanding that affordable housing, via the additional income it provides families to invest in their children, has a strong connection to children’s cognitive development. The study is also the first to empirically confirm the soundness of the 30 percent rule of thumb. Among families with incomes below approximately $30,000 a year (i.e., at or below 200 percent of the federal poverty line), those who spend 30 percent of their household income on rent spend $125 more per year on child enrichment than those who spend 10 percent of their income on rent, and $75 dollars more per year than those who spend 50 percent of their income on rent.”

More here.


More on Children’s Social Security Numbers

WordPress lets this Federal Reserve blogger see the search terms that bring people to our Central Premise blog, and I have been shocked to learn how many parents are seeking information on how to use their child’s Social Security number for their own needs. That is fraud. Moreover, it is dangerous for the child’s future. See our most popular post here, one we hope discourages parents from committing fraud.

Recently, Ron Lieber wrote in the NY Times about the challenges a parent faces when doing the opposite: trying to protect his child’s Social Security number.

In “Identity Theft Poses Extra Risks for Children,” Lieber writes about why child identity theft happens. “Children’s credit reports are clean. That’s attractive to people who want to begin their financial lives anew for any number of reasons. Plus, minors don’t check their credit reports or review monthly bills the way grown-ups do, which means thieves may not get caught for years or even decades.

“One way that people can protect themselves from many kinds of identity theft is to put a freeze on their credit reports with Equifax, Experian and TransUnion, the three agencies that make a lot of money tracking our financial histories and selling that information to companies we want to do business with.”

For the issue of parents using a child’s number, Lieber adds this: “One possibility exists only in theory, and it’s called the 17-10 registry. The idea here is that when children are born, their Social Security numbers automatically go into a ‘do not break the glass until two months before age 18′ database. Parents could be prohibited from opting out of the database for their children, and credit reporting agencies (and employers and the Internal Revenue Service) would hopefully crosscheck it before letting anyone use any Social Security number. TransUnion is experimenting with its own database that families in Utah can put their children in.” More here.

Age 18 sounds kind of late to me. My kids started younger, and here at the Boston Fed, we have numerous paid interns who are still in high school. But it’s good people are thinking about this issue.


Benefit Corporations

There were some interesting comments over at the NY Times after the handcraft website Etsy went public last week. Etsy is a benefit corporation, meaning it aims both to make money and to provide public benefits. Will it be able to keep its second bottom line strong now that it is publicly traded? Will investors that value public benefits more than profits be angry if Etsy starts to be more focused on money?

Hiroko Tabuchi writes, “Etsy declares in its public offering prospectus that it wants to change the decades-old conventional retail model of valuing profits over community. It states that its reputation depends on maintaining its B Corp status by continuing to offer employees stock options and paid time for volunteering, paying all part-time and temporary workers 40 percent above local living wages, teaching local women and minorities programming skills, and composting its food waste. …

” ‘If you look at the history of American business, I would say that’s how we started,’ said Leslie A. Keil, a partner at Hanson Bridgett, law firm in San Francisco that has been a leading proponent of the B Corp movement. ‘But somewhere along the way, it became just about the bottom line, what your dividends are to shareholders, and what executives are taking home, rather than building a long-lasting business that enriches the community.’ ”

More here.


Inequality in Boston

At the Boston Fed, we’ve been busy getting the word out about Ana Patricia Muñoz’s excellent new study the Color of Wealth in Boston, showing the stark disparities in net worth by race and ethnicity.

Coincidentally, the mayor of the city, Marty Walsh, has published (with Bob Annibale of Citi Community Development) a piece on inequality at the Huffington Post.

They write, “On its face, Boston is thriving. The education, health care, bio-med, and technology sectors are creating jobs and fueling business start-ups. …

“Unfortunately, these improvements aren’t adding up to financial stability and prosperity for all, as too many families lack the savings and assets to withstand a financial emergency.

“According to data from, an initiative of the Corporation for Enterprise Development (CFED) in collaboration with Citi, nearly half of Boston households (46.3 percent) are ‘liquid asset poor,’ which means they lack sufficient savings to live at the poverty line for three months if faced with a job loss, medical crisis, or other income disruption. Households in this vulnerable position — especially those without a bank account — are left with few options for weathering an unexpected crisis, apart from expensive alternative financial services like check-cashing services. …

“The data in the report is sobering, but it also offers further evidence that strengthening the economic security of Boston’s families is a complex challenge that requires a holistic approach that brings together government, nonprofit and corporate partners to creatively combine workforce development, housing, education, asset building, and other disciplines into comprehensive programs for expanding financial capability.” More here.

And if you want a more granular look at who has what assets, by country of origin, in the Greater Boston region, do check out the Color of Wealth in Boston, here.

Photo: Caroline Ellis
Boston Mayor Marty Walsh

Affordable Housing Is about the People, Not the Housing

The Northern Virginia Affordable Housing Alliance (NVAHA) has a sensible way of talking about affordable housing.

“People of all ages and at all stages of life need a place to call home. They need housing that is safe, decent, and affordable. We know that housing is the platform upon which individuals and families build their security and stability, and this creates communities that are diverse, successful, and thriving.

“Housing policy wonks discuss AMI (area median income), LIHTC (Low Income Housing Tax Credits), density bonus and annual consolidated community plans, but what really matters is the answer to this question:

‘Do people have a home? Are we creating communities that are resilient, that value economic and social diversity, and that provide housing opportunities for households of all incomes?’

“When children have safe, decent, and affordable housing, they do better in school. Adults whose housing is secure and affordable can concentrate on skills improvement and job advancement. Businesses have an easier time recruiting and retaining stable employees, especially our small and mid-sized employers. This is doubly true if we build affordable housing near job centers and major transit lines, reducing commutes and increasing both productivity and livability for all. Affordable housing allows people to live in the communities where they work – and that includes not just the teachers and first responders, but the plumbers, bank tellers, hospitality workers and the baristas in our coffee shops.”

Check out the good work of the Northern Virginia Affordable Housing Alliance at its website, here.

Businessman with Coat and Tie Holding House.