Asset Building Strategies Mayors and Working Families: City Human Service Officials May 2, 2005

2 Background  Department of Community Initiatives provides family strengthening, human development, and community safety net services to San Antonio residents to improve their quality of life  Two pronged approach to building individual and family assets includes:  Workforce Development  Family Economic Success

3 What is Asset Building?  Family strengthening strategy to promote economic success  Assists low income working families maximize their earnings through participation in the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), and savings incentive programs  Connects families to reputable financial services and multiple public benefits  Improves income and generates wealth through:  Increased homeownership  Higher education  Access to capital

4 Why Invest in Asset Building?  Low-income families spend more for the basics including transportation, housing, food, childcare, and financial transactions  Families are unable to build economic security for themselves, their children, and their neighborhoods  Serves as a strategic public policy, which provides a significant return on investment  Offers an immediate deliverable for elected officials

5 Protecting Assets  Asset Protection  Financial Literacy  Start as early as possible  Sub-Prime Lending Reduction  Predatory Lending Prevention  Housing Counseling  Credit Repair

6 Challenges to Asset Building Predatory Practices

7 Challenges to Asset Building Mortgage Lending Comparisons Monthly Payments on $60,000 MarketSub-primePredatory

8  Increased levels of family savings  More families own their own homes and other assets  More eligible families file for the EITC and Child Tax Credit  Increased access to reasonable priced housing, consumer goods, and financial services  Fewer families have payment-disruptions in housing, utility shut-offs, and foreclosures Asset Building Outcomes

9  VITA serves as the cornerstone of the City’s asset building effort  Helps families take advantage of tax credits  23% of eligible filers do not claim EITC, which costs San Antonio families more than $86 million  Connects working families to comprehensive services including IDA, financial literacy, traditional financial products, and credit repair  Provides comprehensive outreach for multiple public benefits VITA Serves as Key Strategy

10 Earned Income Tax Credit San Antonio Impact  Approximately 145,000 San Antonio families received the EITC during 2002  $283.0 million was returned to local residents  Average EITC for San Antonio families was $1,952  Economic activity generated over $299 million and supports over 5,100 jobs

11 Generating Resources Return on Investment Approach City Council Investment $86,000$121,000$141,000 # of Sites # of Completed Returns – City Sites 9,53715,20019,388 Total # of Returns by Coalition 12,50020,85025,000* $$ Returned to Families – City Sites $12 million $22.3 million $30 million Total $$ Returned by Coalition $21.8 million $30 million $39 million *Estimtate: all Coalition data has not been collected

12  Matched savings account program help working families accumulate savings for long-term assets, including first time homeownership and post secondary education  Creates opportunities for families to acquire and develop capital assets, change spending and savings patterns and make informed consumer choices  Promote financial literacy as a family strengthening value system and part of the community culture  Matches participants savings at a rate of $4 to $1 for a maximum of $4,000 to be applied to an asset goal Individual Development Account (IDA) Program

13  Program eligibility and requirements:  Income at or below 200% of Federal Poverty Guidelines  Verifiable earned income  Completion of 12 hours of financial literacy instruction  Monthly savings deposits for a minimum of six months  Resident of San Antonio or Bexar County Individual Development Account (IDA) Program

14  402 families are enrolled in an IDA and actively saving Homeownership 247 Est. Participant Savings $408,000 Education 143 Est. Match Committed $1,608,000 Micro-enterprise 12  75 families have completed the program requirements and purchased their asset Homeownership 36 Participant Savings: $61,500 Education 36 Match Contributed: $246,000 Micro-enterprise 9 IDA Results

15 IDA Partnerships Program Partners  Annie E. Casey Foundation  Goodwill  United Way  Project QUEST  Northeast ISD  Harlandale ISD  Habitat for Humanity  Edgewood Family Network  ACCD Campuses  SAC Women’s Center  Neighborhood Action Department  UU Housing  Neighborhood Housing Services Program partners provide outreach, referral and supportive services.

16  Asset for Independence Act – HHS  Requires local dollar match for every federal dollar  Banks may contribute as a Community Reinvestment Act credit  United Way  Community Development Block Grant  Foundations  City general fund Financing IDAs

17 Contact Information Dennis J. Campa, Director City of San Antonio Department of Community Initiatives Melody Woosley Special Projects Manager Department of Community Initiatives