Renting Partnerships work in the neighborhood of Avondale, Cincinnati is featured in the January newsletter of the Economics of Compassion Initiative. Click here for a link to the article in Compassionomics.
We are very pleased to learn that the Renter Equity Exchange Concept is inspiring others as a way to improve their cities. Here are links to two recent online articles:
The Center for American Progress published a report this month documenting clearly why it is critical to find ways to enable families that are renting to build assets. The renter equity system Margery Spinney and Carol Smith established at Cornerstone Corporation for Shared Equity is presented as one successful model. Renting Partnerships introduces a legal framework, protocols for community engagement and financial services which are needed for the model to be replicated successfully on a wider scale.
The Center's report also highlights the HUD's Family Self Sufficiency Program and Waypoints Lease Plus Rewards Program. Several factors that are unique and special about renter equity: 1) The credits residents earn are paid for through the vesting period and other savings resulting from resident commitment, 2) This makes the concept sustainable, while public funding is not. 3) It creates a housing option that allows residents to participate as contributors, rather than consumers, which is more like the equity that owners build. 4) Since the savings are not a "gift," resident households can decide how they use their credits. 5) Savings can build indefinitely. This gives residents an incentive to stay in place which contributes to the quality of life in the surrounding neighborhood. 6) Even the lowest income households can participate in an Equity Exchange. It takes character and commitment, not money, to "buy in." If a households assets are restricted by programs, such as rental assistance or SSI, they can still benefit from loans or rent concessions.
Here is a link to the report: http://www.americanprogress.org/issues/housing/report/2014/09/10/96706/as-more-households-rent-how-can-we-encourage-them-to-save/.
Carol Smith, Resident Development for Renting Partnerships, recently received an Appreciation Award for her service as a Board Member to the CDC Association of Greater Cincinnati (cdcagc).
The Ohio Housing Finance Agency recently released a report by the Corporation for Enterprise Development (CFED) evaluating outcomes of the Cornerstone Renter Equity property management system. The report documents Cornerstone's success between 2002 and 2012 in building residents' wealth, sense of well being and maintaining the property. The project demonstrates that it is possible to create a social and economic system within which renters build equity. At the same time, it concludes that "It will be challenging to replicate Cornerstone's equity based property management system elsewhere...without a gifted property manager committed to facilitating resident engagement and empowerment..."
Renting Partnerships' was founded by the former management team at Cornerstone to help organizations integrate resident engagement and empowerment with property development and with management. The financial credit system itself is primarily a means of measuring resident participation. It should not be viewed as a management tool to control resident behavior. Renter equity is not an "add on" property management service. To sustain and replicate the results documented in the study, agencies and owners as well as managers must alter their ways of operating.
Renting Partnerships is very proud to have received a 2013 capacity building grant from the PNC Foundation. Robie Suggs (center) presents the check to Ed Burdell, representing our fiscal sponsor AIR, Inc., and Margery Spinney.
Most readers who are not familiar with the affordable housing industry will find some background helpful in understanding renting partnerships.
Investing net income in a fund for residents makes sense when one realizes that public programs are providing the financial incentives for organizations that develop and own affordable housing. The most effective production program over the past the 25 years has been the provision of low income housing tax credits (LIHTC). Investors, such as banks and insurance companies, provide funds for development instead of paying taxes on income earned from other business. This creates a mixed public-private economy in the low income housing industry. The industry has produced an average of about 75,000 affordable multifamily units each year since the 1980's.
Affordable housing is privately owned and not synonymous with subsidized housing. Residents pay rent out of pocket unless other programs are involved. Rents are lower than market rate because they do not need to cover all of the financing costs and a profit to the owner. Tax credits for historic rehabilitation, grants and contributions may also be used to lower rents, either separately or in combination with LIHTC.
Renting Partnerships is participating in a session on the Economics of Compassion hosted by the Bellarmine Chapel at Xavier University, Cincinnati, October 21, 2013. Please click on the following link to see a program description and flyer.