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

1. Asset Building StrategiesMayors 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 BuildingPredatory Practices

7. Challenges to Asset BuildingMortgage Lending ComparisonsMonthly Payments on $60,000 Market Sub-prime Predatory

8. Asset Building Outcomes • 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

9. VITA Serves as Key Strategy • 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

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 ResourcesReturn on Investment Approach *Estimtate: all Coalition data has not been collected

12. Individual Development Account (IDA) Program • 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

13. Individual Development Account (IDA) Program • 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

14. IDA Results • 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

15. 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 IDA PartnershipsProgram Partners Program partners provide outreach, referral and supportive services.

16. Financing IDAs • 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

17. Contact Information Dennis J. Campa, Director City of San Antonio Department of Community Initiatives 210-207-7209 dcampa@sanantonio.gov Melody Woosley Special Projects Manager Department of Community Initiatives 210-207-8134 mwoosley@sanantonio.gov