Author Archive: Oscar Perry Abello

These Planners Stepped Away From the Spreadsheets and Into the Community

(Photo by Oscar Perry Abello)

Like many immigrant communities across the United States, those on Long Island have been living, working and raising families under a growing threat of deportation. In the past few years, they’ve faced waves of Immigration and Customs Enforcement raids, the continued limbo of DACA (the work permit program for immigrants who arrived in the U.S. undocumented as children), and the Trump administration’s overall stance on immigration. Most recently the White House announced it was ending specific programs for immigrants fleeing natural or manmade disasters in Central America and Haiti.

Walter Barrientos has spent a fair amount of time organizing resistance around these federal threats — but he has also seized an opportunity to effect change locally. He’s encouraged Long Island immigrant communities to participate in a regional planning process. It might seem absurd to think long-term under such conditions, but Barrientos believes the engagement has given them even more to fight for.

“At times, it felt self-contradictory, because it feels like we’re dealing with a fire, and here we are thinking about what we want our communities to look like in 20 years,” says Barrientos. “Many feel like the messages they’re getting now are that they don’t belong here, that this is not their home, but I think there was something very reassuring and empowering in the process of deciding priorities and taking ownership of their communities and saying this is what we want it to look like.”

As Long Island organizing director for Make the Road New York, Barrientos set up long-term planning discussions that were part of the drafting process for the Regional Plan Association’s Fourth Regional Plan, published on Nov. 30.

An independent, nonpartisan, nonprofit research and advocacy organization, the Regional Plan Association (RPA) has been around since 1922, when some of New York’s most prominent business and professional leaders launched an effort to survey, analyze and plan for the future growth of the NYC metropolitan region. RPA touts the way it thinks comprehensively about the region, which consists of some 23 million residents and nearly 800 cities and towns in 31 counties, across three states.

RPA published its first regional plan in 1929, a document that’s noted for its proposal for what eventually was built as the George Washington Bridge. In 1968, RPA published its second regional plan, which included a call for the creation of both NJ Transit and the Metropolitan Transportation Authority. The third regional plan, published in 1996, included a call to redevelop underused postindustrial waterfronts around the NYC harbor. Since then, there’s been highly visible waterfront redevelopment in Brooklyn, Queens and also Jersey City, New Jersey, in particular.

(Credit: Regional Plan Association)

The Fourth Regional Plan’s key recommendations start with reforming the region’s transportation authorities and reducing the costs of transit projects. That includes the establishment of a new Subway Reconstruction Benefit Corporation to overhaul and modernize the NYC subway system within the next 15 years. The next key recommendation is to expand and strengthen the region’s carbon emissions cap-and-trade program, based on California’s model, which would drive down greenhouse gas emissions and also create a new revenue stream that would then be used to invest in creating an equitable, low-carbon economy.

The plan also calls for local governments to take steps to engage with the public more efficiently and more inclusively. Few residents participate in many types of community decision-making, the plan says, and there is uneven representation by race, age and income. As a result, the plan charges, local institutions make decisions that often reflect the values and needs of older, wealthier, and mostly white residents rather than the population at large.

The drafting process for the plan itself attempted to model this key recommendation, and included the discussions that Barrientos helped to organize.

“RPA has a strong history of broad engagement — engaging a wide array of people, experts, academics, in different sectors,” says Pierina Ana Sanchez, New York director at RPA. “One thing we hadn’t done in previous plans was engaging directly with communities, and with grassroots groups in formal, contractual relationships as partners.”

Make the Road New York was one of eight grassroots organizations (plus one technical assistance provider) in the NYC metropolitan region that partnered with RPA to undertake a multiyear community engagement process as part of drafting the Fourth Regional Plan. Collectively, the eight grassroots organizations claim to represent more than 50,000 low-income residents and residents of color in the NYC region. Sanchez estimates that, as part of this process, those groups directly engaged around 1,600 people in scores of face-to-face settings, including issue area working groups, surveys, public forums and briefings, over the past three years. By the final draft, grassroots organizations had the chance to weigh in on every recommendation, Sanchez says.

RPA’s grassroots partners divvied up organizing by geographic region. (Credit: Regional Plan Association)

The multiyear community engagement began in 2014, partly at the behest of RPA’s funders, including the Ford Foundation, according to Sanchez. (Next City receives support from the Ford Foundation.)

“For urban planners, the model generically is, you do some existing conditions research, then you go and you present findings to a group of stakeholders, get some reactions, start some discussions, then you go back and write up what the implications are and your plan,” she says. “With this process, it was, let’s look at the screen together at the same time, and let’s draft this together. It was a partnership from the very beginning in the sense that the RPA research and planning process mirrored the engagement process.”

At times, it was an awkward dance, especially in the beginning. Neither side was sure it would be a productive relationship. Language was a huge barrier — not English vs. other languages, but rather, the language of planning.

“An average community member or even most people with a college degree would have a hard time engaging in these conversations in a productive way,” Barrientos says. “In the first phase, even we as a staff were having such a hard time understanding how this works. We had to make it a priority to work with RPA to come up with a curriculum to teach people the language of planning and zoning. All of that helped build trust that historically we haven’t had.”

As RPA planners began gathering data, community engagement partners conducted surveys, focus groups, and other discussions to gather input to verify or provide additional insight into the issues planners were examining at the same time. Working with the Hester Street Collaborative, RPA and the community engagement partners created a series of games to illustrate long-term planning challenges and gather input on recommendations. RPA staff facilitated and sometimes played the games themselves alongside members or leaders from the grassroots organizations.

“It was not easy to rip [planners] away from their Excel sheets and GIS, but we did,” says Sanchez.

While it took time to get members truly up to speed on planning language, Barrientos recalls a definite breakthrough feeling about a year ago, as Make the Road New York began holding sessions for residents to vote on final priorities for the plan. He recalls a new level of engagement — that people at the grassroots level weren’t just providing input on preconceived priorities, but setting priorities.

“People are usually engaging in the design of a park, but somebody has already decided that park needs to be the priority,” says Barrientos. “I think for many community members, on our side largely Latino immigrants or children of immigrants, even if they have lived here sometimes for decades, this was the first time they understood how these decisions were made and they felt they were informing the process and deciding or suggesting to RPA in this case what the priorities should be.”

RPA President Tom Wright also acknowledges a steep learning curve.

“There was a diversity of feelings on both the community side and the staff side,” he says. “On the staff side, there were some folks who felt like this was always what they wanted to do and it was exciting, and there were others who felt initially they’ve been doing this for 20 years and ‘I know what I’m supposed to do.’ It was definitely a learning process, and I put myself in that.”

For example, grassroots groups taught RPA reps a lot about factors influencing the housing affordability crisis and displacement around the region.

“On the housing and community development side, this plan is much more robust and richer in its understanding of the factors that influence community growth and displacement than ever before,” Wright says. “I learned an enormous amount about it.”

The plan includes a map of the region showing areas where low-income or working-class households are at risk of displacement. The key recommendations include a call for cities and states to be more proactive in protecting vulnerable residents from displacement due to housing costs. RPA estimates in the metropolitan region there are more than 1 million low- to moderate-income households that are vulnerable to displacement, 70 percent of them black or Hispanic.

(Credit: Regional Plan Association)

Some of the displacement findings were published in March 2017 in a separate document, “Pushed Out: Housing Displacement in an Unaffordable Region.” Displacement is a regional phenomenon, RPA found: As demand for homes in cities like New York, Jersey City, and Stamford, Connecticut, push rents and sale prices upward, lower-income households are pushed outward, often into areas not yet equipped for their housing needs.

“You’ll see a neighborhood on the map that looks like it should be a lot of single-family homes but as you drive through the neighborhood, because of how expensive it is to live in the region, many of these properties are being used for multifamily housing that is going underreported and creating tensions,” says Barrientos.

Recognizing that reality, the plan recommends creating 300,000 homes across the region, including on Long Island, through simple policy changes like allowing just 10 percent of single- and two-family properties to add an “accessory dwelling unit,” or ADU.

Affordable housing was the number one priority among the communities Barrientos helped organize on Long Island. Overall, the plan also recognizes that the housing affordability crisis is a top concern for the region.

“We really need to work with elected officials and other stakeholders to develop a model for truly affordable housing for low-income and working-class families who are already working as much as they can work and still cannot afford housing throughout the region,” Barrientos says. “They may not be able to afford to live where they grew up because of gentrification.”

RPA estimates half a million new homes could be added to the region’s housing supply without constructing one new building, such as the homes added by permitting ADUs, or repurposing blighted non-residential buildings.

Calls for more housing are based on forecasts of growth, but such estimates aren’t guaranteed — another reality that Barrientos and Long Island participants were able to bring to RPA’s planners.

“Federal policy has major implications throughout much of the region, because much of the growth in places like Long Island and the Hudson Valley is very much being shaped by immigration,” Barrientos says. “That was a connection they didn’t necessarily have before.”

In Long Island’s Suffolk County alone, Barrientos notes, many immigrants from Central America and Haiti in particular have legal residency thanks to the Temporary Protected Status (TPS) program, which exempts from deportation and grants work permits to immigrants from nations besieged by natural disaster, war or famine. As reported in Newsday, residents with TPS program status account for $373 million in annual local spending per year in Suffolk County alone, according to the county’s Department of Economic Development and Planning.

But now the Trump administration is ending the TPS program, and telling immigrants who fled hurricanes or earthquakes in Nicaragua and Haiti to pack their bags and go home. Immigrants from Honduras or El Salvador could be next. Some 600,000 immigrants in the U.S. are here through the TPS program.

Moving forward, as RPA goes into advocacy mode, relying on its influential board made up of former public officials, real estate magnates, financial industry players, academics, and even a few activists, it’s also pursuing grant funding to continue working with grassroots groups to keep community voices involved.

“We will fight the fights we need to fight now, but this is the vision we were working towards,” says Barrientos. “The planning process gave people hope, and a vision for what we need to build on despite all the attacks that we’re dealing with and all we’re having to fight for at the moment.”

These Oakland Entrepreneurs Didn’t Need a Shark Tank to Raise $237K

(Credit: Spotlight:Girls)

Lynn Johnson and Allison Kenny’s business, Spotlight:Girls, uses arts and performance to teach social and emotional skills to girls. That might sound like a model nonprofit, but the two, who are married, thought otherwise.

“I came from the world of nonprofits and very specifically did not want to run a nonprofit,” says Johnson, who is a theater artist. “I wanted to be in a situation where I was generating wealth for myself, my family and my community. I was fighting against the idea of having to be a starving artist, to prove that what we do for the world has value.”

Thanks to an array of tools, some new and some old, they’re taking their business national now. Their first girls-only summer camp was in an Oakland church basement in 2008, with just 17 campers. Their after-school and in-school programs now reach over 460 girls, and their main summer/winter camp business now reaches around 500 first- to fourth-grade girls a year, across multiple sites in the Bay Area. For those who cannot afford to pay the $699 camp fee, Spotlight:Girls has secured paid sponsorships from local businesses looking for exposure to camper parents.

Lynn Johnson, left, and Allison Kenny, right (Credit: Spotlight:Girls)

The business now earns around $400,000 in revenue a year, and they have a plan to take their trademark “Go Girls!” summer camp to 35 sites nationwide by 2020, using a franchising model. They’ll teach franchisees how to run the camps as well as how to recruit local business sponsors.

“As we’re growing into that we want to be a relatively low point of entry for franchise buy-in, so we can work with a diversity of entrepreneurs,” says Johnson.

Starting up a franchise like a McDonald’s can run in the hundreds of thousands of dollars, up to $2 million according to one estimate, plus an annual cut of revenues. For Go Girls! camps, franchisees will pay a $7,500 training/set­up fee and then 8 percent of annual revenues from their Go Girls! camps. The opportunity is open to non­profit franchisees too, who will pay a one­-time fee of $5,000. All franchisees will also have access to the core Spotlight:Girls team for ongoing technical support in running the camps.

Johnson raised $237,500 in capital for the national expansion, for training costs and materials for new franchisees and a new marketing director and a larger marketing budget. When thinking about how to get that capital, Johnson considered many options, from banks to venture capitalists, but she knew the numbers.

Loan approval rates for women-owned businesses are 33 percent lower than what men-owned businesses get, and loan denial rates for minority-owned firms are around 42 percent, compared to those of non-minority-owned firms at 16 percent. A bank loan doesn’t quite make sense, either, for this kind of business; banks generally want steady payments all year round, but a business built on a summer camp and other education work doesn’t get steady revenue all year round.

On the venture capital side, Project Diane analyzed the 10,238 venture capital investments made in the U.S. from 2012 to 2014, and found just 24 of them had a company with a black woman founder. That’s 0.02 percent.

“We looked at all the different options,” Johnson says. “Based on the size of the business, who I am in the world, there’s so many types of investment I’m just not going to get.”

Instead, Johnson combined an array of tools to raise the capital Spotlight:Girls needed from their own backyard and from a community of like-minded individuals who believed in Johnson and the company’s mission. Throughout the process, Johnson worked with Oakland-based lawyer Jenny Kassan, who specializes in helping mission-driven entrepreneurs raise capital.

“I’ve raised this money by being supported by a community of women entrepreneurs,” Johnson says.

Kassan has two decades of experience helping dozens of clients all over the U.S. to raise capital through similar processes, as an alternative to the “shark tank” style of venture capital investing: three-minute pitches, huge conferences and high-pressure conversations.

“That is not a good model for 99.9 percent of businesses but a lot of people don’t realize there are a lot of other options,” Kassan says. “Even if you do get the money, you might end up regretting it, because basically you’re bringing on a boss and they might push you to do things you might not want to do.”

Johnson’s capital raising started with her community; she raised $50,000 from two friends. With Kassan’s guidance, she used what’s called a private offering, in which entrepreneurs sell non-voting ownership shares of their business — so they can maintain control but allow other investors to share in the profits.

The U.S. Securities and Exchange Commission (SEC) has lots of rules about how to advertise and how much any one investor can put in and how much an entrepreneur can raise through the private offering process, but as long as you follow the rules, pretty much anyone you know can invest. One of Johnson’s friends set up a self-directed IRA (individual retirement account) so that they could move retirement savings into that account and from there make an investment in Spotlight:Girls.

It can still be intimidating, Kassan says, but having a mission helps. “When you first start raising money for your business, you might feel like you have to promise really high returns or that there’s no way you’re going to lose someone’s money,” she says. “It gets better when you start to have confidence in your mission and who you are.”

Johnson found the experience starkly different from going to a bank or a venture capitalist, where the investors’ expectations are the main drivers of the discussion. Investors, especially venture capitalists, are on the hunt for businesses that will take their $1 million and turn it into $10 million or $100 million.

“When you go to your community you give them the term sheet,” Johnson says. “Some have said yes, some have said no, but I’ve raised what I needed to raise.”

Next came WeFunder, one of a wave of new online platforms that allow entrepreneurs to raise capital from investors. Spotlight:Girls used WeFunder to raise $87,500 from more than 40 investors. The minimum investment was just $500.

Proponents of crowdfunding have said it could help level the playing field for business investment, and since the rise of these platforms, there is some early evidence that promise may hold up. Investibule, an online investment aggregator, analyzed the first 500 online investment offerings listed on its site, and found that women and minorities are succeeding at far higher rates than they have using the traditional venture capital route. Across a diverse array of industries, led by food and beverage, there were 134 women-owned businesses and 62 minority-owned businesses among the “Community Capital 500.” Investibule found that 76 percent of women-owned businesses and 73 percent of minority-owned businesses successfully raised the capital they needed from online investors.

The last and biggest chunk of capital for Spotlight:Girls’ expansion came from the Force for Good Fund, a unique investment fund that itself used the same tools above — and raised around $700,000 from a private offering and $401,401 from 201 investors via WeFunder. The fund plans to make investments in 10 companies, focusing on women- and minority-owned businesses.

“Women and people of color generally have much less access to capital for business, and we really wanted to change that,” says Kassan, who helped assemble the fund. “It’s a good investment to have a more diverse portfolio. If everyone you invest in looks the same and comes from the same background, that’s not diversity.”

Spotlight:Girls was Force for Good Fund’s first investment, with $100,000. Instead of ongoing repayments, the company pays back a percentage of its annual revenues for up to eight years. If the company does well, it could pay back what it owes early. The fund has since made two more investments, in The Town Kitchen (also based in Oakland) and Community Services Unlimited, in Los Angeles.

According to Kassan, Force for Good Fund has offered to open source documents and exchange knowledge so others can create similar funds across the country.

Force for Good Fund portfolio companies also get discounted technical assistance to become a certified B corporation, or B corp for short, as Spotlight:Girls did after receiving its investment.

“One of our goals is we would like to see the B corp community be more diverse. We want that community to be really accessible to lots of different kinds of businesses led by very diverse founders,” says Kassan.

B corps commit to embedding social and environmental goals into their core business models, and to reporting social and environmental outcomes on a regular basis to B Lab, the nonprofit organization that administers B corp certification. There are currently 2,310 B corps around the world. Certifying her company as a B corp was always important to Johnson, as a way of being transparent and being held accountable for the positive impact of their business on their community.

“It was something that seemed like a no-brainer because it gives the roadmap for how to do business in this way,” says Johnson.

Being a mission-driven company, with B corp certification to prove it, could become a key advantage for businesses that use these alternative ways of raising capital from their communities.

“Every company I’ve worked with to raise money has been a mission-driven business,” says Kassan. “I actually think if you’re not a mission-driven business it could be harder. I could be wrong, but I think it’s just easier to find people who are excited to support you.”

Lawmaker Proposes Floating Benefits for Gig Economy Workers

Seeing the rise of the independent contractor workforce or “gig economy” jobs in her state, Washington legislator Monica Stonier introduced a bill this week that would require companies using gig economy workers to contribute to a portable benefits fund that would cover part of the costs of health insurance, paid time off, retirement and workers’ compensation insurance.

In an op-ed for Fortune, Stonier wrote, “As an independent contractor, a worker should be afforded autonomy and flexibility. But American workplace protection laws barely acknowledge that independent contractors exist … . When I talk to gig workers, I hear again and again that they want good jobs, and should not be forced to choose between decent wages and flexibility.”

The new bill would require companies that use a minimum of 50 independent contractors in any given 12-month period to contribute funds to qualified benefits providers serving these workers, who often work in the app-centric, on-demand service sector. Companies would be required to contribute either 25 percent of the fee charged to consumers or $6 per hour, whichever is lesser. It would only apply to services provided to consumers in Washington state. The bill spells out that companies would be allowed to pass on the cost of the contribution to consumers.

Workers would have a say in the benefits they receive, accounting for at least half the members of the independent benefits administrator boards that administer the funds.

It’s a bill that goes further than what other states or localities have provided so far. Late last year, New York City passed a bill giving key rights to independent contractors, including protections against wage theft. According to a 2014 survey, freelancers lose an average of $5,968 in unpaid income yearly, or 13 percent of the average survey respondent’s annual income. Half of freelancers said they had trouble getting paid in 2014, and 71 percent said they have had trouble collecting payment at some point in their career.

However policymakers choose to deal with the problem, the new contractor-based economy seems to be inevitable at this point. A new study published today by the Freelancers Union and Upwork predicts that freelancer work will include the majority of the U.S. workforce within a decade, with nearly 50 percent of millennials already taking part in the freelance economy. The study also estimates that freelance work contributes $1.4 trillion to the economy. An estimated 57.3 million people currently receive income via independent contractor work, according to the study.

“We are in the Fourth Industrial Revolution — a period of rapid change in work driven by increasing automation, but we have a unique opportunity to guide the future of work and freelancers will play more of a key role than people realize,” said Stephane Kasriel, CEO of Upwork and co-chair of the World Economic Forum’s Council on the Future of Gender, Education and Work, in a statement announcing the study.

Moves like Stonier’s could help make that future more equitable. Will more lawmakers follow suit?

With Cities Facing Tech Displacement, Google Offers $1 Billion Pledge

Google CEO Sundar Pichai announces a new initiative called Grow With Google during a news conference at the Google offices in Pittsburgh, in October. (AP Photo/Keith Srakocic)

In Pittsburgh, the city where Google is prototyping a future of driverless cars and other artificial intelligence-powered products, the internet company this week pledged $1 billion toward addressing the needs of workers replaced by new technology.

In his announcement, Google CEO Sundar Pichai said the funding would be dedicated to “closing the world’s education gap, helping people prepare for the changing nature of work, and ensuring that no one is excluded from opportunity.”

While the quest for a driverless future has its merits, Next City’s Johnny Magdaleno reported in June that driving has long provided crucial employment for those without access to greater opportunity; ninety-three percent of the 4.1 million employed drivers in the U.S. don’t have a bachelor’s degree, yet drivers on the whole average a poverty rate that’s lower than workers who aren’t in the driving field.

Pichai announced the $1 billion in grants would go to nonprofits, along with a pledge of 1 million Google employee volunteer hours. Perhaps Google could do well to work closely with cities whose workforce development systems and social safety net will be coming under added pressure from displaced former drivers. As Magdaleno reported:

Maya Rockeymoore, a lead researcher on the report and director of the Center for Global Policy Solutions, says she’s also worried about what a sudden influx of unemployed drivers would do at the municipal level.

“What this could mean for those areas where there’s disproportionate impact, is that we see more unemployment, and people scrambling to get jobs but when they do get jobs they’re earning less,” she says. “That means human need will increase, and the burden will fall on public programs in cities to meet that need.

Earlier this year, Pittsburgh Mayor Bill Peduto called for technology companies like Google to do their civic part with regards to their impact on the changing economy.

In addition to the billion-dollar pledge, Pichai announced the launch of Grow With Google, a new initiative to help Americans with the skills they need to get a job or grow their business. The initiative kicks off with a tour in partnership with libraries and community organizations to host these events providing career advice and training for people and businesses. Pittsburgh is the first stop; additional visits announced so far include Indianapolis, Oklahoma City and Louisville, Kentucky.

Pichai also announced a $10 million grant — Google’s largest single grant yet — to Goodwill Industries, which Pichai says will enable Goodwill to offer 1.2 million people digital skills and career opportunities in all 156 Goodwill locations across every state over the next three years.

Google also unveiled the Impact Challenge, which invites nonprofits to submit proposals for “bold ideas” to “make neighborhoods better.” Together with a panel of advisers, Google will review these applications and will choose four finalists who will receive $50,000 in funding and other support from Google. Then, Google will invite the Pittsburgh community to cast their vote to help decide on the most impactful idea, and the winning project will receive an additional $50,000 grant.

Pichai also spoke with the Pittsburgh Post-Gazette about his outlook for the future of employment in a changing economy, lamenting that industry and the private sector can only do so much.

“I think the government has to do it, educational programs have to do it, and all the companies sort of play a part. It’s a long game,” Pichai told the newspaper.

Public Housing Residents Ask the Crowd to Fund Sustainability Projects

The market at Rockaway Youth Task Force’s community garden (Photo by Oscar Perry Abello)

The Rockaway Youth Task Force has a long waiting list of families who want spots in its community garden, but more of those aspiring harvesters might be tending fresh veggies soon thanks to a new crowdfunding effort by the New York City Housing Authority.

“My vision for the organization is to provide young people the tools that they need to advocate for themselves,” says Milan Taylor, who founded Rockaway Youth Task Force in 2011 and was born and raised in the Rockaways, a beachside community at the far southern edge of New York City.

Most of the Rockaways was a food desert before Superstorm Sandy hit New York in 2012, and after the storm, access to fresh, healthy foods only got more limited when some retailers didn’t recover. “At the same time there’s plenty of fast food options around,” Taylor says.

Wanting to help residents take things into their own hands, Rockaway Youth Task Force created its first community garden, right across the street from one of the city’s largest public housing communities, Ocean Bay (Bayside) Apartments. No one expects the gardens to meet all the participating families’ food needs, but Taylor estimates that, on average, each raised bed produces some $500 worth of food per year. What families don’t need, they may choose to sell through an onsite community market.

There are 70 families on the waiting list, according to Taylor. Many are from Ocean Bay. However, a plan to build two new community gardens on the Ocean Bay grounds, adding 40 new raised beds for growing, should shorten that list significantly.

To pay for the project, the group tapped into a new partnership between NYCHA and crowdfunding platform Ioby to raise nearly $30,000.

NYCHA’s sustainability agenda defines the authority’s environmental health and sustainability goals for the next 10 years, and outlines several strategies to achieve those goals — including the creation of an online “Ideas Marketplace” for resident-led and community-led initiatives.

“Having a very visual place for all these projects to live, and the transparency, creates an ability for residents to reach out to each other and exchange ideas,” says Vlada Kenniff, NYCHA’s director of sustainability programs.

While NYCHA is making other large-scale capital investments in sustainability, such as putting solar panels on top of 20 buildings at Ocean Bay, there are many smaller projects that Kenniff says would be meaningful for residents and often led by residents but don’t require enough funding to make it worth moving the mountain of bureaucracy that is the nation’s largest local public housing authority. NYCHA communities are home to some 400,000 residents, including 4,000 at Ocean Bay alone.

“There are large investments happening on the capital side, but these are smaller projects,” Kenniff says. “There may not be funding for it from NYCHA central, but they’re needed.”

In terms of getting approval from the massive bureaucracy, projects coming through the Ideas Marketplace also get an internal champion at NYCHA: Rasmia Kirmani-Frye, director of public-private partnerships at NYCHA. In her capacity, she is also head of the Fund for Public Housing, a NYCHA-affiliated nonprofit created in 2016 to raise philanthropic dollars in support of NYCHA residents.

“One of the benefits of the Ideas Marketplace is that NYCHA is at the table right from the beginning,” Kirmani-Frye says. “If other folks at NYCHA need to be brought in, that’s something that Vlada and I can focus on.”

There is no set list of project types eligible for funding. NYCHA didn’t want to put limits on residents’ creativity. “We want to make sure we’re flexible with the ideas that are coming in,” says Kenniff.

Ioby’s model has its roots in the community-organizing world, encouraging and supporting projects led by people who live near and potentially benefit from the project. So far, 1,325 projects have successfully raised $3.8 million through the nonprofit organization’s platform, with an average donation of $30. Around 87 percent of projects on the platform successfully hit their funding goals, and the average funding goal is around $4,100. Within NYC, about half of projects funded through Ioby to date are in areas earning below the median household income for NYC, or about $50,000.

“Lots and lots of tech companies and businesses use online fundraising to raise money for their companies,” Kirmani-Frye says. “So in a lot of ways this is about equity in crowdfunding.”

At a training day in September, which brought together a range of nonprofits with experience in raising money and working with public housing residents, David Weinberger, city partnerships director at Ioby, talked through the model.

“While we don’t want to lean on residents and make it seem like NYCHA residents are solely responsible for funding their own projects, we think these communities are often overlooked as potential funders for projects, especially those that they lead themselves,” Weinberger says. “We want to test the waters and get projects from higher-capacity groups that are already working with residents in some capacity, demonstrating the model can work. In the future, we hope more ideas come straight from residents themselves, with or without an established community partner.”

In the case of Rockaway Youth Task Force and Ocean Bay (Bayside), there was an additional partner: MDG, the developer that’s currently working on a half-billion-dollar renovation of Ocean Bay as part of NYCHA’s first public housing conversion under the federal government’s Rental Assistance Demonstration Program, a new large-scale public-private partnership model to finance long-delayed repairs and modernization of public housing. MDG marketed the community garden project to its staff and subcontractor network. It wouldn’t have been possible to raise the needed funds without their help, according to Taylor.

“That was one of our concerns initially with crowdfunding. There’s not that much disposable income in our community,” Taylor says.

Work on the garden expansion has already commenced. Once completed, the Rockaway Youth Task Force will also have a part-time paid staffer available to train and assist residents with their raised beds.

“For a lot of residents this will be their first time growing, even for older adults living in NYC all their lives,” Taylor adds.

The ribbon cutting ceremony for the new gardens is scheduled for Oct. 28.

How 6 Universities Are Keeping Promise of Being a Good Neighbor

Drexel University in Philadelphia, above, is part of a group of anchor institutions that made a commitment to local investment two years ago. (Photo by Sebastian Weigand)

Universities in the United States employ over 4 million people, spend over $43 billion annually on goods and services, and hold around $535 billion in endowments.

Two years ago, Buffalo State College, University of Missouri–St. Louis, Rutgers University–Newark, Cleveland State University, Drexel University, and Virginia Commonwealth University each made a commitment to investing, hiring and purchasing locally. Now, a new report from the Democracy Collaborative by Emily Sladek illustrates how they take seriously their role as “anchor institutions” when it comes to economic impact on their local economies.

Buffalo State College’s Small Business Development Center has been supporting and incubating small local businesses owned by minorities and women. The office has nurtured entrepreneurs such as an organic goat farm owner and an artisan who was able to build up her business into providing costuming for singer Katy Perry’s tour.

A Rutgers faculty member, Kevin Lyons, led an effort to map out local procurement needs for hospitals and universities in the area. He found hospital socks were shipped in from out of state; now a local business provides them instead.

Virginia Commonwealth University worked with a grassroots coalition to create a jobs training program in construction for formerly incarcerated residents. It places graduates in state-funded construction projects at a living wage.

As a group, the six universities also hashed out a shared dashboard and data collection process to track the local economy impact of all existing and new initiatives. According to the report, internal conversations about the local economic impact of universities are becoming more “sophisticated” and “in some cases enthusiastically embraced.”

The report outlines five big indicators for success, starting with leadership from the top. Jennifer Jettner, assistant director of community-engaged research at Virginia Commonwealth University, told Democracy Collaborative, “A champion in a leadership position to drive the ship — specifically, clearly communicate the vision, gain buy-in, empower others to act on the anchor mission, and garner resources to fund the effort.”

The anchor institution’s efforts in this sphere must also be part of a broader strategic plan. Another success factor was the establishing of anchor committees — an unexpected development that came about after the group of six came together. Five formed anchor committees, which meet at varying frequencies, from once a quarter to biweekly. Some campuses have a leadership team made up of high-level administrators (e.g., chief of staff, provost, deans, chief information officer, chief financial officer) as well as working groups with other staff. Committees include, on average, six to eight members.

Implementing data collection protocols was another indicator for success. The report includes sample surveys and metrics used among the group to track data in a transparent way that allows universities to compare performance between themselves. One key question: How do universities define “local”? Each university in the cohort selected at least two geographies to collect data on. Most selected three: the university, the city and a specific low-income neighborhood. The locations were selected for various reasons including preexisting university impact objectives and programming, and a desire to reach historically underserved communities.

The fifth success indicator was relationship building with external partners. While important, it’s also something that needs more clarity in some cases.

Alan Delmerico, a Buffalo State behavioral scientist, told the Democracy Collaborative: “This is one of the challenges that our committee has encountered. Our committee does not have a standard definition for what a partnership is but rather labels an organization as a partner if we do any service work with them. The quality to which we define a partnership is the bigger issue.”

Impact Investors Have a New Way to Put Money Into Communities in Need

(Photo by Oscar Perry Abello)

If you’ve listened to KQED public radio in northern California in the last week, you may have heard a spot from a new sponsor: the Low-Income Investment Fund (LIIF), a CDFI (community development financial institution) based in San Francisco.

The spot is part of LIIF’s marketing campaign to raise $35 million through its new LIIF Impact Note, marking the first time the CDFI has sought capital from individual investors.

Like many community development lenders, LIIF has traditionally sought capital from banks, foundations and other large investors.

“We really wanted to open the fund up and democratize capital raising and bring in people that we know care about their communities and make community development investing available to all investors,” says Jessica Standiford, director of development and impact investing at LIIF.

For the campaign, LIIF is using ImpactUs Marketplace, an online platform where organizers of mission-driven projects can raise capital (and which I covered previously). Community Note is among the first offerings open to retail-level investors — those who are not super-rich.

Although the minimum investment is $1,000, anyone can invest as long as they live in one of the following: California, New York, Connecticut, Colorado, Massachusetts, Maryland, Maine, New Hampshire, New Jersey, Virginia, Vermont, and the District of Columbia.

“Those geographies align with where we mostly lend, though we work nationwide,” Standiford says.

The interest rate on the money varies from 1 to 3 percent, based on how long investors decide to loan their money to LIIF: 6 months, three years, five years or 10 years. Longer terms get a higher return, in exchange for the greater risk.

The process is a significant undertaking, which includes filing paperwork in each of the eligible states, but LIIF was encountering growing demand from individual investors for the opportunity to invest in its work.

“I don’t know why, if it’s because of what is going on in this country right now, but they’re coming to us,” says Standiford. “We didn’t have [an investment] product for them until now.”

And LIIF is not the only CDFI encountering that demand. Since 2010, Enterprise Community Loan Fund has raised $78 million through its Impact Note, 62 percent of which has come from individual investors. This year alone, Enterprise has raised or gotten commitments for $25.5 million through that — with a minimum investment of $5,000, and without any opportunity to make those investments online.

More online platforms are emerging that allow more individual investors to put money into community development. CNote launched a year ago but only just opened up to all investors. Previously, it was only open to “accredited” investors — the Securities Exchange Commission’s shorthand for wealthy individuals, specifically those with a net worth of at least $1 million or an annual income of at least $200,000 for the previous two years. CNote pools the capital it raises from investors and invests it in CDFIs.

Meanwhile, more CDFIs are also in talks with ImpactUs Marketplace to list investment offerings online.

“Our institutional partners have been fantastic and they continue to be great partners, but we think we can help fuel a movement that’s already happening where CDFIs and impact investors can combine more efforts,” says Standiford.

Federal Regulators Aim to Curb Payday Lending “Debt Traps”

A block in Albuquerque, New Mexico, has several small loan storefronts. (AP Photo/Vik Jolly, File)

The Consumer Financial Protection Bureau (CFPB) last week issued its long-anticipated final rule on payday loans, restricting lenders’ ability to profit from high-interest, short-term loans and earning the agency high praise from community lenders and consumer advocates.

Payday loans are typically for small dollar amounts and are due in full by the borrower’s next paycheck, usually two or four weeks later. The Pew Charitable Trusts estimates that 12 million Americans take out payday loans every year, paying $7 billion in fees. Most payday loan borrowers pay more in fees than the amount borrowed; according to Pew, the average payday loan borrower is in debt for five months of the year, spending an average of $520 in fees for borrowing just $375.

According to the CFPB, these loans are heavily marketed to financially vulnerable consumers who often cannot afford to pay back the full balance when it is due. The agency found that more than four out of five payday loans are reborrowed within a month, usually right when the loan is due or shortly thereafter; nearly one in four initial payday loans are reborrowed nine times or more, with the borrower paying far more in fees than they received in credit.

CFPB’s new rule also includes protections against predatory practices in auto title lending, in which borrowers put up their car as collateral for a loan, also typically encountering expensive charges and borrowing on short terms usually of 30 days or less. As with payday loans, the CFPB found that the vast majority of auto title loans are reborrowed on their due date or shortly thereafter.

“This new rule is a step toward stopping payday lenders from harming families who are struggling to make ends meet. It will disrupt the abusive predatory payday lending business model, which thrives on trapping financially distressed customers in a cycle of unaffordable loans,” says Mike Calhoun, president of Center for Responsible Lending, a nonpartisan think tank affiliated with the $2 billion Self-Help Credit Union based in North Carolina, adding that the rule is “years in the making.”

The new protections apply to loans that require consumers to repay all or most of the debt at once. Under the new rule, lenders must conduct a “full payment test” to determine upfront that borrowers can afford to repay their loans without reborrowing, and there are limits on reborrowing. In effect, lenders will be allowed to make a single loan of up to $500 with few restrictions, but only to borrowers with no other outstanding payday loans.

There are also restrictions on the number of times a payday lender may attempt to automatically withdraw repayments from borrowers’ bank accounts. The CFPB found that the average payday loan borrower paid $185 in penalty or overdraft fees to their bank for failed payment attempts, in addition to any fees charged by payday lenders.

The CFPB developed the payday regulations over five years of research, outreach, and a review of more than one million comments on the proposed rule from payday borrowers, consumer advocates, faith leaders, payday and auto-title lenders, tribal leaders, state regulators and attorneys general, and others.

“We need to ensure that all Americans have access to responsible basic banking products and services and that they are protected from abusive lending from unsavory financial predators. This rule from the CFPB is an important step in that direction,” says John Taylor, president and CEO of the National Community Reinvestment Coalition, a national network of bank watchdog and community development organizations.

The new rule includes an exemption for organizations that do not rely on payday loans as a large part of their business, earning praise from community bankers. Any lender that makes 2,500 or fewer covered short-term or balloon-payment small-dollar loans per year and derives no more than 10 percent of its revenue from such loans is excluded from the new requirements. Certain alternative loans already offered by credit unions are also exempted.

“This exemption will enable community banks the flexibility to continue providing safe and sustainable small-dollar loans to the customers who need it most,” the Independent Community Bankers of America said in a statement.

Payday lenders were less than pleased with the decision. A payday lending industry group estimated that the proposed regulations would lead to the closings of many payday loan storefronts around the country. There are now more payday loan stores in the United States than there are McDonald’s restaurants, The New York Times reported, and the operators of those stores make around $46 billion a year in loans.

A spokesperson for Advance America, a payday lending chain with 2,100 locations in 28 states, told The New York Times that the new rule “completely disregards the concerns and needs of actual borrowers,” and called on President Trump and Congress to intercede.

Under the Congressional Review Act, Congress has 60 days to reject the new rule. Isaac Boltansky, the director of policy research at Compass Point Research & Trading, told The New York Times that in this case the odds of such a reversal are very low despite the Trump Administration’s anti-regulatory stance. Most moderate Republicans, he said, do not want to be seen as anti-consumer.

Oakland Incubator Is Keeping Tabs on City’s Promises About Equity and Legal Cannabis

A mural in Oakland (Photo by Oscar Perry Abello)

When Ebele Ifedigbo was growing up on the East Side of Buffalo, Ifedigbo’s father, an architect, would point out the check cashers and the rent-to-own shops as they drove around the neighborhood and the city. Those drives helped to cultivate curiosity about the ongoing economic injustice that undermines black communities in cities everywhere, but Ifedigbo couldn’t have known then that the path would lead to looking to correct that injustice through opportunity in cannabis legalization.

“He would show me all this stuff and he would say ‘these are the things that actually prevent us from being able to build wealth,’” Ifedigbo remembers. “They suck out the resources that we don’t really have.”

The wealth disparity today: Median net worth for white non-Hispanic households ($132,483) is 14.6 times the median net worth of black households ($9,211), according to figures released this month by the U.S. Census Bureau. Ifedigbo’s curiosity about this injustice led to studies at Columbia University, work in the financial and nonprofit sectors, and a degree from Yale’s business school.

“We can talk about political power, social power, all of those are important, but for me I feel like economics is the foundation for those other things to stand sturdy and be sustainable,” Ifedigbo says. “When I went into business school I was thinking, can business serve the ends of social justice, and if so, what would that look like?”

The path toward an answer came sooner than Ifedigbo expected, in 2015, when a wave of pot legalization began to spread across the United States.

“The War on Drugs has been decimating our communities for decades, and even racist drug policy before that has been disenfranchising our communities, and now here we are at this moment where that same exact plant is now legalized and people are making millions and billions off it,” Ifedigbo says. “We got to figure out a way to get our people on that path.”

As co-founder and co-director of the Hood Incubator, a cannabis industry incubator designed to cater toward cannabis entrepreneurs of color, Ifedigbo was announced last week as a member of this year’s cohort of Echoing Green Fellows. The fellowship gives Ifedigbo some runway capital and access to networks of previous fellows, other potential advisors, funders and investors to help grow Hood Incubator.

Ifedigbo and co-founder/co-director Lanese Martin, along with co-founder and lead community organizer Biseat Horning, have a vision for a national network of Hood Incubators that will tap into the growing cannabis industry as a force for social justice on multiple fronts.

“We recognized there’s no accelerator or real hands on direct pipeline to get our people in the cannabis industry and actually start a business,” says Ifedigbo.

Funding for Hood Incubator has so far come from individual donations, grants from foundations and also from the Drug Policy Alliance, and local industry sponsorships. “What’s special about Oakland and why it’s great we started there is not only is the community well-organized around social and political issues, but the mainstream cannabis industry is pretty organized around Oakland and they’re pretty cognizant about this issue,” Ifedigbo says.

Another reason the co-founders chose to pilot their first Hood Incubator location in Oakland is the city’s Equity Permit Program. It’s part of the city’s broader vision to be intentional about carving out a pathway into the legalized cannabis industry for those who have been systematically targeted by the drug enforcement policies of the past.

Under the Equity Permit Program, half of all cannabis industry permits issued will be reserved for Oakland residents with an annual income at or less than 80 percent of Oakland area median income (adjusted for household size), and who live in one of a predetermined set of police precincts where previous cannabis arrests have been historically concentrated — and were arrested after November 5, 1996 and convicted of a cannabis crime committed in Oakland. The equity permit applicant must be at least a majority owner of the business. The city opened the equity application process about two weeks ago.

That equity permit carve-out is a temporary measure, which the city intends to keep in place until its full Equity Assistance Program for the cannabis industry is funded and implemented. Through that initiative, the city intends to eventually provide applicants with financial and technical assistance, including zero-interest business startup loans.

It’s early days yet for Oakland’s equity permit program and the overall cannabis permit program. (San Francisco also recently announced its own measures for its cannabis industry regulations and support.) There are still some kinks to work out, but Ifedigbo is confident that the city will maintain open lines of communication to improve things as they go along. That includes a mandated six-month check-in on the equity permit program.

Ifedigbo says two out of their first cohort of 15 Hood Incubator fellows are eligible for the equity permits. The cohort, chosen from an applicant pool of 40, began intensive business courses in January, completing about 100 hours of instruction, and ended up with a business plan, preliminary financial projections, and a rehearsed pitch presentation — which each fellow delivered to investors, community members and potential customers assembled on Hood Incubator’s inaugural pitch day, on May 6.

While it’s common for incubators or accelerators to take partial ownership position in cohort businesses, Hood Incubator chose not to do so for its first cohort. Ifedigbo says they are considering that for the next group. But Hood Incubator’s vision for equity also extends to potential cannabis industry investors. They’re hoping that mostly white, mostly male venture capitalists aren’t the only ones having all the fun and reaping all the returns from investing in a tremendous new industry.

“We made an effort to bring people in the community who might not always think of themselves as investors but they have capital to deploy,” Ifedigbo says. “Some of the pillars of black communities have been hair salon owners, barbershop owners, small mom-and-pop shops who have had presence in the community and they might have a little extra, whether it’s $10,000 or $5,000 or $25,000, to deploy and support other businesses.”

In addition to supporting cannabis industry entrepreneurs of color around the U.S., Hood Incubator’s vision for national expansion includes rallying more of these community-level investors, you might call them friends and family, to back cannabis industry entrepreneurs of color with capital as well as mentoring and other support as fellow business owners. Some of these community-level investors may even have customer networks to share.

“It’s about how do we corral the community assets that already exist to continue investing in that community,” Ifedigbo says.

Chicago Directs $3.2M to Neighborhoods, Thanks to Developer Fees

West Chicago Avenue (Photo by Matt Watts on flickr)

Air is becoming an increasingly popular bargaining chip for big city mayors. Mayor Bill de Blasio’s Housing NYC Plan works through the city’s zoning code, allowing developers to build higher in exchange for setting aside a portion of their buildings as permanently rent-regulated housing units. Chicago Mayor Rahm Emanuel’s downtown development plan allows developers to build taller and denser in Chicago’s downtown areas in exchange for payments into a pool of funding he calls the Neighborhood Opportunity Fund.

Last week the city of Chicago announced the first $3.2 million awarded out of the Neighborhood Opportunity Fund. The nine awardees included restaurants, a dental office, a marketing company, a bakery and an ice cream shop scattered across low- to moderate-income areas on the South and West Sides of Chicago, overlapping with commercial corridors the city previously targeted for revitalization.

One such corridor is West Humboldt Park, where, as I previously reported, the West Humboldt Park Family and Community Development Council is working to revitalize the area, starting with an anchor commercial tenant, local celebrity chef Quentin Love and his new Turkey Chop restaurant. With Love on board, the group recruited another local celebrity chef, Stephanie Hart, to open a second location for her Brown Sugar Bakery along the corridor — and that location is one of the Neighborhood Opportunity Fund’s first-round awardees.

The city says it received 700 applications in the first round of funding, and 32 winning businesses were selected.

“These investments are going to directly support neighborhood entrepreneurs on Chicago’s south, southwest and west sides,” Emanuel said in a statement. “But they will also expand quality food options, create neighborhood meeting places, support tech business growth, and generate new retail options. By linking growth downtown directly to growth in our neighborhoods we can ensure the entire city of Chicago thrives for generations to come.”

The Chicago Sun-Times characterized the announcement as “the first concrete steps to shed his image as ‘Mayor 1 Percent.’”

Previously, the city’s Zoning Bonus Ordinance allowed downtown developers to build higher and denser than current zoning allowed if they agreed to build underground parking garages, outdoor plazas, winter gardens and other features. That changed after Emanuel’s proposal passed city council last spring. While the fund got started with $4 million in initial payments, there is a $15.6 million payment in the works on a single pending deal, the Chicago Sun-Times reports.

Not all of those funds would go out into the designated South and West Side neighborhoods. Under Emanuel’s proposed changes, 80 percent of developer payments go directly into the Neighborhood Opportunity Fund.

Meanwhile, another 10 percent goes into a citywide fund to support the restoration of structures designated as official landmarks by City Council, and the remaining 10 percent goes into a project local impact fund to support improvements within 1 mile of the development site generating the development funds, including public transit facilities, streetscapes, open spaces, river walks and other sites, including landmarks.

Air is becoming an increasingly popular bargaining chip for big city mayors. Mayor Bill de Blasio’s Housing NYC Plan works through the city’s zoning code, allowing developers to build higher in exchange for setting aside a portion of their buildings as permanently rent-regulated housing units. Chicago Mayor Rahm Emanuel’s downtown development plan allows developers to build taller and denser in Chicago’s downtown areas in exchange for payments into a pool of funding he calls the Neighborhood Opportunity Fund.

Last week the city of Chicago announced the first $3.2 million awarded out of the Neighborhood Opportunity Fund. The nine awardees included restaurants, a dental office, a marketing company, a bakery and an ice cream shop scattered across low- to moderate-income areas on the South and West Sides of Chicago, overlapping with commercial corridors the city previously targeted for revitalization.

One such corridor is West Humboldt Park, where, as I previously reported, the West Humboldt Park Family and Community Development Council is working to revitalize the area, starting with an anchor commercial tenant, local celebrity chef Quentin Love and his new Turkey Chop restaurant. With Love on board, the group recruited another local celebrity chef, Stephanie Hart, to open a second location for her Brown Sugar Bakery along the corridor — and that location is one of the Neighborhood Opportunity Fund’s first-round awardees.

The city says it received 700 applications in the first round of funding, and 32 winning businesses were selected.

“These investments are going to directly support neighborhood entrepreneurs on Chicago’s south, southwest and west sides,” Emanuel said in a statement. “But they will also expand quality food options, create neighborhood meeting places, support tech business growth, and generate new retail options. By linking growth downtown directly to growth in our neighborhoods we can ensure the entire city of Chicago thrives for generations to come.”

The Chicago Sun-Times characterized the announcement as “the first concrete steps to shed his image as ‘Mayor 1 Percent.’”

Previously, the city’s Zoning Bonus Ordinance allowed downtown developers to build higher and denser than current zoning allowed if they agreed to build underground parking garages, outdoor plazas, winter gardens and other features. That changed after Emanuel’s proposal passed city council last spring. While the fund got started with $4 million in initial payments, there is a $15.6 million payment in the works on a single pending deal, the Chicago Sun-Times reports.

Not all of those funds would go out into the designated South and West Side neighborhoods. Under Emanuel’s proposed changes, 80 percent of developer payments go directly into the Neighborhood Opportunity Fund.

Meanwhile, another 10 percent goes into a citywide fund to support the restoration of structures designated as official landmarks by City Council, and the remaining 10 percent goes into a project local impact fund to support improvements within 1 mile of the development site generating the development funds, including public transit facilities, streetscapes, open spaces, river walks and other sites, including landmarks.

NYC Pension Funds Made a $48 Million Statement About Private Prisons

(Photo by Wagner T. Cassimiro via Flickr)

With $175 billion in investments, NYC’s pension funds are collectively the fifth-largest retirement plan in the entire United States. Of that, $58 billion is invested in the stock market. As of last week, those stock market investments no longer included shares in private prison companies. With the sell-off, NYC’s public pension system became the first in the country to divest from private prison companies, selling off $48 million in shares.

“With Donald Trump in the White House, we’re seeing more and more industries try to profit from backwards policies at the expense of immigrants and communities of color. But because of this major new step, we are demonstrating that we will not be complicit. We are standing up for what’s right,” New York City Comptroller Scott M. Stringer said in a statement announcing the successful sell-off.

The move comes practically on the heels of the announcement that NYC has begun the process of cutting ties with Wells Fargo as its primary banker. While city officials said that decision had only to do with Wells Fargo failing its most recent Community Reinvestment Act examination, the bank is also known to be one of the most active financiers of private prisons, as reported in a story from Take Part last fall.

The city’s pension fund trustees, which include Stringer, voted to divest from private prisons in May, after studying the financial implications of doing so. “As fiduciaries of NYCERS (NYC Employees’ Retirement System), we have a responsibility to protect the hard-earned money of thousands of New Yorkers,” said Public Advocate Letitia James in a statement after the vote. “It is apparent that investments in private prisons are not only an unstable and risky investment, but a deeply troubling one.

In the final divestment announcement last week, the comptroller’s office cited reputational risks (poor conditions, high rates of violence, improper staffing levels, inmate abuse and other human rights concerns), legal risks (lawsuits stemming from human rights abuses can lead to high payouts, making private prison companies less profitable), and regulatory risks (such as a future presidential administration reinstating the Obama administration’s plan to phase out the use of private prison companies in the federal prison system).

Both civil rights and immigrant rights activists cheered the decision. Private prison companies also happen to own and operate many of the nation’s immigrant detention centers. The National Network for Immigrant and Refugee Rights is a member of a national prison divestment campaign.

The comptroller’s office found that privately owned detention centers hold as many as 65 percent of Immigration and Customs Enforcement (ICE) detainees, and at least eight immigrant detainees have died while in those private facilities.

“Our investments need to reflect our values. To that end, divesting our city’s pension funds from private prison companies reflects our belief that the abuses of this industry do not advance safety or justice in our society. As a NYCERS trustee, I was proud to cast my vote in favor of full divestment,” Brooklyn Borough President Eric L. Adams said in a statement.