Unpaid utility bills? California will pay off $2 billion to avoid shutoffs

By Jackie Botts
CalMatters

Two years ago the Los Angeles Department of Water and Power shut off electricity at Will Hollman’s home in the San Fernando Valley, forcing the family to rely on a gasoline generator. In late June of this year, the department disconnected the water, too — despite a statewide moratorium on water shutoffs that Gov. Gavin Newsom recently extended through Sept. 30.

Hollman, his 10-year-old son and his 16-year-old stepdaughter endured 11 days of temperatures in the high 90s to low 100s without water or power. For 11 days, they camped out in air-conditioned grocery stores, Starbucks or his truck. They couchsurfed and used friends’ showers. Hollman played it off with the kids as some kind of fun obstacle course.

He called the department’s customer service, and said a representative told him that he must pay off his utility debt of $9,064.13 — largely consisting of charges that Hollman disputes as erroneous — before water or power could be restored.

“It’s been demoralizing, humiliating,” Hollman said on the eighth day. “I have a history of paying my bills, working, being a good provider. You… start having feelings of failure as a parent.”

Ultimately the state’s water agency convinced the LA department to turn on Hollman’s water.

Those 11 days without water or power are a window into what could happen to millions of Californians in the coming months and years, depending on how swiftly and effectively the state distributes relief.

Official estimates of unpaid water and energy bills accumulated during the pandemic verge on $2.7 billion, affecting a few million Californians — and those figures have been growing rapidly.

The state has so far prioritized rent relief — keeping people housed — over utilities relief. A spokesperson for the state’s COVID-19 Rent Relief program said that of the $158 million distributed as of July 16, less than $40,000 had gone to utilities relief. Utility debt makes up about 6% of all assistance requested so far.

On July 11, lawmakers revealed a plan to use one-time federal relief money to address the debt. The deal is a patchwork of new programs to forgive $2 billion of utilities debt and old programs to help households chip away at the rest, with a wide range of eligibility criteria and timelines. But it doesn’t extend current shutoff moratoria past Sept. 30.

“We’re laser-focused on getting this assistance out the door as quickly as possible,” Newsom said in a statement about ongoing rent relief and the utilities relief plan. He has signed the energy bills relief into law, while the water bills relief still awaits his signature.

This will be an important “reboot” to protect Californians and utility companies, said Ellen Hanak, director of the Water Policy Center at the Public Policy Institute of California.

“You don’t want people to be shut off from basic services,” Hanak said, “But it’s also a hit to the entire community if utilities aren’t able to balance their books, because that can have all sorts of ripple effects on the abilities of water and electrical systems to run well.”

When it comes to forgiving California’s utility debt, key questions remain:

  • Will $2 billion be nearly enough?
  • Can the money be distributed quickly enough to prevent shutoffs?

“For public health and safety, it’s important for people to have roofs over their heads, clean water and power. Those are all pieces of the puzzle,” Hanak said.

A Catch-22 at LA’s utilities department?

Hollman’s utilities troubles began well before the pandemic.

After opening an account in 2017, he began receiving unusually high electricity charges topping $1,000 — even during months when no one was living in the house because he was staying with his parents — which Hollman attributes to billing errors by the LA utility.

Under financial stress following a messy separation, Hollman said he let the bills pile up.

By early 2019, his unpaid balance had mounted to nearly $9,000. He applied for $2,000 of assistance from the Los Angeles County Department of Public Social Services to keep service on. But the water agency insisted on full payment of his bill, according to correspondence from his social worker reviewed by CalMatters. In March of 2019, the department shut off his power due to non-payment. He bought a generator.

Following the power shutoff, the electricity charges continued, labeled as “unmetered estimated consumption” in bills reviewed by CalMatters, meaning the utility generated them without checking Hollman’s meter. In December 2019, a customer service representative credited his account with several thousand dollars, but, according to Hollman, told him that the department couldn’t stop the continuing energy charges or issue more credits until a technician read his meter.

Which required that the power be turned back on.

Which couldn’t happen until he paid off the debt.

As Hollman tells it, he was caught in a Catch-22.

In April 2020, amid the first pandemic surge, the LA utilities department closed Hollman’s account with an unpaid balance of $9,064.13, meaning that he couldn’t open a new account until he paid off the debt, which could affect his credit score or be taken to small claims court. But, Hollman said, a representative promised that water would stay on while the pandemic lasted. For over a year, it did — until a technician arrived unannounced in late June.

The LA utilities department tells a somewhat different story. In a statement, a department spokesperson said that it had disconnected Hollman’s water in October 2017 and power in March 2019 because Hollman had made no payments since opening his account in March 2017. The spokesperson said the department turned off his water twice more after detecting unauthorized use, in April 2019 and again this past June, when it “came to light to LADWP… that water service had illegally been turned back on.”

While declining to comment on the high “unmetered estimated consumption” charges or Hollman’s apparent Catch-22, the spokesperson said the department restored water service in early July “in an attempt to work out a payment plan… for the water and power that was consumed since 2017.”

Hollman disputes that he illegally reconnected the water, saying it never stopped flowing and that he never received notices it would be shut off. He said that a water department representative told him last week that he had to pay a third of his outstanding bill — money that he said he doesn’t have — before he can qualify for a payment plan.

Mounting debt, and shutoffs despite protections

Hollman is not alone. Despite shutoff protections, the California State Water Resources Control Board has received 308 reports of water disconnections during the pandemic. No agency tracks power shutoffs.

A spokesperson said the state water board got water restored in each case, including for Hollman.

In February, the state water board estimated that 1.6 million households were late on water bills that totalled over $1 billion across California, and were growing quickly. The California Municipal Utilities Association estimated unpaid energy bills at publicly owned utilities topped $300 million, while close to 4 million customers of investor-owned utilities were behind on energy bills, totaling $1.4 billion, as of late June, according to a California Public Utilities Commission spokesperson.

Many people don’t know that they are still protected from shutoffs. Some no longer are.

When the state reopened in mid-June, Newsom quietly extended the moratorium on water shutoffs to Sept. 30. One water system has already said that it will resume shutoffs the next day.

The California Public Utilities Commission also extended the power shutoff moratorium to Sept. 30, days before it was set to expire on June 30. But that only applies to customers of investor-owned utilities, leaving the quarter of Californians served by publicly owned utilities vulnerable, said Mad Stano, an energy equity attorney at the Greenlining Institute, a racial justice nonprofit.

LA’s water department is the largest publicly owned utility in the United States. During the pandemic, customers’ unpaid bills there increased more than 10-fold, from $37 million accrued during 2019 to $400 million accrued during the first eight months of the pandemic, according to a state Water Board report. More than one in five customers behind on bills had debt over $1,000. The department has voluntarily chosen to extend its own moratorium on shutoffs for nonpayment, according to a spokesperson, but has not yet announced an end date. It has also not publicized that decision.

Deborah Bell-Holt didn’t know.

Her utilities bill ballooned to $19,308.45 during the pandemic as her South Los Angeles household grew to include 12 children, grandchildren and friends.

Bell-Holt assumed that disconnections would start June 30, when evictions were set to begin had lawmakers not made a last-minute deal. She scrambled to send the department $500 in late May and $200 on June 25th, hoping a few payments would stave off shutoffs. To afford that, she said she took out a $500 loan with 347% interest, which she’s still paying back.

Bell-Holt said that if she’d known she wasn’t at risk on June 30, “I wouldn’t put us in a hole like that.”

The state and utilities haven’t done enough to inform Californians about protections, Stano contends. “The state needs to require… communications to people so they don’t make financial decisions that they don’t have to make,” they said.

Living without water or power

On Hollman’s third day this summer without water or power, it hit 100 degrees outside. Inside the house was even hotter.

Hollman and his kids are used to life without air conditioning in one of California’s hottest regions. Their generator — which requires $10 of fuel per day, on average — only powers the lights, electronics and refrigerator. Normally, Hollman might cool the house by hosing down the roof and outdoor plants.

Instead, the family lingered at McDonald’s. “It becomes very difficult to keep your spirit up, but you have to for your kids,” Hollman said. “You can’t crack.”

On the fifth day, his son thanked Hollman for the best day ever, after the two spent the afternoon cutting through the heat on skateboards.

On the ninth morning, Hollman ran out of generator fuel. He reminded his kids not to open the refrigerator, so the food wouldn’t spoil. He knew his car’s radiator was low, but he was out of coolant and bottled water. He crossed his fingers that the old truck wouldn’t overheat on the way to the gas station. It did.

“It’s a dance that people shouldn’t have to f—ing do,” Hollman said.

Relief on the way for California utility bills

Theoretically, lawmakers’ new deal could prevent more people from that dance.

In May, Newsom proposed $2 billion to relieve utilities debt. Legislators agreed to the price tag in June, but continued negotiating the distribution plan in private.

The result is two budget bills that would create new programs that pay utilities directly to forgive customer debt accrued during the pandemic, prioritizing those at greatest risk of shutoffs. The California Arrearage Payment Program would forgive $994 million in energy debt, while the California Water and Wastewater Arrearage Payment Program would forgive $985 million.

In both cases, utilities must opt in. They must also offer all customers with pandemic debt a payment plan that would protect them from shutoffs as long as they enroll and stay current on the plan. Plus, the first forbids energy utilities from disconnecting power to a customer for 90 days after applying forgiveness to their account. Neither bill extends the shutoff moratoria, though the Public Utilities Commission has extended a moratorium on shutoffs for a segment of water utilities, which cover about 16% of customers.

The pending legislation also funnels an unspecified amount of federal relief money into two existing programs for which households must be income-eligible and apply for the assistance.

It’s unclear whether Hollman will be eligible for the programs, given that he accrued his debt before the COVID-19 pandemic. He may be at risk of another water shutoff soon.

A repeat of rent relief troubles?

The state has created countless new assistance programs during the pandemic — many mired by delaysbureaucracy and scandals.

The state’s COVID rent relief program is one example. As CalMatters reported, lengthy online applications available in too few languages initially blocked access to vulnerable renters, while distribution has been painfully slow.

The California utility bill debt forgiveness programs proposed last week sidestep some of these problems by requiring utilities, instead of customers, to apply, and by not requiring customers to prove eligibility. Advocates cheered that choice, but worried lawmakers didn’t go far enough to prevent shutoffs.

The water program legislation requires the water board to start distributing funds by Nov. 1. But that’s a month after the shutoff moratorium ends, said Jennifer Clary, California state director of nonprofit Clean Water Action. “I’m a little concerned about that gap,” she said.

Stano of the Greenlining Institute said that the bill language doesn’t prevent publicly owned utilities from shutting off power right now. They said it also doesn’t provide enough guidance to ensure that payment plans are sufficiently accessible and reasonable to keep people safe from shutoffs — especially given that only about two-thirds of the debt is expected to be forgiven.

“We will not be celebrating anything until the risk of disconnection is removed,” said Stano, who is pushing for the energy shutoff moratorium to be extended past Sept. 30.

A life-long Democrat, Hollman finds his faith in government assistance tested. He says he’s never relied much on it until his work as a telecommunications salesman for brick-and-mortar businesses came to a sudden halt last March. He applied for unemployment benefits so that he could focus on overseeing his children’s virtual schooling without any electricity coming to the house, but the checks don’t cover rent, food and generator fuel. He borrowed money, sold assets and made partial rent payments.

Like millions of Californians, Hollman has run into unemployment benefits snafus.

The last one happened several nights after the water department turned the water back on. Hollman received his unemployment payment to his Bank of America unemployment benefits account, but said when he tried paying bills the next morning, the money had already been withdrawn. He said he filed reports of identity theft with police and the Employment Development Department.

Hollman also said he called his landlord to tell him he wouldn’t be able to make July’s rent — and that he hasn’t heard back about the $5,000 in rent relief he’s applied for from the city of Los Angeles. He said he planned to find work this summer, but has been in crisis mode since the water shutoff.

“It can’t be understated,” Hollman texted, “how delicate the balance of survival is.”

California’s ‘historic’ broadband bill passes key Senate committee

By Cyrus Farivar
NBC News

The California Senate Budget Committee passed a comprehensive bill Wednesday aimed at expanding broadband infrastructure across the state, setting up all-but-certain passage in the state Assembly and the Senate.

Gov. Gavin Newsom, a Democrat, announced his support for the bill this week, calling it “historic,” but it was unknown when precisely he would sign it into law.

If the bill is enacted, the state would spend $5.25 billion on broadband expansion, including $3.25 billion on a so-called open-access middle-mile network. The wonky term describes the often expensive network infrastructure connecting the so-called internet “backbone” to the “last mile,” where a local internet service provider, or ISP, connects to individual households. The “open-access” term means both public and private ISPs would be able to connect equally.

While there such publicly funded networks in other states, the California version would be likely to be a much greater state-level network than has been built anywhere else in the country. Broadband experts say such middle-mile networks can encourage new ISPs to build faster and less expensive access to the internet to compete with existing providers.

It can be difficult and expensive to connect the landing stations, sometimes called global connection points, to local providers. The problem is often worsened in poorer and rural areas because large ISPs may not see them as profitable.

In an op-ed published Wednesday in Capitol Weekly, a state government-focused publication, the head of the California Cable & Telecommunications Association, an industry group, asked that the bill be amended to focus largely on “unserved” areas where not even a single provider offers minimal broadband service. AT&T made similar comments in a letter to the governor last month.

But Vinhcent Le, a technology equity lawyer with the Greenlining Institute, an advocacy organization in Oakland, said large ISPs see the bill as a “huge deal” that could spur new competition with incumbent providers, like AT&T, even in major urban areas.

“I think this is something that should have been done 10 years ago,” he said.

During the hearing Wednesday, Sen. Mike McGuire, a Democrat who represents Marin County, north of San Francisco, and a coastal stretch to the Oregon border, said the state cannot rely on private companies to expand access statewide.

“We’re not in it for the profit. This state is in it for the people,” he said. “More competition will bring down the prices for everyone in this state.”

California’s nonpartisan legislative research arm, the Legislative Analyst’s Office, found last month that poorer households across the state largely correlate with lower broadband adoption rates.

Similarly, the broader American digital divide was starkly illustrated last month when the National Telecommunications and Information Administration published a comprehensive map showing that many poor, rural and tribal areas of the country lack quality and affordable service.

“California is blessed with having a lot of global connection points,” said Ernesto Falcon, a lawyer with the Electronic Frontier Foundation, a digital advocacy group.

“What the state is designing to do is bridge the capacity gap between the backbone to all communities,” Falcon said. “If global connections are LAX [Los Angeles International Airport], then this is building the way for people to take a freeway to get to the world.”

What the US can learn from Europe about broadband affordability (and what it can’t)

By Katie Collins
CNET

Some of the prices for fixed broadband in Europe are low enough to make the average internet-addicted American swoon. Think gigabit fiber for less than $10 per month. No strings or income restrictions.

Thanks to COVID-19, the effects of the digital divide are more pronounced than ever. With broadband affordability high on the agenda, it could, at first glance, seem that Europe has all the answers. This is decidedly not the case.

Europe, too, has its own struggles with digital divide, and it hasn’t cracked the affordability problem across the board. Cheap prices do not always equal broad availability or high bandwidth, and every European country comes with its own baggage and struggles. But look closely at Europe’s success stories and you’ll see there are potential takeaways for the US, which is amid a debate over how to close the digital divide.

Despite the pressures of the pandemic, broadband affordability improved everywhere in the world this past year except in North America, according to the Inclusive Internet Index, which is commissioned by Facebook and developed annually by the Economist Intelligence Unit. Overall, the US tends to rank well in affordability lists (which are an inexact science and use sources tricky to verify), but it doesn’t want to be standing still while the world marches forward.

Within the EU, member states are working toward ensuring every household can be connected to gigabit fiber by 2030, and there are a number of financing initiatives they’re able to take advantage of to keep costs down. Speaking to the European Parliament in October, European Commission President Ursula von der Leyen emphasized that no one should be deprived of broadband for economic or social reasons.

“Greater connectivity is not a luxury — it is a necessity,” she said. “And it is a right for everyone in the EU. Every citizen should have access to an affordable fixed data connection. It is a universal service — like receiving post or electricity.”

Europe’s enviable competitive streak

Europe has been able to spur more affordable prices thanks to a regulated market environment that promotes competition.

In the US, competition among internet providers has historically happened at the infrastructure level, meaning your choice is between DSL, cable, fiber or 5G satellite. With so few competitive options available to consumers, companies don’t feel the need to jostle for customers by lowering prices, Vinhcent Le, legal counsel for technology equity at the Greenlining Institute, said in an interview.

Meanwhile in Europe, open access infrastructure — which in the case of broadband means a physical network that different service providers can all make use of — has allowed multiple companies to compete for customers at a service level, forcing them to offer more competitive prices. By contrast, the major telcos often foot the bill for building out their networks. The government does offer subsidies to encourage service providers to expand into sparsely populated areas, but even that process is filled with problems.

The UK and Sweden are particularly good examples of an open access environment, said Teddy Woodhouse, research manager for access and affordability at the Web Foundation. “Both countries have high fixed coverage (including even at higher speeds within Sweden) and a high number of fixed connections provided by non-incumbent operators, which is a good sign of market competition,” he said over email.

Not everyone agrees that more competition is the best strategy for making internet more affordable in the US — including the nonpartisan think tank the Information Technology and Innovation Foundation, which argues that the affordability problem in the US is overblown and that making the system more competitive won’t help heal the country’s digital divide.

But generally, competition has resulted in lower prices. In its 2019 Affordability Index, the Alliance for Affordable Internet highlighted the fact that markets with more operators had lower prices. “Poor broadband policy that fails to foster a healthy, competitive market costs users an estimated $3.42 per GB,” it said.

Meanwhile, the Inclusive Internet Index (which takes into account fixed and mobile broadband) noted that while the US was still ranked fifth overall in the world for affordability, it had experienced a decline in the past year “owing to a deterioration in the competitive environment,” likely a reference to the combination of T-Mobile and Sprint.

Attempts to regulate in favor of more open access infrastructure in the US has elicited pushback from the powerful telecoms lobby, which has a vested interest in keeping competition minimal to ensure prices stay high.

“We just lack that coordination that a lot of other countries have,” Le said. “That’s a lot by the design of the incumbents — they’ve sued in a lot of states to prevent utilities from expanding their networks outside the city limits.”

A Swedish model for California?

Sweden is the model that Le believes could be ideal for a state like California to follow to improve broadband affordability. The regions are comparable in terms of rural-urban divide and therefore make for a good point of comparison, he said.

In Sweden, the government gave support to cities to build infrastructure that is fully open access, taking the rollout of fiber to homes out of the affordability equation and allowing multiple providers the opportunity to compete for customers with well-priced services while guaranteeing good performance.

“Sweden’s open-access model, paired with its early advantage of investment through municipal networks, is a key point in the story of that country’s market,” said Woodhouse.

In the past, California has been “hamstrung” by not allowing any broadband regulation, said Le. But now, he said, things are beginning to change, as the state is making it easier and committing money to building open-access networks and middle-mile fiber, which connects local networks to major service providers.

“The prices aren’t ever going to go down to what it should be, which is, in my head, $30 to $40 for fiber internet, 1000Mbps” he said. “But unless we have these open access rules, just given how these networks were developed, I don’t see the political will in the United States to kind of force that to happen.”

Political will is an important component in making the internet affordable, but promises about connectivity alone aren’t enough to get the job done. “The United States creates these political goals, but they don’t actually do anything about it,” said Le.

Conversely in Europe, political will to create affordable broadband for residents has then been supported through policy development and heavy investment to achieve these goals. This can be seen in Sweden, but also in Baltic countries such as Latvia and Lithuania, which both rank high for fiber penetration, and Romania, where EU funding has been instrumental in trying to expand access to the high-speed broadband enjoyed in urban centers out to more rural areas.

Where affordable fiber thrives

“Today, people living in Bucharest, Romania, have access to much faster Internet than most of the US,” tweeted Sen. Bernie Sanders in 2016. “That’s unacceptable and must change.”

Five years on, Sanders may be disappointed to hear that little has changed. Not only do people living in Romania have faster internet than in the US, but, dollar to gigabyte, it’s cheaper too. It’s regularly listed in surveys as one of the top countries in the world for the most affordable high-speed broadband.

According to Digi, Romania’s largest broadband provider, the country’s success in making internet cheap and fast is largely because it didn’t need to upgrade its legacy infrastructure while rolling out a more modern fiber-optic network.

Along with other former Soviet states in Central and Eastern Europe, when the time came to get serious about building broadband, Romania didn’t have a strong existing DSL network or telecom regulation to govern it due to lack of investment from its time behind the Iron Curtain. So while it was often cheaper to maintain and upgrade existing copper wire networks for the US and Western Europe, these other countries were busy leapfrogging straight to fiber and writing their own rules as they went.

Romania started rolling out fiber to the home as early as 2004, and the technology is used by the majority of Digi’s subscribers, who now enjoy packages starting at 6 euros ($7.20) per month, or 8 euros ($9.60) for gigabit services. The narrow gap in price between lower and higher speeds is something other countries — the US included — have failed to offer customers. For instance, Verizon’s gigabit service starts at $80 a month, double the cost of its entry-level offering.

“Over the last few years, mainly Digi, but also our competitors, have invested several billions of euros in FTTH infrastructure, without any financial support from the state or other similar sources,” said a spokeswoman for the company in a statement. “The highly competitive environment has determined an efficient cost base allowing for an affordable pricing on the end consumers.”

Affordability: It’s all relative

Putting too much focus on  prices, however, also has the potential to obscure the bigger picture. A direct dollars-for-dollars comparison with monthly US costs for broadband packages doesn’t take into account the disparity in average income between countries.

Europe as a region boasts the lowest fixed broadband prices (as a percentage of gross national income) compared with other regions as there are better income levels in a number of countries, said Eleanor Sarpong, deputy director and policy lead at the Alliance for Affordable Internet. But, she added, this isn’t the case across the board.

In some parts of Europe, especially in former Soviet Union states that aren’t part of the EU, but also in parts of countries such as Romania, extremely low incomes mean broadband is still a luxury many can’t afford. The divide between broadband access in rural and urban areas can also be stark, Sarpong added.

In fact, when you compare Romania’s prices against those paid in the US, broadband in both countries costs the same percentage (just 0.8%) of gross national income, according to the ITU.

But even when adjusting for income levels, Europeans on average pay a lower proportion of their salary than people living in other regions. In a 2020 policy brief published by the International Telecommunications Union, Europe was listed as the only region in the world where consumers spend less than 2% of their income on fixed broadband. This still doesn’t necessarily mean internet in these regions is affordable for all, especially when you bear in mind this doesn’t begin to take into account mobile data prices.

Price also doesn’t necessarily reflect quality. Some of the cheapest countries in the world for fixed broadband include Syria, Bhutan and Kyrgyzstan, but the speeds they offer are among the slowest.

Likewise some of the highest speeds in Europe can be found in small municipalities such as Liechtenstein and Andorra, which are smaller than individual US states, and don’t rank high on any lists of affordable broadband. The dense population of these small areas means that just like in Singapore and Hong Kong — both leaders in fast, affordable broadband — bringing good-quality fiber to these areas is far easier than building out a network across a sprawling country like the US.

In fact, Europe on the whole is more densely populated than the US, which potentially distorts affordability statistics. The knock-on impact of the population being more spread out is that the average cost of connecting each household is much higher, and prices are likely to reflect this.

So exaggerated are the demographic differences between the two regions that Recon Analytics analyst Roger Entner said in his newsletter earlier this month it was “unremarkable that US prices might exceed European prices as it costs substantially more to deploy these networks.”

Opening minds

What stops broadband being affordable can’t be understood simply by looking at the price per gigabyte in dollars alone. Instead there’s a tapestry of problems including speed, rural access, income disparity and regulations that are inextricably linked with price that keep people disconnected.

In the US alone, historic baggage comes in the form of legacy infrastructure, huge expanses of sparsely populated land and a mindset that keeps everyone comfortably settled on the status quo.

A big concern in the US is that providers will retrofit affordable broadband packages into the existing systems, creating a second-class tier of internet for low-income users. But it doesn’t have to be this way. Romania, for example, has shown that gigabit speeds don’t have to be drastically higher to subsidize entry-level packages.

In Sweden and the UK, open access has allowed competition to thrive and push prices down in a way that hasn’t so far been possible in the US, but could be.

Le, for one is hopeful things will change. He can see it beginning to happen already, he said, even if it is coming “20 years too late.”

The Evolution of DEI at Deckers Brands

By Deckers Brands
Winslow, Evans & Crocker

Deckers Brands (NYSE: DECK), a global leader in designing, marketing and distributing innovative footwear, apparel and accessories, today announced the recipients of their annual $500,000 donation to support social and racial justice, along with a comprehensive year in review of their Diversity, Equity, and Inclusion (DEI) corporate initiatives.

As part of their commitment to being an anti-racist company, to amplifying voices of historically marginalized communities, and to using their platform to advocate for a more just future,  Deckers Brands will be donating to organizations that engage in critical work in the areas of social and racial justice, protection of voting rights, disability inclusion, and supporting indigenous populations and the LGBTQIA+ community. Deckers crowdsourced suggestions for donation recipients from consumers, retail employees, employee resource groups, and its distribution center employees. This year, the following organizations will receive a donation of $50,000 each: Pacific Pride Foundation, First Nations Development Institute, TASH, Equal Justice Initiative, Advancement Project, Greenlining Institute, Students Deserve, Asian Americans Advancing Justice – Asian Law Caucus, Homeboy Industries, and National Urban League.

“This annual donation amplifies the philosophy of our company and its portfolio of brands. We believe in doing great in business and good in the world, and these donations are one of many ways we will continue showing up, using our platform to help amplify the voices of marginalized groups and supporting organizations across the globe that work tirelessly for social justice,” says President and CEO Dave Powers of this year’s donation.

The donation announcement was accompanied by a video highlighting Deckers’ key internal and external DEI initiatives from the past year. Through employee resource groups, monthly facilitated small group conversations, listening tours, webinars, guest speakers, and mandatory and supplemental training, Deckers Brands has supported its most valuable resource—its employees—by providing opportunities for learning, authentic conversation, self-awareness and growth. Deckers Brands believes that these initiatives are critical in order to create a workplace where every individual can come as they are.

In addition to their efforts to create a more inclusive workplace, a noteworthy DEI goal set by Deckers Brands is their commitment to having 25% representation of Black, Indigenous, and People of Color (BIPOC) in the U.S. at Director levels and above by 2027. Since last year, the number of BIPOC employees at Director levels and above has increased from 12% to 16%. Additionally, since last June, 49% of all new hires have been from BIPOC communities, putting Deckers on track to meet its goal. UGG, HOKA, Teva, Sanuk, and Koolaburra by UGG have also each committed to representing 60% BIPOC, LGBTQ+ and diversity of body types and abilities in all future marketing campaigns. “While we are trending in the right direction, we know we have a ways to go. What gets measured gets done, and holding ourselves accountable is going to be critical to our success,” Director of DEI Daalia Refaat said.

The announcement falls during the week of Juneteenth, as a recognition of racial and social justice milestones and the further progress needed for true equality. Deckers Brands intends to report on their progress towards DEI representation goals in their annual Corporate Responsibility report, reinforcing the importance of accountability and transparency as part of their overall commitment.

Deckers Brands is a global leader in designing, marketing, and distributing innovative footwear, apparel, and accessories developed for both everyday casual lifestyle use and high-performance activities. The Company’s portfolio of brands includes UGG®, Koolaburra®, HOKA ONE ONE®, Teva®, and Sanuk®. Deckers Brands products are sold in more than 50 countries and territories through select department and specialty stores, Company-owned and operated retail stores, and select online stores, including Company-owned websites. Deckers Brands has over 40 years of history building niche footwear brands into lifestyle market leaders attracting millions of loyal consumers globally. For more information, please visit www.deckers.com.

MacKenzie Scott Donates $2.7B to Charity; Here’s Which Organizations Were Recipients

By Alexandra Hutzler
Newsweek

Philanthropist MacKenzie Scott has donated more than $2.7 billion to hundreds of charities and organizations.

Scott, the ex-wife of Amazon founder Jeff Bezos, made the announcement in a Medium blog post on Tuesday.

“These are people who have spent years successfully advancing humanitarian aims, often without knowing whether there will be any money in their bank accounts in two months,” Scott wrote. “What do we think they might do with more cash on hand than they expected? Buy needed supplies. Find new creative ways to help. Hire a few extra team members they know they can pay for the next five years. Buy chairs for them. Stop having to work every weekend. Get some sleep.”

Tuesday’s announcement is the third major round of donations Scott has made over the past year. In 2020, she pledged roughly $6 billion to coronavirus relief organizations, racial equity groups, historically Black colleges and more.

Her latest philanthropic effort included $2,739,000,000 in gifts to 286 organizations in “categories and communities that have been historically underfunded and overlooked.”

“We chose to make relatively large gifts to the organizations named below, both to enable their work, and as a signal of trust and encouragement, to them and to others,” Scott wrote in her Medium post.

Here’s a list of every organization that received a donation.

  • 317 Main Community Music Center
  • A Place Called Home
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    -Spark Justice Fund
  • Brazosport College
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  • Cal Poly Pomona
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  • Candid
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Programmers, Lawmakers Want A.I. to Eliminate Bias, Not Promote It

By Kristian Hernandez
PEW Trusts

DALLAS — When software engineer Bejoy Narayana was developing Bob.ai, an application to help automate Dallas-Fort Worth’s Section 8 voucher program, he stopped and asked himself, ‘‘Could this system be used to help some people more than others?”

Bob.ai uses artificial intelligence, known as AI, and automation to help voucher holders find rental units, property owners complete contracting and housing authorities conduct inspections. The software and mobile app were released in 2018 in partnership with the Dallas Housing Authority, which gave Narayana access to data from some 16,000 Section 8 voucher holders.

Artificial intelligence is used in a host of algorithms in medicine, banking and other major industries. But as it has proliferated, studies have shown that AI can be biased against people of color. In housing, AI has helped perpetuate segregation, redlining and other forms of racial discrimination against Black families, who disproportionately rely on vouchers.

Narayana worried that Bob.ai would do the same, so he tweaked his app so that tenants could search for apartments using their voucher number alone, without providing any other identifying information.

As an Indian immigrant overseeing a team largely made up of people of color, Narayana was especially sensitive to the threat of racial bias. But lawmakers in a growing number of states don’t want to rely on the goodwill of AI developers. Instead, as AI is adopted by more industries and government agencies, they want to strengthen and update laws to guard against racially discriminatory algorithms—especially in the absence of federal rules.

Since 2019, more than 100 bills related to artificial intelligence and automated decision systems have been introduced in nearly two dozen states, according to the National Conference of State Legislatures. This year, lawmakers in at least 16 states proposed creating panels to review AI’s impact, promote public and private investment in AI, or address transparency and fairness in AI development.

A bill in California would be the first to require developers to evaluate the privacy and security risks of their software, as well as assess their products’ potential to generate inaccurate, unfair, biased or discriminatory decisions. Under the proposed law, the California Department of Technology would have to approve software before it could be used in the public sector.

The bill, introduced by Assembly Member Ed Chau, a Democrat and chair of the Committee on Privacy and Consumer Protection, passed the California State Assembly earlier this month and was pending in the state Senate at publication time.

Chau said the bill would set up a clear system of accountability and offer transparency on AI design systems to minimize discriminatory effects on California residents, a critical goal as the state works on its pandemic recovery. Writing a new policy “is especially important as our government agencies seek to utilize algorithm-driven [AI] systems to improve our quality of life,” he wrote in an emailed statement.

Vinhcent Le, a lawyer at the Greenlining Institute, an advocacy group focused on racial economic justice, helped write the California legislation. Le described algorithms such as Bob.ai as gatekeepers to opportunity that can either perpetuate segregation and redlining or help to end them.

“It’s great that the developers of Bob.ai decided to omit a person’s name, but we can’t rely on small groups of people making decisions that can essentially affect thousands,” Le said. “We need an agreed way to audit these systems to ensure they are integrating equity metrics in ways that don’t unfairly disadvantage people.”

Automated Discrimination

According to an October report by the Massachusetts Institute of Technology, AI often has exacerbated racial bias in housing. A 2019 report from the University of California, Berkeley, showed that an AI-based mortgage lending system charged Black and Hispanic borrowers higher rates than White people for the same loans.

In 2019, U.S. Sen. Cory Booker, a New Jersey Democrat, introduced a bill like the one under consideration in California, but it died in committee and has not been reintroduced.

“Fifty years ago, my parents encountered a practice called ‘real estate steering’ where black couples were steered away from certain neighborhoods in New Jersey. With the help of local advocates and the backing of federal legislation, they prevailed,” Booker said in a news release introducing the bill.

“However, the discrimination that my family faced in 1969 can be significantly harder to detect in 2019: houses that you never know are for sale, job opportunities that never present themselves, and financing that you never become aware of—all due to biased algorithms.”

Several states have struggled in recent years with problematic software.

Facebook overhauled its ad-targeting system to prevent discrimination in housing, credit and job ads in 2019 as part of a settlement to resolve legal challenges filed by the National Fair Housing Alliance, the American Civil Liberties Union, the Communications Workers of America and other advocacy groups.

In Michigan, an AI system that cost the state $47 million to build in 2013 falsely accused as many as 40,000 people of unemployment insurance fraud, forcing some people into bankruptcy, according to the Detroit Free Press.

In Pennsylvania, a child abuse prediction model unfairly targets low-income families because it relies on data that is collected only on families using public resources, according to Virginia Eubanks’ 2018 book “Automating Inequality.”

“Automated decision-making shatters the social safety net, criminalizes the poor, intensifies discrimination, and compromises our deepest national values,” Eubanks wrote. “And while the most sweeping digital decision-making tools are tested in what could be called ‘low rights environments’ where there are few expectations of political accountability and transparency, systems first designed for the poor will eventually be used on everyone.”

The Sacramento Housing Redevelopment Agency began using Bob.ai in March. Laila Darby, assistant director of the housing voucher program, said the agency vetted Bob.ai before using it to make sure it didn’t raise privacy and discrimination concerns.

Narayana said he’s sure Bob.ai would pass any state-mandated test for algorithmic discrimination.

“We’re a company that is fighting discrimination and doing everything possible to expand housing for voucher holders,” Narayana said. “Vetting these systems is beneficial because discrimination and inequality is something everyone should be concerned about.”

Automating Solutions

Narayana worked as an engineer at IBM until he decided to start his own company with the mission of rethinking government functions. He founded BoodsKapper in 2016 and began developing Bob.ai out of a co-working space near the Dallas-Fort Worth airport.

Narayana’s creation has been a huge success—in Dallas and beyond. The Dallas Housing Authority has used Bob.ai to cut the average wait time for an apartment inspection from 15 days to one. Since the launch of Bob.ai, Dallas and more than a dozen other housing agencies have added some 20,000 Section 8 units from landlords who were not participating in the program because of the long inspection wait times.

“We partnered with [Narayana] to come up with some technology advancements to our workflows and automation so that we could more timely respond to our business partners so that they didn’t see this as a lost lead in terms of working with the voucher program,” said Troy Broussard, Dallas Housing Authority CEO.

Marian Russo, executive director of the Village of Patchogue Community Development Agency on Long Island, New York, said she hopes Bob.ai can help the agency reverse the area’s long history of redlining. The authority plans to begin using Bob.ai to manage its 173 housing vouchers later this year.

“We’re one of the most segregated parts of the country,” Russo said of Long Island. “We have 25 housing authorities, so if we could just have a central place with all the landlords who are renting through the program and all the individuals who are looking for housing in one place, that could be a part of equalizing the housing issues on Long Island.”

U.S. Rep. Bill Foster, an Illinois Democrat, has similar hopes for AI. In a May 7 hearing, members of the Task Force on Artificial Intelligence of the U.S. House Committee on Financial Services discussed how AI could expand lending, housing and other opportunities. But they also warned that historical data inputted into AI can create models that are racist or sexist. Foster’s office did not respond to multiple requests for comment.

“The real promise of AI in this space is that it may eventually produce greater fairness and equity in ways that we may not have contemplated ourselves,” said Foster, chair of the task force, in the hearing. “So, we want to make sure that the biases of the analog world are not repeated in the AI and machine-learning world.”

SVB Financial Group Announces $11.2 Billion Community Benefits Plan

SVB Financial Group

SANTA CLARA, Calif. and BOSTON – May 20, 2021 – SVB Financial Group (“SVB”) (NASDAQ: SIVB), the parent of Silicon Valley Bank, the bank of the world’s most innovative companies and their investors, today announced a proposed five-year, $11.2 billion community benefits plan that builds on its long-standing commitment toward helping small businesses, financing affordable housing, reinvesting in low- and moderate-income (“LMI”) communities and supporting the greater good through philanthropy and volunteering. The plan was developed in collaboration with the California Reinvestment Coalition (“CRC”), The Greenlining Institute, Massachusetts Affordable Housing Alliance (“MAHA”) and Massachusetts Association of Community Development Corporations (“MACDC”), based on anticipated growth resulting from and subject to the completion of SVB’s pending acquisition of Boston Private Financial Holdings, Inc. (“Boston Private”) (NASDAQ: BPFH), the parent of Boston Private Bank & Trust Company.  The acquisition was announced in January 2021 and is expected to close in mid-2021, subject to the satisfaction of customary closing conditions and applicable regulatory approvals.

Over a five-year period from January 2022 through December 2026, SVB’s $11.2 billion commitment will focus on providing financial support to LMI communities in California and Massachusetts:

  • $5.0 billion in small business loans of $1 million or less;
  • $4.8 billion in Community Reinvestment Act (“CRA”) community development (“CD”) loans and investments;
  • $1.3 billion in residential mortgages to LMI borrowers and in LMI census tracts; and
  • $75 million in charitable contributions.

As part of its residential mortgage lending commitment, SVB will expand its participation in the Massachusetts Housing Partnership’s ONE Mortgage and the City of Boston’s ONE+Boston first-time homebuyer mortgage programs. SVB will also commit to the Massachusetts Housing Partnership Fund.

In addition, SVB plans to adopt and implement a corporate supplier diversity program with a goal, by 2026, of contracting at least eight percent of its corporate supplier spending annually to locally-based businesses owned or led by members of historically underserved communities, such as people of color and women. SVB will also continue its commitment to increase management diversity within the organization and has signed on to Silicon Valley Leadership Group’s 25×25 program.

“As a leader in the innovation economy, we strive to use our voice and influence to help shape a better future and contribute to progress in our communities,” said Greg Becker, President and CEO of SVB Financial Group. “This proposed community benefits plan aligns with our long-held commitment to significantly contribute to our communities’ well-being.  The growth of our business gives us the ability to step up more aggressively.  We are intent on making a lasting impact and welcome the support of our community partners in developing this plan.”

SVB’s business model serving small and growing businesses, and its key community development initiative, Access to Innovation, are aimed at giving entrepreneurs and innovative startups opportunities to build their businesses, create jobs and give back to their communities.

As part of the proposed community benefits plan, SVB will also create a community advisory council and will meet with representatives from the CRC, The Greenlining Institute, MAHA and MACDC to review and discuss progress toward the plan’s goals.

Silicon Valley Bank operates under a Strategic Plan to comply with the Community Reinvestment Act. Upon completion of the pending acquisition of Boston Private, Silicon Valley Bank plans to amend its CRA Strategic Plan to include updated goals in California and new assessment areas for the greater Boston and Los Angeles regions. To receive a copy of SVB’s CRA Strategic Plan, please contact SVBintheCommunity@svb.com.

“This plan is a culmination of joint efforts by the Greenlining Institute and CRC, and grows SVB’s commitment to meeting the needs of low- and moderate-income communities and communities of color in an especially critical time, as many Californian families are either struggling to find housing or remain housed, and as small businesses weather the devastating financial impacts brought on by the COVID-19 pandemic. This is a win for both SVB and our communities,” said Kevin Stein, CRC Deputy Director.

“For 25 years, Boston Private Bank & Trust has been a Community Reinvestment Act leader here in Massachusetts,” said Symone Crawford, MAHA’s Director of Homeownership Education. “We applaud SVB for making this commitment to low-to moderate-income communities and households in greater Boston and bringing new resources to assist first-time homebuyers, small businesses and nonprofits. If we are to narrow the racial homeownership gap, we need financial institutions to do more in programs like ONE Mortgage and ONE+Boston and SVB is committing to do just that.”

About SVB Financial Group
For nearly 40 years, SVB Financial Group (NASDAQ: SIVB) and its subsidiaries have helped innovative companies and their investors move bold ideas forward, fast. SVB Financial Group’s businesses, including Silicon Valley Bank, offer commercial, investment and private banking, asset management, private wealth management, brokerage and investment services and funds management services to companies in the technology, life science and healthcare, private equity and venture capital, and premium wine industries. Headquartered in Santa Clara, California, SVB Financial Group operates in centers of innovation around the world. Learn more at svb.com.

SVB Financial Group is the holding company for all business units and groups © 2021 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group. [SIVB-F]

What California lawmakers could do to boost homeownership for Black families

By Manuela Tobias
CalMatters

When she was in grad school to become a therapist, Merika Reagan sketched out her future with a friend. They would each start their own practice, buy homes and raise their families in Oakland.

Her classmate, who could count on her family’s financial support, achieved the dream.

But Reagan struggled to find a job that checked her school’s internship requirements and still paid the rent. Her parents, who stayed in senior housing and later passed away, left no savings. She never finished her degree, bought a home or started a family — and she has a clear explanation for why their paths diverged.

“The difference is, she is white and I am Black,” said Reagan, now 46. “That did not happen for me because of generational poverty. Because of being Black, because of being a descendant of slavery, because of stolen wealth.”

California is in a deep housing crisis that has made it nearly impossible for many to afford rent, let alone buy a house. That crisis is, in part, the result of a decade of housing supply not keeping up with demand. But for communities of color, and especially Black people, housing is less an emergency than a chronic illness compounded by centuries of discriminatory, if not outright racist, policies.

“A housing crisis implies it hasn’t been happening this whole time,” said Roderick Hall, a project manager at Pacific Urbanism and a steering committee member of Our Future Los Angeles, both housing groups.

And housing inequality worsened during most of the COVID-19 pandemic, with Blacks and Hispanics more likely than whites to be at risk of eviction and foreclosure, according to a study by the Brookings Institution, a Washington, D.C., think tank. While inequality has lessened from its peak, that’s because more whites are facing housing instability, the study says.

“People have always had issues with housing, but now it’s hit the white middle class,” Hall said. “And now that it’s not working for them, it’s becoming an issue.”

Following the growth of the Black Lives Matter movement and a growing recognition of America’s racist past, “equity” has become one of the hottest buzzwords at the state Capitol. But equity is a loaded term, and it means different things to different people.

By law, the state can’t favor any one racial group over another. So racial equity often gets addressed through measures that aim to level the economic playing field.

Housing groups and lawmakers all say they want to narrow the racial wealth and homeownership gap, but not everyone agrees on how. And as with many issues, the people who are most affected are least likely to have a seat at the table.

Black wealth and homeownership gaps

Homeownership has long been the primary way that families build wealth in the United States. That’s especially true in California, where home prices have skyrocketed. And over the years, many Black families have been deliberately excluded.

Redlining systematically denied loans on homes in predominantly Black neighborhoods. New highways bulldozed through thriving Black communities, while urban renewal destroyed struggling areas. Changes in zoning from multifamily to single family homes allowed white neighborhoods to exclude Black residents from moving in. During the 2008 housing crisis, lenders pushed risky subprime loans more aggressively to Black people, who lost their homes in hundreds of thousands of foreclosures, according to a recent report by the Terner Center for Housing Innovation at UC Berkeley.

In California today, about 63% of non-Hispanic white families own their homes. Only around 36% of Black households can say the same, a gap that has actually widened since housing discrimination was officially outlawed with the Fair Housing Act of 1968.

Even when Black families own their homes, they are typically worth less. A recent study by Brookings found that on average, owner-occupied homes in Black neighborhoods are undervalued by $48,000, adding up to $156 billion in cumulative losses.

The median white family in the United States now has more than eight times the wealth of the median Black family. In Los Angeles, one study found Black and Mexican households hold only 1% of the wealth of whites households.

One significant way to narrow this gap, many California lawmakers agree, is by making it easier for people to buy a home. The challenge: Research by the California Association of Realtors shows that less than a fifth of Black Californians could afford to buy a median-priced home last year, compared with about two-fifths of white households.

A recent study by California Forward, a nonprofit advocacy group, found a gap totaling $61.8 billion between the home prices that low- to moderate income California households can afford and the typical home prices where they live. Latino, Black and Native American Californians were disproportionately represented in that gap.

A few programs boost homeownership through help with down payments — one of the biggest barriers to buying a home for people who don’t have savings or wealthy parents. The largest state program is through the California Housing Finance Agency, which provides as much as $11,000 of down payment assistance to qualifying first-time homebuyers.

The program served more than 9,000 families last year using $165 million from state appropriations, interest and loan repayments. But due to California’s exorbitant home prices, the assistance doesn’t go too far in places like the Bay Area, said Ashley Garner, the agency’s community outreach coordinator. About half of last year’s aid went to buying homes in San Bernardino, Riverside, Sacramento, Kern and Los Angeles counties.

While this program is designed to help low- and middle-income Californians of all races, Hispanic and Black borrowers are overrepresented. About 8% of last year’s borrowers who took advantage of this state aid were Black, which is more than the 5.5% Black share of the state population. More than half of borrowers identified as Hispanic, compared with their 39% share of the state population.

If California hopes to close the racial homeownership gap, however, those numbers need to be far higher.

Garner, who also leads the agency’s Building Black Wealth initiative, hopes to double Black participation through outreach that includes videos to educate people on housing discrimination and encourage Black homeownership.

“If it wasn’t so important, why did they lock you out of it? I need the Black community to understand,” Garner said. “It’s a better lifestyle for our children. It’s employment opportunities. Owning a home is more than just building wealth.”

Still, she said the program’s biggest obstacle has been getting the word out and securing trust. She recalled sitting at an informational booth in a predominantly Black community. A long line formed to speak with Garner, a Black woman, while her white colleague sat idle.

“How can you solve an issue in a community you never set foot in?” she asked. “For us to get somewhere in housing you have to bring these voices to the table.”

Aside from the need for down payment assistance, Black people disproportionately suffer from poor debt-to-credit ratios, which make it difficult to buy a house through any program. That’s because people of color have long been flooded with predatory loans and excluded from the lending system, said Maeve Elise Brown, executive director of Housing and Economic Rights Advocates in Oakland.

“There are scored differentials based on race in our country, which are inextricably tied to a historic lack of access to credit or being force-fed onerous credit,” she said. “This is the lingering aftermath of that damage. Those are lost years.”

Several banks have acknowledged the role of past structural racism in the financial system. But there’s little consensus on how to move forward. Shareholders recently urged the nation’s biggest banks to take a closer look at how their practices affect communities of color. The banks largely responded that it was unnecessary because of internal initiatives and investments in the issue. JP Morgan, for example, committed $30 billion over the next five years toward Black and Latino homeownership and affordable rental financing programs.

Where’s the money going?

Flush with a historic budget windfall of more than $100 billion, state lawmakers have a chance to put their money where their mouths are on housing. Assembly and Senate budget leaders alike have identified homeownership as key, but must still agree on the details.

The Assembly has made it a priority to increase investment in the finance agency’s down payment assistance program. By how much, or the source for that funding, is yet to be hammered out.

In his revised budget that he submitted to the Legislature on Friday, Gov. Gavin Newsom proposed a $100 million state and federal investment in the same program. Newsom also proposed $100 million to finance “granny flats” and other accessory dwelling units for low- and middle-income families.

Senate Democrats have a more radical idea. Under their pandemic recovery budget blueprint released last month, the state would partner with first-time homebuyers to buy through what they’re dubbing “California Dream for All.” The state would pay, and own, up to 45% of the home, cutting the purchase price for people by nearly half. For example, a family could buy a $400,000 home for $220,000 under the program.

The money would come from a yet-unspecified revolving fund set up by the state, with shares sold to investors. As home values increase, so would the value of the shares.

The Democrats have proposed commissioning the state treasurer to hash out the program in greater detail and present it back to the Legislature for approval in 2022.

The expansion in homeowner aid would disproportionately favor low-income communities of color who most need the help, allowing the state to “circle around” the constitutional provisions that bar the state from considering race in programs, said Muhammad Alameldin, economic equity fellow at the Greenlining Institute in Oakland.

Are legislators ready to tackle equity?

When it comes to policy bills, however, advocates say the Legislature has repeatedly failed to tackle racial equity head-on.

“We say things like ‘Black lives matter,’ we say we care about homelesseness, but until we confront the systemic inequalities that create these things, we’re never going to solve these issues,” said Assemblymember Alex Lee, a 25-year-old Democratic Socialist from San Jose.

Lee introduced a number of bills to redistribute wealth and protect tenants, but most did not make it out of the housing or revenue and tax committees.

A prime example: Assembly Bill 946, which Alameldin helped craft. That bill, too, would have dramatically increased funding to the finance agency’s homebuyer program — but by ending a mortgage interest deduction on second homes.

“Democrats are choosing to go through the budget process because the policy committees have not taken the housing crisis seriously,” Alameldin said.

Lee also re-introduced a bill that would have sharply curtailed displacement under the Ellis Act, which gives landlords a path to evict tenants when leaving the rental business. Tenants rights advocates have long argued that speculators use that law to flip the state’s waning supply of affordable rental units. He said the bill would have been a boon to people of color, who are vastly overrepresented in homelessness. About a third of people who accessed homeless services last year were Black — five-fold their share of California’s population.

But opposition from Realtors doomed the bill, said Sarah Abdeshahian, campaign manager at Tenderloin Housing Clinic in San Francisco, which co-sponsored the legislation.

“Even legislators who are also people of color, we tell them, we are seeing people left with no choice but to be homeless because there’s no way for them to find another rent-controlled unit within San Francisco,” she said. “They’ll understand, but they refuse to take the bold step of supporting us because it would mean losing the money from Realtors.”

California’s Realtors spent roughly $2.3 million in last year’s legislative races alone.

Sanjay Wagle, senior vice president of governmental affairs at the California Association of Realtors, countered that advocacy groups such as the AIDS Healthcare Foundation have poured millions into supporting tenant protections.

“From our perspective, we see these housing committees and think, ‘Oh boy, look how pro-tenant they are,” Wagle said.

The burden of low-income tenants shouldn’t fall on real estate interests, Wagle argues. “If it’s a social good, then shouldn’t society be helping through a more aggressive voucher system?” he asked. “It’s a social cost. That cost should be spread.”

Abdeshahian also blamed the composition of housing committees for inaction on bills. A CalMatters analysis last year found that at least 30 legislators are landlords, themselves, a big majority are homeowners and only one who was a tenant — who has since bought a condo.

“There is a class divide here that we don’t talk about enough,” Abdeshahian added.

Until those power imbalances are addressed within the Legislature, equity will remain but a buzzword outside the Capitol, too, said Lee.

“Who traditionally has more say and more influence? The people with a lot of money and a lot of power,” he said. “It’s not going to be those people in rent control units. That’s the unfortunate dilemma.”

Which are the best solutions?

Many of this session’s big Democratic housing bills target restrictive zoning — a tool experts say has been used to keep Black, brown and low-income people out of mostly white neighborhoods.

  • Senate Bill 9, by Senate leader Toni Atkins of San Diego, would allow homeowners to put a duplex on single-family lots or split the lots;
  • SB 10, by Sen. Scott Wiener of San Francisco, would allow cities to rezone transit centers and job hubs to allow as many as 10 units per parcel;
  • And SB 478, also by Wiener, would close loopholes that limit multi-family units in places already zoned for it.

These measures could improve equity by adding more units to the housing stock. In their Roadmap Home 2030 plan, Housing California, the California Housing Partnership and a broad coalition of partners across the state identified the need for 1.2 million affordable homes.

“You can’t get anywhere close to a solution without addressing the supply,” said Matthew Lewis, director of communications for California YIMBY, a housing advocacy group. “You need years of building. The starting point is you have to make it legal.”

“The fact is the housing crisis has extremely racialized effects,” added Darrell Owens, policy and data analyst at California YIMBY. “Anything that expands the availability of housing is an equity bill. Anything that curtails that, I would consider to be not rooted in housing equity.”

The YIMBY movement believes in increasing that market-rate supply along with subsidized affordable housing. But other advocates don’t believe growing the real estate market is the answer.

“No matter how much you up-zone, housing is not going to be affordable,” said Isaiah Madison, a board member of Livable California, a local control group that supports single-family neighborhoods, and a neighborhood council member in South Los Angeles. “I just don’t think real estate development is an equity tool.”

Oakland, for instance, has seen a recent glut in housing production. But it’s concentrated on the higher end of the market, creating few units for low-income families and in fact, pushing many out, said Brown, from Housing and Economic Rights Advocates.

The market, Madison argued, will never make room for people suffering from intergenerational poverty without government intervention. Plus, he said, “A lot of the people using equity as a talking point come from white communities … and to me seem more upset about the racial segregation that exists today than I do or people that I organize do.”

The idea behind allowing more dense housing in historically white communities is partly to expand access to their resources: better-funded schools, better infrastructure, healthier water and air — in short, opportunity.

But some advocates wonder why Black and brown people have to uproot to access the same opportunities. “As people of color, we’re not chess pieces,” said Hall, from Our Future Los Angeles. “You can’t just move us around your board and tell us to go live here and there.”

These advocates say housing alone can’t fix California’s massive inequality. It’s going to take investment in every part of neglected communities of color to even the playing field.

Madison says another measure, also introduced by Wiener, would help. It would repeal Article 34 in the state’s constitution, which has made it nearly impossible to build public housing by requiring voter approval of every project. The attempt to repeal the law has failed repeatedly.

The ballot initiative has support from the California Association of Realtors, which helped cement Article 34 into law. The main opponent: NIMBYs who want a say in what gets built.

But there’s also opposition to the singular focus on building affordable rental housing from some equity-focused groups. Sylvia Aguilar, from the Berkeley-based nonprofit California Community Builders, says the state has not invested enough in affordable homes for sale. Her organization proposes building more “missing middle” income housing, such as condos and “granny flats” on single-family lots.

“We see a gap between this idea of keeping people housed and in rentals off the street, but not really creating opportunities to build wealth,” Aguilar said. “Homeownership was the key to creating the great middle class in the mid-twentieth century, and it can happen again. If the equity talk is real, this is one path to achieving that.”

‘Let’s put our thumb on the scale’

Mary M. Lee, former deputy director for the equity-focused research and advocacy group PolicyLink, says the solution lies in ending the commodification of housing.

“The system isn’t broken, it’s designed to work this way,” said the longtime fair housing advocate in Los Angeles. “Let’s put our thumb on the scale to help low-income people —not just have a roof over their head, but also to build wealth.”

One way to do that, Lee said, is by letting those disadvantaged communities decide for themselves what housing they need. “That’s one of the problems we have with housing,” she said. “We’re trying to let people make mass solutions for problems that aren’t all the same.”

Steve King, executive director of the Oakland Community Land Trust, is working on one such creative public-private hybrid. His nonprofit owns the land a home sits on and leases that land to the homeowner — decreasing the price significantly and protecting the home’s value from market volatility.

“Whenever there’s a disturbance in the market, those are inflection points that without a doubt have caused harm in Oakland’s communities of color,” King said. “We remove land from that equation.”

So far, the land trust covers about 50 properties and 150 residents.

One of them is Merika Reagan, who had never stayed in the same house for more than a couple years growing up around San Francisco as her parents staved off eviction.

Reagan’s two-bedroom house in East Oakland changed ownership three times since she moved there in 2016. Only 30% of the homes in her majority Black and Latino neighborhood were occupied by their owners last year. And each year, she faced rent hikes she feared would make her homeless.

“I was having panic attacks, chest pains. I couldn’t sleep well, but I was still showing up for my clients,” Reagan recalled, when her rent rose by $350 in 2019. That’s when she became involved with the Alliance of Californians for Community Empowerment, a tenant organization that helped her negotiate the rent increase down to $100. When the pandemic hit, and her corporate landlord tried to up the rent again, the group connected her with the land trust, which purchased Reagan’s home.

Her newfound stability has changed her life. When burglars tried to break into her house, her neighbors called the police, providing a sense of community she had never experienced before. When her girlfriend — now fiancee — moved in, she introduced her to the neighbors. Now that the trust owns the land, they can finally grow vegetables in their garden. Reagan is gearing up to take homeownership classes, so that she can eventually buy her house.

“Before this, I never thought ownership was in my horizon at all,” Reagan said. “I thought, ‘I’m going to be a renter until the day I die.’”

For the record: This story has been changed to clarify the description of Livable California, a local control group that supports single-family neighborhoods.

Newsom Budget Boosts Revolutionary California Climate Effort

Transformative Climate Communities, Seen as National Model, Gets $420 million Over 3 Years

Contact: Bruce Mirken, Greenlining Institute Associate Director for Media Relations, 415-846-7758 (cell)

SACRAMENTO, CALIFORNIA – In his May budget revision, California Governor Gavin Newsom has proposed a game-changing increase in and stabilization of funding for one of California’s most creative and effective climate programs, Transformative Climate Communities.

Based on legislation passed in 2016, authored by Assemblymember Autumn Burke and sponsored by The Greenlining Institute and the California Environmental Justice Alliance, Transformative Climate Communities offers a model for fighting climate change, building economic prosperity and redressing historic injustices by funding community-developed climate projects in the state’s most under-resourced communities.

“Transformative Climate Communities is unique in two ways,” said Greenlining Institute Vice President of Policy Alvaro Sanchez. “First, it places communities first, requiring that plans and projects be developed with community leadership, based on what residents need and want. Second, unlike most government programs, it puts the pieces together, linking things like clean energy, transportation, affordable housing near transit and more in ways that both cut carbon emissions and create healthier, more liveable, more prosperous neighborhoods.”

“TCC should be a national model for how to do climate policy right, putting communities first and connecting the dots between energy, transportation, housing and jobs,” Sanchez continued. “We applaud the governor for proposing a level of funding in California that can truly tap into this program’s potential, with stable funding of $140 million a year for the next three years. We hope  legislators will go even farther and raise it to the $500 million level that environmental justice advocates have proposed. Congress and the administration should use this as a model as they look at proposals like the Green New Deal for Cities Act.”

TCC elevates community ownership by requiring that all projects develop a collaborative governance structure between stakeholders such as local government, community-based organizations and residents. This ensures that projects are derived from resident-identified needs, assets and visions, and gives community members who know best more ownership over the changes taking place in their own neighborhoods. It also requires applicants to develop plans for community engagement, workforce development, displacement avoidance and climate resilience.

Although hampered by inadequate funding since its inception, TCC has still produced some remarkable results. In Stockton, for example, a $10.8 million TCC grant is funding streetscape improvements, solar installations on over 100 single-family homes and several multi-family housing complexes, energy and water efficiency upgrades for more than 500 households, the planting of over 1,500 trees plus weekly healthy produce boxes for 50 families – simultaneously fighting climate change while providing a better quality of life for residents and promoting jobs and economic opportunities. The Greenlining Institute is presently analyzing TCC’s implementation thus far and will be releasing its findings later this year.

To learn more about The Greenlining Institute, visit www.greenlining.org.

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THE GREENLINING INSTITUTE works toward a future when communities of color can build wealth, live in healthy places filled with economic opportunity, and are ready to meet the challenges posed by climate change.
www.greenlining.org
@Greenlining

Newsom “California Comeback” Budget Can Help California Build a Just Recovery

Greenlining Institute Urges Legislators to Emphasize Racial, Economic Equity

Contact: Bruce Mirken, Greenlining Institute Associate Director for Media Relations, 415-846-7758 (cell)

The revised “California Comeback” budget released by Gov. Gavin Newsom today can pave the way for California’s efforts to build a just recovery from the COVID-19 pandemic and a just economy that works for all, and legislators must build on what the governor has proposed, The Greenlining Institute said today.

“We’re heartened by much of what Gov. Newsom has proposed,” said Greenlining Institute President and CEO Debra Gore-Mann. “Now it’s up to the legislature to build on this foundation, using both the budget and pending legislation to build a truly just economy in California. The budget affects all of us, so we urge everyone to contact their legislators and push them to seize this opportunity to pass a just, equitable budget”

Highlights of the governor’s revised budget include:

  • Utility Debt Relief. Greenlining strongly applauds Gov. Newsom’s plan to provide $2 billion in assistance for past-due water and utility bills. This can prevent hundreds of thousands of California households from losing these vital services in publicly owned and investor owned utilities’ territories. More relief will be needed as the state recovers, but this an essential first step.
  • Transformative Climate Communities. The governor’s proposed allocation of $420 million over three years for TCC, an innovative program that funds community-led climate projects that integrate clean energy, transportation, affordable housing and more, represents a huge step in the right direction. We urge the legislature to fully fund TCC at the $500 million level urged by advocates. A companion statement amplifies our thoughts on this ground-breaking program.
  • Housing and Rent Relief. Housing unaffordability is an existential crisis facing California’s communities of color. The governor’s proposed $7 billion allocation for Project Homekey — a program administered by the California Department of Housing and Community Development that funds cities, counties, and housing authorities to purchase and rehabilitate 46,000 units of housing, including hotels, motels, vacant apartment buildings and other buildings and convert them into interim or permanent, long-term housing — is an excellent step in the right direction. We also applaud his commitment of $7.2 billion to help low-income tenants financially affected by the COVID-19 pandemic cover all of their outstanding rent and utility payments.
  • Stimulus Payments. In the governor’s newly proposed $100 billion California Comeback Plan, nearly $12 billion will be set aside for stimulus checks — $600 payments for qualifying taxpayers. This is an essential step in ensuring that families still struggling due to COVID-related economic impacts do not fall farther behind. We applaud the governor’s plan and look forward to additional innovative thinking to address other areas of racial and social inequality.
  • Broadband. The Greenlining Institute strongly supports the governor’s broadband budget and commitment to closing the digital divide. The proposed budget balances short and long term needs by providing $7 billion in funding towards open-access middle-mile broadband networks, municipal broadband and last mile infrastructure that will provide Californians with long-term benefits, while ensuring families can afford the internet while these new networks are built. Municipal broadband and open-access infrastructure investments will create jobs, provide faster internet connections to Californians and enable internet service providers to more easily enter the broadband market and compete with incumbents that charge high prices and are slow to upgrade their networks. The governor’s broadband budget creates a sustainable path for closing the digital divide for families that need internet access for jobs, education, health and economic opportunity.
  • Clean Transportation. Electric vehicle equity programs have proven health and economic benefits for families and communities. The governor’s proposal of $3.2 billion altogether over three years for clean transportation, including $1.4 billion for clean trucks and buses, represents a historic step forward. Because pollution from diesel medium- and heavy-duty vehicles is toxic and disproportionately harms communities of color, this funding will make a huge difference in our communities’ health. The May revision also proposes $650 million over three years for Clean Cars 4 All/Equity Programs and the Clean Vehicle Rebate Program. We are pleased to see equity programs receive $250 million, programs with proven health and economic benefits for families and communities. The revised budget also allocates $400 million over three years for the Clean Vehicle Rebate Program, which has been demonstrated to mainly benefit higher-income households. While Greenlining believes that transforming the car market to electric vehicles is important, it is time for the decade-long investment in CVRP to start ramping down. For now, the governor’s investment in CVRP must be targeted to low-income and middle-income Californians.
  • Urban and Community Forestry. California’s urban forests sequester carbon and are critical to helping the most vulnerable populations adapt to climate change, create community resilience and preserve their mental and physical health. Greenlining supported $200 million for this program but the governor has proposed $23 million.
  • Low-Income Weatherization Program. This critical program helps low-income households cut their utility bills and improve health and safety while saving energy, creating jobs and preserving affordable housing.  The governor’s proposed $50 million allocation is seriously inadequate. Legislators should increase it to $375 million.
  • Urban Greening. Vulnerable populations too often lack access to parks and green spaces within walking distance of their homes. The Urban Greening Program helps to mitigate these inequalities  and Gov. Newsom’s proposed  $200 million over two years represents a solid beginning.
  • Community Resilience Centers. The governor proposed a one-time investment of $150 million to support the development and enhancement of community resilience centers split between local fairgrounds and other community facilities. We are excited about the opportunity to develop a new program for community resilience centers that focuses on placing facilities closest to vulnerable communities that address the growing needs of working class communities of color in the face of the converging climate, economic, public health crises. We believe this important program should be funded at $500 million.
  • Regional Climate Collaboratives. Implementation of SB 1072 (Leyva, 2018) to create the Regional Climate Collaboratives program will build the capacity of local communities to make the transition to a climate resilient future, building community-driven leadership, knowledge, and skills. The governor’s proposed $20 million represents a solid start but should be increased to $35 million.
  • Vulnerable Communities Platform. Although there is mounting evidence of the unequal effects of climate change, California has no existing tool that holistically and comprehensively displays the data needed to identify the most vulnerable communities. Greenlining commends the governor for including this priority in the proposed $5 million under community resilience. We strongly recommend that the state use some of this money to resource a community advisory committee to center the vision and expertise of communities disproportionately impacted by climate change in the development and implementation of the mapping platform.

“We urge the legislature to move swiftly to approve a budget that meets the real needs of California’s diverse communities, but legislators can’t stop there,” Gore-Mann said. “We also urge swift passage of SB 17, to create an Office of Racial Equity, and HR 39, which will commit the Assembly to analyzing the racial equity implications of new legislation. Problems based in racism and discrimination need race-conscious solutions if we are build a truly just economy in our state.”

To learn more about The Greenlining Institute, visit www.greenlining.org.

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THE GREENLINING INSTITUTE works toward a future when communities of color can build wealth, live in healthy places filled with economic opportunity, and are ready to meet the challenges posed by climate change.
www.greenlining.org
@Greenlining