First, we'd like to take a moment to celebrate a milestone in strengthening and modernizing the Community Reinvestment Act (CRA), when all three bank regulatory agencies issued a final rule to update the CRA on October 24. (More on this below.)
The event is symbolic of the past year being one of profound reflection on where the community development field has been and where it is headed (see this timeline related to CRA). There is no denying that the current environment in which we operate is more complex, as are the solutions. This was a consistent theme at Policy Summit 2023: Communities Thriving in Changing Economy which took place in June. We hear the desire of many members of our community both within and outside the community development field, to keep the conversation going around many issues and questions including:
How can we be better listeners? While barriers to upward mobility remain largely the same (e.g. access to transportation, credit, housing, childcare) the post-pandemic environment requires different, more interconnected solutions to meet workers and businesses’ needs. For more on what those are, check out the Worker Voices Project. And small business owners can fill out the Small Business Credit Survey—open through November 17—to help decision makers understand and address the changing credit needs of small businesses.
How are changes to funding sources affecting lower-income communities and businesses? This applies to both COVID-era relief funding that has waned, and to major federal investments that are still being deployed. Our recent Community Issues Survey elevates short-term trends, while a recent report discusses one critical area—digital equity and broadband— where new sources federal and state funding are available but varied, complex and sometimes difficult to navigate.
We know the issues. Can we talk more about solutions? Benefits cliffs—a drop-off in benefits larger than what one would receive by taking a job or raise— is one example of an issue that continues to get in the way of workers’ advancement. However, there was new urgency around ensuring that it is not just discussed in nonprofit and policy circles, but also motivates employers to get involved. For more info, check out Atlanta Fed Advancing Careers program as well as stories about what’s working.
These are just some themes worth highlighting now and into 2024, as we strive to promote economic resilience and mobility of lower-income communities. Check out the latest research from our team and our colleagues at the Cleveland Fed and across the country—and let us know whatyou think.
On October 24, Federal bank regulatory agencies jointly issued a final rule to strengthen and modernize regulations implementing the Community Reinvestment Act (CRA) to better achieve the purposes of the law.
See the Community Reinvestment Act Final Rule for related materials, including a fact sheet, interagency summary of key objectives, Board member statements, and additional resources.
Lessons from the Eastern Kentucky flooding
“People woke up with water lapping at their beds” and residents lost their homes, belongings, and livelihoods in this flood-prone region last July. Read insights on how this community is rebuilding and maintaining resiliency in the face of change.
Help improve what’s known about small businesses: Survey closes November 17th
Owners and key financial decisionmakers of for-profit small businesses, share your recent experiences. How would you rate the financial condition of your business? Did your business seek financing such as loans or lines of credit in the last 12 months? Within the past 12 months, did your business sustain losses from a natural disaster?
Please consider sharing with your networks or if you are a small business owner, consider taking a 12-minute survey. By doing so, you contribute to data that directly informs the Fed, federal government agencies, service providers, policymakers, and others.
The survey is open to businesses with 500 or less employees currently in operation, those recently closed, and those about to launch. All responses are confidential.
Rural and low-income communities are most impacted by the digital divide
The Fourth District (Ohio, western Pennsylvania, and parts of Kentucky and West Virginia) covers a mix of urban areas and rural communities, both face unique challenges accessing broadband. About 20% of rural households cannot access broadband, compared to about 10% of metro area households. Read our full report on digital equity in the Fourth District.
Blog posts cover digital divide, affordable housing and economic equity
In Notes from the Field, members of our Community Development team discuss what they are seeing and hearing in their work on the ground. Catch up on the latest blog posts:
Low-and moderate-income communities report that affordable housing still remains an issue
According to the September 2023 Community Issues Survey, job availability remains elevated but has returned to prepandemic levels, while both affordable housing availability and financial well-being are near their lowest points. See the chart.
Corporate and institutional investors play roles in both expanding and constraining housing opportunities
Since the Great Recession, financial markets have increasingly influenced housing markets and have had a particular impact on low- and moderate-income communities. Whether selling homes through contracts for deed or acquiring single-family homes to rent out, corporate and institutional investors are both expanding and constraining opportunity. Watch the recording of our recent event, Keys to Opportunity in the Housing Market: How Financial Models Advance and Constrain Low-income Communities, a research-driven discussion that explored how both contracts for deed and investor-owned single-family rentals are affecting lower-income communities.
Small Business
Survey helps inform public on the success and challenges all small businesses face
The Small Business Credit Survey help us build public reports, sharable data, and inform policy conversations and decision-making. Learn more.
Data reveal insights into small businesses owned by people of color
In this Ask the Expert, Lucas Misera, Small Business Credit Survey Policy Analyst, explains that startups owned by people of color faced challenges through the pandemic that are intertwined with race and ethnicity in complex ways.
Workforce
Opioid Crisis impacts national regional labor markets
Published in the Labor Economics Journal, Cleveland Fed research finds the impact of the opioid crisis on national and regional labor markets is large, showing that an increase in the local opioid prescription rate is associated with a decrease in employment rates for both men and women. Read the article here.
Employment levels in metro areas still working to recover
The nation’s employment took less than 2 years to recover from the pandemic-associated recession. That many metro areas in our region have yet to see the same recovery suggests that structural factors may be limiting their progress. Read the full District Data Brief.
Stress point for non-profits
The Federal Reserve’s Beige Book now includes additional sections devoted to conditions of lower-income individuals and communities. The most recent report includes the following insights from the Fourth District:
Several nonprofits said that hiring and retaining staff had been particularly challenging, and one large community service provider reported that it was 40 workers shy of its desired staffing level of 170.
Nonprofits noted increased demand for their services. For example, one entity providing mental health and addiction treatment services received 50 applications for just two openings in the program, with wait times as long as nine months.
Workers emphasized flexible hours and location as important facets of job quality
A greater understanding of what constitutes a quality job can not only help improve worker well-being but also lead to a stronger bottom line by reducing the costs associated with job vacancies and high turnover rates. Check outWorker Voices Special Brief: Perspectives on Job Quality to learn more about what workers constitute as a quality job.
Events
Policy Summit 2023 session recordings now available
Since the early 2000s, the Cleveland Fed has hosted Policy Summit to ensure that local communities have access to the latest community development research and best practices outside of conventional DC-based policy circles, and that people’s lived experience in turn informs research and policymaking. That objective continues to be met in its 16th year. It was attended by more than 550 individuals from 36 states and DC, with support from eight Reserve Bank partners and 16 community organizations. Videos of the following are now live:
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