Bert Caldwell: Affordable housing conference gets a wealth of good advice

THURSDAY, SEPT. 13, 2007

Assets, not income, are the key to lifting families out of poverty, yet many public policies discourage saving or do not protect what savings can be accumulated.

So says Robert Friedman, chairman of the Corporation for Enterprise Development, which Wednesday issued an “Assets and Opportunities Scorecard” that grades the states and programs that encourage home and business ownership, support education, and insure health. The scorecard also takes a look at how well state citizens are doing financially.

Coincidentally with the scorecard release, Friedman was in Spokane to address the 14th Annual Affordable Housing Conference.

Assets, he says, change family and individual psychology. If you own a home or business, investments, or just a savings account, you have “permission” to live in the present, and think about the future. The debt-burdened live in the past.

Education is also an asset, one with the proven power to increase income over a lifetime.

It takes very little, just a few hundred dollars, to start wealth-building, Friedman says, and that’s where the organization he founded in 1981 has focused its attention, notably by championing microenterprise and Individual Development Accounts. IDAs can in three years or less generate rather remarkable savings — several thousand dollars — by matching an individual’s scrimpings with federal, state and financial institution money. The money can be used to buy a home or business, or pay for a college education.

Spokane Neighborhood Action Programs, which administers the program locally, just received $200,000 in state money to fund IDAs, and another $250,000 in federal dollars are in the pipeline.

Friedman calls the IDA assistance “getting-ahead money, not staying-ahead money.”

The program also includes financial education, which Friedman says is critical to a family’s ability to progress when the economic environment turns, as it is now for many consumers who purchased homes using mortgages they did not understand, and cannot afford.

Friedman fears that, without government intervention, a 25.8 percent jump in median net worth nationwide between 2005 and 2007 will evaporate.

“Wealth can be created in a relatively short time, and it can be destroyed as well,” he says.

To prevent an implosion, CFED advocates strong anti-predatory lending laws that might have blocked the sale of many subprime mortgages. Another safeguard: expanded government health insurance programs to help pay medical bills that are a leading cause of bankruptcies.

Washington, which earned a grade of ‘B’ on the CFED scorecard, was hurt for lack of curbs on predatory lending, and for limited health care coverage. That grade did not take into account the 65,000 added this year to the State Children’s Health Insurance Program.

The state was also marked down by its ranking near the bottom among all states for housing affordability. The strengths were education and financial security. Of note: Washingtonians have a lot of installment and credit card debt.

Idaho also earned a ‘B,’ showing strength where Washington was considered weak — home and business ownership, and vulnerability where Washington stood out — education and financial security.

The complete rankings, and CFED’s recommended policy changes at the state level, are posted at

Friedman says measures to encourage asset building are relatively inexpensive, and some have attracted bi-partisan support in Congress. State and federal governments alike could help by simply not penalizing recipients of public assistance if they manage to save a few dollars.

But he cautioned that small steps also mean slow progress.

The scorecard found that 15.5 percent of Americans have zero or negative net worth, and 22 percent do not have enough in assets to sustain them for three months should their incomes dry up. Wide disparities remain between states, between races, and between genders.

“I think of this as a generational thing,” he says. “We’re still fairly low on the asset-building curve.”


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