A community development and labor perspective

Rob Valletta:

Welcome back to the afternoon session of our Fed Listens event on a hot economy, sustainability and trade-offs here at the San Francisco Fed. In the morning, we had some great presentations by researchers, some really interesting discussion as a follow-up to that about some of the issues raised, the trade-offs, the upsides and downsides of a hot economy.

I’m really looking forward to this afternoon session. I’m Rob Valletta, one of the economists here at the Fed, and it may seem a little bit odd to have an economist helping to facilitate a discussion from a community development perspective. But much of my research is on poverty and inequality, access to health insurance, and issues like that. So I’m very excited to be participating in this panel and helping facilitate the discussion.

We’ve got a terrific lineup of four presenters, and I want to introduce them all right off the bat. But before I do, just to emphasize the importance of this part of the day, the community perspectives part of this Fed Listens initiative has been very important and very impactful so far. I know this because of what Chair Powell has said about it, having attended some of the Fed Listens events.

The speech he gave in late June, after having attended the Chicago Fed Listens event in early June, Chair Powell said, “I was particularly struck by two panels that included people who work every day in low and middle income communities. What we heard loud and clear was that today’s tight labor markets mean that the benefits of this long recovery are now reaching these communities to a degree that has not been felt for many years. We hear that many people, who in the past struggled to stay in the workforce, are now getting an opportunity to add new and better chapters to their life stories.”

So obviously there are some strong upsides. We heard about that this morning, but there may be downsides as well. And it’s only getting the perspectives of people working in those communities that I think we can really get an understanding of that.

With that in mind, I’d like to quickly introduce our four panelists. Carolina Reid will be opening up with a broad overview of what’s going on in some low and moderate income communities. She’s an assistant professor of City and Regional Planning at UC Berkeley, and the faculty research advisor for the Turner Center for Housing Innovation. She specializes in housing and community development with a specific focus on access to credit, housing and mortgage markets, urban poverty and racial inequality.

We also have Dr. Carmen Rojas with us. She is the president of Workers Lab. She’s actually co-founder and CEO. It’s an organization founded in 2014 that invests in experiments and innovation to build power for working people in the 21st century. For more than 20 years, she has worked with foundations, financial institutions, and nonprofits to improve the lives of working people across the United States. Welcome Carmen.

We also have with us today Isela Gracian, who is president of the East Los Angeles Community Corporation. It’s a social and economic justice community development organization in LA’s Eastside. Isela began with ELACC in 2004 as coordinator for a job training program, and has held various progressive positions including community organizing director, an excellent example of upward mobility.

And finally, Carrie Cihak is the chief of policy for King County, which includes Seattle and most of its eastern suburbs. It’s the 13th largest county in the United States. She’s responsible for identifying the highest priority policy areas, and community outcomes for leadership focus, and for developing and launching innovative solutions to issues that are complex, controversial, and cross-sectoral. Welcome to all of our panelists. Carolina, we’ll start out with an overview of some of the key issues.

Carolina Reid:

Thank you Rob, and thank you for inviting me to be on this panel. I’m going to do my best to talk a little bit about sort of overall trends that I see when I am looking at issues facing low-income communities.

For those of you who don’t know me… I am very happy to see also familiar faces. But for those of you who don’t know me, I actually had the privilege of working here at the San Francisco Fed under Janet Yellen. We are in her conference room, and as I was preparing for today’s remarks, I couldn’t help but reflect on what a profound influence she had on my life, and on my understanding of what it means to be a Fed employee, and what we’re trying to do through our research and our policymaking.

It struck me that in 2006, which was shortly after I joined the San Francisco Fed, she actually gave a talk on economic inequality, and she was the first president of the Federal Reserve System to lift up the issue of inequality as an issue that the Fed should be concerned about. It was at the tail, but she didn’t know it was at the tail end of a period of economic expansion, but it was at the tail end of a period of economic expansion. This is what she said, I’m just going to read a teeny, tiny, little quote from that talk.

“Much of my interest in macro policy has been founded on the belief that it can and should improve the lives of a broad range of our nation’s people. Inequality has risen to the point that it seems to me worthwhile for the US to seriously consider taking steps to make our economy more rewarding for more of its people.”

I think our plan for this panel today, in terms of including talking about some solutions and some interesting strategies to move towards making this economic expansion more broadly shared, it’s also going to talk about how it’s not broadly shared. And I know that earlier today you guys spoke a lot about income inequality. My goal today is to give you some stylized facts of what is happening here in the Bay Area and in California.

Although I’m focusing on this for time, I think that the trends I’m going to be talking about right now are being replicated in many of the areas of the 12th District. Maybe to varying degrees, but it is certainly something that resonates with low-income communities in Los Angeles, Seattle, Portland, and all of the 12th District’s nine western states.

We know a lot about income inequality in the United States. I think everybody has seen the United States statistics. I’m showing you data for just California. California, Washington, and Nevada, three of our nine western states, are States among the top 10 states in the United States with the highest levels of income inequality. Those three blue lines, those are all the top 1%. That biggest blue line all the way in the top is actually the 0.01% and changes in their income and average income.

Right now in California, the average income of the top 1% is 1.7 million. The average income of the bottom 99% is just 55,000. And so, we see a real divergence in terms of who has been benefiting from the economic growth since the recession. I want to argue that these larger trends are being felt most acutely at the local level, and that it is at the local level that these income inequality, and these widening gaps, are playing out not only across class but also across race.

I’m going to show you just one slide, or two slides, to illustrate this point. This is San Francisco in 1980. This is the distribution of household incomes in San Francisco in 1980. You can see that even in 1980, black households in the city tended to earn less than white households. The bar all the way on the right of more than 125,000 is slightly higher for white households than black, and it’s the opposite at the lowest end of the income spectrum. But you also see a very broad and equally shared middle.

This is what it looks like in 2017. At the same time that we see this polarization, we also see an absolute loss of African Americans from this city. In 1980, we had about 800,000 African Americans, and now we have just 400,000. The share has dropped from about 14% to 5%. This is being felt very acutely. This is leading to significant concerns around displacement, and around who is this economy for? As San Francisco is booming, adding more jobs than ever before, who is benefiting from those jobs?

I would argue one of the biggest challenges for hot market cities, like San Francisco, and Seattle, and Los Angeles, is the fact that our housing market is largely broken. So if we think about the housing market, how many cities in California do you think actually met the state mandated goals for how much housing, at all income levels, they had to produce to accommodate just population growth? So not any sort of latent, unfilled housing demand. How many cities do you think actually met those stated goals? Somebody throw out a number.

Audience:

Zero.

Carolina Reid:

Zero. We’ve got three. So, about 2%. Fifty percent of cities didn’t even bother to report any data on whether or not they were meeting their goals. Okay?

This is a huge problem because what it means is we are not building enough housing even as we are adding jobs. In the Bay Area alone, 58% of the buildable land area saw no new housing at all, and 30% of that area only saw single family homes built. What does this mean? This means that rents have, and this is for just a one bedroom unit, have increased exponentially since the end of the recession. And incomes have not followed. So the three income bands that you see here are the incomes for what they could pay for rent. It’s a third of the actual average income for those three different occupations.

Which means that a construction worker, who’s actually making a decent salary, that sort of $55,000 average salary from that bottom 99%, is not able to afford a one bedroom apartment. In fact, if they are in a one bedroom apartment, even though their wages have gone up pretty substantially—3%, 4%, or 5%—their actual quality of life has gone way down, right? Because they are spending more and more for housing.

I did a series of interviews last year. I interviewed about 180 low-income families across the state of California, and this tells you, this quote I’m going to read, tells you about the precarity that a lot of these families are feeling. “You get laid off, you get evicted because you can’t pay your rent. Now you have to find a place, but the rent will be higher, so you end up in a place with mold or that feels unsafe. And your next job pays less or you have less hours because you’re new.”

And so these labor market insecurities and these housing market insecurities are playing off of one another. In these interviews and surveys, we found that for people who are making between 50% and 60% of AMI, so these are families that are making probably around $40,000–$45,000. More than half did not have any health insurance. Almost half didn’t have any paid vacation. And more troubling, about 40% saw absolutely no opportunities for advancement or increases in their wages over time. So, as we are looking at the historically low unemployment rates, we have to think about what kind of quality of jobs are we actually providing, and what kind of economic security is coming along with those jobs.

The other thing that in preparing for this I read a lot about was that lower interest rates as a result of monetary policy are good for people with debt, right? They should be income inequality enhancing, or it should help income inequality, right? Because people with more debt would be benefiting from lower interest rates. I would argue that it really depends on whether it is debt or whether it is credit, and that many of the credit or debt products that low-income families rely on are much less sensitive to monetary policy than we might expect. So certainly car loans, credit card loans, all of those do move with monetary policy. But particularly for borrowers who are subprime or who don’t have access to mainstream financial services, they are paying more for that credit, and that credit isn’t going to be as, again, as sensitive to monetary policy.

The other thing, and this is going to be my final point before I close and let our other panelists talk about what they’re seeing in their neighborhoods, is that the tightened credit market post-recession has had a huge differential impact across population groups, particularly for black homeowners as well as neighborhoods of color. This is new research that I’m hoping to finalize soon.

The three lines there are different types of neighborhoods, so they have been clustered by three different types of neighborhoods across the country. You have majority minority neighborhoods in blue. You have majority white neighborhoods in green. And the red or orange line on top are neighborhoods that during the subprime boom, and in fact all the way from about 1992 to 2004, were the domain of largely African American and Latino homeowners, and where the majority of loans in those neighborhoods were going to African Americans and LatinX households.

You see that the volatility in the market was much greater in those neighborhoods, right? That their peak was much higher and their low was much lower. This is price per square foot. And that they have rebounded quite substantially since the recession. The majority of those loans made in 2011 and 2012 in those neighborhoods went to white home buyers and higher income home buyers. In the Bay Area, in 2017, 92% of the loans in low-income neighborhoods and moderate-income neighborhoods went to higher-income households. And so when we’re thinking about gentrification pressures, and when we’re thinking about these concerns around displacement, it is partly a rental market story, but it is also partly a home ownership story, and who has access to stay and buy in these places.

To conclude, I actually don’t think this is about monetary policy. I think that monetary policy, very importantly, ensures that there is economic growth, and a job is better than no job. I would argue that most of this is not within the domain of monetary policy, and that local and fiscal policy really matters. But I would encourage people here to think about when you’re thinking about the economy, that it’s important to unpack these larger statistics, and think about how they may look different in different communities, and across different kinds of people.

Finally, I do think that the Fed has other really important tools that can help to mediate some of these inequalities. The Fed’s oversight over the Community Reinvestment Act, for example, I think plays a really important role in ensuring that these communities, and also some of my peers up here on the panel, that they can do the work of investing in low-income places for the benefit of the people who live there. Thank you.

Rob Valletta:

Well, thank you very much, Carolina. That’s a great opening. We know your middle name’s not Pollyanna.

Carolina Reid:

I am actually very optimistic.

Rob Valletta:

Well, there’s a lot of work to be done to improve these outcomes in these communities. Next up, Carmen Rojas, who specializes in issues related to the labor market, and the kinds of jobs that are out there, and how workers are doing. What’s your perspective on this? What are you seeing for the people you’re working with, and the kinds of programs that you have in place to try to help them develop better job placements, and what kinds of jobs are being created?

Carmen Rojas:

Yeah, so first and foremost, thank you so much for having me. I’m really excited to be here. Again, my name is Carmen Rojas. I run an organization called The Workers Lab. We are a lab that was founded in partnership with the Service Employees International Union really to try and find new ways to build power for working people beyond collective bargaining.

The idea being that we, as a country, have spent a whole lot of time and resources tying worker power and well-being to collective bargaining and the labor contract as the sole way to improve the lives of working people. Knowing that there were probably other things that could be tried. And so The Workers Lab is meant to be that place where we can support people who have great ideas to test them out in the real world.

I come to this work in part from DCRP, from city planning, go Bears. And also because I’ve really benefited from this unique moment in time when my parents immigrated to this country. My parents immigrated here to San Francisco in the late 60s at the moment where labor had organized, where peak labor organizing, almost half of American workers were in a labor union. When the civil rights movement and the women’s rights movement had started to make really tremendous gains for the people of this country.

They came, and my mom actually worked at the Levi’s factory in the Mission District, and she worked cleaning office buildings. She cleaned One South Van Ness, which was a Bank of America, and they had a hiring process for entry-level jobs at Bank of America. She got her first entry-level job working at a bank. This bank, I’m going to say Bank of American, this will be the last time that I say it, I promise, because it’s astounding. At that point, in the early 70s… late 1960s, offered all of its employees no-interest loans to pay for their first home.

So my parents were able with a middle school education to immigrate to the United States, do entry level work, and with their first foothold into an entry-level position, have access to a job. But not only a job, but to a home in San Francisco, which really transformed my life and made it possible for my parents to have a daughter who has a PhD from Berkeley, right?

There was a moment in time where the fates of the private sector are really tied to the fates of working people, and I am an expression of that fate. And so I built The Workers Lab really as a testament, and it’s kind of my pay it forward, my deep belief that it’s always possible for us to make a different set of choices.

At The Workers Lab, we have two key organizational programs that I’d like to share with you guys. One is an innovation fund. We fund private entrepreneurs, nonprofit and public sector leaders really to try something new. We give folks $150,000. An example is the City and County of San Francisco is trying to figure out how to create an alternative to payday lending for SFO employees.

And then we run a design sprint, where we take an actual problem and try to put a product out into the market to solve it. The design sprint that we’re currently in is one that’s trying to create a body of evidence around three things. One is around portable benefits. Two, it’s sort of lifting up the fact that 70% of Americans can’t cover an unexpected expense. And three, removing the burden of covering that expense from the backs of working people.

We launched design sprint to try to get gig companies, the least accountable of companies to their workers, to pay into a fund that would make $1,000 available to their drivers, couriers, and care workers. And we’re in the middle of a pilot right now in San Francisco, Dallas, Detroit, and New York, where we’re getting a set of gig workers this $1,000. For me, this design sprint has been such an amazing opportunity to really tap into how working people are experiencing this very hot economy.

I’ve said this. Seventy percent of Americans can’t cover an unexpected expense. Fifty percent of American workers earn $15 or less an hour. One hundred percent of minimum wage workers can’t afford a two bedroom apartment in any state in America. The state of working people in this country today, compared to when my parents came here, is radically different. We’ve seen a complete untethering of fates, and have seen the ways that companies, almost at any expense, have made it so that working people have to bear the burden of their profit making.

One of the things that we’re trying to explore as an organization, that I’ve been really grappling with, two of the things. One is with this design sprint, we’ve done a number of interviews with workers. And what’s really striking to me now, I was saying this to Carolina, is in our interviews with workers is how much they personally feel responsible for the failures of our labor market and our economic system.

We hear from workers who made one choice in one moment in time; dropped out of high school, had a child, had a parent get sick and needed to make a set of choices, can almost tie back to this one moment in time, this belief that they made a choice and so they should be working and poor. That’s something that’s been really consistent in the set of interviews that we’ve done with workers.

The second, and this is particularly true for workers under 40, is a belief that the economy and the labor market was never meant to work for them. I think that I am probably the last generation of Americans in this country who will have benefited from these leaps and gains of the so-called American dream. But we are talking to young people. I feel like there’s a narrative. I’m going to take you on like a narrative journey. Going to see how this works out for me.

I often talk to young people about the economy and I’m like, “Remember when?” Like, “Do you remember when you could call, and then you could get a social service, or you can call and you could have access to a scholarship? Remember when you could start out at a minimum wage job, and then slowly work your way up? Do you remember when?”

The metaphor that I’ve been holding is, I’ve been telling people a fairy tale as if they’ve grown up in the land of abundance, and a dragon came down and burnt everything down, and they remember the land of abundance. Unfortunately, most young people only remember the rubble. They only remember the stones. They only remember the dryness. They don’t expect or believe that our labor market, and more importantly, our economy or our democracy is set up to serve them.

For me, it’s really been striking, one, because I’ve just seen in many ways how there’s a lack of agency, but a disbelief and disengagement from our public institutions and public systems. For us as an organization, I feel like our mandate is really to start to seed into the ground the set of experiments out in the world that create a different body of evidence. That start to show low-wage working people that it’s not right that you work 40 hours a week and are poor. That start to question and problematize an identity of working poor as if it’s normal that people work full-time jobs and are poor. And start to create a different body of evidence, and say the vast majority of the jobs that our economy is creating are in retail, service, restaurant, care⁠—those jobs should be great jobs. You should be able to care for somebody for 40 hours a week, and buy a home and pay your rent. You should be able to serve at a restaurant 40 hours a week and pay your rent, or move to a better neighborhood, or send your kid to whatever school you want to send them to.

I, like Carolina, believe that we are at a really critical moment, at an inflection point, where the set of choices narratively for the Fed, but I think for all of us, and especially people in this room, is to start to tell the truth about poor working people. The vast majority of people who work in this country are poor. Our aspiration to something different requires a reconciling of where people are actually at today. Mostly so that they can come along in the journey for something different with us, of the economy that we believe and I know is possible for the people in this country.

Rob Valletta:

One quick follow-up question is sort of the big question about how the Fed thinks about the economy, which is, is it getting better? I guess that’s one, over the last few years, as the national indicators-

Carmen Rojas:

No.

Rob Valletta:

… have… Okay, the answer is no.

Carmen Rojas:

I don’t know.

Rob Valletta:

It’s not getting better?

Carmen Rojas:

I mean, I think if you’re a low-wage worker, if you are a majority worker, no. I feel like employers are not offering… If we just look at the last set of slides, the benefits that were once offered. I know that there’s like the two fears that always come to, one because I run an organization called The Workers Lab, so people think I’m a tech maven or an investor. And I’m based in the Bay Area, so there’s all kinds of associations that get put on me. But the two things that are often brought to me are one, the issue of classification, so the rise of gig work. But two, is the rise of automation or the threat of automation.

I feel like in both of those cases, we have a set of choices to make, right? Like, what is the pace of automation? What does it look like? Our public sector leaders and our government leaders need to be able to have a sophisticated conversation about the impacts of automation. But it’s not like there’s a mama robot on Mars making all the robots, and they’re going to come and take all the jobs. There’s like actual investments that are going into creating these jobs, and we have to be able to grapple with that. And with the rise of gig work, from what we’ve seen in the Bay Area, and so curious to see what you’ve seen. The vast majority of people who are driving for Uber, working at Postmates, have a W-2 job, and that W-2 job is just a bad job, it’s not paying them enough. And they can’t afford to live, and so they’re using it as supplemental income.

Our current set of data, and this is for the researchers in the room, the data that we have on how people move to the labor market is insufficient. It’s currently insufficient and it’s painting a hot economy. How do you say?

Carrie Cihak:

I said, “Who’s the economy hot for and who’s getting burned?”

Carmen Rojas:

Yeah. Yeah. I feel like it’s created a picture of a hot economy without actually talking about who’s getting burned.

Rob Valletta:

Well, let’s suppose the Federal Reserve was able to keep this expansion going for a sustained period, which has been stated as the goal, and we’ve got unemployment going down further nationwide, maybe down into the low threes, something like that. That would be beyond what we typically label as being full or maximum employment. It sounds like you’re saying-

Carmen Rojas:

The logic is of a different time.

Rob Valletta:

—it’s not going to do it.

Carmen Rojas:

I think the logic is also of a different time, right? There was a time when full employment came with a set of benefits and a relationship, my mom’s story, and a relationship to an employer. There is today time where that’s just not true, where you have the vast majority of employers are actually not investing in their workers and are not investing in, it’s a untethered fate.

I think we think of full employment as something that can benefit workers and create greater competition, I actually think it’s creating a greater sense of precarity, right? All of the other data that’s not just about the economy is actually demonstrating that workers are more and more desperate, that they’re suffering more. Yeah.

Carolina Reid:

When we did the survey, we found that 42% of these low-age, or the lower-skilled or lower-income households, all had at least two or more jobs. And if you look at the official data for California, it’s like 4% or 5%. And so, there’s something that is not getting picked up in these official statistics.

And I would argue, too, it goes way higher up. I had last year in my graduate students at UC Berkeley, so we’re already talking about a significantly privileged group of people, I had four homeless students. Can you imagine when you were in grad school if you were trying to do all of your courses and you were living out of your car? The implications of this for that human capital development and moving out are really, really hard.

Rob Valletta:

Yeah. Well we should move on and then we can circle back to some of these issues. Before we do that, I want to answer your question about, do you remember when? Because my own, do you remember when, as having been an undergraduate at UC Berkeley in the early 1980s and at that time paying a little bit under $1,000 in fees for the entire year of school at UC Berkeley.

Carolina Reid:

Somebody-

Rob Valletta:

I remember when, and that was something that was available to the average high school graduate growing up in California that made a huge difference for so many of us.

Carmen Rojas:

Texas, up until 1979, you can go to university for free in Texas. California is like, “We want great things here,” but if that was possible in Texas, why is that seem impossible for us today?

Rob Valletta:

Yeah. Well, so switching over to Isela, and making sure we all have a chance to weigh in on these issues. We’ve heard already that maybe not everybody is really feeling strong benefits from what, at least in terms of the aggregate, overall metrics suggests is a strong economy. You talked with your community members and you asked them about, how do you feel about this hot economy? Would they give you a blank look? What would they say to that?

Isela Gracian:

They’d probably say, “What hot economy?”. At East L.A. Community Corporation, we’re transforming the way community and home work for people, and we really do that by building affordable housing, doing community organizing, and community wealth building.

Most of the residence that engage in our work and that work with us are low-income or extremely low-income, predominately first generation arrival immigrants, Spanish-dominant. For the work that we do, and the population we engage in, when the economy is in an upswing, they may be experiencing some greater stability on their income, but they are experiencing the other pressures of the housing market being so hot, particularly in Los Angeles. They still have an instability in regards to their home and other factors in their lives.

And when there’s the downturn, then they’re facing the instability of income and then the potential of losing their home because of a lack of income. The population we work with are always feeling a strain, whether the economy is hot or not. And when I started with the organization back in 2004 doing a job training and placement program, we were part of an initiative across the city that was looking at being able to improve the health of folks by improving their opportunities to work.

And what we found in our work was that there was a lot of interest in the job training and placement, and we were looking at sectors of growth. At the time it was construction, health, banking, film, and there was a lot of interest. A lot of people wanted to do the trainings, we could get them into the trainings, but the placement was really challenging.

Even within the construction field, we saw barriers. For example, I remember I had a case where there was a young man who had parking tickets, so he had his driver’s license suspended, so he couldn’t enroll in the training program because he had to have an active driver’s license. He didn’t have the resources to pay off the tickets, so then he couldn’t get into work and the training.

We kept seeing these challenges, and we asked ourselves as an organization, “Okay, well what are people in our community already doing to generate income?” And it may not be in a formal work setting. And in the neighborhood of Boyle Heights on the Eastside of Los Angeles, there’s a plaza known as Mariachi Plaza and there’s mariachi musicians that hang out there kind of like day laborers. If you want to go serenade someone in the morning, you can swing by and pick up a band and do that.

We were looking at maybe working with them, and at the same time we started hearing from community residents. Through our organizing, we work on land use, on housing, and economic policies. And we were working on land use with community members when they shared with us that there was street vendors that were being harassed, folks that had been working in the neighborhood for over 20 years and all of a sudden, or what felt like all of a sudden, there were sweeps of the vendors and they were losing their opportunity for income.

We decided to start engaging in a conversation of like, why was the city doing these sweeps and what was happening with street vendors? What we found out was really that it was not allowed for them to sell on the sidewalk. And we also started looking at, well what happens with this⁠, well, I guess now in a lot of areas it’s called gig economy? Back then it was informal economy or illegal economy⁠. It depends on who the workers are and that’s how it gets labeled.

Carmen Rojas:

That’s right.

Isela Gracian:

We started engaging in that policy because for us it was like, okay, how do we capture the ability for our community members to still generate income even if they’re not in a formal workplace? And that launched us into a whole policy campaign at the City of L.A. and then statewide of being able to change, at least decriminalize, the act of street vending across the state and in the City of L.A., get to a point where they could get permits to be able to sell. And those should be ready at the beginning of next year to be rolled out

But when we hear about the hot economy and talked to our community members about what’s going on in their neighborhood, really, our work is about building collective power for them to change the environment so that they can have access to opportunities and success. There was that piece of them not feeling that the growth in the economy was reaching them.

In Boyle Heights, which has a long history of community residents coming together to fight and struggle for benefits in their community, and it’s one of the biggest contested neighborhoods in the City of Los Angeles around the issues of gentrification, it has really come down to their ability to stay in a neighborhood that they fought for the changes that they want to see. We have improved with the light rail, we have improved schools, we have investments coming into the neighborhood, and now it’s this question about, can they be able to continue to stay in their neighborhood?

When we talked to community residents about what they need, it comes down to jobs and the ability to work in those jobs given that the population that we work with is high immigrant population, mixed families. Right now in the environment that we’re in, given the raids that have been happening and even the mass shootings across the country, we are seeing, in a very localized way, an impact in the economy with less people shopping.

Even when we’re talking to street vendors about how their business is doing, they definitely communicate a chill factor in them being able to do their business and people being out and about, because of the fear of being picked up, whether it’s by ICE or if they’re in a public setting, there could be a potential for a mass shooting.

We’re definitely feeling that at a very local level in regards to money circulating in the community. I think the conversation for today, and I’ll wrap up with this to share and then take questions, I went to school at UC Davis, and oddly enough I actually went in thinking I wanted to be an economist. And I’ll tell you why I didn’t go that route.

I took a micro-econ class, I loved it. I took a macro-econ class, and as the professor was going through the different policies and theories, I was sitting in class and thinking, “Wow, the challenges that my family went through, actually, there was intentionality around the policies that were created.” I sat there and I kept raising my hand and questioning the social impacts that these policies were having. After the second time he called on me, he stopped calling on me. He wouldn’t even entertain that conversation.

I thought to myself, “I can’t sit through four years of this.” So, being here and hearing the conversation, I’m glad that the question of inequality is at least at the table. Although I know it’s not specific to what the Federal Reserve Bank is charged with, I think it is an important piece to uplift because there is a structural component. Because in that class, I also sat there and thought, “Wow, unemployment is part of how this system works.”

The term that stuck to me was “healthy unemployment.” And when my dad was unemployed, there was nothing healthy about that. Being a fourth grader, coming home and seeing my dad home early, and just that feeling without even knowing or hearing anything, that something was wrong, was not healthy at all.

In a system where unemployment has to happen for that system to function, we need to be able to have other supports for people that are serving their purpose in the system. Right? And that’s largely why I do the work that I do, because I know that that is not healthy for communities, and that there’s intentionality around what got us to the inequalities that we have right now, and that as people, we can have that intentionality to undo those inequalities.

Rob Valletta:

Yeah. Thank you. That was very powerful. It’s just a quick follow up to that, I mean that was just very moving. Sounds like you’re dealing with a lot of long-term structural barriers associated with living in the Los Angeles area that reflect a variety of social influences that are very hard to overcome.

Are there any stories that you’re hearing that are maybe more along the lines of people overcoming those in surprising ways? That maybe although the struggles are always there, that at least with the fact that employers are trying to hire, even if the jobs are not necessarily the ideal jobs people are looking for, that they’re at least getting a foothold in maybe ways that they weren’t, say, five years ago or eight years ago?

Isela Gracian:

Yeah, I think what we’re seeing and what we’re in conversation and supporting is around having collective ownership of land, home, and work. Of how people are coming together. In the upswing in the economy, and actually in the downswing also, the greatest support for folks is on a local community level, of being able, what we say in Spanish, the taza de azúcar, the cup of sugar. Going to your neighbor and being able to knock on the door and be able to get that support and that help.

Where we’re seeing that glimmer of hope for people is in conversation of how they can collectively come together to either build businesses, build a different way of owning homes, of owning land. Particularly in the neighborhood of Boyle Heights, there are smaller business owners that are also committed to the community struggle and the community work. They’re actually in conversation with their neighbors and with us about what can they contribute and how can they contribute through their work as business owners to supporting this momentum that’s building up around shared ownership, shared responsibility, and supporting each other.

Rob Valletta:

Right. Right. Great. Well, thank you. Moving on to talk a little bit with Carrie. You’re looking at things more from the perspective of a local policy maker, so a certain ground level perspective, but also seeing the impact of these kinds of structural impediments at a broader level and having to think about, well how do we overcome them as a local government? What kinds of resources do we have and how do we approach them?

What are you seeing up there in the Seattle area in terms of the kinds of challenges that we’ve talked about and the extent to which they might be harder or easier to overcome in the current prolonged expansion that we’ve been seeing at the national level?

Carrie Cihak:

Thank you, and thank you for inviting me to be here today. I want to really thank my sisters up here who have shared their deeply personal stories. That was really impactful, so thank you.

I’m actually trained as an economist. This is probably one of the few rooms that I talk to where no one will be impressed by the fact that I was a staff economist at the Council of Economic Advisors. Low, so many years ago. Thank you. And it’s been great being here amongst all of you, it’s given be a chance to both regret and rejoice in my subsequent career choice.

Let me maybe start by just painting a little picture for you about King County. King County is where the City of Seattle is. It’s the 13th largest county in the country. We’re home to 2.2 million residents. We are 30% of the population of the state of Washington, 40% of the jobs, 50% of the state economy right in King County.

Seattle’s about a third of the population. There are 38 other cities who, as the county, we equally love in our region. And we also have a really vast rural area and forested lands. We’re experiencing very, very rapid population growth. In the next 20 years, we will be adding another city of Seattle, the equivalent of that population in our region.

And in the last 10 years, our growth, fully three-quarters of our growth, has been among people of color, and half of our new residents in the county were born in another country. And we think that diversity is really contributing to the innovation and the great culture and all the good things that are happening in our region.

I’m going to share with you four paradoxical statements that usefully describe our region. We outperform other regions in the country on many of our top-line measures, like around health, income, education, longevity. And yet, when we disaggregate those statistics, we show some of the largest disparities in the country by race, place, and gender.

The City of Seattle is known, and you probably have an image in your mind of it being the fifth whitest city in the country, and yet in King County, we also have some of the most diverse neighborhoods in the entire world, actually. And our under 18 population is majority, minority.

In Washington State, we are ranked number one in the highest percentage of jobs that are in STEM, science, technology, engineering, and math, and at the same time, our on-time high school graduation rate, we’re ranked 42nd in the nation A lot of the opportunity that’s available to people in our economy, we’re importing talent in while we’re leaving talent that’s homegrown on the table.

And then our poverty is both suburbanizing and concentrating at the same time. We see poverty moving into the suburban areas of our region, but also concentrating in small pockets where there’s very high poverty neighborhoods. People living in neighborhoods where 40% or more of households are in poverty.

In King County government, we’re one of the top 10 employers in the region, along with other places you’ve probably heard of, like, I don’t know, Amazon, Boeing. Any of those ring a bell? Microsoft. We have 13,000 employees, $6 billion annual operating budget.

And what the county does is really operate regional systems. We provide a lot of the backbone infrastructure for stuff to happen. Think about things like public transit, the public health system, mental health system, courts, environmental services. Those are the kinds of things that we provide as a county.

And in all of the work that we do at the county, we are working to advance racial justice, we’re working to reduce our region’s climate impacts, and we’re trying to ground our work really in data evidence and science.

A lot of what I’ve heard up here really resonates in terms of what’s happening in California, it’s very similar picture, I think, in the Seattle region. Again, the question I think is, we’re sort of seeing these dual economies emerge, where there’s a hot economy for some people, and then an economy where a lot of people are getting burned.

I wanted to talk a little bit about kind of three aspects of the Fed’s policy work and how they are playing out in King County. Full employment, price stability, and interest rates or access to credit. Around full employment, I’d say a lot of the stories I heard, and particularly the picture you painted, Carmen, really resonated.

I think trying to think about how we might shift our goals from our traditional measures of full employment to really thinking about a goal of fulfilled employment or full potential. Our focus in King County and the policy work we do is really around trying to bring people to full potential.

In King County, the share of households who are earning over $200,000 a year has doubled since 2007. It’s that very top tier of households where we’re really seeing the growth, and it’s about 25% of our households now. And I can’t unpack this in kind of the aggregate data, but I’m quite certain that’s not because lower income households are moving up and earning a lot more money. It’s much more likely that people are moving in for the job opportunities and coming with the skills they need to earn that kind of income.

And there’s a really fundamental shift I think that’s happened in the structure of our labor markets, the loss of worker power, it’s leading to a lot of uncertainty for people. Employment is less stable, there’s less full-time employment, less control over hours and scheduling, that’s a huge issue for people that we hear about all the time in low and moderate income households.

And that’s true, that loss of worker power and control, that precocity, that uncertainty, that’s true even in the region where we have the City of SeaTac and the City of Seattle where the $15 minimum wage movement really sprung forth. It’s a significant issue.

And it also seems like there are some fairly big asymmetries in labor markets around the impacts of boom and bust and exit and entry. And I think that’s true not only in the labor market, but in the housing market and financial services. It’s very easy for people to fall off the path of opportunity, and then much more difficult to get back in.

The result is that we’re seeing, I think, less upward economic mobility. Raj Chetty and his work has shown that our region historically has been one of the best regions for economic mobility, but the sense we have today is that that’s kind of faltering, and that people who are just trying to get by, it’s very difficult to get ahead if you’re just trying to get by.

That’s kind of my comments around full employment. And then, looking at price stability, again, I think looking at those traditional measures of inflation, we have very stable prices in King County. I was really interested in the comments Heather had earlier today about the differential kind of price effects for lower income families versus higher income families. And if you think about the bulk of a lower income family’s budget, it’s things like housing, education, childcare, transportation. The costs of those things have gone up astronomically while wages have been relatively stagnant, some growth, but relatively stagnant.

We have worked a lot with one of the companies in our region, Zillow, looking at issues around homelessness, and there’s a very strong correlation between a 5% increase in housing costs and median rent, that leads to 300 additional people becoming homeless in our region. And in the last few years, our median rents have gone up 25%, and that’s across the whole region. The rents in the core, where most of the job opportunities are, are much steeper.

Turning a little bit to access to credit and the low interest rate environment. I took the opportunity in preparing for this to talk to a lot of people in the region, our business community, members of the community that we work with, and the consistent picture that kind of came out is capital chasing high returns. Even small businesses who have a solid business plan, great business idea, they’re having a really hard time raising capital, and that’s particularly true, I think, for business owners of color or women.

There’s, likewise, a ton of investment. I think there’s like 90 of these big cranes in the country and 60 of them have been in Seattle, something like this. They’re everywhere. They look like these big bugs littering the landscape. We have a ton of investment and a ton of building in high-end housing, high-end condos. But we have very little private investment in affordable units.

There’s less access, I think, for financial services for low income neighborhoods. Some of the banking infrastructure has really left our lower income neighborhoods, so there’s quite a bit of reliance on payday lending. Actually, some of our staff in public health have been doing work with the San Francisco Fed on looking at payday lending and the impacts on health, which has been really interesting. Thank you for your support in that.

A lot of what’s happening is people are paying very high rents, higher rents all the time, that’s leading them to not be able to generate savings, which means they can’t get into mortgage markets, which means less wealth accumulation. Again, big disparities by race, place, and gender.

I think the summary of the picture for us is really needing to shift our attention from some of those big top-line aggregate measures to policy goals that really deliver results for the people who are furthest from opportunity. And I think that if we can do that, it’s going to work for all of the rest of us, too.

Rob Valletta:

Before we turn it over to general questions, I did want to just ask one quick follow-up, Carrie. I mean, again, that was just really illuminating about the challenges that you’re facing in your area. From the perspective of a local policy maker. You’re probably getting the idea here that I’m always looking for the silver lining, it’s my desperate search for the silver lining, and I have a feeling I’m not going to find it here because it sounds like your county government is probably in a better financial position because the economy has been doing quite well for a while. But I guess you’ve got pretty significant infrastructure challenges and challenges having to do with rapid population growth and just the changing mix of who is living there and the ability to provide the housing and resources for them. So is it easier when the economy is hot as a policy maker?

Carrie Cihak:

Yeah.

Rob Valletta:

Or is it harder?

Carrie Cihak:

Well, let me complain for a little bit and then I’ll try to switch around to somewhat of a silver lining. I think the really interesting thing about working in the public sector, in local government in particular, is there’s not a link between our revenues and demand for services, and there’s not a link between our revenues and the hot economy.

So for example, in King County, we have two main sources of revenue. One is property taxes, the other is sales tax. Property values have gone up. We should be swimming in money, right? Well, unfortunately our total property tax collections are limited to 1% growth a year, so that’s not even keeping up with our population growth.

And then what’s also been interesting is looking on the sales tax side, we’ve seen actually quite a big structural shift in our sales tax collections, so as people have shifted more of their consumption into services, which are largely untaxed in Washington State, we’re seeing less growth in our sales tax collections as well. So there’s just less capacity overall in local government, I think, in Washington state in particular.

Here we are in California, we have the most equitable tax system in the country in the State of California. I was super lucky to live down at Stanford for a year last year, and I did complain a little bit about paying the California income tax, but at the end of the day I was happy to do so. Everyone here is paying about the same percent with actually the wealthiest 1% paying a little bit more than everybody else in Washington, by contrast. This is some of the challenge you all have as the fed district and looking at what’s happening in the region. Washington has the most regressive tax system in the country. We don’t have an income tax. If you’re in the top 1% of income earners in Washington State, you pay about 3% in taxes of your income. If you’re in the bottom 20%, you’re paying 18% of your income in taxes.

It’s an incredibly regressive system, so the issue for us as local government is we’ve been really fortunate in our region where voters have been willing to approve revenue raising measures that help us invest in some really innovative strategies like early childhood development. We’re building out our transit system as fast as we possibly can, but that comes at a big cost for lower income communities. So we’re having to really think about, if we’re trying to raise revenue, then how do we mitigate those impacts on lower income communities?

For example, with our transit system, we started a income based transit fair. So if you’re 200% or below of the federal poverty level, you qualify for a half price fair. That’s something that’s now being replicated in other places around the country. It’s challenging.

I was really interested to hear the opening speaker talk about legitimacy of government. This is something I’m thinking a lot about. We’re facing a crisis in legitimacy for government at the precise time when we know that the complexity of the challenges as well as our knowledge about the types of solutions that work really require the public to be engaged as never before. And we’ve got to figure out how we can put government back in the position of creating the conditions under which people can exercise their agency to be involved in solutions.

So I think the silver lining I have for you here is, that’s what we’re trying to do here. That’s what this FedListens event is about, is how do we really start engaging with communities and building credibility back in our institutions and having people start to lead with some of those solutions?

Rob Valletta:

Great. Well, thank you. Thank you all for really thought provoking and informative presentations. We have time for questions. Let’s go right to them. I’m going to start with Professor Mian.

Everybody should be mic’d, so we can record it for posterity in the live stream.

Professor Mian:

My question can be answered by either or both Carolina and Carrie, which is on housing and I really liked the beginning.

There’s clearly lack of growth in housing supply and one possible reason is that it’s driven by zoning restrictions. I, A, wonder if you think that’s the main reason. And, B, if it is a significant hurdle, why can we not solve it? So I’m sure it’s politics, it’s rent seeking and so on, so if you could, say a little bit about what can be done to resolve this issue because I see this as a major problem for the macro economy.

Carolina Reid:

I think it’s super complicated. Zoning is definitely one part of it. I would say that from where I sit, we’re in California, we are having incredible political battles around trying do the same reforms that Portland and Minnesota did around zoning. It’s that for too long, too many California cities have abrogated their responsibility around building any kind of housing. And so the only housing that is being built is being built in lower income communities of color, who are seeing high rise buildings coming in where, again, investment hasn’t been for decades, and where the average rents of those are so beyond anything that they can afford. They see it as a true attack on their communities.

And so we’re in this strange place right now where we have both the traditional not-in-my-backyard Nimby saying we don’t want to make a zoning reform, but we also have a very strong equity advocacy community who says we’ve been bearing the burden of this hot economy, and we don’t want that anymore either because it’s not benefiting us.

Some other things in California, I’m doing an analysis now on low income housing tax credit properties. These are properties that are being built for affordable housing. The average cost per unit in California or in the Bay Area anyway, is upwards of $950,000. So, if you think about the difference between these incomes and what it’s costing us to produce a unit of affordable housing, the amount of subsidy that is needed there is just enormous. And so we’ve been pretty lucky with the economy in California that people and the crisis and housing, we see a lot of governments stepping in and devoting money and resources towards it, but that that gap is just so high.

So, I think it’s going to take zoning reform. I think it’s going to take public subsidy. I think it’s going to take a lot of better coordination across agencies, particularly in the homelessness space. There are still a lot of fractured governance and more regional solutions could be really helpful, but I don’t think it’s zoning alone. And personally, I think it’s time for some of these exclusionary communities to do their fair share in building some of the housing, and that’s only going to benefit our climate change goals, too.

Isela Gracian:

And if I could jump on this one, because we build housing as well and the zoning is one aspect of it. Looking at a community-wide perspective, zoning, if it doesn’t have intention around affordability, it’s not going to solve the problem. That’s the challenge that we see through our organization and some of the statewide policy proposals that we’re trying to improve.

But then even if the zoning is there, you still have a cost of the land, labor, and materials that are a big challenge. In none of the spaces that we’re in, costs and driving down costs, is the land brought up as a possibility. Nobody wants to touch that as a possibility of one of the areas to improve on costs.

In 2004, we thought we weren’t going to be able to build anymore on the Eastside of LA, and we were looking at other neighborhoods to build. By 2006, by chance, we were able to purchase two properties in the neighborhood and then the economic downturn gave us a little bit of wiggle room to be able to acquire more properties, where now we’re looking more at public land. But the cost of land, particularly in LA, San Francisco, markets like that, it makes it a lot harder, so zoning is definitely one piece of it, but there is more to it in order to be able to build more.

Carrie Cihak:

Those comments really resonate with me. I would just say I’ve been thinking a lot about these big problems where we get stuck, which are largely around housing and transportation, and they have three key features, I think. One is that they’re very politically difficult because you’re messing with people’s stuff. Then secondly, they’re very expensive. And then thirdly, or maybe there’s four attributes. Third, it takes a long time to see the benefits realized, particularly with being transportation infrastructure, so that makes it politically, even more difficult.

And then they typically require a lot of coordination among different governmental entities and private sector entities and across sectors. And so the combination of the politics, the financing and that coordination just makes them very sticky problems.

Carmen Rojas:

I want to actually, add a fifth to that. I think this is for our future article that we are all going to write it as an amazing panel of Debbie Downers. It’s racial segregation that like-

Carrie Cihak:

Totally.

Carmen Rojas:

And this may be like your first point of messing with people’s stuff, but the people’s stuff that we’re messing with are overwhelmingly white, and they don’t want to see an increasing number of black and brown people in or with proximity to a set of public institutions that they want to benefit from.

Carrie Cihak:

I agree, and I also say, Carmen, it’s playing out in people of color neighborhoods too, right?

Carmen Rojas:

Yeah.

Carrie Cihak:

Because a lot of what’s happening is we’re creating physical displacement, so people are getting evicted. Economic displacement because we’re building in ways that people in those communities can’t afford. And then that ends up creating cultural displacement, right?

Carmen Rojas:

Yeah.

Carrie Cihak:

Because people just don’t feel like they belong in that place anymore. I think it’s a problem both in majority white neighborhoods, but also in majority minority neighborhoods.

Carmen Rojas:

Yeah. I know I think that’s right.

Rob Valletta:

I think Mary had a question, if somebody could bring a mic, and then we had a question over there as well that we’ll get to in a moment.

President Mary C. Daly:

I have a question because you all have talked about very challenging structural problems that we have to work through. And the question I have for each one of you is, is it easier for you to see working through some of these when we have a strong economy that’s running hot, or does that pull against some of the things you’re trying to achieve? Because ultimately, that’s the job of the fed, is to think about calibrating the economy to reach the dual mandate goals. And one of the questions I always have in my mind is, are the trade offs so large that we’re not seeing them that you would prefer us to slow it down? Or does this give you the proper foundation to do your best work? So I would love an answer from each of you on how you net this out.

Carolina Reid:

Carmen? You seem to know what you’re going to say.

Carmen Rojas:

It’s something I really struggle with. In 2008, I feel like everybody had a line of sight to the system that was failing them, and there was a sense that people made a set of decisions that were careless and reckless, and put their houses on the line, put their communities on the line. There was opening because there was alignment that some change needed to happen, and I feel like in 2009 even if you just take the language of the 1% that has become a common archetype in our imagination, I feel like culturally, it’s easier to push the boundary of what’s possible, to find the edge of what’s possible and actually say it’s possible. Let’s work for the best, let’s work to make sure that everybody benefits, so that this doesn’t ever happen again, and people suffer.

I love this question because I feel people are suffering right now, but everybody around them and including in the framing of this conversation, we’re like, “The economy is really hot, a 100% unemployment. 100% employment, there are jobs everywhere. Why aren’t you doing all right?” And people are like, “God, why?” If the news is telling me this, if people around me are telling me this, if really smart people are telling me this, what have I done so that I am not benefiting from this?

You’re asking a structural question and I’m responding with a cultural answer. It’s culturally easier, I think, in a downturn to actually push people to the edge and to create visibility to all of the different systems in place that create our economy and our democracy. And it’s really hard right now because everything around them is telling them it should be, “What’s wrong with you?”

Isela Gracian:

So …

Carmen Rojas:

Oh, yeah, go ahead. You were going to …

Isela Gracian:

I don’t know about the net, I think, because we work on different issues. On the housing side, the hot market definitely makes it a lot harder. The calls, the number of people that are walking in our door looking either because they’re on the verge of losing their home because prices went up or they’re already living in their cars, it definitely makes it harder on the housing side.

On the organizing and policy work, and this may be just because of the years of work that we’ve been doing with different bodies and agencies, we were actually seeing more windows of opportunity pretty on housing because of the homelessness crisis being so big in LA, in the region. But in other policy areas, we’re seeing the County Board of Supervisors moving.

For example, renter protections. The County Board of Supervisors just passed earlier this month, permanent rent control framework and that’s going to keep evolving also around community benefits agreements for development projects that are coming in. So it’s probably both that there’s an upswing in capital flow that they’re seeing and we have decision makers and the infrastructure on the ground that’s pushing them to say, “Okay, now that we have money, let’s have the policies that guide them in the best way to tackle inequalities.”

I don’t know how that nets out completely, but on the housing, definitely more challenging. On the policy side, given the environment that we have right now, we’re seeing greater windows of opportunity to move policy that could help the list that was shared earlier, housing, healthcare, at least in the LA County and the city.

Carrie Cihak:

I’m opportunistic, so I’m going to try to find the places where I can work with other people regardless of whether it’s an upswing or a downswing, and I think you find those opportunities in both. I would say in the Seattle area it’s pretty hard to get people’s attention right now because just everybody feels like they’re running on a really fast treadmill and attention is diverted. But at the same time, I think there’s opportunities there because of the tight labor market and businesses really feeling some pain points around being able to attract workers.

We have more opportunity to bring business directly into some of our workforce development work. So, we can really partner effectively with the private sector where we’re making sure we’re creating the training that is really needed to give people the skills that are going to lead to jobs. But we as the public sector are providing the infrastructure around that, and the outreach around that, so I think it’s a mixed bag.

I think there are also opportunities in downturns where you can really get people’s attention and there’s a sense of urgency when things are not going as great, which can be effective. But we’re just going to keep pressing forward wherever we can.

Carolina Reid:

I would say that we have an economy that is growing and an economy that is building wealth in the aggregate, and that is seeing indicators of strength when viewed from that 10,000 feet level. I wouldn’t define it as a strong economy because the full foundations for what makes for a strong country are being worn away in terms of wages, in terms of labor market stability, in terms of job quality, in terms of housing, in terms of politics, in terms of investments in education.

Again, UC Berkeley, we’re struggling. We are struggling as a public institution that has historically helped to build the next set of middle class families. We don’t even have a garbage can in my classroom because we can’t pay for a janitor, and that’s a silly thing, but I think we are not investing in any of the foundations that actually makes for not only a strong economy, but also a strong democracy. And so I am really hopeful that this is going to help to mobilize a lot of energy around, and I see it in the work that I do with communities.

People have been engaged in the political process. I see it in my students who are more engaged in the political process and what’s going on than ever before. But I don’t see this turning out well over the long term without changes.

Rob Valletta:

We had a question over there. We really just have time for maybe two quick questions, and I think we can get Sheila’s in afterwards, so go ahead, please.

Faith Bautista:

I am Faith Bautista with National Asian American Coalition. I have a question on the value of nonprofit. During the foreclosure crisis it was the HUD approved counseling agency, it was the faith based organization that helped a lot of the people save their homes. But yet, when the properties were foreclosed, the properties were sold to investors instead, rather than a nonprofit. So in Daly City, the investors were buying it for $150,000 for a two bedroom. Now it’s worth $600,000.

So this is, I think, in a 100 years I will not see the income and wealth inequality, that gap. I just want to hear your comments because we can actually move the needle if we’re just going to do it. Carve out, for example, for a nonprofit, if we can have a first right of refusal. They’re doing that in San Francisco. FHA is doing that. But very little. And I think there are nonprofits that are investors, but have a bigger heart because they don’t have these big shareholders. The profit goes back to the community. Isela, I’m sure your organization has done so much because they invested in you and you created a lot of jobs.

So I wonder how we can increase that more in using the nonprofits.

Isela Gracian:

Well, I think you definitely raised a few points or ideas around with the nonprofits or other entities around first right of refusal when it comes to properties. That can help ease some of the transition in housing. I think that there’s definitely conversations around how to also better capitalize nonprofits or other organizations. There’s a growing conversation around community land trust, so there’s a lot of work in that realm that I think having money that we borrow that’s less expensive becomes very helpful in that world. But there’s definitely policies at local jurisdiction level that can help all those different components. So I definitely agree with you on those points.

Rob Valletta:

Last question from Sheila, please.

Sheila Harris:

Thank you. I’m Sheila Harris from Arizona. I ran the Arizona Department of Housing, so I’m very familiar with low-income housing tax credits. And I think the difference between what we’ve talked about here was the person who talked about how do we invest those profits that are being made in our hot economy. And I think people feel like they’re not being invested in when they’re just a worker and they don’t have their childcare needs for their children and their health care and those kinds of things. So how can we come up with some creative strategies with people who are doing very well in the hot economy to reinvest or invest in our communities, and there not be this, “I made a bunch of money and thank you very much and now I’m going to go and live someplace else”?

I also just want to caution everybody. I’m an advocate and it’s pejorative to refer to people as the homeless. It implies that they are always going to be homeless. You can look at me and say that’s a white lady ranting about people that she feels very compassionate about. That’s a descriptor of me. I’ll own that, but if we could in the future think about using the phrase, “people who are experiencing homelessness”, and focus upon this as not a permanent condition, and we need to figure out how to invest in them, so they can come back and be part of our broader community. Thank you.

Isela Gracian:

Thank you for uplifting that.

Carolina Reid:

I think that’s absolutely accurate, and when we look at the data, there are people who are unhoused every night, and when we focus on that unhousing I think it’s much more than ascribing a condition, so I apologize if that was one of the things that I said, too.

Sheila Harris:

You’re the one that said it best.

Carolina Reid:

But, yeah. Just, yeah.

Rob Valletta:

Well, I think that was a-

Carolina Reid:

Wait. Just to go back.

Rob Valletta:

I was going to end on the shared learning mood.

Carolina Reid:

Just one thing that I think is actually really important because I think I have been on the negative side and that’s because I had been feeling it particularly starkly in the communities I’ve been working with, but there is a lot of innovation happening. There’s a lot of innovation happening at the local level. A lot of innovation happening at nonprofits. There’s even a lot of innovation happening in the private sector for social equity goals.

And I think that what you guys are doing with The Workers Lab is amazing. What you guys are doing in trying to create a cooperative employment center, or a commercial space is really incredibly valuable. And so I do think that the acknowledgement that the Fed is making, that there is this problem of inequality, has been opening up conversations with stakeholders who might not otherwise engage in a conversation around, how do we innovate around these things. And I’ve seen many more CDFIs and private sector investors getting involved in community land trusts and thinking about cooperatives, so I’m positive that it can spark innovation and just hope that people will support those ideas.

Rob Valletta:

Well, great. That’s a hopeful note to end on. I appreciate it. Thank you all so much. That was great.