FOR IMMEDIATE RELEASE:
Thursday, December 21, 2017
Abigail Lootens / Christine Gianakis
Department of Consumer Affairs
(212) 436-0042 email@example.com
Department of Consumer Affairs Releases Report on the Ways Neighborhoods Influence Residents' Financial Health
The Report Defines Neighborhood Financial Health and Offers a Set of Goals and Indicators for a Financially Healthy Neighborhood
NEW YORK, NY
—Department of Consumer Affairs (DCA) Commissioner Lorelei Salas today released the “How Neighborhoods Help New Yorkers Get Ahead
” report, which defines and creates a framework for understanding and addressing how neighborhoods influence the financial health of individual residents. Over the past year, with the support of the Mayor’s Fund to Advance New York City and the Citi Foundation, DCA’s Office of Financial Empowerment (OFE) has undertaken the Collaborative for Neighborhood Financial Health project to engage with New Yorkers at the community level to understand what factors influence a neighborhood’s financial health. OFE engaged hundreds of East Harlem and Bedford-Stuyvesant neighborhood residents and stakeholders in interviews, focus groups, and interactive community workshops to learn more about neighborhood conditions and the ways those conditions support or limit individual financial health. Using this feedback, DCA created a definition of neighborhood financial health, goals for what makes a financially healthy neighborhood, and a set of practices and tools for working with communities to understand and improve their neighborhood’s financial health. OFE plans to use the information to develop strategies, programs, and interventions that could improve financial health outcomes for all New York City communities and their residents.
“The Collaborative for Neighborhood Financial Health represents a new approach to financial health that explicitly recognizes how place and community – including access to services such as affordable food and housing – affect individuals’ financial health and opportunities,” said DCA Commissioner Lorelei Salas. “Our Office of Financial Empowerment is implementing neighborhood-wide strategies that promote long-term financial resiliency and economic opportunity to help lift New Yorkers out of poverty. We look forward to continuing our research and our partnership with communities to help New Yorkers achieve financial health.”
Through the Collaborative for Neighborhood Financial Health, OFE and its collaborators developed a working definition for neighborhood financial health, and used this definition to create goals and indicators for what a financially healthy neighborhood looks like. Neighborhood financial health means that “neighborhood conditions promote long-term financial resiliency and opportunity for residents and provide resources that residents use to spend, save, borrow, and plan for life. In turn, financial health among residents contributes to a strong and cohesive neighborhood and local economy. Neighborhood financial health can be measured by the prevalence of supportive institutions, actors, and goods and services in a community, as well as residents’ collective financial health.” A financially healthy neighborhood is a neighborhood where residents have:
- Access to affordable, high-quality financial services
- Access to affordable, high-quality goods and services
- Access to quality jobs and income supports
- Stable housing and capacity to limit financial shocks
- Opportunities to build assets and plan for the future
The Collaborative for Neighborhood Financial Health’s findings underscore the importance of viewing financial health through a broad lens, and consider the central role that neighborhoods play in influencing outcomes for individuals.
- Neighborhoods influence the financial health and asset building outcomes of their residents.
Throughout the research, community members and stakeholders described their neighborhood as strongly influencing the financial health and long-term outcomes of residents. Stakeholders attributed this influence to three sources:
- The neighborhood economic landscape (housing stock, available financial services, grocery stores, etc.);
- The social services available in the neighborhood;
- The neighborhood’s existing social networks, which propagate systems of shared beliefs and practices.
- The presence in a neighborhood of a product or service that supports individual financial health does not necessarily translate to access.
Residents and stakeholders repeatedly cited that the presence of a beneficial product in a community, such as a bank or credit union branch, does not translate to access if there are perceived and/or structural barriers, including:
- If the bank or credit union imposes identification or minimum balance requirements that are prohibitive to most residents;
- If residents share a perception that all mainstream financial institutions are untrustworthy.
- A relatively small number of economic entities impact a neighborhood’s financial health directly and significantly.
One of the report’s most important findings is that grocery stores, financial service businesses, childcare, and affordable housing have a direct and significant impact, both positive and negative, on a neighborhood’s financial health.
- As one would expect, lower income neighborhoods correlate with lower neighborhood financial health; however, the ways in which lower financial health manifested in lower income neighborhoods differed significantly.
Although both East Harlem and Bedford-Stuyvesant report lower median incomes, how lower neighborhood financial health reveals itself in each neighborhood is different. For example, East Harlem has substantially better access to groceries in terms of supermarket square footage per 100 residents compared to Bedford-Stuyvesant, but Bedford-Stuyvesant has fewer check cashers and pawnshops relative to bank and credit union branches compared to East Harlem.
- Ownership—especially stable, affordable, and own-able housing—is fundamental to an individual’s ability to build financial health and assets over time.
Rapidly rising housing prices make it difficult for families with low incomes to own an apartment or house and save for the future, keeping residents from building assets. In addition to this, high rents, difficulty accessing financing, and other challenges make it difficult for many New York residents and nonprofits to own their own businesses. In Bedford-Stuyvesant and East Harlem, the residential sales price per square foot has risen 139 percent and 158 percent from 2010 to 2015. Longtime residents in rapidly changing neighborhoods fear that rising rents, along with tenant harassment and other pressures, will displace them from their neighborhoods. Displacement can have a significant effect on financial health and can disrupt other informal and formal systems that support financial stability, such as access to credit and childcare.
Based on the findings of the report it is clear that there is a role for citywide policy and programs in addressing issues of neighborhood financial health. In the next phase of its work on Neighborhood Financial Health, DCA will focus its research on identifying causal connections between a resident’s financial health, examining citywide trends in access to ownership and creating solutions to barriers in the creation of financially healthy neighborhoods. Ongoing partnership with city agencies will enable future research, programs, and policy that will increase access to key businesses such as supermarkets and will build trust in financial institutions in an effort to provide all New York residents with the tools and resources needed to achieve financial security for themselves and their communities.
“The complex challenges facing financially vulnerable households require a holistic approach – one that both encourages individuals to start saving or improving their credit scores, and enables neighborhoods to empower households to build assets and achieve a more secure financial future,” said Eileen Auld, Citi Community Development New York Tri State Director. “OFE is creating a roadmap for community residents, businesses, and the City to test and scale new approaches, programs, and partnerships at this new frontier of financial empowerment.”
“Too often, financial health is perceived primarily as an outcome of individual behavior and choice," said Deyanira Del Rio, co-director of New Economy Project. "The reality is that New Yorkers have unequal access to the resources, services and systems needed to achieve financial security, based on the neighborhoods in which they live. We applaud OFE for adopting a place-based approach to its work, and for ensuring through this initiative that community residents articulated their own lived experiences and needs."
"This innovative pilot gave Restoration and our All for One partners, IMPACCT Brooklyn and Bridge Street Development Corporation, an opportunity to innovate on key strategies to address the financial health needs of our community,” said Tracey Capers, EVP Programs and Organizational Development at BedStuy Restoration Corporation. “We decided to focus on mobility and transportation since focus groups, surveys, and interviews with residents and other stakeholders showed that this was considered a major barrier in terms of maintaining employment. By coming up with a more cost effective way to getting to and from work, we provided direct benefits to our residents most in need."
“The Office of Financial Empowerment’s research, paired with the strategies, programs and interventions that will come out of this work, will help change trajectories for individuals and neighborhoods across the City,” said Darren Bloch, the Executive Director of the Mayor’s Fund to Advance New York City. “The Mayor’s Fund is proud to support this collaborative work to understand and improve neighborhood financial health.”
The NYC Department of Consumer Affairs (DCA) protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCA licenses more than 81,000 businesses in more than 50 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more. By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCA protects the marketplace from predatory practices and strives to create a culture of compliance. Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCA empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. DCA also conducts research and advocates for public policy that furthers its work to support New York City’s communities. For more information about DCA and its work, call 311 or visit DCA at nyc.gov/dca or on its social media sites, Twitter, Facebook, Instagram and YouTube.