Wells Fargo Announces $1 Billion Affordable Housing Commitment

[QueEx]

BLACKPRESS

Wells Fargo Announces $1 Billion Affordable Housing Commitment


NNPA NEWSWIRE — Candy Moore, the senior vice president and manager of Wells Fargo’s Community Relations and Southeast Community Development, told NNPA Newswire that the company will invest $1 billion over the next five years from its business and foundation to help make housing more affordable.

August 24, 2019
By Stacy M. Brown

Cynthia Eaglin and Rufaro Jenkins in front of their former home at Parkway Overlook Apartments in Washington, D.C.


By Stacy M. Brown,
NNPA Newswire Correspondent
@StacyBrownMedia

The lack of affordable housing has caught the attention of Wells Fargo and the banking giant isn’t taking it lightly and has unveiled an ambitious plan to tackle the problem.

Candy Moore, the senior vice president and manager of Wells Fargo’s Community Relations and Southeast Community Development, told NNPA Newswire that the company will invest $1 billion over the next five years from its business and foundation to help make housing more affordable.

“We will address three key issues in underserved communities that have been plagued by the lack of affordable housing – housing affordability, financial health and small business growth,” said Moore.

“Charitable giving has always been a part of our history,” Moore said.

“And, we feel we should be doing even more to address the systematic changes in affordable housing and uncover new ways to increase the availability and sustainability of affordable housing,” she said.

Moore noted that if one took the available affordable housing units in Washington, D.C., Philadelphia, Chicago, Los Angeles, Houston and Atlanta, it would still fall far short of meeting current housing demands.

“We want to continue to help the underserved reach their full potential with the support we’re offering through our philanthropic efforts,” Moore said.

The $1 billion pledge is part of a larger effort for the bank to overhaul its philanthropic strategy, Moore said.

As part of their commitment, Wells Fargo aims to donate two percent of its after-tax profits to corporate philanthropy concentrating on housing affordability, small business growth and financial health, she said.

During a June presentation to the NNPA’s member publishers, Moore shared a video that underscored the importance of Wells Fargo’s new initiative and why it’s vital to people of color and others in underserved communities.

The video presentation highlighted the Parkway Overlook Apartments in Washington, D.C. whose residents were unexpectedly forced to relocate when the development closed in 2008.

As a result of the efforts of two former residents who fought hard for the community, working together with Wells Fargo and the District of Columbia, the apartments are being redeveloped a decade later.

“I feel like a mother who watched her troubled child in school finally graduate from high school,” said Rufaro Jenkins, one of the residents who is now a homeowner.

“I used to tell them in meetings that Parkway Overlook was one of my children. Mothers protect their children, and I was going to protect Parkway Overlook,” Jenkins said in the video presentation.

After a 10-year process to secure approval and funding to rebuild the community, the renovations to Parkway Overlook are currently underway, and construction is expected to be completed this year, providing 220 apartments of affordable housing for families in Ward 8, which is considered one of DC’s poorest areas.

While Jenkins and former resident and fellow Parkway Overlook Tenants Association member Cynthia Eaglin are happy about the redevelopment, it’s been a long journey, they said in the video.

The two have worked with Washington Interfaith Network – or WIN, a grassroots organization that brings citizens and residents together to develop solutions for communities — in this case, coming up with a strategy, bringing former residents together, and meeting with local leaders, according to the video.

The biggest hurdle, though, was getting funding to redevelop Parkway Overlook, said Jennifer Knox, lead organizer for WIN.

In 2014, Mayor Muriel Bowser, then chairwoman of the city council’s Committee on Economic Development, brokered a deal with the D.C. Housing Finance Agency and District of Columbia Housing Authority to take control of the property and finish the renovations, said Merrick Malone, director of the Office of Capital Programs for the District of Columbia Housing Authority.

Ultimately, Wells Fargo provided the construction loan and equity for the project development, D.C. Department of Housing and Community Development provided $20.1 million in financing toward the project, and the D.C. Housing Finance Agency provided bond financing in the amount of about $38 million and low-income housing tax credits.

“We will need to work with you,” Moore told NNPA publishers. “We will need to work with civic leaders, local governments, and residents to address the full spectrum of housing affordability,” she said.

To learn more about the Wells Fargo initiative and for the full Parkway Overlook story, click here.


https://blackpressusa.com/wells-fargo-announces-1-billion-affordable-housing-commitment/

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[Mrfreddygoodbud]

wells fargo NEEDS to do something.. lets just call this

a decent first step....

 

[conspiracy Bro]

I don't trust them

 

[QueEx]

wells fargo NEEDS to do something.. lets just call this

a decent first step....

I don't trust them

I agree with you both!

 

[QueEx]

Rocked by lawsuits and investigations into its lending practices, Wells Fargo has been making efforts to scrub its corporate image. CX Matiash/AP


Wells Fargo to Donate $1 Billion for Affordable Housing

KRISTON CAPPS
JUN 6, 2019


Three unnamed cities are on a shortlist to score a philanthropic windfall from the Wells Fargo Foundation, the scandal-plagued megabank’s charitable arm


Wells Fargo Bank has been rocked by a series of scandals over its lending in recent years: Since 2017, Oakland, Miami, Philadelphia, and Sacramento have sued the megabank over claims of predatory practices that violate the Fair Housing Act. The cities accuse Wells Fargo of writing high-risk loans for African American and Hispanic borrowers whose credit enabled them to apply for better loans. The bank also faces an ongoing federal probe over its alleged role in a fraudulent scheme to undermine affordable housing tax credits.


So the recent announcement that the Wells Fargo Foundation plans to commit $1 billion in philanthropic funds through 2025 to address housing affordability is more than just the usual proclamation of corporate good citizenship. This is Wells Fargo’s most serious effort yet to repair its tarnished reputation in urban America.

It’s an ambitious slate of programs: With grants and other initiatives, the Wells Fargo Foundation aims to deliver hundreds of millions in annual funds to address rental, transitional, and supportive housing, among other needs. The bank further announced that, starting in 2019, it will set aside 2 percent of its after-tax profits to put toward its goals in housing affordability, small business development, and financial wellbeing. For a few select cities, this giving will mean multi-year, collaborative efforts to address housing affordability and homelessness.

Wells Fargo has a shortlist of about seven cities in mind for its placed-based housing philanthropy—the bank won’t give their names—and will likely name three soon, with the expectation that it will add at least two more at a later date.

“Doing a little bit of everything was starting to gnaw at some of us,” says Jon Campbell, executive vice president and head of corporate philanthropy and community relations for Wells Fargo, of the new focus on housing. The company donated $444 million to some 11,000 nonprofits in 2018, a 40 percent increase in corporate giving over its 2017 levels. Going forward, the bank will more specifically tailor its giving to match its expertise, Campbell says, starting with housing.

The $1 billion figure is aside from any traditional activity in lending over the next 6 years. While the details are still in the works, the bank says that partnerships with nonprofit housing organizations such as Enterprise Community Partners and the Local Initiatives Support Corporation are likely in the offing.

The bank’s role in housing affordability has lately not been viewed as positive. The bank is currently negotiating with the U.S. Justice Department to settle an investigation into its potentially fraudulent procurement of housing tax credits. Justice officials are looking into whether Wells Fargo (along with other banks) colluded with developers to low-ball bids for housing tax credits. The Low Income Housing Tax Credit (LIHTC) program is currently the nation’s best engine for producing new affordable housing units, and Wells Fargo is one of the nation’s biggest LIHTC investors.

Here’s how the program works: State housing agencies allocate these federally funded credits to developers, who sell them to banks in exchange for developing affordable housing units. Investors buy housing tax credits to offset their income tax liability; in addition to the tax write-off, banks that purchasing housing credits can fulfill their obligations under the Community Reinvestment Act, a fair-lending law that requires banks to serve all members of a community, including poor areas. If a bank worked with developers to fix bargain-basement prices for LIHTCs, it would decrease costs for developers, increase returns for the bank, and limit the revenue received by the federal government. Wells Fargo’s settlement with the DOJ could exceed $100 million, according to Bloomberg.

The housing tax credit investigation is just one of several episodes of bankerly malfeasance that Wells Fargo has been entangled recently. The bank earned a failing grade from a federal regulator testing its compliance with the Community Reinvestment Act in 2017, and the Federal Reserve moved to restrict the bank’s growth in 2018 in response to consumer abuses. Those include the notorious fake account scandal—a scheme to charge customers fees associated with some 2 million unauthorized accounts—but also auto loan and mortgage violations that led to an unprecedented $1 billion fine from the Consumer Financial Protection Bureau.

“Wells Fargo’s ongoing lawlessness and the failure to right the ship, suggests the bank … is simply too big to manage,” said Representative Maxine Waters, chair of the House Financial Services Committee, during a recent hearing. The bank’s CEO, Tim Sloan, resigned abruptly in March, following years of calls for his resignation from Senator Elizabeth Warren and other critics.

While the Wells Fargo brand may have seen better days, $1 billion can buy a lot of good will, and cities that the bank has approached in talks over its place-based philanthropic strategies have welcomed the bank, according to Campbell. “As we narrow the group of cities, we’ve been in dialogue both with the city governments and the housing leaders in those markets,” Campbell says. “There are certainly headlines, but when we are at the city level talking to the nonprofits that are expert in the housing space and the mayor’s office, we are not seeing [any] reservation.”

It’s not clear whether any of the cities with ongoing legal challenges against Wells Fargo are among the shortlisted candidates for philanthropy, although the foundation says that it will not rule out any city for that reason.

Much of this future effort remains undefined. The Wells Fargo Foundation has pledged to fund efforts in innovation for lowering the financing costs of rental housing, for example, and to try to change the narrative of affordable housing as negative. But Campbell compares the place-based plank of its strategy to another Wells Fargo program, NeighborhoodLIFT—which means that select cities could receive as much as $100 million a year or more in housing affordability funds.

“What do we want to be known for?” Campbell says. “Wells Fargo really believes we’re well positioned to make a difference here.”


https://www.citylab.com/equity/2019...grants-affordable-housing-tax-credits/590998/


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