Philadelphia City Council Testimony in Support of Consolidated Plan for Year 38

June 6, 2012

Submitted by Donald Kelly, Director of Community and Economic Development, Urban Affairs Coalition

Thank you for the opportunity to testify on behalf of the Urban Affairs Coalition regarding the Consolidated Plan for Year 38, especially the parts of the Plan that will be funded by CDBG funds.

Since 2003 the Plan has included funding for anti-predatory lending, in recent years in the amount of $60,000 per year. This supports most of the operational costs of running the PHIL-Plus and Mini-PHIL Home Improvement Loan Programs. Funds for marketing these loans have come from the private sector. As of June 2012 OHCD’s support for this program has leveraged 398 private sector loans totaling just under $8 million. 

These are loans from mainstream financial institutions at affordable rates to Philadelphia homeowners who would otherwise have had to turn to subprime and predatory lenders for loans for needed home repairs, improvements and debt consolidations. Most of the loan recipients are low- or moderate-income. The loans improve homes, help to stabilize or revitalize neighborhoods, help senior citizens to remain longer in their homes and help homeowners to reduce energy costs. 

In addition, this program is a model of public/private partnership. In this partnership the City uses public resources in a strategic way to leverage private sector capital to accomplish a public purpose. In times like this, when public resources are becoming scarcer, more public purposes can be achieved by strategically leveraging private sector capital. That is exactly what the PHIL-Plus and Mini-PHIL Home Improvement Loan partnership does, and will continue to do with the City’s support. We urge you to approve the continuation of funding for this program as proposed in the Consolidated Plan before you. 

Another key partner in this public/private partnership is the nonprofit housing counseling industry here in Philadelphia. Trained counselors help homeowners to identify the most appropriate loan program to suit their needs and qualifications. When PHIL-Plus or Mini-PHIL is the right choice they prepare a referral package that gets them on their way to obtaining a bank loan. As you know, despite the admirable support of the City, housing counselors are overworked and underpaid. 

The Coalition is working to bring more resources from bank foundations in support of counseling agencies to support all of the valuable work that they do including PHIL-Plus/Mini-PHIL counseling, foreclosure counseling and pre-purchase counseling. The funding that we are advocating for would not be as a replacement of City funding but as a supplement to City funding so counseling staffs can be expanded and experienced counselors retained. This is an industry that is critical to the housing market, creating opportunities for low- and moderate-income Philadelphians, foreclosure prevention and neighborhood revitalization. We urge the City to maintain its level of funding commitment to this industry. 

With regard to another community service provided by a Coalition affiliate, we urge the City to continue its crucial support for providing free tax services to low- and moderate-income City residents. Through this service citizens can make the most of what tax credit and benefits may be available to them while avoiding predatory tax refund lenders. The Campaign for Working Families facilitates increased financial stability and asset accumulation for Philadelphia families by connecting them to valuable tax credits, quality financial services, savings options, wealth-building resources and public benefits. It operates 11 community-based tax sites. Services are available to families that make less than $50,000 and individuals that make less than $20,000.

Over the past ten years the Campaign has prepared and e-filed 116,329 tax returns and brought $198.7 million in state and federal funds to working families throughout Philadelphia. The Campaign’s free tax preparation services have saved these families an additional $24.8 million of interest, fees and charges for tax preparation, check cashing and loans. 

For tax season 2012 the Campaign trained and used 728 IRS-certified volunteers, completed 13,509 tax returns including 702 small business returns and 4,085 EITC returns and opened 580 new financial products such as pre-paid debit cards and basic bank accounts. Again, City funding for this service uses leveraging to bring in a much larger amount of money to Philadelphians that need it the most. We ask you to continue your support for this program as proposed in the Consolidated Plan before you.

Finally, the Urban Affairs Coalition endorses the proposal of the Philadelphia Association of Community Development Corporations to form a land bank of City-owned properties so that they may be recycled into productive uses more efficiently. Doing so will benefit the neighborhoods, new property owners and City tax revenues. 

Thank you for the opportunity to provide this testimony. 

Submitted by Donald Kelly, Director of Community and Economic Development, Urban Affairs Coalition, 1207 Chestnut Street, Philadelphia, PA 19107, telephone: 215-851-1738, e-mail: