A new frontier for the advancement of economic and personal freedom for persons with disabilities

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Asset Development

• A new frontier for the advancement of economic
  and personal freedom for persons with
  disabilities
• June 11 , 2004
• San Juan, Puerto Rico
• National Federation of Community Development
  Credit Unions Thirtieth Anniversary Meeting
• Johnette T. Hartnett, Ed.D.

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National Disability Institute

• To provide leadership nationwide for innovative
  capital development and other capacity building
  strategies that expand social and economic
  options for low-income Americans with
  Disabilities.

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GOAL OF ASSET DEVELOPMENT AND TAX POLICY RESEARCH

• To develop and disseminate a new and
  comprehensive body of knowledge regarding the
  barriers and facilitators of tax and other public
  policies to the improvement of the economic
  independence, social empowerment, and community
  integration of persons with disabilities.

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AATPPAsset Accumulation and Tax Policy Project

• Five year project funded by the National
  Institute on Disability and Rehabilitation
  Research
• Nov 1, 2003 October 31, 2008

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Johnette T. Hartnett, Ed.D.
Law Health Policy and Disability
Center University of Iowa College of
Law Washington, DC http//disability.law.uiowa.edu
National Disability Institute NCB Development
Corporation Washington, DC http//www.ncbdc.org
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OVERVIEW

• Emerging Field of Asset Development - History and
  Challenges
• Defining Asset Development - Individual and
  Non-Individual Definitions
• Dispelling Myths about Asset Ownership

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OVERVIEWContinued

• Examining Financial Mechanisms and Strategies for
  Asset Accumulation
• Exploring Next Steps for Persons with Disabilities

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DEFINING ASSETS

• INCOME The amount of money we take in from
  salaries, wages, government transfer and spend on
  items, like food, housing, clothing.
• ASSETS Resources people own, like a house,
  savings accounts, stock portfolio.

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DEFINING ASSETScontinued

• ASSET POVERTY Net worth needed to get by for
  three months at the poverty level.
• ASSETS Capacities and resources that enable
  individuals to identify, choose, and implement
  activities that enhance their quality of life
  experience.
• INDIVIDUAL ASSETS Money, stocks, real and
  personal property.

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DEFINING ASSETSContinued

• HUMAN CAPITAL ASSETS Education, skills, and
  knowledge.
• COMMUNITY ASSETS Infrastructure of physical and
  emotional supports and services.
• ENTERPRISE ASSETS Business ownership that
  provides power and position.
• SOCIAL CAPITAL Networks of informal trust and
  social control.

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WHY WE ARE INTERESTED IN THE ASSET DEVELOPMENT
FIELD

• Research shows that families who own assets are
  happier, healthier, less transient and develop
  human and social potential that enhances the
  welfare of generations to come.

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Lincolns Homestead Act of 1862

• Provided land on the frontier to stimulate
  economic growth and made land available for the
  first time to immigrants and former slaves
• Over 76 years 1.5 million households (out of a
  possible 3 million) given title to 246 million
  acres of land
• Mostly to persons who are White and non-poor
• Few homesteads granted to persons who are Black
• 25 of current population has a legacy to
  property ownership and assets in their background
  linked to national policy

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G.I. Bill Servicemens Readjustment Act of 1944

• 500 a year for college tuition and other
  educational costs
• Mortgage subsidies represented 20 of all
  single-family homes built in the 20 years after
  World War II through the GI loan guarantee program

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G.I. Bill Servicemens Readjustment Act of
1944continued

• 70 Billion cost for G.I. Program
• Every dollar invested in the G.I. Bill, the
  country recoups between 5 and 12.50 resulting
  from increased taxes paid by veterans with higher
  incomes made possible by education opportunities.

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Federal Housing Authority(FHA)Veteran Housing
Affairs

• Creation of 30-year mortgages
• Subsidized new home construction in suburbs
• Less than 3 went to people of color
• Redlining of property values

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Assets for Independence ActOctober 27, 1998

• Bipartisan support of AFIA
• Senator Coats (R-IN)
• Senator Harkin (D-IA)
• Representative Hall (D-OH)
• Representative Kasich (R-OH)
• U.S. Department of Health and Human Services
  conducting a five year, 25 million per year IDA
  demonstration.

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ASSET FACTS FOR PERSONS WITH DISABILITIES

• One out of every three adults with disabilities
  live in very low income households as opposed to
  one out of every eight non-disabled adults. (NCD
  1996 Report)
• Only 37 of adults with significant disabilities
  are participating in the nations workforce.
  (National Health Interview Survey, 2000)

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ASSET FACTS FOR PERSONS WITH DISABILITIES
Continued

• When people with disabilities are employed they
  earn substantially less than their non-disabled
  peers, roughly 72 to the dollar. (NCD 1996
  Report)
• Public assistance represents 59 of the total
  income of people with significant disabilities
  and only 8 of the total income of people who
  have no disability. (Harris Survey 2002)
• On a national level, 1.8 million SSI recipients
  with disabilities between the ages of 18 and 64
  have no banking relationship. (SSA 2002)

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ASSET FACTS FOR PERSONS WITH DISABILITIES
Continued

• Less than 10 of people with disabilities own
  their own homes compared with 70 of Americans
  with no disabilities.
• One-third of students with disabilities do not
  finish high school. (NCD, 2003)
• People with disabilities enroll in post-secondary
  education at half the rate of the general
  population.

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Continued

• 45.4 of Americans net worth, less home equity,
  equals 5,000 or less. (Oliver Shapiro, 1997)
• 33 of all American households have zero or
  negative net assets.
• 54 of Hispanic households have zero or negative
  assets.

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Continued

• 60 of African American households have no net
  assets. For persons with disabilities, estimates
  are as high as 80.
• The non-poor receive asset acquisition annually
  through federal government subsidies over 200
  billion in the form of home mortgage deductions,
  preferential capital gains, and pension fund
  exclusions.

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Examining Financial Mechanisms and Strategies for
Asset Accumulation

• Financial Mechanisms
• Financial Education
• Individual Development Accounts Dedicated
  savings accounts designed specifically to help
  low-income families save money

• Financial Strategies
• Expanding collaboration among conventional
  lenders, public institutions and private funders
  and foundations

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Examining Financial Mechanisms and Strategies for
Asset Accumulation

• Individual Budgets
• Work Incentives PASS, Medicaid Buy-In
• Tax Policy - EITC

• Developing relationships with Community
  Development Institutions
• such as Community Development Financial
  Institutions (CDFIs) and Community Development
  Credit Unions (CDCUs)

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Individual Development Accounts Eligibility and
Uses

• 200 of poverty level 18,000 for a family of
  three EITC, TANF eligible
• Uses for home ownership, college and business.
• Some other uses home repair, vehicle ownerships
• Working people with disabilities eligible for SSI
  and SSDI are participating in IDAs if asset caps
  are lifted

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How IDAs Work

• 1 of savings could 2 4 in matched by
  private and public institutions.
• IDAs managed by community organizations, and the
  accounts are held at local financial institutions.

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Economic Literacy Training Goals

• Participation in an IDA includes economic
  literacy training
• to improve credit
• to create and manage a budget, and
• to develop long-term management skills.

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Challenges for Persons with Disabilities

• Financial disincentives (real or perceived)
• Lack of financial literacy
• Problems navigating public benefit system
• Little or no banking relationships
• Little credit history no savings history
• Lack of peer support for building financial
  wellness and managing illness
• Lack of knowledge about tax provisions such as
  EITC, etc.

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IDA Case Study

• BERT Works part-time, lives in public
  accessible housing, earns 12,852 (520/month
  SSDI -- 541/month).
• Lives in a Medicaid Buy-In state and participates
  in a Home and Community-Based service waiver.
  Enrolled in IDA program with the goal of
  homeownership. Average monthly savings 100.
• Goal to save 1,200 and to match with 3,600
  interest

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Exploring Next Steps for Persons with
Disabilities

• Identify and assess the fiscal and social
  environmental barriers to economic empowerment
  and advancement for persons with disabilities.
• Review and analyze specific government benefits,
  tax policies, and current legislative
  initiatives.

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FORGING NEW PARTNERSHIPS

• Community Development Organizations at a local
  and state level (CDC, CDFI, CAP)
• Community Based Financial Service Organizations
• Community and Faith Based Organizations Involved
  in Asset Development Activities
• Disability Related Organizations and Persons with
  Disabilities
• State Economic Development and Community
  Development Agencies
• Financial Institutions (Banks and Credit Unions)
• Microenterprise Loan Programs
• Financial Education Programs

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Key Questions

• What policies prevent or facilitate the
  advancement of personal and economic freedom?
• What strategies are effective to advance asset
  development at an individual level and/or at a
  community level?
• What services, supports, policies and/or
  practices must change to enable persons with
  disabilities to increase their effective and
  meaningful participation in and/or benefit from
  current asset development opportunities at an
  individual or community level?

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Contact Information

• Johnette Hartnett, Ed.D.Law, Health Policy
  Disability CenterUniversity of Iowa, College of
  LawandNational Disability Institute1725 Eye
  Street, NW Suite 600Washington, DC 20006
• Jhartnett_at_ncbdc.org