Web Editor's Note: The Saving America’s Cities Working Group, chaired by Rep. Mike Turner (R-Ohio), is examining the challenges facing America’s urban areas. House of Representatives Speaker Dennis Hastert (R-Ill.) created the working group in 2003.

June 28, 2005 — Good morning, members of the Saving America’s Cities Working Group and Advisory Committee. My name is Ken Wade, and I am the chief executive officer of Neighborhood Reinvestment Corporation, now doing business as NeighborWorks America. I’m here today to offer the experiences of how the NeighborWorks system has assisted cities in addressing the economic challenges they face. This system includes NeighborWorks America and 235 nonprofit, community-based organizations that comprise the NeighborWorks network. Our affiliated local NeighborWorks organizations serve more than 3,000 urban, rural and suburban communities across the United States.

NeighborWorks America
NeighborWorks America evolved from an effort by the Federal Home Loan Bank Board in the early 70's to respond to allegations of redlining by financial institutions and to increase thrift-industry lending in declining neighborhoods. Recognizing the model’s effectiveness in community development and turning around urban blight, Congress chartered NeighborWorks America as a public nonprofit organization in the Housing and Community Development Amendments of 1978.

For nearly 30 years, the NeighborWorks System has proven to be an increasingly effective and efficient vehicle for generating significant private-sector resources for community revitalization and affordable-housing. The NeighborWorks System relies on public-private partnerships, the leveraging of limited federal funding, and flexible locally-controlled revolving loan funds to achieve results. Innovations generated in response to community needs are a hallmark of the NeighborWorks System. We were borne out of a real and present community need for more private sector investment and involvement in decaying urban areas in the 70’s, and continue to nimbly address real and present community needs today.

How NeighborWorks America Assists America’s Cities
In our nearly 30 years of work in America’s largest cities, several effective strategies have consistently produced results nationwide. These best practices include:

• Local autonomy: Each NeighborWorks organization defines how it might best serve the community, and NeighborWorks America provides guidance on that strategy. We recognize that what works in Philadelphia may not work in Dayton.

• Resident leadership and involvement: NeighborWorks organizations must be 501(c)3 tax-exempt corporations, with a board of directors that includes local government, the private sector, and residents. Empowering residents to be active in improving their neighborhoods is vital to the success of these organizations.

• Flexible funding: NeighborWorks America’s grant funds are some of the most flexible in all of community development. This allows for creative financing, which results in the completion of many projects that otherwise would never occur.

• Significant oversight: NeighborWorks America mandates that each of our chartered NeighborWorks organizations submit an annual unqualified financial audit, and permit periodic on-sight reviews of their operation. We also provide significant technical assistance through our district offices that helps our organizations operate more efficiently.

• Opportunities for peer learning: One of the hallmarks of the NeighborWorks System is the NeighborWorks Training Institute, which gathers over 1500 community development practitioners, lenders and public sector officials five times a year to learn from each other the most effective strategies for serving communities.

• Creating and sustaining homeownership gains: NeighborWorks America is the nation’s largest certifier of high-quality homeownership education counselors, creating a national force of homeownership and financial literacy education counselors that have educated and empowered more than 500,000 Americans nationwide.

Our Efforts to Address a Current Threat
A growing problem threatening many of America’s cities is the significant increase in foreclosures. Some of these foreclosures, sadly, are the result of family economic struggles – exacerbated by the uncertainties of today's economy. But perhaps even more tragically for America's cities is the fact that many foreclosures today are the result of overly aggressive (and in some instances, blatantly illegal) financing tactics by predatory lenders. The actions of these unscrupulous lenders could erode the important gains that have been made over the years by local governments, groups like NeighborWorks America and other groups here today. We will continue to support efforts by hard-working Americans who have “pulled themselves up by their boot-straps,” to keep their piece of the American Dream.

NeighborWorks America has recently launched two new national initiatives to address this problem: The NeighborWorks Center for Homeownership Education and Counseling, and the Center for Foreclosure Solutions designed to mitigate and prevent foreclosures. Through pre-purchase counseling, post-purchase education and partnerships with cities and lenders, the NeighborWorks system continues to assist homebuyers of modest means in their battle to sustain home equity and avoid predatory lending and foreclosure.

Conclusion

NeighborWorks America is committed to the over 3,000 communities served by the NeighborWorks network, including small and large cities. As these cities redefine themselves and strive to attract residents, businesses and economic sustainability, NeighborWorks America will continue to partner with local governments to assist their communities by the most efficient, effective and innovative means. I thank the working group for their focus on this important issue and for the invitation to meet with you today, and I look forward to working with you.