useful underpinning for the transformation effort. In addition to a new 230-unit Nehemiah singlefamily housing development, the Gilmor Homes public housing complex was undergoing modernization.

Sandtown-Winchester is a 72 square block area with 10,300 residents, 99 percent of whom are African-American. Plagued by all of the symptoms of persistent poverty, the community nevertheless has a rich cultural heritage and energetic community organizations such as the Sandtown-Winchester Improvement Association (SWIA), Gilmor Homes Tenant Association, and Committee United to Save Sandtown (CUSS). There are over 40 churches, many with strong social missions, and Baltimoreans United in Leadership Development (BUILD), a citywide church-based advocacy group, is active in the neighborhood.

To guide the transformation process, Mayor Schmoke appointed the Sandtown-Winchester Task Force in early 1990. It included top city officials, neighborhood residents, and representatives from Enterprise and citywide leadership organizations. The Task Force was charged with overseeing a Community Planning Process to develop a vision, goals and program strategies for the physical and social revitalization of Sandtown-Winchester. As one component of the Community Planning Process, resident workgroups in eight areas met as often as twice a week for seven months to formulate the following goals:

Physical Development: Develop a continuum of decent, affordable housing options; cluster land uses; create an appealing and interactive physical environment.

Education: Restructure public schools as inter-generational resource centers with increased parental and community involvement; use schools as sites for employment, health care and human services.

Health Care: Design a comprehensive, integrated delivery system promoting accessible, quality health care to all residents; emphasize primary and preventive health care.

Employment and Community Economic Development: Reduce unemployment, promote business development and ownership by community residents, and provide accessible quality retail goods and services.

Family Development: Make Sandtown-Winchester a model family- focused community that meets the physical, spiritual, educational, and psychological needs of residents; encourage the development of family support and day care centers owned and managed by residents. Substance Abuse: Utilize schools, churches, businesses and health centers to nurture a drug-free community and a wholesome, caring environment.

Crime and Public Safety: Mobilize residents, businesses and churches to form a community
that is responsible for its citizens, works well with the police department, and respects and
protects the rights, property, and safety of everyone.

Community Pride and Spirit: Promote a sense of belonging to and responsibility for
Sandtown-Winchester through resident initiatives in sanitation, communications and

recreation.

Initial Project Activities

Project activities already underway in Sandtown-Winchester include special projects for youth and construction and renovation of housing in the neighborhood. They involve:

Modernization of 589 units in the Gilmor Homes public housing complex;

Construction of 230 Nehemiah townhouses;

Selective rehab of 40 rowhouses under the City Homes program;

Implementation of the Department of Labor's Youth Opportunities Unlimited (YOU) grant for training and education of young adults;

Implementation of the Baltimore Project for pre- and post-natal care and services;

Leadership development training and community organizing;

Production of a community newsletter; and

Organization of program design and strategic planning clusters.

Next Steps

Mayor Schmoke, Sandtown residents, and The Enterprise Foundation have recommended expansion of the Task Force into an Interim Advisory Committee composed of many original Task Force members as well as additional residents and resource persons from City agencies and the private sector. The Interim Advisory Committee will be charged with guiding the three main components of the next phase of the project. These include:

A community building initiative to continue and expand community organizing, leadership development and resident capacity building activities;

Immediate project activities based on achievable workgroup recommendations that complement long-term programming; and

The organization of program design and strategic planning clusters in various areas relating to physical and economic development, human services, and education, with a strong community building component in each cluster.

Ultimately, this process will produce a comprehensive plan to guide the neighborhood transformation process over the next decade and beyond. A critical task in this phase is the design of a neighborhood-based operating entity to oversee implementation of the transformation activities. Toward this end, it is expected that a community partnership will be formed in Sandtown-Winchester in 1992 to carry out all transformation activities.

Do you believe that the President's proposals to deal with the problems of our inner cities are sufficient or is different or additional actions needed?

The President's proposals are clearly insufficient to deal with the size and scope of the urban problem in the country today. The central housing proposals, Enterprise Zones and HOPE, in themselves touch very little of any urban community.

It has been well discussed that Enterprise Zones alone do not address the key issues business face in their selection of a location. HOPE addresses private ownership of public housing and HUD foreclosed housing. It is fine, but simply doesn't affect 90% of the people in the urban community.

In housing, a community-based response coupled with maximum local initiatives can get to many issues in the community and hold forth hope for change. There is a capacity in our citizens whether in high income or low income areas and mobilization of community residents is the best way to fight drugs, crime, indifference and restore positive values. But in low-income areas, the community needs outside help, funding and partners.

Few

Additionally, these communities need capital and
credit. It is all too clear that financial
institutions have a hard time getting credit to
low-income communities. Without credit very
little can happen, very few people can have a
stake through homeownership in the community.
businesses can prosper. Taking the example of
Shorebank in Chicago, a local development bank can
be instrumental in restoring faith, business,
mortgages and a stake in the community.
Furthermore, such banking doesn't cost the
government money if properly done. It is one of
many local interventions that hold the best hope
for significant change in the physical
infrastructure.

In conclusion, what the President has proposed
only is a start, a very modest beginning.

Housing and neighborhood businesses are only the start. They are the platform. But as in our

Sandtown-Winchester comprehensive neighborhood
program, radical changes in education, health care
and job training must be considered. In some
neighborhoods, it may not be enough to fix these
institutions the way they now operate. It might
not be the most cost effective way either.
Without significant investment for the future, the
cycle of poverty won't be broken.

Finally, welfare reform is overdue. Incentives
are needed that keep the family together,
encourage work, but also mean an individual or
family is better off working than on welfare
(particularly regarding health care).

After the rioting in Los Angeles, amidst the rubble of a razed neighborhood, a single shopping center, located on the corners of Vermont and Slauson streets in south central Los Angeles, remained intact. This shopping center was developed by a community-based economic development corporation.

As well, in the 1960's riots in Detroit,

businesses and houses developed by the Positive Neighborhood Action Committee (PNAC), an organized community group, also remained undamaged while areas around them were destroyed.

What do these anecdotes teach us about the role community-based organizations should play in developing our nation's cities?

You can add to the anecdotes mentioned.
Enterprise helped the Ward Economic Development
Corporation, a non-profit group, develop 120 units
of housing in its Ward Villa project several
blocks from the worst riots in south central Los
Angeles. The shopping center next to Ward Villa
is now a wire sculpture while Ward Villa remains
intact.

It is not a surprise that a community values what
it has a stake in. This principle doesn't always
work in a riot, but it is remarkable how much
"community" property was not touched.

To the extent that the United States has a growing number of people who are disconnected, alienated and disinterested in American values this country will have a growing and costly problem.

DISPARITY IN CAPITAL LENDING TO MINORITY AND INNER-CITY COMMUNITIES

TUESDAY, JUNE 23, 1992

U.S. SENATE,

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,

Washington, DC.

The committee met at 10:05 a.m., in room SD-538 of the Dirksen Senate Office Building, Senator Donald W. Riegle, Jr. (chairman of the committee) presiding.

OPENING STATEMENT OF CHAIRMAN DONALD W. RIEGLE, JR. The CHAIRMAN. The committee will come to order.

Let me welcome all those in attendance this morning.

Today, we're going to be addressing the issue of access to capital for our Nation's inner-city and minority communities.

This issue is of critical importance to our Nation's economic strength and the well-being of our citizens and just the fundamental principle of fairness with respect to how our credit and financial systems work.

In the wake of the tragic events in Los Angeles a few weeks ago, the country has displayed a renewed interest in the problems that are plaguing the Nation's urban communities. This committee, under its urban affairs jurisdiction, has held several hearings on the state of the Nation's cities, stretching back prior to the time of the Los Angeles problems, and covering generally the issues that are facing urban America.

The committee has consistently heard that a severe problem exists for inner-city and minority communities in gaining access to capital. Racism clearly plays a role in this problem, and that has been well documented by a large number of Government studies. These studies have reinforced the theme which indicate the disparity in mortgage lending activity in minority and inner-city communities. By now, many people are aware of the alarming results of the Federal Reserve Board study of the Home Mortgage Disclosure Act data which indicated that black families and minority communities were two- to four-times as likely to be denied mortgage credit as their similarly situated white counterparts.

This committee, during the time of my chairmanship, has made improvements in fair lending laws, in the Community Reinvestment Act and the Home Mortgage Disclosure Act, as a way of dealing with this persistent problem.

In addition, the committee has passed the GSE bill which will require Fannie Mae and Freddie Mac to increase the flow of mort