FOR IMMEDIATE RELEASE

Economic Fall Out from Pandemic Requires Large Scale and Equitable Response

Investments Needed for Small Business, Housing and Non-Profit Sectors

March 24, 2020

CONTACT: Joseph Kriesberg, 617-721-7250 / joek@macdc.org

A statewide association of Community Development Corporations is calling upon state leaders to take immediate action to address growing and urgent needs for small businesses, tenants, homeowners and nonprofit organizations impacted by the COVID-19 public health crisis.

The Massachusetts Association of Community Development Corporations (MACDC) represents 88 community-based nonprofits across the state that work to advance economic opportunity, affordable housing and thriving neighborhoods across the state. MACDC is calling for the following actions:

• $150 million investment in loans, grants, and technical assistance to help small businesses survive and recover from this economic crisis, especially those businesses owned by people of color, immigrants, women, and low- or moderate-income people;

• Creation of a Massachusetts COVID-19 Small Business Response Task Force to guide the on-going response to this crisis and consider other initiatives to help small businesses through this crisis;

• Expanded unemployment insurance criteria to cover currently ineligible business owners, such as sole proprietors, independent contractors and micro businesses;

• Short-term eviction moratorium to keep people housed during this public health crisis;

• At least $25 million in emergency funding to help tenants impacted by the COVID-19 crisis pay their rent;

• Special initiatives to help nonprofit organizations, including community-based cultural organizations, youth programs, CDCs, and other critical local organizations.

(Read, MACDC's full Initial Policy Recommendations in Response to the Public Health and Economic Crisis)

“The economic fallout from the COVID-19 public health emergency is likely to hurt just about everyone, but it will have a particularly significant impact on lower-income communities, communities of color, Gateway Cities, and distressed rural areas,” said Joseph Kriesberg, President of MACDC. “We need the state to step up immediately with significant and equitable investments to help our small businesses survive and recover from this unprecedented crisis.”

“We know this pandemic will have a particularly significant impact on the most vulnerable among us.  It will reveal and exacerbate the persistent racial and economic inequities in our society,” noted Kriesberg. “That is why we need a strategy based on equity that targets resources to the businesses, families and communities that most need assistance”.

MACDC recommends that much of the small business development assistance be deployed through the highly effective network of community-based organizations already working with the state through the Small Business Technical Assistance program.  These organizations are working with over 3,000 small businesses across the state, with 88% of the clients coming from underserved communities such as people of color, immigrants, or lower-income communities.  Additional support can be deployed by Community Development Financial Institutions (CDFIs) with a proven record of leveraging federal and private funding to deliver capital to small businesses.  MACDC is also urging an expansion of the Mass Growth Capital Corporation’s Small Business Recovery Loan fund which is already oversubscribed. Given the scale of this crisis, we recommend that businesses be able to access both loans and/or grants to ensure their long-term survival and to avoid new debt obligations that will burden their recovery.

MACDC’s policy statement calls on the legislature and the Governor to use the state’s Rainy Day Fund and General Obligation Bonds to help cover the costs of these emergency investments.

(Read, MACDC's full Initial Policy Recommendations in Response to the Public Health and Economic Crisis)

The low- and moderate-income communities in which Massachusetts CDCs work are disproportionately affected by the current Coronavirus crisis. This disproportionate impact results from the same structural inequities to which economically disadvantaged communities are routinely subject. The current Coronavirus pandemic further highlights the ways in which structural inequity that impacts lower-income communities ends up negatively impacting all individuals and communities, regardless of income-level. While Coronavirus is wreaking havoc on population health and the economy, it also carries opportunities for CDCs to help keep our communities safe, and to advocate for economically progressive policies.

First, let’s establish the ways in which lower-income community residents are disproportionately impacted by the spread of the Coronavirus:

Poor Quality Housing

Poor quality housing quickens the spread of infectious disease when there is improper ventilation between units. Families who live in close quarters are at increased risk of spreading illness between family members.

Unstable Housing

Cuts to jobs and hours will put low-income tenants at increased risk for eviction and foreclosure as individuals and families fall behind on their rent or mortgage payments.

People Experiencing Homelessness

Individuals experiencing homelessness who are living in shelters are impacted by increased disease transmission due to overcrowding. Those living on the streets are at greater risk because of lack of access to clean water with which to wash their hands. Individuals living on the streets who fall ill due to the virus will suffer more because of exposure to extreme heat and cold, and they also don’t have an easy way to quarantine themselves.

Economic Impacts on Low-Wage Workers and Small Businesses

Low-wage workers without paid sick time have to make the impossible choice between going to work sick or losing wages needed for food and other necessities. Individuals who go to work sick are more likely to infect others, and healthy workers who are forced to work are more likely to be exposed. Individuals who are living paycheck-to-paycheck are not able to “stock up” on essential items, like medicine, food, and hygiene items that will be needed in case of illness or quarantine. If forced to wait to buy these items, individuals will have a greater likelihood of being exposed and exposing others as the pandemic worsens. Small business owners will disproportionately suffer from lost business while still needing to keep up with overhead costs.

Impacts of Quarantine

School closures disproportionately impact low-income families who have less access to affordable childcare options. Further many low-income children rely on schools for free or reduced-price meals.

Access to Health Care

Individuals who are underinsured or who lack access to health care will be less able to access quality and affordable health care as the demand on the health system inevitably increases. Undocumented immigrants may be afraid to access care or other services because of real or perceived concerns over repercussions resulting from their immigration status.

Prejudice and Discrimination

Our Asian and Asian-American community members and businesses are also subject to the racism faced by many of Asian descent resulting from prejudice, fear and misinformation.

In addition to highlighting the ways in which lower-income communities are impacted by infectious disease, the Coronavirus pandemic makes it clear that what impacts lower-income community residents also impacts the general population.

CDCs can support their community residents in a variety of ways, including:

1. Taking precautions to limit the spread of disease, such as frequently disinfecting common spaces in their apartment buildings;
2. Checking in on residents with particular attention to those who are elderly and/or immuno-compromised;
3. Encouraging residents to use recommended hygiene methods, including frequent handwashing, and, if exposed, letting management know and self-isolating or quarantining;
4. Suspending evictions that are not essential to the protection of health or property;
5. Canceling community events.

Immediate steps to care for our communities needs to be our first priority. Emergency funding can help prevent evictions and foreclosures and lessen the financial pain to workers and small businesses. In addition to necessitating emergency response, this international crisis underscores the need for better social and economic policies when our world is not in crisis, including:

1. Expanding unemployment insurance;
2. Creating protections to prevent evictions/foreclosures;
3. Funding to support local businesses;
4. Advocating for paid sick leave for all employees.

In addition to advocacy on the policy-level, it is crucial that we continue our racial equity work to undo the racist attitudes and institutions whose legacy we encounter in the current crisis, as well as in so many areas of our work. As information and advice changes by the hour, let’s not lose sight of the larger context in which we find ourselves. Let’s continue to think creatively about strategies and policies to improve population health and to expand economic opportunities – both in the short-term as well as in the long-term.