Home in 5 Program

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The Industrial Development Authorities of Phoenix and Maricopa County have teamed up to offer up one hundred million dollars to help borrowers buy their first home. The program is called “Home in Five” Bond program. Margie O’Campo de Castillo from the Phoenix Industrial Development Authority talks to HORIZONTE about the program.

Jose Cardenas:
Good evening. I'm José Cardenas. Welcome to Horizonte. Tonight, hear about a new study profiling Arizona 's Hispanic and Latina-owned businesses and a discussion with Ed Pastor on unions and immigration. And if you are a first time home buyer learn about a program that could help you afford your dream home. That's next on Horizonte.

Jose Cardenas:
Salt River Project and the Hispanic research center of ASU just released data from the 2006 Hispanic outlook business study. The results look at Hispanic and Latina-owned businesses in Arizona and the challenges facing them in the business market today. Mike Sauceda gives us details from the study.

Mike Sauceda:
The second annual SRP Arizona Hispanic outlook business study gives us a look into Hispanic-owned businesses and identifies issues facing them in the market today. This year's report also spotlights businesses owned by Hispanic women. Over a five-year period, from 1997 to 2002, the percentage of minority owned businesses in the United States grew three times faster than the national average. The number of women-owned businesses grew twice as fast. Here are some findings. One in four Hispanic-owned businesses in Arizona has annual revenue of more than $1 million. In general, Hispanic-owned businesses feel their company's position has improved over the last 12 months and their companies are financially healthy when it comes to businesses owned by Latinas they have significantly smaller operations and Latinas are more likely to be in services and retail industries and less likely to be in manufacturing and construction. Also their median personal income is comparable to businesses owned by Hispanic males.

Jose Cardenas:
With me to talk about this year's Hispanic outlook business study is SRP 's Senior Planning Analyst Hector Penunuri along with President and CEO of the Arizona Chamber of Commerce Harry Garewal. Hector let's talk about this study. As I understand it most respects very similar to the first one done a year ago but this year the focus was on Latinas. Why?

Hector Penunuri:
As you mention it is a little bit different but the fact that Hispanic-owned businesses in general are growing at such a large pace, it's something you want to pay attention to last year being the initial study of our efforts with this. And when we look at Latinas, they are growing at such a faster pace we figured we have to pay attention to the Hispanic-owned businesses, but here's a subgroup of that growing even faster. Let's start to pay attention to them as well.

Jose Cardenas:
As I understand it, although you have Hispanic businesses going three times faster than the national average, and women-owned twice as fast, this is the only study of its kind in the country. What explains that?

Hector Penunuri:
Correct. We are in the process of learning that right now. I think a little bit of the history of perhaps the kind of organization that Latinas have, growing industries within themselves could be one of the reasons but as we go into next year's study, hopefully that's one of the questions we are going to address.

Jose Cardenas:
Now, who all was involved this year? Putting together this study?

Hector Penunuri:
Dr. Olivas of ASU. He has been doing the study similar to this going on 14, 15 years.

Jose Cardenas:
The grandfather of this whole area of investigation.

Hector Penunuri:
Exactly. And we saw what he did and good information, and information that SRP would like to have. And we found that there was opportunity to even expand on that so we lended our resources, so really SRP and we partnered with West Group Research and they did all this research for us.

Jose Cardenas:
Harry, let's talk about some of those finding as they relate to Latinas. Does this mirror your experience as president of the Hispanic Chamber of Commerce?

Harry Garewal:
Absolutely. We just came back from the US Hispanic Chamber of Commerce conference in Philadelphia . And the percentages and the numbers in the statistics are absolutely mirrored nationally as well. From the chairman's perspective last year we started to focus on the Hispanic-owned businesses in the state of Arizona because we realized there were about 35,000 Hispanic-owned businesses in the state. And that's a very large segment of the business community that most people haven't even paid much attention to.

Jose Cardenas:
What right top issues facing Latinas?

Harry Garewal:
Well, in the study they talked about things like fuel costs and, again, I think that was reflective of the time when the survey was conducted. Because that's when people were thinking about paying $3 a gallon for gasoline. So I think that was one of the biggest challenges that they were facing. As well as some of the other normal ones. Access to capital, having the able to grow your business by being able to get loans or being in a position to get bonded. Those are very important, not only to Latinas but to all small businesses but in particular for Hispanic-owned businesses and Latina-owned businesses.

Jose Cardenas:
If you look the at the summary and introduction to the book which is bound and I understand was released earlier this week, the issues, the top four challenges sound like same kind of challenges that would face any business.

Harry Garewal:
Absolutely. I think the one thing that we are understanding is that it doesn't matter if you are Hispanic-owned business, Latina-owned business, if you are a small business owner you are going to have the same issues regardless.

Jose Cardenas:
On top of that the study goes on to note, issues of discrimination will not, among the top four, did surface as you were investigating this and approximately a third of the owners surveyed experience some form of discrimination. Is that also your experiences as head of the chamber?

Harry Garewal:
It is. And I think part of that is as a result of the community starting to get into the business. So as you, if you don't have the experience and you don't have the background, I think you are going to have a more difficult time trying to access to capital, access some of those procurement opportunities. And so they may resonate as a form of discrimination that way.

Jose Cardenas:
For Latinas on top of that would be issues of gender discrimination?

Harry Garewal:
I am sure. I think when we were looking at the Latina business community and someone asked us at the chamber, why do you think there are more Latinas going into business, it's easier to start -- I shouldn't say that. You have more of an opportunity to be the boss if you are owning your own business. Versus trying to work through some of the corporate structures and some of the other businesses that are out there and working your way up.

Jose Cardenas:
Hector do you see any connection between the fact that you have about a third of the respondents saying they have faced some discrimination but less than half of the businesses promote their Hispanic heritage as part of their business outreach. That is a reaction to that? They are fearful of discrimination or it's just not important to their particular line of business?

Hector Penunuri:
It's hard to tell because when we asked that question, there were not a lot of specifics given depending on how the question was asked, I should say. But good, bad, or indifferent is how we put it. Like you said about one third did say they were treated differently. Or the perception of being Hispanic-owned business was something they had to overcome. But that still means that two-thirds say we do business as usual. We are Hispanic-owned it doesn't really matter, doesn't really affect us that much. I think that's one of the reasons.

Jose Cardenas:
Did you sense there was, there were businesses consciously minimizing or de-emphasizing their Hispanic heritage for fear of these kinds of discrimination issues?

Hector Penunuri:
We didn't see a lot of that. And I think the reason may be is just that most of the businesses today are really mainstream. Like Harry talked about. They face the same challenges as any other businesses. I think in many cases they just are so busy, a lot of them, I think we talked about 85% of those businesses we talk to are small businesses. 37% are home-based. So the really small, owners may wear many if not all the hats in that business. They doesn't have a lot of time to think about minority-owned business certification, for example, taking advantages of minority-type organizations and programs that are out there and so we saw more of, I am just a regular company going about things as opposed to, you know, the concentrating on the Hispanic portion of their being other business.

Jose Cardenas:
Harry, the report says one in four revenues of $1 million or more. How significant is that?

Harry Garewal:
If you think about it from the perspective of an economic engine specifically in the state of Arizona it's very significant. In fact, from the federal level there's a lot of emphasis being placed on, you know, Hispanic-owned business that generate over $500,000 in gross revenues, because that's the fastest growing segment. So if you can grow that economic engine faster, then you are going to have a much more profound impact on the community. Versus a start-up or a small business.

Jose Cardenas:
Harry, on in and I realize this would be hard to do because we already established the faculty this is the only study of its kind in the country. Do you have a sense for the profile of Hispanic businesses in Arizona compares to the profile of Hispanic businesses in other states?

Harry Garewal:
You know, I would only be able to do that anecdotally. The reason I say that I have been invited to Toledo , Ohio , by the mayor there to talk about these kinds of studies. And one of the things that from the chamber's perspective we have been trying to do is encourage other states, other organizations to replicate these studies. Can you imagine, José, if we were having these studies done in, say, New Mexico and California, in our region, and we were able to start to regionalize some of this data and then we were able to nationalize it we would have a much better understanding of what the small business, Hispanic small business profiles would look like out there.

Jose Cardenas:
Hector, producing something as professional as this, all the work that goes into it obviously there's some great costs associated. What's the benefit to SRP ?

Hector Penunuri:
We talk about marketing 101. Know your customer. A lot of information on residential customers out there. But the business customer is a large segment of our customer base. And there wasn't a lot of information on business customers so we just, part of the reason for this partnership is; we want to learn more about our customer. One of the benefits but at the same time we have business customers, customers that I just mentioned, and we see it as giving more value to our relationship with those customers. Because I know I'm talking about one business customer segment but we can have businesses that are SRP customers that want to sell products and services to Hispanic-owned businesses. And they don't have the information. You know, how do I reach them? What do if need to know? Is there cultural type aspects?

Jose Cardenas:
Business sense.

Hector Penunuri:
We are learning more about the customers we serve but then we are also providing information to other customers that we serve.

Jose Cardenas:
Thank you, gentlemen, both for joining us. Hector Penunuri, Harry Garewal, president of the Hispanic Chamber of Commerce.

Jose Cardenas:
U.S. Congressman Ed Pastor was noted as having a pro union voting record. He's been in the forefront of current immigration issues. The labor movement has sometimes walked alongside immigration movement and sometimes against it. Larry Lemmons sat down with congressman Pastor to talk about this relationship.

Larry Lemmons:
You were born and raised in Clay Pool, Arizona . That is the time you noticed organized labor and the effect it had on people?

Ed Pastor:
My father was very active in the union. He was a shop steward. And all my uncles and all my family were members of the mine, mill and smelter workers. And what happened in the 1950s, they were deemed to be too radical and communist-oriented. And so later, the United Steel Workers of America came in and there was a jurisdictional battle but steel workers represented us. And so I remember as a young kid, seeing salt of the earth in the union halls, and on strike, I was out there with my dad on the picket lines and I was in the kitchen with my mom. So I got to see the union, the effectiveness of unions and participated in a lot of their events.

Larry Lemmons:
When do you first start noticing how organized labor dealt with immigration issues?

Ed Pastor:
Well, that union was very progressive. And it organized Mexican Americans. And that particular instance, there was no delineation of immigrant, non-immigrant because most of the miners, underground miners and the laborers were Mexican American or Mexican. That they were a great training ground for leadership development, and so the president was Bob Barcon. Pete Benitez was the treasurer. So the officers were all Hispanic so we saw the union as an ally of the Hispanic community because that's where we would go. It was a safe haven for us.

Larry Lemmons:
Historically there's been a tension, sometimes, between labor and immigration. On the one hand, obviously, labor wants to embrace immigration because it makes their numbers more powerful if they can organize it. On the other hand, some would say that an uncontrolled immigration actually works to bring wages down.

Ed Pastor:
I think that the immigration issue with Pete Wilson and proposition in California , probably made the issue of immigration more political. It developed into an ideology for the conservatives, the neo-conservatives as a litmus test for the conservatives and it brought the issue where you begin thinking of immigration as a political issue. I think initially, the unions especially those that were skilled or semi skilled unions were concerned about the wages. But I can tell you that when I came to Phoenix , in the early 1960s and into the 1970s, that the unions here, especially the ones that relied on labor skill, labor is local 383, their main membership was either black or Mexican, and it didn't matter if there were undocumented, documented, or citizens. And so but I think after the proposition, people -- and unions started to seeing that there was a debate of whether or not the immigration was suppressing wages.

Larry Lemmons:
Is opinion within organized labor divided on that issue?

Ed Pastor:
I think the opinion is divided. About four or five years ago the Hispanic caucus in congress started talking about immigration, and possible remedies. And we were thinking more in line of the '84 action, 1984 action that dealt with the amnesty. And then the thought came about, guest workers and there was a reluctant because at least with the Hispanic caucus, and even with labor, because at the time everybody thought about the 1950 project of the Braceros, where they brought in and worked and wages were really suppressed. And there were very few rights. I think today that there is a division, here locally. I went to a human rights rally with the unions, and half the unions, labor, the roofers, and ironworkers, the ones that rely on unskilled or labor type of pool, that their membership was highly Hispanic. And I would tell you probably a lot of them were undocumented. So you have organizations like SCIUwho relies on a population of immigrant, the janitor, and the service workers, which are very much involved in the immigration reform. Probably the skilled unions, the carpenters, and that type of union, may not be in favor of guest programs, but I think on the issue of earned legalization where people, 12 million, that there be a process of learned immigration, learned legalization. I think you will find that the unions, including the National Chamber of Commerce, would be supportive.

Larry Lemmons:
How difficult is it for unions to organize in a right to work state as we are, obviously if someone is undocumented and they are trying to organize within a workplace, they are going to be the first ones out.

Ed Pastor:
Well, I think it's common with undocumented, also people who are citizens, and because this is right to work. You will find that that's probably a procedure and a practice that's used against American citizens who are trying to organize where once they expose themselves, the union, as union or want to bring in unions that there's ways of basically weeding them out as trouble makers, et cetera. With the undocumented, obviously, it's very difficult for them to bring charges, unfair labor practices. It's very difficult to bring EEOC cases. And so with the person who is undocumented because they don't have basic rights, as given by the legislation, given to citizens, and legal residents, that basically an employer can say, well, you're gone and that's it. Where if someone is a citizen they may find a reason to appeal the firing, whether it be discrimination or unfair labor practice, et cetera.

Larry Lemmons:
In California , the AFL - CIO is working with an organization of day laborers to come to some sort of agreement as to how they can organize but they are not doing that in Arizona . Why not?

Ed Pastor:
Well, I think that basically, it's this right to work legislation but I will tell you in the construction industry, that the unions who are involved in construction are employing organizers, Hispanic organizers and are trying to organize the undocumented because they know that's who's being employed, that's who's working. And so they want to make sure that they are able to organize them, knowing that the employer may retaliate, but they also know that because of the demand for this labor pool, that retaliation by just getting rid of them is not as easy as it could have been.

Larry Lemmons:
What do you think should happen in terms of immigration reform in the future?

Ed Pastor:
Well, I think that obviously, number one, we need to secure the borders. I think that's issue number one. And the piece of legislation that I support is the one that supported by Jim Colby and Jeff Lake which, number one, it would secure the borders, ensure that we mitigate the best we can the undocumented traffic north. Secondly, it would create a guest worker program that would ensure basic rights for the workers coming in and that there are willing employers that would hire them. But the responsibility is on that willing employer that there are basic rights for that employee, and so that you just don't get rid of them because they're here. They're here legally but because they are not citizens you can get rid of them. And I think there is some contention when some unions of whether or not the rights will go far enough in terms of organizing. And then thirdly, the third part would be that you have approximately 12 million people who are undocumented. And there should be a process that would have them earn their legalization.

Larry Lemmons:
Thank you, congressman, for visiting us today.

Ed Pastor:
Thank you.

Jose Cardenas:
The industrial development authorities of Phoenix and Maricopa County have teamed up to offer up to $100 million to help borrowers buy their first home. The program is called the Home in Five Bond Program. Joining me from the Phoenix Industrial Development Authority is Margie O'campo de Castillo. Welcome to Horizonte.

Margie O'campo de Castillo:
Thank you.

Jose Cardenas:
Tell us kind of an overview way what the Home in Five Program is.

Margie O'campo de Castillo:
It's a way to afford buyers a home. You have a 5% down payment which is not -- you don't have to repay that. That is a great assistance and if you have a $100,000 loan, 5% of that will be gifted to you in a grant.

Jose Cardenas:
As I understand it, there are income and area restrictions. What are those?

Margie O'campo de Castillo:
The household income limits for a family of one to two persons would be $60,100. In a non-targeted area. In a target area it would be $72,120. So families that three or more would be $69,000 in a non-targeted area and $72,684 in the targeted area.

Jose Cardenas:
What are targeted areas?

Margie O'campo de Castillo:
Those areas are basically identified by the census where the great majority of the families having income lower than median.

Jose Cardenas:
Is it applicable to any home price? Or are there limits there as well in terms of the amount of house you can buy.

Margie O'campo de Castillo:
Yes, as far as the house price limit, we would have $301,500 if you are purchasing in a non-targeted area. And if you are purchasing in a targeted area, it would be $368,500. So these prices are -- you can afford to buy a very nice house at this price. So we are not -- so we are not limiting it so to speak.

Jose Cardenas:
Let's talk about what's actually happened to date. We talked in the intro about a $100 million program which as I understand it there have been two series. The first amount was $25 million. The second was a little over $37 million. You got some data of what has been done with that second series of monies. Can you share that with us in terms of things like the average loan amount and who are the people who are actually taking advantage of the program?

Margie O'campo de Castillo:
Sure. Our loan amount is look at about $177,000. The household income at about $42,000. Purchase price or the price of the home is at about $183,000 and the household size is about two persons age about 32 years of age. We also have 72% of the people taking advantage of this program are Caucasian. 20% Hispanic, 5% African American.

Jose Cardenas:
Does any of that data surprise you? It strikes me this is a relatively young group.

Margie O'campo de Castillo:
Yes.

Jose Cardenas:
First of all. And given the program's focus on targeted areas, the ethnic break down sounds a little surprising to me. Does it surprise you?

Margie O'campo de Castillo:
Yes, I would like to see more of a -- I would like to see a lot other families, Hispanic families or maybe larger families taking advantage of this awesome program.

Jose Cardenas:
It is open to everybody?

Margie O'campo de Castillo:
It is.

Jose Cardenas:
Are there certain outreach efforts being made to make this known to the Hispanic community?

Margie O'campo de Castillo:
We have done some radio spots, and we are looking to do more.

Jose Cardenas:
I know we have got some phone numbers that people can call. The Phoenix IDA , hopefully will be able to flash them up on the screen where people can call the numbers, get some information. How else can they get information about this program?

Margie O'campo de Castillo:
They can go on the website which is phoenix.gov/housing. We have several lenders on our website. They can call, talk to and find out if they can qualify. This is as easy as pick up the phone and getting on the computer. That's it.

Jose Cardenas:
Margie O'campo de Castillo, thank you for joining us to talk about this very interesting and very productive project. If you would like the transcript of tonight's show or would like to learn about future topics, please log on to our website at www.azpbs.org and click on Horizonte. That's Horizonte for tonight. I am José Cardenas and for everyone at Horizonte, have a good evening.

Ed Pastor:U.S. Congressman;

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