Sunday, October 15, 2006

Nobel Peace Prize Winning Answer to Miami Public Housing Crisis

It's called "micro-credit." Thirty years ago, Bangladeshi economist Muhammad Yunus, began making loans as small as $9 to help beggars start small businesses. Finally on Friday, after several years of being nominated and passed over, Mr. Yunus, 66, won the Nobel Peace Prize. Congratulations! It's about time.

"Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty," the Norwegian Nobel Committee said. " Micro-credit is one such means."

Exactly. And bankers are at the gates to changing the world on a grand scale if they take up the challenge. Embracing the ideals of democracy is one thing, but unless the poor are given the opportunity to get a bank loan to help them step up into the middle class, democracy will never be all it can be.

"You cannot go on having absurd amounts of wealth when other people have problems of survival," he said. "If you can bring an end to poverty, at least from an economic point of view, you can have a more livable situation between very rich people and very poor people, very rich countries and very poor countries. That's our basic ingredient for peace."

To a certain extent, it sounds as if Mr. Yunus is describing Dade County. With the average price of a home creeping toward $300,000 and a "workforce" struggling to find an affordable place to live, a micro-credit loan to the lowest guys on the stepladder of upper mobility can only help all of us. Otherwise, expect chaos.

If only the rich can afford to live here, where will the vast majority live? Where will the teachers live? The police? Firemen? Plumbers? Electricians? Carpenters? Cooks? Retail employees? Over time they'll move out and won't be replaced. For them to hang on, they will need innovative solutions to the problem. As a concept, micro-credit loans would have to be tweaked to work in an "industrialized" nation. Besides helping break the cycle of poverty where generations of a family are stuck in public housing and dead-end jobs by giving them micro-loans to "follow their dreams," micro-loans will also benefit the lower middle class struggling to pay its bills. Of course, a micro-loan isn't aimed at paying off credit card debt on non-essential items that have nothing to do with housing and holding a family together.

We don't pretend to know where to draw the line or how to administer such a program, but the first step to solving the problem is to acknowledge that micro-loans are part of the solution-- that and incorporating MVB's "foothold homes" idea. From a banker's point of view, that proposal is even more radical: Give the poor in Dade County the boarded up public housing units in exchange for the Habitat for Humanity principal of "sweat equity," where first time homeowners take on the responsibilities of repair and maintenace in exchange for the keys to the "unit." With a "foothold home," the poor get a helping hand to step up to becoming part of the middle-class while taking from government and placing upon themselves the burden and expense of repair and maintenance. Some might need a micro-loan to do this, that's where government and business come in, working together to pull it off.

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