Publications

Growing Conscious Consumerism: Understanding the Rent-to-Own Industry in NYC

For our workforce development colleagues: you know the importance of financial education and empowerment in positioning your participants to maintain jobs and build sustainable employment. However, protecting the communities you work with from predatory financing and lending practices that put them at long-term risk can be a challenge. One piece of the solution is understanding where financial risks lie. We recently conducted a survey of practices in the Rent-to-Own (RTO) industry in New York City to understand how RTO stores conduct business and help explore ways in which consumers can identify risks within these types of agreements. Our research – including interviewing subject matter experts, conducting outreach to consumers, and doing our own secret shopping – taught us a lot about this sometimes illusive industry. We wanted to relay a few of our learnings in the interest of raising awareness around these issues and informing how RTO might impact your clients or program participants.

First, how it works: RTO is a service directed to consumers who immediately need specific products such as appliances or household furniture, but may not have the funds on hand to make a purchase outright. An RTO retailer will rent those products to consumers through a modest upfront payment, followed by recurring installments for an agreed to period of time until the product is paid off. Unfortunately, many who enter these rental agreements can end up paying more than 2.5 times the purchase price of a product through the structure of monthly payments and interest over their rental term. For example, during our secret shopping we found that a television marked $699.99 at Best Buy might be $1,049.99 in total fees at an RTO establishment. Simply put, that’s a bad deal.

Second, things to look out for:

  • In NYC, RTO chains are consolidated in neighborhoods with above average poverty rates, including areas in the South Bronx, Upper Manhattan, Central Brooklyn, and Southeast Queens. By mapping Aaron’s and Rent-a-Center locations in NYC, two of the nation’s largest RTO retailers, we found that they are predominantly situated in or near areas with more than 20% of households in poverty.
  • Our research suggested that RTO salespeople frequently focus their pitch on the product, and are often vague or unclear about the rental payment terms. They often do not share written terms until after you’ve agreed to purchase an item. Consumers also noted difficulty in getting RTO salespeople to provide clear and informative responses to their questions.
  • Even when rental terms are provided, consumers expressed confusion on how to assess those terms and admitted they didn’t understand what they were getting into – or the ultimate costs – before committing to the purchase.
  • Consumers noted the negative effects of missing just one rental payment. RTO retailers reportedly hire collection agencies to collect missed payments, using employer information and personal references to track down consumers.

Raising awareness around RTO and these practices is a critical next step in helping protect consumers. It may sound straightforward, but encouraging consumers to request and thoroughly review payment terms before signing any rental agreement is likely to go a long way in helping them to protect themselves. While our survey represents initial consumer engagement, further research and outreach would help surface nuances to the experience and challenges faced by consumers in NYC, which in turn will help inform actionable solutions. We encourage you to raise awareness around RTO within your organizations and keep an eye out for when your participants may have fallen victim to unfavorable rental terms.

July 2017 Newsletter: Combating Poverty | Supporting the Garment Industry | 2nd-Grader Focus Groups

Evaluating Collective Efforts to Reduce Poverty

In our third year supporting the Change Capital Fund – a collaboration of 17 foundations and financial institutions dedicated to the revitalization of distressed New York City neighborhoods – our impact analysis showed increased service and improved outcomes across grantees and their participants. Since Year 1, grantee programs have seen an 81% growth in the number of individuals served. In Year 3, grantees – Cypress Hill Local Development Corporation (CHLDC)St. Nick’s Alliance (St. Nick’s)Fifth Avenue Committee’s Stronger Together (Stronger Together) and New Settlement Apartments (New Settlement) – served nearly 10,000 participants in workforce, education for children and youth, and adult education programs. 

We’ve supported CCF by helping grantees establish ongoing assessment and outcome evaluation systems, identify key common measures of poverty alleviation, and work with the City to access administrative data that will facilitate measurement of outcomes and public savings associated with each initiative. Read our full report on Year 3 to see more outcomes on wage increases and educational attainment.

Working with Stakeholders to Identify Opportunities to Support the NYC Garment Industry

This summer, we’ve been facilitating the Garment Industry Steering Committee convened by Borough President Gale A. Brewer, the NYC Economic Development Corporation, and Council Member Corey Johnson. The group – which brings together elected officials, City agencies, manufacturing business owners, designers, and other Garment Center stakeholders – is charged with identifying and planning for opportunities to advance NYC’s fashion and garment industries in preparation for a review of potential zoning changes for the Garment District in Midtown. We look forward to joining Committee Chairs in announcing outcomes from the group’s process later this summer.

Talking Arts Curriculum with 2nd Graders

We recently completed an engagement helping Lincoln Center Education identify opportunities to effectively integrate arts programming to increase school outcomes for students, parents, and teachers in Community District 7 in the Bronx. To determine ways LCE might adjust its curriculum that would stick with CSD 7 students, we needed to gather feedback from elementary school students directly – not your everyday focus group audience. We got creative with our facilitation strategy and structured the focus group discussion around a picture book, Quinito’s Neighborhood/El vecindario de Quinito. This book follows a young boy walking through his neighborhood and talking with family members and neighbors about different roles they play in the community. We used images from each page to discuss key interests with the 2nd graders, such as a mural to ask about the type of art they’ve seen in their neighborhood, as well as the type of art they like to make themselves. The tactic worked, and students provided a wealth of perspective on how they perceive their community, the arts, and how they most like to engage with both. We were able to glean valuable insights as LCE thinks through.

New Virtual Reality Lab to Create Jobs through New York Works

Photo credit: ​NYU Tandon School. Leaders from NYU, Lehman, the City of New York, and City Council join for the unveiling of the hub

We were excited to see the recent announcement from NYC EDC and MOME that the NYU Tandon School of Engineering has been selected to develop and operate a hub for virtual reality and augmented reality (VR/AR) at the Brooklyn Navy Yard with a workforce development center at CUNY Lehman College. We supported the workforce component of the proposal, which will help connect New Yorkers to over 500 newly created jobs through the lab over the next ten years, positioning New York as a leader in the VR/AR industry. We look forward to seeing the implementation unfold.

Increased Service, Improved Outcomes Among Change Capital Fund Grantees

Our work was featured in the Change Capital Fund’s Newsletter this month. Check out the full article below, discussing how we evaluated improved outcomes among their grantees in the areas of workforce development, youth and adult education, and housing. Since receiving their grants, these organizations have continuously increased participation in their programs and delivered better quality results for participants.

Increased Service, Improved Outcomes Among Change Capital Fund Grantees in Year 4

By Celeste Frye and Doneliza Joaquin

In the third year of the Change Capital Fund (CCF), grantees – Cypress Hill Local Development Corporation (CHLDC), St. Nick’s Alliance (St. Nick’s), Fifth Avenue Committee’s Stronger Together (Stronger Together) and New Settlement Apartments (New Settlement) – have continued their collective efforts to reduce poverty in their neighborhoods through workforce, adult education, youth education, and housing development.

The following information is based on a report produced for CCF by Public Works Partners:

Year 3 Findings:

  • Programs have maintained or increased participation.
  • Quality of job placements increased as represented by hourly wage, number of hours worked, and benefits received.
  • Retention is up in workforce programs.
  • College access programs exceeded goals and citywide outcomes.
  • Adult education training increased participation and exceeded achievement goals.

In year 3, grantees served 9,777 participants in workforce, education for children and youth, and adult education programs. Since Year 1, grantees programs have seen an 81% growth in the number of individuals served.

Workforce

Grantees served 858 workforce participants in Year 3, up 128% percent from Year 1. Forty five percent of participants are between the ages of 17 and 24, 95% identify as Black or Hispanic, 43% received government benefits within the past year (e.g. TANF, food stamps, Medicaid), and 15% of participants did not have a high-school degree or equivalent at the time of program enrollment.

Additionally:

  • 200 of 425 placements were identified as having benefits, such as health insurance.
  • The average hourly wage for participants increased from $10.55 in Year 1 to $12.82 in Year 3.  FAC saw the largest growth of nearly $2 an hour.
  • The average participant hours worked per week continued to increase to 33.89 hours per week.

Education for Children and Youth

Grantees served 8,071 participants in their education for children and youth programs, up 30% from Year 1 (6,189). Thirty-three percent of participants are in grades kindergarten to 3rd and 68% identify as Hispanic and 23% as Black. Most participants are served in after-school programs.

High School Graduation

Eighty-two percent of 501 participants anticipated to earn their high school degree in Year 3 achieved that goal, compared with 70% among all NYC students and 65% and 64% for Black and Hispanic students, respectively, regardless of income level.

College Access and Retention

New Settlement’s rates of enrollment for participants in their college access programs at 81% far exceeds the NYC rate of 55% for students overall. In 3 years, grantees helped 1,638 students enroll in college. 1,218 of those participants are still enrolled.

Adult Education

Grantees served 848 participants in Year 3, up 12% from Y2 (754) and 234% from Y1 (254). 37% of participants were 25 to 39 years old. 59% identified as Hispanic and 29% as Black. 75% of participants did not have a high school degree or equivalent at time of enrollment.

Housing

St. Nick’s has grown its housing development program from 36 to 75 to 162 over the CCF years. For CHDLC, in addition to the 29 Cypress Village units completed in Year 1, 54 senior housing units are expected to be completed in Year 4. New Settlement will contribute 60 housing units in Year 4.

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