ADAR SCHNEIDER, ECONOMIC DEVELOPMENT CENTER
I sat down with a man named Jeff* in front of the CVS on 21st street, bringing him the ham sandwich he had asked me for. He’s been sitting in front of the CVS for nearly half his life. Jeff is a man facing schizophrenia and drug addiction, and has been chronically homeless for twenty years. He’s also one of the warmest, friendliest people I’ve met.
When we think about what homelessness looks like in a community, we often envision the same people sitting in the same places. But chronic homelessness, when an adult has been homeless for over one year or has experienced four episodes of homelessness in the past three years, is estimated to affect 18% of the homeless population. This means that 82% of those who lose their homes manage to transition back out of homelessness. The chronically homeless are some of the most vulnerable, and are almost universally disabled, usually mentally.
Jeff is unemployed. He hasn’t been able to hold a steady job since his onset of schizophrenia when he was my age, 21. But he does still have a strong sense of pride. He told me about an organization in DC called Green Door which provides support services for people with mental illness. He goes every day, and does art workshops, life skills trainings, group therapy, and sees a case worker. Through Green Door, Jeff has found friends, emotional support, and recently, housing assistance.
Public housing assistance has traditionally asked for guarantees from its recipients: Do you have a steady income? Do you have good credit? Are you clean from any substances? Only then can you expect to be put on the long list of people waiting for subsidized housing. This often leaves those that find themselves unable to fend off addiction or without the tools to keep a job chronically homeless – like Jeff.
Pathways to Housing created a model which shows that it’s actually cheaper to give the chronically homeless housing for free than to rack up costs by having government pay for shelters, prisons, emergency rooms, or psychiatric wards. Called the Housing First approach, the paradigm believes that it is not only unreasonable to be expected to have a steady job, good credit, and clean record while homeless; it is nearly impossible. That’s why so many who become chronically homeless stay that way.
In Massachusetts, a program called Home and Healthy for Good is a Housing First initiative, which has placed 723 people who were chronically homeless in apartments and has reduced the cost of a person before and after giving them free housing by $9,372 annually.
DC’s Housing First initiative has been operating through Pathways to Housing since 2004, and claims to have ended homelessness and supported recovery for 600 individuals. Not only does their program get people off the streets who otherwise would be considered ineligible, but they keep them off the streets with an 85-90% retention rate.
The paradigm shift to free housing for those least eligible may be a difficult transition for those who don’t see housing as a basic human right. But the numbers show that providing our most vulnerable populations with basic housing is a preventative measure that actually saves taxpayers thousands of dollars in remedial and emergency services.
People who are chronically homeless and mentally ill or otherwise disabled tend to cycle between emergency rooms, shelters, jail, and psychiatric hospitals. Homeless tend to need high-cost medical care, and stay in emergency rooms for several days longer, because they lack access to preventative care much of the time. Although chronically homeless account for 10% of shelter inhabitants, they use over 50% of shelters’ resources. And those who are arrested, often mentally ill, have nowhere to go afterward and are found back on the streets.
Housing First has been shown to reduce the cost of shelters, emergency rooms, jail and psychiatric hospitals by combining supportive housing services. For example, a study of homeless people in New York City with mental illness found that by providing permanent housing, use of emergency shelters decreased by 60%, plus additional decreases in public medical, mental health, city jails and state prison services.
Through public-private partnerships such as the DC Housing Authority and Pathways DC, Housing First programs can offer vouchers to chronically homeless for living spaces across the city. A partnership between DC Veterans Services and Pathways DC has moved 50 veterans with serious disabilities and mental illnesses into permanent supportive housing, according to their 2012 annual report. Continuing partnerships like these is reducing the amount of resources spent on shelters, emergency medical services, and arrests.
A segment of a short documentary called @home shows not only the financial impact these programs can have, but the emotional and physical effects as well. With housing, those who used to be chronically homeless are better able to care for themselves and work toward fully integrating themselves back into their community.
Through housing assistance at Green Door, Jeff was set to move into a community house two days after I spoke with him. He will continue to receive support there, and he hopes to one day be able to live fully independently. By supporting programs that help our most vulnerable, we help our communities thrive while easing the burden of the tax-paying middle class.
*Name has been changed for confidentiality.
JACK NOLAND, ECONOMIC DEVELOPMENT DIRECTOR
It has been a long winter. The falling snow makes for a lovely view from the windows of GW’s warm, well-appointed residence halls. For D.C.’s homeless, however, winter means hardship even beyond the everyday struggle of destitution. By last count, the city has 6,859 people living without homes, an incomparably tragic facet of life in D.C. today. In truth, these numbers miss the entirety of D.C.’s housing problem, which goes much deeper.
This is a city that has seemingly been stuck in dichotomy – being the seat of the federal government and a major metropolis, white and nonwhite, rich and poor. It has been difficult for the community and government to bridge the gap between these two sides of D.C. There is a serious poverty problem here, and its effects are both rooted, and most manifest in the lack of affordable housing across the district.
There are over 70,000 names on the waiting list for D.C. Housing Authority (DCHA) assistance, and as of April 2013, that number has been capped. This aid can come in the form of public housing or through the Section 8 Housing Choice Voucher Program, with which low-income individuals receive rent assistance to live in private buildings. Thus far, these programs have largely failed D.C. residents because there are still so many without homes for themselves and their families.
Market solutions are political infeasible at best, and economically impossible at worst. At long last, D.C.’s minimum wage is set to rise to $11.50 per hour by 2016, up from $8.25. This is a victory for lower-, and middle-class workers around the district, but unfortunately, it will do little to help curb housing costs that have continued to rise. For a family of four to afford a two-bedroom apartment at the market-rate, they need to earn a whooping $27.15 per hour. For single-parent households, or those where only one can work, this may be an impossible proposition. The district cannot rely on minimum wage increases alone to mitigate this problem. Systemic changes must be made to the amount and quality of housing in the District.
Stagnant incomes have made soaring residential prices more expensive across the district in real terms, something made all the worse by the diminished market for affordable housing. According to this report, the percentage of low-cost units has been halved in a decade, from almost 50 percent in 2000 to “just 24 percent of total rental units in 2010,” a “decline of 51 percent” of low-cost apartments in general. Minimum wage increases may help to alleviate income stagnation, but housing remains untouched by such changes.
The poor are becoming poorer, while being simultaneously priced out of an ever-costlier market. In 2010, “the typical low-income rental household spent 69 percent of income on housing,” or more than double the 30 percent that the U.S. Department of Housing and Urban Development sets as the “standard measure of affordability.”
There have been several attempts at reform thus far. In 2008, the District implemented the Inclusionary Zoning Affordable Housing Program, which stipulates that new residential developments of at least 10 units, or renovations with a 50 percent increase in size, must now include 8 to 10 percent of units priced at low- or moderate- income rates. In accordance with these standards, to build its Square 75 development, GW has agreed to renovate three derelict townhouses on F Street. This will produce a total of 7,209 square feet of affordable housing for those earning 80% of average mean income (AMI), priced at a maximum of 35% of household income at that level. Citywide, the program has struggled, with the first unit not rented until July 2013. More IZ developments are expected, but Councilmember Kenyan McDuffie (D-Ward 5) proposes that the affordable unit threshold be set at 20-30%, a figure echoed in a 2012 report from the Coalition for Smarter Growth.
The Housing Production Trust Fund (HPTF), through which D.C. provides grants for affordable housing development, serves as the District’s main means of expanding residential options for lower-income people. In his “State of the District” speech, Mayor Gray pointed to a $187 million investment into the HPTF and the goal of building 10,000 affordable units by 2020 as examples of current reform efforts.
These investments could be further augmented as the Mayor, McDuffie, and Council Chair Mendelson have declared that 50 percent of future budget surpluses would be allocated to the HPTF. While financial details and mandated reserves may push this allotment back, at the very least, it shows the city’s commitment to affordable housing growth.
ONE DC, an community-based activist organization seeking to promote the needs of low-income and minority residents, argues that these changes are not enough. The current allotment would only fund 2 percent of the needed affordable units for people earning less than 30 percent of the District’s AMI. Empower DC, another important local group, has also worked extensively on mobilizing and informing residents of their housing rights to create collective change from within the community itself.
Overall, D.C. must make affordable housing a key part of any long-term plan for growth, through dependable, increased funding. While the investments in the HPTF are important, the program’s financial allotment is primarily based on deed recordation and transfer taxes, and can fluctuate based on economic circumstances. Funding must be made more secure to ensure that development will not simply bottom-out during downturns, when affordable housing is needed most.
The District must also focus on the maintenance and renovation of existing structures to prevent displacement and nurture existing communities. Vacant properties owned by the city should be considered primarily for affordable housing developments, before they can be auctioned to developers. Inclusionary Zoning and mixed-income developments should also be encouraged, especially as a means of developing neighborhoods with better socioeconomic integration, to help bridge the disparities in wealth and poverty that have come to characterize D.C.
Finally, home ownership should be made a priority through increased funding for the Home Purchase Assistance Program, especially as “the number of low-value homes has fallen by 72 percent” from 2000 to 2010. Helping D.C. residents to buy houses will aid in creating lasting, multigenerational communities and spur institutional development in neighborhoods across the city. This is key, according to the Coalition for Nonprofit Housing and Economic Development, which also points to the Local Rent Supplement Program and the Permanent Supportive Housing Program as vital means of assisting those with very low incomes and the chronically homeless. Several groups with varying incomes across the city need a stronger commitment to affordable housing, which illustrates exactly how widespread this issue has become.
The lack of affordable housing in D.C. is not a problem that will go away overnight. The District needs to focus on developing and preserving housing for low- and moderate-income residents to make lasting and worthwhile inroads toward bottom-up economic growth and an overall reduction in poverty. Snapping this city out of its perpetual winter will require bringing all of its residents out of the cold. Safe and secure housing is key to the success of communities, and D.C. must strive to provide for all of its citizens.
ZACH KOMES, CHAPTER POLICY DIRECTOR
This year’s 50th Anniversary of the War on Poverty has led to a national discussion on how to revamp public policy to better help the most vulnerable. Faced with a messaging crisis, a rise in suburban poverty, and polls showing wide concern among the American public about rising wealth inequality, Republicans have appeared ready this year to propose overhauls of education, tax, and regulatory systems in the name of boosting social mobility.
These recent developments have shown that the Right may be starting to again recognize that individual effort is not only what determines economic success—institutional forces, whether public or private, play an important role in determining one’s position on the economic ladder. And as such, government should be involved to help make sure that all have a chance at moving up.
But Rep. Paul Ryan (R-WI)’s recent comments have shown that the Party has not strayed away from their confining ideology—one that that blames worker initiative for systemic social problems:
“We have got this tailspin of culture in our inner cities, in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of hard work. So there’s a cultural problem that has to be dealt with.”
The racial undertones of this statement are clear, similar to the “welfare queen” narrative during the Reagan era and the “47%” comments of the 2012 election. As many commentators have rightly pointed out, the phrase “inner city” is often used as coded language to shield racist comments by “color-blind” whites about the black urban poor. The “cultural values” of poor rural Southern white men, who also suffer from widespread joblessness, are not questioned the same way as this different “class” of poor. The allegation that African Americans lack a strong work ethic consistent with national “American” values of personal responsibility has existed long before the Jim Crow era.
Just as striking is that Ryan’s comments ignore the many structural economic challenges that have been dramatically changing American cities for decades. While having only 7% of the total U.S. workforce, low-income urban neighborhoods have nearly one-quarter of American poverty. And while Ryan is right that there have often been generations of families without stable and well-paying jobs, the reasons for this massive structural unemployment are more complex than a lack of hard work by the poor. Larger political and economic shifts continue to affect employment in U.S. cities.
The Decline of Manufacturing
Globalization, technical progress, and offshoring since the 1970s have dramatically transformed once-thriving cities across the country. Cities are still copying with the effects of deindustrialization and the shift to a posindustrial economy, which left many communities without widespread sources of family-supporting jobs.
Between 1980 and 2009, the United States lost 7.1 million manufacturing jobs, more than 61% of which were originally in the metropolitan areas. In my hometown of Milwaukee, just to the north of Ryan’s District, the loss of anchor corporations like American Motors, A.O. Smith, Schlitz, and Pabst led to massive unemployment and declines in incomes, affecting the African American community the hardest. There has not been a resurgence of employment to replace the many jobs lost; only 44.7% of working-age men of color in Milwaukee were employed in 2010. This story is far too common in many urban communities across the country.
Suburbanization of Employment and Transit Barriers
With urban areas in distress, many who had the means to leave chose to. Those that couldn’t were force to stay. “White flight” to suburban areas intensified after jobs disappeared. Many Rust Belt cities saw their populations decline by nearly half, extracting tax revenue, home values, human capital, and further destabilizing these urban economies. Housing discrimination and financial barriers prevented many black families from moving out of poor neighborhoods.
With less wealth and growth in cities, many industries also left to the suburbs. Today, 72 percent of employment is located more than five miles from central urban business districts, creating “spatial mismatches” with many urban workers disconnected from suburban labor markets. With 10% of urban households without access to a vehicle, public transit is a necessity to connecting residents to these new jobs outside city limits. But current transit services are often inadequate, with only 17.3% of suburban jobs accessible by public transit in less than 90 minutes. Continued service cuts and fare increases, which have affected 79% of transit agencies since 2011, have severely hurt efforts to help urban workers find family-supporting employment.
Workforce Readiness and Education Challenges
As globalization increases competition between U.S. and international workers, pressure has been put on public education and workforce development systems to maintain American comparative advantage. These new challenges have not been met with the amount of investment needed to fit the need. In 2013, 39% of large American firms report having trouble filling positions because of not having enough qualified candidates.
Longtime unequal education funding disparities between poor urban and wealthy suburban areas, perpetuated by funding mechanisms based on local property taxes, continue to exist. 31% of all American students are heavily concentrated in 1.5% of urban schools which receive only 89% of the average national per pupil revenue. Higher class sizes, more frequent teacher turnover rates, fewer support services, less college readiness programs, and less funding for extracurricular activities are far too common in urban public schools. Because many poor breadwinners have multiple part-time jobs, there also tends to be less parental involvement in city schools, shown to have a strong correlation to student achievement.
The Great Recession hit urban education systems hard. Two-thirds of state governments are providing less per-student funding for K-12 education in 2014 than 2008. Federal funding for the Title I program, which targets high-poverty school districts, was cut by 12% in 2011. While increased funding is not the only solution to help our urban education systems perform against global rivals, public disinvestment from our schools is leaving urban workers behind.
Stop Blaming Economic Forces on the Poor
This is just a glimpse of the many systemic challenges facing American cities. Ryan’s position that blames the marginalized for their own poverty ignores far too many factors that have been preventing renewed prosperity in cities for decades.
If Republicans want to propose real solutions to modernize the War on Poverty, the first step will be to change their tendency to criticize, instead of empower, the vulnerable. Blaming individuals for systemic challenges is not only misguided, but removes policymakers’ responsibility to act. Democrats, too, need to evaluate federal programs with an open-mind and to start working with the other side of the aisle to help create family-supporting jobs in our neighborhoods. Solutions, not finger-pointing, are what is needed to help alleviate poverty in our challenged cities. Americans deserve better.
SHANNON QUINN, EDUCATION DIRECTOR
In his recent State of the Union Address, President Obama reaffirmed his commitment to expanding early childhood education, stating that, “Last year, I asked this Congress to help states make high-quality pre-K available to every 4-year-old. And as a parent as well as a president, I repeat that request tonight.” Some cities, such as New York City, have recently begun efforts in tackling the challenge of expanding and ultimately universalizing Pre-Kindergarten programs.
For years, research in early childhood education has shown that early exposure to education, especially among at-risk youth, reaps substantial benefit by both the individual and the community. However, implementing policy that capitalizes upon these benefits is the tricky part. Programs involving early childhood education that have sprung to life more often than not ignore research that is vital for successful implementation.
One of the most prominent long-term studies of the benefits of early childhood education, The HighScope Perry Preschool Project, surveys a group of individuals at various stages in their life through age 40. The annual study tracks participants placed in an early program versus a control group of individuals that were not. The findings from the study were significant. For example, the incidence of arrest in the Pre-K group was only 36% of participants, compared to the 55% of the non-program group. As shown in Figure 1, participants in the early education programs had higher IQs, were more likely to graduate from high school, and earned higher incomes as adults.
These studies show the strong promise of universal Pre-K programs. The problems lie within the existing traditional government-sponsored early education programs. Head Start and Early Head Start (EHS) both receive significant funding from the government to increase access of early education to low-income families; on January 17th, programs under the Head Start Act were allocated $8,598,095,000. This points to a continuous backing of a program that may not be living up to expectations.
Although there have been no long-term studies, like the Perry Project, done on Head Start, research on short-term effects show disappointing results. Figure 2 depicts the significant favorable impact on the child in differing areas of learning. The measurable impact that this program appears to have lasts barely longer than a year—in some cases, studied variables, such as spelling and oral comprehension, even fall short in the year that the child is enrolled in the program.
Studies have shown the inefficiencies of both Head Start and Early Head Start programs. Where the Perry Preschool Project used verified scientific methods in teaching young children, Head Start programs often lack structured implementation that produces positively-measured outcomes. Evidence shows that the curricula used in EHS programs has no significant impact on poor children in skills such as reading or math by the time they reach Kindergarten.
Many of these programs do not rely on stable, trained leadership and teachers, an essential factor in the success of previous Pre-K research projects. Despite this necessity, the lack coordination of funds, resources, and qualified teachers seriously inhibits the success of many Head Start programs. Although some modest short-term improvement has been seen, ample amount of evidence points to little impact in the long run. Despite these shortcomings, these programs are still propped up without any serious contemplation of improvements. This is troubling when coupled with the push of Head Start programs as one of the primary means expanding early childhood education.
If we are to change the state of our stagnant education in this country, we must look seriously at the outcome deficits of our existing funded programs with an eye towards strengthening them. A successful early education program will implement curricula that have been verified by research. Prioritizing the training and retaining strong teachers is key. Sweeping under the rug inefficiencies with the hopes that they’ll simply disappear will only keep a platform with much potential in the working stages. Constantly re-evaluating and critiquing the progress of education programs such as Head Start will allow new, innovative improvements to these programs critical to the success of our nation’s children.
Simply doling out money to programs that don’t have the highest impact possible will no longer cut it if we really want to make progress in education to get the projected returns on investment. Improvement should be made on coordination of allotted funds in order to more efficiently to reach the areas that are in most desperate need of early education intervention. New or stronger initiatives will be refreshing in an arena where the same ideas—ideas that don’t seem to quite be getting the job done—resurface again and again.
MIHIR KHUBCHANDANI, DEFENSE AND DIPLOMACY CENTER
When one typically thinks of insurance, it is seen as a costly investment, rarely seen as a program to help alleviate poverty in developing nations. However, this is exactly what microinsurance programs aim to do: offer accessible insurance with low monthly fees to help improve the lives of the poor. The potential benefits of widespread microinsurance programs are a good way of giving developing nations a bigger leg up.
Microinsurance, called a “barefoot hedge-fund” by Abhijit Bannerjee, works in a very similar way to traditional insurance. A customer purchases insurance and pays a premium on a monthly or periodic basis. The amount collected is stored in a “pool” by the insurance company, to be used when a customer makes a claim. The key difference in microinsurance is that the premium is much lower than in standard insurance policies.
For instance, the lowest premium charged by the South African microinsurance organization AllLife is just $15 per month, a New York Times article explains. Such microinsurance programs are able to reach those who would not be able to afford traditional insurance.
Microinsurance covers those who are generally seen as more vulnerable due to poorer living conditions and the high risk environment in which they live and work. The average customer targeted by microinsurance is a low-income farmer, who is able to produce just enough every week to provide food, shelter, and basic necessities. Droughts, plagues, or diseases can create shocks to farm yields, leading the farmer without enough income to support his or her family.
If a farmer were to have insurance, the reclaimable payment would be enough to sustain a family in the event of a short-term shock. Microinsurance helps smooth out the risks faced by these poor entrepreneurs.
As a result, microinsurance removes the cost attributed with a poor yield and allows the buyer to take more risks such as allowing subsistence farmers to send their children to school rather than having to work on the land or allowing those farmers to widen the variety of crops they grow and sell different products, potentially helping them earn higher profits.
This program extends beyond crop protection, also providing medical coverage to those in need. In developing nations where living conditions are poor, the typical low-income earner is not able to afford even basic medical care. In a similar way to traditional medical insurance, microinsurance programs allow patients to be reimbursed on some part of their healthcare expenses, enabling more people to obtain the professional medical services they need, rather than treating themselves in often inefficient or even dangerous manners.
Implementation of microinsurance programs can be spurred by subsidies and grants to insurance providers, either by domestic governments or by foreign aid from governments and non-profit agencies. Such grants will allow insurance providers to lower the premiums charged, and will also enable them to reach in to more remote areas, ensuring many more can benefit from these programs.
Still a relatively new concept, microinsurers are still looking to find the equilibrium between charging low premiums and accumulating sufficient funds to cover clients when needed. Further, a lack of financial literacy among typical microinsurance beneficiaries may also mean that customers will be slow to purchase coverage.
Microinsurance programs offer great potential in helping nations develop. They enable clients to take risks in crop production, provide healthcare at a basic level to those who often need it most, and have enough lifestyle flexibility to send their own children to school. Microinsurance requires relatively small effort and comes at a low cost, making it a highly sustainable means of meeting many development goals in the coming years.
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