Stable Housing is The Single Best Way to Combat Poverty And Save Money

As part of a discussion about affordable housing, I wrote that poverty wasn’t aspirational. Like most things in life there are both simple and complex explanations.  In the US, a lot of poverty is explained by a systemic game of three-card Monty whereby minorities are kept at arm’s length from money through education and opportunity inequality.  Of course minorities are not alone in poverty, but they are disproportionately represented. But there are untold other reasons for poverty from the top-of-mind mental illness and substance abuse to more nuanced problems of isolation and hopelessness.

Just as poverty isn’t aspirational, poverty isn’t one thing.  Like most things in this world, poverty is a continuum ranging from homeless destitution to working 80-hour weeks and still living unsafe and hungry.

Why should a real estate blog care about affordable housing and poverty? Because poverty is the scourge of neighborhoods, not poor people.  Because I wrote about some areas in southern Dallas that contain wonderful housing stock and increasingly vibrant neighborhoods that many won’t consider.  Because Dallas was just presented with a Market Value Analysis to help them identify and spend appropriately on affordable housing.

Treating Symptoms Doesn’t Work

Many social experiments have been conducted by well-meaning organizations and governments to reduce homelessness (who said human experimentation was amoral?). Like bariatric surgery or America’s Biggest Loser, most don’t work for the simple reason that they don’t fix the underlying issue.  The re-fattening rates of the quickly thin tell of a “cure” that never solved the underlying issue.  It’s also a solution that harmed, as metabolisms continued to slow for years, making weight gain even easier than ever. This explains why in season eight, 13 of 14 America’s Biggest Loser contestants regained some weight and four, just under a third, weigh more than ever.

Homeless programs have similarities.  A large proportion of the chronically homeless have drug problems. Conventional programs made being clean a requirement for housing while missing the obvious fact that if they could get clean on the streets, many would have.  Ditto the mentally ill who need structure to stay on treatment programs.

Equally, unemployed homeless can’t get a job without certain infrastructure we take for granted.  Try getting and keeping a job when your day starts with packing up everything you own and wheeling it to your office. Try maintaining basic hygiene without washing machines, toothpaste, and shampoo. Some have the “luxury” of a car to store things but still lack many trappings needed for employment.

And once you’re homeless, getting out of it becomes harder as each day passes.

Homeless – Housing First

Begun in 1988 in Los Angeles to address family homelessness, Housing First has become the foundation for dealing with the underlying issues that resulted in homelessness.  Many are confused about what Housing First means. It’s a program for mitigating homelessness. It is not a program for people who are already in housing.

The program is also about long-term goals.  It doesn’t just chuck a homeless person in an apartment and walk away.  The program requires heavy case management, wellness visits, and skills training to address problems and prepare people to re-enter society. While in the program, participants aren’t able to fall into squalor.

The results have been dramatic. From 2005-2007 The US Department of Housing and Urban Development reported a 30 percent decrease in chronic homelessness, in part because of Housing First initiatives. Utah reported a 72 percent decrease in homelessness and an expectation to eliminate chronic homelessness. Utah reported that 10 percent of program residents return to normal living conditions each year.

But for those who cheered when Bruce Hornsby sang,

“The man in the silk suit hurries by
As he catches the poor old lady’s eyes
Just for fun he says, ‘Get a job’”

The results of Housing First aren’t just for the homeless.  According to research in Utah and New York City, each person in their Housing First programs saves the taxpayer $8,000 and $10,000 per year.  A single program in North Carolina reported saving $2.4 million a year in county costs.  How can that be? Homeless people are a burden to the system by way of increased medical expenses, policing, and jailing. Having a stable, indoor place to live dramatically reduces public expenditures. Homelessness costs taxpayers more than the solution, and that’s not counting the benefit of turning homeless people into tax-paying consumers. One think tank estimated that the cost to eliminate homelessness is less than what the US spends in one year on Christmas decorations and flowers, or about $20 billion.

Can Housing First be screwed up?  Sure, ask San Francisco, which spends tons and gets little benefit because of a lack of caseworkers and terrible housing the homeless won’t stay in.

Low-Income Programs

Housing First is great for addressing homelessness, but what about the just plain poor?  In 2013, Texas shelled out $23 billion in assistance to the poor and homeless. Nearly two-thirds of that went to the working poor.

There’s an old rubric about poor people being lazy because the stellar benefits made working pointless. These are people who haven’t experienced a day of true poverty.

SNAP (Supplemental Nutrition Assistance Program), better known as food stamps, is available to those making less than 130 percent of the federal poverty level.  For a family of four that’s $24,600 or a maximum income of $31,900 to qualify. That’s two full-time workers earning minimum wage … oh, and you can’t have more than $3,150 in assets. Half of participants have children under 17 and just over half have a single wage-earner. As poor as recipients are, the average benefit is just $30 per person per week. Texas has roughly 1 million working families in SNAP.

Texas chose not to expand Medicaid in concert with the Affordable Care Act. That in part, explains why Texas has the highest rate and whole number of uninsured citizens in the US. The above headline speaks for itself.

Real Life Example

Next let’s look at a college-educated friend of mine who had an eye disease that slowly blinded her making her unable to work. She qualified for Social Security Disability and Section 8 housing.  Many would faint at having such a person as their neighbor (which explains why Dallas has over 1,000 affordable housing vouchers no landlord will take).

Here’s the thing with Social Security — it pays based on what you pay in.  My friend never made a ton of money as an office manager and seamstress, so her benefits were a few hundred per month. And while Section 8 paid most of her rent, it didn’t pay all. She was expected to cover the rest from her Social Security benefits.  An almost impossible undertaking. I never saw her go food shopping without a calculator, every penny and morsel had to be accounted for.

Here’s the rub.  Were she to have found some type of work – even taking in mending – it would have diminished her benefits and may have knocked her out of Section 8.  Remember, she was going blind, so whatever job she’d be getting would be low-wage and likely not permanent as her sight deteriorated.

In that situation, who’d look for work that would make them poorer and potentially homeless? If she left Section 8, getting back on would take years with no guarantee.

Also, some believe Section 8 housing and tenants are filthy or dishonest, and some probably are.  My friend went through a rigorous annual inspection to ensure she’d not fallen into squalor, augmented her income or rented a room out.  When I bought her things like a new radio or tape player (to listen to books), or when blindness charities supplied various aids, they had to be accounted for.

But Section 8 was also there to inspect the apartment to make sure the landlord was keeping up his end of the deal.  If Section 8 required something to be fixed, they stopped paying if it wasn’t.  That protects tenants from being taken advantage of.

Homeowners More Isolated

If you own a home and fall into poverty (large medical bills, chronic unemployment, etc.), you’re on your own, housing-wise.  The city doesn’t inspect privately owned homes to ensure they’re being maintained. For those cash poor with a home, food or property taxes come before Windex.  Sure there are community outreach services available if you know about them or want them.  Many are too proud to ask for help.

Age and isolation make it very easy for anyone, not just the poor to fall between the cracks. Heck, I’ve lived alone for most of my life. Were I to suddenly die, the smell would alert my neighbors long before I was missed, and I’m far from socially isolated or poor.

In the end, the only people who think vast numbers of the poor are scamming the system or living the life of Riley have no clue.  As the City of Dallas contemplates the data supplied by the Market Value Analysis, I hope they keep this in mind.

 

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement.  If you’re interested in hosting a Candysdirt.com Staff Meeting event, I’m your guy. In 2016 and 2017, the National Association of Real Estate Editors has recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email [email protected].