Long Lines and Dashed Hopes: The Need for Increased Housing Assistance

News about high rent and cuts to housing programs keep grabbing my attention. Three of weeks ago, NPR took a look at the personal toll sequestration is taking on people struggling to secure affordable housing. Sequester Puts Some Needing Housing Aid ‘Back To Square One’ tells the story of two people who waited years to receive their housing voucher, only to have them rescinded due to budget cuts.

One young woman spent seven years on the waitlist for assistance. While she waited, she lost her job, and then her housing.  Word eventually came that she was approved for a voucher, but before she was able to secure housing it was revoked due to budget cuts. A Virginia man waited ten years for a voucher. He was finally scheduled for an interview with the housing authority, but it too was canceled due budget concerns. He continues to live on the street.

These dashed hopes are an outcome of sequestration, but the long wait times are part of a bigger problem. As mentioned in another NPR story, recent cuts came on top of a 25% cut to voucher programs in January of 2012.

Both NPR reports, and other sources, have supplied details on how housing authorities around the country are dealing with the loss of funding.

• In Connecticut, the city of Hartford rescinded 88 newly issued vouchers.
• Fort Worth, Texas rescinded 99 vouchers for families who had not yet signed a lease.
• In Minnesota, 160 vouchers were put on hold.

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New Paper Sheds Light on Payday Loans

A new study by the Consumer Financial Protection Bureau (CFPB) should catch the attention of anyone advocating for stronger regulation of the payday loan industry and deposit advances.  Initial findings were recently released under the title Payday Loans and Deposit Advance Products.  According to CFED, it is one of the most comprehensive studies conducted on the subject so far, as it included data on millions of borrowers.  As stated by CFPB Director Richard Cordray, the study shows common industry practices put consumers at long-term financial risk and often serve as “debt traps” instead of a simple short-term, emergency loan.  The individual who borrows the money may find it necessary to take out another loan to pay off the first, and it creates a cycle of indebtedness.

Today’s blog post will concentrate on the payday lending portion of the report.  As the name suggests, payday loans are often due by the borrower’s next pay period.  These loans exploit a considerable number of low-income borrowers who lack the cash flow to quickly dig themselves out of short-term loan as the extra fees quickly accumulate.  The average annual income for a borrower was found to be $26,167, but a quarter of borrowers report an annual income of $14,172 or lower.  Three quarters of those borrowing money were employed full- or part-time, and the rest had fixed incomes due to retirement, disability or other assistance.

Borrowers are often repeat customers,

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Can Past Debt Become an Obstacle to Future Income?

According to a recent study by Demos, three important factors are linked with a poor credit report: unemployment, lack of health coverage and medical debt.  Needless to say, the recent recession created an environment where a good credit report was a likely casualty, as many families struggled with job loss.  Ironically, one of the barriers unemployed job applicants may face as they search for a good job, with a living wage, is the credit report that took such a hit during their period of unemployment.

As the Demos report explains, federal law requires employers to have written permission before requesting an applicant’s credit report.  The catch is, employers can refuse to hire employees who refuse to give permission.  And although federal law also requires employers to disclose when credit information is the basis for denying someone a job, the denial of employment for this reason is legal in most cases.

During the Great Recession, many uninsured, unemployed Americans saw debt accumulate due to health issues or other emergencies beyond their control.  This record of unpaid debt now sits on their credit reports and is part of what potential employers may see as they make hiring decisions.  For some quick perspective on the number of people potentially impacted by this issue,  consider that:

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Rental Housing, Sequestration and Oklahomans

A couple of weeks ago I posted about the lack of affordable rental housing for families with low-income.  In essence, there is no state in the country where fair market rent is affordable for a single worker at minimum wage.  A partial solution to this crisis is provided by federal housing assistance, through vouchers or public housing.  However there are often waiting lists for these programs, as the demand outpaces the availability of funds.

Now, a recently released paper, authored by Douglas Rice of the Center on Budget and Policy Priorities (CBPP), lays out what sequestration cuts will mean for families who are either currently receiving housing assistance or on the waitlist.  The extremely short version is that state and federal agencies will probably have to cut assistance to about 140,000 families by early 2014 – and that just represents funding cuts for Housing Choice Vouchers, sometimes referred to as Section 8 Vouchers. The chart below gives a more detailed look at the cuts to vouchers, public housing, homeless assistance and other housing programs.

In Oklahoma, some of the pressure is already being felt by the agencies that receive and distribute federal housing assistance.  The Muskogee Phoenix reported in March that the Muskogee Housing Authority is expecting a $153,000 decrease in funds for Section 8 vouchers and an additional $167,000 decrease in funds for public housing programs.  While the housing authority has

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Thoughts on “A Place at the Table,” Part One

A couple of weeks ago, in my previous post, I promised to write about the Tulsa premier of A Place at the Table and the discussion that followed.  It’s impossible to sum up every issue brought up by the film.  It is equally impossible to write a single post about the film and the discussion that followed; too many important topics to cover.  So this will be a two-part report highlighting some of the issues that I found particularly relevant.  For this first installment, I want to talk about the film itself, with the understanding this in no way represents the entire list of issues raised by the documentary.   

A Place at the Table draws its power from the personal stories of people struggling to afford healthy food.  Experts on nutrition and hunger push the message further by explaining the negative effects long-term food insecurity has on a person’s health, education and potential. After watching this documentary, it is impossible to avoid the conclusion that this problem is bigger than any one charity can tackle; it is bigger than the current funding of our social safety net can address. These are just three of the reasons why:

• The rate and requirements of SNAP benefits are out of sync with the cost of living.  As the film tracks the story of Barbie, a single mother in Philadelphia, this fact becomes clear. Barbie loses her SNAP benefits entirely when she begins to earn more money, but despite a slightly higher paycheck her overall financial situation has not improved. Her children are still eating canned noodles instead of a balanced diet and their mental and physical development will be impacted as a consequence.
• The school lunch program, launched under the Truman administration, was a great idea but is currently underfunded.  The film points out that less than a dollar a day per child is actually spent on food for lunches, and then demonstrates how it is impossible to make a quality meal that meets dietary needs on that budget.

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Tax Credits That Help Families Advance

Life seems to be measured in Seasons. The Holiday and Football Seasons are behind us; the Tax Season and Baseball Season are now upon us. (Pitchers and catchers officially began reporting on Feb. 11^th.)   But until the taxes are filed and regular season games begin, Tax Season takes precedence even over baseball in the minds of most Americans.  While the season may be met with anticipation by some and dread by others, for many low and moderate income families and policymakers, there is relief at the recent extension of some key tax provisions.  As the Center on Budget and Policy Priorities (CBPP) blogged about, Congress recently extended some important components of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) through 2017.

To understand why these extensions are important we need to understand what makes them examples of good policy.  The EITC and the CTC are appealing to many policymakers because they encourage work and strengthen a family’s finances.  These credits encourage employment because individuals must report earned income to be eligible for the credits. They also give workers an incentive to achieve higher wages because the more an individual earns the larger their credit will be, until it begins to phase out at higher income levels.  Another key advantage to low-income families is that the tax credits are refundable, meaning that if the credit exceeds the amount of taxes owed by a low-wage worker, the IRS will still refund all or part of the balance.  Unfortunately, many Americans are unaware of the EITC.  Estimates show that one out of five eligible taxpayers failed to take advantage of it in 2011 alone.  It’s like hitting a home run, and failing to tag all the bases; many families earned the tax credit, but never took the necessary steps to receive the benefit.

Now we turn to the importance of these extensions in the lives of American families.  The EITC, which lifted an estimated 3 million children out of poverty in 2011, had two important elements added in the 2009 Recovery Act.

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When You Can’t Afford the Flu

The flu is here. It is not only all over the news; it is all over the country.  Oklahoma was hit hard last week, with the rate of flu related hospitalizations up, and the number of flu related deaths climbing.  Experts are advising those who have not already received a flu shot to get one now.  Simply put, the shot not only protects people who are vaccinated but everyone around them.  Avoiding the flu is serious business, too, because in addition to the miserable experience, many Americans simply can’t afford to take the time off to be sick.

In addition to the flu shot, health experts advocate other effective ways to avoid spreading the flu, including: frequently washing your hands; covering your mouth when you cough; and most importantly, staying home when you have the flu.  It is the last one that poses a significant problem for low income families.  According to a 2010 report from the U.S. Bureau of Labor Statistics, only 33% of private sector workers within the lowest 25% of wage earners had the benefit of paid sick leave.  Compare this to 81% of private sector workers with access to paid sick leave among the highest 25% of wage earners, and the disparity is quite drastic.  The segment of the workforce who can least afford to miss a day’s wages is also the one least likely to have access to paid sick days.

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Child Care Costs as Compared to College Tuition

Average yearly tuition at a public university in this country is around $8,244.  For that money, we expect college students to receive a quality education, preparing them for their next stage in life.  So what return do we expect for the cost of child care, which nationwide can range from $4,600 to $20,000 for infants and $3,900 to $15,450 for a four-year old?

In Oklahoma, average in-state tuition is around $6,059 a year. When we contrast this information with the average cost of care for infants and four-year olds in Oklahoma, which is $7,288 and $5,397 respectively, it becomes clear many parents are investing as much or more in child care as they would in college tuition.  In a perfect world, we would expect to get a comparable level of return in quality of child care as we do with higher education, that is, children who are better prepared for the next stage in their life.  However, the truth is, for many families, even non-quality child care is unaffordable.

This is one of the issues brought to light in Child Care Aware for America’s recent report, Parents and the High Cost of Child Care. 

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Tracking Intergenerational Poverty

In Utah, conservative state Senator Stuart C. Reid sponsored the Intergenerational Poverty Mitigation Act.  The bill requires the state to build and maintain a system to track  intergenerational poverty in the state.  The bill received bipartisan support in the state’s legislature and from advocacy groups across the state.  No matter your political persuasion or your feelings on government spending, you have to concede that we need more data to support both decision-making and policy making surrounding poverty and the programs designed to mitigate its effects. 

As a data person and public administration nerd, I am interested to see how everything shakes out when the bill is implemented.  Someone remind me to come back to this in 6 months or a year!

For more discussion on the bill check out Jodie Levin-Epstein’s, Deputy Direct of CLASP, article “Painting a Picture of Poverty in Utah: By the Numbers” on Huffington Post. 

For the full text of the bill, click here.

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Data and Neighborhood Revitalization

I haven’t had the time to read all 118(!) pages of this report, but I wanted to share it before it gets swallowed by the paper monster that is my desk right now.  The Board of Governors of the Federal Reserve System published Putting Data to Work: Data-Driven Approaches to Strengthening Neighborhoods. 

The report looks at how communities are building and using data systems to target resources.  Individual sections are written by authors from The Urban Institute, LISC, Brookings, The Reinvestment Fund, and other organizations.  The report is part of a broader effort from the Federal Reserve, Urban Institute, The Reinvestment Fund, and LISC to “help communities develop the infrastructure and data sources they need to make strategic policy decisions with respect to neighborhood stabilization.”

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