John Petro
Homelessness in NYC: Addressing root causes
Today, the Times reported on New York City's practice of offering homeless families a one-way ticket out of town as an alternative to staying in the shelter system. A confluence of factors is pushing more and more families into shelters: rising rent burdens, stagnant wage growth, and rising unemployment. The Times article portrays the city's policy of providing travel expenses to homeless families as "a way of keeping them out of the expensive shelter system."
This policy is troubling because it represents how the city has failed to lift up the aspiring middle class, or to provide the type of environment that allows low-income families to gain a foothold and prosper. It seems that two factors, more than any others, are contributing to this failure: the increasing cost of housing and the lack of middle-class jobs.
A report from the Community Service Society gives an in-depth look at the housing rent burdens that low-income families face in New York City. Surprisingly, two-thirds of low-income families in the city do not receive any type of housing assistance and are completely at the mercy of the private housing market. And the private market has not been kind to these families.
Between 1996 and 2005, median contract rents in private, unsubsidized units rose by 50 percent (from $600 to $900), outpacing median renter incomes, which increased only 31 percent (from $29,000 to $38,000). The result is that, for many renters, relatively static household incomes have had to stretch further simply to meet rising rents.
The result is that after paying rent, poor families have $132 a month to spend on other necessities. This equals "less than $5 a day to cover each member's food, clothing, transportation, school supply, uncovered medical, and other necessary costs."
And that brings us to the second half of the homeless problem: employment and income. A report by the coalition organization One City One Future describes how wages have been falling for the majority of working New Yorkers. The report states: "The typical New Yorker has seen a pay cut of nearly 8 percent since the early 1990s." The reason is that good paying middle class jobs in manufacturing and industry are being lost and replaced by low-paying jobs in retail, hospitality, and health care.
These trends in housing and employment aren't completely the fault of city leadership, though the city could certainly be doing more to mitigate these factors. In a recent DMI report, I provide two examples of policies that other cities have enacted that could serve to do so. The first is changing the way the city makes economic development deals. Minneapolis stipulates that any city subsidy must create living wage jobs--a simple, straightforward, and effective policy. In addition, the city-controlled Economic Development Corporation and Industrial Development Agency should create a middle-class jobs strategy instead of focusing on high-income sectors such as finance and biotech.
The second policy is from San Francisco, which has implemented mandatory inclusionary zoning. Any new housing development over 5 units must include 15 percent affordable units. New York has used a voluntary inclusionary zoning policy that has been less successful. If New York had implemented a mandatory inclusionary zoning like San Francisco, about 5,800 more affordable units would have been produced in the city since 2005, all without any city subsidy. Additionally, the state could help preserve tens of thousands of affordable apartments every year by repealing vacancy decontrol.
In summary, the city's response to homelessness is as much about how to deal with families that are currently homeless as it does with preventing homelessness in the first place. By addressing the high cost of housing and finding ways to create good-paying jobs, the city could reap savings through reduced use of the homeless shelter system.
John Petro: Author Bio | Other Posts
Posted at 3:26 PM, Jul 29, 2009 in
Housing | Urban Affairs
Permalink | Email to Friend
