How Far We Have Come

I’ve been a student of history for the past ten years, in particular ancient history.  I love it!  Reading epics and myths, accounting and administrative texts, and contracts and lawsuits over 4000 years old is just plain interesting to me (I’m kind of a nerd that way).  I even got my master’s in it: Assyriology, the study of ancient Iraq.  Often times we point out that our society is far better than the ancients:  our government is more inclusive, our society more free, and, in the world of economics, our fiscal systems are more advanced.  One thing I’ve seen in the textual record from a few thousand years ago (specifically the Old Babylonian Period for those interested) is usurious loans, that is, loans made to individuals with a low income at extremely high interest rates that lead to loss of land and ultimately debt slavery.  It is interesting to note that these loans would be made with crops and housing, even family members, as collateral, that is, one would promise a percentage of the crop at harvest for a loan today.

It may seem strange, but payday loans have existed for thousands of years and were as destructive to ancient society as they are toward modern.  While we don’t have debt slavery, these loans, and other problems that go with being un- or underbanked can cost low income households a significant proportion of their income, ultimately keeping the household under the poverty level and making it difficult to raise themselves out of poverty.  As noted in a previous blog entry, children born and raised into poverty are more likely to remain in poverty than the rest of the population.

An unbanked individual is one who has no access to a bank account.  This accounts for 7.7 percent of U.S. households, approximately 9.9 million individuals.  These households do not have access to such basic financial products as a checking or savings account.  Under banked households accounted for 17.9 percent of U.S. households, made up of roughly 21 million individuals.  This term describes those who cannot get their basic needs met through a government backed financial institution.  “Specifically, underbanked households have used non-bank money orders, non-bank check-cashing services, payday loans, rent-to-own agreements, or pawn shops at least once or twice a year or refund anticipation loans at least once in the past five years.”[1]

What being un-banked or under-banked amounts to is an inability to access basic financial services.  This inability forces an individual to find other means for accessing pay; such as check cashing services, which usually require a fee.  One report noted that: “Check cashing fees vary widely across the country and between types of checks, but typically range from 1.5 percent to 3.5 percent of face value.”[2]  This same study noted that “A worker earning $12,000 a year would pay approximately $250 annually just to cash payroll checks at a check-cashing outlet, in addition to fees for money orders, wire transfers, bill payments, and other common transactions.”[3]

A further problem is pay day loans, that is, short term loans of small amounts, under $500, to low or moderate income workers who have bank accounts but lack credit, have poor credit, or have reached their credit limit.  These individuals, when in financial trouble, will make a short term loan at a very high interest rate, upwards to 400 percent APR for a typical two week loan.^[4]  These loans ensnare borrowers in a spending trap that forces them to take out additional payday loans or other expensive loans to pay off the initial sum and can lead to poor financial outcomes for the borrower, such as difficulty paying other bills, credit card default, loss of checking accounts, and bankruptcy.[5]  Fees spiral out of control for the borrower, a scenario which happens all too often.

These are problems that many at the shelter face.  There is no real outlet for them to save money or to put their money when they do work.  How do you make ends meet, find housing, feed yourself, and pay the bills, when to even access your wages you have to pay a fee?  Being unbanked is just one more thing that keeps our guests in the shelter and trapped in poverty.

And we at NLHHC have taken some steps.  One is that any guest who has an income must put 30 percent of their pay into a housing savings account.  This money is the guests, but can only be accessed by the guest for housing related expenses.  They can always request their money back, but they will be forced to leave the shelter for a time if they do.  This forces the guests to save some money for housing and has already increased the number of positive outcomes at the shelter.  But this does not answer the problem of being unbanked, nor of usurious practices.

All I have to say is it’s amazing how far we’ve come in the past 4000 years!

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[1] “FDIC National Survey of Unbanked and Underbanked Households” http://www.fdic.gov/householdsurvey/  Updated 5/3/2010, accessed November 29, 2010.

[2] Michael S. Barr, “Banking the Poor: Policies to Bring Low-Income Americans Into the Financial Mainstream” John M. Olin Center for Law & Economics Working Paper Series 48 (2004): 2,  http://www.frbsf.org/community/issues/assets/bankonsf/resources/banking_the_poor.pdf

[3] Ibid. 3.

[4] “Mainstream banks making payday loans: Regulators must put swift end to new trend,” Center for Responsible Lending Policy Brief (February 2010): 2.  http://www.responsiblelending.org/payday-lending/policy-legislation/regulators/mainstream-banks-making-payday-loans.pdf

[5] Ibid. 2.

The Changing Face of the Suburbs

I meet a lot of people who used to have pretty good lives and now live in the shelter.  Many were middle class, married, living in the suburbs, and doing just fine.  Yet they now live in the shelter!  There are many reasons for this:  One man I met experimented with drugs and eventually found himself addicted, in jail, and divorced.  Another has discovered a psychological impairment that has strained his marriage since his military days and he is now alone and in the shelter.  A third used to own his own business!  But many simply lost their job and could not find another for one month, then two, then a year or two.  These all have been trying to help themselves out of homelessness since they got here, indeed they tried to prevent the situation to begin with, and we do work with them to help.  They are all good people and all deserve a chance. 

There is a growing problem in the United States reflected in these individuals.  A recent report noted a dramatic increase in the number of persons living at poverty level in our nation’s suburbs:

By 2008, suburbs were home to the largest and fastest-growing poor population in the country. Between 2000 and 2008, suburbs in the country’s largest metro areas saw their poor population grow by 25 percent—almost five times faster than primary cities and well ahead of the growth seen in smaller metro areas and non-metropolitan communities. As a result, by 2008 large suburbs were home to 1.5 million more poor than their primary cities and housed almost one-third of the nation’s poor overall.^[1]

Jobs and employment was reported as a major factor in this spread of poverty stricken America.  Since the late 1990’s America’s jobs have shifted away from the urban core toward the suburban periphery of almost all metro areas.^[2] Among these jobs moving out of the core of our cities are lower income jobs as well as temporary positions, and people to go with them.  Both types are unsustainable and eventually lead to an increase in poverty.

Unfortunately, suburban safety nets have not been able to cope with this upswing; they rely on relatively fewer resources than do the safety nets in major cities yet service a much larger area with a more dispersed population:  “Thirty-four percent of nonprofits surveyed reported operating in more than one suburban county, and 60 percent offered services in more than one suburban municipality.” ^[3]­ Demand for services has increased across the country, and families who once provided for these services now find themselves relying on them.  Almost three fourths of service providers across the U.S. noted an increase in new clients, that is, people who had never used area services before, and more frequent use of services by those that were already in the system.[4]  This is while suburban nonprofits are contracting: “Almost half of suburban nonprofits surveyed (47 percent) reported a loss in a key revenue source last year, with more funding cuts anticipated in the year to come.”[5]

Poverty is spreading.  It is no longer just a problem for cities but has taken roots in our neighborhoods, even while safety nets are shrinking.  Those men mentioned above, and countless other men, women, and children, people who have lived in neighborhoods previously insulated from the issues of poverty now find themselves in dire straits and in need of our shelter.  In our annual report the executive director notes that many who have used our shelter over the year came with all their worldly items following an eviction.  These are people who used to live a stable life but now are on the streets.  

Poverty does not go away, either.  It follows people from generation to generation.  According to another survey, “being poor at birth is a strong predictor of future poverty status… Children who are born into poverty and spend multiple years living in poor families have worse adult outcomes than their counterparts in higher-income families.” ^[6]  This means that the children of the newly impoverished residents of our suburbs are more likely to make use area safety nets in the future.  They will not leave the area; the problem won’t just go away, just like it doesn’t go away in our cities. 

In a state like Connecticut, a state with such a dispersed population, these finding ring true:  People live in the woods behind the bank in Waterford.  Waterford is definitely not the city of New London: it is a more dispersed population with fewer safety nets than New London.  But Waterford is part of the New London metro area just as Stamford, CT is part of the New York metro area.  Nor would I really call New London a major metropolis like New York.  But there is a significant population here and in the surrounding municipalities that do live within the poverty threshold.  

Experience has taught our city that the poor won’t go away, we can’t just ignore them.  Dissolving social services only exacerbated the problem and forced the neighborhoods to provide shelter care and resources.  I can only say that we are lucky here that the faith and community based organizations got together to form the New London Homeless Hospitality Center.  We need the services provided by NLHHC and its sister shelter.  Those people listed above certainly did not expect to find themselves in the shelter.  I hear it over and over again: ‘I worked all my, I’m nearing retirement, I never thought I’d find myself here.” 

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[1] Elizabeth Kneebone and Emily Garr, “The Suburbanization of Poverty: Trends in Metropolitan America, 2000 to 2008”  Brookings Metropolitan Opportunity Series 2 (January 2010) :1.

[2] Ibid 14.

[3] Scott W. Allard and Benjamin Roth, “Strained Suburbs: The Social Service Challenges of Rising Suburban Poverty” in Brookings Metropolitan Opportunity Series 8 (October 2010): 1.

[4] Ibid 1.

[5] Ibid 1.

[6] Caroline Ratcliffe and Signe-Mary McKernan, “Childhood Poverty Persistence: Facts and Consequences” in The Urban Institute Brief 14 (June 2010): 1

A Day for Our Veterans

At the shelter on Tuesday I talked to a man who, as far as I could tell, the reasons he was in the shelter that night was a result of his military career years ago.  After serving our country, he married, had kids, and began what should have been a normal life.  But it was not a normal life, there were too many service related psychological injuries and now he no longer has a family to call upon but needs the shelter to live in.  He does have help from the VA and will be out of the shelter and in an inpatient treatment facility for veterans soon.  The shelter is his temporary abode and without it he would be on the streets and, quite possibly, drop out of VA case management.  As to my conversation with him at the shelter, he was just glad to have someone listen to him for a little while without judging him.

I am a veteran too, and proud of it.  I served in the Army Reserves for six years, was active for two of those years, and without the army I would not be where I am today.  For me the army was an opportunity: I was sent to the Defense Language Institute where I learned how to both cope with a learning difficulty and learn a language.  Today I read eight languages and have a Master’s Degree. 

For many of our veterans, like my friend at the shelter, military service has left more scars than benefits.  According to the National Coalition for Homeless Veterans (NCHV), “VA estimates that 107,000 veterans are homeless on any given night. Over the course of a year, approximately twice that many experience homelessness. Only eight percent of the general population can claim veteran status, but nearly one-fifth of the homeless population are veterans.”[1]  In addition, 1.5 million veterans are at risk of becoming homeless, according to the same source. 

Listening to NPR this morning a story declared that woman veterans are a growing homeless population:  often case workers don’t believe them when they declare problems related to their service.[2]  Further, according to the 2009 CHALENG report: “Although only four percent of all homeless Veterans treated in VA’s specialized homeless services are women, this proportion will likely increase as currently 15 percent of all US troops are women.”[3]  This means that there is currently a lag between the number of women veterans and supportive services for them, which in turn can lead to homelessness.

When we look at what services are needed, two pop out right away:  housing and employment.  The NCHV states this concerning the needs of our homeless veterans:

Homeless veterans need a coordinated effort that provides secure housing and nutritional meals; essential physical health care, substance abuse aftercare and mental health counseling; and personal development and empowerment. Veterans also need job assessment, training and placement assistance. NCHV strongly believes that all programs to assist homeless veterans must focus on helping veterans reach the point where they can obtain and sustain gainful employment. If not, clients will be unable to find and maintain safe, decent, permanent housing.[4]  

 The good news is that there are services out there for our veterans.  The post 9-11 GI Bill offers significant assistance in affordable higher education for anyone serving since 2001.  Job Corps has just launched a pilot program to train young veterans, ages 20 to 24 in over 100 fields, providing housing and a modest stipend for those enrolled.  And at Shaw’s Cove 6 there are VA reps who will work with our unemployed veterans.   For older veterans there is headway as well, over $ 42 billion has been set aside for new health concerns surrounding the use of Agent Orange.  This is in stark contrast to the years it took the VA to even recognize possible health concerns related to this agent.[5]

A current trend of the VA is to work with private, already established community based organizations to maximize their results.[6]  This is seen at the New London Homeless Hospitality Center as well:  Through a grant from the VA and fundraising on NLHHC’s part, a transitional veteran’s house has been added to New London that both houses up to eight homeless veterans for at most two years and offers extensive case management.  This allows us to give back to some of our nation’s citizens who have given so much for our country only to find themselves on the streets without support. 

The veteran's house has had an impact, and of late, we Volunteer Coordinators have been noticing a new opportunity for volunteers to assist our veterans even more:  As veterans leave HHC’s housing coordinator, they have to walk through our office, where volunteers are located to help people as they need.  Our office offers some support, through volunteers, in finding a job and services.  Volunteers help fill out job applications, can coach someone before a job interview, direct a guest to vital service, etc.  What has the potential of forming is a one stop shop for the veterans at the house, where they receive case management from the housing specialist as well as assistance from volunteers in finding a job, benefits, and a new life. 

This is not where a volunteer’s potential impact ends.  My friend at the Shelter on Tuesday night was already receiving case management: therapy, job assistance, etc.  His need was for a place to stay at night and someone to talk to, to listen to him, and to just be his friend in an atmosphere that can be unfriendly and confusing.  This too can be met by volunteers.  We have the structure and supports to make a difference.  All we need are volunteers and the lives of our veterans, who have made such a significant sacrifice of both their bodies and sanity, can be changed.

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[1] National Coalition for Homeless Veterans, “Background & Statistics,” http://www.nchv.org/background.cfm (accessed November 11, 2010).   This is according to the 2009 CHALENG report cited below.

[2] Susan Kaplan,  “No Place To Call Home For Many Female Veterans,”  NPR Morning Addition Air date November 11, 2010.

[3] “The Sixteenth Annual Progress Report: Community Homeless Assessment, Local education and Networking Group (CHALENG) for Veterans (FY 2009)” Services for Homeless Assessment and Coordination, Mar. 17, 2010, 35: http://www1.va.gov/HOMELESS/docs/chaleng/chaleng_sixteenth_annual_report.pdf, (Accessed November 11, 2010.

[4] National Coalition for Homeless Veterans, “Media Information,” http://www.nchv.org/media.cfm  (accessed November 11, 2010)

[5] cf. “Washington Wire,” VFW (November/December 2010): 12-13.

[6] National Coalition for Homeless Veterans, “Background & Statistics.” http://www.nchv.org/background.cfm (accessed November 11, 2010)

A Cold Fall Morning

I write this morning as a storm is wreaking havoc on Connecticut, sneaking in from the ocean to deliver a pounding:  Snow, sleet, and rain at varying degrees throughout the state!  Winter is fast approaching and we at NLHHC are doing our best to prepare.  We are at no freeze right now, meaning anyone can come in, as long as they are not violent or in serious breach of our rules and policies, and find a warm place to stay the night.  We’ve done our best to acquire enough blankets, especially with the bed-bug scare that is going around. A new staff member has been added to assist in the evening as more and more people seek refuge with us from the elements.

I read two articles this morning dealing with homeless in Connecticut (both of which I promptly posted on our Facebook page).  The first article I read was a story in the Hartford Courant dealing with a recent report on homelessness in Connecticut.  Two things popped out at me:  One, there were almost four thousand individuals in Connecticut staying in a shelter on any given evening over the past year.  This is slightly up from last year’s count and, sadly, does not include those who were unable to find refuge at a shelter.  This means that there were probably just under 4000 individuals who needed safety from the elements last night and were only able to find it at a shelter.  Moreover, there were others who woke up to the howling wind, sleet, rain, and snow, and found no safety! 

The second article I read concerned the price of housing in Connecticut. Two paragraphs struck me:

“The situation is direr for renters and the shortage of units acute. The "housing wage," what someone must earn per hour to afford a typical two-bedroom apartment at no more than one-third of their pay, grew to $23 per hour in 2010. Of the 683 occupations tracked by the state's Department of Labor, about half, 337, have an average wage lower than that.

 About one-quarter of state renters are making less than 50 percent of median income and spending more than half of that on housing, according to the National Low Income Housing Coalition. The National Alliance to End Homelessness estimated that as of 2008 more than 35,000 state households were doubled up to make ends meet.”[1]

 This article does a pretty good job of explaining why someone who works may not be able to find affordable housing and points to a reason why it is difficult to house someone who is homeless.  The housing specialist here knows all too well the difficulties posed in housing someone with a limited income.  As stated in the article, one often has to have a flat-mate in order to even afford an apartment. And, if that flat-mate loses a job, incurs unexpected expenses, or just plain flakes out, one may find him or herself homeless through no fault of their own.  This is a serious problem, one we deal with everyday!

Why is this important?  For one thing, as cold weather creeps in our space will become more and more taxed.  There are limits to our capacity, even if we make every effort to find additional space, someone may be turned away.  Every time we help someone find housing that is one more free bed at night at our shelter.  That means that one more person in dire straits on a cold winter’s night can come to our doors and find refuge.

But finding someone housing is only half the struggle!  If the housing is unsustainable, then those we house will find themselves back in our shelter.  The numbers show that you need to make around $23 an hour to securely rent your own apartment.  Minimum wage, $8.25 an hour, is less than half of this.  However, minimum wage is the only option readily accessible to many of our guests.  Please recall from an earlier post that 15% of single adults and 39% of adults in families were currently working.  Finding a job does not always get someone out of homelessness, a job may not even cover a month’s rent let alone a deposit!  Our goal is to help everyone out of homelessness, not temporarily but permanently.  And that can be tough. 

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[1] “Housing problem didn't burst with bubble,” TheDay.com, November 7, 2010, http://www.theday.com/article/20101107/OP01/311079908