By David Pendered
The longer Bill McGahan talked, the clearer became the connection between homelessness and affordable housing. And he didn’t even mention housing.
McGahan is founder and chairman of Georgia Works!, a program that helps homeless men clear their record, stop addiction, and get and keep a job.
“These are not just $8, $9 an hour jobs,” McGahan said at a meeting of the Northwest Community Alliance that focused on homelessness. “There’s demand in the job cycle for $8 to $20 an hour; $15 an hour in a warehouse. There’s a $50,000 a year job for a guy [from our program] who’s a truck driver.”
However, even a household income of $50,000, and scant down payment, won’t buy much in the way of housing, according to Paul Weech, speaking at “Underwater Atlanta,” a seminar on the ongoing foreclosure crisis hosted by Piece by Piece, an initiative of foreclosure advocates and providers.
Weech said affordable housing is the fourth of his six ideas to ease the impact of the foreclosure crisis. Weech is president/CEO of Neighborworks America, created and funded by Congress to support communities. Weech’s fourth idea is to:
- “Rebuild the path to sustainable homeownership for the low income. Credit remains tight because of uncertainty and structural reform.”
The two programs were unrelated and attracted different audiences.
But coming as they did, back to back on March 17 and March 18, their timing helped illuminate the depth of policy challenges as a growing proportion of Americans are slipping from the middle class into poverty. Many households are a paycheck away financial crisis if someone loses a job, a vehicle breaks down, or something such as an unexpected health expense arises. This is the scenario when foreclosure strikes.
“They’re trapped in a situation where if they see their income decrease, now they can’t afford their mortgage,” Spencer Cowan, vice president of Chicago-based Woodstock Institute, said at the “Underwater Atlanta” program. “What’s their strategy? They can’t downsize because their home is underwater. They exhaust their savings, retirement. They can’t relocate, because they’re underwater, so they can’t move to take a better job.”
In Georgia, the proportion of middle class households declined 4.8 percent, from 2000 to 2013. That decline occurred even as the income needed to be defined “middle class” dropped. The median income in Georgia plummeted by 18 percent during that period, falling more than $10,000, from $58,473 (inflation adjusted) to $47,829, according to a report released last week by Pew Charitable Trust. The trend was similar across the nation.
Meanwhile, the decline in housing values means many owners don’t have enough equity to borrow against to start or expand a business, or enroll in programs to improve skills that could lead to greater job opportunities.
Against this backdrop, much of the conversation around the foreclosure issue focuses on preventing foreclosure. Much of the conversation around homelessness focuses on getting people off the streets and into a stable environment from which they can find work and a home.
The two advocacy movements seem to have opportunities to combine their efforts. Each has access to federal funding, and resources to bridge the gap in order to help those fluttering on the periphery of homeownership. Homeownership is at its lowest rate in decades, at 63.5 percent, further threatening the stability of families, schools, and communities.
Atlanta City Council President Ceasar Mitchell compared the situation to a stocky soup. He spoke at the “Underwater Atlanta” program.
“It’s a negative soup with so many negative ingredients,” Mitchell said. “The soup has lack of access to capital, lack of job attainment, lack of education attainment, blight, foreclosure, code enforcement. All of that’s in the soup, and once it’s in the soup, you can’t pluck it out like a tomato from a salad. That means you need an integrated strategy. That’s where partnerships come into play.”