Tracking HALA: Use Vouchers to Help House People with Criminal Records

We’ve started a tracking program to keep an eye on progress on the 65 recommendations of the Mayor’s Housing Affordability and Livability Agenda (HALA) Committee. There are a lot of good ideas and good intentions in the document that aren’t being discussed now because so much of the discussion is about the Grand Bargain, just 1 of the recommendations and perhaps the most problematic. We’re hoping that by pointing out the other elements of HALA we can help draw a distinction between the two (HALA recommendations and the Bargain) and get more support and implementation of some of the good ideas in HALA. Here’s two under the “Increase Tenant Supports” section:

T.1 Increase Access to Housing for People with Criminal Records

An estimated one in every three to four adults in the US has a criminal record which can have a lifelong impact on access to housing. Persons with a criminal record, who are disproportionately lower income and people of color, need fair access to suitable housing options. Studies show that people with stable housing are more likely to successfully reintegrate into society and less likely to reoffend. The City should pursue a combination of local legislation, education, and technical assistance to ensure fair access to Seattle’s housing options for people with criminal records. Any legislation should provide fair access to people with criminal records yet protect property owner’s rights and interests.

T.7 Explore Solutions to Housing for People Exiting Incarceration Most people sentenced to prison in Washington state are required to provide a reasonable and safe release plan that identifies where they will live. Some find that after paying their debt to society, they do not have any release options due to a lack of family or community support, a lack of suitable housing options, or simply a lack of funds to pay for housing. The City should convene stakeholders to explore housing solutions for people leaving incarceration and re-integrating into the community, including incentives for private market housing and additional resources for publicly funded housing.

I wrote about the problem identified in T.7 back in 2014. According to the Department of Corrections:

Most offenders sentenced to prison in Washington State are required to provide a reasonable and safe release plan, including a residential address, to the Department of Corrections, which must be investigated and approved before the offender can be released. Some offenders find themselves without release options due to a lack of family or community support, lack of suitable housing options or simply lack of funds to pay for housing. Offenders in this circumstance remain in custody at an average cost of $3,000⁄month until a release plan is approved, which can take months or, in some cases, years.

But there is a voucher program called the Earned Release Housing Voucher Program that covers the costs of housing for released prisoners for three months. The program has been studied and that study, by Zachary Hamilton, Alex Kigerl & Zachary Hays and published in an article titled, Removing Release Impediments and Reducing Correctional Costs: Evaluation of Washington State’s Housing Voucher Program (Justice Quarterly) found that the program saves money, prevents return visits to prison, and reduces homelessness.

I’ll quote that study again:

The total weighted costs of rent expenses paid out to voucher recipients and administrative and supervision costs of the program for the duration of the study were $2,198,254.80. However, paying such expenses was associated with lower initial incarceration costs via earlier release to the community, amounting to $2,640,875.53 for the [Housing Voucher Program] HVP group and $9,218,643.44 for the comparison group (difference of $6,577,587.91). In addition, recidivism costs were also lower amongst the voucher sample, resulting in $21,296,793.00 worth of new crimes for the HVP group, and $30,248,975.28 worth of new crimes for the comparison group (difference of $8,952,182.28). The amount spent on the voucher program relative to the sum of the two cost differences (early release and recidivism) equates to a cost benefit ratio of 1:7.06, where every dollar invested in paying for an offender’s voucher expenses saved over 7 dollars in other costs through HVP (emphasis is mine).

Here’s another great idea buried in the pages of the HALA recommendations that the City should embrace. And imagine pairing this with Social Impact Bonds (SIB) that I wrote about yesterday. Perhaps private investors could be lined up to take a look at local impact measures in Seattle associated with people coming into the community from jail and expand the voucher program. If there are savings, as the study shows there are, the investors could be paid back from those savings. Perhaps this investment could be a longer extension of the vouchers to 6 or even 9 months while released prisoners build up their savings, get work experience, or perhaps start a training program.

In some ways, this would be among the easier of the recommendations to implement since the EVP program already exists; the City would just have to include an expansion in its plans for Levy funding or other funding proposals. Putting it together with the SIB idea would take more work, but as I’ve said before, Seattle can and should be the city where people can know they can succeed even if they have a record. But we’d have to shift our attention away from all the work being done on Mandatory Inclusionary Zoning — a program that probably won’t work.

 

Stop! That Car Might Be Someone’s Home: Please Amend Scofflaw Ordinance

I just sent this e-mail at the request of Bill Kirlin-Hackett. This is a problem I have seen in my own neighborhood and I think needs to be addressed. I don’t think it is a huge problem, and I think a small investment of time and money would just about solve it. You should send an e-mail too.

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Dear Mayor Murray and Councilmembers,

In 2011 the Seattle City Council passed the Scofflaw Ordinance that seeks to get parking fines paid. It includes booting a vehicle that has 4 or more outstanding tickets to require payment. The problem with the ordinance is it makes no accommodation for persons living in vehicles. Parking Enforcement Officers are not doing the work required to identify this situation and offer resources and help to the residents of the vehicle. When the vehicle gets towed away, the people lose their house and end up on the streets, less safe, and more vulnerable. 

 

Tracking HALA: Ending Homelessness with Social Impact Bonds

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We’re starting a project that tracks all 65 recommendations of the Mayor’s Housing Affordabilty and Livabilty Agenda (HALA) Committee. As I’ve mentioned (and been derided for) the HALA document has gone from a pile of wonky idea and policies to a slogan being used to push Mandatory Inclusionary Zoning (MIZ). So far, the only recommendation getting a big push. But hopefully by taking a deeper look at the actual recommendations will help remind people what HALA actually is; a bunch of recommendations, not a housing panacea waiting for a vote by the City Council. And there are ideas we should look at like Social Investment Bonds (SIB):

In the weedy parts of the HALA document is a recommensation R.10 to

Explore a Social Impact Investing Model for Housing in Seattle The City should use the opportunities of significant regional growth in private venture capital activities to convene stakeholders to explore local opportunities for Social Investments in housing. This can include the use of social impact investments and social impact bonds. Social Impact Bonds use private investments to implement or expand prevention and early intervention social programs. Private investors can earn a financial return if programs achieve desired goals, as demonstrated by third party evaluators, and potentially reduce future government expenses for the target populations. Other jurisdictions have explored or piloted Social Impact Bond models that address various issues, including chronic homelessness, homeless children and jail recidivism. Social Impact Investments are usually loans provided by social investors to nonprofit organizations. Unlike grants and donations, these are loans which organizations repay and use to create real social impact. They can be used for a host of purposes, including capital investments.

This is a very compelling idea nobody is talking about — and they should be. Private investment goes into housing homeless people, and if there are savings to the City from providing less services, the investors are paid back with the savings. One project, like Downtown Emergecy Service Center’s (DESC) 1811 Project comes to mind. The agency housed people who previously were homeless and drinking enough to wind up in the Emergency Room many nights of the year. Housing these people meant savings to the County. How much money saved? From my blog post from 2009 cited above:

In total, participant costs fell from $8 million per year in the old way of doing business to about $4 million per year during the study period. In other words, the program reduced taxpayer expenses by about half.

Seattle could try this approach for building housing on City owned land, something that has been resisted because of worries about using the City’s credit. A SIB program would make that argument moot.

Have these kind of investment models been tried? London has a program to use this investment strategy to help house 800 people who were sleeping outside find steady housing solutions.

The 800 people have extra needs – perhaps mental health issues or family problems – that require intensive, time-consuming support from frontline workers, which is what the investment will pay for.

Investors are putting up the money to pay for the scheme’s running costs. The Greater London authority will reimburse investors according to the results – paying out once a homeless person can be shown to have remained in a stable tenancy for more than 12 months, and once there is evidence that he or she is proving to be less of a burden on the NHS.

 Is it working? A report on the project is mixed and it’s probably best described as “too soon to tell.” But initially

Both providers [getting SIB proceeds] have exceeded their targets, continuing the performance of the first year. At that time, the outcomes related to entry to accommodation only. At the time of this report, there are outcomes relating to sustainment and these too have (almost all) been exceeded.

 The SIB concept actually expands resources and rewards success with private resources rather than raising the price of all housing to fund a few hundred rent restricted units. Now if we could just someone at the City to work on this rather than inflationary mandates that might trigger law suits.

Here We Go Again: Commercial Rent Control Still On the Table

A proposal for commercial rent control is back! Bad ideas seem to thrive in Seattle. Or I should say, old ideas. Don’t like the price of something? Freeze it in place. Don’t try to understand or address the underlying issues about why prices are going up or even ask, “Are they going up that fast?” And don’t bother to have a measure of what ‘affordability’ even is; just pick an arbitrary percentage of gross income and set a ratio to the price of rent. How about 30 percent! Done!

As I have already pointed out, the reason why smaller, incubator spaces for artists and small business are scarce is because we’re not incentivizing them or even allowing them in low-rise zones. We also have a code that mandates certain kinds of commercial spaces in new development. If you don’t like the new Walgreens on the corner and would rather have a warren of smaller performance spaces, look at the land use code, not for a regime of price controls that will certainly wipe out smaller spaces by disincentiving their creation and maintenance.

I won’t go over all the reasons rent control is an idea that should remain mothballed. But I did send a letter to the City official who is running the process around the Mayor’s Commercial Affordability Advisory Committee. I suggest that the City revisit rules and regulation that promote larger spaces and limit the value of creating smaller spaces. They can start with reversing their decision to disallow ground floor commercial spaces in some low-rise zones.

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April 15, 2016

Dear Mr. Surratt,

We are concerned that the Mayor’s Commercial Affordability Advisory Committee will be considering some form of rent control on commercial spaces. We are unequivically opposed to rent and price control in all its forms; rent control reduces supply, disincentivizes new investment and is, overall, an inflationary policy and thus antithecital to the Mayor’s goals.

Here are some important things to consider.

First, rent control is not legal in Washington State, and while there is some reason to believe that the law is less clear on commercial spaces, we think it makes no sense to launch a policy intervention that will certainly face legal challenges. Why not look at what is already available to the City to address concerns.

Second, it appears the City has no data on commercial real estate prices and how to develop a normative standard for what is “affordable.” Remember, affordability is a qualitative measure. Everything is affordable to somebody, somewhere. The question is how can the City avoid the mistakes of its housing work and find data that is current and reflects the realities of doing business in a variety of settings in a complex business economy.

Third, I sat on the Mayor McGinn’s Regulatory Reform Committee that recommended allowing commercial space in the Low Rise Zones. Please put this on the table for reconsideration. The Council rejected this on a close vote and at the behest of residential neighbors. What causes higher prices and larger spaces is scarcity of space and not enough space in smaller buildings, like the ones that proliferate in neighborhoods like Ballard and Capitol Hill and West Seattle.

Lastly, and most importantly, people renting space in Seattle are mostly small and medium sized family businesses. Slapping curbs on rents will add one more disincentive to their business, discourage expansion and development of new spaces for artists, innovators, and small businesses.

Rent control is not the answer. Instead, dig deep to find smart approaches to gathering data, look at innovative approaches to lowering regulatory barriers, and allow more flexibility in the land use code.

Thank you for your consideration.

Sincerely,

 

Roger Valdez

Director

It Might Be Time for Guaranteed Income for Seattle’s Poorest

Imagine if poor people living in Seattle were guaranteed a minimum level of income for housing costs. I don’t like the standard typically used to establish the normative standard for housing costs—30 percent of gross monthly income discounted by some percentage of Area Median Income—but let’s start with that. In my thought experiment everyone earning 30 percent of area median income, or $19,000 would be assured of at least $475 a month for housing.

AMI	30 %	40 %	50 %	60 %	65 %	80 %
Annual Income	$19,000	$25,320	$31,650	$41,145	$41,145	$48,550
Standard Rent	$475	$633	$791	$1,029	$1,029	$1,214

According to a recent presentation hosted by Councilmember Lisa Herbold, there are 36,000 households fitting in this income band. It’s time for Seattle to consider a property tax for guaranteed housing income for people in our city who are poor.

You may think I have lost my mind. But stick with me for a minute. First of all, I have never ever said that the market would “sort out” the housing problems faced by the truly poor. On the contrary, I have always said,  as I did earlier this week, that increasing the supply of market rate housing will have to include some subsidies for people who earn very little money.

One idea I have always liked is the idea of a negative income tax—an idea with support from a hero of mine, Milton Freidman. Friedman is hardly a socialist, but he liked the idea of a guaranteed income from a reverse tax because it put more cash in the hands of poor people without any strings. And most importantly he said,

The proposal for a negative income tax is a proposal to help poor people by giving them money, which is what they need, rather than as now, by requiring them to come before a government official to tally all their assets and liabilities and be told that you may spend X dollars on rent, Y dollars on food, etc.

I like the idea that instead of laundering taxes and fees generated by private enterprise and development through a government housing bureaucracy, a guaranteed housing income would simply give poor people more income, and if they use that income for housing it would free up other money for other important things. This would mean less money spent on City process, rules, fees, penalties, and staff and more money in the hands of real poor people.

As I said early this week, data is being presented to show a housing problem when what it really reveals is a poverty problem – people earning $19,000 a year simply don’t have very much money. A guaranteed housing income would mean more money for families that need it and more choice about where they live and how they manage their expenses.

How would this program work?

My best math (and remember I am a philosophy major) shows 36,000 households getting $475 per month toward a basic, guaranteed housing income would be $205,200,000 per year. If we spread that across all property value in Seattle, about $117,000,000,000 through a tax, it would break down to about $1.75 per $1,000 of property value. So a single-family home of median value, about $550,000 would pay about $964 annually to distribute this income to poor people in out community.These numbers are old, but you get the idea. Everyone would have to file an income tax form, but people in Seattle love that idea!

Now, the vast majority of people with incomes as low as $19,000 are already housed. One way of managing this subsidy would be to allocate funds to pay for all housing costs above the normative standard. So, those households paying 50 percent of their income on housing could have that cost reduced down to 30 percent. So a single person earning $19,000 and paying $792 a month in rent would get a monthly payment of $317. Problem solved! The additional funds could be set aside and invested in building housing on City owned land.

My theory of taxation is simple. Taxes are a good and necessary thing in a society and economy because they, 1. Raise revenue for shared and public goods, 2. Incentivize and disincentivize different kinds behavior and investment, and 3. Redistribute wealth.

I’m sure that my friends in single-family neighborhoods living in houses valued at half a million dollars would be glad to contribute $1,000 a year toward helping a person struggling in our city earning very little to make ends meet each month. And of course the costs of the program would be passed on to all housing consumers in higher housing costs and rents, but it would be a mild, predictable, and reasonable burden to bear, shared by everyone in the city. That’s something that EVERYONE can cheer about, right?