Allowing People on Benefits to Gain Economic Security

Introducing the Author: Alicia Alvarez, CSH Metro Team member

I am Alicia Alvarez, a member of the CSH Metro Team. I joined as an intern with lived experience of housing instability. Since 2018, my work and advocacy have helped identify existing barriers to housing people experiencing long-term homelessness and voucher recipients. Through this work, I participated in a Community Based Participatory Action Research project as a Community Researcher, which resulted in the county developing a Landlord Incentive Program. I am currently a member of several Morris County Continuum of Care Committees, including the Executive Committee, Allocations Committee, Coordinated Assessment Placement System Committee, and the Advisory Board for People with Lived Expertise. I also sit on the Board of Directors for Nourish NJ and completed the Garden State Leaders Advocacy Program.
But most importantly, I am currently a voucher recipient in Morris County. This work serving on these committees and boards has ignited a fire inside me and allowed me to find my voice. It is my mission to help others find theirs; through our stories and experiences, we can work together to help bridge this gap in the system.

When the opportunity presented itself and CSH had an opening for an internship for People with Lived Experience (PWLE), I felt the work I have been doing aligned with the work CSH does. For the past ten months, I've been working with the CSH Metro Team (serving New Jersey, New York and Pennsylvania) on a few different projects and advising on the New Jersey Housing First work. I feel incredibly privileged to be part of such a fantastic team, mentoring and encouraging me to be the best version of myself, and I look forward to working and growing within CSH and the Metro Team.

Throughout these months, the Metro Team has had dedicated conversations on Housing First in New Jersey, and for me, these three recurring themes have emerged.

1) The System Was Created to Keep You in the System
2) The Impact of Asset Limits
3) Challenges Related to Using a Housing Voucher

#1 The System Was Created to Keep You in the System

What Usually Happens When a Person Gets a Raise

People attribute poverty to laziness as opposed to socio-economic unfairness. When someone gets a raise in their job, it is usually considered an outstanding achievement or something to be celebrated. Most people, when they get a job or a raise or come across extra money, typically start to make plans to put some aside for a rainy day. Whether it's to start saving for their future, go on vacation, or even get something they've wanted for a while, they now have the extra money to do so. In society, it is encouraged to save, save, save.

When you receive assistance, things work a little differently. A raise could mean your rent will go up, and if you receive food stamps (SNAP), these benefits are lowered. When you report your change of income, within two weeks or so, you will receive a letter informing you of your rent increase and another letter informing you that your SNAP benefits have been lowered -- all before receiving your first check. The fewer you make, the more benefits you get. As you make more, you start to lose your benefits. This can happen fast, depending on how much you drive and when you could potentially no longer qualify. Your eligibility for benefits can even be jeopardized by what time of the month you start working. The system now creates a lot of room for dependency on benefits since working and receiving raises can ultimately penalize you for trying to better your situation. In a system like this, accepting a raise is a decision that can come with significant consequences.

What Happens When You Get a Raise, and You are on Benefits

Imagine being a single mother of 4 having to rely on assistance to pay your rent and buy food to feed your family. Although these benefits are not enough, and most people would not be able to live like this due to the high cost of rent and jobs that don't pay enough, this is the only way you feel you can secure some of these basic human necessities. Instead of giving people the necessary tools to achieve financial independence, the system creates dependency. HUD has set guidelines that determine how much your rent will go up; some say it's 30 to 40% of your income, but for some reason, most of us could never figure it out. I have had conversations with some providers who say that often, this uncertainty is where their client's hesitation to accept a raise or a new job comes from. I've spoken with other voucher recipients, and all have said, "They don't even let us get our first check before they are taking and asking for more money".

This single mother of four children works at a department store earning minimum wage, and she gets offered a new position making $3 more an hour. When you add taxes and the benefits decrease once she reports her new wages, she may only take home 10 cents of every dollar she makes. A gain in income means a reduction in some or all benefits and often isn't a net gain. You end up losing more than you had, so what is the point of taking that new position?

Here are my recommendations for federal and local government policies and what the changes can look like:

  • Programs should support those in need, not create barriers, discourage work, and deter people from reaching their full potential. Great dignity comes from being able to provide for your family, but that feeling can be overtaken by fear of losing some or all of your benefits. It should not feel like you are being penalized or that all this is happening due to getting a job or a raise. Instead, you should feel encouraged and rewarded for working. You should think that you are improving you and/or your family's circumstances.
  • To break the dependency on the system, you first have to take away some of the fear of losing everything and potentially getting taken off the program. This fosters an "Us Against them" mentality. It's essential to create a program that works for the client with the client. If the guidelines say the rent increase should be 30-40 % of your income, why not increase it gradually by 10 % for the first two months, then add another 10% two months later and the final 10% two months after that? This gives the voucher recipient time to create a safety net, save and feel comfortable. This can create a program that offers incentives to work toward self-sufficiency and financial independence

#2 The Impact of Asset Limits

What are asset limits?

Asset limits are limits to the number of total assets a household applying for assistance may have and remain eligible for the aid they are using for. Asset limits are considered a barrier to economic security, also referred to as helping families achieve economic security. These usually include financial assets such as a savings account, checking, cash savings, stocks, and bonds. They also may include the cost of your vehicle or if you own a home.

Let me share Jessica's* story to glimpse how asset limits can be considered a barrier to economic security. Jessica finds the courage to leave her abusive husband, and to make ends meet, she applies for public assistance. She was denied service because she owns a car that is eight years old, which has a value of $4,650. This is over the total number of assets that one could have. When applying for assistance and with no other option left, Jessica has to sell her car to afford basic expenses like paying for utilities or rent. When she finally liquidates her assets, it is only then that she eventually becomes eligible for benefits. She is now in a much more vulnerable position than before. Now with no car, it is much more difficult for her to get back on her feet.

How are you supposed to get off the program if you don't have anything saved?

The long-term effects of asset limits while receiving government assistance discourage families from attempting to save and build a safety net. Asset limits ultimately hold families facing financial hardships back, forcing them to choose between short-term assistance or potential long-term financial security. With this in mind, Lisa's story below is one of many examples of how asset limits can discourage families.

Lisa*, a mother of six with two high school-aged children still living at home, divorced after 13 years. Her husband was the primary source of income for the family. After the divorce, the house went into foreclosure.

Lisa had some health issues and was unable to work. She is currently applying for Supplemental Security Income (SSI). The bank is in the process of selling the house, and Lisa is now forced to move. She has reached out to the County for some assistance but is denied. She is being told that due to asset limits, she does not qualify. Lisa would have to liquidate her assets and use the money to pay her bills. Lisa has a car about two years old, and if she sells the vehicle, transportation will become a significant issue. She is responsible for getting her kids to and from school and has a slew of doctors' appointments. It would also affect her credit score, ultimately putting her in a worse situation than she began.

Spotlighting smart asset policies that translate into family savings and fewer families on benefits

Building up savings and assets is extremely important for low-income families trying to pull themselves out of poverty. The ability to save can make it easier to fight against financial setbacks without facing utilities being cut off or being evicted and possibly becoming homeless. With asset limits set in place, families on the precipice of financial hardships face a brutal reality: continuing to not have any savings to qualify for benefits. This prevents the family from having any rainy-day funds for emergencies like other families. Increasing asset limits would allow families to increase wages and savings and be in a position to keep their cars so they can achieve financial self-sufficiency.

There often is fear in the initial discussions around changes to asset policies. Local, state and federal governments are worried they will be overwhelmed with how many applicants would apply if they raised the limits. However, the states that made positive changes (eliminating or increasing the asset limits) saw significant reductions in families using benefits like SNAP, etc. For example, Louisiana saw the number of their TANF enrollment plummet by 57%, while Ohio saw its caseload drop by 50%. Alabama, Colorado, Hawaii, Illinois, Maryland, and Virginia are other states that did away with Asset Limits and have seen positive results.

Recommendations on Asset Limits

1. States should remove savings and ownership restrictions so families in need can get help when needed. Lessons can be learned from states that have already removed Asset Limits, allowing these states to replicate similar policies that help families build and plan for their future.

2. Find ways we can reform the system to help people on benefits get back to work and earn instead of leaving them worse off than when they started. This means making sure that it always pays and makes sense to work. This will allow people on benefits to get jobs and create an environment that can encourage training and skill building, customizing benefits to fit people's needs.

3. Congress should remove ownership restrictions to enable families on benefits to build and plan for the future.

#3 Challenges Related to Using a Housing Voucher

Despite laws on the books regarding discrimination against people with a housing voucher, we know landlords, brokers, and real estate agents often don't abide by these laws
New Jersey and New York have laws protecting housing voucher recipients against housing discrimination, but landlords have found innovative ways to work around these laws. Voucher recipients face many barriers while obtaining affordable housing in a neighborhood with better schools and opportunities.

Pablo's* story is just one example of how discrimination is present and normalized. Pablo, a dad of three (two girls and one boy), recently received a Section 8 voucher. This is a direct impact of the effects that the Covid-19 Tsunami has had on tens of thousands of households. Before the pandemic, Pablo had longevity in a high-paying job. He lived in a 2-bedroom house where he shared a room with his son, and the girls shared the second room.

When the pandemic hit, Pablo was one of many that suffered a substantial drop in income, creating a financial tightrope that eventually led him to lose his home. For Pablo, the Section 8 Voucher meant a promise of security and a new beginning for his family. Pablo had heard stories of landlords discriminating against renters with vouchers and knew that he would most likely face some of those barriers. He quickly became aware of a new and widely used form of discrimination called Source of Income Discrimination.

A big challenge not covered by laws nor talked about in mainstream media is using platforms like Zillow to find an apartment with a voucher. New Jersey and New York are two states where voucher recipients are responsible for paying for the landlord's services. Broker and real estate fees are in addition to the other costs.

When Pablo began his search to use his Section 8 voucher, he drove around some neighborhoods hoping to see some "FOR RENT" signs. It became apparent that this method was a thing of the past. He looked on Craigslist as this was how he found his last place (over six years ago), but all he found were potential scams and an occasional listing that resulted in nothing.

He quickly realized that landlords were now advertising their units on websites like Zillow, Trulia, Marketplace and even on real estate agency websites like Wiechert's. Pablo had okay credit, high enough to meet the requirements on the listings. He was working part-time and supplemented this with some odd jobs.

He started his search, and every listing he came across had a realtor agent or broker as the point of contact. He also noticed that a lot of the applications and sites had fees. He filled out anything that would fall within his voucher allotment. Every day Pablo looked for an apartment. Whenever he did get a response, he was told that the landlord decided to go with another applicant, mostly because he didn't make enough money (but he has a voucher) or his credit score was an issue. Sometimes they blatantly said, "We Do Not Accept Vouchers"!

On the rare occasion, Pablo did get past the preliminaries, he was told he couldn't afford the unit. He was also informed he would be responsible for the typical required first month's rent and a month and a half security deposit. But he learned he'd also be responsible for the realtor/broker fee, usually equivalent to one month's rent. For Pablo to move into a unit, he would need approximately $10,000 just to secure the lease, which doesn't include the actual moving cost.

Where do you go now to report discrimination?

HUD and other government agencies have departments where you can report discrimination. The problem is that most people, including myself, don't know how or where to report the incident. We are racing against time because you only have 60 days to secure a unit or potentially face losing your voucher. We can apply for an extension, but it is nearly impossible to find adequate housing within that time. People would instead move on and not report the incident.
Recommendations that will help

  • The renter should NOT be responsible for paying the realtor/broker fees unless they are the ones seeking the services.
  • For government departments that receive reports of discrimination, there should be a much faster response and resolution to the claims that are being reported.
  • Changes to laws, policy and oversight of these changes need to be made to hold these landlords accountable. For example:
  • Increase efforts to investigate listings that blatantly say no vouchers are accepted.
  • Create harsher penalties for landlords that break the law.
  • Fighting to break the stigma that comes attached to having a voucher.
  • Adopting best practices from organizations/agencies that have amazing results housing clients.
  • Increasing the extension period from the current 60 days in New Jersey to 90 days to be able to find housing with your voucher.

* All characters described, while fictional, represent an accurate description of people who receive vouchers and are based on the author's real-life conversations with her peers.


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