Most economists agree a ceiling on rents reduces the quantity and quality of housing available. Rent control and rent stabilization, intended to make housing affordable to low-income families, have been known to lead to many unintended consequences. Also, there is evidence of possible reductions in supply resulting from a price cap, as owners have little incentive to maintain their properties or to build or fix up new ones. The resulting decline in supply aggravates the problem with an increase in prices, as demand outpaces supply.
Though this may justify the generally negative view many people have about subsidized housing, the problem of housing for the poor remains.
A set of low-income housing developments in Madison, Wisconsin, is a place to find a solution to this problem. Northport and Packer, subsidized housing developments run by the Housing Ministries of American Baptists in Wisconsin, are more than just low-income housing complexes. Carmen Porco, the director of housing for these apartments, understands that housing is really one of many problems the poor face — economic poverty often results in and is reinforced by psychological and sociological poverty. This understanding has shaped Northport and Packer into a center for the holistic growth and development of its residents.
Each of the Northport and Packer housing complexes has a community learning center with 30 workstations, educational and training resources delivered via educational software, and resident training provided in graphic arts, web design and video production.
The centers’ educational support and resources have helped boost the average GPA of its students from 1.4 to 3.2 on a four-point scale and eliminated dropouts. As of a few years ago, they were the only low-income housing centers in the nation to hand out scholarships to higher education; over 221 scholarships were awarded. In addition, residents of Northport and Packer have access to resources such as day care and Head Start.
Such efforts made by the Housing Ministries of American Baptists in Wisconsin have attracted the attention of a wider community seeking to address the fundamental issues underlying inequality and poverty. People from the private sector, institutions of higher education, the state government and Rotary, as well as private citizens, have teamed up with Northport and Packer to generate sustainable employment strategies for its residents.
Specifically, the Community Advocates United for Sustainable Employment (CAUSE), as this initiative is called, has helped train residents to survey fellow residents at Northport and Packer to assess both their desires and their assets to make the best sustainable employment matches for residents and employers. By matching people’s skills, desires and interests to higher education, jobs and careers, the community is showing a long-term interest in the residents.
With a philosophy that combines social gospel theological principles, organizational development, business, psychology and sociology, Northport and Packer may be the kind of model solution that really gets to the heart of the issue — poverty.
Instead of asking, “How can we make housing more affordable for the poor?” perhaps the better question is, “How can we assist the poor to help themselves?”
A community-born initiative that invests in the development and sustainable employment of its low-income residents is not only a fabulous way to address poverty, but a very good way to have diverse elements of a community work together. When a broad swath of people becomes involved in lifting and helping, much of the anxiety and distress of inequality is set aside, government programs are relieved, and a real sense of community is fostered. With such positive components, this may be the kind of housing development that actually makes sense to subsidize.
John Hoffmire is director of the Impact Bond Fund at Saïd Business School at Oxford University and directs the Center on Business and Poverty at the Wisconsin School of Business at UW-Madison. He runs Progress Through Business, a nonprofit group promoting economic development.
Heeje Yoo, Hoffmire’s colleague at Progress Through Business, did the research for this article.