DC considers mandatory savings program for homeless
Washington, D.C. is developing a program that will require many people in homeless shelters to put part of any income they receive — wages or welfare — into mandatory savings accounts. The idea is to save up a pot of money to help in the transition to permanent housing. But that makes some homeless people worry about losing control of the little money they have.
Latoya Edwards stands outside D.C. General. It’s an old hospital that now houses some 900 homeless children and adults. Edwards gets so-call TANF benefits — formerly known as welfare — but not much: $129 a month.
Some families get a few hundred dollars a month.
Edwards says that by the time she buys diapers for her two kids and pays to wash their clothes, “I still end up zero and even in the negative at the end of the month. But if you’re talking about being able to save, I could probably do maybe five dollars per month.”
This is what’s hard about setting up a mandatory savings program. There are an estimated 7,000 homeless people in Washington. Many, like Edwards, have debt from being evicted. Many have no benefits and no earnings. Many are mentally ill. D.C. can exempt hardship cases from the savings programs. But it can also impose sanctions when eligible people don’t participate.
“What isn’t fair is for individuals and especially for children and families to be living in shelters,” says David Berns, the Director of D.C.’s Department of Human Services.
“It costs the taxpayer $50,000 a year for a family to stay at D.C. General. And it’s a very, very poor way to be raising a child,” he says.
Berns wants families to develop the habit of saving. So when they do move out of the shelter, a flat tire or a medical bill won’t send them straight back there. That’s why D.C. is looking to Massachusetts, where families in shelters are required to save 30 percent of their income if they can. Aaron Gornstein is Massachusetts’ Undersecretary for Housing and Community Development.
“Once they get into permanent affordable housing, 30 percent of their income is going to go for rent in most cases,” he says. “So it really establishes that precedent early on, while they’re in shelter.”
Back in D.C., Latoya Edwards wants to save — on her own terms. She says she’s not homeless because she’s irresponsible.
“I would like to be able to make my own financial decisions,” she says.
Edwards says she’s homeless because she got laid off.
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