The Children's Aid Society

NY State Housing Shelter Allowances

September 23, 2002

New York State Office of Temporary and Disability Assistance
Written Testimony by Cathleen Clements, Esq.
The Children's Aid Society
September 12, 2002

The Children's Aid Society is a private, non-sectarian family support services agency with 150 years of experience providing innovative social, educational, recreational and health services for the children and families of New York City. Over the years, we have striven to ensure that our programs are readily available to those individuals who need them – in community settings near their homes, in familiar, unthreatening neighborhood schools and community centers, open at times that are convenient and staffed by people who speak their language and understand their needs.

Through our work with families over the past year, we believe increased requests for assistance with rent, food, and clothing indicate that many of our poorest parents, whether fully employed or receiving supplementary benefits, no longer have adequate resources to cover their children's basic subsistence needs. After observing the deterioration in their living conditions, we are convinced that we can do more to ease working parents' transition from welfare to the world of work.

Background
During the nineties, New York participated in an unprecedented economic boom, where welfare reform was repeatedly characterized as an unqualified success. Indeed, the public assistance rolls fell by more than half: between April 1990 and April 2000, New York State's welfare rolls dropped by over 445,000. While common sense tells us we should observe a commensurate decrease in poverty, a closer look at conditions affecting the city's poor puts into question the actual prosperity of this decade. In fact, New York's poverty rate increased by 1.6% over the past ten years, with almost 15% (nearly 3 million) state residents now living in poverty. Even more appalling is the 30.5% poverty rate in the Bronx, twice the state's overall rate.

Regarding child poverty, New York is among the nation's leaders, related largely to the prevalence of poverty in New York City: 40% of the children who lived in the Bronx in 2000 fell below the poverty line; in Brooklyn, 34%; and in Manhattan, 30%. While just outside the city, only 4.5% of children in Putnam County and 5.8% in Nassau County lived in poverty.

Full utilization of welfare benefits and support programs, in conjunction with advocates who can insure access, could help many of these fragile families to move out of poverty. Today we would like to suggest some alternative poverty reform proposals for consideration by New York State.

Alternative Proposals
Perhaps the most important information we have gained about welfare reform in New York City is that caseload reduction does not remedy or alleviate poverty. A substantial number of those who have left welfare have obtained employment, and for some, this has meant an improvement in their living standard.

But as indicated by the research described above, even during a period of remarkable economic growth, many of those who moved off welfare have struggled with low-paying and temporary jobs without employee benefits; many others have left the rolls without employment at all. Many have moved to the streets and soup kitchens; the demand at emergency food and shelters has never been greater. For those remaining on welfare or in need of welfare, basic survival is an increasingly difficult challenge. A realistic look at life in poverty suggests a number of urgently needed policy modifications.

A. Easing Hardship for Welfare Recipients
The most fundamental change is required to care for those with no choice but to rely on welfare: the grant in New York State, now unchanged in over twelve years, must be substantially increased. The real value of the grant has diminished by close to fifty percent since the mid-1970’s, so that meeting basic survival needs is virtually impossible in the typical case, where a mother and two children are allotted only $577 per month, including $286 to pay their entire rent expense.

Similarly, an important component of the reassessment of the welfare grant is the need for an honest, realistic examination of the shelter allowance. The portion of the grant designated for housing bears no meaningful relation to the actual cost of housing in New York City. Any of a range of alternatives would improve housing affordability. These include:
· a general increase in the public assistance grant, as discussed above, from which the recipient could allocate more funds for rent;
· an increase in the housing portion of the grant, although we favor the general increase affording the recipient the ability to make allocation choices;
· the creation of a housing subsidy program similar to the federal Section 8 program, although we prefer an entitlement over the capped Section 8 benefit; and
· a realistic resolution to the Jiggetts lawsuit, which currently subsidizes rent for thousands of needy families, that includes a meaningful increase in the shelter allowance for those who continue to receive welfare supplements.
A separate housing subsidy has the advantage of not counting as income for food stamp budgeting purposes.

B. Easing Hardship for Those Leaving Welfare
While still campaigning for the presidency, Bill Clinton began to use the language, “making work pay.” The central tenet of this policy is that no person employed full-time should be living in poverty. President Clinton’s proposals for making entry-level employment available should be pursued. Among key features designed to make work pay are:
· an expansion of both the size of the Earned Income Tax Credit and those households eligible to receive it;
· a health care system that covers every employed person and his or her family;
· simplification of the current bureaucracy that discourages families and individuals from receiving food stamps; and
· more widely available childcare resources.

As Katherine Edin and Laura Lein note in Making Ends Meet, many of those who leave welfare for employment suffer a net loss of income, due largely to the increased cost of childcare, health care, travel, and clothing. Adoption of the proposals outlined above would make substantial contributions toward alleviating this misfortune.

Finally, the housing crisis afflicts not only public assistance recipients, but also those households with higher incomes. The New York Times has reported on the panic of more than two million residents of rent-stabilized apartments who annually face increases by the Rent Guidelines Board. Owners are having a hard time maintaining their buildings without higher rents, but tenants say that rent absorbs nearly their entire income, leaving less and less for food and other necessities. Programs such as housing subsidies and incentives for rehabilitation and new construction, similar to those proposed for the welfare population, are also desperately needed for non-welfare, lower income families.

Conclusion
As we go forward with the reauthorization of TANF, we must abandon the policy of equating the success of welfare reform with caseload reduction and instead develop new principles that address the reality of the continuing poverty disclosed by research conducted in New York City over the past five years. We urge the Office of Temporary and Disability Assistance to establish a system designed to (1) address the barriers to financial independence faced by those who remain in need of support; (2) provide access to reasonable financial support for those who are currently unable to provide adequately for themselves; and (3) ensure the timely, respectful, and proper administration of benefit delivery by the local agencies and by private entities under contract to the agency.