Poor, Invisible, and Left Behind: Understanding Financial Instability, Material Hardship, and the Availability and Use of Community Resources among Low-Income Rural Households
The project: More than 85% of persistently poor counties in the U.S. are rural, and yet, researchers and policymakers overwhelmingly focus on urban poverty. This study set out to gain a better understanding of the factors likely to contribute to material hardship and financial instability in rural areas and to assess the availability of community resources for low-income rural households.
The process: The study analyzed federal household financial survey data from 2013 to 2016 for more than 66,000 low- to moderate-income tax filers in order to compile demographic information on varying levels of financial instability in urban and rural areas. To determine the availability of nonprofit resources, the study divided total nonprofit program expenses in 688 commuting zones by the number of people with incomes at or below 200 percent of the poverty line (about $50,000 for a family four). Each zone is classified as rural or urban in order to discern whether there’s a difference in available resources depending on the type of area.
Results: The study found significant differences in the financial hardship of low-income rural households and low-income urban households. Urban households had higher liquid assets and net worth, and they were more likely to have a checking and savings account, credit cards, health insurance, and to regularly save money. Rural households had higher rates of car and home ownership. Overall, rural households had significantly higher rates of all types of material and healthcare hardship compared to urban households with similar income levels.
On the point of available community resources, the study found there were significantly more nonprofit organizations in urban areas compared to rural areas, but the per capita spending on nonprofit programs was comparable. Those results varied by region, with the South seeing fewer resources in rural areas compared to urban areas, especially in Arkansas, Louisiana, Oklahoma, and Texas.
“This is concerning given the rural poverty rate is nearly 6 percentage points higher than the urban poverty rate in the South,” according to a paper on the study’s findings submitted to the Society for Social Work and Research’s 23rd annual conference in January 2019. “Government discretionary human service funding formulas and national and regional foundation funding priorities could be adjusted to reduce these resource disparities.”
The project: Digital technologies that support employment — like LinkedIn and Massive Open Online Courses — are primarily used by individuals with higher education levels. According to a 2015 Pew Research report, American job seekers with lower educational attainment would benefit the most from using digital tools to support their employment endeavors. To understand opportunities to develop these digital tools, this study examined how best to connect underserved job seekers with available work in the gig economy that could increase their employability and help them re-enter the job market. Underserved job seekers include people living in low socioeconomic areas, people who have low income and people who have limited education. They may not feel comfortable using technology to connect with employers, may not fully understand the skills needed for employment, and may not know how to clearly articulate the skills they have. The study explored effective uses of crowdsourcing to compile a list of tasks employers want completed, how to match underserved job seekers with those available jobs and what it would take to translate a series of tasks into long-term employment.
The process: In phase one, the study used Craigslist and other low-barrier gig economy platforms to compile a list of more than 400 tasks, which were labeled according to the skills needed to complete each task. The study then created mock “baseline” resumes typical for entry-level workers and mock “enhanced” resumes that included more gigs/skills to see which type of resume received the most callbacks from employers and which specific skills elicit callbacks.
In phase two, the study explored the use of online platforms to link tasks together and help workers build skills that could lead to higher-paying jobs, while earning income. The final step was to connect the online skills-building platform with the list of available gigs.
Results: The study piloted a job-search tool called DreamGigs that provided job seekers with a list of local available jobs and volunteer opportunities. DreamGigs specifies which skills job seekers need to develop in order to achieve their ideal jobs and identifies available opportunities to help them acquire those skills. The study found Craigslist lists plenty of needed tasks and does not require much digital literacy, but low-resource job seekers did not feel safe exploring jobs on Craigslist.
In terms of using an automated system to help workers build skills, the study found a series of challenges: most tasks are only available once; descriptions of tasks vary widely, making it difficult to match keywords; the way tasks are sorted by existing platforms assumes all workers are uniformly inexperienced or only shows jobs suited for their current skill set, which leaves little opportunity to build skills; and variation in pay makes it difficult to outline a path for workers to increase their pay rate as their skills progress.
“Despite this, we see potential paths forward in using machine learning to learn more complex patterns, allowing it to help workers strategically bridge work opportunities to build and evidence their skills,” the study’s final report states.
More information: DreamGigs: Designing a tool to empower low-resource job seekers
The project: This case study of Washtenaw County examines the impact of the 2017 changes to the federal Supplemental Nutrition Assistance Program (SNAP). Michigan’s new work requirement and time limit for receiving SNAP benefits rolled out in January 2017 meant 3,346 people in Washtenaw County could potentially lose their food assistance. Washtenaw County has one of the lowest percentages of residents using SNAP benefits in the state, so the effects of the SNAP eligibility change likely would be felt even more acutely in other Michigan counties.
Reduced public assistance places more burden on civil society organizations to support people in poverty, and the study wanted to look at whether:
- Food assistance agencies saw increased demand for emergency food assistance;
- More people fell behind on rent and utilities and requiring more housing assistance because they have to spend more out-of-pocket money on food;
- The local Department of Health and Human Services office saw an increased caseload as people tried to understand why their benefits were cut; and
- Farmers markets that leveraged SNAP dollars through programs like Double Up Food Bucks saw a decrease in SNAP shoppers.
The process: The study analyzed data from food assistance agencies, housing organizations and farmers markets from 2012 through early summer of 2017 in order to assess the impact of SNAP changes in 2013, 2015, and 2017. To provide additional context, the study also included interviews with staff from the Michigan Department of Health and Human Services’ Washtenaw County office, housing assistance programs, food assistance institutions, and former SNAP recipients.
Results: Of 101 food assistance agencies surveyed, 1-in-6 said they saw an increase in clients who had recently lost their SNAP benefits.
Eight of the 15 food assistance agencies that participated in follow-up interviews said they saw an increase in requests to volunteer, which possibly was the result of people trying to use community service hours to meet the SNAP work requirements. However, six out of 13 people who had recently lost their SNAP benefits did not know volunteer service counted toward the work requirement, the study found.
A drop in total SNAP payments made to Washtenaw County residents in 2017 corresponded with a drop in SNAP spending and Double Up Food Bucks redeemed that year at Ann Arbor and Ypsilanti farmers markets, which shows the impact of SNAP benefits on the local economy.
Another notable finding was that 44% of civil society organizations that offered five or more services – like food assistance, transportation, and other necessities – saw an increase in clients after the 2017 SNAP changes went into effect. Principal investigator Lesli Hoey said that indicates people who are food insecure have multiple needs, and the study recommended promoting key agencies that offer wraparound services.
“As other research has found, most individuals who go on and off SNAP attempt to find work even when time limits are not in effect, suggesting that the time limit may not be necessary to encourage work,” states the study’s final report. “The management of time limit requirements, therefore, may be drawing human and financial resources away from other vital poverty alleviation services.”
Lesli Hoey, U-M Taubman College of Architecture and Urban Planning
Sue Ann Savas, U-M School of Social Work
Andrew Jones, U-M School of Public Health
Sandra K. Danziger, U-M Ford School of Public Policy
Mary Jo Callan, Director, U-M Edward Ginsberg Center
Markell Miller, Food Gatherers
Kate Kraus, Fair Food Network
The project: Stable housing is very important as it relates to economic, physical, and emotional well-being. However, as housing affordability has declined in the past 15 years, housing
has become more unstable, which impacts the housing and living arrangements of low-income families.
Housing vouchers help improve housing outcomes, but only 24% of 19 million eligible households receive that type of assistance. The Earned Income Tax Credit (EITC) could offer another avenue to improve housing outcomes for low-income households. The EITC provides a cash refund to about 26 million working low- and moderate-income households every year, and the refund amount is determined by income level and number of children. States also have EITCs that are typically a percentage of the federal EITC.
Between 1975 and 2016, the maximum federal EITC refund grew from $1,700 to $6,300, in 2016 dollars. The study aimed to determine whether more generous EITC refunds would improve the housing outcomes of low-income unmarried mothers.
The process: Using data from the Fragile Families and Child Well-being Study, Current Population Survey, and American Community Survey, the study focused on unmarried mothers because they are the primary recipients of EITC, are most likely to experience poor housing outcomes, and their children are vulnerable to the detrimental effects of housing instability.
Housing outcomes examined included homelessness, eviction, cost burden (spending 30% or more of income on housing), severe cost burden (spending 50% or more of income on housing), household crowding, and doubled-up living arrangements like living with other adults who are not part of the nuclear family or multi-generational households.
Results: The study found a $1,000 increase in the EITC improved housing outcomes by reducing housing cost burdens and crowding, but it had no effect on eviction or homelessness. Increases in the EITC also reduced doubled-up living arrangements and multi-generational households, suggesting mothers prefer to live independently. Mothers also were more likely to be named on their lease or mortgage, which may increase housing stability.
“Implementing or expanding EITCs may be an effective way to address some pressing housing issues. By improving housing outcomes and increasing the stability in living arrangements of children, the EITC may help reduce the intergenerational consequences of housing instability,” states a peer-reviewed article on the study that was accepted in January to be published in the Population Association of America’s “Demography” journal.
Natasha Pilkauskas, U-M Ford School of Public Policy
Katherine Michelmore, Syracuse University Maxwell School of Citizenship and Public Affairs
The project: A lack of reliable transportation can exacerbate symptoms of poverty and in some cases even cause poverty by making it difficult to secure employment or access services. Yet transportation is often overlooked as a dimension of poverty. Currently, mobility is measured by single factors like car ownership or neighborhood accessibility. Creating a new Transportation Security Index could provide a more comprehensive measure of whether people can travel where they need to go, regardless of mode of travel or neighborhood context. Modeled after the Food Security Index that raised awareness of hunger in America, the Transportation Security Index aims to offer new insights on how transportation-related policies and programs affect poverty and socioeconomic mobility.
The process: Based on a survey of 511 people, the investigators organized symptoms of transportation insecurity into six categories: lateness; skipping trips; spending a long time planning, waiting, or traveling; social isolation; feeling unsafe; and worrying.Those categories were used to inform survey questions for the preliminary Transportation Security Index, and the approach and analysis has undergone two rounds of peer review.
Results: The study found there are two dimensions to transportation insecurity: material and relational. The 16-question preliminary Transportation Security Index survey asks about material impact like being late getting somewhere or feeling stuck at home, as well as relational impact like feeling embarrassed about a lack of transportation and worrying about inconveniencing others due to a need for help with transportation.
To validate the preliminary Transportation Security Index, the researchers fielded a nationally representative survey in May 2018. Data from that survey will determine if the index can be validated and replicated, and the results will inform articles on the correlation of transportation insecurity and other types of hardship associated with poverty.
In the meantime, parts of the Transportation Security Index survey have been used to study food insecurity among U-M students and as part of a neighborhood survey by Detroit Metropolitan Area Communities Study.
Alexandra K. Murphy, PhD, Assistant Professor, Department of Sociology & Faculty Associate, Population Studies Center, University of Michigan
Jamie Griffin, PhD, Assistant Research Scientist, Survey Research Center, University of Michigan
Alix Gould-Werth, PhD, Adjunct Assistant Research Scientist, Population Studies Center, University of Michigan & Researcher, Mathematica Policy Research
The project: Sometimes small barriers, solvable with relatively minor amounts of funding, present major obstacles for those living in poverty. For many Detroit residents, these barriers prevent them from making progress toward their goals of economic self-sufficiency.Through a partnership between the University of Michigan’s Ross School of Business and Focus: HOPE, a nonprofit civil and human rights organization based in Detroit, this project team introduced and evaluated a “Barrier Buster” pilot program that provided small financial awards to address these challenges. This new barrier buster approach intended to promote economic self-sufficiency among low-income Detroit residents, with the potential to inform future programming in the region and across the country.
The process: The research group designed and implemented a Barrier Buster fund, and a group of leaders from HOPE Village Neighborhood Network’s partner organizations developed procedures to recruit participants, select recipients of the funds. and disperse the awards. The Neighborhood Network group anonymously nominated community members who, they believed, would use the Barrier Buster funds to overcome a barrier and reach a specific goal related to self sufficiency.
The study tracked outcomes for 11 nominees who received Barrier Buster awards ranging from $500 to $2,000 — with an average amount of $863 — and a comparison group of four nominees who did not receive Barrier Buster awards. The study included pre- and post-program interviews, as well as follow-up interviews with a sub-sample of participants.
Results: The study found credit scores improved more for people who received a Barrier Buster award than those in the comparison group. Total self-sufficiency (a combination of scores on 11 domains of self-sufficiency) increased for both groups, but more for participants who received a Barrier Buster award.
The study also found most individuals who received Barrier Buster awards used them for the purposes they described when they requested the funds. Those who did not use the funds as initially intended instead spent the money on other needs that arose, which typically still contributed to the same end goal.
“These findings are contrary to criticisms rooted in negative stereotypes that contend that low-income people will use unrestricted funds for recreational purposes,” states a working paper on the Barrier Busters study. “Moreover, these findings suggest a major benefit of unrestricted cash transfers, in that they allow recipients to address immediate needs that may arise and interfere with progress toward their primary goals.”
Michael Gordon, U-M Ross School of Business
Stephanie Moore, Center for Education Design, Evaluation & Research (CEDER) and U-M School of Education
Julie Gowda, Focus: HOPE
Debbie Fisher, Focus: HOPE
Poverty Solutions is partnering with the Population Studies Center at the University of Michigan Institute for Social Research to pilot a new, cost-effective project to survey Detroit area residents about their community, including their experiences, perceptions, priorities, and aspirations.
The Detroit Metro Area Communities Study (DMACS) Neighborhoods Project is a new endeavor that extends the DMACS work by focusing more narrowly, and deeply, on specific local neighborhoods within the city. A critical element of this work is engaging with key stakeholders in the neighborhoods in which we are working. This includes meeting with community organizations and residents before, during, and after the data collection, and also involves employing local residents and U-M students to work together in teams as data collectors.
The surveys are web-based, and accessible via smartphone, tablet, or computer; encouraging and facilitating online completion is an important focus of the project. The initial phase of the Neighborhoods Project was run as a pilot to test and perfect the survey and its delivery, as well as the opportunities for community involvement. Ultimately, we hope to extend this work into additional neighborhoods across the city in order to assess the impact of various initiatives and neighborhood improvements on area residents, and provide critical insights that will guide future policy decisions.
DMACS is envisioned as a long-term, large-scale investment in the people and communities of metro Detroit. At the core of the study is an ongoing, online survey of Detroit area residents. This survey will provide data in a manner that is scientifically valid, accessible to a wide range of users, covers the entire metropolitan area, captures change over time, and reaches underserved/under-represented groups. It will have the capacity to rapidly deliver research-quality information about the impact of current changes and initiatives in the city, allowing dynamic tracking of how residents perceive, evaluate, and connect with their communities. It will be customizable to meet the needs of policymakers and other stakeholders so as to provide information that can inform future public policy decisions and investments. Finally, it will provide citizens a platform for communicating their needs, their visions of the future for both their local areas and the broader region, and their reactions to new initiatives.
Jeffrey Morenoff, Institute for Social Research, College of Literature, Science and the Arts, Department of Sociology
Elisabeth Gerber, Gerald R. Ford School of Public Policy, Institute for Social Research
Conan Smith, Washtenaw County Commissioner
Josh Rivera, Project Manager, Poverty Solutions
The project: Each year, non-payment of property taxes causes thousands of Detroit residents to lose their homes to tax foreclosure. Detroit’s exceptionally high tax rate disproportionately burdens low-income residents, threatening their ability to maintain homeownership and attain long-term financial stability. Michigan law requires local governing bodies to make a Poverty Tax Exemption (PTE) available for homeowners in poverty who own and occupy their property. By reducing or eliminating property taxes for low-income homeowners, this policy works to alleviate poverty by decreasing household tax burden and preventing the devastating financial consequences of property tax foreclosure.
While approximately 12,000 Detroit homeowners living in poverty qualify for the PTE, the policy remains underutilized by residents in need. In partnership with the United Community Housing Coalition (UCHC), the Healthy Environments Partnership (HEP) and researchers at the University of Michigan School of Public Health, this project evaluated the effectiveness of the policy and studied potential factors that may hinder or facilitate its access. Findings can inform best practices across local governing bodies to strengthen this policy’s ability to alleviate poverty in Detroit and statewide.
The process: Researchers interviewed 105 Detroit homeowners who sought walk-in counseling assistance with the United Community Housing Coalition Tax Foreclosure Prevention Project in 2017. The majority of participants in the study owned their homes outright (91%), while 5% had land contracts. About 64% of the households were unemployed.
Results: The study found many homeowners who were eligible for the HPTAP in prior years did not apply for the exemption because they did not know it existed or that they qualified. Some people now face tax debt and foreclosure for back taxes they could have been exempt from paying.
Even if homeowners were aware of the Poverty Tax Exemption, they still faced considerable barriers at each stage of the application process that prevented them from receiving the exemption. Challenges stemmed from the application’s complex documentation requirements and procedural demands, and were often compounded by the multiple social, economic, and/or physical vulnerabilities faced by applicants.
The study made recommendations for next steps to increase awareness of the Poverty Tax Exemption, make it easier for homeowners to access and complete the PTE application process, hold the city accountable for notifying residents of the status of their PTE application, and alleviate the financial burden of back taxes.
Roshanak Mehdipanah, U-M School of Public Health
Alexa Eisenberg, U-M School of Public Health
Ted Phillips, United Community Housing Coalition
Michele Oberholtzer, United Community Housing Coalition
The project: Health and poverty are inextricably linked. Health problems interfere with work and education, and poverty exacerbates health problems, producing a cycle of negative influence that maintains both poverty and ill-health. An effective approach to improve health is through community health workers (CHWs) recruited from and working in their home neighborhoods. Such positions also provide jobs within those same neighborhoods, lower costs for health care and insurance providers, improve health outcomes for community members, and increase economic attainment.
This project developed a new model for employing CHWs to serve the Detroit Cody Rouge neighborhood. U-M’s Institute for Healthcare Policy and Innovation (IHPI), the Detroit Health Department, Joy-Southfield Community Development Corporation, Inc., and five Detroit Medicaid health plans all partnered to facilitate the program.
The process: In the summer of 2017, the project team interviewed 14 community leaders representing 10 organizations to get a better sense of the neighborhood’s key needs, priorities, and possible facilitators and barriers to implementing a one-year community health worker demonstration program.
Five community health workers employed by Detroit Medicaid health plans and three program trainees—Cody Rouge residents interested in becoming CHWs—participated in a 10-week Michigan Community Health Worker Alliance training program.
Results: This project focused on the pre-implementation phase, and the researchers have since secured additional grant funding and a commitment from three Detroit Medicaid health plans to provide community health workers for the program for 1.5 years.
Of the 14 community leaders interviewed in the summer of 2017, four were invited to participate in an advisory board that will help guide Cody Rouge’s community health worker program. One of the community health workers received additional training on how to train other CHWs, and the health plan partners worked together to develop health interventions that meet their needs as well as the community’s.
Michele Heisler, U-M Institute for Healthcare Policy & Innovation
David J. Law, Joy-Southfield Community Development Corporation
Dr. Joneigh Khaldun, Detroit Health Department
The project: The Low-Income Housing Tax Credit (LIHTC) program is the nation’s largest source of financing for building or rehabilitating affordable housing. The sale of the credits provides equity to help finance the production of decent affordable housing for low-income renters who are in or near poverty, many of whom are elderly or disabled or have experienced chronic homelessness. But once projects reach 15 years of operation, investors can sell their ownership, often leaving affordable housing projects in need of new sources of capital to provide much needed maintenance. In Detroit, more than 7,700 units have reached or will reach 15 years of operation between 2016 and 2022, so finding solutions to restructuring financing and management is an urgent need.
For more than three years, U-M researchers have teamed with a Detroit LIHTC task force to analyze the financing and ownership to preserve decent affordable housing after this critical time frame. Through this partnership, researchers determined strategies to help address the looming crisis.
The process: Researchers reviewed as many projects’ financial information as possible using 2015 audits, identified outcomes for projects that already have passed year 15, studied the financial and physical conditions of the projects that will reach year 15 between 2016 and 2022, and identified promising practices that other weak-market cities have used to preserve affordable housing after year 15.
Results: The study included 155 properties placed in service since 1990 that have passed year 15, and researchers found the majority of those properties are continuing as affordable housing without recapitalization. Most cannot support additional debt and will face challenges making substantial repairs when needed.
Of the 105 properties reaching year 15 between 2016 and 2022, researchers received 2015 financial audits for 63 of them. The financial analysis showed projects are more financially stressed in Detroit than in the nation as a whole.
The research resulted in a report identifying promising practices weak-market cities have used to preserve affordable housing after year 15 of LIHTC, and Detroit’s Department of Housing and Revitalization built on the task force’s work in its strategic plan to preserve affordable housing.
Margaret Dewar, U-M Taubman College of Architecture and Urban Planning
Lan Deng, U-M Taubman College of Architecture and Urban Planning
Sarida Scott, Community Development Advocates of Detroit
Ruth Johnson, Community Development Advocates of Detroit
Julie Schneider, Detroit Department of Housing and Revitalization
Rebecca Labov, Detroit Department of Housing and Revitalization
Tahirih Ziegler, Detroit Local Initiatives Support Corporation
Victor Alba, Detroit Local Initiatives Support Corporation
Tim Thorland, Southwest Housing Solutions
Kirby Burkholder, IFF
Yulonda Byrd, Cinnaire