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And you can bank on it

One of the things I am learning about poverty is how quickly and how easily you can get completely wiped out. I, for example, have a line of credit. If something happened to my job, I’d still have 8 or 9 months of rent that I could borrow (on top of Employment Insurance and the fact that I’m highly employable) to keep myself in my home and in groceries. That doesn’t happen by accident – I can borrow because I have a job based on my income. I have the job with my income because I was able to go to school, because my parents helped me, because they worked jobs with good income… and so it goes.

If I didn’t have all of those things – a personal history that puts me in this advantageous position – I’d be in major trouble if I lost my job. If I was living cheque to cheque, the slightest disruption to my income could result in me being out on the streets. I wouldn’t be able to borrow, except through credit cards with high fees that would put me deeper in debt the longer I relied on them. Trying to claw my way out of that debt would take an extraordinary and consistent string of good luck. Chances are, I’d end up bounced to the streets within 3 months.

Of course once I’m on the streets, things get rough. Without a permanent address, I can’t apply for a job. No job means no steady source of income which means my ass stays on the street. Then again, if there was some way for me to patch a small hole, cover the cost of a rent payment, a broken cell phone, any kind of financial emergency that might come up in the course of life, I’d be able to avoid losing my residence perhaps long enough to get something going for myself.

And that’s where the city comes in:

A new program that provides micro-loans for poor people in danger of losing their housing is coming to Vancouver. The city is set to approve a plan to provide $150,000 over three years to a new, Vancouver-wide rent bank run by a local non-profit, similar to those that operate in Ontario, Prince George and Surrey.

Vancouver Councillor Kerry Jang said he believes that by providing small amounts of money through loans, the city can help people stay out of expensive shelters and keep families stable. “This is to help with the people we are hearing about [at Vancouver neighbourhood houses], like a single mom who has come in and asked for help, she’s between jobs or has a job and had a crisis or she wants a chance to move into a decent place but needs a damage deposit,” Mr. Jang said.

The city’s money will actually cover part of the administrative costs. The Streetohome Foundation, a group of business people raising money to combat homelessness, is donating the loan money that will be distributed. The foundation’s $150,000 a year is expected to provide 540 loans a year of about $835 apiece over the three years of a pilot project. A report from city manager Penny Ballem says it will potentially prevent 1,620 evictions in that time.

Programs like this hit me in the most pragmatic part of my liberalism. Yes, I believe that housing should be available for all. There is no human dignity without security, and housing is part of that. But beyond the platitudes of emotion-based argument lies a simple fact: housing is also sound fiscal policy. The evidence strongly suggests that providing housing has a profound effect on not only a person’s ability to secure employment, but on hir physical and psychological health as well. A healthy, secure workforce is preferable in nearly every conceivable way to one where a sizeable portion is relying on social services (or worse, emergency services) just to survive.

Beyond the simple fact that this program will be keeping more people and families in their homes, it also has a built-in component to ensure that those who benefit from the bank will gain the skills required to wean themselves off needing the help:

But for every dollar lent, another one will be spent on counselling and support services, both for those who get loans and the many who don’t, in order to help them access more services and manage their money. Vancity Credit Union will provide financial literacy training.

(snip)

“If we provide a loan, our main question is, ‘Will this loan provide stability?’ If you came in with just too much debt or you made bad choices – your income is $1,500 a month and your car payments are $900 – then it’s, ‘No, we can’t solve this problem with a loan,’ ” [Surrey Team Leader Judy] Peterson said. That applicant gets counselling instead.

It is interesting to see the concept of microloans (much like our own Kiva fund) applied in this circumstance rather than in developing countries, but the issues facing impoverished nations still exist here. The sooner we realize that aggregate (or even average) wealth is less important than wealth disparity in terms of measuring the health of a society, the sooner we will no longer need the private sector to step in and run programs like this out of the goodness of their hearts(?).

And while many may deride a program like this as another “handout” to the poor, they are sadly missing both the intention and the effect of the program. The rent bank is not about giving people money – it’s about giving them the wherewithal to keep out of the most abject type of poverty. The type of poverty that doesn’t stay local to ‘poor people’ but leaks out and affects all aspects of society, including eventually those who got to their vaunted position by the sweat of their brows and pulled themselves up from nothing. That’s what it is – it’s an extra hand to help tug on those bootstraps.

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