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.


“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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  1. says

    This is so awesome. I was once in a position that I could have really, really used a programme like this. I was living pay cheque to cheque and had just caught up on bills from the last time I was unemployed, when my gov’t contract ended and wasn’t renewed (surprise!). Because I was technically self-employed, I didn’t qualify for EI and hadn’t been able to establish credit. I had a stable apartment that I’d been living in for a couple of years, two cats and a roomful of books. I couldn’t afford $800 in rent a month plus hydro and food. I ended up with a part time job and had to go on welfare which only paid about $400 a month. It would have cost me more than I had to move, and where could I have moved to that would have cost only a couple hundred a month? Maybe a room in a boarding house? I had to borrow from friends and still had my hydro almost cut off a couple of times. Most of the social programmes were geared toward people who needed a better education or training or language help, not someone with a Master’s degree. It was pretty bad. The worst time in my life by far.

  2. carlie says

    I love this way of doing things, and the supports that they’ve tied to the actual monetary assistance.

    If I could shill a moment, there is also a foundation called Modest Needs that was started by a former history professor in the same vein, although with microgrants rather than microloans. I’ve been donating and following almost since its inception, and its whole basis for being is to patch those “small holes” that can spiral into losing everything. It eems there’s a need for a lot of organizations like these.

  3. Leni says

    I’m moving to Canada :/

    The only reasons I’m not homeless are because I have a very forgiving landlord and awesome friends and family.

    Getting laid off from a pretty decent job (even if the pay wasn’t so great) has definitely made me aware of how tenuous it is for so many people. I’ve been really, really lucky.

  4. says

    The Gathering Place (run by the city of Vancouver) is also an amazing resource for those that do end up homeless: access to a mailing address, phones, showers, laundry, and suits for interviews, as well as educational programming.

    It is always far better though to try and prevent this from happening in the first place.

  5. says

    RE: The Gathering Place
    Run by Vancouver is maybe not fair: it is run mostly by volunteers in a facility owned by Vancouver and funded by the province. It is also a registered charity, and definitely seems to be one of the most effective ones in the Downtown Vancouver area.

    If you’re not from Vancouver, look at how they run the place and what they offer: something like this just might work very well in your city as well. Also, try to get your municipality to look at microloans like Ian suggests.

  6. ischemgeek says

    I freaking love this idea!

    I know people back home who are caught in that horrible loop of no jobs in the area -> unemployed -> need to move to find work -> no money to move because unemployed -> unemployed -> etc. They could really benefit from something like this. Too bad they’re about as far away from Vancouver as you can get while still being Canadian.

    I’m lucky that in my field, when I’m done my degree, it’s standard practice to pay for relocation, so while the nearest job is about 1000km away, once I get the job, I don’t have to worry. And there’s so much demand in my field right now, employers will eat a few grand in relocation in exchange for a 3-year or 5-year contract. I don’t have to worry about getting caught in the Unemployment Loop of Doom, but if the economy changes direction again, I might end up staring it down.

  7. left0ver1under says

    I hope I’m not going off on a tangent…

    One social group (in an unnamed Canadian city where I used to live) offered help to the homeless – or those without phones – looking for work in a way that’s easily repeatable elsewhere. The group would act as a messaging service for the poor, taking messages and mail from prospective employers for the people looking for work. The clients could also freely use the group’s phones for local calls related to job hunting.

    Part of the funding for the group involved government grants. Other free services were available for clients such as resume writing, job search techniques and computers for email.

  8. says

    I had to wait a few days till I could read this article because I have been super busy this week. That being said, I am glad I did.

    I am one of the people that liberalism helps. There have been times in the near past where we have used and needed various social programs. They have been used and needed all in an effort to better ourselves so that in the long run we will have a chance to give back more than we have ever taken from society.

    Eventually, I will make more than it costs for me to live. I won’t be in the 100% propensity to spend bracket. When that happens, I have every intention to continue to advocate fiscally liberal policies (especially ones with this pragmatic of forethought). I have every intention of voting people in that are willing to tax my income so that we can try and narrow the gap between rich and poor. I have every intention of donating my time and money to help make the world a better place.

    This really is a good news week.

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