Owning Up Poverty, Assets, and the American Dream

by Miller-Adams, Michelle

• ISBN13: 9780815706205
• ISBN10: 0815706200
• Format: Hardcover
• Copyright: 2002-08-30
• Publisher: Brookings Institution Press

Summary

Despite the recent success of welfare reform in moving people off public assistance and into jobs, most of America's working poor are still unable to accumulate even the most minimal of assets. Even when they are getting by, they lack many of the resources --tangible and intangible --that provide middle-class Americans with a sense of security, stability, and a stake in the future. In Owning Up, Michelle Miller-Adams demonstrates how asset-building programs, used in combination with traditional income-based support, can be an effective means for helping millions of American out of poverty.Miller-Adams expands the traditional concept of assets to encompass a range of tools, experiences, resources, and support systems that are necessary if asset building is to serve as an effective anti-poverty strategy. She identifies four types of assets that can represent sources of wealth for low-income individuals and communities: economic human social, and natural assets. Economic assets include equity, retirement savings, and other financial holdings. Human assets include education, knowledge, skills, and talents. Included among social assets are the networks of trust and reciprocity that bind communities together. Natural assets include the land, water, air and other natural resources we depend on for survival.Owning Up also examines five organizations at the forefront of building assets for the poor. Their stories are told through the eyes of individuals whose lives they have helped transform. These organizations have all developed effective strategies for building assets, and Miller-Adams identifies them as models to be emulated elsewhere. The profiled organizations include: Neighborhoods Incorporated of Battle Creek, Michigan. Its innovative strategies seek to increase home ownership and promote neighborhood revitalization in poor communities. The Watershed Research and Training Center. This local organization strengthens the natural resource-based economy by retraining workers and strengthening social ties. The Private Industry Partnership of Wildcat Service Corporation. Based in New York City, PIP trains former welfare recipients in New York City for entry-level white collar jobs. Iowa's Institute for Social and Economic Development. This microenterprise development organization is one of the largest U.S. based organizations training low-income entrepreneurs. The Corporation for Enterprise Development. CFED, a Washington, D.C.-based think tank that has been instrumental in showing that poor people can and will save if given the opportunities and incentives for doing so. They have helped put Individual Development Accounts on the national agenda.

Author Biography

Michelle Miller-Adams is a visiting assistant professor of political science at Kalamazoo College.

Table of Contents

Acknowledgments	p. ix
Building Assets	p. 1
Coming Home	p. 23
On Common Ground	p. 52
Work with a Future	p. 87
Making It Her Business	p. 117
Can the Poor Save?	p. 151
Epilogue	p. 190
Notes	p. 203
Index	p. 217
Table of Contents provided by Syndetics. All Rights Reserved.

Excerpts

Coming Home

Home ownership stands at the center of the American dream. Buying a home has long been a symbol of success, a sign of having made it into the middle class. Two-thirds of Americans own their homes and, among those who do not, a majority ranks home ownership as the highest priority. For most families, their home is their single largest investment and an important source of security. Once a home is fully paid for, the owners can live in it rent-free or pass it on to their children. And, unlike rental costs that may increase each year, ownership makes housing expenses predictable. It also confers certain legal rights. Renters can be evicted from an apartment in ten days if they do not pay the rent. For homeowners, it takes between six and eighteen months for a foreclosure to work its way through the system. In this sense, homes act as a kind of insurance that gives those who are vulnerable a chance to get back on their feet.

Beyond these tangible benefits, home ownership confers tremendous psychological advantages. Most Americans say that owning a home helps them make a better life for their children and lends stability to a marriage. Home ownership gives people freedom about such simple decisions as whether to plant a garden or own a pet. And homes represent an asset that can be borrowed against to finance an education, start a business, or cushion a family from economic crisis.

Like the other assets discussed in this book, home ownership is not distributed equally. Wealthier Americans are far more likely to own their homes than are low-income families. Home ownership rates for minorities, while rising, continue to lag behind those for whites. And families headed by single women are less likely than two-parent families to live in a house of their own.

The benefits of home ownership and the gaps in this area have led government agencies and private organizations to promote home ownership as a strategy for moving low-income families out of poverty. Unlike many policies designed to help the poor, this one has long enjoyed broad-based political support. Traditional antipoverty advocates welcome initiatives that enable poor families to leave behind overpriced rental housing and improve their living conditions. Those who emphasize self-reliance and personal responsibility as the keys to ending poverty also see home ownership as a desirable strategy. Initiatives designed to increase home ownership among the poor have proliferated in recent years among such diverse entities as Fannie Mae, Bank of America, the NAACP, and the nonprofit Center for Community Self-Help.

While the emphasis on creating new assets embodied in these approaches is welcome, it is not enough just to help people buy homes. Many homes already owned by low-income families are in areas where property values are declining. In such neighborhoods, it makes little sense for owners to improve their homes because the money invested is unlikely ever to be recouped. A downward spiral sets in, with homes sinking into disrepair and property values falling further. As neighborhoods deteriorate, low-income families find themselves holding assets that are actually declining in value. This dynamic has led to a growing recognition that for home ownership to benefit the poor, it must be linked to strategies for keeping neighborhoods healthy. The difficulty lies in achieving this.

One place to look for answers is in Battle Creek, Michigan. Here, a nonprofit organization called Neighborhoods Incorporated has helped revitalize some of the city's most distressed areas by lending for home purchase and rehabilitation while strengthening the social capital of these same communities. Neighborhoods Incorporated's unique approach requires home buyers to invest in their homes and neighborhoods. By working street by street, not only to upgrade the physical quality of homes but also to build relationships among the people who live in them, Neighborhoods Incorporated has accomplished several goals. Property values have increased, providing many low-income homeowners with a new economic resource. Residents have organized to make their streets safer and cleaner, improving both the reality and perception of their neighborhoods. And the well-being of the larger community has increased as its stock of economic, human, and social assets has grown. These achievements are by no means comprehensive. With limited resources, Neighborhoods Incorporated has been able to focus on just a few target neighborhoods, and even in these areas much remains to be done. But the organization's efforts have resulted in positive change in the neighborhoods-and in the lives of their residents. The story of how this transformation came about offers lessons that can be included in other efforts to increase the assets of the poor through home ownership.

The Long Road Back

Greenwood Avenue was a frightening place for a young girl, yet Denise Washington had to walk down it each afternoon. The street, which runs through the heart of Washington Heights, a largely African American neighborhood on the northwest side of Battle Creek, had a long history of violence, drugs, and prostitution. On her way to and from elementary school and junior high, Denise managed to avoid Greenwood, but once she started high school it was the quickest route home. "When I got to that street," she remembers, "I would start running until I got through, and I wouldn't look back. Anything and everything was happening on that street."

A few years later, just out of high school, Denise and her baby daughter needed a place to live. An apartment on Greenwood was the only place she could afford. "I remember at night there was gunfire, there were drugs," she says. "There was always some kind of police action going on. Three people were murdered in the daylight on that street. This one guy was coming out of his house; he was just walking out of the house at eight in the morning and was shot. They just left him there." Elderly residents slept in their basements to avoid the gunfire. Even during Battle Creek's hot and humid summers, Denise kept her windows closed in fear.

Denise knew the neighborhood well. One of four children, she was raised by her grandparents just a few blocks away. She describes her father as a rolling stone; it seemed that after each of his visits home another baby was born. Overwhelmed, Denise's mother agreed to let her parents care for her eldest daughter. Denise is grateful to her grandparents for providing her with a safe and stable home, but nonetheless the family was marked by tragedy and upheaval. One of Denise's two sisters died in her late teens and her brother was killed in prison, where he was serving time for murder, at the age of twenty-seven. Denise graduated from Battle Creek Central High School and went to work at a local bank, but lacking a college degree could make little progress. A brief marriage that left her with a baby made it hard for her to return to school. Instead, Denise joined the military, serving for eight years in Germany. The stresses of military life took their toll on Denise's second marriage, which ended after seven years. She returned to Battle Creek in 1986, again divorced and now with two young children. The skills she had gained as a stock accountant in the army, however, helped her land a good job with the city, meaning that she could now afford an apartment in a nicer part of town. It seemed that her life was finally on track.

Within four years of her return from Germany, Denise was desperate. Things had somehow gone terribly wrong. Another short marriage had resulted in a third child; her husband walked out before their son was even born. Denise's grandfather became ill and moved in with Denise and her children. His medical expenses, coupled with the costs of caring for the family on her own, were more than she could handle. Just as damaging was Denise's propensity to help others even when she couldn't afford to. "I felt it was my personal duty to save the world," she says today. "My mentality was if you have a loaf of bread and somebody needs it, give them the whole loaf. You'll get some more." Credit card bills mounted and Denise found it hard to keep up. "I have this real personal spot in my heart for single parents," she explains. "I would see families who were less fortunate than myself and I would take my credit cards and buy them snowsuits and boots and whatever else they needed. I don't want to say I was stupid, but I wasn't very cautious.... I looked at it like, `If I need [help], I know these people will come through for me.' I never intended on collecting, but you figure you have all these markers out there.... I trusted everyone. With that mentality, you don't expect anyone to take advantage of you." In 1990, Denise declared bankruptcy. Her fall from a sound credit rating had taken less than a year.

Denise's financial crisis was made worse by the relatively high cost of the family's housing. Ironically, it was her stable city job that had created the problem. Each cost-of-living raise Denise received had led to an increase in her rent. By now she was paying $500 a month for substandard housing that was going for $100 a month to families on welfare. She could not afford to go on like this. When she had first returned to Battle Creek, Denise had heard about a nonprofit housing organization based in Washington Heights. At the time, Neighborhoods Incorporated had not been able to help her, but five years later, with nowhere else to turn, she decided to give them another try.

Over six feet tall, her hair pulled back off her face, Denise Washington cuts an imposing figure. In her mid-forties, she dresses elegantly and wears a large cross. Although she is not a regular churchgoer, Denise considers herself a deeply spiritual person and credits her faith in God for much of the good that has happened in her life. The rest she attributes to Neighborhoods Incorporated. Denise's story emerges slowly-the big picture first, the painful details later on. Articulate yet soft-spoken, she is willing to share her story in the hope of helping others.

Kim Winfrey took Denise's call that day in 1991 and came out to see her the very same evening. Denise told Kim that she had recently filed for bankruptcy and did not see how she would ever be able to own a home. It was clear that Denise's financial woes had sapped her confidence as well as her credit rating. "I went through this thing of failure," she remembers. "I mean, it devastated me. When Kim came along, I had resigned myself to the fact I would never be a homeowner. I would always be mediocre. There was just nothing in store for me."

In Kim Denise found a powerful advocate. A woman of strong opinions and iron will, Kim had joined Neighborhoods Incorporated a few years earlier with a background in public relations. Initially she ran volunteer events and prepared the organization's newsletter but soon traded in her computer for a tool belt and began working on home repair. By the time Denise approached Neighborhoods, Kim had become the organization's housing counselor, responsible, among other things, for assessing whether new clients were ready for home ownership. Although many years have passed since their first meeting, Denise can recall Kim's words as though it were yesterday: "If you believe that I can help you, I can help you," Kim said. "It might not be overnight, but if you're willing to work with me on these issues I can get you into a house."

Denise's dream of becoming a homeowner was one most Americans share. But realizing this goal is harder for some than for others. While the home ownership rate for whites stands at 74 percent, it is only 46 percent for Hispanics and 48 percent for African Americans. Only about half of those earning below the median income are homeowners, compared to more than 80 percent of those earning more than the median. And of single-parent women, only 31 percent own their homes, as opposed to 77 percent of married couples with children. Even apart from her bankruptcy, Denise faced formidable odds in buying a home. Kim Winfrey and the organization she worked for were there to help her beat these odds. To understand how and why, it is necessary to take a brief look back at the history of Battle Creek and the reasons Neighborhoods Incorporated came into being.

Battle Creek was once a boomtown. In the late 1800s, the city had become home to leaders of the Seventh Day Adventist Church who promoted a new kind of health regime that quickly grew in popularity. Wealthy individuals came from around the country to check into the Battle Creek Sanitarium. Run by the Adventist doctor John Harvey Kellogg, the sanitarium offered cures that included vegetarianism, massage, vigorous exercise, and the consumption of a newly invented grain-based food. It was John's brother, Will, who transformed the Adventist promotion of a healthy diet into a commercial venture and, along with C. W. Post and a bevy of other cereal entrepreneurs, turned Battle Creek into the mecca of the breakfast food industry.

By the standards of the day, W. K. Kellogg and C. W. Post were enlightened businessmen, committed to the flourishing of their hometown and their workers. Post built a tract of two-story homes just south of his plant that were offered to employees of his Postum Company at cost. Payment schedules were tailored to income and down payments were as low as $5. Other Battle Creek residents could purchase the lots at slightly higher prices-although in a reflection of the racism of the day, black employees and residents were excluded from the development. Over the years, the company offered cash prizes for the best-maintained homes and gardens and, by 1915, more than 81 percent of Postum employees owned their homes. Battle Creek became known as a "city of homes"; even during the Great Depression, seven of ten residents lived in their own homes-a rate substantially higher than the national average.

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Excerpted from Owning Up by Michelle Miller-Adams Copyright © 2002 by Brookings Institution Press
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.