CSL has made a major commitment to bringing "asset and wealth development" into the conversation about helping low-income families break the cycle of poverty. Too many of our neighbors just can't get ahead. Until families can develop assets and wealth, it's hard to move up the economic ladder.
Unfortunately, there are not a lot of ways for low-income families to develop wealth and assets. They often don't have jobs with employers that offer retirement accounts with matching incentives. The wages earned at those jobs aren't enough to meet a family's current obligations, let alone get ahead.
Enter the FSS Program. The U.S. Department of Housing & Urban Development (HUD) started FSS, the Family Self-Sufficiency Program in 1990. The program encourages residents of HUD-subsidized public housing to work more, earn more, and save more. Here's how it works:
1) Families in HUD-subsidized housing pay 30% of their income in rent
2) Normally, if a family earns more, then they pay more. This model becomes a disincentive to work.
3) By enrolling in FSS, when rent increases, the increase is captured in an escrow account for the benefit of the resident
CSL runs the FSS Program at Hawthorne Place Apartments in Independence for POAH (Preservation of Affordable Housing), the property owner. We became a HUD-approved FSS Program in 2017, and began enrolling families in the latter half of 2017. In under two years, we have 113 families enrolled in the program. We are proud to report that as of April 1, 2019, our escrowing families have cumulatively saved more than $100,000!
These families can escrow for up to five years, and can use their escrow for homeownership, higher education, and/or credit repair. Participants are all in an active Financial Coaching relationship, and meet with their Coach to track their progress. Consider the story of one of our Hawthorne neighbors, Beth, as written by her Financial Coach, Jeff Sheets:
"Beth Joined the FSS Program in late 2017. She is originally from New York and moved here with her ex-husband because of relatives in the area and a job. He left the family fairly quickly after the move and went back to New York. She moved to Hawthorne because she had no means to support for herself and her three children. We met Beth and she was extremely motivated to get a job and start escrowing. She went through forklift training but could never get any good job opportunities, so she decided to drive a school bus and started in September 2018. Her goal is to own a home. She currently has $3,360 in her savings account and is now starting to see the possibility of getting her own house. What I like about Beth is that she emails me with questions all the time about financial matters, whether it is taxes, home ownership, etc. She is extremely interactive and takes advantage of all of her resources."
Hard work will get people ahead, but the road to economic opportunities is supported when families have goals, and the opportunity to develop assets along the way.
This month, we're celebrating with families at Hawthorne by giving away (appropriately) 100 Grand bars! We're celebrating the accomplishments, and encouraging new families to join FSS.
On April 24, we celebrated a milestone for our FSS work at Hawthorne. Robert, who CSL helped obtain a job at the local Guitar Center distribution facility, graduated from the FSS program and withdrew his savings. He is our first graduate of the program! He is moving from subsidized housing to market-rate housing, and recently got a raise to $14/hour! His departure from Hawthorne means that there is now an opening for a family seeking affordable housing.
Your philanthropy is making this work possible. We look forward to celebrating with you in a few years when we help families save their first million dollars!