Why Catholic Charities is building houses
In the first installment of this series on the four obstacles to housing stability – conviction, eviction, low income and disability – director of housing at Catholic Charities of Kansas City-St. Joseph Jarrod Sanderson explained how a past conviction can frustrate housing stability, making it seem almost unattainable. An 11-year Catholic Charities of Kansas City and St. Joseph veteran, Sanderson in this issue discusses some revolutionary steps the organization is now undertaking to meet the chronic issue of income insufficiency in terms of affordable housingQWhen people hear about low income being an obstacle to stable housing, that seems pretty common-sense. But you say it’s not always that cut and dried. Is there some nuance we’re missing? What exactly do we mean by “low-income?” ATrue, the low-income standard is fairly straightforward. Low income is the No. 1 reason people get evicted. The vast majority of evictions aren’t someone damaging property or causing problems with neighbors, it’s because they can’t afford to pay the rent anymore. We typically look at a moving benchmark that says if you’re spending more than 30 percent of your income on rent or mortgage payments, then you are cost restricted by housing—you are in a situation where your financial liability is unstable.
But what people may not appreciate is the creeping income insufficiency that can come when we face a housing market as we do in Kansas City right now. We have a housing market that is hot. Rents are going up everywhere. Now, for a lot of people this is a good thing. Their property values are increasing. If they own real estate, they’re making more money off of that real estate.
But for the people who are already on the cusp of spending that 30 percent of their income on rent, their rent is creeping up as the Kansas City housing market inches up. But their income is not increasing alongside. And so at some point—even if nothing happens to them, if there’s no emergency, if there’s no medical crisis, no family emergency, no lost job—even then, they can still suddenly find themselves one day not being able to afford their rent.QSo we’re looking at an emergency in slow motion? How does the income insufficiency begin to take its toll?
QHow widespread do you estimate the problem of income insufficiency is? What do the average numbers say for the Kansas City and Saint Joseph area?
AIf you take just an average figure in Kansas City, rent or mortgage across the board is somewhere around $950 a month. If you take that and plug it into that 30 percent of income standard, somebody needs to be making north of $40,000 a year to be able to afford $950 a month. Now, we know that somewhere in the neighborhood of 30 to 40 percent of Kansas City isn’t making $40,000 per year. So you have anywhere from three to four out of 10 people already cost burdened by just housing. Plug that statistic back into Kansas City population figures, and we’re talking hundreds of thousands of people who can’t afford the place they’re living.
AOnce circumstance has put you in that insufficiency situation, typically then it just takes another piece to fall and you now have a crisis. And so you have to start choosing between vital parts of your life. Are you going to feed your children? Are you going to pay your rent? Are you going to make your next car payment? And you find yourself choosing between either/or for those things—all of which you have to have. Not having enough income to keep up with the housing market puts you in jeopardy where if you want to simply maintain your current housing, you have to let something else go that’s probably vital.
Anybody who’s making less than $15 an hour may fall into that category. And if you’re someone who is working for minimum wage, it doesn’t matter if you’re working full time, you probably can’t afford the place you’re living in, or you’re being pushed into substandard housing, where you’re maybe paying only $200 or $300 per month, but the water’s not on, the building’s not being maintained, you have bedbug infestation and all kinds of other things that are probably going to lead to you not being able to live there at some point.QThat’s why we’ve been focusing on the factors that affect housing stability in this series. But you have said it can work in the other direction, as well? Housing instability can have a domino effect that impacts other parts of people’s lives. Explain that. AQuite often we find someone will choose paying for their housing over anything else first, because it’s the most immediate need. So, for instance, if somebody has a car that breaks down, then they’re choosing to not get that fixed in order to make rent. That means they’re now reliant on public transportation, which changes their entire daily schedule. That change in turn may cause them to lose their child care, because now they have to travel by bus and can’t get there to pick up the kids on time. That in turn may actually cause them to lose their job because they can’t get to work on the same schedule. And then, of course, that compounds the income hit. And so, it cascades. Those are the kind of decisions people are forced to make when they’re paying too much for housing. QThe exciting news is that Catholic Charities is doing some things that are unique not only in our sphere, but in the charitable organization world in general. What are we doing to help people overcome these obstacles and give them stable housing? What are we doing to make an impact? AWe’re helping on two fronts. First, we spend somewhere between $200,000 and $250,000 a year helping people pay utility bills. So when things get dicey month to month, threatening that ability to make rent, we can help in the short term.
In the longer term, we’re actually trying to develop housing that understands this need from the initial development. We’re trying to find ways to build quality affordable single-family housing, because that’s where one of the big dearths in the city is. We are developing that housing in a way we can actually hold rents at that 30 percent of income for people making $30,000 to $40,000 a year and still offer them quality, affordable house with space for a family. We’re doing that in part because we have support from the community and because we have our own funding mechanisms to offset some of the costs of construction. And we’re not trying to generate a profit beyond what it takes to maintain the program. That allows us to not have to charge as much. We’re able to offer rents that are 20 to 30 percent below market to people who potentially have some issues in their background, but who nevertheless are ready to be good residents and good tenants. QYou’re talking about Catholic Charities’ Neighborhoods of Hope program. Give us a brief description of Neighborhoods of Hope.
ANeighborhoods of Hope is a separate 501c charitable organization Catholic Charities developed specifically to build that type of housing. Historically, Catholic Charities hasn’t developed housing ourselves; we’ve worked with other property owners to provide services to house our people. Neighborhoods of Hope is designed as a holding entity to develop those properties ourselves, so we control the costs, the expenses and the services provided from start to finish. And that’s how we can control development costs and fundraising for development that allows us to charge cheaper rents.
We just broke ground on two single-family homes in the Northeast—three bedroom/one bath. Those are our first attempt at owning, building and developing single-family housing from the ground up. We’re treating those as our proof of concept, showing we know how to do this, learning what we don’t know. Once we have the process down and can replicate it faster and more effectively, we’re hoping to get funding for six to 10 more units immediately, and then our longterm goal would be to do dozens per year in the near future.QCatholic Charities is getting into the business of being a landlord?
A No. I wouldn’t say that, for a couple of reasons. First, Catholic Charities has owned housing in the past, primarily for seniors. So we’re not getting into something new. We will continue to do that. We’re not getting out of that market throughout our service area. We’ve just got a 38-unit building funded in Saint Joseph for people 62 years old and older and those who qualify under a special needs category. Rents for that property on one- and two-bedroom apartments will start somewhere around $185 and top out around $525 depending on unit size and income. Second, we are not competing with the traditional housing market. We are simply extending our mission of helping those who can’t find stable housing in that traditional market. Neighborhoods of Hope will be open access, accepting clients potentially with criminal backgrounds, with evictions, with low income. That’s where Catholic Charities has an advantage.
Through our own programs and our nonprofit partners, we get a chance to know people. We get to work with people as they try to overcome barriers, and we get to know them beyond just a background check. Sometimes that takes months. Sometimes that takes years. But we get the time to figure out who this person is, where they are in their life, and if there are any outstanding barriers that would cause problems in maintaining a lease. That’s an advantage the traditional housing market doesn’t have. We want to be able to open housing opportunities to anybody who has demonstrated they’re ready, not just to those who can manage to look like it on paper.