Money for Mobility: Inside a New Push to Get Poor Families to Better Neighborhoods

Dan Rinzler, Manager, Special Projects and Initiatives, Low Income Investment FundWhere you grow up can have a huge influence on your access to opportunity, and low-income families across the U.S. continue to face high hurdles when it comes to good housing and its related benefits. Concentrated poverty has become an increasing trend in recent years, and low-cost rentals in areas with good school systems are at a premium. But one group of thinkers wants to see a new funding mechanism, Pay for Success, working on housing mobility in a more intensive way.

Related: Could Pay for Success Increase Housing Mobility? Some Funders Want to Find Out

Just what is housing mobility? Hit this link for a nuanced picture, but in general, it's a set of services that includes counseling low-income families who receive housing vouchers in order to provide search assistance, landlord outreach, and post-move support, thereby increasing the chances that the new housing option will be high quality and sustainable. Housing mobility has been tested rigorously and is believed to improve long-term earnings and health outcomes for children.

What's needed now are new ways to scale this approach to improving opportunity, and that's where Pay for Success comes in. The idea, here, is to fund housing mobility programs, tracking these efforts for effectiveness in terms of positive health, education, and earnings outcomes. If benchmarks for improvements are met, the initial investors would be paid back, with interest, for saving money in health care and other social sector costs. 

It's an exciting idea, and to learn more, I spoke recently with Dan Rinzler, one of the key thinkers behind this effort. Rinzler is Manager of Special Projects and Initiatives at the San Francisco-based Low Income Investment Fund (LIIF), a community development financial institution that "provides innovative capital solutions that support healthy families and communities." In its housing work, LIIF has supported affordable housing developments in California, Massachusetts, New York, Texas, Washington State, and Washington, DC.

Rinzler is also one of the co-authors of a working paper called "Leveraging the Power of Place: Using Pay for Success to Support Housing Mobility." Other collaborators on this working paper include Philip Tegeler of the Poverty & Race Research Action Council, Mary Cunningham of the Urban Institute, two longtime experts on housing mobility, and Craig Pollack of Johns Hopkins School of Medicine.

With the growing knowledge base of Pay for Success, Rinzler and his co-authors recognized a perfect opportunity to combine their work with philanthropy's latest hot idea. "Housing can be used really effectively as a platform to address a lot of other social outcomes that have significant fiscal impacts for government agencies," said Rinzler.

I asked Rinzler about another big, recent development for Pay for Success and housing—a plan underway in Santa Clara, California, to use the Pay for Success funding model to provide services and permanent housing to 150 to 200 chronically homeless individuals who are frequent users of emergency rooms, acute mental health facilities and jail. He sees this as a big step forward. "I'm very supportive of ideas that improve the whole life, and are not just about getting someone housed."

In the case of Rinzler and his co-author's proposal, the idea is that housing can function as a vaccine—preventative medicine against education and health problems, and poverty. "We see housing as a platform to improve people's lives across multiple domains—education, earnings, and health."

I asked Rinzler if any big funders had come forward to support the plan to enact housing mobility programs with Pay for Success. "It's still very early," said Rinzler, noting that the new working paper was only issued a month ago. "We're having conversations," he added, but could provide no other specifics yet.

In Santa Clara, a huge coalition of foundations and other partners have signed on to support the Pay for Success housing project for the chronically homeless. With $6.9 million in upfront funders, including the Sobrato Family Foundation, the California Endowment, the Health Trust, the Reinvestment Fund, Corporation for Supportive Housing, the James Irvine Foundation, and, this is a project on a roll.

Another significant feature to the Santa Clara project: Laura and John Arnold Foundation will provide support for the project’s evaluation. A good evaluation of this initiative might go far in helping others get underway. As we've reported, Arnold has lately laid out some big money to build knowledge around Pay for Success, partnering with the Urban Institute. 

Related:The ArnoldFoundation is Betting Big On Pay for Success

"Philanthropy plays a really important role," said Rinzler. "They have such a large platform in addition to money. They can help sustain and grow the model afterward, generate new learning, and influence government decision making down the road."

Rinzler also emphasized that housing mobility programs are a way to work with and enhance the current system. "The service of housing mobility, in the way we're talking about it, is not the cost of housing. It's just a set of services layered over the housing voucher program. The voucher program really underperforms in terms of helping families get to well-resourced, high opportunity neighborhoods."

The barriers Rinzler listed included information gaps, supply side issues, and administrative barriers like lack of portability to different housing authorities. "With the problems in the way the voucher program is currently run, it leaves enormous social benefits on the table."

But if you can add in a range of services, including better financial planning for families and better landlord outreach, says Rinzler, "we have great evidence that you get much better outcomes, and good things start to happen. It's a problem in the way the housing voucher program runs, and if congress won't pay for it, maybe Pay for Success is the way to jumpstart housing mobility programs."

With regard to the portability issue, Rinzler noted that HUD recently clarified a rule that makes moving to different regions a possibility. "It's a big administrative barrier, and HUD is trying to make that easier for families."

Rinzler described the public housing system as Balkanized. "There are over 3,000 housing authorities in the U.S. Anything we can do to make it possible for families to move about the region and access better neighborhoods through voucher programs, that would be a positive."

I asked Rinzler about the Supreme Court's recent ruling on disparate impact, and how he sees it affecting the picture for fair housing. He sees it as a net positive, and hopes it might embolden more challenges of exclusionary zoning laws and other discriminatory practices with disparate impact claims. 

Exclusionary zoning is a very detrimental factor in influencing where low-income families can live, so it's an important thing to overcome. It's kind of like establishing the context, a minimum requirement for a family to be able to live somewhere. There has to be housing available, and if you have communities completely shut off, it's not even an option. It's an important thing to pursue, along with programs like housing mobility.

Housing counseling, which is a large part of housing mobility work, appears to be a rising trend in other social sector circles as well, with a new coalition just announced recently that includes some big players like Catholic Charities, the National Council on Housing and the National Urban League. All of these players could come together to advocate for funders to address housing mobility with Pay for Success. It might be the best fighting chance for the idea.