EXECUTIVE SUMMARY
The Housing and Community Development Act of 1987 (Public Law 100-242)
authorized the Public Housing Comprehensive Transition Demonstration, a
program intended to move residents out of public housing and into their
own homes. The Gateway Housing Program in Charlotte, North Carolina, is
the only demonstration site in the country. This report, mandated by Section
126 of the Act, assesses the effectiveness of the program and responds
to the Congressional charge for a final report.
Program Design and Development
In 1987, the staff of the Charlotte Housing Authority (CHA) developed
a variation of Project Self-Sufficiency, one of the Quality of Life Demonstrations
developed under the Reagan Administration. They called their new program
the Gateway Transitional Families Program. The Gateway program began on
January 1, 1989. It built on the core elements of Project Self-Sufficiency,
which were:
- A coordinating committee composed of representatives of the local housing
authority and major social service providers in the area;
- A procedure for conducting assessments of participant needs in order
to develop individualized program plans; and
- Case managers to help participants obtain the necessary support and
to provide encouragement to achieve self-sufficiency.
The program grew out of a survey of CHA families who wanted to leave
public housing but lacked the work experience and skills needed to obtain
the kinds of jobs that would make this possible. These families were asked
what it would take to enable them to leave public housing, and this led
to two new program elements:
- Escrow accounts; and
- A freeze of rent and need-based benefits.
The freeze on rent and need-based benefits occurs during the program’s
two-year remediation stage and is designed to provide participants
with an additional incentive to work. This freeze is only effective, however,
for those with incomes of less than 50 percent of the local Aid to Families
with Dependent Children (AFDC) and Food Stamps qualifying median income.
If a participant’s income rises above 50 percent of the median income,
the local department of social services determines their benefits in the
normal way. The remediation stage is designed to allow time for participants
to develop the skills necessary to obtain jobs that will pay them enough
to move out of public housing and purchase a home.
The escrow accounts begin during the transitional stage. Participants
can take an additional five years to strengthen their employment skills,
increase their incomes, and save for a down payment for a house. Rents
rise to 30 percent of their incomes during this time, with any portion
beyond the operating cost of the unit, set at $274, going into an escrow
account. The escrow accounts are to be used to help them buy their own
homes.
Target Population
A family must meet several criteria to qualify for the Gateway Program:
- The family’s annual income must be no more than $12,500.
- The head of the household must have a high school degree or a high
school equivalency diploma.
- The head of the household must be willing to commit to educational
and vocational goals aimed at long-term upward mobility.
- The family must already be living in public housing or be on the waiting
list, where they will be given priority for public housing over those on
the waiting list who have not applied to participate in the program.
- The family must commit to leaving public housing in five to seven years.
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Evaluation Method
The evaluation design is longitudinal, following program participants
and comparison group members over a six-year period. Between January 1989
and June 1993, 153 people entered the program. These are the persons that
comprise the treatment group. The comparison group is composed of 71 people
who applied to the program during the same time period but either did not
complete the application process or declined participation once accepted.
Data were collected from four sources: interviews with program participants
and comparison group members; reviews of program records; interviews with
representatives of the service agencies involved in the program; and focus
groups with participants, drop-outs, graduates, and persons who did not
complete their application. Of the original 153 program entrants, 128 were
interviewed at least once, for a response rate of 84 percent; of the comparison
group, 76 percent consented to be interviewed.
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Characteristics of Program Participants
and Comparison Group Members
Program participants and comparison group members had similar characteristics:
- Just over half of the program participants and half of the comparison
group members came from the public housing waiting list.
- More than 94 percent of both groups were African-American, female,
and single.
- Roughly half of both groups were receiving AFDC at the time they applied
to the program.
- About two-thirds of both groups were working; one-third, full-time
and another third, part-time.
- Almost all had children under the age of 17 when they were first surveyed,
while 91 percent of program entrants and 87 percent of the comparison group
had children younger than 12 years of age.
- Incomes among 84 percent of participants and 93 percent of comparison
group members were below $1,000 a month at application.
- The only significant difference between the participant and the comparison
groups is that program entrants had somewhat more education.
Of course, the fact that the comparison group chose not to participate
in Gateway suggests that they may be different from the participants in
some unknown respects.
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Program Outcomes
The program had difficulty graduating participants, with only 32 percent
of those who entered the program from 1989 until mid-1993 finishing. Another
62 percent dropped-out of the program while the remaining 6 percent continued
with the program. The main reasons for the high drop-out rate were:
- Inadequate staffing;
- Non-compliance with program or public housing rules by participants;
- The difficulty of juggling both student and parental responsibilities;
and
- The necessity to supplement AFDC payments during the remediation stage
by working.
Regardless of whether the participant dropped out or graduated, the
average program cost for the first 153 participants was $15,909 per participant.
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Program Impacts
For those who graduated, the program had a moderate impact on their
post-program educational level, employment, receipt of AFDC and Food Stamps,
and their dependence on public housing assistance.
Education
- The majority of both program participants and comparison group members
attended education programs during the time of the program. However, a
greater proportion of program participants attended school, 90 percent
compared to 74 percent of comparison group members.
- On average, participants attended more months of school than the comparison
group, but a large majority of each group did not complete their education
programs.
- Program graduates completed education programs at a higher rate than
other program participants or the comparison group.
Employment and Income
- The majority of program participants and comparison group members shifted
from part-time to full-time work during the time of the study. However,
the greatest increase in full-time employment occurred among program graduates.
- Program graduates had increased their average incomes and hourly wages
by the last observation more than other program participants or the comparison
group.
Need-Based Benefits
- Both graduates and withdrawals decreased their dependence on AFDC at
a higher rate than the comparison group. By the end of the evaluation,
10 percent of graduates received AFDC, compared to 37 percent of the comparison
group.
- Graduates also decreased their dependence on Food Stamps more than
the comparison group: 27 percent of program graduates received Food Stamps,
compared to 48 percent of comparison group members.
- The greatest monetary reduction in both AFDC payments and Food Stamp
benefits was among graduates.
Housing Assistance
- Graduates received housing assistance at a lower rate than other program
participants and the comparison group. Thirty-two percent of graduates
received housing assistance after leaving the program, compared to 56 percent
of the comparison group and 46 percent of program withdrawals.
- Dependence on housing assistance among graduates declined by 26 percent,
where the comparison group experienced a 9 percent increase.
- Graduates were able to own homes by the last observation at a higher
rate than other program participants or the comparison group -- more than
one third of graduates owned a home, compared to 9 percent of the comparison
group.
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Recommendations for Other Self-Sufficiency
Programs and Welfare Reform
The program’s modest impacts point to recommendations for other self-sufficiency
programs and welfare reform.
Two years for remediation is too short. Gateway participants
were the most educated and motivated of public housing residents, but they
had a 62 percent withdrawal rate. For those who are less educated and less
motivated than the people who entered the Gateway Program, becoming self-sufficient
could take much longer. These results suggest that it will take most public
housing residents more than two years to complete the education necessary
to substantially increase their incomes and to become totally self-sufficient.
Likewise, it will likely take those on welfare more than two years to gain
the skills to find jobs that pay enough to be self-sufficient.
Leaving need-based benefits is the most difficult part of achieving
self-sufficiency. Roughly a third of graduates still received welfare,
and 10 percent still depended on Food Stamps after leaving the program.
Without funding for adequate staffing, a program based upon case
management will likely fail. One over-arching reason for the high drop-out
rate among Gateway participants was the lack of adequate staffing to guide
them through the program. Those who are trying to leave welfare and public
housing need help negotiating the many obstacles to self-sufficiency.
Moving people off public subsidies will be very expensive in the
short run. The Gateway Housing Program cost more than $15,000 per participant,
and only 32 percent of those participants graduated. Furthermore, the increases
in wages and employment were moderate, compared to the comparison group.
The Gateway Program offered stable benefits as long as the participant’s
income remained at less than 50 percent of the area median. The question
for welfare reform is if threatening to end and actually terminating those
same benefits will be any more successful in moving people, not simply
off public subsidies, but also out of poverty.
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