Evaluating the Social Benefits and Costs of An Enhanced Self-Sufficiency Program to Promote Low-Income Home Ownership
The Family Self-Sufficiency program (FSS) aims to build financial, human, and social capital in households receiving housing subsidies. Authorized by the National Affordable Housing Act of 1990, FSS is a central part of federal efforts in this area. Despite the program’s longevity and importance, no research assesses its comparative social benefits and costs. Our research addresses this void by estimating the benefits and costs associated with an enhanced variant of the FSS program: the Denver Housing Authority’s (DHA) Home Ownership Program (HOP). Our research is motivated by the following question: To what degree does participation in DHA’s HOP yield net benefits to participants, nonparticipants, and society as a whole?
In assessing benefits, we rely upon parameter estimates from a recent set of sophisticated statistical studies that employ quasi-experimental methodologies and permit one to draw causal inferences with substantial confidence. We utilize administrative and survey data collected for the 2001–2009 cohort of HOP participants, whom we tracked longitudinally through 2011. We draw upon administrative records to assess costs. We employ a comprehensive accounting framework, distinguishing benefits and costs accruing to program participants, nonparticipants (other citizens, taxpayers, and governments), and their aggregation—society as a whole. We use Monte Carlo simulation techniques to approximate distributions of benefits and costs. This allows us to assess the precision with which we can answer our research question.
The postgraduation earnings of HOP participants increase as a result of the human and social capital gained through participation . Moreover, participants benefit from increased wealth associated with purchasing a home. That wealth, accrued initially through downpayment-assistance grants and then through home appreciation, grows on average by $204 annually. We also find substantial health benefits for children and youth. Compared with the children of nonparticipants, the offspring of participants live in neighborhoods with lower levels of violence and social disorder, less residential turnover, and more neighbors with higher levels of education and occupational status. Further, these neighborhoods have higher proportions of foreign born residents. Finally, we conclude that the program yields substantial net benefits to program graduates (both those who bought homes and those who did not) as well as to society as a whole. The costs to participants include the loss of rental housing subsidies and housing stability associated with such subsidies. Additional costs are incurred by DHA for the provision of case management, classes, and subsidies to HOP participants. .
Conclusions and Implications
By expanding housing-assistance and other social safety-net programs to build the financial, human, and social assets of low-income households, social workers can provide substantial net benefits to participants and society as a whole. Social workers should not overreact to low-income homebuyers’ disastrous experiences during the mortgage-market meltdown of the last decade by concluding that the profession should abandon all efforts to expand home ownership opportunities in this realm. Instead, welfare agencies should explore collaborations with housing-assistance agencies to expand the FSS programs to more low-income families.