2014 Competition Winners (c)

Informality and Instability at the Bottom of the American Housing Market

 

by Edward G. Goetz (Center for Urban and Regional Affairs, University of Minnesota) and Kimberly Skobba (Consumer Research Center, University of Georgia)

 

Millions of people at the bottom of the class structure in America are unable to find adequate, safe, and affordable housing. Their housing patterns consist of a series of makeshift informal arrangements, negotiated with family members, friends, or sometimes mere acquaintances, punctuated by occasional forays into the „formal? housing market in which they enter into contractual leases with property owners or their agents. For many economically marginalized people, however, these attempts at securing housing of their own through mainstream means are generally unsuccessful, often ending in forced displacement caused by an inability to meet rent payments or a change in their personal circumstances, or by turnover in ownership, property condemnation or other circumstances beyond their control.

 

That housing is often unaffordable for many is, of course, not news. What is less extensively understood is the variety of strategies that very low-income households employ in order to obtain and maintain shelter and the impact these strategies have on families. Most of what we know about the housing problems that confront the very poor comes in a series of snapshots. We can see for a given point in time the number of people who are homeless, the percentage of cost-burdened households, how many renters were evicted, and estimate of the population doubled-up with friends or family. These fragmented snapshots are useful in estimating the magnitude of housing problems and tracking changes over time. However, they say little about the ongoing experiences of very low-income families in the housing market.

 

Our approach in this book is to focus on a relatively small number of households and describe their experiences over an extended period of time. We examine entire housing careers – all of the housing accommodations utilized by people over their entire adult lives. We shift our analytic focus away from the problem – eviction, homelessness, doubling up – and towards the families. Our analysis allows us to track people through their life courses and describe their passages through housing markets. Such a shift in focus allows us to answer a different set of questions, not how many people are doubled up with family or friends at a given time, but how and under what circumstances very low-income families resort to such strategies; not how many forced evictions occur at any point, but how formal housing accommodations result in such evictions for people in this income stratum and what happens afterwards.

 

Our findings, above all else, paint a picture of extreme and enduring instability in housing for those at the bottom. Instability in housing arrangements is characterized by short-term accommodations that change frequently. It is also characterized by instability in household structure as people take on or shed partners, boarders, and family members in efforts to secure or maintain housing. Our study reveals the extensive degree to which very low-income families rely upon informal housing arrangements, doubling up with 2 others in long or short term arrangements not governed by leases or legal agreements of any kind. These three outcomes, instability in housing, heavy reliance on informal housing arrangements and instability in household composition point to a constant condition of adaptation and negotiation, a largely hidden process by which people of extremely limited means make repeated adjustments in both their housing and their households in order to find and keep a roof over their heads.

 

Robyn has moved 15 times in her 33 years as an adult. Among the people we studied, this is a record of relative stability. Yet, half of Robyn’s housing accommodations have been informal arrangements, and only once in her 15 moves did she not change households. Lisa has made 13 moves in a nine-year housing career. She has engaged the formal housing market (i.e., renting with a lease) on only two occasions. Lisa has stayed with family or friends seven times and been housed in institutions (jail, homeless shelter, etc.) five times. Changes in household composition occurred in 12 of the 13 times moves. Joyce has moved 28 times in 29 years, 23 of those moves also meant a change in household composition. She has engaged the formal housing market only seven times and been housed informally 14 times during her housing career.

 

For these three women and others like them, housing instability, household change, and reliance on informal housing accommodations constitute the modal housing experiences. For very low-income people housing accommodations, formal and informal, fail frequently. Many of their moves are forced upon them when rents are increased beyond ability to pay, or when units are sold to new owners with different plans. In other cases, it is the household that fails, as when a woman’s partner, taken on in part to help make ends meet, becomes abusive, or when relationships with family or friends sour, or when roommates go to jail. Indeed, the shifting relationships that define and redefine households are among the greatest determinants of residential instability among the very low-income individuals we have studied. Finally, of course, individual circumstances can also cause mobility and instability as when drug use interferes with the ability to maintain an income stream or to conform to lease requirements.

 

Several revealing studies have been completed in recent years that analyze and describe the ways in which the very poor meet daily needs. Edin and Lein’s Making Ends Meet and Dominguez and Watkins (2003) research on social capital among low-income mothers both owe to Stack’s groundbreaking work, All Our Kin which documents the survival strategies of very low-income Black women. These and other studies highlight the almost constant pursuit of alternative strategies of resource-generation undertaken by very low-income households. From reliance on kin-networks and social capital, to utilizing institutional forms of support such as food banks and social service agencies, to engaging in informal and sometimes illicit economic transactions, the very poor cobble together resources that allow their survival. These studies have for the most part focused on income-generation strategies. In our study we show that there is a parallel process undertaken to secure and maintain shelter. Kin-networks are extremely important in this process, as is reliance on support networks of friends and acquaintances. Formal forms of support are also used, ranging from subsidized housing to emergency shelters. We show that a very large percentage of the housing accommodations experienced by those at the bottom of the class structure are informal, “off the books” and thus largely invisible. But, we show the process by which people who have little to no means go about securing shelter, and how these strategies work and do not work.

 

The Study

In order to examine the strategies used by very low-income families to navigate an unforgiving housing market, we conducted in-depth, structured interviews. Through our interviews we reconstructed the entire “housing careers” of persons living in subsidized housing and on the waiting list for such housing in Minneapolis and Saint Paul, Minnesota.

 

The participants that we interviewed had extremely low-incomes and irregular work histories. The respondents were frequently unemployed; at least 31% of the time over the course of their housing careers they reported not having a job.1 They supplemented their wage earnings with other sources, over half of the time these were public assistance programs, but 27.5% of the time support came from significant others or parents, and 10% from child support. The respondents had incomes below 30% of the median family income in the region 91% of the time. Respondents were below 50% of median income more than 97% of the time. Two-thirds of the respondents were single parents, 71% were people of color, and only 40% had any education beyond high school, only 12% with a post-high school degree and almost all of them from two-year colleges or vocation/technical schools.  This likely under represents the true extent of unemployment because if they were employed for part of the time that they spent in a housing situation we counted it for the entire duration of their accommodation.

 

Interviews provided information about every housing accommodation respondents had experienced as an adult. Five follow-up interviews were conducted with a subset of participants to more deeply investigate issues such as housing search strategies, social support networks, and the participants? own assessment of the trajectory of their housing careers. Through these interviews we are able to reconstruct the progression of people through the housing market and across the life span. We focus on lived experiences of dozens of families, we document the extreme residential instability they face, the strategies they employ in searching for accommodations, the tradeoffs they make, implicitly and explicitly in those searches, and the impacts of housing insecurity on their lives.

 

Our methods provide a number of different avenues for analysis. We construct case stories for each of our interviewees, a comprehensive history of housing experiences and the path taken through the housing market. By looking at the individual as the unit of analysis we are able to characterize housing careers by their stability, by the trajectory of housing conditions and experiences. We interviewed 77 people who had an average housing career of 19 years by the time we had interviewed them. Thus, we have detailed housing and household information for 1405 person-years for this group. By geocoding the location of each residence we are also able to track the path taken through and across the urban neighborhoods inhabited by our interviewees. We look at neighborhood conditions as a component of the housing experience; we examine neighborhood quality, satisfaction, and the role of neighborhood in housing mobility decisions. We are also able to look at census-based indicators of neighborhood quality to help characterize the residential experience of people at all stages of their housing careers.

 

Our research also uses the “housing accommodation” as the unit of analysis for some research questions. Among the 77 people we studied, a total of 1025 different accommodations were reported. By examining these accommodations we are able to make generalizations about patterns of movement and instability. For example, 31% of the accommodations reported by our interviewees were “off-lease” arrangements. This was the most common form of housing arrangement for those we interviewed. Nearly one-quarter of the formal, on-lease arrangements ended directly because of affordability problems and half ended through circumstances that forced the family out of the unit. Over two-thirds of the evictions were followed by a move to an informal accommodation or to an institutional setting (most often a homeless shelter). The average length of accommodation (i.e., the stability of residence) was no greater for our interviewees at the end of their housing careers than it had been at the beginning.

 

The Book

 

Chapter 1

The book begins with an introductory chapter in which the housing conditions for very low-income people in the U.S. are summarized through national statistics on affordability and homelessness. We also describe the housing career research approach and our sample of respondents. The findings of the book are previewed and put into a larger context of what is known about the more general coping strategies of very low-income people.

 

Chapter 2: Informality

In the second chapter, we present our findings on informal housing arrangements. Doubling up with friends and family was the modal housing accommodation for the participants in our study. Off-lease, informal arrangements took on many forms. In some cases it was joint tenancy – roommates sharing an apartment each with a bedroom. In other cases it was returning to parents for periods of time until economic or interpersonal conditions allowed or forced a change. In still other cases, families would double-up with others, occupying a basement room and/or sleeping on couches for extended periods of time. Families often negotiated payments to their hosts or provided in-kind contributions to the household and in many cases these arrangements allowed greater flexibility than a lease payment arrangement (due on the first of the month, every month) allows.

 

Low wages and low earning capacity mean a constant juggling of finances that make meeting all basic needs such as food, shelter, and clothing, difficult on a monthly basis. While families may reduce expenditures on food and clothing for short periods of time to make it through difficult periods, the nature of housing is different in two ways; first, it is generally the largest single household expenditure and second, it is invariant. The very low-income household competes with all other households in the formal market, a competition in which they are disadvantaged by virtue of their limited income, and typically by the imperfect housing history they have accumulated as a result. The private market takes on the aspect of Hobbesian world of fierce and unrelenting struggle in which they are ill-equipped to compete (Venkatesh 2006). The result for very low-income families is extreme residential instability and/or negotiation of informal accommodations with friends or family.

 

Informal housing arrangements allow persons to make periodic and sometimes non-cash payments to secure housing. For many people of very limited means, however, accommodations are arranged and changed frequently due to the inherent instability of such arrangements and the limited earning power of such families. The housing strategies of very low-income people mimic their employment and consumer behavior in that formal and informal markets are employed interchangeably and there is frequent movement back and forth (Kalil and Ryan, 2010; Sigle-Rushton and McLanahan, 2002). The formal market is engaged when possible and/or convenient and the informal market is resorted to when necessary or convenient. Chapter 2 documents the fluidity of movement by very low-income people from the formal to the informal housing market and back again.

 

Chapter 3: Instability

Residential instability is a central feature in the lives of the poor. Unsteady earnings, irregular employment, or an unexpected hike in non-housing expenses can put a family in jeopardy of falling behind and facing eviction. Even when families meet their obligations under the lease, they are often forced into mobility by the nature of the housing stock they occupy. Ownership can change, buildings can be sold, condemned, demolished or renovated, all of which might result in termination of tenancy. Paid work in the formal sector “provides incomplete protection against housing instability” (Phinney et al., 2007). When families engage the informal housing market, merging households with others, doubling up with family and friends, instability derives from the difficulty that these arrangement produce for the relationships upon which they are based.

 

The instability in their housing careers is one of the more defining characteristics of the group we studied. The average duration of a housing accommodation for our study participants was 18 months and the median was just 12 months – this among people who had been on their own an average of 19 years. Among some, their path through the housing market was one of constant movement; Joyce, a 47 year old woman and mother of two had lived in 29 different places in 20 years. For Thomas, only two of his 26 stays over a 20 year period were longer than 18 months. Early in his career he experienced a stretch of 15 different accommodations, none of which lasted for more than one year, and only two of which lasted for more than six months. There was, furthermore, no evidence that the low-income families in our study were becoming more stable in their housing over time. The vast majority of our study participants never achieved lasting stability in their housing arrangements.

 

Instability of housing was often accompanied by instability in household composition. As Venkatesh argues, “household composition is driven fundamentally by economic necessity” (2006, 44). Alliances are formed with acquaintances, families are prevailed upon, and friends are enlisted to provide assistance when housing problems arise. These strategies mean taking on boarders or roommates to help make the rent, or crowding into a basement, or „couch-hopping? with friends, or moving back in with parents when necessary. The variability of household composition has also been a long-noted characteristic of very low-income communities, leading Hannerz to describe the “open household boundaries” of very low-income families in the 1960s (Hannerz 1969). Our participants? households changed in a number of ways; roommates were added or changed, life-partners would come or go, but also children might be lost, moving to other family members with better housing situations or taken away by the state or by the other parent. The relationship between housing instability and household composition changes was recursive – household changes caused and were caused by changes in housing accommodations.

 

Chapter 4: Housing Search

The circumstances of very low-income households dictate different housing search strategies than what is seen for middle-income people. In many cases, the notion of a “housing search” in fact does not apply. Limited ability to pay prevailing rents, poor rental histories, and reliance on informal means of housing suggests that shopping for housing rarely involves perusal of rental listings, multiple visits to available apartments to comparison shop, or enlisting the aid of a real estate professional. Instead, word of mouth or opportunistic alliances determine housing search outcomes. Often, the resulting housing decisions involved significant tradeoffs – for example, sacrificing neighborhood quality in order to secure affordable shelter (see Clampet-Lundquist 2003). In chapter 4 we examine the search activities of our respondents.

 

Participants? own assessments of their moves were typically not related to qualities such as neighborhood environment or the physical conditions of the unit. Participants were just as likely to perceive a move into a shelter, for example, as an „upward? move as they were to characterize it as a step backward. Many moves either solved or created interpersonal issues and relationship troubles that directly affected the participants? subjective assessment of their housing situations. Fleeing an abusive situation can make the move from an apartment to a shelter or to the couch of an acquaintance a positive move. Making and breaking alliances that are in place to solve housing affordability problems trumped housing conditions and neighborhood environment when respondents judged their housing experiences.

Chapter 5: Housing Subsidies

Rental subsidies, typically Housing Choice Vouchers or Project-based Section 8, reduce some of the disadvantages that lower income families face in the housing market by bringing housing costs in line with income. Specifically, subsidies are effective in reducing the chronic residential mobility faced by very low-income families (Berger, Heintze, Naidich and Meyers, 2008; Bartlett 1997), as well as ending cycles of episodic homelessness (Dworsky and Piliavin 2000).

 

Housing subsidies allowed many of our participants to achieve greater housing stability and to live independent of family and friends. Participants in our study were either living in a project-based Section 8 unit, had their rent subsidized with a Section 8 Housing Choice Voucher or were on a waiting list to receive housing assistance at the time of the interview. Among our study participants, housing accommodations that were subsidized were of longer duration on average than other accommodation types. In fact, the average duration of subsidized accommodations that we measure is an underestimate of the true difference because three-quarters of our study participants were living in subsidized housing at the time of the interview and thus the length of those stays was artificially truncated by the timing of the interview. Several of the participants with vouchers had experienced relatively long periods of housing stability; seven had stays of three years or more following the receipt of their voucher, and two had lived in their current housing with a voucher for 10 years.

 

In addition to making housing more affordable, housing subsidies make families visible tenants. Housing subsidies often link low-income families to formal support. Many of our participants living in project-based subsidized housing described receiving support from the housing organization that was crucial in addressing chemical and mental health issues and other service needs. When provided in a multifamily setting, subsidized housing often provided an environment in which residents living in a similar situation were able to provide mutual support.

 

Chapter 6: Neighborhoods

The neighborhood environment for low-income households has taken on greater importance in public policy circles in recent years. The idea that neighborhoods matter for life outcomes has propelled a number of policy initiatives aimed at facilitating or forcing the movement of low-income people out of high-poverty neighborhoods. In chapter 6 we examine the role of neighborhood in the decision-making of our participants and in their housing outcomes. If the policy hypotheses are correct, we would expect to find respondents desiring but unable to exit high poverty environments. On the other hand a significant amount of research points to the importance of social ties and physical proximity to social support networks as primary concerns for very low-income households (see Brown and Gary 1987; Rossi and Rossi 1990; Roschelle 1997; Wellman and Galin 1999). These ties would tend to limit the desire of families to disperse widely (Dawkins 2006). High rates of residential instability can disrupt place-based social networks and damage a household’s ability to maintain the cash and in-kind benefits gained from private safety nets (Harknett 2006). This is a high-likelihood outcome for our participants given the extreme instability in their housing careers.

 

In chapter 6 we examine these issues and more related to the neighborhood environments of our study participants. We find that participants have spent large portions of their careers in high poverty neighborhoods, and though they occasionally exit such environments, they are typically unable to sustain residence outside of disadvantaged neighborhoods. We also find, however, a general disregard for neighborhood environment as an important element in their housing experiences. Neighborhood conditions were rarely identified by participants as important in determining the fit or quality of their accommodations. Neighborhoods were almost never mentioned as factors in determining when or where to move. However, among those dependent upon income from informal work, there was a need to position themselves in neighborhoods where that type of work exists and where informal markets flourish (see also Venkatesh 2006). This need predisposed families towards lower-income neighborhoods.

 

Summary

Our study provides a unique view into the housing experiences of very low-income families. Using a housing career approach we are able to examine in detail the path of families in poverty through the housing market and over a life span. In so doing, we are able to make contributions to the understanding of housing informality in the U.S., and the residential and household instability of very low-income families. Our work will also provide insights into the highly-constrained search strategies of these families. Our study intersects as well with public policy issues related to the effectiveness of housing subsidies and the importance of neighborhood environment for very low-income families.