Financial Counseling Helping New Yorkers Unlock Affordable Housing
EDITOR’S NOTE: This is the third entry in a series of blog posts published by Prosperity Now’s Affordable Homeownership team about the role of financial capability in affordable housing services to help more low- and moderate-income households achieve financial security. Our first post looked at a promising program to boost economic opportunity for families living in publicly-assisted housing. The second post focused on research that sheds light on housing and financial capability integration.
Today’s post is from the New York City Department of Consumer Affairs (DCA). Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCA empowers consumers and working families by providing the tools and resources they need to be educated consumers, and achieve financial health and work-life balance. DCA also conducts research and advocates for public policy that strengthens its efforts to support New York City’s communities.
For many people living in or near poverty, access to affordable housing is a vital part of financial stability. But, particularly here in New York City, finding an affordable place to live is a struggle when the cost of housing is rising but incomes are not.
So how can we make it easier for people to acquire affordable housing? An important step is to guide people through the process applying for affordable housing. A study from the New York City Department of Consumer Affairs (DCA) found that poor credit, a lack of savings and difficulty navigating affordable housing applications (including the complexity of accurately calculating household income to meet eligibility requirements) are key financial barriers preventing eligibility for affordable housing.
That’s why in the spring of 2017, the DCA Office of Financial Empowerment (OFE) and the New York City Department of Housing Preservation and Development (HPD)—with support from the New York City Council—launched the program, Ready to Rent: Financial Counseling for Affordable Housing. Ready to Rent assesses whether financial counseling could help affordable housing applicants submit a stronger application. The program is a continuation of a pilot program supported by Citi Community Development in 2014 that had promising initial findings.
The program, run in partnership with nonprofit financial counseling provider Ariva, offers housing-focused financial counseling services that draw directly upon requirements of Housing Connect, which allows people to apply for affordable housing in New York City. In addition to completing OFE’s Financial Counselor Certification, counselors are trained on the U.S. Department of Housing and Urban Development’s income qualifications and fair housing policies, as well as HPD’s affordable housing marketing and lottery process, policies and procedures.
Counselors help New Yorkers review their credit history and other factors affecting housing eligibility, accurately calculate their income, identify financial goals and create realistic budgets that include rent, moving costs and other housing-related expenses. In the third and current phase of the program, we have already served nearly 500 New Yorkers and are on target to serve even more. The majority of participants have been 45 years old or above and earn below $20,000 annually, though many work full-time jobs.
The story of one client, Ms. Robinson, illustrates how the counseling process opens up access to affordable housing opportunities. Ms. Robinson met with a Ready to Rent financial counselor after being rejected from the housing lottery to better understand the application process and why she had been denied. Ariva’s financial counselor informed Ms. Robinson’s that some of her credit history was concerning—specifically, her debt-to-income ratio was high.
To make her eligible for affordable housing, Ms. Robinson and Ariva’s counselor worked on a debt payment plan, helped consolidate her student loans and even helped her join the Public Service Loan Forgiveness plan, which relieves debt on federal loans for public service workers. A week later, Ms. Robinson called Ariva’s counselor to express her gratitude and announce that she was accepted for housing. Ms. Robinson also shared that her credit score increased by 37 points.
We intend to use this information on the counseling process to inform clients—like Ms. Robinson—how they can benefit from Ready to Rent. This will help us build upon program’s initial success.
With the help of the Center for Urban Pedagogy (CUP), a civic engagement and design agency, DCA and HPD also created a guide, Ready, Set, Apply! Getting Ready for Affordable Housing in NYC, which is now available in eight languages with more coming soon, to help New Yorkers prepare for and navigate the housing application process. New York City Council funding also helped produce translations of a step-by-step guide in 18 languages on what to expect when applying for affordable housing, an income guide and a guide for selected applicants to prepare for their interview after they apply.
The DCA’s Office of Financial Empowerment and our financial security counselors are eager to offer financial counseling services to increase access to affordable housing. We will continue working to empower our communities with the tools and resources they need to achieve financial security.
Lorelei Salas is the Commissioner of the New York City Department of Consumer Affairs, which houses the City’s Office of Financial Empowerment. Learn more at nyc.gov/dca.