Family Financial Security Matters for Cities Presented by: Caroline - - PowerPoint PPT Presentation

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Family Financial Security Matters for Cities Presented by: Caroline - - PowerPoint PPT Presentation

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Family Financial Security Matters for Cities Presented by: Caroline Ratcliffe May 2, 2018 Increasing the Financial Health of San Antonio Residents San Antonio Area Asset Funders Network Family financial health Examine relationship between

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Family Financial Security Matters for Cities

Presented by: Caroline Ratcliffe May 2, 2018

Increasing the Financial Health of San Antonio Residents San Antonio Area Asset Funders Network

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Family financial health

  • Examine relationship between family financial health—measured by savings

and debts—and four outcomes that matter for cities:

  • Ability to pay rent /mortgage, ability to pay utility bills, and eviction
  • Examine family financial health in the face of three income disruptions:
  • Involuntary job loss, health-related work limitation, income drop of at least 50%
  • For families that experience an income disruption, is increased financial

health associated with decreased financial hardship?

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Why family financial health matters to cities

  • City budgets rely on tax revenue (e.g., property and sales taxes)
  • When families can pay rent or mortgage, more likely to pay property taxes
  • When utilities city-owned, non-payment of utility bills reduces revenue
  • Evictions can lead to homelessness, increasing shelter costs for cities and

potentially disrupting children’s education

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Families with even small savings less likely to experience hardship

20% 21% 15%**++ 13%*** 11%*** 6%***++ 4%*** 25% 25% 19%***+++ 16%*** 11%***++ 8%*** 5%*** $0 $1–$249 $250–$749 $750–$1,999 $2000–$4,999 $5,000–$19,999 $20,000+ Missed housing payment Missed utility payment Savings

**/*** Savings category differs significantly from $1–$249 at the 0.05/0.01 level.

++/ +++ Category differs significantly from previous category at the 0.05/0.01 level.

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Savings matter beyond income

  • After an income disruption, low-income families with $2,000-$5,000 in

savings are better off than middle-income families without savings

  • Savings is important for families at all income levels

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Income disruptions happen often

Income disruption Share of families Involuntary job loss 6% Health-related work limitation 5% Income drop of 50 percent or more 18% Any of three disruptions 26%

Share of Families with an Income Disruption over a Year

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Many families are not prepared to weather income disruptions

24% 13% 8% 9% 9% 14% 24%

$0 $1–$249 $250–$749 $750–$1,999 $2,000–$4,999 $5,000– $19,999$20,000 or more

Nonretirement savings

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About half

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Families with debt not worse off after income disruption

  • No significant evidence that families with more debt experience greater

hardship when an income disruption occurs

  • Debt is related to access to credit, so families with debt can be more

advantaged than families without debt

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San Antonio: Economically strong with threats to financial stability

Web feature: https://apps.urban.org/features/city-financial-health/

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34% 49% 51% 47% 37% National Average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from a major credit bureau, 2016

(Financial Health of Residents: A City-Level Dashboard)

Half of San Antonio residents have delinquent debt

Share of residents with debt 60 or more days delinquent

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34% 49% 51% 47% 37% National Average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from a major credit bureau, 2016

(Financial Health of Residents: A City-Level Dashboard)

Half of San Antonio residents have delinquent debt

Share of residents with debt 60 or more days delinquent

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34% 49% 51% 47% 37% National Average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from a major credit bureau, 2016

(Financial Health of Residents: A City-Level Dashboard)

Half of San Antonio residents have delinquent debt

Share of residents with debt 60 or more days delinquent

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675 646 626 642 675

National average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from a major credit bureau, 2016

(Financial Health of Residents: A City-Level Dashboard)

Credit score below national average

Median credit score

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675 646 626 642 675

National average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from a major credit bureau, 2016

(Financial Health of Residents: A City-Level Dashboard)

Credit score below national average

Median credit score

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675 646 626 642 675

National average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from a major credit bureau, 2016

(Financial Health of Residents: A City-Level Dashboard)

Credit score below national average

Median credit score

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697 721 621 615 National average San Antonio

Source: Urban Institute tabulations from a major credit bureau, 2016

(Financial Health of Residents: A City-Level Dashboard)

Credit scores substantially higher in predominantly white vs. nonwhite areas

Median credit score

San Antonio National Average

White areas Nonwhite areas White areas Nonwhite areas 12

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61% 62% 66% 68% National average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from the American Community Survey (2015)

(Financial Health of Residents: A City-level Dashboard)

San Antonio housing-cost burden high, but near national average

Share of low-income households that are housing-cost burdened

78%

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61% 62% 66% 68% National average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from the American Community Survey (2015)

(Financial Health of Residents: A City-level Dashboard)

San Antonio housing-cost burden high, but near national average

Share of low-income households that are housing-cost burdened

78%

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61% 62% 66% 68% National average San Antonio Dallas Houston Austin

Source: Urban Institute tabulations from the American Community Survey (2015)

(Financial Health of Residents: A City-level Dashboard)

San Antonio housing-cost burden high, but near national average

Share of low-income households that are housing-cost burdened

78%

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San Antonio has more unbanked than national average

Share of households that do not have a bank account (MSA)

7% 11% 6% 10% 9% National average San Antonio Dallas Houston Austin Source: FDIC Survey of Unbanked and Underbanked Households, 2015

(Financial Health of Residents: A City-level Dashboard)

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San Antonio has more unbanked than national average

Share of households that do not have a bank account

7% 11% 6% 10% 9% National average San Antonio Dallas Houston Austin Source: FDIC Survey of Unbanked and Underbanked Households, 2015

(Financial Health of Residents: A City-level Dashboard)

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San Antonio has more unbanked than national average

Share of households that do not have a bank account

7% 11% 6% 10% 9% National average San Antonio Dallas Houston Austin Source: FDIC Survey of Unbanked and Underbanked Households, 2015

(Financial Health of Residents: A City-level Dashboard)

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Approaches cities can take to improve financial security

  • Integrate financial and savings interventions into existing programs
  • Housing, employment, community colleges, tax preparation, and public utilities
  • Provide financial coaching to help residents save, manage their debt, and

build credit scores.

  • Help residents save through savings programs with incentives.
  • Assess the city’s employment practices and take steps to boost city

employees’ financial security.

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City Approaches: https://apps.urban.org/features/city-financial-health/financial-health-

  • f%20residents_city-approaches.pdf
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Feature: Debt in America

Web Feature: https://apps.urban.org/features/debt-interactive-map/ 16

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Key takeaways

  • Families with a small amount of savings are less likely to experience a

hardship when income disruptions occur

  • Many families have only a small financial cushion
  • Many San Antonio residents have delinquent debt and low credit

scores

  • Steps to improve San Antonio residents’ financial health can improve

the city’s financial health

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Learn more Thr Thrivi ving Resi ng Resident dents Thr s Thrivi ving Ci ng Cities Landi es Landing Page g Page

https://w https://www.urb urban.org/policy n.org/policy-centers/cr centers/cross-center-initi

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p/projects/t ects/thriving- hriving-resid residents-thriv nts-thriving-cities ng-cities

Debt Debt i in Ameri America: a: An I An Interac ractive Map ive Map

https://apps.u https://apps.urban an.o .org/fe /featu ture res/debt-in bt-interac activ tive-m

  • map/

ap/

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City-Level Dashboard Financial Health of Residents Interactive feature Why Cities Should Care About Family Financial Security Blog Financially Insecure Residents Can Cost Cities Millions

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Multi‐sector Collaborations to Address Barriers to Financial Well‐Being

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Credit & Financial Services

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  • At least 600 fewer families lose a car to an auto title lender every year.
  • $29.7 million fewer dollars drained from struggling families.

‐28% ‐50% ‐28% ‐45% ‐48% 33% ‐18% ‐15% ‐13% ‐39%

‐60% ‐40% ‐20% 0% 20% 40%

$ Fees $ New Loans # of Repos # of Borrowers # of Locations

PAYDAY AND AUTO TITLE LENDING IN SAN ANTONIO MSA % CHANGE 2012‐2017

San Antonio MSA Texas

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0.00% 20.00% 40.00% 60.00% 80.00% High Poverty Moderate Poverty Low Poverty

DISTRIBUTION OF FINANCIAL SERVICES IN SAN ANTONIO POVERTY RATE BY ZIP CODE

Alternative

  • San Antonio has a slightly higher concentration of payday and auto

title loan businesses compared to the state as a whole.

  • 247% increase in RAL Providers from 2014‐2017, from 47 to 163.
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Debt

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  • New cases growing at rates faster than the state (82% and 6% for Texas)
  • Default judgments at nearly 50% for both case types. (33% and 31% for Texas)
  • Bexar County has a 3.97% eviction rate (evictions per 100 renter homes), almost twice

the state average.

5,938 15,198 17,476 21,101

2014 2017 2014 2017 Debt Claim Landlord Tenant

NEW DEBT CASES FILED IN JUSTICE COURT BEXAR COUNTY

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Contact Information Ann Baddour Director, Fair Financial Services Project abaddour@texasappleseed.net