Gateway Housing Program: Report to Congress

Authors: Rohe, William M.     Kleit, Rachel Garshick    

Analysis of a pioneering self-sufficiency program operated by the Charlotte (North Carolina) Housing Authority (CHA) offers sobering results of and valuable insights into residence-based welfare-to-work efforts. In Gateway Housing Program: Report to Congress, University of North Carolina researchers William M. Rohe and Rachel Garshick Kleit report that in 6 years of operation, the program helped some public housing residents reduce their dependence on public assistance and take advantage of educational and employment opportunities -- but with a failure rate of 62 percent and at a cost of almost $16,000 per participant.

The Gateway Housing Program was designed to help households move out of public housing into their own homes. When initiating the program in 1989, CHA employed measures that have since become key elements of self-sufficiency programs: a procedure for assessing individual needs and making individual plans, case managers to provide ongoing support, and a coordinating committee of representatives from the housing authority and major social service providers in the area.

Participating householders were public housing residents (or applicants on the waiting list) with annual incomes of no more than $12,500, who held a high school diploma or equivalent and were willing to commit to achieving educational and vocational goals and to leaving public housing in 5 to 7 years.

Participants moved through the program in two distinct stages. During the initial remediation stage -- designed to last up to 2 years -- participants developed the vocational and personal skills they needed to obtain jobs paying enough to enable them to move out of public housing. During the transitional stage -- designed to last up to 5 years -- participants were expected to strengthen their employment skills, build their resources, and increase their incomes.

The ultimate goal of the program is for participants to acquire the resources and skills to become homeowners. Participants' public housing rents, frozen in the remediation stage, increased during the transitional phase as their incomes rose, but part of the increase went into an escrow account that the families could use for the downpayment on a house or the security deposit on a private-market rental unit.

Approximately one-third of the 153 participants described in the report graduated from Gateway -- they completed all requirements and left the program. Graduates were more likely to complete educational programs and shift to full-time employment than nongraduating participants or the comparison group, which was composed of people who had applied for the program but were not enrolled. Graduates also reduced their use of Aid to Families with Dependent Children (AFDC), food stamps, and housing assistance.

However, 62 percent of participants left the program without graduating. Some left prematurely because of difficulties juggling student, parental, and worker roles. Others did not comply with the rules either of the program or of public housing. Inadequate staffing at the beginning prevented the levels of support needed to retain some participants. The authors draw important lessons from the Gateway experience that may be applied to other self-sufficiency programs. They suggest that 2 years is not long enough for participants to gain the personal and employment skills to start down the path to eventual self-sufficiency. Even with a supportive program, it is a struggle for many participants to leave need-based benefits. Adequate staffing for case management services is also critical. Moving people off public subsidies is likely to be expensive in the short run: The average program cost for the first 153 participants in Charlotte was $15,909 per participant -- whether they graduated or not.

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