Category Archives: Poverty & income gap

Finally, an Anti-Poverty Program that Actually Might Reduce Poverty

by James A. Bacon

Most anti-poverty programs are double-edged swords. They alleviate the symptoms of poverty — insufficient money for housing, food, health care — but do nothing to induce poor people to change their behavior and improve their condition. But this program is different: With funding from the the Cities for Financial Empowerment Fund (CFE), the City of Richmond will start providing free, professional, one-on-one financial counseling as a public service to residents.

“Financial empowerment is necessary to build an equitable economic environment,” said Mayor Levar Stoney in a press release. “This opportunity for one-on-one counseling will give residents the power to make informed financial choices with confidence.”

Bacon’s  translation: Rather than treating poor people as passive victims, the financial counseling program will explain how they can take control over their financial destinies by taking modest, achievable steps. The program teaches, dare I say it, personal responsibility. Continue reading

Is Inclusionary Zoning the Answer to the Housing Crisis?

Source: “Inclusionary Zoning and Housing Market Outcomes.” 

by James A. Bacon

I have often advanced a common-sense proposition: If you want to create more affordable housing, increase the supply of housing. If the housing stock increases faster than demand, the price declines. A new study on “inclusive housing” policies in the Washington-Baltimore metropolitan area, which includes Northern Virginia, gives some support to that proposition, although it suggests that in highly regulated housing markets, the relationship between supply, demand and price is not straightforward.

Emily Hamilton, a research fellow at George Mason University’s Mercatus Center, has undertaken an in-depth study of inclusionary zoning in the Washington-Baltimore metro. Inclusionary zoning (IZ) is a policy in which local governments require or incentivize real estate developers to provide below-market-rate houses in new housing developments.

Economic theory (which has informed my thinking on this blog) predicts that IZ could be counter-productive. By increasing the cost of building new units, the policy diminishes the supply of new housing, which has the effect of pushing housing prices higher overall. But IZ programs vary widely in design and impacts vary, says Hamilton in her paper, “Inclusionary Zoning and Housing Market Outcomes.” Continue reading

Our Little Five Billion

UVa President James Ryan

by James A. Bacon

University fund-raisers are like presidential elections — as soon as one campaign ends, another one starts. Here in the Old Dominion, the University of Virginia is in the midst of a $5 billion boodle-building campaign. Meanwhile, Virginia Tech is raising $1.5 billion, the College of William & Mary $1 billion, Virginia Commonwealth University $750 million, and George Mason University $500 million. That’s pretty serious dough. For purposes of comparison: Harvard, the wealthiest institution of higher education in the country (and probably the world), raised $9.6 billion in its last five-year campaign.

It never ceases to fascinate me how higher ed, which obsesses over issues of racial and socio-economic equity, has become such an engine of elitism. Donors get tax write-offs for their contributions, and public university endowments pay no taxes on income. (The 2017 federal tax law imposes a 1.4% excise tax on private-institution endowments worth $500,000 or more per student.) Here in Virginia, public university endowments also are exempt from the Freedom of Information Act. Sweet deal — tax breaks out the  wazoo, and freedom from public scrutiny! All to benefit whom? Faculty, administrators and, disproportionately, the children of the well-to-do.

Not surprisingly, university administrators cast their pitches for mo’ money as benefiting students and the public — more financial aid, more enriching education, more research, and, of course, as UVa President James E. Ryan, puts it, a “fearless search for truth.”

You can’t spend $5 billion without doing some good for somebody. But it bothers me that almost no one ever pushes back. No one ever questions the fund-raising goals. No one asks if the money could be spent to better effect elsewhere. There are rare exceptions — listen to Malcolm Gladwell’s podcast, “My Little Hundred Million.” But you never hear such voices in Virginia. Continue reading

Dems & Dom, RGGI Grows, Medicaid & Work

By Steve Haner

What Was Lost Is Found Again.  Couldn’t they wait at least another few weeks?  Anybody foolish enough to believe that Dominion Energy Virginia and the Virginia Democratic Party establishment have really parted ways (as Jim Bacon seemed to think a while back), take note of this from today’s Richmond Times-Dispatch:   Governor Ralph Northam’s new communications director, Grant Neely, is totally plugged into the Dominion Energy/Richmond’s Navy Hill/Mark Warner and Bob Blue nexus.  You can fool some of the people some of the time, but certain Democrats just about any time you want.

Source: Philadelphia Inquirer

The P in PJM Now Joining RGGI.  Pennsylvania Governor Tom Wolf, a Democrat, has signed an executive order that his state should be the next to join the Regional Greenhouse Gas Initiative.  According to this from The Philadelphia Inquirer, the executive order route comes after being rebuffed by the legislature.  It is a strong first step but not a done deal, with litigation one possible route for opponents.  Virginia’s on-hold membership will likely be determined by the General Assembly elected next month.

Continue reading

Why Are So Many Rural Virginians Stuck in Place?

Declining geographic mobility. Graph credit: McKinsey Global Institute

by James A. Bacon

A recurring question on this blog and elsewhere is why don’t more Americans (and rural Virginians) move to areas of greater economic opportunity? Why do they remain stuck in communities with high unemployment and low wages? Americans have always moved to economic opportunity in the past. What’s different now?

Those questions give rise to another set of questions. If people refuse to budge, should the rest of society take pity on them and subsidize their choice to stay put? As Don Rippert commented in a previous post, “The best thing the state can do is issue relocation vouchers to rural residents.”

The authors of a McKinsey Global Institute report, “The Future of Work in America,” tackles the geographic-mobility question. The biggest factor, they suggest, is the vast and growing gap in the cost of living between prospering cities and lagging communities. “Variations in the cost of living — and particularly in housing costs — are a clear contributing factor holding back geographic mobility in the United States. The cities offering the greatest job opportunity also happen to be expensive places to live.” Continue reading

UVa’s Booming R&D Program: What It Means

University of Virginia research funding. Source: UVa.

by James A. Bacon

One can debate how well the University of Virginia is serving the interests of students, families and the general citizenry through its aggressive increases in tuition, fees, and other costs of attendance. But there is no denying that Virginia’s No. 2 research university has been successful at attracting outside research dollars.

Sponsored research funding has increased from $311 million in 2014-15 to $412 million in in 2018-19 — a 32.5% increase, according to data recently released by the university.

“Our outstanding teams of faculty, staff and students across all the schools have propelled us over the $400 million mark in research funding,” said Executive Vice President and Provost Liz Magill. “Meanwhile, researchers … are targeting interdisciplinary approaches that improve the chances of receiving grants down the road.” Continue reading

Want More Affordable Housing? Build More Luxury Apartments.

Camden Fairfax Corner luxury apartments. Yes, building more housing like this is part of addressing the affordable housing crisis.

by James A. Bacon

Planners in the Washington metropolitan area are worried, as they well should be, that continued population growth coupled with housing shortages could turn the region into another unaffordable hellhole like San Francisco or Los Angeles where legions of homeless people are taking over the public spaces and making life miserable for everyone. The solution, says the Metropolitan Washington Council of Governments (COG), is to build more housing.

“You can’t afford to live in San Francisco — the workforce [there] is being displaced,” said COG Vice Chair Derrick Leon Davis, from Prince George County, Md. “We don’t want to be that region.”

Davis is absolutely right about that. Unfortunately, the solutions proffered by the regional planning organization aren’t practicable. COG says the region needs to add 320,000 housing units between 2020 and 2030, 75,000 more than previously forecast. Of those, reports the Washington Post, at least three-quarters should be “affordable to low- and middle-income households.” That, in turn, likely requires increasing public subsidies such as rental vouchers and low-cost loans or redirecting funds from schools, transportation or other priorities.

In other words, COG planners have set a goal and then established preconditions that make fulfillment of that goal politically and fiscally impossible. Continue reading

Danville Free Clinic Bites the Dust

by James A. Bacon

Before Virginia embarked upon Medicaid expansion, the state had a network of free clinics that provided primary-care services to people lacking health insurance. It was an imperfect safety net, to be sure, but at least it was something. Now, more than a half year into Medicaid expansion, that safety net is fraying in places.

The Free Clinic of Danville has closed its doors after experiencing a sharp drop in patient volume, reports GoDanRiver.com. In operation since 1993, the clinic survived on state grants, local foundation grants, private donations, and volunteer labor.

The drop in patients following Medicaid expansion was felt almost immediately. The clinic, which had 187 patients at the end of 2018, had only 15 by July. The remaining patients are being transferred to Piedmont Access to Health Services (PATHS), the SOVAH Family Medicine Residency Clinic and other providers. Continue reading

The Scooter Murder Capital of the World

Bolt in happier days: Richmond Mayor Levar Stoney (center) and Bolt EVP Will Nicholas (right) back in June.

Wow, the City of Richmond is one tough market for scooter companies to crack — and the reasons why do not reflect well either on the city administration or the populace.

Last summer, California-based Bird began placing scooters around town, but the company hadn’t cleared its initiative with city officials, so the city shut down the service until the city administration could devise a licensing protocol. Police rounded up the two-wheelers and took them to the municipal impound lot. Eventually, Bird abandoned its effort at guerilla capitalism, auctioned off 300 scooters to private bidders, and bailed from the market.

In January City Council adopted an ordinance that charged companies $40,000 per year to put up to 100 scooters on city streets, with higher-but-discounted rates for larger numbers. Only one of the burgeoning number of scooter companies, Bolt Mobility, co-founded by track legend Usain Bolt, decided it was worth some $400 per device to get a license. Ridership numbers in the first month were high — 27,000 trips — but the company didn’t count on the high rate of vandalism. Continue reading

The New Childcare Crisis: Affordability

Virginia Child Care Costs as a Percentage of Women’s Median Earnings, 2009-2017. Gray line: Infant center costs. Blue: line: four-year-old center costs. Source: National Women’s Law Center

by James A. Bacon

The cost of full-time infant care in Virginia has increased by 37% in inflation-adjusted dollars between 2008 and 2017, while women’s wages in the state have grown by only 5%, finds a new report by the National Women’s Law Center, “From Shortchanged to Empowered: A Pathway to Improving Women’s Well-Being in Virginia.” As a percentage of income, the cost of infant-center care has surged from 24% of women’s median earnings to 31%.

The study suffers from the usual victimhood rhetoric regarding women’s income — asserting that Virginia women earn only 80.9% of what men earn without adjusting for occupations, education and length of time in the workforce — which makes me wonder if the child-care data is similarly subject to tendentious analysis. With that caveat in mind, there does appear to be a problem, and it’s one that is especially devastating for poor women who see an ever large share of their income consumed by child care.

What the study doesn’t do is inquire into why the cost of child care has risen so precipitously in the past decade. For that information, we must turn to Adele Uphaus-Conner with the Free Lance-Star who, while dutifully and uncritically reporting the study’s findings, actually went out and interviewed someone in the community who knew something about the topic! Continue reading

Community Colleges and the Opportunity Society

Increase in undergraduate, in-state tuition & fees between 2015-16 academic year and 2019-20 academic year. Data source: SCHEV

by James A. Bacon

What does it take to create an Opportunity Society? One critical element is providing Virginians with the skills they need to be employable in the occupations of the future. Nearly three out of five jobs created between now and 2026 will be “middle skill” jobs requiring community- or career-college training, not a four-year college degree. A majority of Virginians, therefore, will look to the Virginia Community College System (VCCS) for their ticket to the middle class.

Virginia’s community college system doesn’t get its due. The VCCS board is acutely aware of the affordability issue, and it has made it a priority to limit increases in tuition and fees. I thought it would be interesting to contrast the VCCS’s success in that regard to the runaway tuition-and-fees increases at Virginia’s public four-year residential colleges. I took the latest data from the State Council of Higher Education for Virginia (SCHEV) Tuition and Fees database to compare increases between the 2015-16 academic year and the current 2019-20 academic year.

You can see from the chart above that the community colleges have done a far superior job of keeping charges under control. Community colleges on average increased T&F only 8.1% over the four-year period compared to a range for the four-years of 10.1% for Virginia State University to 22% for the College of William & Mary. (Richard Bland, a two-year residential college is an extreme outlier.)

What accounts for the difference? Continue reading

Crash and Burn: How Misguided Policies Ruin Lives

by James A. Bacon

Give Richmond educators credit for brutal honesty. A presentation of the school system’s five-year plan surfaced some devastating data: Only one in ten Richmond high school students is ready for college and a career, according to College Board criteria. If it’s any comfort, that number is up from 9% in the 2017-18 school year.

“Finally we can demonstrate with empirical evidence that RPS has failed our students and our families and our city,” said Board member Jonathan Young, as quoted by the Richmond Times-Dispatch. That sentiment was echoed by Superintendent Jason Kamras. “It’s devastating. We, the adults, have failed our kids for years.”

Indeed, the educational system has not only failed Richmond’s predominantly African-American students, it has shepherded many young people into college programs from which they subsequently dropped out. Left unsaid in the analysis is that college drop-outs are typically saddled with thousands of dollars in student debt, which many cannot repay. In other words, the coupling of high expectations (every student has a right to attend college) with abysmal performance is ruining thousands of lives. Continue reading

Those Tenant-Eviction Stats Are Valid

by Marty Wegbreit

The August 15, 2019 post, “A Closer Look at Those Tenant-Eviction Stats,” fails to stand up to statistical or critical analysis. The post blames Virginia’s Independent City/County form of government for high eviction rates. (Five of the highest ten eviction rates in large U.S. cities over 100,000 population are in Virginia.) Virginia’s independent cities do not incorporate the wealthier suburbs. Supposedly, this artificially raises the eviction rate. No data are presented to support this theory.

When you examine cities of similar population, similar area, and similar percentage of African-American population, Richmond still stands out with a high eviction rate.

Richmond’s eviction rate is substantially greater than Jackson, Miss., and Baton Rouge, La. Something clearly is wrong in Richmond. The theory of cities that do not incorporate wealthier suburbs also fails when comparing Richmond to Chesapeake, an independent city more than 5½ times larger in area. Continue reading

Undercover Billionaire and the Opportunity Narrative

Billionaire sleeping in old pickup truck - Erie, Pa

Billionaire sleeping in old pickup truck, Erie PA

by Don Rippert

The show.  The Discovery Channel started airing a new series about a billionaire who goes to Erie, Pa with an old pickup truck, $100 and a cell phone with no contacts.  His goal is to build a business worth $1m in 90 days.  If he achieves the goal he will share ownership of the business with the employees.  If he fails he will finance the business with $1m of his own money.  This show strikes me as a laboratory experiment regarding Jim Bacon’s Opportunity Narrative. Continue reading

A Closer Look at those Tenant-Eviction Stats

Graphic credit: VPM

Virginia’s eviction-reform movement gained considerable momentum last year when the New York Times, citing data of the Princeton Eviction Lab, published a story asserting that four Virginia cities numbered in the top 10 cities with the highest eviction rates in the country. Richmond supposedly had an eviction rate five times the national average. Armed with this scandalous data, renters rights advocates pressed successfully for changes to state law that make it somewhat easier for tenants to avoid eviction.

Now a VPM (Virginia Public Media) investigation has revealed significant flaws in the data. The first problem is one that I identified shortly after the Times article was published: The reason Virginia cities stood out so prominently in the Top 10 list was not that Virginia laws are tougher on renters but because Virginia’s city/county form of government skewed the data.

A second problem is that Princeton Eviction Lab cobbled together different data sets for different states. The Lab was able to obtain court data directly from 12 states, including Virginia. For the others, they used data from private sources. Continue reading