Springboard to Opportunities is a member of a new, groundbreaking national network led by Compass Working Capital. The goal of the network is to expand the scope and impact of the Family Self-Sufficiency (FSS) program – a powerful employment and savings program for families who live in federally subsidized housing. In addition to Springboard, the network includes Maine Housing and the Portland (Maine) Housing Authority.
What is the FSS Program?
The FSS program is grounded in an understanding of the numerous “poverty traps” that make it difficult for low-income families to build sufficient savings and assets to escape poverty. One such poverty trap exists for families who live in federally subsidized housing. Eligible low-income families typically pay 30% of their income toward rent, a formula designed to ease the rent burden for the poor while efficiently allocating larger amounts of subsidy to those who need it the most. However, an unintended consequence of this structure is that it discourages some residents from increasing their income since they worry about paying more rent and losing other benefits – an effect which also makes it difficult for residents to build savings. HUD established the FSS program in 1990 to address this work disincentive. The FSS program fundamentally shifts the incentive structure by allowing participants who increase their income through work to capture their increased rent payments in an escrow account, held by the housing authority, which can be accessed upon successful completion of the program. Participants can utilize their savings to achieve their financial goals and reduce their reliance on public assistance. To graduate from the program and retain the escrow account, a participant must be employed and not enrolled in TANF (cash welfare) for the previous 12 months. The average escrow at graduation is $6,600.
Springboard staff recently attended a training in Boston with Compass Working Capital staff. Our goal is pilot the FSS program at two of our Mississippi-based communities.