Increasing Self-Sufficiency for Valley residents.

Bridging the Gap to Self-Sufficiency is United Way of Greater Los Angeles' plan for creating opportunities that promote economic empowerment and help working poor and homeless residents break the cycle of poverty. Part of United Way's Community Agenda, which focuses resources on the most pressing issues in L.A. County. Bridging the Gap to Self-Sufficiency works to ensure that adults and families achieve economic self-sufficiency and that families and individuals can access adequate, year-round food and shelter when they face a crisis.

According to United Way's 1999 report on the state of the county, A Tale of Two Cities, an estimated 236,000 men, women and children are homeless in Los Angeles County. With 174,000 individuals, 49,000 families and 12,000 runaway and homeless teens, there are twice as many homeless people in Los Angeles County than there are people living in Burbank.

The tragic events of September 11, 2001 have added to the crisis as ripple effects from the attacks reach our local economy. Hardest hit are workers in L.A.'s travel and hospitality industries, where initial job loss estimates include forty percent of working hotel and restaurant union members. Many families are now at an increased risk of becoming homeless as they struggle to make mortgage and rental payments, following the sudden loss of their primary income.

To meet these challenges, United Way of Greater Los Angeles funds a network of safety-net services that provide shelter and food to individuals facing personal and community-wide crisis. Last year alone, United Way's safety-net services provided meals to 89,581 hungry people and temporary and transitional shelter to 23,044 homeless individuals and families.

United Way also renewed its partnership with the Fannie Mae Foundation recently to continue the Help the Homeless Prevention Program, which seeks to prevent homelessness by way of rental and mortgage assistance, eviction prevention, utilities assistance and other related services. The program is investing $179,000 to help struggling families maintain their current residence and avoid future displacement. United Way was also able to commit an additional $175,000 specifically for rental assistance and eviction prevention to secondary victims of the September 11 attacks, thanks to a grant from the California Endowment. According to a nationwide survey from the Office of the Inspector General, prevention programs like these are the most cost effective solution to combating homelessness, as the average assistance grant costs one-sixth the cost of a typical stay in a shelter.

In addition to helping individuals and families preserve the residence they have, United Way is helping families who are currently renting an apartment or home make the transition from renter to property owner.

Currently, the San Fernando Valley enjoys a greater number of homeowners than renters, according to the 2000 Census. In 2000, a larger percent of residents owned a home in the San Fernando Valley than in Los Angeles County. Fifty-four percent of residents in the San Fernando Valley owned their homes and Forty-six percent rented, compared to Forty-eight percent homeowners and Fifty-two percent renters in Los Angeles County as a whole.

But opportunities for homeownership can often elude the working-poor. High rental costs combined with low wages mean that many families are not be able to progress economically because of their limited housing options. Forty-one percent of renters spend more than one third of their monthly income on housing, and yet this expenditure does not contribute to the acquisition of the property for the renter. But according to a 1998 study by Southern California Association of Governments, it is homeownership that has traditionally been the source of wealth creation by which immigrants and ethnic groups have improved their economic status and moved out of poverty into the middle class.

One of the most promising anti-poverty tools gaining national attention in recent years is the creation of Individual Development Accounts (IDAs). IDAs are matched savings accounts available to low-income households that help participants accumulate appreciating assets, such as a home.

IDAs work because they provide an incentive and support mechanism for saving. IDA participants save a fixed portion of their income each month with the intent of capitalizing on a specific appreciating asset after a fixed savings period. At the end of that time, the money in the account is matched by a philanthropic individual, company or foundation partner, and the account holder makes their investment in an asset like a home, postsecondary education or small business enterprise. Participants in IDA programs also attend financial literacy courses that offer support on how to save for their investment and strategies to continue their economic advancement.

IDAs can help individuals cross the barrier from renting to homeownership, allowing them to turn their monthly housing expense into an investment toward greater economic stability. For example, if the closing cost of a home is $128,000, an IDA account holder who has been saving $75 per month for two years can make a down payment of $7,200 when their $1,800 in savings is matched 3:1 with an additional $5,400. Money that had been previously used as rent is converted to mortgage payments, allowing the new homeowner to make the necessity of shelter an asset for their future.

Due to the tremendous potential offered by IDAs, United Way is working with community leaders to bring IDAs to scale across Los Angeles County and is in the process of developing programs with partner agencies in the San Fernando Valley. By creating an effective countywide IDA system, United Way hopes to make IDAs a reality for 7,000-10,000 low-income households over the next 5 years.

United Way of Greater Los Angeles and its donors are increasing the economic empowerment of the working poor, and Bridging the Gap to Self-Sufficiency.

For more information on United Way's Community Agenda, updates on county trends and ways that you can help create positive change, please visit United Way's web site at www.unitedwayla.org. To support United Way through a workplace campaign, contact John Dakin, VP Resource Development, San Fernando Valley Office at [phone].