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Could $1,000 cash help Sacramento renters stay in their homes?

California’s housing crisis: ‘The hardest part is living with someone who I don’t know.’

The state’s housing shortage is forcing people like Nancy Avalos, a Sacramento mother of three, out of their homes.
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The state’s housing shortage is forcing people like Nancy Avalos, a Sacramento mother of three, out of their homes.

Sacramento Mayor Darrell Steinberg set an ambitious goal last year of finding shelter for 2,000 homeless people. Now he's floating a plan he said could help prevent another 2,000 people from ending up on the streets.

Steinberg is ramping up a $20 million fundraising campaign from the private sector, seeking to provide an unprecedented financial boost to combat one of the city's most dire social issues.

The most unusual element would create a "rent stabilization fund" to provide $1,000 cash subsidies to people who have suffered an unexpected onetime expense – like a car accident or injury – that may lead to eviction.

A similar program was used in Chicago, where researchers with the University of Notre Dame found that people who received cash from a homeless prevention call center were 76 percent less likely to be homeless six months later than those who did not receive help. Researchers also determined that many tenants who received the aid were still in their homes two years later.

In order to receive the assistance, tenants had to prove they had a steady income source and that the cash would cover their rent for a month.

"It's common sense and it's simple," Steinberg said. "It's not a bunch of government funding formula gobbledygook."

The mayor said in his State of Downtown address in January that 1,800 families in Sacramento could benefit from the rental subsidies.

Steinberg has been thinking about creating the fund for months, but said he felt more urgency after he spoke with participants of the Women's March in January who were "living in precarious circumstances." They weren't homeless, they told the mayor, but were on the edge.

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"It's a broken-down car, it's one lost job, it's one rent increase that is that tipping point for people and in some cases leads to people living in shelters or worse, on the streets," Steinberg said. "If we can intervene before any of that happens and they can keep their housing for an additional two years, I could not think of a better investment of public and private resources."

The mayor said he has not decided whether he wants City Hall to administer the fund or place that responsibility with a nonprofit service provider. But he said supporting the fund is a key message as he begins to solicit local business leaders for money.

Steinberg also wants to pay for two permanent homeless shelters from the $20 million fund. The mayor said earlier this month that the city has hired a real estate broker to find potential sites for two homeless shelters. Those facilities would join a third shelter currently operating on North Sacramento's Railroad Drive that had initially been planned as temporary, but is likely to remain open. Steinberg has not identified where he wants the additional shelters, but ruled out placing them in North Sacramento.

Finally, the mayor wants to use some of the money he's raising to provide financial incentives to landlords in the city who are wary of renting to tenants using Section 8 housing vouchers.

"My case to the private sector and the community is this is not a charitable ask here," the mayor said. "It's about what is necessary for everyone – including the business stakeholders – to realize a real difference."

So far, Steinberg and City Hall have relied heavily upon public dollars and the city's hospital systems – especially Sutter to provide funding for homeless services and housing. Asked if the business community has carried enough of its share, the mayor replied, "no."

"I’m not pointing a finger in any way, they have absolutely appropriate and rightful complaints about how this issue has impacted their businesses," Steinberg said. "Well, for the first time on the public side, we are not only making it a priority, but we are gaining the resources. Now it's (the business community's) opportunity to partner with us in an even more productive way to help."

Robert Dugan, a senior vice president of economic development and public policy for the Sacramento Metropolitan Chamber of Commerce, said the organization would "need to look at (the mayor's) proposal itself" before committing to the campaign.

"It must be part of a comprehensive solution that addresses the causes of homelessness, the housing supply shortage, the health needs of that population, and identifies meaningful and sustainable funding sources to build the housing options that are necessary," Dugan wrote in an email. "We applaud the city and county, as well as our other jurisdictions throughout the region that are engaged on this difficult issue and I am confident that the business community is poised to support appropriate proposals to address it.”

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