All Commentary
Saturday, August 1, 1992

Tough Love for the Needy

James L. Payne is director of Lytton Research and Analysis in Sandpoint, Idaho. He is the author of The Culture of Spending: Why Congress Lives Beyond Our Means, published by ICS Press.

Why do government welfare programs keep failing? Much of the problem can be summed up in one word: dependency. Government programs reinforce the social pathologies they are trying to cure: they pay people for being out of work, and encourage unemployment, and they pay people to have children they can’t support, and encourage larger welfare families.

Even politicians agree that this one-sided giving is unhealthy. In their rhetoric, they condemn policies of “handout,” and extol the virtues of the “helping hand.” Yet in practice, program after program turns into another dependency-causing subsidy.

Nowhere is this pattern more dramatically illustrated than in programs to provide shelter for the unhoused. Governments keep increasing their efforts, only to reap ever-growing numbers of homeless. In New York, for example, to help street people the city has built 26,700 units of permanent housing, and has provided 23,000 temporary beds. Yet after spending $2 billion on these programs, the city’s homeless problem is more acute than ever, with 50,000 now sleeping on the streets. The mayor’s own commission on the homeless concedes defeat: “The current system must be seen as the failure it is.”

At the root of the failure of the government programs is irresponsible giving. When a person gives away his own, hard-earned funds, he wants to get full value for his sacrifice. He wants to make sure he is really helping someone, and not just throwing his money down the proverbial rat hole. In government welfare programs, legislators and administrators are not spending their personal funds. They are spending tax dollars, money taken involuntarily from other people. Hence, they lack a keen, personal interest in seeing that welfare dollars are spent constructively.

The value of direct, private giving is demonstrated by the success of a remarkable new organization in the housing field, Habitat for Humanity. Founded in 1976, Habitat is a Christian voluntary group that promotes housing for the poor. It has grown to 700 chapters in the United States, Canada, and Australia, and is adding a dozen new ones every month. Worldwide, the organization built 4,300 homes in 1991; it expects to complete 6,000 in 1992.

All of the locally controlled chapters follow the “partnership” approach to building housing. The poor are assisted, but in return they must help themselves. They must put in “sweat equity” building their own homes (the typical requirement is 500 hours), and they must agree to make payments on a no-interest loan for the cash cost of their houses (which averages around $26,000). Habitat accepts no government funds and relies on donations and the volunteer labor of its members. A number of other voluntary groups are taking up this idea of self-help housing: Charis Community Housing group in Atlanta is one example; Southern Mutual Help Association in Louisiana is another.

The founder of Habitat, and its current president, Millard Fuller, explains its appeal: “People feel like they are a part of a permanent solution to a problem rather than putting a Band-Aid on it,” he says. “They also feel they are helping to empower people, to make them stronger and to maintain their sense of self-dignity.”

Empowering needy people is hard work. Each Habitat chapter has a family selection committee that interviews applicants and explains what is expected of them. Committee members investigate thoroughly to select families that want to make a success of the housing opportunity being offered. After the family moves into its Habitat-built home, a family nurture committee provides financial counselling and encourages the family to live up to its contractual responsibilities.


The Effect of Sweat Equity

This attention pays off in an extremely low default rate on Habitat loans—a rate much lower than that of commercial banks, reports Fuller. “People don’t like to disappoint somebody they know who loves them. We try to develop that relationship with the families: a close, loving, caring relationship.” Another reason for the low default rate is the effect of “sweat equity.”

“A person does not like to lose that which he or she built with their own hands. They have an emotional and psychological investment in it,” says Fuller. “People don’t feel connected to a government housing unit—because they had nothing to do with building it.”

Even though defaults are few, they can occur. Habitat workers are willing to be resolute about evictions, when necessary, because it is their own sacrifice being wasted by the irresponsible family. “We emphasize partnership in Habitat,” says Fuller. “We always would exercise mercy with people if there’s a loss of job, or an unexpected illness. But if it becomes obvious that the family is not paying just because they’d rather use their money to buy beer, or go on joyrides, or to buy two or three television sets, when it becomes obvious that they’re just trying to take advantage of the program, then we exercise what I call tough love, and say to them, ‘You have decided, by your actions, not to be a partner in this ministry.’”

Contrast this firm stance with the typical practice in a government housing program. Just six blocks from my home is a HUD-subsidized apartment complex. There the tenants’ rent is 30 percent of their incomes—whatever that happens to be. If their income is zero, then they pay zero rent. Naturally, this system discourages tenants from getting and keeping jobs: the taxpayers pick up the tab no matter what. The administrators in charge of the program don’t mind: after all, it’s not their money that’s being thrown away.

Fuller is opposed to this indulgent approach. He uses an analogy with childrearing: “It’s a bad parent who says to a child, ‘You can do anything you want to, I’ll still love you and support you. If you want to take drugs, rob a bank, shoot somebody, beat somebody up, tear the house up, that’s okay because I love you.’ What kind of love is that?” he asks indignantly. “You have to say, ‘You have responsibilities.’”

This is Habitat’s stance: “You have to say to the homeowners, ‘We love you, we care for you—that’s obvious because we worked with you to build this house—but you now have responsibilities. You’re going to have to live up to them. If you don’t, there will be consequences.” In requiring that their tenants uphold their end of a partnership, Habitat workers promote self-reliance—and success—in the needy they are trying to help.

  • Dr. James L. Payne is a research fellow at the Independent Institute and author. He earned his PhD in political science from the University of California at Berkeley, and he has taught political science at a number of universities including Yale University.