How Mayors and Cities are Solving Household Financial Insecurity

The number of Americans living in cities is growing – 80 percent of Americans now live in urban areas. With so much of our population concentrated, household financial insecurity and the wellbeing of cities are entwined. In recognizing the opportunity for city and municipal level action, the Aspen Institute Financial Security Program (FSP) has been closely following, engaging with, and learning from what appears to be a growing tide of local elected officials taking leadership on issues of household financial insecurity.

Why cities care about financial security

In June, FSP attended the 86th Annual Meeting of the United States Conference of Mayors (USCM). During a session focused on metro economies, FSP Managing Director Joanna Smith-Ramani presented on the impacts of income volatility and the broader financial insecurity households are coping with regularly: “Tackling a challenge as far-reaching and systemic as income volatility requires us to look beyond abstract analyses to get a fully informed, on-the-ground understanding of how it impacts real people in real American cities.”

Household financial security was a recurring theme at USCM. In addition to the session on metro economies, sessions at the conference covered housing affordability and availability, hunger and homelessness policy, and workforce development. During the session on housing, Seattle Mayor Jenny Durkan shared a list of some of the challenges her city is navigating day-to-day: Skyrocketing home prices. In Seattle, the average home price? $820,000. Rent? In the last five years alone, rent prices have increased by 57 percent. And homelessness? 4,500 people are living unsheltered throughout the city. Seattle is not unique. Cities across the country are facing a similar set of problems. Fixing these problems requires elected officials to view financial insecurity as a priority, dedicate resources to learning more about the specific hardships families face, and test best practices for administering solutions. Luckily, many are doing exactly that.

Why cities can offer rapid relief to communities and families

Cities are uniquely positioned to implement policy and programs that help low- and moderate-income families achieve greater financial stability. The City of San Francisco has put this belief into practice by creating offices specifically geared toward developing financial wellness programs. Since San Francisco founded its Office of Financial Empowerment, it has launched over five new pilots and programs focused on building economic security and mobility. Additionally, San Francisco launched the country’s first Office of Financial Justice, aimed specifically at evaluating and changing the negative impacts of government fines and fees. Other innovations can be found scattered across the country:

• Boston’s Mayor’s Office of Financial Empowerment established Boston Builds Credit, which aims to assist a minimum of 25,000 citizens to improve their credit scores.
• Mayors and other elected officials in Oakland, CA, Lansing, MI, St. Louis, MO, and Columbia, SC have used convening power to engage their communities on the challenges of income volatility and have committed to developing solutions.
• The City of Oakland is putting together a survey of city employees to determine what kinds of policies and programs should be developed in response to their financial needs.

The list above is not exhaustive but offers a glimpse at the leadership cities and local elected officials are taking to help individuals and families reach greater financial security.

FSP’s work with cities to combat income volatility

In 2017, FSP, in partnership with an innovative fintech firm and national think tanks, launched Finance Forward, an event series that enables local leaders to develop solutions that respond to the unique financial needs of their communities and cities. In its inaugural year, Finance Forward partnered with elected officials across four cities – Mayor Steve Benjamin of Columbia, South Carolina, former Mayor Virg Bernero of Lansing, Michigan, Treasurer Tishaura Jones of St. Louis, Missouri, and Mayor Libby Schaaf of Oakland, California – and inspired solutions from not just these local governments, but employers, nonprofits, fintech companies, and more.

However, support from elected officials has been key to Finance Forward’s success, giving the series the foundation, credibility, and relevance necessary to convene a diverse set of thought leaders. Steve Benjamin, Mayor of Columbia and president of the US Conference of Mayors, was the first elected official to partner with Finance Forward, and since has been vocal in claiming household financial insecurity, specifically income volatility, as a priority issue. Since initially partnering with Finance Forward, Mayor Benjamin has committed to designing and piloting a new small-dollar loan program for City of Columbia employees: “I’m confident that through [Finance Forward], we can play a role in developing solid solutions, both for our residents and for other communities facing similar challenges.”

For more on FSP’s work with cities, visit financeforward.org.