New Homes for Foster Care's Old Folks
California serves as a lab for transitional living innovations by nonprofits, churches, businesses and government agencies.
By Martha Shirk

After a day of hustling between college classes and two jobs, 19-year-old Sean Dachtler is ready to fall into bed in his neatly kept apartment.

Many emancipated foster youth don't have that luxury. "I know a lot of kids who ended up couch surfing and not knowing where they were going to sleep the next night," Dachtler says.

Housing the estimated 20,000 young people who age out of foster care each year is a struggle in communities around the country, but no where is that struggle more urgent than in California – home to one-fifth of the nation's emancipated foster youth. So it is no surprise that California government agencies, nonprofits, businesses and faith-based groups have developed innovative approaches to help youths like Dachtler – approaches that suggest ways for other states to finance more housing options for youth transitioning from foster care or juvenile justice programs.

Dachtler is one of 32 emancipated foster youths who live in a supportive housing program run by Rising Tide Communities, a partnership of Orange County business leaders, the Orangewood Children's Foundation and Mariners Church.

At a time when foster youth advocates believe that up to half of the youth who age out of foster care become homeless within 18 months, California serves as the most glaring example of the challenges they face. A 2002 study by the California

Department of Social Services concluded that 65 percent of the 4,355 foster youth who aged out in the previous year lacked stable housing. The National Low-Income Housing Coalition ranks California as the "least affordable" state, with an hourly wage of $16.88 needed to afford a one-bedroom apartment. Compounding the problem is that youth here are generally discharged from foster care at 18, while youth in most other large states can remain in foster care until they're older and more likely to be self-sufficient.

Things seem likely to get worse. "We're seeing an increasing proportion of adolescents in foster care, which means we're likely to see more emancipating," notes Michele Byrnes, director of Honoring Emancipated Youth (HEY) in San Francisco, a project of United Way. "Many of them are children who have been raised by the child welfare system and have not been prepared to live on their own."

The best transitional living programs combine subsidized housing with case management and life-skills training, says Roxana Torrico of the Child Welfare League of America, who recently completed a study of housing options for emancipated foster youth. "A lot of these young people are just not prepared to live on their own," she said. "They don't understand that they need to respect their neighbors or pay their rent on time. To help them succeed, a program has to meet them where they are. It's also really important to help connect them with the community, because eventually they won't have a case manager."
Here are snapshots of two highly lauded California programs that have taken differing approaches to the problem: Rising Tide Communities, in Santa Ana, and First Place Fund for Youth, in Oakland.

Rising Tide

In 1998, John Pentz, a shopping center developer in Newport Beach, was inspired by a motivational speaker who challenged successful Christians to use their wealth as "venture capital" for new social ministries. Over the next year, Pentz brought together five other successful businessmen and a professional facilitator for monthly discussions about Orange County's unmet social needs. They dubbed themselves the Rising Tide Guys.

The group settled on helping youth transition from foster care. "We very quickly focused on their need for housing," recalls Dennis Sweeney, chairman of the Rising Tide Joint Venture Board. "They had a lot of problems, but it was hard to figure out how they'd work on them without a roof over their heads."

The men decided to put up the down payment to buy an apartment complex. "The idea was that our equity would get paid back with cash flow, and we could then use it to purchase subsequent apartment complexes," Sweeney says. They formed a special-purpose nonprofit organization, the Tustin Affordable Housing Corp., to purchase a property.

They knew that providing housing wouldn't be enough. "We realized that we needed to not only provide housing, but help them find jobs, finish school, get counseling – basically provide a support network that would help them take whatever steps they needed to take to achieve independence," Sweeney says.

They recruited the Orangewood Children's Foundation, which has funded foster care-related programs since 1981, to design the support services.

The foundation's executive director, Gene Howard, was dazzled by the proposal. "So many programs fail because there's no continuing funding, and here were these very successful businessmen with a business plan for a program that would be sustainable," he says.

The businessmen also secured an agreement from their church, the 10,000-member Mariners Church in Newport Beach, to provide mentors.

Armies of attorneys and accountants spent months putting together the deal. The businessmen put up the down payment on the 33-year-old Flanders Pointe complex in Tustin; the rest of the $5 million purchase price, plus about $500,000 in closing costs, was financed with tax-exempt revenue bonds. The bonds require the complex to rent three-quarters of the 80 units to low-income residents for 30 years. Eight of the units are reserved for emancipated foster youth.

They didn't stop there. Less than two years later, the businessmen formed the Garden Grove Housing Corp. to acquire Orange Tree Apartments, an 82-unit complex in Garden Grove. The Samueli Foundation donated $650,000 for the bulk of the down payment, with the rest of the $7 million purchase price again financed by tax-exempt revenue bonds. Again, eight of the units were reserved for emancipated foster youth.

In both complexes, pairs of youth share furnished one-bedroom units. Their rent payments increase gradually over nine months, maxing out at $350 for each youth. (The market rate is $1,000 per apartment.) When a youth pays his rent on time, $50 is put into an escrow account that he receives when he leaves the program. Each resident can also receive $50 a month in a savings match.

A resident manager with counseling credentials organizes social events, mediates roommate disputes and conducts twice-monthly housekeeping inspections. Each youth has a case manager at the foundation and a mentor, usually from Mariners Church. The youths are encouraged to participate in Young Life, a Christian youth group.

The program costs about $450,000 a year, or about $14,062 per resident. Income from the properties subsidizes about half the cost. Rising Tide expects the program to become self-supporting over the next few years, as rates rise in the units that rent to the public.

The support services are continually evolving. Mental health services were beefed up as the residents' emotional problems, particularly anxiety and depression, became more apparent. Figuring out what kind of relationships to have with their family members is difficult for many. And personal budgeting is a problem for almost all of them. "Many have never had cash before, and they don't have the self-discipline to defer gratification," says Linda Levshin, the housing program's executive director.
The residents who do best are those who tried to make it on their own for a while without much success. "They've been out there and seen how tough it is, and now they're ready to commit to our community," says Levshin. Youth can stay in the program for two years, or until they turn 21.

Except for a few months when he tried out another program, Dachtler has been part of Rising Tide since the day after his August 2003 emancipation from foster care. He attends community college and works full-time as a waiter and part-time as a peer counselor for Orangewood. He appreciates not only having a safe, affordable place to live, but also his relationships with the staff.

"They're not just in it for the paycheck," he said. "They've really been there to guide me and help me and keep me positive."

First Place Fund

At about the same time the businessmen were starting Rising Tide Communities, two graduate students at the University of California at Berkeley were patching together their left-over student loan funds with a $20,000 grant from the Echoing Green

Foundation to form the First Place Fund for Youth, a micro-lending and housing program for former foster kids.
In seven years, the brainchild of public policy students Amy Lemley and Deanne Pearne has evolved into a $1.7 million-a-year program that has won national recognition. This month, the fund was one of 14 nonprofits chosen from a field of more than 300 for a $1 million, four-year grant from the Robert Wood Johnson Foundation.

First Place Fund has helped about 310 former foster youth live for up to two years in safe, affordable apartment units scattered around the East Bay. About 85 percent of the program's graduates have continued to live in stable housing, sometimes in the same units, after the fund's services ended.

The program kicks off with an eight-week course in economic literacy. Completing it qualifies a youth for a $1,400 loan to pay the security deposit and first month's rent on an apartment secured by the fund. Two youths share each two-bedroom unit (except for pregnant or parenting participants, who get one-bedroom apartments). First Place Fund either holds the lease on the apartment, subleasing it to the youths, or the youths themselves sign the lease and the fund gives the landlord a rent guarantee.

For the first three months, the rent is 10 percent of market rent. It rises to 20 percent for the next three months, and then increases periodically, until a youth is paying half of the full market rate – up to $1,200 for a two-bedroom apartment – at the end of two years.

Each youth must take part in four to six hours a week of support services. The nonprofit agency's 19 staffers teach life skills and help residents find jobs, medical care and educational aid. Financial incentives are used to establish good habits. For instance, a youth who pays the rent on time and attends all scheduled meetings in a month earns a $50 grocery certificate. Making the weekly loan payments and attending weekly loan class meetings earns monthly transit passes. Monthly social activities build a sense of community. Eligibility extends until age 23.

The program houses 49 former foster youth and 16 of their children. In a typical month, 92 percent pay their rent on time, and 86 percent make the loan payments on time, says Lemley, the fund's executive director. Key to the program's success is the high quality of the housing and the respect with which the staff members treat the youths, she believes. "Even though they're often homeless when they come to us, we treat them as informed and empowered consumers," she says.

The program costs the agency about $21,600 a year per youth. Funding initially came from private donations and grants from foundations and the city of Oakland. Then in October 2003, the agency figured out how to tap into the state Transitional Housing Placement Program, known as THP Plus, which was enacted in 2001 but had not yet been utilized. Counties can draw money from the state program, but must provide local funds equal to 60 percent of the project cost – a requirement that dampened demand.

The First Place Fund put up matching funds on behalf of Alameda County and drew $115,000 from the state program, which partially subsidized 15 youths for a year. Last year, the fund increased the match from Alameda County, subsidizing 21 youths for a year. A similar deal with Contra Costa County covers housing for 10 youths, while San Francisco County put up $500,000 to draw the state match, then contracted to house 31 youths through the First Place Fund and Larkin Street Youth Services.
First Place Fund's success with the fund has persuaded other counties that the benefits are worth the money and the trouble, Lemley said. This year, San Mateo County has drawn on it, and Santa Cruz, Los Angeles, Kern and Lassen counties are expected to.

An offshoot of the First Place Fund, the Alameda County Foster Youth Alliance, is collaborating with Honoring Emancipated Youth (HEY) on the statewide Campaign for Safe Transitions for Foster Youth to build public support for helping emancipated foster youth with housing. The campaign is pushing a bill in the state legislature that would increase the state fund to $10 million, lower the county match to 40 percent, and extend the eligibility age to 23.

"There are close to 5,000 youth aging out of care each year, and only 80-some beds funded by THP Plus," notes Amy Freeman, the Alliance's director. "We aren't even close to meeting the need."

Lemley would like to see the state fund increased to $50 million. "This fund is the future," says Lemley, who is leaving First Place Fund in August to work on public policy issues. "It needs to grow, so that every youth who ages out of care in every county has safe and affordable housing."

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