Rochester is one of ten American cities selected to participate in an initiative to identify and measure ways to accelerate the economic stability of its residents, according to Mayor Lovely Warren.
The initiative is sponsored through Bloomberg Philanthropies, the Bill and Melinda Gates Foundation, and Ballmer Group.
The Mayor’s Office of Innovation and Community Wealth Building has found that financial instability is a major challenge for many families in Rochester.
Kate May, chief performance officer for the city, says the idea is to help these families be better prepared for emergencies.
“We know that Rochester has a lot of need when it comes to savings and income stability," May said. "We know that, for example, 58 percent of households are classified as living in what we call, liquid asset poverty, so they don’t have enough savings to get them beyond the poverty level for more than 3 months without some sort of income support.”
May said that a study shows 40 percent of Americans would have a hard time paying a thousand dollars for unexpected expense.
Over the next 18 months, Rochester will develop a savings program for income-eligible families to help them deal with financial shocks and build wealth. They will get a cash match for portions of a tax refund that they put into savings.
“For example, we might have every three months, some of this money is made available to them with a match, and that can help people pay down debt, it could help people have emergency savings cushions so if they did have that (one) thousand dollar unexpected expense, they’re more likely to be able to pay for it without seeking predatory lending or anything else like that,” May explained.
The pilot group of families the city is working with will involve somewhere around 200 to 300 people. It is hoped that the model can eventually be shared with more cities around the U.S.