Wednesday, September 19, 2012

Community Incentive Programs: A Wise Investment?

An short article appeared in the New York Times about cash incentives many communities--Reform to Orthodox--are offering to get a community off the ground, expand a community, or bring in new blood.  From $625 a month (the subsidy that is offered by Young Israel of Pelham Parkway of the Bronx) to a $50,000 relocation package (in Dothan, AL), these incentive programs aren't cheap.

OU Chairman Savitsky calls these programs a "proven model" but I'm not really sure what has been proven.  Unless I'm mistaken, the incentive programs aren't long standing and have yet to prove their longevity.

A number of years ago, we were told about an incentive program and took brief interest, but I don't like strings . . . and there were plenty of them.  Personally speaking, anything that ties us educationally is a non-starter, and ultimately we weren't so hard up that even a more generous grant would have made a difference over a life of a 30 year mortgage.  I can't imagine too many communities would want families that are seriously struggling.

So readers, your thoughts?  Would anyone be willing to share their experience with taking a grant/loan?  Would you recommend it to a friend?  Was it a good decision or shortsighted?  The article mentioned three families that moved into the featured community without taking any incentive funds.  Have you made a similar decision and what drove that decision?  And the professional in me wonders about the tax treatment of outright grants.  I would think the grant would be taxable, but I haven't done any research on the matter.

On the flip side:  are you involved or have you been involved in administering an incentive program?  Has it performed as expected?  What are the advantages of the program?  What are the disadvantages?  If you were initially supportive/unsupportive, do you maintain the same position today?


Abba said...

at the very least these grant programs seem to garner some attention in the jewish media, thereby putting otherwise unknown or ignored communities on the radar for those willing to be "adventurous"

Yannai Segal said...

Incentive have to be very carefully designed to not create tensions between long-time community members who will not qualify and newcomers who got a sweet deal even though their actual needs may be less.

I was against a tuition-based incentive offered by the shul in my community because of inevitable tensions it would (and did) create with other shuls and with existing families. That said, the incentive did help attract some high quality families to the community.

One problem is that incentive-based plans can be zero-sum on a broad scale - if City A offers Family 1 a $10,000 incentive to move from City B, and City B offers the same for Family 2 to move from City A...

Incentives are also inefficient because it is difficult to filter out people who would have moved anyway, and people for whom moving to the community is a terrible choice and that will require significant additional communal assistance or create future problems.

In the short term these incentives are more marketing than actual drivers to move because in most cases the actual dollars involved are not enough for someone in a good situation to pack up and leave. The means that as more communities offer incentives the publicity value will decrease and they will become even less effective.

Avi Greengart said...

I like incentives, and I don't think they're a zero sum game at all. Incentives rarely change the underlying economics, but they give psychological cover to some who are uncomfortable going against the grain i.e., living somewhere other than Riverdale, Teaneck, or Queens when first married, and somewhere other than Teaneck or Five Towns once you have kids. For RWers, replace that with Baltimore, Monsey, Passaic, and Lakewood. That's also the reason that they aren't a zero sum game: Houston isn't competing with Dothan, AL, Houston is competing with not moving anywhere at all.

No Name Yet said...

I happen to know of one community out there that could use a few good families. They are providing incentives- but nothing that creates tension. The local families are grateful for the new members and they lose nothing. All the "incentive" really does for this community is help those who are thinking of moving with some help, instead of cash. They own houses already that no one is living in- so they rent them out to these families. In this way, these incentives are a good thing.

Aliana said...

Incentives programs aren't supposed to be long-lasting. They're usually a desperate attempt to get a community moving in the right direction,and they either work or don't work within a couple of years. I think it'd be hard to prove if they work, there are so many factors involved.

The goal is to get to a critical mass of families so that people will start to choose the community based on its merits again.

There are programs like that in Israel, too - not just for aliya like the article mentioned, but also to help bad neighborhoods. The incentives are usually specifically for students or professionals.

In one case I can think of the incentives was a rent subsidy and led to a rapid increase in rent prices. So it didn't benefit the recipients so much, they paid as much as they would have without the program - but it probably did help the city, because the higher prices drove out the "undesirables" temporarily, so more "desirables" (students, etc) moved in, making it a more popular student neighborhood, so more students moved in... and things started moving the direction they wanted.

It's too early to say how the other incentive program I know of is doing.

Ultimately I think it's sometimes a waste, sometimes a good idea. There are other ways to invest the money that would benefit everyone - improve the schools, clean up the streets, create more playgrounds, things like that (I'm thinking Israel here, I'm not sure what the equivalent would be in the US), and I think most communities should focus on that. Because if there are long-term problems, incentives will only give a short-term solution.

But I think it can work as a very temporary, very last-ditch measure, like if the only way to prevent the one school from closing is to get 5 new families in the next month. It would have to be a situation where the community is attractive in itself except for one issue that could be solved by simply having more people. In a case like that just paying people to come (and solve your problem by doing so) is often cheaper than investing in communal infrastructure.

Mr. Cohen said...

For many Jews, the greatest incentives are non-monetary: an eruv that is accepted by the entire community, the ability the pray in a synagogue where decorum rules instead of incessant idle chatter, a community where Jews accept each other for who they are, a community where Jews observe Torah but SJMs and SJFs are allowed to talk to each other without being labeled sinners, quiet residential streets and clean commercial streets.

in the vanguard said...

Reading the NYT is tantamount to accepting their perverse anti-Jewish, anti-Israel, pro-Arab, pro-Socialist agendas, just by supporting it financially - if nothing else, let alone quote from it so others should support that rag of a newspaper.

From the time of the hoocaust already they made sure the world should know as little as possible about the abuse that happened across the ocean, and until today the NYT has not changed! A pox on them!

Anonymous said...

These communities are looking for young families. That we are not. But the incentive program was helpful because it made us aware of a neighborhood in New York we knew nothing about - Pelham Parkway. We realized from their website that there were shuls, and with a car you could easily get to Riverdale to buy kosher items. However, the need for a car would cancel out the lower cost of housing. And the long commute (51 minutes) to midtown made it impractical. But there may be others who become aware of such neighborhoods through incentive programs. Even those who don't qualify for (or need) incentives may be motivated to look into the neighborhood for lower cost housing.

CJ Srullowitz said...

I would think that the number one incentive would be a job.

Amohl, people went to "out of town" communities from Elis Island because of a job or because of family who had already gone there for a job.

Today, facing the worst job market since the depression, the way to lure people OOT would be to find them jobs. You have many excellent families whose breadwinner went from six figures to nothing in a short period of time. Many of these families are barely holding on through unemployment insurance, emergency savings, retirement savings, family assistance, communal assistance, et al.

Faced with the choice to continue living in the NY metro area with no job or getting back on track out of town, I think many would choose the latter.

The question is, are the jobs there? I would recommend that any community liaisons looking to recruit people look to match professionals with jobs in there area, rather than a simple "tzedaka" package. said...

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