Focusing locally – Why do so many people need help?

Neighbors and Friends,

In this curiosity-driven series of letters, we’re exploring the surprising reality that 35% of people in Northfield and Faribault are asking for help and assistance at Community Action Center (CAC). In my first letter, I confessed that the recent growth at CAC caught me by surprise and sparked my curiosity to better understand the stories of the individuals and families coming to CAC. I found a pattern in the data that seems to suggest that 40-50% of our community currently needs or is likely to need assistance of some kind. If you missed the introduction to this series, you can find it here. We are exploring three questions by providing a behind-the-scenes view from CAC’s perspective:

         1)        How many people need help in our community? (Nov 7th)

         2)        Why do so many people need help? (this letter)

         3)        Who is responsible for providing this level of support? (later this month)

As a reminder, you are welcome to email your thoughts and questions directly to me at gro.retnecnoitcaytinummoc@ttocs.atapow. I’ll share and incorporate themes from your responses in my next letter to encourage further community conversations.

Question #2:  Why do so many people need help?

I’m committed to the local focus of these letters, while acknowledging the impact of national trends and data. I hope this letter can provide clarity and understanding of our community, but there are seemingly incompatible realities in the data that caught me by surprise. This series of letters is committed to learning from honest truths and leaning into the ones that leave us with more questions. Perhaps this dissonance will stoke your curiosity further to better understand your neighbors and friends.

Employment: Rice County unemployment is incredibly low. The Economist published an article about Northfield, MN having one of the lowest unemployment rates (1.2%) in the country two years ago. The rate currently hovers near historic lows at 2.4%. People are employed and working in Rice County at unprecedented levels.

Stock Market: The US stock market has soared recently with the S&P 500 and the Dow Jones Industrial Average providing nearly 50% returns over the past two years.

Inflation: While inflation soared to 9% in 2022, it declined rapidly in 2023 to 4.1% and leveled off in 2024 at 2.4%.

How do we hold these seemingly dissonant truths together and still functionally answer our question? How does a booming economy, low (recent) inflation, and low unemployment lead to the 40-50% of neighbors and friends needing significant support and resources discussed in my last letter? My curiosity is unresolved. I wanted this data to tell a cleaner narrative, but sometimes reality is surprising, even frustrating. Families in our community continue to make really hard decisions between basic needs like food, housing, and health care. Savings and investment strategies become an understandably distant and unobtainable priority with less than 30% of lower income families owning stock (compared to 84% of higher income families). 

A pattern that emerged in the responses to my last letter was a desire for an honest discussion about the financial choices low-income individuals make. There are occasionally individuals in our food shelves or seeking support at CAC with nicer cars, clothes, or smartphones than we might initially anticipate. CAC’s relational approach enables us to have direct conversations about financial literacy and accountability. However, the rising cost of constant car repairs, societal pressures to fit in, and the shift to a smartphone driven economy has tempered my initial reactions. My judgment has begun to transform into curiosity. I have been impressed by the financial savvy exercised by many of the lower-income families at CAC, stretching an incredibly thin budget across a complicated economy.  

Can you budget your way out of poverty? A family budget of $50,000 for a family of 4 gets spent quickly*: $16,000 on food, $15,000 on housing, $7,000 on transportation, $7,000 on health care, and $5,000 on childcare. This leaves zero margin for youth activities, education, clothing, insurance, cell phone/internet, furniture, or missed wages. Saving for retirement or unexpected expenses isn’t possible. The physical and mental stress of this unsustainable reality are significant. Additional health care costs and missed work can exacerbate each other, spiraling an already vulnerable family. Preventing this spiral is a good community investment through efficient and coordinated social infrastructure, like CAC’s Resource Centers.

Another theme from responses to my last letter was about the effect a lack of affordable housing has on the whole local economy. Quite simply, people can’t afford to live here. Additionally, housing instability is directly connected to negative health and educational outcomes for families, children, and seniors. As CAC has stepped into the role of an affordable housing developer in both Northfield and Faribault, we have learned a lot about both the aspirations and realities of building more affordable housing.

Reality check**: To build a medium-density townhome development with 30% equity and 70% financing, rents would need to be well over $3,000/month to cover expenses. This is only affordable to a family making more than $120,000/year. In true market conditions, rents would need to be over $3,500 to generate enough profit to attract private development.

It is not possible to build affordable housing without significant subsidies. There are tools and mechanisms to lower the total development costs. However, these are ideas to explore in our next letter: Who is responsible for providing this level of support? For now, the market is failing to provide affordable housing, pricing our neighbors and friends out of this essential human need. This is ultimately hurting families in our community, as well as our local businesses, industries, schools, and local economy.

Are you surprised by any of this? Do you have questions? Again, you are welcome to email your thoughts and questions directly to me at gro.retnecnoitcaytinummoc@ttocs.atapow. I’ll share and incorporate themes from your responses in my next letter to encourage further community conversations. If you’re inspired to be part of this growing and collective community action, you can donate or volunteer today.

More soon,

Scott Wopata
Executive Director
Community Action Center

* Based primarily on ALICE cost of living data, but informed by experiences of families accessing CAC.

** Based on a proforma at $325,000/unit for acquisition, predevelopment, site work, construction, legal, and financing; 7% interest commercial loan terms; and typical operating expenses related to maintenance, management, taxes, utilities, insurance, etc.

CAC’s vitality depends on the community — from volunteers to donations to program-specific support — so that we can continue to meet our neighbors’ basic needs. Stay Connected