Robert Lerman, an economics professor at American University, has developed a proposal to help veterans overcome employment and housing obstacles: a construction apprenticeship program that would train veterans to rehabilitate homes, while also helping them purchase those homes. I recently spoke with Lerman, who is also a fellow at the Urban Institute, about this idea. Our exchange has been edited and condensed.
(Denis Carrier)Could you explain your idea? The basic idea is to design a program that would renovate homes in communities where the cost of buying is especially low compared with the cost of renting and to utilize veterans as apprentices on the construction of the homes. The veterans would earn residential-construction credentials while at the same time renovating the homes. And then the program would also have a mechanism for selling the homes, either to veterans or to others using mortgage programs. The proceeds from those sales could then be used as working capital for the next set of homes.
What specific problem does this solve? Veterans are often confronted with housing and employment problems, and meanwhile, there are hundreds of vacant housing units in several cities. So this helps to solve the problem of vacant and deteriorating homes, while offering a high-quality apprenticeship to veterans. And it's also addressing the problems of high rents and housing burdens on large numbers of lower- and middle-income families, a group that includes many veterans. I'm trying to conceive of both the supply and the demand sides of this issue. And I'm also looking to create a sustained effort: As units are sold, you get working capital for subsequent units.
What kind of places might be a good fit for this program? We've looked closely at places like Baltimore and Cleveland. These are two of many cities where you could renovate homes that have been abandoned. In Cleveland, a land bank owns more than a thousand units that they're willing to give up for good purposes. And the good purpose that this program would propose to the land bank would be the apprenticeship and the renovation of these units, along with the increased access to homeownership.
What would it take logistically to put this idea into practice? The apprenticeship program could be overseen by either the apprenticeship office at the Labor Department or a local body—probably a little bit of both. There would be someone in charge of the entire project, which might be a nonprofit or an economic-development agency of some kind. And then they would hire private contractors who would be required to do the work in connection with this apprenticeship program.
What would the training element look like? Let's say that a local housing authority gave a number of units to a nonprofit on the basis that they would renovate them. The nonprofit would need some startup money to finance the first several houses, and then it would oversee the renovations. As part of overseeing the renovations, they would be hiring subcontractors or general contractors, and those people would agree to hire apprentices. So the contractors would be doing carpentry, plumbing, or roofing, with an apprentice alongside them.
What are the potential drawbacks to this proposal? One criticism of the homeownership element is that a lot of people aren't ready to be homeowners, and they will not know how to keep up the homes. But as far as the apprenticeships, I don't see a downside. Others might say that the administrative costs of developing this initiative would be very high. But I don't see how these costs would come anywhere close to outweighing the benefits.