In 10 major US cities, financially insecure families are prevalent, and residents’ financial insecurity affects city budgets. In 2019, the costs to cities range from between $6 and $14 million in Miami to between $534 million and $1,232 million in New York City. In Los Angeles, the costs range from $107 to $248 million, suggesting that Los Angeles, like other cities, has an economic interest in improving residents’ financial health.
Analyses of residents’ credit health and debt can provide cities additional information about the financial health of families. Roughly two in five Los Angeles residents have a below-prime credit score, a rate similar to the national and California state averages. Although most Los Angeles neighborhoods display strong credit health, residents in central Los Angeles neighborhoods appear to have, on average, lower median credit scores than residents in other areas. This suggests that some Los Angeles residents may have weaker overall financial health than others.
Cities can pursue initiatives that address long standing structural barriers including residential segregation, lack of access to capital flows and affordable housing, and measures that would address predatory financial practices to improve their residents’ financial health. These initiatives can be challenging to implement and require long-term investments and planning. In the meantime, cities can integrate financial coaching, counseling, credit building, and incentivized savings interventions into existing government programs into improve residents’ financial well-being and help the city meet residents where they are.