Subsidized housing and neighborhood racial transition: An empirical investigation

Abstract

Popular wisdom has it that the development of project‐based assisted housing will cause whites to flee or avoid the surrounding neighborhood, leading to rapid racial transition. This article examines the question of whether the development of several types of project‐based, federally assisted housing had an impact on neighborhood racial transition during the 1980s. In general, the development of assisted housing in a neighborhood did not lead to racial transition, nor did it approach levels suggesting “white flight” in the few instances where racial transition did occur.

The results of our analysis suggest that one of the major criticisms of project‐based assisted housing—that it contributes to racial segregation by causing white flight—is not supported by empirical evidence.     

The emergence of stable racially and ethnically diverse urban communities: A case study of nine U.S. cities

Abstract

We examine the characteristics of 14 stable racially and ethnically diverse urban communities in 9 U.S. cities and point to policies that could strengthen these communities and encourage the growth of more diverse neighborhoods in American cities. The cities examined are Chicago; Denver; Houston; Memphis, TN; Milwaukee; New York; Oakland, CA; Philadelphia; and Seattle. University researchers and community leaders in each city collaborated on the research for this project.

We identify two types of stable diverse communities, “self‐conscious” and “laissez‐faire,” which have evolved for different reasons and with different characteristics. Stable diverse communities will not just happen, but they can be influenced by a number of policy recommendations stemming from our research. These include helping individuals and organizations take leadership roles in their communities, strengthening and enforcing fair housing and antidiscrimination laws, earmarking economic resources to encourage neighborhood diversity, and creating community safety and jobs programs.     

Assets and neighborhoods: The role of individual assets in neighborhood revitalization

Abstract

Asset‐building strategies—including individual development accounts, homeownership programs, and microenterprise development—became increasingly popular in the 1990s. Although research has demonstrated how assets produce individual benefits, less is known about the extent to which these benefits induce positive place‐based effects. We develop a model of the relationship between individual asset‐building strategies and neighborhood revitalization in order to inform future empirical work and help ensure that asset accumulation and neighborhood revitalization are mutually reinforcing. Our model emphasizes the conditions and programmatic factors that may encourage and discourage the transfer of benefits from individuals to neighborhoods.

Examples from case studies of four community‐based organizations suggest that the likelihood of neighborhood spillovers may be increased if policies and practices aim to “manage” the returns from the individual asset, retain asset holders, provide reinvestment conduits, track local purchasing power, and create additional opportunities for collective action.     

Racial/ethnic differences in housing outcomes for first‐time,low‐income home buyers: Findings from a National homeownership education program

Abstract

Federal housing policies aimed at making homeownership more accessible through education and affordable lending have been successful in raising the homeownership rate among minorities. By marketing homeownership to underserved populations and helping them overcome financial and informational obstacles, such programs might be expected to promote equality in housing outcomes, including housing quality, neighborhood composition, and neighborhood conditions, for minority homeowners.

This article examines the experience of participants in a national home‐ownership education program. While the transition to homeownership has been associated with modest progress, it does not overcome persistent disparities in housing quality. Homeownership appears to lead to poorer neighborhood conditions for all lower‐income buyers—not just minorities—and may be exacerbating social and spatial isolation rather than helping to overcome it. Differences in neighborhood outcomes, however, may be due to locational preference rather than discrimination in housing and mortgage markets.     

The changing demography of multifamily rental housing

Abstract

The residents of multifamily rental housing are different from both homeowners and single‐family home renters, and these differences have implications for the housing market and for public policy. This article describes apartment residents today, discusses recent changes in their number and characteristics, projects their future growth and composition, and highlights business and policy implications of future changes.

For purposes of business and public policy, a segmentation of apartment residents into three submarkets is useful: the “affordable” market serving low‐ and moderate‐income households, some of which receive government housing assistance; the “lifestyle apartment market” serving higher‐income adult households; and the substantial “middle market.” The number of apartment renters is likely to grow moderately over time. The combination of multifamily structure type and rental tenure form offers unique opportunities not only for provision of affordable housing but also for revitalization of downtown areas and balanced “smart” growth in suburban areas.     

“… And a suitable living environment”: The failure of housing programs to deliver on neighborhood quality

Abstract

This article evaluates the relative performance of housing programs in terms of neighborhood quality. We profile neighborhood characteristics surrounding assisted housing units and assess the direction of assisted housing policy in light of this information. The analysis relies on a housing census database we developed that identifies the type and census tract location of assisted housing units—that is, public housing, developments assisted under the Department of Housing and Urban Development, the Section 515 Rural Rental Housing Direct Loan Program, the low‐income housing tax credit, certificates and vouchers, and state rental assistance programs.

We conclude that project‐based assistance programs do little to improve the quality of recipients’ neighborhoods relative to those of welfare households and, in the case of public housing, appear to make things significantly worse. The certificate and voucher programs, however, appear to reduce the probability that families will live in the most economically and socially distressed areas.     

Comment on Victoria Basolo and Mai Thi Nguyen's “Does mobility matter? The neighborhood conditions of housing voucher holders by race and ethnicity”

Abstract

Creating the opportunity for minorities to move away from poor, racially concentrated neighborhoods to better ones is an important goal of the Housing Choice Voucher Program. However, mobility is not its only—or even its primary—objective. Rather, it aims to reduce severe rent burdens for very low income families and individuals.

Basolo and Nguyen imply that the voucher program by itself can overcome entrenched patterns of racial discrimination. This is unrealistic, even when families receive search assistance. Instead, the test is whether a minority family with a voucher is more likely to live in a low‐poverty, low‐minority neighborhood than the same family without a voucher. The program passes that test. However, Basolo and Nguyen's analysis points to the need for more research on voucher use in localities like Santa Ana where overcrowded housing is an issue, in neighborhoods with a mixed minority population, and in specific metropolitan areas.     

Combining historic preservation and income class integration: A case study of the butchers hill neighborhood of Baltimore

Abstract

For the past several decades in the United States, a tension has existed between the goals of historic preservation, the provision of affordable housing, and the creation of mixed‐income neighborhoods. Historic restoration for residential uses has often been associated with gentrification and the displacement of low‐income residents. This article examines the public and private sector support system for combining historic preservation with the creation of affordable and mixed‐income housing and neighborhoods and analyzes the strategies and experiences of the Baltimore neighborhood of Butchers Hill in taking this approach to community re‐vitalization.

Using historic preservation as a catalyst for community revitalization requires a comprehensive approach to prevent displacement of low‐income residents. In Butchers Hill, the mixed‐income community that was created was an outgrowth of conflict between two community‐based organizations. The case eludes simple typologies of gentrification and indicates the need for additional study of the dynamics and benefits of mixed‐income neighborhoods.     

Restoring community through traditional neighborhood design: A case study of Diggs town public housing

Abstract

This article examines how traditional neighborhood design (TND) can restore a sense of community to distressed neighborhoods. Traditional neighborhoods, such as those found in many cities and inner suburbs, provide their residents numerous opportunities and venues for social interaction. We apply the principles of TND to the redesign of a public housing project. We call our approach an “architecture of engagement.”

Using a case study of Diggs Town, a public housing project in Norfolk, VA, we explore how the application of TND principles transformed a socially alienated and distressed neighborhood into a socially integrated and functional one. We find that TND techniques improve the quality of life by facilitating the social exchanges that create social capital.     

Challenges confronting nonprofit housing organizations’ self‐sufficiency programs

Abstract

In recent years, interest has grown at the federal level in strategies to combine subsidized housing with programs promoting household self‐sufficiency. This article explores how nonprofit housing organizations conceptualize their self‐sufficiency programs for their residents. A broad definition of self‐sufficiency is presented—one that is not exclusively focused on the individual and, instead, also includes program strategies that are focused on changing the context in which individuals live and work.

The paper then analyzes the relationship between the self‐sufficiency strategies being implemented in the nonprofit housing world and how these organizations will be affected by welfare reform, the shrinking and restructuring of federally subsidized housing, the emergence of block grant job training and workforce development programs, and the general devolution of government programs into ever more fungible pots at state and local levels. These transformations in the domestic policy agenda will present challenges to nonprofit housing organizations and to the goal of promoting self‐sufficiency.     

Consumer Preference for Neotraditional Neighborhood Characteristics

Abstract

Much research on residential mobility relies on examining people's choices within the context of what is available in a local housing market. However, it is difficult to determine the demand for alternative housing or neighborhood types that may not be available or are available only in limited quantities. Hence, the market may not accurately reveal consumer preferences for such alternatives.

We estimate a discrete choice model of neighborhood choice by using data from a choice‐based conjoint analysis survey that allows us to vary characteristics experimentally. The model is used to determine consumer preferences for neotraditional neighborhood design features, including neighborhood layout, housing density, surrounding open space, and commuting time, while holding other characteristics, including school quality and neighborhood safety, constant. The results indicate that the neotraditional design with higher density is less preferred on average, but that niche marketing, additional open space, or other amenities can overcome its negative effects.     

The Gautreaux Legacy: What Might Mixed‐Income and Dispersal Strategies Mean for the Poorest Public Housing Tenants?

Abstract

The current transformation of public and assisted housing reflects the legacy of the Gautreaux case, which created the first mobility and scattered‐site programs. Mixed‐income and dispersal strategies now dominate federal housing policy, although their focus has shifted. Drawing on evidence from two preliminary studies of public housing transformation in Chicago, we argue that these new strategies seem to offer benefits for distressed public housing communities but also involve risks for the most vulnerable current tenants. Increased screening and/or the need to compete with private market tenants may force these families out of the assisted housing market.

Addressing the complex needs of the most troubled public housing tenants will call for a more comprehensive solution. The intent of the Gautreaux case was to increase opportunity and enhance quality of life for public housing tenants; policy makers should take steps to ensure that current programs reflect these fundamental goals.     

Comment on Sandra J. Newman and Ann B. Schnare's “'… And a suitable living environment’: The failure of housing programs to deliver on neighborhood quality”

Abstract

Newman and Schnare provide a useful portrait of where housing assistance ends up geographically. The evidence that certificate and voucher holders are less likely than public housing residents to live in the poorest neighborhoods is encouraging, as well as important for policy decisions. Unresolved in the article, and unresolvable with the data, as the authors themselves note, is the matter of how neighborhood quality is affected by housing assistance. The least popular housing developments have long been relegated to neighborhoods of least political resistance, a fact that constrains most local efforts to deconcentrate poverty. Futhermore, through the tax code, America spends about three times as much on housing assistance for middle‐ and upper‐income households as it does on assistance to low‐ and moderate‐income households. Thus far, we have not applied “fair share” principles either to the location of housing assistance or to its allocation across the income spectrum.     

Public housing and the American dream: Residents’ views on buying into “the projects”

Abstract

This article examines residents’ attitudes toward homeownership in five large inner‐city public housing projects composed of multifamily apartment buildings. Based on 267 interviews with public housing residents in Boston, it contrasts their broad support for homeownership as a concept with their wholly mixed reaction to the idea of owning a public housing apartment. Interest in homeownership in public housing is shown to be independent of residents’ current employment status and closely tied to residents’ social investment in specific housing developments and to their perceptions about the quality of that development's management, maintenance, and security.

The findings cast renewed doubt on policies that would make public housing sales a centerpiece of national policy, but they provide qualified support for more modest efforts to increase homeownership in public housing developments and in low‐income neighborhoods around them.     

Subsidized housing and work among welfare recipients

Abstract

Some studies suggest an inverse relationship between housing assistance and employment. That is, when housing assistance increases, employment decreases. A popular view holds that subsidized housing generates an economic disincentive to work. This article examines the relationship between subsidized housing and the number of hours female recipients of public assistance work. A California survey reveals that residents in Section 8 housing work considerably more than do those renting in the private market or residing in public housing. This finding holds after controlling for observable personal characteristics and accounting for income effects. Additional analysis comparing the two housing programs shows a consistent, robust difference, with those in Section 8 working more.

One explanation is that the finding is a statistical artifact caused by programmatic creaming or self‐selection among applicants. The second, more plausible explanation is that Section 8 housing offers residential choice and mobility that improve opportunities for employment.     

Market factors affecting spatial heterogeneity among urban neighborhoods

Abstract

Institutional factors perpetuating segregation in urban neighborhoods— redlining by lenders and insurers, steering by brokers, and discrimination by owners—have attracted much attention recently. But natural market forces (demand, supply, and equilibrium price adjustment) can also create neighborhood heterogeneity in income, race, and housing characteristics.

This article establishes a framework to examine the market forces that create spatial clustering of households. On the demand side, differences in resident preferences and incomes lead to clustering; on the supply side, differences in cost functions, created by market specialization or location‐specific features, are important. Equilibrium price adjustment reinforces tendencies toward heterogeneity and leads to differential affordability patterns. Bid‐rent and other models of residential location, discrimination in urban housing markets, and the Tiebout model are discussed. A research agenda is proposed to measure neighborhood heterogeneity, isolate its influence on educational and employment opportunities, and evaluate policies for ameliorating its adverse effects.     

The viability of the thrift industry

Abstract

This paper argues that many widely referenced studies on the cost effectiveness of alternative assistance programs were conducted at a time when rental housing markets were depressed. Recent increases in rent appear to have reduced the apparent cost advantage that demand‐side subsidies hold over supply‐side interventions. In addition, the nonsubsidized poor increasingly must compete for a dwindling supply of low‐cost privately owned housing. Housing vouchers or similar demand subsidies may be appropriate in some contexts, but economic theory and recent empirical analysis suggest that such subsidies are “not the best at all times and under all situations.” Rather, the “best policy” depends on program targeting and the nature and extent of program‐induced price increases and externality effects. Since funding limitations currently block the creation of an entitlement housing assistance program, housing policy must balance the often competing goals of expanding the ability of participating low‐income households to pay for decent housing while at the same time working to limit the adverse effects that rent increases and the loss of low‐cost nonsubsidized stock have on households falling outside of the housing assistance safety net.     

The contributions of historic preservation to housing and economic development

Abstract

Historic preservation contributes greatly to housing and economic development. Historic preservation has produced almost 250,000 housing units through use of the federal historic rehabilitation tax credit. Additionally, heritage tourism is a multibillion‐dollar industry, and preservation projects help further community revitalization.

Historic preservation also has a downside. Preservation's growing popularity may dilute its imperative and market prowess, and some argue it is used to thwart new development. Preservation requirements may impede affordable housing production and displace area residents. These undesirable consequences are not givens, however. Preservationists are working to become more flexible, and we suggest ways to practice historic preservation while mitigating some of its negative consequences—for example, tax credit changes, more flexible building codes, and a “tiered” system of designating historic properties at varying levels of significance.     

Property values in inner‐city neighborhoods: The effects of homeownership,housing investment,and economic development

Abstract

This article examines the determinants of property values in Cleveland with a focus on three approaches to improving or maintaining neighborhood quality: investing in new housing, attracting and retaining homeowners, and encouraging economic development. Data comprise home sales in 1996 and 1997, investments in new housing from 1991 to 1995, homeowner migration between 1991 and 1995, and changes in the number of business establishments from 1991 to 1995.

The results suggest that (1) investments in new houses have a positive impact on housing values, especially for houses close to the new investment; (2) homeowner out‐migration has a negative effect; and (3) growth in the number of business establishments, except for social service establishments, also has a negative effect. These results further suggest that while programs to encourage housing investment and homeowner‐ship can increase neighborhood property values, care should be taken to avoid an inappropriate mixing of land uses.     

Comment on Roberto G. Quercia and George C. Galster's “The challenges facing public housing authorities in a brave new world”

Abstract

We find Quercia and Galster's article on reforming public housing an intriguing academic exercise that contains some key insights useful to practitioners. However, the article fails to consider several key elements in the provision of assisted housing that make their “constrained quadrilemma” much less problematic than they assume.

The article ignores the tenant‐based certificate/voucher approach to meeting the housing needs of low‐income and very low income persons and households. This is a significant oversight, in that many public housing authorities (PHAs) manage a larger portfolio of certificates than of PHA‐owned housing. If the litmus test of the success of public housing's “reinvention” is the extent to which it is able to maximize both the number of low‐income households served and their social and geographic integration, then public housing's extensive use of certificate/voucher programs demonstrates a road out of the quadrilemma.