The challenges facing public housing authorities in a brave new world

Abstract

Public housing authorities (PHAs) are entering a brave new world. Major proposed changes to the public housing program will force PHAs to compete with private sector providers for tenants. To succeed, they will have to act more like entrepreneurial market participants: to change their management practices, the types of tenants they house, and the kinds of developments they operate, and to attract private capital for the development and operation of public‐private public housing ventures.

PHAs must confront the challenges of transformation while pursuing four mutually conflicting goals: housing the neediest, achieving diversity of tenantry, cross‐subsidizing by attracting unsubsidized tenants, and attracting private capital. Success, or even survival, may require sacrificing one or more of these goals. Whether PHAs can increase housing production to such an extent that they can provide sufficient housing for the neediest while fulfilling the other goals as well remains unclear.     

Comment on Chester Hartman and David Robinson's “evictions: The hidden housing problem"—protection or protraction?

Abstract

Since the 1960s, judges and legislatures have made it increasingly difficult for landlords to evict tenants even in those instances where tenants have breached their leases. Sometimes, the growth of tenant protections has actually harmed law‐abiding tenants by raising costs to landlords and allowing rule‐breakers to remain in their apartments. Most landlords and tenants should want a system of laws that provides for both fair and efficient eviction procedures. Tenants should be entitled to legal representation when they are threatened with eviction, but their attorneys should not use the legal system to obtain free accommodations for their clients.

In the end, efforts to improve the housing of low‐ and moderate‐income households should rely not on setting up impediments to eviction, but rather on increasing tenants’ ability to afford housing and reducing the cost of housing development and operation.     

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.     

Federalism and suitable housing for the frail elderly: A comparison of policies in Canada and the United States

Abstract

The frail elderly have special multidimensional housing needs beyond affordability, including shelter that is more adaptive to reduced function and offers supportive services. Suitable housing for this population comprises three policy areas—housing, health care, and social services. In a federal system, development and implementation of policies in these areas involves participation of several levels of government and the nongovernmental sector. This paper uses federalism as a conceptual framework to examine and compare these policy areas in Canada and the United States.

In both countries, general national housing policies—relying heavily on the nongovernmental sector and characterized by joint federal‐provincial programs in Canada and by important local government roles and age‐specific programs in the United States‐have benefited the elderly. The effects of such policies on the frail elderly, however, have been less positive because of the general lack of essential human services and, to a lesser degree, health care that enables them to live outside institutions. This is especially true in the United States, where health care policy is fragmented and is dominated by a private insurance system, partial federal financing of health insurance for the elderly, and tense federal‐state relations in financing health care for the poor. Although Canadian policies and programs operate autonomously and more uniformly within a national health plan, neither country has a universal, comprehensive long‐term care system. Geographically diverse patterns of social services, funded by grants to states and provinces and the nonprofit sector, are common to both countries. However, the United States has inadequately funded age‐specific programs and has relied on a growing commercial service provision. Housing outcomes for frail elders are moving in the right direction in both countries; however, Canada seems to be better positioned, largely because of its health care system. As increased decentralization continues to characterize the three policy areas that affect suitable housing for frail elders, the United States can learn from Canada's negotiated federalism approach to more uniform solutions to merging housing and long‐term care.     

Assessing the property value impacts of the dispersed subsidy housing program in Denver

This study tests the hypothesis that the acquisition of existing property by the public housing authority and its subsequent rehabilitation and occupancy by subsidized tenants significantly reduced the property values of surrounding single‐family homes in Denver during the 1990s. This assessment examined pre‐ and post‐occupancy sales, while controlling for the idiosyncratic neighborhood, local public service, and zoning characteristics of the areas in order to identify which sorts of neighborhoods, if any, experienced declining property values as a result of proximity to dispersed housing tenants. The analyses revealed that proximity to a subsidized housing site generally had an independent, positive effect on single‐family home sales prices. The most notable exception to this pattern occurred in neighborhoods more than 20 percent of whose residents were black. Proximity to dispersed public housing sites in these neighborhoods resulted in slower growth in home sales prices in an other‐wise booming housing market and suggest a threshold within “vulnerable” neighborhoods whereby any potential gains associated with rehabilitating existing units are offset by the increased concentration of poor residents. © 2001 by the Association for Public Policy Analysis and Management.     

Nonprofit housing development: Status,trends, and prospects

Abstract

This article relies on a national survey of community‐based housing development organizations to profile production levels, spatial coverage, funding sources, and nondevelopmental roles of the nonprofit housing development sector. It also uses Urban Institute case study results and secondary data sources to examine continuing barriers to increased production in the sector and the evolution of institutional responses to those barriers.

Nationwide, about 13 percent of all recent federally supported housing units (excluding public housing) have been sponsored by nonprofit developers. This production is distributed very unevenly; relatively few developers produce the bulk of units, and regional disparities are marked. Long‐standing barriers to efficient production at higher volumes continue: Undercapitalization, high‐risk developments, patchwork systems of finance, and the difficulty of demonstrating the social payoff of community development investments constrain even the most sophisticated portions of the sector. However, the creation of national intermediary institutions over the past decade and the proliferation of similar organizations locally have established the preconditions for sector expansion. And in view of recent local initiatives in participatory, comprehensive neighborhood revitalization, and hints of federal support for like efforts, increased capacity in the sector has taken on new national importance.     

The convergence of nonequity housing models in Canada: Changes to housing policy since 1990

Abstract

This study examines the impact of housing policy convergence on the nonequity housing system in Ontario, Canada. Ontario has four distinct nonequity housing models— public, nonprofit cooperative, municipal nonprofit, and private nonprofit. This article argues that since 1990, housing policy in Canada, and particularly in Ontario, has become increasingly influenced by the neoconservative agenda of downsizing and decentralization of government functions found in the United States.

The findings reveal that changes to housing policy have caused the convergence of nonequity housing models in the areas of management and administration. Drawing on the present findings and on an experimental project in tenant management, this article argues that the trend toward convergence will continue and will likely result in one nonequity housing model in Canada. This pattern is interpreted in light of the neoconservative agenda of both countries that emphasizes private sector solutions to housing low‐income families.     

Do impact fees raise the price of existing housing?

Abstract

This article uses 1991–2000 data on single‐family housing sales from King County, WA, to provide new evidence relating to the effects of impact fees on housing prices. The hedonic regression method is used to examine the effects of these fees on existing housing as well as their differential effects on price as determined by housing quality.

Impact fees raise existing home prices by about 83 percent of the amount of the fee. The increase is 103 percent for high‐quality homes and is not statistically significant for low‐quality homes. The owners of high‐quality homes realize capital gains from impact fees. However, such fees do not raise the price of low‐quality homes. To the extent that low‐quality housing is more likely to be owned by low‐ and moderate‐income households, which are often composed of racial and ethnic minorities, this finding has significant policy implications for the supporters of impact fees.     

Evictions: The hidden housing problem

Abstract

Although evictions are a major housing problem that disproportionately affects lower‐income and minority tenants, no systematic data about evictions are collected on a local or national level. This article presents the scattered available data on the magnitude and impact of the problem, along with existing model efforts to reduce its incidence and impact.

Creating a national database on evictions—how many, where, who, why, and what happens to evictees—would be an important first step in focusing attention on this neglected issue. Definitional questions must be resolved as an initial step. In an effort to launch such a project, suggestions are offered on how to begin creating such a database.     

Does the Likely Demographics of Affordable Housing Justify NIMBYism?

ABSTRACT

NIMBYism (not in my backyard) decreases the amount of affordable housing construction. A possible motivator for this is an existing homeowner’s fear that proximity to affordable housing depresses property value. Using a hedonic regression analysis of the sales prices of homes in Sacramento County, California, this study finds that increases in the demographic characteristics in a census tract that are likely to increase if more affordable housing is built there lower the sales price of a home. This finding holds even after controlling for the percentages of racial/ethnic groups more likely to face discrimination. Policymakers should recognize this economic element of NIMBYism as they consider instruments to increase the amount of affordable housing built. We conclude with a suggestion for a knowingly controversial policy mechanism based upon cap and trade with the hope it will spur further debate on this issue.     

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.     

A practical analysis of shared‐appreciation mortgages

Abstract

When the development of large‐scale public housing projects was discontinued in the 1970s in both Canada and the United States, the policy response was very different. This article reviews the nature of the dissimilar low‐income housing policy paths, documenting the role of federal housing policy in the evolution of a significant nonprofit “third sector” in Canada's housing system; the decision of the U.S. federal government to rely on the private sector for subsidized rental supply; and, with very little help from the federal government, the ‘bottom‐up” attempt to develop a nonprofit housing sector in communities throughout the United States. In Canada, a permanent stock of good‐quality, nonprofit social housing was created along with a growing and increasingly competent community‐based housing development sector.

The Canadian experience demonstrates that it takes time to build the capacity of the nonprofit sector. The U.S. experience demonstrates that there is a great deal of community‐based talent ready and willing to provide nonprofit housing if reliable and adequate funding is available. Canada has made outstanding progress relative to the United States in the area of affordable housing supply, creating yet another small but significant difference in the quality of life for lower income households. The general Canadian approach to consistent national support of nonprofit and cooperative housing can be applied in the United States. Canada's relative success is not based on unique structural or systemic differences—that is, it is a matter of political choice and political will. The United States should look to Canada's 20‐year experience to determine whether some of the mechanisms used to support Canada's nonprofit sector might be transferable to the United States.     

Equality as a driver of inequality? Universalistic welfare,generalised creditworthiness and financialised housing markets

Abstract

Scandinavian countries are known for their universalistic welfare states, corporatist coordination, strong economic performances and egalitarian outcomes, an institutional combination often referred to as the ‘Nordic model’. However, these countries also possess volatile and increasingly vulnerable housing markets characterised by periods of sharp increases in prices and rents and some of the highest debt to income ratios in the world. The combination of a universalistic welfare state and housing market dynamics sets off a self-reinforcing process of increased stratification and re-familialisation. How did these orderly, egalitarian and welfare-oriented societies end up with housing markets that expose their citizens to increasing risk while driving inequality? The key lies in the effect the Nordic welfare state has on financialised housing markets. Successful decommodification of human lives leads to generalised creditworthiness which stimulates asset price inflation and new wealth and risk inequalities.     

Declining foreclosure neighborhood effects over time

According to previous studies, residential foreclosures reduce the value of neighboring residential units and the initial negative effects decay over time and space. This study attempts to investigate the temporal path of the initial effects by following cohorts of single-family housing distressed sales (foreclosures and real estate owned sales) over time. A hedonic model estimation of single-family housing sales in Saint Louis County, Missouri, produced larger marginal impacts for new distressed sales in the year 2000 compared with the marginal impact of new distressed sales in 2007, that is, the marginal impact of new distressed sales is declining in at least one housing market. This result holds true for the distressed sale neighborhood impact, the effect of distress on the same unit's future sales price, and the discount on a distressed unit's current “liquidation sale” price.     

State policies and programs to preserve federally assisted low‐income housing

Abstract

Preservation of the existing assisted housing stock is likely to be a major housing issue throughout the 1990s and into the twenty‐first century. Federal legislation—the Emergency Low‐Income Housing Preservation Act and the Low‐Income Housing Preservation and Resident Homeownership Act—addresses the first wave of preservation needs and provides critically needed programs to maintain eligible units as assisted housing for the next 50 years.

This paper presents a brief review of federal preservation requirements and argues for state participation in the implementation of preservation programs. Seven areas are identified for state action, and leading state preservation programs are reviewed. Each state needs to ensure that a foundation is established to preserve these units over their useful life as decent, affordable housing. What the states learn from participating in the implementation of the federal preservation program will help them address future preservation needs and develop the capacity to manage the interdependent provision of assisted housing by the public, for‐profit, and nonprofit sectors.     

Gateway to Opportunity? Disparities in Neighborhood Conditions Among Low-Income Housing Tax Credit Residents

A key goal of housing assistance programs is to help lower income households reach neighborhoods of opportunity. Studies have described the degree to which Low-Income Housing Tax Credit (LIHTC) developments are located in high-opportunity neighborhoods, but our focus is on how neighborhood outcomes vary across different subsets of LIHTC residents. We also examine whether LIHTC households are better able to reach certain types of neighborhood opportunities. Specifically, we use new data on LIHTC tenants in 12 states along with eight measures of neighborhood opportunity. We find that compared with other rental units, LIHTC units are located in neighborhoods with higher poverty rates, weaker labor markets, more polluted environments, and lower performing schools, but better transit access. We also find that compared with other LIHTC tenants, poor and minority tenants live in neighborhoods that are significantly more disadvantaged.     

Expanding housing choices for the sector popular: Strategies for Mexico

Abstract

By the year 2000, some 40 million people in Mexico will live in settlements commonly called the informal sector. Most will live in houses that they have constructed themselves and that have some infrastructure deficit. To meet their needs, the authors propose a set of demand and supply strategies. Emphasis is placed on the increased use of small group savings programs, the provision of progressive infrastructure, and the creation of housing‐related employment. The supply of low‐cost land must be increased, which will necessitate reforms in the ejido land tenure system. Examples of locally derived, non‐government‐supported betterment programs are presented.

The article concludes by calling on the federal government to create stronger links with the informal sector and to reestablish its role as the supporter of social housing in Mexico.     

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.