U.S. Housing Programs to Deconcentrate Poverty: A Critical Geographic Review

1. U.S. Housing Programs to Deconcentrate Poverty: A Critical Geographic Review George Galster Hilberry Professor of Urban Affairs Dept. of Urban Studies and Planning Wayne State University, Detroit Presentation at ESRC Neighbourhood Policy Seminar Glasgow University, Scotland April 8, 2011

2. OVERVIEW: QUESTIONS ADDRESSED To what extent do main pillars of U.S. Federal housing policy deconcentrate poverty? What are key reasons for this performance? What are implications for policy makers in U.S. and Europe? What are next steps for scholars?

3. OVERVIEW: QUESTIONS ANSWERED To what extent do the main pillars of U.S. federal housing policy deconcentrate poverty? LITTLE COMPARED TO MARKET What are key reasons for this performance? INDIVIDUAL & STRUCTURAL BARRIERS What are implications for policy makers in U.S. and Europe? VARIETY OF REFORMS TO DEMAND - & SUPPLY-SIDE PROGRAMS What are next steps for scholars? MODEL NEIGHBORHOOD DYNAMICS IN LIGHT OF ASSISTED HOUSING INTERVENTIONS

4. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Pillars of U.S. Federal Housing Policy: Scattered-Site Public Housing (late 1960s with court impetus in 1980-90s) Rental Vouchers (HCV) (1974, deconcentration impetus in 1990s) Low-Income Housing Tax Credit (LIHTC) Private Developments (1986- ) Distressed Public Housing Redevelopment into Mixed-Income (HOPE VI) (1990s- )

5. HOW MUCH POVERTY DECONCENTRATION ACHIEVED? HARD TO ANSWER Selection into programs and into program outcomes Functional overlaps among HCV - LIHTC – HOPE VI Little known about endogenous responses of neighborhoods to changes in shares of subsidized dwellings and/or tenants

6. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Scattered-Site Public Housing: [Only a few case studies 1994 survey]: 59% located in > area-wide mean poverty rate 61% located in > area-wide mean minority rate [though significantly better than conventional public housing]

7. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Rental Voucher (HCV) Holders: Mean neigh’d. poverty rate HCV = 18.9 % vs. 19.8% for low-income renters (2002) [McClure, 2006] [Feins & Patterson, 2005]

8. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Rental Voucher (HCV) Holders with Mobility Counseling: Gautreaux Court-Ordered Racial Desegregation Program 15-20 year followup: [Keels et al ,2005]

9. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Rental Voucher (HCV) Holders with Mobility Counseling & Low-Poverty Neigh. Required: MTO Demonstration 5- year follow up: [Orr et al., 2003]

10. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Low-Income Housing Tax Credit (LIHTC) Private Developments: In <10% neigh’d. poverty rate LIHTC = 29 % vs. 27% for low-income renters (2002) In >40% neigh’d. poverty rate LIHTC = 9 % vs. 9% for low-income renters (2002) [McClure, 2006]

11. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Distressed Public Housing Redevelopment into Mixed-Income Sites (HOPE VI): National survey (2000) [Kingsley, Johnson & Pettit, 2003]

12. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Comparisons Across Programs: National HUD database (1998) [Pendall, 2002]

13. QUESTION #1: HOW MUCH POVERTY DECONCENTRATION ACHIEVED? Conclusion: Depends on Counterfactual Compared to Conventional Public Housing: Significantly lower neighborhood poverty rates and somewhat lower neighborhood minority rates Compared to Unsubsidized, Low-Income Renters: Not significantly different neighborhood poverty or minority rates

14. QUESTION #2: WHY LITTLE POVERTY DECONCENTRATION ACHIEVED? Scattered-Site Public Housing: Few $$; NIMBY LIHTC: Program Rules: “Qualified Census Tract” Bias HOPE VI: only 19% original residents return HCV: Structuralist – Individualist Debate

15. INDIVIDUALIST VS. STRUCTURALIST VIEWS Individualist View: Personal characteristics of HCV holders [preferences, housing search patterns, social networks, personal psychological and intellectual resources, family responsibilities, criminal histories] Structuralist View: metropolitan housing market (low vacancy rates, racial discrimination, selective participation of landlords in HCV program), public transportation systems, & HCV program itself

16. INDIVIDUALIST VIEW: EVIDENCE Localized Social Networks: Provide geographic center of gravity for residents who are granted HCVs in two ways: desire for proximity to kin / friends spatially biased information [But… Structure intervenes: dominance of urgent, “reactive moves”]

17. STRUCTURALIST VIEW: EVIDENCE Few vacant, FMR apartments in low-poverty areas with landlords willing to participate in HCV [Even with relocation counseling, experimental MTO group’s lease up rate was 14 percentage points lower than the generic HCV participants’] Biases towards HCV use in poor areas from landlords, housing authorities, LIHTC project use of HCV for its tenants Racial Discrimination barriers to entry

18. STRUCTURALIST VIEW: EVIDENCE RE: EROSION OF NEIGHBORHOOD QUALITY OF HCV Many landlords refuse to continue participating in HCV Lack of social acceptance of HCV users from neighbors in non-poor areas Spatial mismatch among residence, work, childcare, and socialization (especially if no auto)

19. QUESTION #3: IMPLICATIONS FOR POLICYMAKERS? U.S.: Wide range of housing reforms (both supply-side & demand-side) and non-housing proposals forwarded to enhance deconcentration effects

20. DEMAND-SIDE HOUSING REFORM PROPOSALS • Direct leasing and brokerage connecting HVC holders to market-rate rental housing and LIHTC developments in good neighborhoods • Financial incentives to HCV holders and potential HCV landlords in desirable areas, such as raising Fair Market Rent levels there • PHA performance incentives rewarding those who help HCV holders move outside disadvantaged neighborhoods • End PHA administration, instead contract to non-profit organizations with metro-wide coverage

21. DEMAND-SIDE HOUSING REFORM PROPOSALS (continued) • Requirements that HCVs can only be used in certain neighborhoods • Requirements that all landlords participate in HCV program upon request • Intensified pre-move mobility counseling and aid, coupled with post-move follow-up, support, and assistance when necessary • Beefed-up fair housing enforcement aimed at minority users of HCVs

22. SUPPY-SIDE HOUSING REFORM PROPOSALS • Changing rules of LITC allocations to discourage development in poor (non-gentrifying) neighborhoods & create more income mixing within LIHTC developments • Changing basis for states’ allocations of tax credits to favor tighter housing markets • Limitations on where subsidized developments can be sited (“neighborhood impaction standards”) to avoid low-income concentrations • Inclusionary zoning for new, privately developed complexes

23. SUPPY-SIDE HOUSING REFORM PROPOSALS(continued) • Preserving & developing affordable housing in gentrifying areas • Housing developments with supportive services on-site to serve the “hard to house” who are unable to utilize vouchers effectively • Empowering metropolitan planning organizations to tie receipt of federal grants to suburban jurisdictions with their creation of “fair share” assisted housing development

24. NON-HOUSING REFORM PROPOSALS • Car vouchers to help navigate tricky transportation requirements for home-work-childcare-church transitions • Attaching child-care vouchers and job training assistance to housing assistance

25. IMPLICATIONS FOR WESTERN EUROPEAN POLICYMAKERS Power of tenant-based (demand-side) efforts to deconcentrate poverty inversely related to: • Tightness of local housing market in desirable neighborhoods for assisted tenants • Extent that concentrated low-income households constitute racial-ethnic-immigrant minorities and the private housing market is balkanized by discriminatory barriers • Strength of local social ties among low-income households & density of location-specific institutions purveying cultural capital to these communities

26. IMPLICATIONS FOR WESTERN EUROPEAN POLICYMAKERS Power of dwelling-based (supply-side) efforts to deconcentrate poverty inversely related to: • Regulatory powers granted to local public planning and housing development authorities • Geographic area over which these powers may be exercised • Tightness of the local metropolitan housing market overall that will limit the ability of higher-income households to avoid living in mixed-income neighborhoods

27. IMPLICATIONS FOR WESTERN EUROPEAN POLICYMAKERS: CAVEATS Specifying counterfactual to concentrated poverty: • Composition • Concentration • Scale • Distance Deconcentration may be insufficient from some households

28. QUESTION #4: IMPLICATIONS FOR SCHOLARSHIP Better understand neighborhood dynamics associated with changes in subsidized housing and/or tenants

29. CONCLUSIONS: QUESTIONS ANSWERED To what extent do the main pillars of U.S. federal housing policy deconcentrate poverty? LITTLE COMPARED TO MARKET What are key reasons for this performance? INDIVIDUAL & STRUCTURAL BARRIERS What are implications for policy makers in U.S. and Europe? VARIETY OF REFORMS TO DEMAND - & SUPPLY-SIDE PROGRAMS What are next steps for scholars? MODEL NEIGHBORHOOD DYNAMICS IN LIGHT OF ASSISTED HOUSING INTERVENTIONS

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