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Guest post written by Kristen Tauber, Research Analyst at the Federal Reserve Bank of Cleveland

The views stated here are those of the author and are not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System.

Introduction

Housing mobility programs, like the one administered by the Baltimore Regional Housing Partnership, assist people in moving from disinvested neighborhoods to ones with more resources and opportunities. My coauthors, Dionissi Aliprantis and Hal Martin, and I study what features of housing mobility programs help combat racial segregation. We recently presented our findings at the first BRHP in Conversation event on October 26 to an audience of housing mobility practitioners, emerging housing mobility programs, and other members of the housing industry.

Residential segregation is one of the many roadblocks to racial equity in America, and public housing policy reaches some of the people most impacted by it.

We start by defining success in terms of the original goal of housing mobility programs: to improve racial equality.

This was the purpose of the Gautreaux Assisted Housing Program, the first mobility program that began in Chicago in 1976. Housing mobility programs since Gautreaux have evolved to focus on economic desegregation in cities. The difference between these programs is the inclusion of race as part of the eligibility criteria for participation.

Our work investigates four important choices practitioners make when designing housing mobility programs: 1. how to define an opportunity area, 2. what geographic scope the program should use, 3. who to support with a housing voucher, and 4. how much energy to devote toward tenant counseling and landlord outreach. We run simulations in order to examine how these decisions impact the success of a program in reducing residential segregation.

Defining an Opportunity Area

With the goal of helping families access areas with more resources, an HMP must decide how to identify the “opportunity” neighborhoods to which participants are encouraged to move. We define a neighborhood as a census tract. Opportunity neighborhoods have been identified through a variety of measures, including: neighborhood poverty rate (Wilson 1987), combinations of neighborhood observables such as neighborhood quality (Aliprantis and Richter 2020) or the Child Opportunity Index 2.0 (Noelke et al. 2020), and neighborhood outcomes as observed in the Opportunity Atlas (Chetty et al. 2020).

Neighborhood poverty, neighborhood quality, and the COI are highly correlated. Opportunity Atlas is much less correlated with these traditional measures. Aliprantis and Martin 2020 find that this could be because of changes in neighborhood observables over time or small sample sizes of children in neighborhoods. Opportunity neighborhoods are tracts ranked in the top 1/3 of the local area according to the chosen measure, and the precise tracts included will vary depending on the chosen measure.

Defining the geographic scope

Housing mobility programs often focus on the central county of a metropolitan area (MSA) that contains the major city.  However, the most successful HMPs, including Gautreax and the Baltimore Housing Mobility Program, operate as regional partnerships that facilitate moves across counties.  We design our baseline simulation to use the MSA, which typically incudes multiple counties, as the set of potential neighborhoods. This increases the number of opportunity areas from which participants can choose.

Who to support with a housing voucher

All housing voucher programs target people who are low-income. However, by focusing on low-income people in the lowest-quality neighborhoods, practitioners can more effectively deconcentrate high-poverty areas. Our baseline simulation to improve racial equality targets low-income Black residents in the lowest-quality neighborhoods.

Housing supply

We constrain our housing supply to a fraction of the tract’s rental units with 2 or more bedrooms. We fill all available units up to 30 units so a maximum of 30 families are moved into each tract. From a policy perspective, it is important to remember that these families will likely move over the course of a decade or two.  HMPs can and should be designed to have very low impacts in opportunity areas. A program of this size increases the total population of residents living in an MSA’s opportunity neighborhoods by around 1 percent. Thus, these programs can lead to improvements in racial equality without reconcentrating voucher holders in receiving neighborhoods.

Results

Our baseline simulation reveals that the neighborhood opportunity measure is not a critical design choice for HMPs. Regardless of the index used, we see improvements of similar magnitudes to racial equality.

Geographic scope turned out to be much more important. Housing mobility programs that allow residents to move anywhere within an MSA have greater impacts on reducing racial segregation than those that restrict residents to a central county.

Varying the eligibility criteria is very important. Focusing only on poor residents lead to virtually no improvements to racial equality. However, when we focus on poor residents in the lowest-opportunity neighborhoods, we find that cities with high concentrations of Black populations in low-quality neighborhoods still see significant improvements in racial equality. Cities with smaller Black populations experience improvements between the baseline model and the model that focuses only on poor residents.

Housing supply is also critical for the success of HMPs; removing the constraint results in large increases in racial equality.  Because we define housing supply in terms of a fixed fraction of a tract’s available rental units, this could be interpreted as showing the importance of tenant counseling and landlord outreach; two services that help increase housing supply.

Q&A

Our audience asked about housing supply and how to expand programs into areas surrounding the city where rental supply may not be as high. While we stressed the importance of having a regional mobility program, this question raises an important point: practitioners often face barriers to expanding the reach of their programs. The responses to this topic emphasized how important counseling and landlord outreach services are when exploring new neighborhoods. Additionally, legislation and practices at the local and national levels such as banning and enforcing source of income discrimination, small area fair market rents (SAFMRs), and changing zoning restrictions to allow for the creation of rental stocks would help housing mobility programs reach more areas.

We asked our audience members what factors they find to be the most important when designing successful housing mobility programs. All of our audience members emphasized the importance of counseling in these programs. Pre-counseling, post-counseling, and the continual availability of resources help families stabilize and form stronger connections to their new community.

Summary

There are three key take-aways from our research and discussion:

Housing mobility programs with race-based criteria would do the most to improve racial equality; however, race-conscious criteria, aimed at residents in the lowest ranked neighborhoods, could also improve racial equality in cities with highly-concentrated areas of poor Black residents.

Housing supply and regional scope are very important to the success of housing mobility programs. There are services and legislation that could reduce barriers to opportunity neighborhoods.

Ongoing services provided by the housing mobility programs such as counseling and landlord outreach are crucial for the stability and success of families who move.

Watch the BRHP in Conversation presentation:

This post summarizes research from the upcoming paper:

Aliprantis, D., H. Martin, and K. Tauber (2020). What determines the success of housing mobility programs? Mimeo., FRB of Cleveland.

Citations:

Aliprantis, D. and F. G.-C. Richter (2020). Evidence of neighborhood effects from Moving to Opportunity: LATEs of neighborhood quality. The Review of Economics and Statistics 102(4), 633-647.

Chetty, R., J. N. Friedman, N. Hendren, M. R. Jones, and S. R. Porter (2020). The Opportunity Atlas: Mapping the childhood roots of social mobility. Mimeo., Opportunity Insights.

Noelke, C., N. McArdle, M. Baek, N. Huntington, R. Huber, E. Hardy, and D. Acevedo-Garcia (2020). Child Opportunity Index 2.0 Technical Documentation. Brandeis University. Retrieved from diversitydatakids.org/researchlibrary/research-briefhow-we-built-it.

Wilson, W. J. (1987). The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy. University of Chicago.

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