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«Mixed Messages on Mixed incoMes Volume 15, Number 2 • 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and ...»

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14 Mixed Messages on Mixed Incomes

Mixed-Income Living:

Anticipated and Realized Benefits for Low-Income Households Diane K. Levy Zach McDade Kassie Bertumen Urban Institute Abstract The basic elements of a mixed-income housing strategy—redeveloping public housing developments and poor neighborhoods to attract higher income residents and relocating lower income households to less poor areas—continue to inform federal and local housing policies in the United States and a number of other countries. Mixed-income strategies usually begin with the hypothesis that mixing incomes will address a number of problems associated with poverty concentration and neighborhood disinvestment. To set the stage for other articles in the symposium of this issue of Cityscape, this article defines terms and then reviews the hypothesized benefits of mixed-income environments for low-income adults and children and examines evidence of benefits. It concludes with a literature-based consideration of how practice might best address the goals of economic desegregation and poverty alleviation that income mixing has yet to achieve.

Introduction Mixed-income housing strategies, broadly conceived, include a variety of programs and policies— from inclusionary zoning, to subsidized housing vouchers, to the transformation of public housing developments into income-integrated properties. Whether through the dispersal of low-income households from a poor area or the attraction of relatively higher income households to a (previously) poor area, the strategies usually begin with the hypothesis that mixing incomes will address a number of problems associated with poverty concentration and neighborhood disinvestment. This article builds from a literature review that surveyed the field of knowledge on mixed-income housing and

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benefits for lower income residents (Levy, McDade, and Dumlao, 2010). We consider the hypotheses regarding such benefits and the evidence to date on their realization. We conclude with a discussion on how policy and practice might advance to address the goals income mixing has yet to achieve.

Mixed-income housing and neighborhoods have been put forth as a strategy for addressing the problems associated with poverty since at least the early 1960s (Gans, 1961a, 1961b). Since the 1990s, Wilson’s argument that concentrated poverty—low-income households living in high-poverty, resource-poor areas—leads to a cycle of diminished life chances for children and adults and to neighborhoods marked by urban decay (Wilson, 1987) has been used as the basis for mixed-income policies and programs. If concentrated poverty is a source of myriad problems, efforts to deconcentrate, such as income mixing and dispersing low-income households, have been put forth as solutions. Mixed income as a strategy has become part of federal housing policy in a number of ways, perhaps most notably through the Housing Opportunities for People Everywhere (HOPE VI) Program, which supported the redevelopment of public housing into mixed-income developments.

Housing choice vouchers also have been used in certain mobility efforts to support low-income households’ relocation to higher income areas.

No definition of mixed-income housing is universally agreed on, although the definition offered by Brophy and Smith related to housing developments captures key elements of the strategy and has been picked up by a number of researchers (for example, Joseph, Chaskin, and Webber, 2007).

Brophy and Smith (1997: 5) defined mixed income as the “deliberate effort to construct and/or own a multifamily development that has the mixing of income groups as a fundamental part of its financial and operational plans.” Other definitions encompass both developments and neighborhoods. The Mixed-Income Research Design Group uses the phrase to mean “all intentional efforts to generate socioeconomic diversity in a targeted geographic area” (Briggs et al., 2009: 10). Galster, Booza, and Cutsinger (2008) referred to the broad range of communities that are characterized by a diversity of household incomes as “income-diverse areas.” Using two terms distinguishes lowpoverty neighborhoods into which low-income families move, whether via a mobility program or independently, that are not the target of mixed-income efforts per se from developments designed as mixed-income housing. We focus here on mixed-income housing developments but use the phrase “income diverse” where appropriate.

What counts as mixed income varies considerably. Depending on the development, relatively higher income households have been defined as those earning anywhere from 51 to 200 percent of the Area Median Income. Developments might have only two income tiers or three or more income tiers and might include both rental and homeownership tenures. The percentage of units targeted to low-income families also ranges from a small percentage of all units to more than one-half. (See Brophy and Smith, 1997; Khadduri and Martin, 1997; Schwartz and Tajbakhsh, 1997.) Developments also vary in the extent to which they design the exterior and interior of subsidized and market-rate units to be indistinguishable from one another and in the degree of spatial integration of subsidized and unsubsidized units (Schubert and Thresher, 1996; Tach, 2009). Some developments mix income groups on the same floor of a multifamily building, whereas others segregate income tiers by floor or building. Further, some developments vary the quality of units based on income, whereas others simply subsidize market-rate-quality units for low-income families (Schwartz and Tajbakhsh, 1997).

16 Mixed Messages on Mixed Incomes Mixed-Income Living: Anticipated and Realized Benefits for Low-Income Households Hypothesized Benefits of Mixed-Income Living The goals or purposes claimed for mixed-income housing strategies have been categorized as threefold. (See Brower, 2009; Duke, 2009; Joseph, 2006; Joseph and Chaskin, 2010; Joseph, Chaskin, and Webber, 2007; Kleit, 2005.) Economic desegregation can affect disadvantaged and advantaged neighborhoods as lower income households disperse from poor areas and higher income families move into previously poor areas. The hypothesized benefits associated with this place-oriented goal for mixed-income developments, or at least their lower income residents, include better quality housing, improved services, increased neighborhood amenities, and a safer environment relative to what is available in most homogenously poor areas. Examples of programs that incorporate an economic desegregation goal include HOPE VI and the Moving to Opportunity for Fair Housing Demonstration (MTO), which provided housing vouchers to one randomly selected group of participants to be used in higher income areas.

Poverty alleviation is expected to benefit lower income households most directly as their economic circumstances improve through neighboring with higher income households and living in less segregated areas. The benefits associated with this people-oriented goal have included access to more instrumentally valuable networks and to behavior and lifestyle alternatives as modeled by higher income neighbors. Until research began to show otherwise, it was hypothesized that the HOPE VI Program would alleviate poverty among lower income residents through mechanisms of neighbor interactions and behavior modeling. Dispersal-oriented efforts, such as voucher-supported mobility moves under MTO and its precursor, the Gautreaux program, also anticipated reductions in poverty.

Urban revitalization through mixed-income housing can affect disadvantaged areas as investments flow in from both public and private sources. The benefits associated with this place-oriented goal for areas in and around mixed-income developments have included increased safety; the development of more or improved amenities, such as stores, parks, and playgrounds; and, possibly, improvements to transit access and schools (buildings and instructional quality). Revitalization might also increase a jurisdiction’s tax revenues from increased property values and new businesses.

This goal undergirds the Obama administration’s Choice Neighborhoods initiative, which focuses investments on a target housing development, the surrounding neighborhood, and the residents.

The hypothesized goals and benefits suggest effects for both lower and higher income households.

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