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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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Market-Driven Public Housing Reforms: Inadequacy for Poverty Alleviation Amy T. Khare University of Chicago The three preceding articles in this symposium raise the similar question of how very low-income households (some of whom move with the assistance of the Housing Choice Voucher Program [HCVP]) fare across a range of potential outcomes, including employment, residential stability, housing satisfaction, school quality, and neighborhood economic conditions. In this commentary, I first briefly frame the historical and political context that led to public housing policy reforms, before summarizing the findings from the three articles in this section. Coinciding with the implications suggested by the authors, I make strategic recommendations for programmatic and structural changes that aim to create greater access to affordable rental apartments and to supportive housing interventions. My central argument throughout this commentary is that market-based housing strategies aimed at mobility alone will not significantly shift economic and social outcomes for extremely low-income households. As these articles suggest, poverty alleviation requires more than access to private-market rental housing. In closing, I offer policy recommendations that aim to reallocate federal housing assistance by increasing the supply of affordable housing units, providing universal tax incentives for renters, expanding the use of vouchers to unsaturated neighborhoods, and creating supportive housing interventions to address deep and persistent poverty.

Public Housing Transformation and Market-Driven Policy Reforms The underlying rationale of the HCVP, particularly as it relates to public housing reforms, prioritizes the private-market provision of affordable rental housing. The historical and political context is relevant in order to assess the findings and implications of these three studies, as well as the others in this symposium on mixed-income housing strategies.

Since the late 1960s, the federal governments’ role for the provision of affordable rental housing has steadily embraced strategies that subsidize private owners of rental properties. As opposed to

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publically owned properties, most new affordable housing units have been built through federal initiatives—such as the Low Income Housing Tax Credit (1986) and HOME funds from the National Affordable Housing Act (1990)—that use public funding to leverage private financing (Erikson, 2009;

Fraser, Oakley, and Bazuin, 2012; McCarty, 2012; Schwartz, 2010). Subsidizing private development has been argued by political opponents of large government bureaucracy as a more efficient and timely method for producing affordable rental housing. Advocates of privatization claim the U.S. government has historically failed to adequately deliver necessary quality services, in part because of the inefficient state bureaucracies that are poorly managed and not properly incentivized.

The reduction of government services encourages private-sector entities to enter new markets that were previously untapped. Private-sector actors, seeking to maximize their economic interests, will deliver better quality services, at lower costs. Individual citizens benefit by having an expanded market with more attractive alternatives than were previously available when the public service was the only option (Ellickson, 2010; Glaeser and Gyourko, 2008; Husock, 2003; Marcuse and Keating, 2006).

The underlying rationale for reforms suggests that market investment into the built environment of places long associated with concentrated poverty is necessary because the public-sector interventions have failed. If urban neighborhoods are to be radically reshaped, then a significant portion of the subsidized public housing rental units (and the renters living in them) will need to be replaced with housing and other related amenities that increase the potential for economic development.

These housing policy reforms reflect a broader movement of the U.S. welfare state that increasingly shifts responsibility from the public sector to the private sector for the provision of necessary goods and services, such as affordable rental housing. The trend in U.S. policymaking, which is increasing, has been to retrench government programs that meet basic needs for vulnerable citizens (such as for food, shelter, safety, and health) and to implement a private-sector model in which nongovernmental institutions are engaged by public policies to respond to individual needs. This shift places the role of the state in a removed or hidden position, as the government contracts out the direct operations of rental housing to private actors (Dreier, 2006; Hacker, 2002; Marcuse and Keating, 2006). These alterations in housing policy became widely embraced in the 1970s with federal housing assistance models that used rental subsidies to essentially reserve existing units in the private housing market. Rather than making an investment in rehabbing the old public housing units or constructing new units, the federal government policies since the mid-1980s responded to criticisms and shortcomings of the public housing program by inducing the private market to deliver affordable rental units.

A movement in the mid-1990s to reform public housing and deconcentrate poverty resulted in two major approaches that continue to dominate the policy agenda. The first focuses on dispersing public housing tenants and relocating them primarily through the use of the HCVP. Instead of living in public housing projects they would move to privately owned apartments where their rent would be subsidized by vouchers (Goetz, 2003; Varady et al., 2005). The second framework of mixedincome development focuses on redeveloping public housing sites through demolition, renovation, and the construction of new housing, primarily as embodied in the Housing Opportunities for People Everywhere (HOPE VI) Program. The new developments would, it was argued, attract residents with higher incomes to urban low-income neighborhoods while maintaining a portion of the 194 Mixed Messages on Mixed Incomes Market-Driven Public Housing Reforms: Inadequacy for Poverty Alleviation units for lower income residents (Fraser, Oakley, and Bazuin, 2012; Joseph, Chaskin, and Webber, 2007; Popkin et al., 2004; Smith, 2006). The policy framework of mixed-income development depends on the first strategy of dispersal because the mixed-income model necessitates the removal of tenants who live in redeveloping public housing sites, only a portion of whom are eligible and able to return the site. In contrast to the mixed-income development strategy, the dispersal strategy through housing vouchers does not aim to integrate public housing residents in close proximity to housing units that are not considered to be public or subsidized housing. Rather, voucher holders have the freedom to choose their housing and neighborhoods, although in a context of real constraints given the lack of affordable rental housing options truly available to residents who obtain vouchers.

A growing body of literature critiques housing reforms centered on mixed-income development and dispersal strategies. At the core of these analyses is the value to be extracted from otherwise underdeveloped areas of a city. Critics see government policies that encourage mixed-income housing and mobility initiatives as examples of neoliberal urban redevelopment—a process aimed at generating profits for economic and political elites who reclaim centrally located neighborhoods from the poor (Arena, 2012; Chaskin and Joseph, 2013; DeFilippis and Fraser, 2010; Fraser, DeFilippis, and Bazuin, 2012; Hackworth, 2009, 2007; Hyra, 2012; Imbroscio, 2011, 2008; Lees, 2008; Lipman, 2008; Smith and Stovall, 2008; Steinberg, 2010). What these policies do not do accomplish, critics say, is addressing systemic economic inequality, expanding opportunities for low-income families, or making efforts toward equitable urban redevelopment.

HOPE VI and the HCVP are illustrative of neoliberal policies that use government incentives to induce property owners to lease apartments to low-income households through the use of portable vouchers. Because these strategies are not structured to expand the availability of rental housing in tight markets, the strategies aim to address the problem of housing affordability, while leaving vague the problem of housing availability. This dilemma is the case because the policies are structured around the consumption rather than the production of new affordable rental units (Hays, 2012;

Pierson, 1994; Schwartz, 2010). Since passage of the Quality Housing and Work Opportunity Reconciliation Act of 1998, public housing reforms have resulted in the reduction of approximately 200,000 units of public housing (McCarty, 2012). Furthermore, the 2008 recession affected the rental housing market in tremendous ways, primarily by increasing the numbers of households in need of rental housing. In fact, the number of households seeking rental housing rose by 1 million in 2011, representing the single largest increase in a 1-year period since the early 1980s (JCHS, 2012). As the rental housing market booms, the vacancy rates decrease and create a tighter rental market in which rents can be increased. According to the report from the National Low Income Housing Coalition, Out of Reach 2013, “for every 100 extremely low-income renter households, there are just 30 affordable and available units” (NLIHC, 2013: 1). During this same period, the federal government has continued to reduce the amount of funds for the HOME Investment Partnerships program, the Community Development Block Grant program, the Public Housing Operating and Capital Funds, and other programs that support federal rental assistance. It is within this historical and political context that research on public housing reforms that work to rely on market mechanisms need to be interrogated, a topic to which I now turn.

Victoria Basolo’s study investigates the neighborhood poverty levels, employment status, and school quality for residents moving with housing vouchers compared with nonmovers who also have housing vouchers; it also examines these same factors for the movers before their move and

Cityscape 195Khare

subsequently afterwards. Basolo has a unique dataset comprising primary survey data and secondary administrative data from two local housing authorities in California collected between 2002 and 2004. Her literature review helps to contextualize the policy shifts that led to the expansion of the HCVP. She finds that movers do not have any significant differences when compared with nonmovers. It is more interesting that she finds that movers live in neighborhoods with very slight improvements in poverty rates and school quality, but that their employment status significantly drops after their move. These findings support previous research that the HCVP does not result in significant poverty deconcentration or produce mixed-income neighborhoods. In the aggregate, the HCVP may amount to a reshuffling of low-income households into other concentrated and segregated neighborhoods.

The findings by Kimberly Skobba and Edward G. Goetz raise the question of why informal housing arrangements and support networks matter more to low-income households than mobility to neighborhoods with access to higher quality services, amenities, and resources. This qualitative study examines the role of neighborhood conditions in the relocation decisions that low-income households make. Findings suggest that very low-income households are likely to use family, friends, and previous landlords to conduct quick, unplanned housing searches characterized out of “convenience and necessity.” It is most significant that this article critiques housing policy strategies that make false assumptions about the choices and benefits of moving to opportunity neighborhoods, suggesting that low-income households make decisions about their moves based on relationships rather than on neighborhood environments. The authors argue that the informal social-support systems of low-income families are valuable assets to their residential stability, and so should not be ignored in the design of housing policies.

In Deirdre Oakley, Erin Ruel, and Lesley Reid’s empirical study of 232 former public housing residents who relocated in Atlanta, the author’s present two major findings. First, they find that residents who were less satisfied with the relocation process are also less satisfied with their postrelocation home and neighborhood. This finding is not surprising, considering that the Atlanta Housing Authority required all residents to move regardless of their personal needs or interests. Residents may have perceived that they were under dictates by the policy initiative that forced them to move.

As a result, they reported ongoing discomfort with the experience of relocation and the ultimate outcome of living in their new apartments and neighborhoods. This finding raises the question of how to best provide the prerelocation and postrelocation supports to maximize a more positive experience for residents who have no choice but to move. The finding also calls into question whether residents (the purported beneficiaries) perceive the reforms, which demolish existing public housing, as positive. The second major finding is that relocated residents are moving to neighborhoods characterized by poverty and racial segregation. These neighborhoods are only slightly safer and less disadvantaged than the neighborhoods where their public housing apartments were located. Across the sample, former public housing residents who reported high satisfaction with their relocation process moved to slightly more residentially stable neighborhoods.

Those neighborhoods also had significantly higher proportions of female-headed households, unemployment, and racial segregation, however—all indicators of neighborhood disadvantage.

This finding suggests that mobility initiatives may not deconcentrate poverty in central cities when programmatic requirements are not in place to ensure vouchers are used in housing markets that do not already have saturation of subsidized housing.

196 Mixed Messages on Mixed Incomes Market-Driven Public Housing Reforms: Inadequacy for Poverty Alleviation Poverty Deconcentration or Poverty Alleviation?

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