«Mixed Messages on Mixed incoMes Volume 15, Number 2 • 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and ...»
In response to the three articles presented here and the summarized historical and political context, I now critique the underlying assumption that mobility policies, as represented through the HCVP, may be a “mechanism for low-income people to achieve better neighborhoods and access to new opportunities,” as Basolo says. The underlying assumption—made by some policymakers, advocates, researchers, housing providers and others—that public housing reforms aimed at deconcentrating poverty also aim to decrease poverty must be called into question (Goetz, 2013, 2010; Imbroscio, 2011, 2008). Several reasons exist as to why it is important to not confuse poverty deconcentration through housing mobility with poverty alleviation.
The first reason relates to the structures of benefits in the HCVP. Although the manifest aim of policy is to provide housing assistance to low-income households, the transfer of the benefit from the government goes directly to the private property owner. The rent burden is reduced for the low-income household, while the property owner benefits through access to stable rental income.
Depending on the condition of the unit and the demand for rental housing, the costs to operate an apartment may be less than the rental income provided through the program. It is possible that the HCVP creates a higher profit margin for owners leasing to a subsidized renter. This higher profit is one reason that owners of mixed-income housing developments in Chicago (and likely other places) are leasing market-rate units to voucher holders. Although it is not always the case that significant profit is obtained by landlords who house residents in the HCVP (as can be seen by its spatial concentration in certain areas and not others), the market-driven policy structure enables wealth generation, such that the unintended consequence of the policy further expands income and asset inequalities between those who have the means to purchase property and those who do not.
There is a second reason to be cautious to not assume the aims of poverty deconcentration through housing mobility are the same as poverty alleviation. These strategies do nothing to create equity in federal housing tax policy among citizens with low incomes and those with higher incomes (as signified by their ownership of a home). As is well documented, homeowners derive additional income through tax benefits (Dreier, 2006). Tax-based subsidies benefiting the affluent come in a variety of forms, including the federal home-mortgage interest deduction. This policy universally benefits higher income households who own homes because it lowers taxes for these households, at a cost of more than $60 billion to the federal government (NLIHC, 2013). This tax benefit has the effect of stimulating the demand and raising prices of owner-occupied housing units, which in turn negatively affects the supply of low- and moderate-income housing. If the most economically challenged proportion of the population is forced out of the private market (in part, because of government policies), then the solution may not be to further expand the use of market-driven policy mechanisms through vouchers but rather to find ways to expand access to income and wealth generating opportunities. One policy solution for this expansion could be in the form of a tax benefit for low-income renters that provides a similar tax benefit as the home-mortgage interest deduction, thus creating more equity between renters and homeowners alike.
The third reason to be cautious not to assume the aims of poverty deconcentration through housing mobility are poverty alleviation is that housing vouchers do not in and by themselves create access to more economically stable neighborhoods with greater resources, institutions, and amenities.
The research presented here suggests that the opposite is true—that low-income households with vouchers remain housed in neighborhoods that are racially segregated and economically disconnected. Although Skobba and Goetz suggest that this phenomenon may be because of individual desires to remain close to informal social-support networks, they also recognize that the portability of the vouchers are limited because of discrimination in certain local markets. By design, the policy does not necessitate that vouchers be distributed across municipalities or regions. This flexibility in how low-income households can use the vouchers (particularly in this case across spatial boundaries) may appear as a positive aspect of the program because households have the freedom to relocate to the area of their “choice.” As the findings in these studies and others demonstrate, however, the voucher program is less flexible in implementation than in policy design because vouchers are clearly not a ticket to any neighborhood (Buron, Hayes, and Hailey, 2013; Chaskin et al., 2012).
These articles demonstrate the real constraints of the voucher program because, in all three studies, most households remained in areas characterized by concentrated poverty and racial segregation.
Because the federal policy lacks requirements (and proper incentives) for owners in stronger housing markets to participate, the outcomes of this housing mobility program are largely predictable.
Municipalities with more economic stability (and usually where most of the population is nonminority) have very little enticement to take advantage of the program if the limited rental housing that exists can easily be rented through traditional market-rate methods. Thus, the current implementation of the voucher program does little to stem racial segregation and poverty concentration.
Again, poverty deconcentration strategies should not be confused with poverty alleviation.
The final reason to be cautious about the underlying policy assumptions is that the policy is designed as a nonentitlement and nonuniversal program. As mentioned previously, many more households are eligible for federal rental housing assistance than who are awarded it. Although the access to rental subsidies certainly helps to reduce the rent burden on households lucky enough to receive it, it does not aim to address deep and persistent poverty on a systemic level for the nearly 30 percent of renter households who live below the federal poverty line (U.S. Census Bureau, 2011).
Public housing reforms aimed at deconcentrating poverty through mobility strategies, embodied by the HCVP, are not fundamentally aimed at decreasing poverty among most households who face risky housing and neighborhood environments. Instead, these strategies enable a portion of eligible households to access a subsidized housing benefit, thus reducing their rent burden. If this policy systemically aimed to alleviate poverty, then this benefit would be universally awarded while also expanding the overall number of permanent affordable housing units.
Implications for Policy and Practice This analysis suggests that shifts in federal policy and local implementation will be necessary to create better outcomes for low-income households needing affordable rental housing. These marketdriven housing strategies of housing vouchers have been embedded in the political structures and processes since the mid-1970s. These strategies are likely to be maintained unless significant political disruption occurs, such as social movement organizing that leads to a more radical transition in housing policy. Until a larger movement erupts, avenues for incremental reforms could restructure access and affordability to housing, such as the ones I recommend here.
198 Mixed Messages on Mixed Incomes Market-Driven Public Housing Reforms: Inadequacy for Poverty Alleviation First, one solution to meeting the increasing demand for affordable rental housing is simply to increase the supply of it. Several policy strategies are available to increase the supply of affordable rental housing, some of which are politically tricky. One important step that should be taken while the Obama Administration is still in office is to secure funding for the National Housing Trust Fund, which was authorized in the 2008 Housing and Economic Recovery Act (Hays, 2012). The appropriations for the fund have yet to be awarded. To finance the fund, The National Low Income Housing Coalition is proposing to reform the mortgage interest deduction, converting it to a nonrefundable 15-percent tax credit and reducing the cap on the maximum mortgage to receive a tax break from $1 million to $500,000 (NLIHC, 2013).
My second proposal suggests the need to ensure the existing public housing stock has sufficient funding for capital improvements. The period in history when repairs and maintenance on public housing could not be addressed needs to be over; but it is not. Instead, most existing public housing properties and other federally assisted multifamily properties (such as those properties that fall under Section 8 Mod Rehab or Section 236 regulations) need significant capital repairs and face a significant lack of funding to address capital risks. HUD’s new Rental Assistance Demonstration (RAD) program allows for the conversion of these properties to long-term Section 8 project-based rent subsidies, while also creating the ability to obtain private equity and debt to pay for necessary renovations. As of January 2013, HUD awarded new Housing Assistance Payment contracts on approximately 13,000 units through the RAD program (HUD, 2013). I hope this program will represent a shift toward more creative economic feasibility and sustainability of the rental housing stock. The maintenance of the existing public housing stock through federal programs such as RAD is of utmost importance.
Third, it may be time to rethink the benefits of the HCVP and call into question the extent that it may be contributing to maintaining urban poverty. If vouchers are unintentionally contributing to reconcentrating poverty in the areas where public housing projects once stood and where mixedincome developments are now located, then resources may be better allocated to investing in strategies that stem the downward cycling of the economic instability in these areas. It may be time to better invest in other economic development and housing strategies that aim to comprehensively redevelop urban neighborhoods. As an alternative, local housing advocates, government officials, and program operators may also need to develop expertise in accessing rental housing outside high-poverty neighborhoods to create better access to residential options. Regional initiatives, such as Chicago’s Preservation Compact that preserves existing affordable rental housing and increases access to it for low-income households, may serve as a model for other municipalities attempting to expand the use of housing vouchers outside of central-city areas (Preservation Compact, 2012).
My final recommendation relates to the importance of ongoing support services for relocated families. The literature review and findings from all three articles suggest that families who are relocated through public housing transformation initiatives face an array of economic and social challenges that are not fundamentally altered by housing initiatives alone. Recent research by the Urban Institute demonstrates that intensive case management to support a particular group of “high need” residents and their children may enable conditions under which some families will be able to address the trauma, violence, and poverty they have endured (Theodos et al., 2012).
The Urban Institute’s multisite Housing Opportunity and Services Together demonstration is
developing a model for innovative strategies for equipping young people and their adult family members with tools to overcome the effects of concentrated disadvantages with the goal of interrupting intergenerational poverty (Scott et al., 2013). Although this demonstration aims at a place-based strategy in family public housing and mixed-income developments, a need still exists to develop and test social-support interventions for those residents who relocate into apartments in the private market through the use of a housing voucher. As evidenced by all these articles, many families who endured the worst of distressed public housing and who are in the midst of relocation face extremely complex challenges, such as long-term disconnection from the labor force, extremely low incomes, and larger household sizes. This reality points to questions about how former public housing residents relocating with vouchers will fare during and after their moves, because they may be in particularly precarious positions and further disconnected from formal community and social supports. It is for these reasons that relocating residents may benefit by providing increased access to and funding for neighborhood-based community and social supports.
In conclusion, the research presented in this symposium, along with the commentaries, enables us to see the importance of developing housing policies that aim to significantly reduce the conditions that create economic inequality and poverty. Public housing reforms that deconcentrate poverty through housing mobility and mixed-income development strategies do not necessarily shift the opportunities and outcomes for very low-income households. Rather, these market-based housing strategies aimed at mobility need to be partnered with other economic and social development policies that together may more fundamentally shift the poverty in the United States.
Acknowledgments The author thanks Jim Fraser, Deirdre Oakley, and Diane Levy for their leadership on this issue and for the invitation to contribute.
Author Amy T. Khare is a doctoral candidate at the University of Chicago, School of Social Service Administration; a senior research analyst with the Mixed-Income Development Study at the University of Chicago; and a research associate for the Urban Institute, Metropolitan Housing and Communities Policy Center.
References Arena, John. 2012. Driven From New Orleans: How Nonprofits Betray Public Housing and Promote Privatization. Minneapolis: University of Minnesota Press.
Buron, Larry, Christopher Hayes, and Chantal Hailey. 2013. An Improved Living Environment, but….
Washington, DC: Urban Institute.
Chaskin, Robert J., and Mark L. Joseph. 2013. “‘Positive’ Gentrification, Social Inclusion, and the ‘Right to the City’ in Mixed-Income Communities: Uses and Expectations of Space and Place.” International Journal of Urban and Regional Research 37 (2): 480–502.