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«AmericAn neighborhoods: inclusion And exclusion Volume 16, Number 3 • 2014 U.S. Department of Housing and Urban Development | Office of Policy ...»

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A Journal of Policy

Development and Research

AmericAn neighborhoods: inclusion And exclusion

Volume 16, Number 3 • 2014

U.S. Department of Housing and Urban Development | Office of Policy Development and Research

Managing Editor: Mark D. Shroder

Associate Editor: Michelle P. Matuga

Advisory Board

Dolores Acevedo-Garcia

Brandeis University

Ira Goldstein

The Reinvestment Fund

Richard K. Green

University of Southern California

Mark Joseph

Case Western Reserve University

Matthew E. Kahn University of California, Los Angeles C. Theodore Koebel Virginia Tech Jens Ludwig University of Chicago Mary Pattillo Northwestern University Carolina Reid University of California Patrick Sharkey New York University Cityscape A Journal of Policy Development and Research AmericAn neighborhoods: inclusion And exclusion Volume 16, number 3 • 2014 U.S. Department of Housing and Urban Development Office of Policy Development and Research The goal of Cityscape is to bring high-quality original research on housing and community development issues to scholars, government officials, and practitioners. Cityscape is open to all relevant disciplines, including architecture, consumer research, demography, economics, engineering, ethnography, finance, geography, law, planning, political science, public policy, regional science, sociology, statistics, and urban studies.

Cityscape is published three times a year by the Office of Policy Development and Research (PD&R) of the U.S. Department of Housing and Urban Development (HUD). Subscriptions are available at no charge and single copies at a nominal fee. The journal is also available on line at http://www.

huduser.org/periodicals/cityscape.html.

PD&R welcomes submissions to the Refereed Papers section of the journal. Our referee process is double blind and timely, and our referees are highly qualified. The managing editor will also respond to authors who submit outlines of proposed papers regarding the suitability of those proposals for inclusion in Cityscape. Send manuscripts or outlines to cityscape@hud.gov.

Opinions expressed in the articles are those of the authors and do not necessarily reflect the views and policies of HUD or the U.S. government.

Visit PD&R’s website, http://www.huduser.org, to find this report and others sponsored by PD&R.

Other services of HUD USER, PD&R’s Research and Information Service, include listservs, special interest and bimonthly publications (best practices, significant studies from other sources), access to public use databases, and a hotline (1–800–245–2691) for help with accessing the information you need.

Contents Symposium American Neighborhoods: Inclusion and Exclusion

Guest Editors: Paul Joice and Meena Bavan Guest Editors’ Introduction Inclusion and Exclusion in American Neighborhoods

Diversity, Inequality, and Microsegregation: Dynamics of Inclusion and Exclusion in a Racially and Economically Diverse Community

by Laura M. Tach Building Ties: The Social Networks of Affordable-Housing Residents

by Elyzabeth Gaumer, Ahuva Jacobowitz, and Jeanne Brooks-Gunn Why and Where Do Homeowners Associations Form?

by Ron Cheung and Rachel Meltzer Race, Segregation, and Choice: Race and Ethnicity in Choice Neighborhoods Initiative Applicant Neighborhoods, 2010–2012

by Matthew F. Gebhardt Departments

Data Shop

Developing a Proxy for Identifying Family Developments in HUD’s LIHTC Data:

Using Information on the Distribution of Units by Size

by Rachel M.B. Atkins and Katherine M. O’Regan Data Sources for U.S. Housing Research, Part 1: Public Sector Data Sources

by Daniel H. Weinberg Graphic Detail Mapping White-Black and Temporal Differences in State Homeownership Rates With Two-Way Comparative Micromaps

by Brent D. Mast Industrial Revolution The Remodeling Conundrum: When the Order Matters

by Patrick H. Huelman Impact Economic Analysis of Increasing HUD’s Manufactured Housing Inspection Label Fee...... 163 by Michael K. Hollar SpAM (Spatial Analysis and Methods)

Evaluating Spatial Model Accuracy in Mass Real Estate Appraisal:

A Comparison of Geographically Weighted Regression and the Spatial Lag Model............ 169 by Paul E. Bidanset and John R. Lombard

–  –  –

Inclusion and Exclusion in American Neighborhoods Paul Joice Meena Bavan U.S. Department of Housing and Urban Development The views expressed in this article are those of the authors and do not represent the official positions or policies of the Office of Policy Development and Research, the U.S. Department of Housing and Urban Development, or the U.S. government.

The year 2013 saw the commemoration of a few of the most significant events in the history of the civil rights movement: the 150th anniversary of the Emancipation Proclamation and the 50th anniversary of the March on Washington, when the Reverend Martin Luther King, Jr., delivered his famous “I Have a Dream” speech. On August 28, 2013, policymakers and advocates gathered on the steps of the Lincoln Memorial in Washington, D.C., to celebrate the great progress and achievements that have been made. Supreme Court rulings in 1917 and 1948 proscribed the use of municipal ordinances and restrictive covenants to discriminate on the basis of race (Buchanan v. Warley; Shelley v. Kraemer). In 1963, President John F. Kennedy issued Executive Order 11063 to ban racial discrimination through the Federal Housing Administration (FHA) and in public housing. In the years after the March on Washington, Congress passed several landmark civil rights laws, including the Fair Housing Act of 1968, which outlawed racial discrimination in the private housing market, and the Fair Housing Amendments Act of 1988, which expanded protection to families with children and people with disabilities. Since these legal decisions and legislative acts, residential racial and ethnic discrimination and segregation have declined substantially. A U.S. Department of Housing and Urban Development (HUD)-sponsored Housing Discrimination Study in 1977 found that Black renters were frequently denied access to advertised units that were available to equally qualified Whites; by 2012, the net difference in advertised unit availability to equally qualified Black and White renters had virtually disappeared. A similar trend characterizes the for-sale market; in 2012, when equally qualified White and Black homebuyers called to make an appointment to view an advertised home for sale, they were treated equally in 95.5 percent of cases (Turner et al., 2013). Discrimination in the housing market has not disappeared entirely, but blatant discrimination has declined substantially. Furthermore, neighborhood segregation—the extent to which minority individuals tend to live near others of the same race—peaked around 1970 and has declined 27 percent since that time (Cutler, Glaeser, and Vigdor, 1999; Litschwartz, 2013).





Cityscape Cityscape: A Journal of Policy Development and Research • Volume 16, Number 3 • 2014 U.S. Department of Housing and Urban Development • Office of Policy Development and Research Joice and Bavan Lingering Disparities One particularly visible sign of progress on civil rights was a man standing on the speaker’s podium at the Lincoln Memorial on the 50th anniversary of the March on Washington: Barack Obama, the first African-American President of the United States. President Obama, like many of the speakers that day, emphasized that, although much progress has been made on civil rights, many important racial and ethnic disparities remain. As of July 2014, the unemployment rate for Black adults was

11.0 percent compared with only 5.2 percent for White adults and 6.1 percent overall (BLS, 2014).

Among Black children born into the lowest quintile of the income distribution, 54 percent remained in the bottom quintile as adults, compared with 31 percent for White children. Among Black children born in the middle quintile, 45 percent fell back to the lowest quintile as adults, compared with only 16 percent for White children (Isaacs, 2008).

In the housing world, similar disparities remain. The same national study of housing discrimination against racial and ethnic minorities that showed significant reductions in some forms of blatant discrimination indicates that housing discrimination continues, simply in more subtle forms.

Minority renters and homebuyers are likely to be told about and shown fewer housing options, constraining their choices. For example, the study found that in about one-half of in-person rental tests, one tester was told about more available units than the other tester, with White renters significantly more likely to be favored than minority renters. In addition, in about one-third of inperson rental visits, one tester was shown more units than the other tester, again with White renters significantly more likely to be favored than minority renters. Similar trends were found in the sales market for Black and Asian homebuyers and, in some cases, minority homebuyers were also steered toward neighborhoods with a lower percentage of White households (Turner at al., 2013).

In addition to ongoing housing discrimination, minorities are also affected by broader patterns of segregation. Exhibit 1 presents the racial and ethnic composition of the United States in the 2010 census. Examining racial and ethnic composition at the census block-group level makes it clear that most neighborhoods are nowhere near as diverse as the country. Although only 63.7 percent of the U.S. population is White, non-Hispanic, the median block group is 76.1 percent White, nonHispanic. Nationwide, 57,968 block groups (26.6 percent) have a White, non-Hispanic population equal to or greater than 90 percent. Looking at minority population, the block-group level figures are similarly extreme. Although 12.2 percent of the U.S. population is Black, non-Hispanic, onehalf of block groups in the country have a Black, non-Hispanic population of 3 percent or less.

Nearly one-third of block groups (67,169 or 30.8 percent) have a Black, non-Hispanic population of less than 1 percent. Most Black households live in a block group that is at least 42.9 percent Black. Hispanic households may be slightly more integrated than Black households but, in most block groups, they are still underrepresented; the population of the median block group is 5.7 percent Hispanic, and 21,825 block groups (10 percent) have a Hispanic population of less than 1 percent. Most Hispanic households live in a block group in which the population is at least 44.1 percent Hispanic.

–  –  –

The numbers and percentages in exhibit 1 confirm the experience many of us have in our daily lives; although neighborhood diversity has increased since 1970, our cities are still full of homogenous neighborhoods. It is important to ask why this pattern persists and what its implications are.

Segregation historically was promoted by government action such as racially restrictive covenants and ordinances and by redlining by the FHA. Although the most blatantly exclusionary policies have been overturned, some continuing policies, such as large-lot zoning and limits on multifamily housing, can have the effect of restricting housing opportunities for minority populations. The most prevalent and stubborn forces preventing integrated neighborhoods, however, may be the economic and social realities that minority households face. High-opportunity neighborhoods with low crime and poverty, good schools, and other public amenities have high housing costs that put them out of reach to low-income minority families; and when these families do manage to find an opportunity, perhaps through well-located assisted housing, they find it difficult to fit in with their new neighbors. The goal of this symposium is to examine the forces that limit inclusion in American neighborhoods.

Neighborhood Effects Some may wonder why any of this matters. If the goal is to help all Americans, regardless of income or race, access opportunity, why not focus on the people themselves rather than the neighborhoods in which live? Why focus specifically on the racial composition of the neighborhood? These questions are complicated and have inspired a significant body of research during the past few decades;

many researchers have concluded that neighborhood conditions affect a wide range of individual outcomes (Ellen and Turner, 1997; Jencks and Mayer, 1990).

CityscapeJoice and Bavan

Two watershed moments in the study of race in American neighborhoods were the 1976 Supreme Court decision in Hills v. Gautreaux and William Julius Wilson’s 1987 book The Truly Disadvantaged.

The Gautreaux decision launched a massive housing mobility project with the explicit goal of reducing segregation in Chicago public housing. Research on the program showed broad-based improvements in education outcomes for children whose families relocated to lower poverty and less segregated neighborhoods (Rubinowitz and Rosenbaum, 2000). The Gautreaux demonstration was a vigorous effort to break the cycle of poverty that gripped poor, minority households— a phenomenon that Wilson’s book put in the spotlight.

In 1994, HUD launched Moving to Opportunity (MTO), a demonstration program meant to rigorously test the findings from Gautreaux. A total of 4,604 low-income households in Baltimore, Boston, Chicago, Los Angeles, and New York participated in the program and were randomly assigned to one of three groups: (1) the treatment group, which received a housing choice voucher to use in a low-poverty neighborhood, plus relocation support; (2) the Section 8 group, which received an unrestricted voucher and no special support; and (3) a control group, which remained on the waiting list for assistance. The findings from the final impact evaluation indicate that households in the treatment group did experience significant improvements in health—both physical and mental.

The treatment group did not have significantly better outcomes, however, on measures of economic self-sufficiency or education (Sanbonmatsu et al., 2011). In the context of this symposium, one notable caveat is that MTO generated only modest changes in the racial composition of census tracts where treatment households lived (Ludwig, 2012).



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