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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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Choice, again like HOPE VI, has the core mission to deconcentrate poverty. Exceeding a minimum rate for poverty or extremely low-income households, along with the presence of distressed, subsidized housing, is the key threshold neighborhoods must pass to apply for a Planning Grant. The racial and ethnic composition of these neighborhoods is not an essential consideration in applying for or receiving a grant. Yet recent federal low-income housing policies, whether intended or not, have had significant and disproportionate effects on racial and ethnic minorities (Goetz, 2013;

Popkin et al., 2004). Examining the racial and ethnic characteristics of Choice applicant neighborhoods illuminates the potential of Choice to affect low-income minority groups, and, given the results presented in the following sections, recommends caution in creating and implementing revitalization plans.

Choice also offers a fascinating window onto high-poverty urban neighborhoods across the United States. Unlike the characteristics of HOPE VI, the demographics of Choice neighborhoods are not constrained by the groups served by the public housing program. Rather than focusing on individual public housing properties, Choice allows for local groups to identify entire neighborhoods that This approach has also been used in other recent initiatives, including the U.S. Department of Education Promise Neighborhoods initiative and Sustainable Communities Initiative.

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they deem to be in need of revitalization. Thus, Choice applicant neighborhoods represent a sample of high-poverty, distressed neighborhoods in U.S. cities. They offer an opportunity to explore the other characteristics of these neighborhoods and possibly identify similarities and trends.

One clear trend that emerged throughout the broader research from which this article is drawn is that the neighborhoods identified in applications for Choice Planning Grants are highly racially and ethnically segregated. With the exception of a small number of mixed neighborhoods, most neighborhoods have majority minority populations with concentrations far exceeding national averages. Although some neighborhoods have followed national trends of increasing diversity, most neighborhoods with high concentrations of minority groups have had these high concentrations for at least the past 20 years. These neighborhoods of persistent segregation and isolation both reinforce the need for a coherent strategy for addressing residential segregation and potentially complicate the implementation of Choice.

U.S. Housing Policy and Poverty Deconcentration During the past two decades, federal urban and public housing policy in the United States has been increasingly focused on poverty deconcentration. Considerable scholarly attention has been directed toward understanding the causes, extent, and effects of concentrated poverty and the benefits, challenges, and mechanisms of mixed-income neighborhoods. Federal housing policy and expenditures also have reflected the interest in concentrated poverty and mixed-income neighborhoods, and substantial resources have been dedicated toward combating the former and creating the latter.

Beginning in the late 1980s, researchers began to highlight a significant and growing trend of spatial concentrations of high-poverty households in cities (for example, Danziger and Gottschalk, 1992;

Jargowsky, 1997; Jargowsky and Bane, 1991; Wilson, 1987). Concentrated poverty was highly correlated with concentrations of minority populations, and some scholars argued that concentrated poverty was a direct result of racial segregation (Massey and Denton, 1993). When translated from scholarship into policy, however, the explicit focus was on poverty rather than race. A number of reasons contribute to this focal point, including that concentrated poverty was growing while racial segregation had peaked in the 1960s (Logan, 2013; Logan and Stults, 2011) and that poverty provided a more acceptable basis for federal policy than race (Goering and Feins, 2003; Goetz, 2010).

New programs that were introduced aimed at deconcentrating poverty by dispersing public housing residents to lower poverty neighborhoods or by redeveloping public housing complexes into mixedincome neighborhoods that would combine dispersal with a dilution of concentrated poverty through an influx of high-income households. The former is exemplified by the Moving to Opportunity for Fair Housing (MTO) demonstration program (hereafter, the MTO program) and the increased use of vouchers through the Housing Choice Voucher Program, and the latter is exemplified by HOPE VI.

The MTO program, begun in 1994, was intended to identify the benefits for low-income families from moving from high- to low-poverty neighborhoods by selecting a random sample of willing public housing families to receive rent vouchers that could be used only in neighborhoods that had poverty rates of less than 10 percent. Residents were tracked to assess the potential benefits of these moves. HOPE VI, which started in 1992 as the Urban Revitalization Demonstration program, employed a different but largely complementary approach to deconcentrating poverty. In concept,

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HOPE VI facilitated poverty deconcentration by dispersing low-income households displaced by demolition and by attracting higher income residents into new mixed-income neighborhoods via redevelopment.

Although public housing and neighborhood revitalization policies during the past 20 years have been conceived of as tools of poverty deconcentration, they have not been race or ethnicity neutral.

Racial and ethnic segregation and separation by income levels are inextricably linked (Jargowsky, 1997; Massey and Denton, 1993), and programs to deconcentrate poverty have had racially and ethnically uneven effects. The demographics of public housing made some effect on minority households inevitable, although Goetz (2011) has shown that the effect was disproportionately large, even given the demographics. He found that demolition and displacement used in HOPE VI disparately affected Black households, forcing more to move out of their existing neighborhoods. The overall effect of this is ambiguous because some families moved to better neighborhoods and did well, while others experienced the opposite. Scholarship tracking resident relocation found that relocation often did little to change residential segregation and also found uneven outcomes for relocating families (Buron et al., 2002; Holin et al., 2003). Race and ethnicity were identified as a potential barrier for public housing residents to relocate to predominantly White neighborhoods through direct housing discrimination or limitations this discrimination placed on the housing search (Popkin and Cunningham, 2002). Racial deconcentration was accomplished through the introduction of higher income individuals into a neighborhood during the creation of mixed-income communities has produced more ambiguous effects on racial segregation with some neighborhoods that remain racially homogenous despite an influx of wealthier households (for example, Patillo, 2007), and these racially homogenous, mixed-income neighborhoods may struggle to attract the level of private investment necessary for sustained success (Turner, Popkin, and Rawlings, 2008).

Choice Neighborhoods Initiative The Choice Neighborhoods Initiative was conceived as both a replacement for and an evolution of HOPE VI. Like its predecessor, Choice is a competitive grant program that has as a core focus the elimination of concentrations of poverty and creation of mixed-income communities through locally derived and implemented plans. The ultimate goal is to create neighborhoods where families of all incomes will choose to live (Pendall et al., 2013).2 Choice is not simply an extension of HOPE VI, however, but is intended to build from the successes and lessons learned from that program. As a result, Choice has several key differences from its predecessor. First, Choice expands redevelopment and revitalization activities beyond the footprint of a single public housing property. This change came from a growing recognition that deterioration and abandonment do not terminate at property lines. Although a small number of studies have shown positive spillover effects from HOPE VI redevelopment projects and many HOPE VI projects were conceived as catalysts for neighborhood revitalization, transformation of surrounding Choice Neighborhoods Initiative—Planning Grants. Notice of Funding Availability, FY 2010. U.S. Department of Housing and Urban Development. http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_9823.pdf.

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neighborhoods is necessary for sustained success (Turbov and Piper, 2005; Zielenbach and Voith, 2010). Choice requires program applicants to self-define neighborhoods that will be the target for revitalization through the program. These neighborhoods must encompass more than a subsidized housing property.

Second, Choice expands the range of groups that can apply for the grants beyond public housing authorities. To draw in other capable local actors and to encourage coalition and capacity building, the pool of eligible applicants under Choice has been expanded to include actors such as cities and nonprofit organizations.

Third, the pool of eligible properties expands from only public housing properties to include other severely distressed, HUD-assisted housing. This property pool refers to publicly or privately owned properties subsidized through programs that include Section 8, Section 221(d)(3), and Section 236.

Many of these properties are facing similar levels of distress as are the public housing properties that were the focus of HOPE VI. The effect of this change is a substantial increase in the number and range of properties that could be targeted and the number and range of neighborhoods that are eligible for the program. Low-Income Housing Tax Credit, or LIHTC, properties, because they are funded through a program administered by the Internal Revenue Service rather than a HUD program, are not eligible for Choice grants.

Although legislation authorizing the Choice Neighborhoods Initiative has been proposed in the Congress, the legislature has yet to pass the law that would fully authorize and fund the initiative.

Instead, Choice was allowed to function as a $65 million demonstration through the U.S. Department of Housing and Urban Development Appropriations Act, 2010. Choice has continued using yearly congressional appropriations for HUD. Each year, HUD distributes funds through a competitive grant process guided by a notice of funding availability (NOFA).

As explained previously, Choice funds are distributed as two different grants—the Planning Grant and the Implementation Grant. Planning Grants, which are comparatively small amounts of money (up to $500,000), fund the creation of local Transformation Plans for locally identified neighborhoods that have high poverty rates and severely distressed subsidized housing. These Transformation Plans outline strategies that will be used to revitalize the target neighborhood in accordance with the goals of Choice and local priorities.

Implementation Grants are available to neighborhoods that meet the minimum criteria for Choice and that have an acceptable Transformation Plan in place. These Transformation Plans need not have been completed as part of a Planning Grant. Implementation Grants provide partial funding that can be used to leverage other public and private funding for activities to revitalize the target neighborhood. Successfully securing a Planning Grant does not automatically qualify an applicant or neighborhood for an Implementation Grant.

To apply for either a Planning or an Implementation Grant, applicants must identify an eligible neighborhood. Neighborhoods are eligible if (1) a minimum of 20 percent of neighborhood residents are either below the poverty line or have extremely low incomes, (2) an eligible severely distressed public or HUD-subsidized property lies within the neighborhood, and (3) the neighborhood

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