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"Concentrated Poverty is a Children’s Issue,"

by Barbara Sard September/October 2013 issue of Poverty & Race

In his new book, Stuck in Place: Urban Neighborhoods and the End of Progress toward Racial Equality, Patrick Sharkey powerfully analyzes the long-term consequences of living in neighborhoods of concentrated poverty—the modern-day “ghettos” in which some 15% of poor children live, frequently for generations. Such neighborhoods, in which 40% or more of the inhabitants are poor, are also predominantly African-American or Hispanic: Few poor white children live in neighborhoods of extreme poverty. Coupled with the emerging literature on the lasting deleterious impacts of the “toxic stress” children experience from prolonged exposure to deep poverty and violence in their homes and communities, Sharkey’s must-read book helps us understand why living in neighborhoods of concentrated poverty is particularly harmful to children, beyond the impact of growing up in a poor family.

Reducing the number of children living in extremely deprived neighborhoods should be high on the agenda of advocates for low-income children. Even in this time of sharply constrained federal resources and federal legislative paralysis, government and its partners at the federal, state and local levels could do much to improve the lives of the most at-risk children, as a forthcoming analysis from the Center on Budget and Policy Priorities will explain.

Location Matters

The first step is to recognize that where children live matters, particularly at the extremes of the continua of neighborhood assets and detriments. Unfortunately, many people interested in poverty issues concluded from the Moving to Opportunity Demonstration (MTO) that location doesn’t matter. Sharkey’s own research in Stuck in Place, along with other studies and a more careful reading of MTO findings, show that neighborhood attributes can have profound effects on poor children. In our analysis this Fall, we will review this literature as a predicate to our findings on the performance of the federal rental assistance programs on providing accessto opportunity and a discussion of our recommended policy changes.

Federal Rental Assistance and Concentrated Poverty

Stuck in Place also reminds us of the central role government policies play in fostering racially concentrated living patterns, and in isolating the minority poor, particularly African Americans. In that context, here is a preview of what our analysis shows about the extent to which federal housing programs contribute to— or counteract—the broader historical trends Sharkey describes so effectively.

More than 25% of the poor children living in extreme-poverty neighborhoods—roughly about 600,000 children—live in households that receive federal rental assistance. The vast majority of these children—more than 90%—are black or Hispanic. Receiving rental assistance makes it more likely that a family will live in an extreme-poverty neighborhood than poor children generally. (In 2010, 17.5% of families with children that receive HUD-funded rental assistance lived in extreme-poverty neighborhoods, compared with 15.2% of all poor children.) The programs with project-based rental assistance—public housing and privately owned properties with project-based Section 8 subsidies—drive this finding, which is not surprising, given the forces that affected the location of these properties. Two-thirds of the families with children that receive federal rental assistance and live in extreme-poverty neighborhoods are assisted under one of these project-based programs; the others have Section 8 vouchers. (It is a mistake to assume that public housing is the primary cause of these findings. A majority of the families with children that receive federal rental assistance and live in extreme-poverty neighborhoods do not live in public housing; they receive tenant-based or project-based Section 8 assistance.)

Location Impacts of Housing Choice Vouchers

Our analysis of data on households that received Housing Choice (Section 8) Voucher (HCV) assistance in 2010 is more encouraging, but also shows substantial room for improvement. Unlike HUD’s project-based programs, the HCV program cuts the likelihood of children living in extreme-poverty neighborhoods by about a third, compared with all poor children, and for black and Hispanic families, by half, compared with poor people of the same racial or ethnic group.

Housing vouchers also help poor families with children, particularly black and Hispanic families, to live in low-poverty areas (those with poverty rates below 10%). One out of five voucher families with children lived in a low-poverty area in 2010, a significantly larger share than the 15% of poor children generally. The share of black and Hispanic families using vouchers to live in low-poverty neighborhoods is a few percentage points lower than the average, but the gap between the shares of white and minority families using vouchers in low-poverty neighborhoods closed substantially between 2000 and 2010, probably at least in part due to an increase in minority families using vouchers to live in suburban neighborhoods.

Notably, while having a voucher makes little difference in a white family’s ability to live in a low-poverty neighborhood, it makes a dramatic difference for minority families. More than double the share of black families with vouchers, and close to double the share of Hispanic families with vouchers, used them to live in low-poverty neighborhoods, compared with other poor blacks and Hispanics generally.

But more than 100,000 families with children—10% of all families with children in the HCV program— used vouchers to rent housing in extreme-poverty neighborhoods in 2010, despite the better options that having a voucher should make available to them. The share of families with children using vouchers to live in extreme-poverty neighborhoods increased by more than 40%, compared with a decade earlier. Kirk McClure, Alex Schwartz and Lydia Taghavi reported a similar finding in a paper presented at the Nov. 2012 Annual Meeting of the Assn. of Collegiate Schools of Planning; they also found that a smaller share of vouchers was used in low-poverty neighborhoods in 2010 than in 2000. In addition to this evidence that the HCV program is performing less effectively than at the end of the Clinton Administration in helping families avoid living in areas of concentrated poverty and to access areas of greater opportunity, a recent analysis for PRRAC by Ingrid Gould Ellen and Keren Mertens Horn (www.prrac.org/pdf/PRRACHousing Location&Schools.pdf) found that families with vouchers have less access to well-performing schools than poor families without rental assistance.

During the decade 2000–2010, HUD implemented a number of new policies in the HCV program aimed at increasing access to lower-poverty communities that provided better opportunities for families. For example, Congress provided agencies with additional flexibility to subsidize higher rents and allowed families to rent more expensive units by paying more than the standard 30% of income. In addition, HUD raised the “fair market rent” levels for highly segregated metro areas, and instituted a new performance measurement system that gave some credit to agencies that engaged in activities to expand housing opportunities. Our findings, and those of other studies, highlight the fact that these well-intentioned policies have not succeeded in achieving better locational results, despite the theoretical advantages that tenant-based assistance provides to enable families to access more desirable neighborhoods.

What Can Be Done?

Policy changes are needed to ensure that federal rental assistance programs provide greater opportunities for families to choose affordable housing outside of extreme-poverty neighborhoods, including in areas with access to better-performing schools, while effective interventions are developed over the longer term to increase incomes, enhance safety and improve educational performance in areas of concentrated poverty. Support of children’s advocates for these largely administrative reforms could help persuade the Obama Administration of their importance.

Substantial progress toward these goals is feasible in the next few years, even in the current fiscally constrained environment, without significant additional funding or action by Congress. To realize better location outcomes in the Housing Choice Voucher program, our forthcoming analysis will recommend four sets of interrelated policy changes, based in large part on experience with the mobility-oriented policy changes the program tried since 2000 and insights from recent qualitative research.
1. Federal policy must incentivize and reward agency performance in achieving better location outcomes.
2. Program policies that weight the scale in favor of families using vouchers in poverty- and racially-concentrated areas should be revised or eliminated (e.g., metro-wide Fair Market Rents and lists of potentially available units only in poverty- and racially-concentrated areas).
3. To expand housing choices outside of racially- or ethnically-concentrated areas of extreme poverty, state and local governments and housing agencies should adopt policies to encourage landlords in low-poverty neighborhoods to participate in the HCV program and to assist interested families to use their vouchers in these areas.
4. The administrative geography of the HCV program must be changed so that the boundaries of agencies’ service areas (“jurisdictions”) no longer undermine the program’s ability to promote access to high-opportunity neighborhoods.

Federal, state and local policies also should promote the preservation of well-located assisted housing, whether publicly or privately owned. More than 200,000 units in HUD’s project-based rental assistance programs house families with children in neighborhoods that are less than 20% poor. These properties likely provide opportunities that cannot be replicated at a similar cost, making their preservation an important priority for public policy and investment.

However, new investments to preserve properties that isolate poor children in neighborhoods that may limit opportunity should be made cautiously. To the extent feasible, such housing investments should be coupled with measures to improve schools and other neighborhood amenities, and to expand families’ ability to choose where to live without losing rental assistance.

While the Low Income Housing Tax Credit (LIHTC) fares somewhat better than other programs at developing rental housing for families with children in lower-poverty neighborhoods and in proximity to better-performing schools, performance among the states is uneven. Federal leadership is particularly important as LIHTC has the untapped potential to be a major source of affordable housing opportunities for families in high-opportunity areas. State efforts in this direction should continue, and federal policy should ensure that families with housing vouchers as well as those protected by the Fair Housing Act are not discriminated against in access to these units.

Most of these recommendations can be implemented by the Obama Administration without new authority or additional funds from Congress. While unglamorous, these types of administrative policies, particularly those incorporated in formal regulations, tend to continue over the long term, despite political changes. In fact, regulatory and other administrative policy changes in the current federal low-income housing programs can be a critical element of the “durable” urban policies Sharkey recommends to reverse the negative effects of the “inherited ghetto.”

Barbara Sard is Vice-President for Housing Policy, Center on Budget and Policy Priorities. She formerly was Senior Advisor on Rental Assistance to HUD Sec. Shaun Donovan. The CBPP report summarized in this article will be available sometime in Oct. and will be posted on the CBPP website: cbpp.org sard@cbpp.org
 
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