Nicholas Kelly and Ingrid Gould Ellen
The work of Raj Chetty and his co-authors shows the power of neighborhoods to shape child outcomes. Yet neighborhoods in the United States are marked by stark racial and economic disparities. There are many barriers to addressing these disparities, most notably political, but one critical issue is cost. Neighborhoods that deliver richer opportunities are typically more expensive and thus providing housing subsidies in such neighborhoods means fewer families are served. We show in our new paper published in the Journal of the American Planning Association that many affordable neighborhoods offer ample opportunities for economic mobility, and we provide both planners and other government officials with a concrete way to identify them.
First, we propose a new, simplified index of economic opportunity, the School-Violence-Poverty (SVP) Index based on the evidence about what matters most to the outcomes of young children: school quality, the violent crime rate, and the poverty rate. Second, we argue for “opportunity bargain” analysis, which enables planners and families to find high opportunity areas that have lower rents than expected, and show that such high-opportunity bargain areas exist in two high-cost locations: New York City and Greater Boston. We believe these two innovations can help planners identify affordable, high opportunity areas that provide families with the best chance to succeed, as well as help improve matches between individuals and neighborhoods by providing better information to planners and families in the housing search process.
2. Redefining neighborhood economic opportunity: The School-Violence-Poverty Index Do we really need another opportunity index?
While the path-breaking Opportunity Atlas helped identify areas that produced better outcomes for children two to three decades ago, it has less relevance for planners looking to identify opportunity areas today, given that many neighborhoods have gentrified in the last 20 years – and some have also declined. Other indices that do rely on contemporary data, such as the Diversity Data Kids Child Opportunity Index, include many neighborhood variables that matter for kids, such as schools – but also many other variables that carry mixed evidence on whether they impact neighborhood economic opportunity, such as proximity to jobs. Furthermore, these indices do not include violent crime rates given the historical difficulty of accessing those data.
We believe the School-Violence-Poverty (SVP) Index addresses these drawbacks by focusing only on these variables most relevant for child outcomes – and with data updated for contemporary neighborhood conditions. Significant research has indicated that high-quality schools are critical to improving the life chances of children. There is also considerable evidence demonstrating that exposure to violent crime has negative impacts on children, including reducing skills in vocabulary and reading, and undermining self-regulation, attention, and impulse control. And finally, the Moving to Opportunity demonstration showed the significant positive impacts that low-poverty neighborhoods have on helping low-income children earn more as adults. In focusing on these three metrics, the SVP Index answers the question planners and policymakers want to know: where is opportunity located in their communities today, and how can it be identified clearly and simply without incorporating other variables that may be at cross-purposes to these factors, such as commute time. And while of course numerous other variables matter for families – including the crucial importance of community and a sense of place that we all value in neighborhoods – these preferences are too idiosyncratic to include in a single index. That’s why we only include the three variables that are most likely to matter for all children and encourage families to complement these factors with other crucial neighborhood indicators on a case by case basis.
When comparing the SVP index to the Opportunity Atlas, the SVP Index, because it draws on more recent data, incorporates the fact that many areas in cities have seen greatly reduced crime rates and improved schools since the 1980s and 1990s. The SVP index therefore more accurately reflects opportunity today. While the Diversity Data Kids Index also draws on contemporary measures, the SVP index focuses on those three indicators most relevant for children. In Greater Boston, for example, the Diversity Data Kids Index rates surrounding high opportunity suburbs such as Brookline as equivalently high opportunity to some Boston neighborhoods with lower-performing schools or higher crime, due to inclusion of indicators such as proximity to jobs on which evidence is mixed.
The one significant limitation of the SVP index is the lack of publicly accessible crime data in a uniform manner nationwide. We worked to collect data on violent crime in New York City and Greater Boston to build the index in those areas, but recognize this makes creating these indices in other communities more labor intensive (though far from impossible). We hope that given nationwide efforts to increase police transparency, police department data will only become more easily accessible for planners, and that planners will work to collect this data from their local police departments to make this critical information available.
3. Finding Opportunity Bargains
It’s one thing to create a new opportunity index – and quite another to find opportunity areas that families can actually afford. Indeed, we find that many opportunity indices leave planners in the lurch without taking into account the crucial element of cost, given that opportunity areas are generally much more expensive than others. To address this, we use data on rental prices, opportunity measures, neighborhood amenities and housing characteristics to locate those areas that scored highly on the SVP index but had rents lower than expected given their levels of opportunity. Controlling for housing characteristics, we were able to identify those areas that a) score above average on the SVP index, b) have rents below the median rent for the region and c) have median rents 10% lower than expected, as high-opportunity bargains.
In New York City and Greater Boston, we found that 15% of areas were high-opportunity bargains. These areas were remarkable in that they had nearly as high-performing schools, similar violent crime rates, and only slightly higher poverty rates than expensive high-opportunity areas – but had rents that were on average $1,000 per month lower in New York City and $700 lower in Greater Boston. In New York City, high-opportunity bargains tended to be in south Brooklyn, Staten Island and parts of Queens, while Manhattan, as one might expect, had rents higher than expected given their SVP score. In Greater Boston, suburbs outside the city to the southwest and northeast represented a discount compared to the more tony suburbs northwest of Boston, despite similar levels of opportunity. In both cases, high-opportunity bargain areas do come with one key tradeoff: a greater distance to the city center. While this may matter for some families, it will not matter for all.
Why do opportunity bargains exist? We found that in both areas, high-opportunity bargain areas tended to have fewer restaurants on Yelp – an amenity some renters may care about, but many low-income families may not prioritize compared to school quality and safety. In New York City, opportunity bargains still had a great public transit access; and while in Greater Boston these areas did not have subway access – they did have commuter rail stops. Interestingly, in both communities, there was a lower percentage of college graduates than expensive opportunity areas – indicating these neighborhoods may be off the radar of college educated professionals who bid up rents in more expensive communities. And in both cases, high-opportunity bargain areas had more moderate household incomes as compared to expensive opportunity areas. As a result, these communities are a bit off the beaten track– hidden gems that low-income families could take advantage of, if they were aware they existed.
The racial diversity of high-opportunity bargain neighborhoods is also critical, especially for low-income families of color. In New York City, we found that three-quarters of these areas were diverse (at least 10% and less than 90% Black and Hispanic). In Greater Boston, however, high-opportunity bargain areas were much less diverse, with just 8% of high-opportunity bargain communities meeting this definition of diversity. This is partly due to the lack of diversity in the suburbs of Greater Boston – indicating opportunity bargain areas may be most helpful for more diverse cities and regions. Overall, however, diverse high-opportunity bargain areas were very similar to nondiverse opportunity areas in terms of neighborhood amenities, with slightly better access to public transit and proximity to downtown.
4. Why the SVP Index Matters for Planners
The SVP Index and opportunity bargain analysis will be useful to both planners and families. For planners, these tools will be crucially important for those designing housing voucher programs to highlight affordable, high-opportunity bargain neighborhoods. Especially for housing agencies that use metropolitan-wide payment standards – meaning there is one maximum rent for voucher across a region – finding those areas that are affordable and high opportunity can help voucher holders stretch their limited voucher dollars to find the best communities for their families. By analyzing affordable opportunity areas in their regions, and crucially providing that information to voucher holders in an intuitive way, housing agencies could greatly expand access to opportunity for low-income families.
Planners can also use these tools to help target public subsidy dollars for new housing development, by prioritizing areas that offer rich opportunities for families at a discount. Specifically, planners can prioritize high-opportunity bargain areas as places to build affordable housing, and where to conduct rezoning to allow more housing. While some cities have focused on increasing density in expensive, high opportunity neighborhoods – a critical goal – we argue planners should also examine those less expensive, but nearly as high opportunity areas for housing as well, to maximize the number of families that can live in high opportunity neighborhoods. Low-income families can also directly use this analysis to locate neighborhoods with lower than expected rents that still offer rich opportunities for children.
To be sure, even if opportunity bargain analysis were widely adopted, it would not solve segregation or inequality in access to opportunity. Our regions are the product of a housing system developed under White supremacy in housing that allows White families to hoard opportunities from communities of color. More systematic changes would be needed to address these disparities, such as municipal incorporation to reduce the number of fragmented suburban municipalities engaging in exclusionary zoning. But while we work towards these more impactful changes, we think improving housing search itself through innovations like we present here can be a critical, low-cost way to expand access to opportunity.
By providing a simple, easy to construct opportunity index focused only on the most critical neighborhood amenities for children and by introducing the crucial – and often overlooked – element of cost into the discussion, we hope to make policies aimed at increasing access to opportunity more rigorous and practical. By comparing the SVP Index against current rents, planners can identify high-opportunity bargains: those under-the-radar areas that are affordable and provide children with ample opportunities to succeed.
Nicholas Kelly (email@example.com) recently received his PhD in public policy and urban planning from the Massachusetts Institute of Technology. He is currently an adjunct lecturer at Northeastern University and Senior Fellow at the Boston Housing Authority. Ingrid Gould Ellen (firstname.lastname@example.org) is Paulette Goddard Professor of Urban Policy and Planning at New York University. This article is based on a recent article published in the Journal of the American Planning Association: Kelly, N., & Ellen, I. G. (2022). Planning for Opportunity: How Planners Can Expand Access to Affordable Opportunity Bargain Areas. Journal of the American Planning Association, 1–15.