Communities of Opportunity: A Framework to Produce Greater Racial, Social and Regional Equity Breako

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Communities of OpportunityA Framework to
Produce Greater Racial, Social and Regional
EquityBreakout Session Housing

• September 23, 2006
• Calhoun County Summit on the Healing of Racism
• Jason Reece, AICP Senior Research Associate
• Christy Rogers, Research Associate
• Kirwan Institute for the Study of Race and
  Ethnicity
• The Ohio State University
• http//www.kirwaninstitute.org/
• Reece.35_at_osu.edu

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Todays Discussion

• Critical importance of housing as means to access
  social, economic and educational opportunity
• Review of housing challenges
• Segregation, realtor steering
• Exclusionary land use policy
• Lack of affordability concentration of
  affordable units
• Summary of policy best practices
• Opportunity Based Housing
• Housing Opportunity Revenue Streams
• Inclusive Housing
• Fair-share Housing
• Employer-assisted Housing

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Place and Life Outcomes

• Where you live is more important than what you
  live in
• Housing, in particular its location, is the
  primary mechanism for accessing opportunity in
  our society
• Housing location determines the quality of
  schools children attend, the quality of public
  services, access to employment and
  transportation, health risks, access to health
  care and public safety
• For those living in high poverty neighborhoods
  these factors can significantly inhibit life
  outcomes

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Social science research on the Neighborhood
Effect

• Neighborhoods vary in terms of
• Resources and local service quality (public and
  private services schools, grocery stores, child
  care, after school activities, parks)
• Crime and violence rates
• Job access
• Model learning via social ties and
  inter-relationships
• Socialization and collective efficacy / norms
• Resident perceptions of deviance

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Ex Influence of Neighborhoods on Health

• Research suggests that living in disadvantaged
  neighborhoods increases the risk of mortality and
  disease
• Possible mechanisms
• direct physical influences (i.e. exposure to
  toxic waste)
• cumulative stress associated with living in
  unsafe neighborhoods with limited resources
• harder to sustain healthy behaviors (i.e. less
  good grocery stores)
• more likely to be targeted by companies promoting
  unhealthy lifestyles (tobacco, alcohol, fast
  food)

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Housing and Wealth

• Housing is the primary way people build assets
  and wealth in the United States, by developing
  home equity
• Home equity accounts for 70 of the average net
  worth of households in the US
• African Americans and Latinos are often denied
  access to this wealth building opportunity
• Why Impediments to homeownership and the loss of
  property values due to segregation and isolation
  from opportunity
• Why is wealth important?
• It is intergenerational, provides a safety net,
  and allows people to access other opportunities

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Housing and Wealth

• The median asset value for a white household was
  79,400 for the median African American
  household this was 7,500 (a disparity of 900)
• For every 1 in assets held by African Americans,
  Whites hold 9
• This disparity is primarily due to differences in
  home equity

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Housing and Opportunity

• Housing is Critical in Determining Access to
  Opportunity

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The Cumulative Impacts of Racial and Opportunity
Segregation
Segregation impacts a number of life-opportunities
Impacts on Health
School Segregation
Impacts on Educational Achievement
Exposure to crime arrest
Transportation limitations and other inequitable
public services
Job segregation
Neighborhood Segregation
Racial stigma, other psychological impacts
Impacts on community power and individual assets
Adapted from figure by Barbara Reskin at
http//faculty.washington.edu/reskin/
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Racial Segregation, Opportunity Segregation and
Racial Disparities

• Housing policies, land use patterns and patterns
  of regional investment and disinvestment converge
  to produce continued racial segregation in our
  society
• Often this racial segregation coexists with
  segregation into high poverty neighborhoods and
  separation from many of the opportunities in our
  metropolitan regions
• Producing a racial isolation in neighborhoods
  that are lacking the essential opportunities to
  advance in our society, and fueling racial
  disparities

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Housing Challenges

• A well documented web of housing challenges
  disproportionately impact people of color
• A housing market that does not produce units that
  are affordable to most people of color
• Exclusionary land use policies
• Discriminatory and predatory lending practices
• Racial discrimination and steering
• Subsidized housing funding and policy
• Resulting in segregation and concentration for
  many African American households

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Growing Affordability Problems in Many Markets

• The nation has a growing affordability problem
• Appreciation in coastal markets and lagging
  incomes in other markets are contributing to this
  trend

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People of Color Disproportionately Impacted by
Affordability Issues

• As housing affordability declines, communities of
  color (who are more likely to have fewer assets
  and less income) bear a disproportionate impact
• Approximately 40 of African American and Latino
  households had housing problems (usually due to
  cost) in 2000
• For Whites only 25 experienced housing problems

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Exclusionary Land Use Policy

• Local government land use restrictions can enable
  suburban communities to exclude affordable
  housing
• These restrictions drive up the cost of housing
  and block access to lower-income families, most
  often African American and Hispanic households
• This is often referred to as exclusionary
  zoning
• density restrictions (lots too large)
• building size (large square footage requirements)
• site restrictions (requiring driveways, large
  setbacks)
• use restrictions (not allowing enough
  multi-family zoned land)

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Realtor steering

• HDS2000 finds that discrimination still persists
  in both rental and sales markets of large
  metropolitan areas nationwide, but that its
  incidence has generally declined since 1989.
• African Americans still face discrimination when
  they search for rental housing in metropolitan
  markets nationwide.
• Geographic steering rose, suggesting that whites
  and blacks are increasingly likely to be
  recommended and shown homes in different
  neighborhoods.
• Source Discrimination in Metropolitan Housing
  Markets National Results from Phase 1, Phase 2,
  and Phase 3 of the Housing Discrimination Study
  (HDS)
• Available at http//www.huduser.org/publications/
  hsgfin/hds.html

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Racial Steering in Detroit
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Policy Best Practices

• Opportunity Based Housing
• Communities of Opportunity
• Housing Opportunity Revenue Streams
• LIHTC and HCV revisions
• Inclusive Housing
• Fair-share Housing
• Employer-assisted Housing

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The Opportunity Based Housing Model

• The opportunity based housing model was
  proposed by Kirwan Institute Executive Director
  john powell
• Affordable housing must be deliberately and
  intelligently connected to high performing
  schools, sustaining employment, necessary
  transportation infrastructure, childcare, and
  institutions that facilitate civic and political
  activity

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Linking Housing to Opportunity

• Need to move beyond thinking of affordable
  housing/subsidized housing in terms of fair
  share or suburban/urban dichotomy
• Need to think in terms of opportunity
• Opportunity structures are the resources and
  services that contribute to stability and
  advancement
• Employment
• Safety from crime and health environments
• Good schools
• Neighborhood investment
• Health care
• Child care

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What Policies Can Connect People to Opportunity?

• Utilizing opportunity based housing principles to
  guide housing policy, coordinate affordable
  housing initiatives and target neighborhood
  revitalization
• Target affordable housing development in areas of
  opportunity
• Target revitalization initiatives in areas of low
  opportunity

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Conditions in High and Low Opportunity Areas
Economic Opportunities
High Opportunity
Low Opportunity
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Children and Schools
High Opportunity
Low Opportunity
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Housing
High Opportunity
Low Opportunity
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How do property values respond to neighboring
public and affordable housing?

• Scale, density, and context matter
• Nguyen (2005) found that instances in which
  affordable housing appears to have no effect
  occur when
• (1) affordable housing is sited in healthy and
  vibrant neighborhoods
• (2) the structure of the affordable housing does
  not change the quality or character of the
  neighborhood
• (3) the management of affordable housing is
  responsive to problems and concerns
• (4) affordable housing is dispersed

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Housing Opportunity Revenue Streams

• LIHTC Low-Income Housing Tax Credits
• Apply regional equity criteria to the
  supply-side amend state policies add
  additional siting criteria)
• California, Wisconsin, Illinois, Minnesota
• HCV Housing Choice Vouchers
• Improve demand-side rental subsidy programs
• Illinois Housing Opportunity Tax Incentive Act
  provided economic incentives for landlords

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Subsidized Housing Policy, Opportunity and
Segregation

• Subsidized housing siting supports racial
  segregation by concentrating units in
  predominately poor African American communities
• In 2000, three quarters of the nations
  traditional assisted housing units were located
  in central cities, while only 37 of the nations
  metropolitan population lived in central cities
• The average metropolitan neighborhood with
  subsidized housing had a poverty rate that was
  three times higher than the average neighborhood

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LIHTC Advocacy and Research

• The LIHTC program is a 5 billion tax credit
  program for private developers to create
  affordable housing opportunities
• While recent federal budgets have reduced funding
  for most housing programs (public housing,
  vouchers, Hope VI), the LIHTC program has
  remained untouched
• The LIHTC program is the primary source of new
  subsidized housing construction in the US
• LIHTC projects produced over 800,000 units in the
  1990s, compared to just 50,000 units of
  traditional site based subsidized housing

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Is the LIHTC Producing Segregation?

• Although the LIHTC program is siting units in
  slightly better neighborhoods than traditional
  public housing, these neighborhoods still
  continue to be areas of very high poverty and
  predominately segregated
• Most notably in urban areas of the Midwest and
  Northeast
• The LIHTC program is administered by the IRS and
  has become a civil rights free zone because of
  the unusual way the program is implemented
• KI and PRRAC are working with state advocates and
  housing finance agencies to set guidelines to
  reduce segregation in LIHTC siting and connect
  more LIHTC units to high opportunity areas

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Inclusive Housing

• End exclusionary land use policies
• State review
• Barrier removal grants (FL)
• Model land use codes
• Promote inclusionary zoning
• Promote mixed-income communities
• Ex Montgomery Co., MD and Highland Park, IL

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Montgomery Co., MD

• The oldest inclusionary zoning (IZ) ordinance in
  the country.
• Known as the Moderate Price Dwelling Unit
  Ordinance
• Provides that between 12.5 and 15 percent of all
  new housing development with 35 or more housing
  units must be affordable to the countys low- and
  moderate-income residents (65 percent of the Area
  Median Income).
• By setting aside 12.5 percent of units as
  affordable, a developer can receive a density
  bonus of up to 22 percent from the county.
• As a result of its IZ ordinance, by 2003,
  Montgomery County had produced 11,210 units of
  affordable housing

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Highland Park, IL

• In 2003, the city of Highland Park, Illinois
  approved an inclusionary zoning ordinance
  following a rapid decline in its stock of
  affordable housing.
• The ordinance applies to all residential
  developmentsnew construction, renovations of
  existing housing, or condominium conversionsthat
  result in 5 or more units.
• All residential developments covered by the
  ordinance are required to make 20 percent of
  their units affordable to low- and
  moderate-income residents. For example, a
  20-unit development would include 4 units that
  are made affordable.
• Long-term affordability
• In-Lieu Payments Made to a Housing Trust Fund
• Dispersal of Affordable Units within the
  Development
• Incentives fee waivers and a density bonus that
  grants one additional market-rate unit per
  affordable unit built.
• Priority to residents who work in Highland Park

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Fair-Share Housing

• Distribute affordable housing across the region
• NJ Fair Share
• CA Fair Share
• MA, RI, CT, IL State appeal boards to
  override exclusionary zoning decisions

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Fair Share Housing California

• Enacted in 1980, California has one of the oldest
  fair share housing policies in the country.
• The states housing element law requires local
  governments to include affordable housing
  planning in their comprehensive plans
• Regional councils of governments allocate to each
  city and county in the state a specific number of
  new housing units that must be planned for that
  are targeted to four income categories (very low,
  low, moderate, and above moderate).
• Housing elements must be updated every five years
  and localities must submit their plans for review
  and approval by the state.
• Housing elements must meet a number of
  requirements to be found in substantial
  compliance with the states fair share law by
  the California Department of Housing and
  Community Development.

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Fair Share Housing MA

• The Massachusetts fair share housing law, known
  as Chapter 40B, was enacted in 1960.
• Rather than calculate housing need, Chapter 40B
  seeks to determine whether a community has met
  its fair share of the regions affordable
  housing. If 10 percent of a communitys housing
  stock consists of local, state, or federally
  subsidized housing, Chapter 40B does not apply.
• If less than 10 percent of the housing stock is
  considered affordable under 40B, affordable
  housing developers can override local zoning
  laws. Because of its intended purpose, 40B has
  become known throughout Massachusetts as the
  anti-snob zoning law.
• Since 1970, 40,000 units have been approved under
  Chapter 40B.

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Employer-assisted Housing

• Tie housing to jobs by increasing affordable
  housing where the jobs are
• EAH programs include
• Home-buying assistance
• Support for new affordable housing construction
• Credit repair / financial counseling
• Investment in affordable housing funding sources

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Other Important Interventions

• Aggressively enforce fair housing laws
• Strategies/education to reduce racial steering by
  realtors
• Tighter regulations to reduce the potential for
  predatory lending
• Mobility counseling to assist families looking to
  relocate
• Assuring preservation of affordable housing in
  gentrifying areas

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Linked Fate Why Should Others Care About Equity
and Inclusion

• Why should those who are not marginalized care
  about equity challenges?
• A region and all its residents share a linked
  fate
• This issue is particularly important today
• To thrive, regions must be competitive in the
  global economy
• Inequality is a sign of an economically/socially
  inefficient region, where proper investments are
  not made in human capital, and where much of the
  population can not meet its creative potential
• These disparities make the region less
  competitive, nationally and globally

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Fair Housing Benefits Everyone

• Not only are people of color negatively impacted
  by our housing market low-income Whites are
  harmed as well
• Low-income Whites also have their housing
  mobility limited by some fair housing impediments
  (such as exclusionary zoning)
• This opportunity segregation also impacts their
  outcomes in life
• Large-lot zoning results in artificially higher
  housing costs, making entire suburban
  neighborhoods vulnerable to market corrections
  and a precipitous drop in value.
• Meanwhile, the exodus from existing communities
  can result in underutilized or vacant land, and
  loss of home equity for lifelong residents of
  these areas.
• As neighborhoods become more and more internally
  homogenous, residents become isolated from the
  diverse life experiences of other people in the
  region.