Urban Policy Brief September 1994, Number 1 RESIDENTIAL MOBILITY PROGRAMS In an effort to reduce concentrations of inner-city poverty, the U.S. Department of Housing and Urban Development (HUD) has developed a set of new initiatives intended to ensure that low-income, inner-city families have access to affordable housing opportunities throughout their metropolitan area. This paper, the first in a series on current issues in housing policy, offers an introductory review of the research and policy literature on these residential mobility strategies. Introduction The past two decades have witnessed an explosive growth in the number of areas of extreme poverty at the heart of most large cities. Although half the metropolitan poor live in suburbs, concentrated poverty is almost exclusively an urban phenomenon. By 1990, approximately one in seven census tracts in the Nation's 100 largest cities were classified as areas of extreme poverty, where at least 40 percent of the residents were poor. In cities such as Detroit and Miami, the percentage of these poverty tracts was much higher. Minority households, for whom residential choice is constrained by racial segregation and housing discrimination, are invariably overrepresented in these areas. One in four black residents of large cities live in high-poverty areas, where they make up almost three-fifths of the population. Hispanics are the fastest-growing group in these poor urban neighborhoods: they represented 24 percent of the local population in 1990, compared with less than 20 percent in 1980. Three basic types of strategies are usually offered for reducin concentrated poverty and ameliorating its attendant social impacts. Place-based initiatives such as empowerment zones and traditional community development programs attempt to bring new resources and opportunities to distressed areas. Personal mobility pro-grams seek to improve residents' access to jobs in other areas through transportation assistance. Residential mobility strategies enable residents to obtain housing in areas where conditions and opportunities are presumably better. Used together or separately, each of these concepts can be a potentially useful component of a public response to the problems of concentrated poverty. This paper focuses only on issues surrounding the concept of residential mobility. Opportunity and Distressed Neighborhoods The isolation of poor minority families in areas of concentrated urban poverty reflect the cumulative impact of persistent segregation and pervasive housing market discrimination, which have prevented minority households from exercising free choice about where to live, constrained them in their pursuit of economic and other opportunities, and exacerbated the social consequences of this lack of opportunity. Racial segregation in the United States has been created and maintained by a complex web of private actions, market practices, and public policies. Despite the passage of the 1968 Fair Housing Act and other civil rights legislation, racial discrimination in housing remains a serious, albeit less overt problem. The nationwide Housing Discrimination Study sponsored by HUD found that blacks and Hispanics encounter discrimination including such explicitly segregative practices as steering in over half their encounters with sales and rental agents. Mortgage lenders are almost twice as likely to reject a loan application from an African American as from a white applicant with comparable income. A racial differential in mortgage loan denial rates persists even after controlling for other under-writing criteria such as wealth and credit history. Segregation and housing discrimination have also prevented lower-income minority households from adjusting to the transformation of the metropolitan job market. During the past several decades, the movement of high-wage manufacturing jobs in the large urban centers of the Northeast and Midwest from the city to the suburbs has been accompanied by an outmigration of middle-income white urbanites and the retail and service businesses that cater to them. Minorities and the poor, for whom suburban housing opportunities are scarce, have been increasingly isolated in economically enfeebled and socially homogeneous inner cities. This isolation has only increased in more recent years as growing numbers of middle-class blacks have also migrated to suburban enclaves. Douglas Massey and his colleagues have compiled statistics that illustrate the nature and extent of segregation in large metropolitan areas with substantial African American populations. Dissimilarity indices used to quantify uneven residential patterns show that in both 1980 and 1990, at least 70 percent of black residents in the 30 metropolitan areas with the largest black populations would need to move to achieve true integration. Measures of isolation indicate that the average African American in Massey's 1980 sample lived in a census tract where almost two-thirds of the population was black. A larger 1990 sample of urban counties revealed that more than one-third of black residents lived in neighborhoods that were at least 90 percent black. Using these and three other indicators of segregation clustering (the tendency of predominantly black areas to be contiguous), centralization (the proximity of black neighborhoods to the central business district), and concentration (the proportion of metropolitan space occupied by blacks). Massey found that 16 metropolitan areas, housing over a third of the Nation's black population, were "highly segregated" on 4 of the 5 dimensions in 1980, a condition he characterized as hypersegregation. Significantly, it is in many of these same cities primarily the older industrial centers of the Northeast and Midwest that urban poverty has become increasingly concentrated. Nearly half of all the poor living in high-poverty areas were in only a handful of the Nation's largest cities (including New York, Chicago, Detroit, Los Angeles, and Philadelphia) and in the predominantly Hispanic colonias along the Texas-Mexico border. By 1990, more than 60 percent of blacks in Miami lived in areas of extreme poverty, as did nearly 40 percent of blacks in Detroit and 30 percent in Atlanta and Chicago. The isolation and devastation of poor minority neighbor-hoods such as these is compounded when discriminatory institutional practices deny them essential resources. Redlining and other practices of lenders, investors, and insurers cut off the flow of capital needed for community and economic development. Similar disinvestment in minority neighborhoods by both government and business often result in deteriorated housing, inferior schools, inadequate access to services, crumbling infrastructure, frayed social institutions, and a lack of local employment opportunities. These and other attributes form what George Galster calls the "opportunity structure" of a particular place, the web of conditions that influence how residents perceive both the choices open to them and the potential socioeconomic benefits of those choices. For inner-city residents, the constraints imposed by the characteristics of their neighborhood and compounded by the additional burden of racial discrimination may seem to foreclose many traditional avenues for advancement. The consequences of the interaction of "place and race" in limiting opportunity among the poor, overwhelmingly minority residents of high-poverty areas is evident in the growth of severely distressed neighborhoods or "under-class areas," which are distinguished by high incidences of several problems associated with long-term poverty. Increasingly segregated and isolated from the larger society and with few perceived options, many residents of "underclass" neighborhoods make decisions that tend to perpetuate their poverty. Thus, in these severely distressed areas: o Women head over 65 percent of families with children. o More than half of adults lack a high school education. o A third of area youths drop out of high school. o Approximately 45 percent of adults are unemployed. o A third of all households receive public assistance. Additional Readings: Galster, George. "Polarization, Place, and Race" in North Carolina Law Review 71 (1993): 1421-62. Kasarda, John P. "Inner-City Concentrated Poverty and Neighborhood Distress" in Housing Policy Debate 4 (1993): 253-302. Massey, Douglas, and Mary A. Denton. American Apartheid: Segregation and the Making of the Underclass (Cambridge, MA: Harvard Univ. Press, 1993). Munnell, Alicia H., et al. Mortgage Lending in Boston: Interpreting HMDA Data (Boston: Federal Reserve Bank of Boston, 1992). Ricketts, Erol R., and Isabel V. Sawhill. "Defining and Measuring the Underclass" in Journal of Policy Analysis and Management 4 (1988): 316-25. Turner, Margery Austin, Raymond J. Struyk, and John Yinger. Housing Discrimination Study: Synthesis (Washington, DC: HUD, 1991). Wilson, William Julius. The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy (Chicago: University of Chicago Press, 1987). The Spatial Mismatch Hypothesis One of the few lines of research that explicitly addresses the effects of place and race on economic opportunities for inner-city blacks is the extensive body of scholarship related to the "spatial mismatch hypothesis." In a paper first published in 1968, John F. Kain attempted to explain the eroding position of blacks in the metropolitan labor market. His theory, later dubbed the "spatial mismatch hypothesis," makes three inter-related assertions which, taken in sum, argue that residential segregation, exacerbated by the decentralization of jobs to the suburbs, limits black workers' access to employment. Several recent papers have reviewed the research literature on spatial mismatch. While there is still much disagreement over both the reliability and the significance of existing research, as well as important gaps in data on key issues, most scholarship seems to support the major contentions of the hypothesis. A number of important observations have emerged from this research: Housing discrimination segregates blacks in areas comparatively distant from employment. The consequences of this isolation are particularly severe for black residents of high-poverty areas because barely 40 percent have access to a car, which has become essential for reaching suburban employment locations. Even among the large numbers of middle-income blacks who joined the sub-urban migration of recent years, many are segregated in minority enclaves far from employment centers. Job proximity is an important factor in the probability of youth employment, with differences in the distance to work accounting for approximately one-quarter of the gap between black and white rates. Residential segregation imposes high commuting costs on black workers. Extensive recent analyses of commuting behavior indicates that black workers face longer and more expensive trips to work than white workers, regardless of residential location. This is a function of both their distance from employment and their reliance on public transportation. Job decentralization aggravates the harmful effects of residential segregation on black employment. As a general matter, the black share of the workforce falls sharply as distance from predominantly black neighborhoods increases. In addition, unemployment among minority males is highest in metropolitan areas where jobs are most suburbanized and the minority population most centralized. One study of business migration found that a fourth of black employees did not remain with a firm that moved to a suburban location, compared to only 10 percent of white workers. Residential mobility policies are promoted as ways of overcoming some of the constraints imposed by place and race. They attempt to circumvent residential segregation and discrimination in the housing market by helping low-income minority families obtain rental housing in suburban areas with a less restrictive opportunity structure, places that would otherwise be effectively inaccessible to them. Additional Readings: Ihlanfeldt, Keith. "The Spatial Mismatch Between Jobs and Residential Locations Within Urban Areas" in Cityscape 1 (forthcoming). Jencks, Christopher, and Susan E. Mayer. "Residential Segregation, Job Proximity, and Black Job Opportunities" in Inner-City Poverty in the United States, edited by Laurence E. Lynn, Jr. and Michael G.H. McGeary (Washington, DC: National Academy Press, 1990). Kain, John F. "The Spatial Mismatch Hypothesis: Three Decades Later" in Housing Policy Debate 3 (1992): 371-460. The Gautreaux Model The first and best known attempt to facilitate the movement of low-income African Americans from inner-city neighborhoods to predominantly white suburbs began as an assault on one of the pillars of urban housing segregation. In 1966 Dorothy Gautreaux and other public housing residents and applicants filed a class-action suit alleging that the Chicago Housing Authority, with the full knowledge of the U.S. Department of Housing and Urban Development (HUD), employed consciously discriminatory practices in siting public housing developments and assigning tenants to them. The evidence in the case offered a portrait of institutional segregation not unlike that which prevailed in many other cities. More than 99 percent of the public housing units in the city of Chicago were located in areas where the population was more than 50 percent black. In addition, although black families comprised more than 90 percent of the families on the Authority's waiting list, they made up only 7 percent of the residents of the four public housing developments in white neighborhoods. After years of litigation, the Federal courts approved a remedial plan to give the "Gautreaux class" access to housing beyond the segregated "general area" in which public housing was available. In a controversial ruling that was upheld by the Supreme Court in 1976, the plan was allowed to encompass the entire six-county Chicago metropolitan area in which HUD operated programs. This "metropolitan area-wide" remedy was crucial, breaching the jurisdictional wall that historically insulated suburban communities from sharing responsibility for the segregation of the urban poor. Under the plan, administered by the nonprofit Leadership Council for Metropolitan Open Communities, up to 7,100 residents of and applicants for Chicago public housing were to be offered Section 8 certificates to rent market-rate housing in Chicago area neighborhoodswhere no more than 30 percent of the population was black. The Leadership Council registers 2,000 eligible families in the program each year, of which almost 90 percent are female-headed households. After an orientation work-shop and initial credit check and home visit, families are assigned to a counselor, who helps them at every step of the housing search process identifying available units, accompanying them on inspection visits, assisting with the lease application. Participants have 6 months to find an appropriate apartment or, more often, be referred to one through the program. Post-move counseling is also available to assist families in adjusting to their new environment. The Gautreaux Model in Action Since it began in 1976, the Gautreaux Assisted Housing Program has placed about 5,600 low-income black families, with more than half locating in predominantly white, middle-class suburbs. For much of that time, James E. Rosenbaum and his colleagues at Northwestern University have been studying the social, educational, and employment progress of the Gautreaux families. Their research provides direct evidence of the long-term effects of residential location on: Social integration. Contrary to expectations, most black families that moved to suburban areas were not socially isolated, reporting that they found new friends and social networks among their white neighbors. Just over half encountered some initial racial harassment, but this quickly diminished. Employment. Suburban movers were significantly more likely to be employed after their move than Gautreaux families that moved to other parts of the city of Chicago. This difference, which only emerged over time, was particularly pronounced for "hard-core unemployed" adults who had never held a job before. Suburban movers attributed their success to more job opportunities, less fear for their family's safety, and the influence of positive role models. Education. After experiencing difficulty in adjusting to the higher standards of their new schools, children in suburban Gautreaux families generally fared well in school. Although similar proportions of city and suburban movers aspired to college, suburban students were more likely to take a college-track curriculum and to attend a four-year college. Only 5 percent of suburban movers dropped out of high school, compared with 20 percent of city movers. Those not attending college were more likely to be employed than their counterparts in the city and were far less likely than employed city movers to hold a low-wage job. Some of these results can be traced to salient features of the Gautreaux program and offer important lessons for future mobility efforts. Intensive counseling is critical in enabling inner-city families to pursue housing opportunities outside their own neighborhoods. Many are particularly reluctant to consider suburban locations, due in part to fears of racial discrimination, attachment to existing social networks, and lack of information and transportation. The constant involvement of a counselor can help ease these concerns. On the other hand, programs such as Section 8 that allow mobility but do not feature counseling services have consistently yielded disappointing results, with most families confining their housing search to a small area and many failing to find appropriate units beyond a fairly narrow Section "submarket." The program works because its effect on neighborhood racial composition is imperceptible. Over a period of 15 years, the Gautreaux program has located approximately 5,600 families in nonminority areas of Chicago and 115 suburban communities, a metropolitan area of more than 8 million people. The impact of this activity in any one place is too small to provoke fear and resistance among the white suburban majority. Rosenbaum and those involved in the design and administration of the Gautreaux program have emphasized the importance of ensuring that participants are dispersed among scattered metropolitan locations so that their arrival does not excite fears of racial or class "tipping." Litigation has spawned mobility efforts on the Gautreaux model in other cities as well, including Dallas, Memphis, Cincinnati, Milwaukee, and Hartford. Paul B. Fischer's evaluation of Cincinnati's Special Mobility Program generally supports Rosenbaum's findings and extends them by also comparing program participants to a control sample of public housing residents. As Fischer states elsewhere, "moves into predominantly White areas, no matter where, were more important for mobility respondents than moves from the city to the suburbs," raising average earnings by 20 percent over public housing residents and increasing employment from one-quarter of the public housing sample to over half among program participants. The results of these initiatives provide strong support for the assumptions and goals underlying the residential mobility concept. They also appear to have been highly influential in shaping recent Federal mobility initiatives. Additional Readings: Davis, Mary. "The Gautreaux Assisted Housing Program" in Housing Markets and Residential Mobility, edited by G. Thomas Kingsley and Margery Austin Turner (Washington, DC: Urban Institute Press, 1993). Fischer, Paul B. "Is Housing Mobility an Effective Anti-Poverty Strategy?: An Examination of the Cincinnati Experience" (Lake Forest, IL: The Stephen Wilder Foundation, 1991). Peroff, Kathleen A., et al. Gautreaux Housing Demonstration: An Evaluation of Its Impact on Participating Households (Washington, DC: HUD, 1979). Roisman, Florence Wagman, and Hilary Botein. "Housing Mobility and Life Opportunities" in Clearinghouse Review 27 (1993): 335-51. Rosenbaum, James E. "Closing the Gap: Does Residential Integration Improve the Employment and Education of Low-Income Blacks?" (with "Comments" by Paul B. Fischer) in Affordable Housing and Public Policy: Strategies for Metropolitan Chicago, edited by Lawrence B. Joseph (Chicago: Center for Urban Research and Policy Studies, 1993). Current Federal Efforts At the same time that the Gautreaux program was getting underway in the late 1970s, HUD initiated two small programs the Areawide Housing Opportunity Plan (AHOP) and the Regional Housing Mobility Program (RHMP) designed to promote the voluntary cooperation of regional bodies and suburban governments in desegregating federally assisted housing. AHOP encouraged the development of regional "fair-share" plans for allocating affordable housing opportunities and provided regional planning organizations and suburban communities with "bonuses" of housing assistance and planning funds to help them implement these plans. RHMP was intended to assist areawide planning organizations in designing a variety of initiatives to facilitate the interjurisdictional mobility of low-income and minority households. Whatever the potential impacts of these programs, they were quickly abandoned when a new administration came into office in 1981 only court-mandated initiatives like Gautreaux survived. Moving to Opportunity Residential mobility reemerged on the national policy agenda in 1991 when HUD proposed and Congress authorized a 5-year residential mobility demonstration called Moving to Opportunity (MTO), which is currently being tested in five cities - Los Angeles, Boston, Chicago, Baltimore, and New York. MTO replicates many of the integral features of the Gautreaux program: very low-income residents of public and assisted housing are given Section 8 vouchers or certificates to aid them in obtaining housing in low-poverty areas. A cooperating nonprofit organization conducts landlord outreach to increase the availability of qualifying rental units and provides intensive pre- and post-move counseling to help participants obtain housing in eligible areas. However, there is one fundamental difference between the two models while the Gautreaux program was explicitly designed to further racial integration, MTO focuses instead on the opportunity benefits reported by Rosenbaum. Thus residence in a high-poverty area, rather than race, is the operative criterion for participating families, and the areas to which they may move are defined by the low concentration of poverty (less than 10 percent) instead of by racial composition. In practice, of course, the high correlation between race and concentrated poverty in large metropolitan areas make it likely that participant characteristics and destinations in the two programs will turn out to be substantially the same. Nonetheless, these important changes would seem to mark MTO as an antipoverty program or more precisely, as a self-sufficiency or "empowerment" initiative that defines the barriers facing inner-city residents in economic terms. HUD's New Mobility Agenda Secretary Henry G. Cisneros has made "promot[ing] the geographic mobility of low-income households" a policy priority for HUD and endorsed a wide-ranging agenda for attaining this objective. HUD's approach does not attempt to prescribe the racial or socioeconomic composition of communities, although it recognizes the terrible costs of spatial separation and the value of diversity. Instead, it simply seeks to restore to poor and minority households the opportunity to fully and freely choose where they live a right already enjoyed by most Americans. Residential mobility strategies, such as the ones under discussion here, comprise only a part of this agenda. HUD has committed to combatting housing discrimination through vigorous enforcement of Federal fair housing and fair lending laws and through the elimination of discriminatory effects from HUD programs in public housing, mortgage insurance, and other areas. In addition, the Department is launching affirmative efforts to overcome defacto segregation by race and class and to remedy the human and economic damage it continues to inflict. These initiatives include encouraging the development of new public and assisted housing opportunities in a wider variety of locations, revitalizing existing inner-city developments, linking investments in housing to the provision of supportive services and job opportunities for residents, and leveraging public investment in safety, schools, and other neighborhood infrastructure. HUD has proposed two new mobility programs as part of this comprehensive strategy: Choice in Residency. Regulatory changes to the Section 8 existing housing program have dramatically enhanced the "portability" of tenant-based assistance, allowing holders of certificates and vouchers to use them outside the jurisdiction of the issuing housing authority. However, this reform has not resulted in appreciable increases in interjurisdictional mobility, in part because few housing authorities offer extensive counseling or information to Section 8 recipients. HUD's proposed Choice in Residency program provides grants that allow the key component of the Gautreaux program comprehensive housing counseling services to be extended to the entire Section 8 program. Available counseling would include housing search strategies, transportation assistance, and information and counseling to help families adjust to their new environment, as well as aggressive outreach to landlords in low-poverty areas. Housing authorities in areas with high incidences of concentrated poverty would be invited to participate in the program and to administer it in partnership with an areawide nonprofit organization; the remainder of the available funds would be awarded competitively. HUD estimates that the requested $149.1 million in funding for FY 1995 would promote mobility opportunities for between 215,000 and 300,000 Section 8 applicants and recipients. Metropolitanwide Assisted Housing Strategies. Returning to a key concept of the abortive Federal efforts of the late 1970s, this demonstration program attempts to overcome the jurisdictional and program delivery barriers to the integration of public and assisted housing by funding comprehensive clearinghouses that would coordinate information on and access to housing assistance on a regional basis. Significantly, this function would be entrusted to nonprofit organizations, which would manage integrated waiting lists for all assisted housing available in the metropolitan area. Applicants for housing assistance would automatically be placed on the waiting list for all programs for which they were eligible and would be offered the first available assistance, regardless of where it was located. This strategy could be combined with housing counseling and supportive services to deliver "one-stop shopping" for low-income households. To ensure that these efforts do not accelerate the abandonment of distressed urban neighborhoods, a critical complement to this approach will involve the designation of "magnet" assisted housing developments, whose revitalization would retain and attract socioeconomic diversity and serve as the focus for broader community development initiatives. Additional Readings: U.S. Dept. of Housing and Urban Development. Creating Communities of Opportunity: Priorities of U.S. Department of Housing and Urban Development (Washington, DC: HUD, 1993). U.S. Dept. of Housing and Urban Development. FY 1995 Budget: Executive Summary (Washington, DC: HUD, 1994). U.S. Senate. National Affordable Housing Act Amendments of 1992: Report of the Committee on Banking, Housing, and Urban Affairs, United States Senate to Accompany S. 3031 (Washington, DC: U.S. Government Printing Office, 1992). Conclusion Residential mobility programs offer some combination of housing assistance, intensive counseling, and other information or supportive services to help low-income, predominantly minority families in distressed inner-city neighborhoods locate and acquire housing in more affluent, often majority-white suburban communities. Whether conceived as a strategy for enhancing residential diversity or as an antipoverty program, the documented experience of programs on the Gautreaux model indicates that the concept can succeed on its own, modest terms. Ironically, such efforts would seem to be self-limiting because success has been predicated on not having a noticeable effect on the racial or socioeconomic composition of suburban communities. In addition, this type of mobility program does not address other obstacles to economic advancement, such as employment discrimination and the lack of public transportation. Even the most ardent advocates of the residential mobility strategies discussed here regard them only as a single part of a larger strategy to reduce the concentrated poverty in which increasing numbers of inner-city residents live. Programs such as Moving to Opportunity and Choice in Residency are elements of a comprehensive Federal urban policy that includes vigorous fair housing enforcement, an integrated approach to homelessness, revitalization of distressed public housing, empowerment zones, welfare and health care reform, and many other efforts. As part of such a policy frame-work, residential mobility strategies can make an important contribution to expanding housing choice for low-income and minority households. Urban Policy Brief is a free publication of HUD USER, the information service sponsored by the Office of Policy Development and Research, U.S. Department of Housing and Urban Development. Published periodically, each Brief offers an introductory review of the research and policy literature on a current issue in housing and urban policy. To order copies or for additional information, contact HUD USER: By mail: P.O. Box 6091 Rockville, MD 20849 By phone: 1-800-245-2691 1-800-877-8339 (TDD) On the Internet: huduser@aspensys.com To order through the ftp file type: ftp huduser.aspensys.com cd pub/housing get brief.txt .