Revisiting Rental Housing: Policies, Programs, and Priorities

3. The Costs of Concentrated Poverty: Neighborhood Property Markets and the Dynamics of Decline

93 Researchers and policymakers have long harbored concerns over the location of low-income (“poor,” hereafter) households, expressing fears that the concentration of poverty contributes to a variety of social maladies (Wilson 1987, 1996; Jargowsky 1997). More recently, the issues related to the spatial distribution of the poor have been framed in more positive way. Housing subsidy programs, it has been argued, should be structured to give poor households wider residential options. This enrichment of spatial alternatives would serve to improve not only the well-being of housing subsidy recipients in the short run but also their families’ prospects for economic self-sufficiency in the long run by enhancing their access to employment and job information networks, better-quality education, and community social norms more supportive of education and employment (Polikoff 1994; Cisneros 1995; Rosenbaum 1995). The arguments have almost entirely been framed in terms of reputed benefits gained by poor households that move from high- to lower-poverty neighborhoods, not in terms of the consequences for households residing in the places from which and to which the poor move. Nevertheless, this set of arguments has been sufficiently persuasive to generate an array of federal legislative and judicial initiatives. These include replacing deteriorated , high-rise public housing complexes with smaller-scale, mixed-income complexes through the Housing Opportunities for People Everywhere (HOPE VI) program, court-ordered dispersal programs for minority tenants as a remedy to past discrimination by public housing authorities, and the encouragement of spatial The Costs of Concentrated Poverty: Neighborhood Property Markets and the Dynamics of Decline george c. galster, jackie m. cutsinger, and ron malega 3 94 george c. galster, jackie m. cutsinger, and ron malega mobility by housing choice voucher (formerly Section 8) rental subsidy recipients through the Moving to Opportunity (MTO) demonstration and the Regional Opportunity Counseling program (Goering and others 1995; Burchell, Listokin, and Pashman 1994; Ludwig and Stolzberg 1995; Peterson and Williams 1996; HUD 1996; Hogan 1996). This chapter analyzes theoretically and empirically whether the current housing policy emphasis on deconcentrating poor populations can be justified on the grounds of economic efficiency—that is, does society as a whole gain from switching from a more- to a less-concentrated poverty regime, without recourse to claims of distributional equity (that is, what’s good for the poor)? The emphasis on efficiency in this chapter should not be taken as an implicit claim that distributional equity concerns are of less importance. On the contrary, distributional concerns are omitted purely for the purpose of isolating efficiency impacts. Nevertheless, we would argue that in the current political context of “performance measurement” of federal programs, the salience of efficiency impacts is large indeed. The Effect of Concentrated Poverty on Households What role does living in a neighborhood of concentrated poverty play in shaping an individual’s behavior? A rapidly expanding body of empirical research has emerged during the past decade assessing with multivariate statistical techniques the degree to which neighborhood environments affect the social and economic outcomes of low-income minority families and their children (see reviews by Haveman and Wolfe 1994; Brooks-Gunn, Duncan, and Aber 1997; Ellen and Turner 1997, 2003; Furstenberg and others 1999; Leventhal and Brooks-Gunn 2000; Sampson, Morenoff, and Earls 2002; Dietz 2002; Lupton 2003). Although findings have been the subject of considerable methodological debate (Duncan and Raudenbush 1999; Manski 1995, 2000; Galster 2003a; Ellen and Turner 2003; McLanahan and others 2003), they consistently suggest that those living in disadvantaged, inner-city neighborhoods characterized by high levels of poverty and social disorganization have poorer health outcomes, lower levels of academic achievement, fewer employment opportunities, heightened vulnerability to gang recruitment, and greater exposure to violence relative to otherwise-comparable people living in more advantaged neighborhoods. The neighborhood scale thus appears to be an important element of what Galster and Sean Killen (1995, p. 9) term one’s “opportunity structure.” The Mechanisms of Neighborhood Effects What are the mechanisms through which these effects transpire? Six deserve particular mention: socialization, collective socialization, social networks, exposure to crime and violence, the weakness of local institutional and public resources, and stigmatization. There have been several comprehensive reviews of the potential links between neighborhood processes and individual behaviors and outcomes (see especially Jencks and Mayer 1990; Duncan, Connell, and Klebanov 1997; Gephart 1997; Friedrichs 1998; Atkinson and Kintrea 2001; Dietz 2002; Sampson, Morenoff, and Gannon-Rowley 2002; and Ioannides and Loury 2004). We therefore outline these...