Housing Programs and Racial Segregation: The Role of Place-Based and Mobility Programs

Peter J. Mateyka, Survey Statistician, Housing and Demographic Analysis Division, PD&R (2023-present)

Overcoming racial segregation in housing is part of the Fair Housing Act of 1968's Affirmatively Furthering Fair Housing (AFFH) mandate. Over the past 50 years, the Office of Policy Development and Research's (PD&R's) work has expanded our understanding of the relationships between HUD's housing programs and racial segregation and how HUD can design housing programs that meet the AFFH mandate of overcoming segregation, promoting fair choice, and creating inclusive communities. The research and data on HUD programs and racial segregation that PD&R produces and disseminates highlight the department's successes, failures, and challenges in the pursuit of fair housing for all.

HUD’s housing programs include place-based programs and housing mobility programs, both of which take different approaches to connecting underserved households to quality housing. Place-based programs focus on community development through revitalizing distressed neighborhoods. Mobility programs provide subsidies to underserved households that allow them to move to high-opportunity neighborhoods with better employment and educational opportunities and lower crime rates. HUD’s proposed 2023 revisions to its AFFH rule incorporate both place-based and housing mobility approaches:

Affirmatively furthering fair housing can involve both bringing investments to improve the housing, infrastructure, and community assets in underserved communities as well as enabling families to seek greater opportunity by moving to areas of the community that already enjoy better community infrastructure and community assets.

This article reviews the history of PD&R's work on HUD's place-based and housing mobility initiatives and discusses how this work has enhanced our understanding of the relationship between housing policy and racial segregation and advanced the AFFH mandate's goal of reducing residential segregation.

Public Housing and Place-Based Initiatives

The AFFH mandate of the Fair Housing Act of 1968 arose to address the extreme segregation and poverty present in central city neighborhoods and the influence of discriminatory federal housing policies — including urban renewal, one of the federal government's first large-scale, place-based initiatives — in perpetuating them. In the decades before the passage of the Fair Housing Act, federal mortgage redlining practices, combined with increasing suburbanization and homeownership among white residents, drove disinvestment in central cities across the United States. Urban renewal policies, beginning in 1949, were intended to return investment to central city areas and revitalize them. The program offered subsidies to localities for redevelopment projects that removed blighted housing and other aging neighborhood structures. In their place, localities often built new housing targeted for middle- and upper-class households and public housing. These projects were successful at revitalizing central city areas through the return of businesses and higher-income households; however the projects overwhelmingly targeted Black neighborhoods, displacing residents to other parts of the city or into public housing and destroying local communities. The newly constructed public housing often was concentrated in Black neighborhoods in central cities, which, along with discriminatory tenant selection practices, promoted racially segregated public housing.

Desegregating Public Housing

With the passage of the Civil Rights Act of 1964 and the Fair Housing Act of 1968, HUD was mandated to eliminate housing discrimination and further fair housing through desegregation efforts. HUD and PD&R's research on housing discrimination is extensive and includes paired-audit testing studies conducted in 1977, 1989, 2000, and 2012, but the desegregation mandate has been more difficult to implement. These difficulties include legal debates over the meaning of the AFFH mandate, changes in AFFH strategies across administrations, and the complexity of defining and establishing the roles of federal, state, and local actors. The mandate extends to desegregating all neighborhoods, not just public housing; however, successfully desegregating public housing has been challenging. In his book Housing Segregation and Federal Policy, John Goering describes some of the difficulties encountered in implementing a 1984 order by the HUD Secretary to desegregate 3.7 million public housing units, with 10 million tenants, in nearly 3,000 public housing agencies (PHAs) nationwide, including congressional pressure, funding issues, changing HUD policies on tenant selection, and a lack of cooperation from some local officials. Exacerbating these issues was an outdated records system at HUD that made tracking occupancy transitions by race across PHAs challenging.

Data limitations also prevented national analyses of segregation in public housing from 1977 to 1993. An early study of segregation in public housing used 1977 HUD administrative data for 50 metropolitan areas and found overwhelming evidence that Black, Hispanic, and Asian recipients of housing assistance lived in public housing buildings and neighborhoods that were heavily segregated. This finding was notably true for Black residents, who were highly segregated in family-only public housing buildings. In the 1990s, HUD updated its data systems, making available national data on housing assistance. A 1994 PD&R study on the racial composition of public housing noted the following:

[T]his study also reveals a profoundly disturbing pattern of racial disparities within the public housing system. The majority of African American public housing residents are living in areas of concentrated poverty, while the majority of [W]hite residents—both families and the elderly—live in neighborhoods with substantially lower levels of segregation and poverty. African American public housing residents also are much more likely than [W]hites to live in predominantly [B]lack neighborhoods.

Evidence suggested that these patterns were slowly beginning to ease, with small decreases in segregation observable from 1977 and 1993, but the patterns varied considerably across metropolitan areas. Segregation in public housing often mirrored metropolitan trends, with highly segregated metropolitan areas also having highly segregated public housing. The modest declines in segregation in public housing are consistent with national patterns of racial residential segregation from 1980 and 1990 decennial census data.

HOPE VI and Choice Neighborhoods

In 1994, HUD initiated the HOPE VI program in response to a report from the National Commission on Severely Distressed Public Housing, which found that 86,000 public housing units in the United States were severely distressed, meaning that tenants were living in despair in poor-quality units in high-poverty neighborhoods and needed significant social supports and services. The HOPE VI program replaced distressed public housing with mixed-income developments and offered some original residents vouchers to find housing on the private market, with the expectation that some would return after construction of the mixed-income housing was complete. The neighborhoods with distressed public housing were majority black, low-income neighborhoods, although the program focused on decreasing concentrated poverty.

An interim PD&R-funded report found that the HOPE VI neighborhoods improved significantly after the replacement of distressed public housing, including improved housing quality, lower crime rates, higher resident incomes, increased rates of resident employment, higher levels of resident educational attainment, improved resident race and ethnic diversity, improved property management, and improved neighborhood conditions. Later research also identified neighborhood spillover effects in which redeveloped HOPE VI neighborhoods were associated with reduced poverty and changing racial composition of adjacent neighborhoods, although this occurred largely because of differences in the composition of in- and out-migrants rather than changes in the situations of the original residents. Less than 30 percent of the original relocated residents returned to the new units after redevelopment. A tracking study of the original residents found that HOPE VI residents generally moved to safer neighborhoods with lower poverty rates, but often the racial composition of the residents' new neighborhoods was only minimally different from that of their original neighborhoods. The displaced residents also experienced negative impacts; some who shifted to the private market struggled with affordability issues.

Choice Neighborhoods, a program designed to address distressed neighborhoods with housing-assisted units, builds on lessons learned from the HOPE VI program. Choice Neighborhoods expands the areas available for funding to those adjoining distressed neighborhoods; increases the pool of grant applicants to include cities, nonprofits, and other committed actors; and expands the types of eligible properties to include other HUD-assisted housing as well as public housing. The program relies on competitive grants (such as HOPE VI) to fund redevelopment and revitalization in neighborhoods that have concentrations of poverty and publicly subsidized housing. The grant process is intended to bring together local leaders, residents, and community groups to develop plans to revitalize neighborhoods that individuals and families will choose to live in. Like HOPE VI, the program focuses on reducing concentrated poverty and neighborhood distress rather than racial segregation, but creating diverse neighborhoods is a goal.

Housing Mobility Programs

HUD’s tenant-based housing assistance programs provide low-income households with subsidies in the form of vouchers to obtain housing on the private market. These programs are designed to move low-income households into high-opportunity neighborhoods. Through these subsidies, the program increases residential choice for low-income households reducing the spatial concentration of voucher holders in neighborhoods. Vouchers also are one of many methods court-ordered settlement programs have used to rectify racial discrimination by PHAs.

Housing Choice Voucher Program

HUD established the Experimental Housing Allowance Program (EHAP) in 1970 to test the effectiveness of providing tenant-based housing subsidies. The program, now called the Housing Choice Voucher (HCV) program, has become the largest of HUD's housing assistance programs. The initial EHAP experiment was intended to improve housing quality by expanding choices for households receiving assistance, but reducing racial segregation and poverty was also a stated goal. The program successfully improved housing quality, and participants were satisfied with their units. However, among the variations of the voucher program that HUD tested, "[n]one of the allowance or non-allowance programs [had] any substantial impact on neighborhoods chosen by recipients or on existing patterns of racial and economic segregation." Instead, EHAP participants and unsubsidized control households both chose neighborhoods with similar racial and economic compositions.

PD&R releases an administrative record dataset on housing assistance called “A Picture of Subsidized Households” that is invaluable for analyzing housing programs. A 2003 PD&R-sponsored study explored the spatial distribution and racial and economic concentration of HCV program participants. Voucher households moved to new units that were somewhat dispersed throughout metropolitan areas, but racial differences were evident. White households were more likely than Black or Hispanic households to live outside of central cities. Vouchers were somewhat successful at moving recipients to neighborhoods with lower levels of poverty, but most voucher households lived in moderate-poverty neighborhoods, defined as neighborhoods with poverty rates from 10 to 40 percent. White households were more likely than Black or Hispanic households to live in low-poverty neighborhoods. Followup studies using more recent data found that voucher households still lived primarily in moderate-poverty neighborhoods and often were just as segregated as their nonvoucher counterparts.

Gautreaux Settlement Program and Moving to Opportunity

The HCV program's limited effect on neighborhood poverty and racial segregation for participants may result from the barriers that low-income and minority households face when moving to higher-opportunity neighborhoods. To move to a different neighborhood in a metropolitan area, a voucher household must find an affordable and available unit, have access to transportation and employment, and overcome potential discrimination both in the search for housing and while living in the new neighborhood. The HCV program does not restrict the neighborhoods where respondents can move beyond the inherent limits imposed by the size of the subsidy. Programs that specifically facilitate moves to low-poverty neighborhoods or neighborhoods with a smaller minority population have had more significant impacts on neighborhood integration and reductions in neighborhood poverty for housing assistance participants. Many of these programs, however, have been court-ordered settlements to remedy discrimination in public housing in a specific locality.

The settlement agreement in the Gautreaux v. Romney case required HUD to develop a program to remediate segregation in public housing arising from the Chicago Housing Authority's discriminatory siting and tenant selection practices for public housing in the 1960s. The program was designed to desegregate public housing by providing Section 8 vouchers for Black households to move to low-poverty suburban neighborhoods in predominantly white areas. Program participants who chose to move experienced lower unemployment rates, higher household incomes, and higher levels of educational attainment, than eligible participants who remained in central city areas. Most Gautreaux participants reported satisfaction with the program, particularly with the quality of their schools. The early Gautreaux participants moved to neighborhoods with minority populations that averaged approximately 5 percent, whereas the average neighborhood of a Section 8 recipient in Chicago at the time had a minority population of 61 percent. In the decades after Gautreaux, HUD settled multiple racial discrimination suits in other localities and willingly entered consent decrees to rectify discriminatory practices and outcomes. The programs HUD developed varied by locality but often included a range of place-based and housing mobility solutions, with mixed results.

Buoyed by the success of the Gautreaux program, HUD created the Moving to Opportunity (MTO) demonstration in 1994. MTO expanded the use of housing vouchers with the goal of moving public housing tenants to affordable neighborhoods with poverty rates of less than 10 percent. MTO was a randomized housing mobility experiment with two treatment groups and a control group. One group received a voucher to move to a low-poverty neighborhood, a second group received a standard voucher, and the control group did not receive a voucher. The randomized nature of the experiment allowed researchers to isolate and measure neighborhood effects on a range of outcomes. Unlike the Gautreaux program, participants, most of whom were Black and Hispanic, were not required to move to neighborhoods with low proportions of minorities. The study proved effective at moving residents to low-poverty neighborhoods; however, the moves often were to housing units close to the voucher recipients' previous neighborhoods, resulting in less of an effect on neighborhood integration than the Gautreaux program. Still, impacts were significant for other outcomes, especially measurable health indicators. Women in households that received assistance were less likely to experience extreme obesity or diabetes than did women in the control group, and women and their female children in the experimental group experienced lower rates of psychological distress and major depression. At the time, the study found no improvement in educational, employment, or income outcomes for voucher families, and the findings seemed to indicate that neighborhood effects were not as large as expected.

A followup study of MTO participants found that the length of time families lived in neighborhoods with low poverty and high education levels was associated with better work, school, and health outcomes. These findings were supported by later work that linked administrative tax records to the children of MTO participants. The later study found that children of MTO participants who moved to low-poverty neighborhoods before age 13 had higher rates of college attendance and job earnings than the children of families in other groups and were less likely to be single parents, whereas those who moved after age 13 did not experience the same benefits. The authors posit that the length of time exposed to the lower-poverty neighborhood is important for determining later-life outcomes.

Despite generating positive outcomes, the Gautreaux and MTO programs also had sizable numbers of eligible households who chose not to participate for various reasons. MTO participants who moved often chose locations close to their original neighborhood. One possible explanation for this finding is that some low-income households prefer to stay in their current neighborhoods because of proximity to jobs and family, but it is also possible some households are unable to move to better homes and neighborhoods because of barriers. Results from a new housing mobility demonstration in Seattle called Creating Moves to Opportunity found that customized assistance in the form of mobility counseling, landlord engagement, and short-term financial assistance significantly increased moves to neighborhoods with more opportunities. The results suggest that for some low-income households, barriers that prevent moves to opportunity neighborhoods can be overcome through innovative design in housing programs.

Conclusion

PD&R’s work over the past 50 years has contributed to a better understanding of the relationship between housing programs and racial segregation, which has, in turn, helped HUD design place-based and housing mobility program designs that better adhere to its AFFH mandate to overcome segregation, promote fair choice, and create inclusive communities, However, declines in neighborhood racial segregation among all U.S. households have slowed in recent decades. Although recent HUD programs often have improved outcomes for neighborhoods and individuals, they have had mixed success at reducing racial segregation in public housing and increasing neighborhood integration for those receiving housing assistance. A promising development is HUD’s recent revisions to its AFFH mandate, which allows HUD to consider the role of race in the initial planning and design of housing programs. One of PD&R’s contributions to AFFH planning is supporting the development of a publicly released data tool that can help localities identify patterns of racial segregation and differences in neighborhood opportunity and incorporate this information into fair housing strategies.