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Wednesday, May 24, 2017

Is subsidized housing creating affordability?

It's a frequent complaint of subsidized housing residents: affordable housing isn't. Politicians might claim new subsidized units are keeping a neighborhood affordable, but those units are, in actuality, no cheaper to live in than the building next door. Often, they're more expensive. In order to rent a so-called "affordable" unit, you need a well-paying job or a Section 8 voucher.

Despite this, subsidized housing development is routinely justified as necessary to protect struggling neighborhoods. Without more subsidized units, it's said, low-income families will be displaced, driven out by market-rate rents they just can't afford.

Both these narratives can't be true at once: either subsidized housing keeps neighborhoods affordable, or it doesn't. So which is it?

The low-income housing tax credit program (or LIHTC) is the nation's single largest housing subsidy. Most subsidized housing projects over the past several decades have involved some level of tax credit investment. Landlords operating tax credits buildings are requested to submit detailed occupancy data to HUD, Although this data isn't perfect, it provides a fairly detailed look at who is living in subsidized tax credit units, and what they're paying.

The graph below includes 398 Twin Cities LIHTC projects in operation in 2015, accounting for about 27,000 units. The horizontal axis is the average rent in each project's census tract, and the vertical axis is the average rent paid by families in each project, as a percentage of the tract average. If a project is above 100 percent, residents are paying higher rent than their neighbors do, on average. (Click to enlarge.)

What this graph shows is that many LIHTC projects, particularly in Minneapolis and Saint Paul, actually charge average rents that substantially exceed neighborhoods rents. This is especially true when those projects are located in lower-rent (and typically lower-income) areas.

These projects are not the exception - they're the rule. About 60 percent of Minneapolis and Saint Paul LIHTC units are less affordable than the neighborhood in which they are situated - approximately 8,050 of 13,370 units.

While there are also above-market LIHTC projects in the suburbs, the problem is less pronounced: 4,570 of 13,600 units, or 34 percent. (It should be remembered, however, that affordable housing in the suburbs tends to be located in somewhat higher-rent census tracts than in the central cities.)

Anecdotally, this reflects the complaints of subsidized housing tenants. But the breadth of the problem ought to disturb housing activists. The implication of this data is that well over half of the housing tax credits spent in the central cities produceno additional affordability in their neighborhoods.

We shouldn't mince words here: if the purpose of the tax credit program is to create housing that's cheaper to rent than what already exists on the market, it is failing. In fact, in Minneapolis and Saint Paul, the aggregate effect of this housing is to make neighborhoods more expensive to live in.

This failure is not universal. In higher-rent (and thus higher-income) neighborhoods, LIHTC rents are significantly lower than market rents. In these areas, tax credit development is providing affordability where it did not previously exist, opening up these neighborhoods to residents who may otherwise be unable to live there. That, in turn, can expand economic and educational opportunity for those tenants. But there is little coordinated effort to pursue LIHTC development in affluent neighborhoods, and, at present, the majority of tax credits units are located in low-income areas.

Interestingly, there appears to be little correlation between neighborhood rents and LIHTC average rents. The graph below shows the same data as above, but use the absolute rents for both projects and neighborhoods, instead of displaying the former as a percentage of the latter. Projects above the line are charging average rents above neighborhood rents.

Not only are plenty of higher-rent buildings located in low-rent tracts, but a handful of extremely affordable buildings are located in comparatively expensive tracts.

Given the apparent failure of LIHTC development to make low-income neighborhoods more affordable, what is the justification for conducting subsidized development in these places? A handful are frequently offered, but none are very convincing.

First, newly developed subsidized units are usually of higher quality than older market-rate units, especially in poor neighborhoods. But if the goal is improving the quality of the housing stock, there are cheaper and more direct ways of doing so than subsidizing large new projects -- such as regulation, inspection, and rehabilitation.

Second, subsidized units developed in low-income areas still increase the absolute amount of affordable housing in the region, at least in the short term. But of course, the same can be said when those units are sited in higher-income areas. Besides, concentration of poverty can result in reduced neighborhood density and increased vacancy rates, so the long-term effect may be to simply replace an older affordable unit with a newer one.

Finally, there's the most-commonly-cited benefit of affordable development in poor neighborhoods: economic development. Some research has hinted that LIHTC developments can improve property values in poor neighborhoods by bringing in new, wealthier tenants.

However, those conclusions are disputed, and our own work suggests these economic benefits are, at best, minor and essentially undetectable. One reason for this may be that the vast majority of LIHTC tenants in low-income areas receive rent assistance, meaning that the bulk of the rent is being paid by housing agencies directly to the apartment owners. Families receiving rent assistance are typically quite poor. Thus, while this arrangement may well enrich the landlord, there isn't a noticeable increase in overall neighborhood wealth.

But beyond all of this, there's a deeper concern about the appropriate role of housing subsidies. Given that housing funding is scarce, shouldn't we use it to make rents cheaper? Even if comparatively expensive units do confer economic benefits to the surrounding neighborhood, there is something very backwards about using affordable housing money to build those units. After all, there are easier ways to get the private market to produce market-rate apartments than paying for them -- usually fully -- with public funds.

Shouldn't the main purpose of affordable housing subsidies be ensuring that low-income families can find affordable rents in places they otherwise couldn't? But if it is, how does one defend current policy?

Friday, May 19, 2017

Mapping racial transition since 1990 in Philadelphia

In what may become a Friday afternoon tradition on this blog, we've generated demographic block maps for another city: Philadelphia.

As elsewhere, Philadelphia began the period heavily segregated, and experienced an explosion of diversity since 1990. Compared to the other cities we've mapped, however, the pace of change seems to continue (and, especially in some northeastern neighborhoods, even accelerate) from 2000 and 2010. There are hints of gentrification around the downtown Central neighborhood, but they're subtle. (As it happens, this fits well with the findings of a Pew Trust report last year about gentrification in Philadelphia.)

As of 2010, at least, even in areas where a gentrifying trend is visible, considerable diversity remains. It remains to be seen whether this results in stably integrated neighborhoods, or is simply a waystation on the path to affluent white enclaves.

We've also mapped the same data, but with blocks color-coded by racial category of residents. We previously did the same with Minneapolis, where it was clear that the primary neighborhood racial divides were between white and nonwhite residents, with nonwhite residents of different racial groups often living side-by-side.

Not so with Philadelphia. In Philly, there is a dramatic boundary between predominantly-black and predominantly-Hispanic areas, neatly splitting the northern neighborhoods in two.

But note that while this divide persists all the way through to 2010, it does not reappear in the increasingly-nonwhite northeastern region. Instead, the area appears well on its way to achieving true diversity.

Here are the maps, in clickable, scrollable form. Downloadable, zoomable versions are available below.

Percentage nonwhite, 1990:

Percentage nonwhite, 2000:

Percentage nonwhite, 2010:

Race and ethnicity, 1990:

Race and ethnicity, 2000:

Race and ethnicity, 2010:

Download the maps here. We've got more maps of the Philadelphia region, and other regions as well, on the IMO website.

Friday, May 12, 2017

Mapping racial transition since 1990 in Baltimore

Previously, we posted block-level racial maps of the Twin Cities (here and here) and Chicago (here). Today, we have maps of Baltimore, 1990 through 2010.

As in Chicago and Minneapolis, the segregated areas of Baltimore expand rapidly between 1990 and 2000, and less quickly between 2000 and 2010 (with the notable exception of the northeast region, which becomes much more diverse in this span). Unlike Chicago, there is virtually no visible gentrification in Baltimore, although there is some demographic churning in the areas adjacent to the Inner Harbor - many of which are uninhabited.

Click the maps to enlarge; scroll through to see change over time.




The original, zoomable versions of the maps are available here. And just a reminder, more maps of Baltimore (and most other major US cities) can be found on the IMO website. Take a look.

Friday, April 28, 2017

Race and neighborhood in the Twin Cities

A while back we posted a few maps showing racial transition in Minneapolis over 20 years. Today, we've got a couple more with a similar theme.

The new maps, which include both Minneapolis and Saint Paul, still use 2010 block-level U.S. Census data. But this time, they show residential demographics by racial category, instead of broadly classifying residents as white or nonwhite. The result is a more detailed view of racial living patterns in the cities.

Here are the maps (click to enlarge). First, Saint Paul:

And Minneapolis:

Discernible racial concentrations are immediately evident - black residents are concentrated in north Minneapolis, Hispanic residents in south Minneapolis, and Asian residents in east Saint Paul.

But there's a major caveat here: segregation still breaks down most clearly along binary "white or nonwhite" lines. Nonwhite racial concentrations are considerably more fragmented, and less defined, then the stark split between predominantly white areas and everywhere else. Within predominantly nonwhite areas, the primary racial group (when there is one) often varies block-by-block.

By comparison, huge swathes of each city are overwhelmingly white, despite the explosive growth of racial and ethnic diversity nearby.

This is no accident, but the product of decades of public and private-market discrimination, often designed to ensure that white neighborhoods stay that way. There are still frequent efforts in policy circles to characterize segregation as, at least in part, the result of choices made by the groups being segregated - the manifestation of individual preferences for living "with one's own race." As these maps show, that is inaccurate. Segregation remains, first and foremost, a manifestation of America's long history of white supremacy. It is imposed by outside forces, not self-imposed from within.

Tuesday, April 4, 2017

The Twin Cities' retreat from fair share housing

When subsidized housing is found concentrated in cities, it's always tempting to assume it happened because exclusionary suburbs refused to build any of their own. But in Minneapolis and Saint Paul, that narrative is ahistorical and incomplete.

For over a decade, the Twin Cities' regional government - the Metropolitan Council - operated an innovative and effective fair share housing program. The program accomplished what few others could, anywhere in the nation: the introduction of large amounts of subsidized housing into the suburbs. And then, it was abandoned. Minnesotans have paid the price ever since.

This critical chapter in the region's history is a significant contributing factor to existing segregation and racial disparities in the Twin Cities. We've written about it at length; here's the short version.

Minnesota's 1972 Land Use Planning Act requires Twin Cities local governments to “provide sufficient existing and new housing to meet the local unit's share of the metropolitan area need for low and moderate income housing,” and empowers the Met Council to coordinate, monitor, and enforce this requirement through the adoption of metro-wide policy plans. The Met Council relied on this law, and other statutory authority, to implement a true “fair share” system in the region.

The system required each local government to accept their regional share of low-income housing, which was specified by the Council itself. The Council also reviewed individual subsidized projects. If cities failed to do their part, they faced the loss of various funding sources, including federal grants, state grants, and parks, sewers, and transportation funding. This was called Policy 13, and later renamed Policy 39.

The fair share system, and Policy 13 in particular, were effective vehicles for ensuring that all socioeconomic groups had access to affordable housing throughout the region. The Met Council's efforts were strikingly successful at instigating the production of subsidized housing in predominantly white suburbs. Previously, the vast majority of the region's subsidized housing development took place in Minneapolis or Saint Paul. But in the 1970s, an unprecedented 73 percent of new Twin Cities subsidized units were produced in comparatively affluent suburban cities instead. This in turn promoted racial and economic integration, and improved low-income families' access to good jobs and good schools.

A remarkable feature of the regional fair share system is how quickly it was accepted by local governments. For instance, one report surveyed local comprehensive plans from the height of the program and found language arguing that it was appropriate to allocate low-income housing at the regional level. The report highlights the following passage from the 1980 plan for the middle-class, predominantly white suburb of Apple Valley:
The need for low and moderate income housing within Apple Valley must be identified on a regional basis because Apple Valley is a suburb within the Minneapolis/Saint Paul Metropolitan area and there is nothing of particular significance within the community that would cause it to stand apart from regional considerations.
Nonetheless, over time, enforcement of the fair share policy and the Land Use Planning Act declined. This was due to a variety of factors, but archival documents suggest the primary source of resistance was not white suburbs (as might be expected) but the central cities of Minneapolis and Saint Paul, which felt shortchanged when housing subsidies were redirected to higher-opportunity areas.

Although the same laws and policies remained on the books, the Council ceased conditioning most funding on housing performance. It also began asserting that its powers to plan, monitor, and enforce housing development were much more limited than its previous actions would indicate. Importantly, this policy shift occurred in the absence of any real change to the underlying legal authorities - whatever powers the Council had historically relied upon were presumptively still operative.

Simultaneously, Minneapolis and Saint Paul sought to recapture the lion's share of funding for subsidized housing. In 1980, the Family Housing Fund, a "quasi-public" entity designed to help round up funding for affordable development, was created jointly by the two cities. Over the next decade, the cities' efforts were rewarded with nearly 10,000 units of Fund-produced housing within their borders. (The organization still exists today and the bulk of its work is still in Minneapolis and Saint Paul.) Later, the two cities were designated housing tax credit "suballocators," ensuring they would have access to minimum annual shares of tax credits.

Production of suburban affordable housing stagnated. After over a decade of rapid progress, the central cities’ share of regional subsidized housing froze. That share has never declined below 55 percent of the regional total, and stands at 60 percent today. Meanwhile, the region's population has continued to suburbanize. As a result, the mismatch between the central cities’ share of total residents and its share of subsidized housing has widened, and is now worse than ever before.

The regional consensus in favor of the fair share system has also suffered. By 1999, the Apple Valley comprehensive plan had stripped language in favor of regional housing planning. The new plan stated, instead, that "the City is in the best position to determine the most responsible option for meeting the future needs of Apple Valley rather than the Metropolitan Council, especially as it relates to residential densities."

Without cooperation from regional leaders, who abandoned a highly effective fair share program in the face of special interests, the Twin Cities today might be one of America's most-integrated places. Instead, it's yet another region moving in the wrong direction altogether.

Friday, March 10, 2017

Integrated charters have grown quickly - but not quickly enough

Last week, the Star Tribune reported on the rapid growth of Minnesota's charter schools. We've spent a couple days following up on this report. One of the first things we looked at is how this growth breaks down across different demographic categories of schools: white, integrated, segregated, and hypersegregated.

What we found was a somewhat paradoxical pattern. Integrated charters have grown more quickly than other types - but new segregated schools are opening even faster, ensuring that most new enrollment is in segregated environments.

Out of all charters already open in 2013, enrollment growth was most rapid at integrated schools, which we defined as those with student bodies between 20 and 60 percent nonwhite. These schools added, in absolute terms, nearly twice as many students as charters in any other demographic category. This is especially impressive when one considers that racially integrated schools only accounted for 13 percent of all charter enrollment. In all, their total growth rate was 27 percent. Meanwhile, the most-segregated charters - those where virtually all children were white or nonwhite - grew extremely slowly, despite accounting for nearly for over three-quarters of total enrollment.

But over the past five years, the majority of enrollment gains in Minnesota charters have not come from the growth of preexisting schools. Instead, approximately 60 percent of all increases have come from the opening of new schools. And among these schools, a very different pattern is evident.

A substantial majority of newly opened charters are segregated. Nearly half the students at new charters attend what we've termed "hypersegregated" schools, where less than ten percent of students are white. All-in-all, 56 percent of the enrollment gains in new charters were in a nonwhite segregated environment.

These findings can be seen in the graphs below (click to enlarge):

The following table shows the same data, in absolute terms.

While many things might contribute to this pattern, we suspect that it is caused at least in part by the reality that different forces are contributing to enrollment changes in each group.

Parental preferences are likely to be a primary factor in enrollment change at existing schools. Although charters do occasionally undergo major internal changes after years of operation, existing schools are, for the most part, stable environments - their focus, location, and pedagogical approach already established. Growth will occur in schools that more students are trying to attend; enrollment declines will occur when few parents are interested in enrolling.

School integration is often a hot topic politically, but in practice, parents exposed to integrated traditional schools tend to appreciate the advantages of diversity. Integration provides myriad academic and social benefits, and parents notice. It is therefore no surprise to see signs of similar dynamics in the more competition-oriented charter sector: integrated schools, their bona fides demonstrated, seem to thrive in comparison to their segregated peers.

Parental demand, however, is only one of many factors affecting when new charter schools open, and what those new schools look like. Other considerations include resource availability, the state regulatory environment, and the ease of designing a school and business model that will receive sufficient political and financial backing.

Across the nation, the process of opening a new charter has grown more standardized over time, in part because minor industries have grown up to assist charter founders with each element of their schools' operation. Specialist companies are ready and eager to provide everything from facility construction to website design. Many new charters follow one of a handful of well-established "templates," casting themselves in the mold of existing institutions. As a result of these trends, new charters can look sometimes more like franchises than unique institutions carefully tailored to local needs.

As our latest report documented, a particularly successful form of charter school is what we have dubbed the "poverty academy": highly-segregated, high-poverty schools which purport to target the most disadvantaged students with "compensatory" academic instruction. These schools have shown limited educational success - they are as likely to underperform expectations as overperform them, and integrated schools produce more consistent academic gains. But poverty academies have nonetheless proven to be a great hit among policymakers and funders, promising to close the achievement gap and help the neediest students without raising politically difficult questions about segregation or resource allocation.

We suspect that the massive growth of enrollment in hypersegregated environments among new schools reflects the popularity of the poverty academy model. For parents, diversity and integration is appealing. But for politicians, foundations, and educational support companies, narrowly targeted poverty academies are an easier sell. And when it comes time to start a new school, it's clear parents are rarely calling the shots.

Wednesday, March 1, 2017

Are segregated charter schools like HBCUs?

Secretary of Education Betsy DeVos generated controversy this week with a series of statements suggesting that historically black colleges and universities demonstrate the benefits of school choice. On Monday, she released a statement that included the following passage:
HBCUs are real pioneers when it comes to school choice. They are living proof that when more options are provided to students, they are afforded greater access and greater equality. Their success has shown that more options help students flourish. 
Yesterday, she added some nuance to the remarks, but also once again drew an implicit comparison between charters and HBCUs, tweeting that the HBCUs' legacy is "[p]roviding an alternative option to students denied the right to attend a quality schools."

Critics in Congress and the civil rights community called her comments misjudged - after all, HBCUs were founded as a consequence of segregation, and are, if anything, the byproduct of lack of choice for black Americans. The president of the Lawyers' Committee for Civil Rights noted that the comments made Secretary DeVos seem "ignorant of racial segregation in the US."

But to those engaged in debates over charter schools and education reform, the secretary's comments sound familiar. In that world, HBCUs are commonly invoked as a justification for the exceptionally segregated nature of charter school education.

In some basic ways, the analogy is inapt: students who attend four-year colleges typically have a range of integrated postsecondary options in front of them; in fact, many HBCUs are themselves integrated. But in the K-12 arena, children of color are often faced with only two options: a segregated traditional school, or segregated charter schools.

Nonetheless, as we'll see, this comparison happens regularly and comes reflexively to many school choice advocates. In Minnesota, it has become a sort of rote defense used by charters. While Secretary DeVos may have moderated her position, Minnesota's experience makes clear that this talking point is not going away any time soon.

Some quick background: in 1999, Minnesota exempted all charters from desegregation rules on dubious legal and policy grounds. In the wake of that decision, many charters have pursued covert, or sometimes even open, strategies of racial targeting - often by billing themselves as Afrocentric, or Hmong academies, or European language academies, or Western classical education schools.

Many of these schools claim "cultural focus" makes it easier to teach to ostensibly-distinct racial groups. A more plausible explanation is that homogeneity makes it easier to institute the harsh discipline and stripped-down, factory-style "drill and kill" teaching upon which many charters rely. In the case of all-white schools, segregation may also be a major boon to student recruitment, as families leave diversifying traditional schools.

But if the justifications are murky, the outcome is not: Minnesota charters have formed a racially divided system, in which white and nonwhite children attend very different schools. Nearly half of charters are heavily segregated and extremely few are diverse or integrated. Nothing similar can be seen in traditional schools.

This is, quite frankly, a bad look for charters. Wonky sociological defenses of integration aside, the legacy of Brown v. Board ensures that the division of schools by race is strongly associated with American white supremacy.

Minnesota charters, faced with the fact that they're building something that looks uncomfortably like Jim Crow, have gone casting about for more favorable historical antecedents. This has led them to compare themselves to HBCUs.

And HBCUs come up a lot when Minnesota charters defend their segregation. For instance, when the state considered dropping the civil rights exemption for charters, one prominent local charter advocate told an administrative law judge the following:
I have concerns about the extension of the proposed integration rule to charter schools in general but to culturally specific schools in particular. And part of that has to do with I believe is a false analysis . . . that tends to consider those schools to be segregated schools.
This flies in the face of civil rights history and also the fact that we have historically black colleges and universities around the country that are specifically designed to affirm, enrich, and enhance the educational experiences of African-Americans who we know have faced historical discrimination throughout our time in this country.
And here's Joe Nathan, a longtime reformer who has been advocating for school choice since even before the invention of charters:
I will quote from outside research commissioned by the State Department of Education which shows very mixed results [for integration]. Not as a way to oppose that program, but to say that relying on that strategy as a major strategy to close achievement gaps and to increase integration doesn't necessarily achieve the results that some of its advocates hoped for. . . And, finally, I will cite national research about what's happened when families are allowed to choose among various colleges and universities and some of them attend historically black colleges and universities . . .
(A historical footnote: when, in 1988, the original charter proposal suggested applying civil rights and desegregation rules to charters, Nathan dissented. He thought the "need to meet desegregation standards" was "worrisome," according to Ember Reichgott Junge, author of the nation's first charter law. He later explained "[w]e had some fabulous schools all over the nation that were mostly people of color.")

The examples go on and on. When we authored an editorial in 2014 calling attention to the segregated state of Minnesota's charters, Nathan coauthored a response with Bill Wilson, who directs a local charter, arguing "civil rights activists have evolved since 1954" and "[l]ike the best HBCUs, successful charter schools focus on modeling and mentoring, not just on text scores."

Underlying all this are two basic arguments.

The first is that HBCUs prove that K-12 segregation can be made to work. But, simply put, they don't. Social science is very clear: college is qualitatively different from elementary and secondary school, where students are just beginning to learn how to interact with each other and the outside world. In grade school, segregation imposes massive developmental costs on children, by starving them of access to needed resources and social networks of opportunity. Integration, by contrast, breaks down concentrations of poverty, and produces a welter of intangible but life-changing social benefits, like reductions in racial stereotyping and greater proficiency navigating diverse environments.

This distinction between K-12 and postsecondary education can be seen in academic outcomes. While many HBCUs have strong academic reputations, highly-segregated grade schools produce low or dismal test score performance compared to integrated peers. Many - charters included - are what Robert Balfanz has termed "dropout factories," from which few students attend a college of any description.

The second thing that charter advocates intend to highlight when they talk about HBCUs is precisely what DeVos said yesterday: the primacy of choice. To many education reformers, parental choice is a value that trumps all others - one that can produce no remediable ill effects. If parents choose to attend segregated schools, they should be empowered to do so. When Minnesota attempted to apply desegregation requirements to its charters, the schools banded together and filed a legal brief with the following passage:
At the core of the argument over whether charter schools should be included in MDE's proposed desegregation/integration rules mandating "integration" is the following question: is achieving some undefined notion of "integration" more important than allowing parents the right to choose where to send their children?
Later, in a public hearing, a charter director testifying against the integration rules put it a little more pointedly. She said "[W]hite students choose not to come to our charter school. It's their choice if they want to come, and they choose not to, so that makes our school free."