Reducing segregation and increasing upward mobility in American cities, one housing voucher at a time

CAMBRIDGE, Mass., Aug. 4, 2019 /PRNewswire/ -- MIT Sloan School Professor Christopher Palmer recently partnered with the Seattle Public Housing Authority and King County (WA) Public Housing Authority to test new ways to reduce common barriers faced by families utilizing Housing Choice Vouchers (HCVs) who wish to move to high-opportunity neighborhoods.

As part of the study, families were given additional resources and services to help them relocate to "opportunity" neighborhoods. "High-opportunity neighborhoods" are identified using the Opportunity Atlas to determine where low-income children have the best chances of upward income mobility. Every year a child spends in an opportunity neighborhood matters; the authors estimate that moving from a low- to a high-opportunity neighborhood at birth increases total lifetime earnings by $210,000 and results in a lower chance of incarceration and teen births. However, most of the 2.2 million families receiving HCVs nationwide live in relatively high-poverty, low-opportunity neighborhoods. In the Seattle area, children who grow up in low-income families in high-opportunity areas earn about 13.9% ($6,800 per year) more as adults than those who grow up in low-opportunity areas in families with comparable incomes.  

In this study, 54 percent of families receiving additional basic services as part of the Creating Moves to Opportunity (CMTO) project chose to move to opportunity neighborhoods compared to approximately 14-percent of families who received standard services from the public housing authorities. Based on a sample of 310 families, the CMTO program has so far increased the share of families who lease units in high-opportunity neighborhoods by 40 percentage points. This result demonstrates that low-income families are not concentrated in lower-opportunity areas because of any preference for such neighborhoods, but rather because of barriers which prevent them from moving to higher-opportunity areas.

"These findings are striking, exciting, and robust," says Christopher Palmer, professor at MIT's Sloan School of Management. "Families in the treatment group moved to neighborhoods with significantly higher predicted adult earnings, lower predicted teen birth rates, and lower predicted incarceration rates. These results point to straightforward and actionable steps that policymakers can and should take to improve the lives of low-income families using housing vouchers."

Creating Moves to Opportunity is a large-scale randomized evaluation in King County, WA. Families that come to the top of the HCV waitlists at the housing authorities were randomly selected to be offered access to additional CMTO services. These include education on the location of high-opportunity areas, personalized rental application coaching, housing search assistance, and financial assistance. Additionally, CMTO staff actively recruit new landlords to rent to families. Importantly, families receiving CMTO services are not required to move to a designated high-opportunity neighborhood and maintain their HCV regardless of their neighborhood decision.

"The results of CMTO are incredibly encouraging," says economist Raj Chetty, a co-author of the study. "CMTO shows that in Seattle and King County segregation is not a result of deep preferences that families have to live in specific neighborhoods or widespread discriminatory preferences among landlords."

Importantly, the program appears to have been equally valuable for a wide variety of participating families, including racial, ethnic, income, linguistic, and education subgroups. Families who moved to higher opportunity areas through the program do not appear to make sacrifices on other dimensions of neighborhood quality and report much higher levels of neighborhood satisfaction.

Recently, Congress passed the Housing Choice Voucher Mobility Demonstration Act to help public housing authorities across the country expand access to opportunity areas for low-income families. Congress is currently considering whether to appropriate additional funding to the demonstration.

Professor Palmer partnered with MIT's Abdul Latif Jameel Poverty Action Lab, Harvard's Opportunity Insights, MDRC, and researchers at Harvard, Johns Hopkins University, and Columbia University in addition to the housing authorities in creating CMTO. This local King County, WA intervention is supported by the Bill & Melinda Gates Foundation and the Surgo Foundation.

https://opportunityinsights.org/wp-content/uploads/2019/08/cmto_paper.pdf

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SOURCE MIT Sloan School of Management

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