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Creating Opportunity for Children

Executive Summary

Most parents want to raise their children in neighborhoods with good schools, safe streets, and neighbors who support their efforts to raise healthy, happy, and successful families.  Their hopes are well-placed because a growing body of evidence supports two conclusions about how neighborhoods affect children’s well-being.

First, high-poverty neighborhoods, which are often violent, stressful, and environmentally hazardous, can impair children’s cognitive development, school performance, mental health, and long-term physical health.  Second, poor children who live in low-poverty neighborhoods and consistently attend high-quality schools — where more students come from middle- or high-income families and do well academically, parents are more involved, teachers are likely to be more skilled, staff morale is higher, and student turnover is low — perform significantly better academically than those who do not.

Nearly 4 million children live in families that receive federal rental assistance.  This assistance not only helps these families to afford decent, stable housing and make ends meet, but it also has the potential to enable their children to grow up in better neighborhoods and thereby enhance their chances of long-term health and success.  Historically, however, federal rental assistance programs have fallen short in helping families live in neighborhoods that provide these opportunities.

Over several decades, policymakers have adopted measures to reduce the extent to which low-income families receiving federal rental assistance are concentrated in distressed neighborhoods and, instead, to improve these families’ access to safe neighborhoods with good schools, more opportunities for recreation and enrichment, and better access to jobs.  To do so, policymakers have relied increasingly on housing vouchers (rather than housing projects) so that families may choose where to live rather than be limited to government-funded projects that often are situated in very poor, segregated neighborhoods.

Despite these efforts, in 2010 only 15 percent of the children in families that received rent subsidies through the Department of Housing and Urban Development’s (HUD) three major rental assistance programs — the Housing Choice Voucher (HCV) program, public housing, and Section 8 Project-Based Rental Assistance (as described in Box 1) — lived in low-poverty neighborhoods, where fewer than 10 percent of the residents had incomes below the poverty line.  A greater share of such children (18 percent) lived in extreme-poverty neighborhoods, where at least 40 percent of the residents are poor.[1]

The HCV program has performed much better than HUD’s project-based rental assistance programs in enabling more low-income families with children — and particularly more African American and Latino families — to live in lower-poverty neighborhoods.  (Only a small share of public housing or privately owned units with project-based rental assistance for families with children are in low-poverty neighborhoods.)  Having a housing voucher also substantially reduces the likelihood of living in an extreme-poverty neighborhood, compared with similar families with children that either receive project-based rental assistance or don’t receive housing assistance at all.

Box 1:  What Is Federal Rental Assistance?

Federal rental assistance enables 5 million low-income households to afford modest homes.  Three major programs — Housing Choice Vouchers, Section 8 Project-Based Rental Assistance, and Public Housing — assist about 90 percent of these households. a   In each of these programs, families generally pay 30 percent of their income for rent and utilities.

Housing Choice Vouchers: More than 5 million people in more than 2 million low-income households use housing vouchers.  About half of these households have minor children in the home.  Families use housing vouchers to help pay for modestly priced, decent-quality homes in the private market.  The program is federally funded but run by a network of about 2,300 state and local housing agencies.

Public Housing: About 2.2 million people in nearly 1 million low-income households live in public housing.  Forty percent of these households include children, while more than half are headed by people who are elderly or have disabilities.  While federally funded, public housing is owned and operated by 3,100 local housing agencies nationwide.

Section 8 Project-Based Rental Assistance (PBRA). PBRA enables 2 million people in more than 1 million households to afford modest apartments, due to long-term rental assistance contracts between the private owners and the Department of Housing and Urban Development.  About 30 percent of these households include children.  Two-thirds are headed by people who are elderly or have disabilities.

a For more on these programs, see Center on Budget and Policy Priorities, “Policy Basics: Federal Rental Assistance,” January 25, 2013,

Nevertheless, a quarter of a million children in the HCV program live in these troubled neighborhoods despite the better options that a voucher should make available to them.  As now administered, the HCV program does not adequately deliver on its potential to expand children’s access to good schools in safe neighborhoods.  It can do better.

Based on the evidence on how housing location affects low-income families, particularly children, and the performance of federal rental assistance

programs on location-related measures, we recommend two closely related near-term goals for federal rental assistance policy:  1) federal rental assistance programs should provide greater opportunities for families to choose affordable housing outside of extreme-poverty neighborhoods; and 2) the programs should provide better access for families to low-poverty, safe communities with better-performing schools.

We can make substantial progress toward these goals in the next few years, even in the current fiscally constrained environment and even without congressional action or more funding.  Federal, state, and local agencies can make four sets of interrelated policy changes that can help more families in the HCV program to live in better locations.  (See Figure 1.)

  • Create strong incentives for local and state housing agencies to achieve better location outcomes.  Federal policy should provide incentives for agencies to reduce the share of families using vouchers in extreme-poverty areas and increase the share residing in low-poverty, high-opportunity areas.   HUD could do this in three ways: by giving added weight to location outcomes in measuring agency performance, reinforcing these changes with a strong fair housing rule — the rule that will revise HUD grantees’ planning for how to achieve outcomes that further fair housing goals — and rewarding agencies that help families move to high-opportunity areas by paying these agencies additional administrative fees.
  • Modify policies that discourage families from living in lower-poverty communities.   Various HCV program policies impede families from moving to low-poverty areas and thereby unintentionally encourage families to use their vouchers in poor neighborhoods that often are highly racially concentrated.  (Most extremely poor neighborhoods are predominantly African American and/or Latino.)  HUD should finalize its proposed rule on public housing agencies’ fair housing obligations.  It also should set its caps on rental subsidy amounts for smaller geographic areas than it now does, and — at least where necessary to help families move from extreme-poverty, highly racially concentrated neighborhoods to higher-opportunity communities with less poverty — require agencies to identify available units in these lower-poverty communities and extend the search period for families seeking to make such moves.
  • Minimize jurisdictional barriers to families’ ability to choose to live in high-opportunity communities.   HUD should modify the HCV program’s administrative geography to substantially reduce the extent to which the boundaries of housing agencies’ service areas impede the program’s ability to promote access to higher-opportunity neighborhoods.  HUD could substantially lessen these barriers by encouraging agencies in the same metropolitan area to unify their program operations and by simplifying “portability” procedures.
  • Assist families in using vouchers to live in high-opportunity areas.   To expand housing choices in safe, low-poverty neighborhoods with well-performing schools, state and local governments and housing agencies should adopt policies — such as tax incentives and laws prohibiting discrimination against voucher holders — to expand participation by landlords in these neighborhoods in the HCV program and to encourage interested families to use their vouchers in these areas.  Such assistance for families could include financial incentives to offset the additional costs of moving to high-opportunity areas, mobility counseling, and programs to expand access to cars and other transportation to and from these areas.

This focus on enhancing families’ ability to choose to move to areas with more opportunities for their children (or  to remain in affordable housing in lower-poverty, high-opportunity neighborhoods) does not imply that policymakers should not pursue broader strategies to increase incomes, enhance safety, and improve educational performance in very poor areas.  Quite the contrary.  Nevertheless, those strategies often take many years to implement and can be costly, and in many cases, we don’t know very much about their effectiveness.

HUD has begun two programs that, over time, may make a significant difference for children living in public housing or privately-owned assisted housing.  The Choice Neighborhoods Initiative provides funding to revitalize distressed HUD-funded properties as a means to support the broader goal of improving residents’ lives, as well as conditions in the surrounding neighborhoods, with parallel investments by partner agencies in education and public safety.  In addition, the Rental Assistance Demonstration enables public housing agencies to leverage private funding to rehabilitate and preserve their properties, while giving residents a choice to move with tenant-based rental assistance.  If implemented well and expanded, both programs have the potential to help more families live in higher-opportunity neighborhoods.

Helping children and their families to avoid living in violent neighborhoods of extreme poverty and enabling more of the families receiving federal rental assistance to live in low-poverty neighborhoods with high-quality schools should be high-priority goals for federal housing policy.

This paper has three sections.  In Section 1, we review the evidence on how neighborhoods affect children; in Section 2, we outline where children in families with rental assistance live; and, in Section 3, we explain the key policy changes needed in federal rental assistance programs to create more opportunity for low-income children.

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