September, 2004

Barriers to Housing - Race, Place and Home:
A Civil Rights and Metropolitan Opportunity Agenda

By Lisa Robinson and Andrew Grant-Thomas

Executive Summary

In this report we consider the potential of federal housing policy to help improve the uneven geography of opportunity in our nation’s metropolitan regions. The report brings together the research, thought, and practice of many concerned with civil rights, affordable housing, smart growth, and regional equity, and sets out a framework for the housing component of a national civil rights agenda for metropolitan opportunity.

In a racially and ethnically diverse nation, growing more so, the substantial mismatch between where low-income and minority families live and where metropolitan opportunities are greatest not only undermines the life chances of those groups but also threatens the health and vitality of our metro regions and the social fabric of the nation as a whole. We contend that federal housing policy – in conjunction with a variety of policies and practices relating to transportation, health, workforce development, and fiscal policies – can serve as a key mechanism for overcoming the regional inequities, reinforced by sprawl, that stand in the way of building more inclusive, healthy, and diverse communities.

Our findings suggest that, far from advancing broad access to regional opportunity, many current elements of federal housing policy tend to deepen racial segregation, regional inequity, and the concentration of disadvantage. In response, we articulate principles and strategies to guide a reorientation of federal housing policies and programs. The overarching goal is to foster housing that serves as a steppingstone “to the resources and services that contribute to stability, advancement, and, more broadly, racial and economic fairness”(powell 2001a: 2).

I. DIVERSITY, SEGREGATION, AND THE STRUCTURE OF METROPOLITAN OPPORTUNITY

The minority share of our nation’s metropolitan-area population rose from 22 to 34 percent between 1980 and 2000. While central cities have historically been home to minority and immigrant populations, minority growth in the suburbs was significant. By 2000, suburbs were home to 71 percent of whites, 58 percent of Asians, 49 percent of Hispanics, and 39 percent of African Americans. Unfortunately, a substantial portion of immigrant and black suburbanization occurred in “at-risk” suburbs that feature school failure, weak fiscal capacity, and other problems long associated with vulnerable cities (Orfield 2002).
Greater diversity at the metropolitan level has not necessarily translated into more integrated neighborhoods for all groups. While the number of mixed-race neighborhoods in metro areas has increased, many neighborhoods remain either exclusively white or exclusively black (Rawlings, Harris and Turner 2004). Neighborhoods with black majorities in 1990 were much more likely than those with white majorities to have gained black population by 2000. Latinos and Asians were less segregated from whites, or each other, than from blacks in 2000, but their rates of segregation have changed little overall since 1990 (Iceland 2002). On the other hand, black residential segregation from whites, while somewhat lower today than in 1990, remains particularly intense in the large metro areas of the Midwest and Northeast. The geographic concentration of poverty overall has declined over the last decade, but poor blacks and Native Americans, for example, are three times more likely than poor whites to live in extreme poverty areas (Jargowsky 2003).

The uneven racial and economic geography of our metro regions has numerous consequences for isolated groups. Concentrated poverty exacerbates the difficulties that often attach to low-income and minority status, promoting outcomes that include joblessness and low wages, violent crime, illegal drug use and drug trafficking, and poor health outcomes (Charles 2003; Massey and Denton 1993; Sampson, Morenoff, and Gannon-Rowley 2002).

Racial segregation and concentrated poverty also have harmful effects on school resources and student achievement. High-poverty schools are very likely to be poorly funded schools marked by large, sometimes overcrowded classes, weak curricula, insufficiently trained teachers and high teacher turnover, low standardized test scores, high grade retention and school drop-out rates, and low rates of parental involvement (Grant-Thomas 2002, Frankenberg, Lee, and Orfield 2003, Orfield and Lee 2004). Students in these schools are less likely to be introduced to college “gateway” classes such as algebra and geometry by the eighth grade, and many instead are subject to tracking practices that do not prepare or qualify them for college. Segregation correlates with other disparities as well, including fiscal capacity (Orfield 2003) and minority group isolation from jobs at the metropolitan level (Raphael and Stoll, 2002).

II. HOUSING CHALLENGES

The National Low Income Housing Coalition estimates that 95 million people had problems with housing affordability, overcrowding, housing quality, or homelessness in 2001 (National Low Income Housing Coalition 2004). Among extremely low-income households, those with incomes at or below 30 percent of the area median income, three-quarters – 23 million people – had housing problems.

Excessive costs are the most frequently experienced housing problem. In 1999, 56 percent of extremely low-income households in the rental market reported that they spent more than half of their incomes on housing. In 2003, the Joint Center for Housing Studies estimated that due to an absolute shortage in low-rent units and to the use of some low-rent units by higher-income renters, the number of renters in the lowest-income quintile, 9.9 million, outnumbered the supply of units affordable and available to them by 4.7 million (State of the Nation’s Housing 2003). Although the affordability problem – and related issues of housing quality, overcrowding, and homelessness – crosses lines of race and ethnicity, owner or renter status, and even socioeconomic status, it is also clear that racial and ethnic minority groups bear more than their “fair” share of housing-related burdens.

If the inadequate supply of safe, decent housing units affordable for low-income and minority renters is the first face of the metropolitan housing dilemma, then the continuing concentration of existing affordable units within a sharply restricted geography is its second face. Locating affordable housing in high-poverty neighborhoods that hinder access to quality schools, good health care facilities, and regional job centers only entrenches racial and class inequalities.

Finally, persistent discrimination continues to shape the experience of racial and ethnic minorities in housing markets. Although certain types of housing discrimination seem to have decreased during the 1990s, HUD’s most recent national study suggests that discrimination against members of all major racial and ethnic minority groups remains substantial (Discrimination in Metropolitan Housing Markets 2002). Whites were favored over blacks in rental housing markets 22 percent of the time and favored over Hispanics 26 percent of the time. In sales markets, whites were favored over blacks and Hispanics 17 and 20 percent of the time, respectively. Findings on discrimination against Asians and Native Americans drew on paired testing in relatively few metro areas, but were no less significant. Moreover, studies of housing credit markets document large differences in minority-white loan denial rates not accounted for by disparities in income, assets or credit history.

Federal housing policy has the potential to help transform the geography of race and opportunity in America. To do so, policies and programs must better address the issues of affordable housing supply, its location within metropolitan regions, and minority access to affordable housing. In this way, federal policy can lead the way in forging a new model of true housing choice that embraces diversity and strengthens our nation's metropolitan areas.

III. TOWARD A HOUSING AND CIVIL RIGHTS AGENDA FOR METROPOLITAN OPPORTUNITY

True housing choice would mean that people of all races and backgrounds enjoy comparable access to housing in the kinds of communities that serve as steppingstones to basic opportunities. Housing choice means the ability to exercise the preference to live in a high job growth area with access to good schools and other amenities, or to remain in an urban “impacted” area – in safe, decent housing – as that area improves.

Forging true housing choice thus means challenging persistent segregation within our nation’s metropolitan areas. The spatial isolation of minority and poor residents by race, ethnicity, and class compounds the serious social, political, and economic disadvantages that already attach to membership within those groups. Too often, their communities are the ones with failing public school systems, high rates of crime, inadequate police protection, and poor job opportunities. A federal housing policy working in concert with other policies to build healthy, diverse metropolitan regions must include ongoing and deliberate efforts to overcome the racial and economic segregation that persists in many of our regions.

From this analysis it follows that federal housing policies that facilitate true housing choice must be explicit about the relevance of race to existing regional geographies of opportunity. Being explicit about the continued significance of race and ethnicity is necessary if we are to overcome the legacy of past discrimination and conquer discrimination in its present forms – in the broader society, as well as within the federal government's own housing policies and programs.

The principles and recommendations detailed below frame a menu of possibilities for future directions in federal housing policy. Some of the changes suggested may be feasible in the context of current programs and the current political environment. Others would require federal statutory changes or entirely new programs. It is our hope that these ideas will help to spark more engagement, debate, and collaboration among the members of the civil rights and racial justice, affordable housing, fair housing, and smart growth communities to whom we primarily direct them.

IV. RECOMMENDATIONS

1. Federal housing policy must address the shortage of safe, decent, and affordable housing, especially for families with very low incomes. Action must include a concerted effort to build or subsidize new units, improve substandard units, and prevent the decay and loss of existing affordable housing. At the same time, any federal initiative to boost supply must ensure that new units are distributed throughout metropolitan regions in a manner that does not reinforce economic and racial segregation.
   • Enact legislation launching a major new production program, such as a National Housing Trust Fund (based on the effectiveness of trust funds at the local, regional, and state levels), to increase the supply of affordable housing to extremely low-income families (30 percent of AMI). Such legislation must include incentives that encourage regional collaboration to address housing needs and that give priority to projects contributing to the equitable regional distribution of affordable family housing. The funding of affordable family housing in “opportunity areas” should be linked to strong affirmative marketing standards and a regional housing mobility strategy and infrastructure, also federally funded, to ensure that such developments improve access to regional opportunity for low-income and minority families.
   • Amend federal programs that support affordable housing production to ensure that developments funded in urban areas are part of viable neighborhood revitalization strategies that promote mixed-income developments, do not displace current residents, and involve residents in planning and implementation. Criteria should be developed, with the active participation of nonprofit affordable housing developers, CDCs, and community- based organizations, to define the goals and outcomes of a “viable” revitalization strategy.
   • Enact a preservation tax incentive that would give owners of subsidized, multi-family homes a tax benefit if the ownership of the property is turned over to new, socially motivated owners who will maintain the properties as safe, decent, and affordable.
   • Enact legislation promoting greater investment in affordable housing by financial institutions, including the GSEs (Fannie Mae, Freddie Mac, Federal Home Loan Banks), the Federal Housing Administration, and private lending institutions through CRA.
   • Accompany investment in affordable housing production with a continuing federal commitment to rental subsidies so that units are affordable for very low- and extremely low-income families.
   • Invest federal funds in creating a network of nonprofit regional housing corporations to develop and preserve affordable housing in suburban areas. This network would build on the achievements of community development corporations that have traditionally operated in urban neighborhoods, providing opportunities to extend their capacity and experience to the regional level.
2. Federal housing policy must explicitly seek to transform existing patterns of racial segregation in housing. All federal housing programs are obligated to affirmatively further fair housing. Program rules and implementation must advance this goal.
   • Both HUD and the Treasury Department should promulgate regulations requiring that the impact of their housing programs on racial equity and regional opportunity for minorities be considered, measured and reported by all recipients of funding and tax credits, in both the application and implementation phases of projects. While current HUD recipients are required to certify their compliance with fair housing laws, this practice has not ensured that meaningful action is taken.
   • Utilize HUD’s block-granting authority to reward jurisdictions that demonstrate progress in implementing – not simply planning for – inclusionary housing strategies.
   • Revisit, update, and enforce HUD site and neighborhood standards applicable to all federal housing programs to further the creation of racially and economically diverse communities.
   • Enact legislation to implement a national pilot project specifically designed to address segregation and promote diverse, mixed-income communities. This national pilot could build on the Moving to Opportunity (MTO) demonstration project and use housing choice vouchers for regional mobility purposes. Such a program could incorporate the lessons learned from MTO implementation to date and go one step further by combining existing MTO elements with the construction or acquisition of housing to serve as “opportunity housing” for current residents of economically and racially segregated communities.
3. The Federal government should provide incentives and assistance at the local, state and regional levels to encourage housing, land use, and transportation initiatives oriented towards building more equitable and inclusive regions.
   • Promote a “fair share” approach to affordable housing by providing incentives to states that revise planning and zoning laws to institute regional fair share housing programs and/or enable inclusionary zoning at the local level, and to local jurisdictions that adopt inclusionary ordinances or regional fair share programs. Incentives could include special federal grants, extra points in HUD block grant allocation processes, or the targeting of federal transportation and infrastructure dollars specifically to those areas that encourage inclusionary patterns of development.
   • Encourage, support, and fund planning among regional and local entities that integrates housing, land use, transportation, public health, environmental, and other policies to enhance metropolitan opportunity for minority groups. A bonus pool of federal funding should be set aside for local jurisdictions that demonstrate progress in advancing collaborative regional strategies that promote racial equity and regional opportunity.
4. HUD should adequately fund existing fair housing enforcement activities and develop proactive, high-visibility approaches to combating housing discrimination.
   • Coordinate with the Department of Justice to take aggressive steps to ensure that local jurisdictions comply with fair housing laws, particularly with regard to zoning regulations or other practices that may have exclusionary effects.
   • Review the administration of HUD-funded programs to prevent discrimination, ensuring that programs do not unfairly displace minority families or increase segregation.
   • Provide funding for sustained fair housing testing in both rental and sales markets.
   • Re-engineer the structure and operation of the national fair housing system to better support the activities of nonprofit fair housing agencies. Ensure more efficient resolution to cases and ensure that all minority groups are able to access and use fair housing tools effectively to combat housing discrimination.
5. HUD should fully and reliably fund the Housing Choice Voucher Program and provide incentives for greater regional collaboration among PHAs.
   • Establish a single regional waiting list for vouchers.
   • Eliminate local resident preferences at the sub-metro level.
   • Implement an aggressive regional mobility strategy and infrastructure to ensure equal access to regional housing opportunity for low-income and minority families, including multifaceted counseling and support.
   • Adjust “fair market rents” to facilitate access to housing in suburban jurisdictions.
   • Redefine performance standards and provide performance awards to PHAs that make demonstrable progress toward racial and economic de-concentration.
6. As the primary federally supported housing production program, the Low Income Housing Tax Credit (LIHTC) should be amended so that it proactively furthers diverse, mixed income communities.
   • Amend the LIHTC statute giving federal preference to projects sited in “qualified census tracts.”
   • Have the Treasury Department promulgate regulations clearly specifying the fair housing obligations of state housing finance agencies and tax credit developers. The regulations should emphasize the need to expand affordable housing opportunities in non-minority neighborhoods.
   • Implement new Treasury Department regulations that require each state housing finance agency that allocates credits to map the racial, ethnic and economic characteristics of its LIHTC units and neighborhoods. The Treasury should require agencies to assess the degree to which new proposals “affirmatively further” fair housing.
   • As a component of affirmatively furthering fair housing, have the Treasury Department direct state housing finance agencies to give LIHTC funding priority to suburban affordable family housing developments that will accept Project-based Section 8 vouchers. Voucher holders should be drawn from a regional waiting list.
7. HUD and other agencies administering housing programs must both collect and use racial and socioeconomic data to monitor the extent to which these programs further the creation of racially and economically diverse communities.
   • Gather racial and socioeconomic data across all HUD programs, both before grants are awarded (to anticipate how programs will affect minorities and minority communities), and after funding is complete (to determine the racial equity and regional opportunity impacts).
   • Include in such data, where applicable, the race of the recipient of the housing benefit as well as the racial composition of the community to which the recipient is locating, in order to assess the impact of programs on racial integration.
   • Through Treasury regulations governing the LIHTC program, require that housing credit agencies collect, assess, and report information about the racial, ethnic, and other protected statuses of residents in LIHTC developments, both at lease-up and on an annual basis. This data should be synthesized and made available at the federal level.
8. The federal government should implement careful and conscientious strategies to support the expansion of minority home ownership as a means to building assets and wealth. At the same time, home ownership should not be pursued at the expense of affordable rental housing, which serves as a critical steppingstone to ownership.
   • Pursue a range of policies that encourage home purchases by minorities in communities where the value of the investment can appreciate and that provide access to regional opportunity. Key areas to address include policies and regulations governing GSEs, FHA mortgage insurance, the Voucher Home Ownership Program, CRA, and others.
   • Increase support for proven housing counseling programs to facilitate minority access to, and preservation of, home equity. Counseling should extend beyond the home purchase itself to ensure that new homeowners are able to keep up with their mortgage payments.
   • Promote equitable access to housing credit through new protections and consumer education. Increase consumer literacy about credit schemes and strengthen laws against predatory lending practices that threaten the home equity of minority homeowners.

CONCLUSION

The principles and recommendations for federal housing policy outlined here represent only a beginning. Their intent is to provoke further research, discussion, and public advocacy around the housing component of a broad, national civil rights agenda. They are also aimed at revealing possible points of convergence and collaboration among proponents of affordable housing, civil rights, smart growth, and racial equity.

Transforming promising elements of a civil rights and housing agenda into federal policy will require powerful constituencies of support and considerable political will. The increasing turn to regionalism, and the economic and demographic changes that prompt it, can play key roles in leveraging support for a federal housing policy that advances racial equity and metropolitan opportunity, and, in so doing, contributes to healthy, competitive, inclusive regions.

To view the COMPLETE REPORT and study conducted by The Civil Rights Project go to:

Barriers to Housing - Race, Place and Home: A Civil Rights and MetropolitanOpportunity Agenda (in PDF Format)

To view the COMPLETE SUMMARY and study conducted by The Civil Rights Project go to:

Roundtable Discussion Summary: Redefining Barriers To Housing - Race, Place and Home: A Civil Rights And Metropolitan Opportunity Agenda (in PDF Format)