Economist: U.S. Plan To Move Minorities To New Neighborhoods Works

59 Comments

BY RAPHAEL BOSTIC

07/30/2015  

 

Earlier this month, the U.S. Department of Housing and Urban Development (HUD) issued a final rule revising its Affirmatively Furthering Fair Housing (AFFH) regulation to clarify and streamline what local communities must do to use HUD funds.

Specifically, communities will have to examine whether their investments have helped provide all residents — including minorities and other groups that have historically faced discrimination — with access to better opportunities. The new rule was designed after careful analysis of the strengths and weaknesses of previous rules and made improvements where needed.

While these types of rules are rarely implemented without detractors, the arguments against AFFH that appeared in a July 9 editorial titled "HUD's Own Study Dashes Utopian Dream Of Cross-Neighborhood Prosperity" attempt to use an evaluation of a HUD demonstration program — Moving to Opportunity (MTO) — to suggest that this effort and all future programs are doomed to fail.

As an assistant secretary for the HUD department that oversaw the study, I penned the foreword and summarized this analysis. Since my words were the key supporting detail in the editorial's theory, I feel it is important that I respond to set the record straight.

First, the MTO evaluation found many benefits that your editorial staff overlooked. Those who moved to lower-poverty neighborhoods experienced significant reductions in diabetes and obesity, two conditions that are often precursors to chronic health ailments.

These improvements reduce the need for health services, thereby reducing health care expenditures and limiting expenses associated with Medicare and Medicaid.

These are important benefits that should not be written off.

Second, the record on the demonstration is far from settled.

You should not have interpreted my forward to that study as the final word on the subject, as it simply summarizes the study's contents and is not a definitive statement.

Indeed, many other researchers studying MTO have found evidence suggesting that the demonstration resulted in substantial income and other benefits for families who were in the program.

For example, a recent study by Harvard economists Raj Chetty, Nathaniel Hendren and Lawrence Katz found that children, particularly those who moved when younger and thus had more ability to take advantage of the better educational resources, had incomes 31% higher than those who remained in isolated, high-poverty neighborhoods by the time they were in their mid-20s.

This is a big effect, and the authors suggest that mobility may be an important component of a strategy to end poverty's persistence across generations.

So I would suggest that the claim of "failure" is at best overblown and more likely just flat-out wrong.

Third, and quite importantly, your suggestion that the HUD regulation is new social engineering that mandates outcomes in jurisdictions is also just wrong.

The regulation revises procedures that have been in place for decades; the mandate is not new.

In fact, I was tasked with helping conceive of the new approach and so am well-versed in its goals and structure.

The new regulation streamlines the process so that communities can better assess their efforts to improve the quality of life of their citizens and consider new strategies in those cases where some residents — often minority residents — have not benefited as much as they might otherwise.

Communities that want to do right by all of their residents will clearly benefit by these revisions. Hopefully, those not so readily inclined will start doing better.

Moreover, under this new regulation, communities will have broad discretion to craft a locally appropriate strategy to ensure that all citizens have access to opportunity.

In some cases, it might involve locating affordable housing in more affluent areas. But in many cases, it will involve investing to improve schools, transportation linkages to job opportunities, or other revitalization strategies.

There are many possible approaches, and HUD clearly recognizes this. The opening paragraphs of the regulation make this point explicitly.

Finally, while I am happily and proudly an African-American economist, highlighting that fact in your editorial was wholly inappropriate, as it implied that academics, government officials and African-Americans neither respect evidence nor develop opinions based on evidence.

This is a low blow that is wrong on all counts. I hope that in the future, the IBD editorial staff will not demean itself by using such transparent race-baiting tactics.

• Bostic is director of the University of Southern California Bedrosian Center on Governance and former assistant secretary of the Housing and Urban Development Department.

Read More At Investor's Business Daily: http://news.investors.com/ibd-editorials-counterpoint/073015-764322-affirmative-housing-rule-will-give-minorities-a-better-life.htm#ixzz3hlY0utpo
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