The spatial bias of federal housing law and policy: concentrated poverty in urban America.

• Author: Schill, Michael H.
• Position: Symposium - Shaping American Communities: Segregation, Housing & the Urban Poor

Problems associated with poverty are not new to American cities. Nevertheless, in recent years a consensus has developed that increasing concentrations of very poor, predominantly minority households in inner-city communities have generated especially severe social pathologies ranging from persistent unemployment and welfare dependency to crime and drug abuse. Patterns of geographically concentrated inner-city poverty are rooted in a number of demographic and social dynamics including urban deindustrialization, the breakdown of the nuclear family, race discrimination,m and the adverse impacts of government policies. In this Article, we examine one surprisingly important and under-examined cause of concentrated inner-city poverty--federal housing law and policy. Throughout the twentieth century, federal housing law and policy have exhibited a locational bias that has promoted the growth of large concentrations of poor people in the inner city.

In Part I, we briefly describe the increase in concentrated poverty that has taken place in American cities over the part two decades as well as the problems it generates. In Part II, we examine how federal housing policies of the past sixty years have contributed to concentrated inner-city poverty. Particular emphasis is placed upon the federal Public Housing Program. In addition to describing how public housing promoted concentrated poverty within its walls, we examine whether the program negatively affected urban neighborhoods. We use data from the city of Philadelphia to test whether the location of public housing in a neighborhood affects overall poverty rates within that community. Our findings suggest that the existence of public housing in a neighborhood contributes substantially to concentrated inner-city poverty. Part II also shows how federal mortgage assistance programs may have destabilized inner-city neighborhoods by redlining areas with significant proportions of minority households. Efforts by the federal government in the late 1960s to remedy the negative effects of these programs paradoxically led to increased levels of abandonment and deterioration in many of these same neighborhoods.

The locational biases of federal housing policy are not merely matters of history. Part III describes how current housing programs and laws continue to foster the isolation of low-income families in inner-city communities. In particular, we use data fromthe Boston metropolitan area to examine how the Community Reinvestment Act, a law designed to increase access to home ownership in low-income neighborhoods, may actually reinforce concentrated poverty in American cities. We conclude in Part IV by describing changes in federal housing subsidy programs and law enforcement that might promote the objective of deconcentrating the inner-city poor.

1. The Growth of Concentrated Inner-City Poverty

   Since the mid-1980s, social scientists have conducted extensive research on the geography of poverty in American cities. Typically, these studies use census tracts as convenient proxies for neighborhoods and characterize particular threshold levels of households earning incomes below the poverty level as "extreme poverty" or "underclass" areas. For example, Paul Jargowsky and Mary Jo Bane report that from 1970 to 1980, the number of poor people living in tracts with 40% or more of their populations composed of poor people increased by 29.5% of 2,449,324.(1)

   Despite the economic boom of the 1980s, data from the 1990 Census of Population and Housing demonstrate that concentrated inner-city poverty continued to grow over the past decade. In a recent article, Kasarda presents census data for several different neighborhood classification types. Among these neighborhoods are "extreme poverty" tracts in which 40% of the residents are impoverished and "distressed" neighborhoods in which the proportion of residents who are simultaneously below the poverty line, unempoloyed, living in female-headed households and receiving public assistance falls at least one or more standard deviations above the average for all tracts in 1980.(2)

   As Table I and II demonstrate, the number of people living in each of these two types of neighborhoods rose between 1980 and 1990. For extreme poverty tracts, the population actually increased at a faster rate during the 1980s than it had during the 1970s. These data also indicate that concentrated poverty increased its spatial reach over the period from 1980 to 1990, affecting a growing number of census tracts.

   Table I Extreme Poverty Tracts Largest 100 Cities (1970-1990)(3)

   (Unless otherwise specified, numbers are percentages.)

   Characteristic 1970 1980 1990 Number of Tracts 751 1331 1954 Tracts as Percentage of All Tracts in Cities 6.0 9.7 13.7 Population (in 1000s) 2691 3833 5496 Population as Percentage of Cities' Population 5.2 7.9 10.7 Proportion of Population Non- Hispanic White 18.6 14.6 15.5 Proportion of Population Non- Hispanic Black 64.8 64.4 57.3 Proportion of Population Hispanic 15.2 19.3 23.8 Proportion of Persons Aged 16-19 Who Are High School Dropouts 24.2 21.9 19.4 Proportion of Households Receiving Public Assistance 28.1 36.4 32.8 Proportion of Men Not Working During Previous Year 30.9 42.8 40.4 TABLE II DISTRESSED TRACTS FOR LARGEST 100 CITIES (1970-1994)(4)

   (Unless otherwise specified, numbers are percentages.)

   Characteristic 1970 1980 1990 Number of Tracts 296 1513 1850 Tracts as Percentage of All Tracts in Cities 2.4 11.0 13.0 Population (in 1000s) 1022 4893 5704 Population as Percentage of Cities' Population 1.7 10.0 11.1 Proportion of Population Non-Hispanic White 14.8 10.1 10.4 Proportion of Population Non-Hispanic Black 76.6 72.4 67.7 Proportion of Population Hispanic 7.1 16.2 19.6 Proportion of Persons Aged 16-19 Who Age High School Dropouts 26.7 23.1 21.4 Proportion of Households Receiving Public Assistance 36.2 36.4 34.6 Important regional differences exist in the growth rates of concentrated inner-city poverty between 1980 and 1990. Both the population living in these neighborhoods as well as the aggregate number of neighborhoods rose in the Midwest and the South, but decreased in the Northeast.(5) Cities with the largest increase in populations living in extreme poverty tracts were Detroit, Los Angeles, Houston, Milwaukee, and Fresno.(6) Cities that experienced the greatest declines in the number of residents in these neighborhoods were Newark, New York, Philadelphia, Baltimore, and Jacksonville.(7) In both extreme poverty and distressed tracts, the overwhelming majority of residents in 1990 were racial minorities.(8) Nevertheless, from 1980 to 1990, the proportion composed of Hispanics and non-Hispanic whites increased slightly.(9)

   Concentrated inner-city poverty generates problems that are different both in kind and in magnitude from those experienced by poor people in other geographic settings. William Julius Wilson, in his 1987 book The Truly Disadvantaged,(10) argues that the geographic isolation of poor people generates behavioral adaptations called "concentration effects."(11) Specifically, children growing up in neighborhoods with few employed role models develop weak attachments to the labor force.(12) Lacking employment opportunities and the appropriate socialization to seek work, youths frequently engage in deviant or illegal activities to earn income and gain status, thereby further distancing themselves from middle-class norms.(13) These behaviors are reinforced by peer groups. Activities that are likely to assist them in obtaining employment and social mobility, such as graduating from high school, are stigmatized rather than valued.(14)

   Wilson's concentration effects hypothesis has received almost universal empirical confirmation. Although the precise causal mechanism remains a matter of debate, studies testing the theory demonstrate a consistent relationship between social and spatial isolation on the one hand, and high rates of teenage childbearing, school dropouts, and welfare dependency on the other.(15)

2. THE INTERPLAY BETWEEN PAST FEDERAL HOUSING POLICIES AND THE GROWTH OF

   CONCENTRATED INNER-CITY POVERTY

   Federal housing policy has historically played an important, albeit nonexclusive,(16) role in the creation of urban ghettos. This locational bias is exhibited in interventions to assist both renters and home owners. In this Part, we examine how the public housing program and homeowner mortgage assistance programs have contributed to the concentration of poverty in the inner city.

   1. The Public Housing Program

      The federal housing program that has generated the most intense pattern of concentrated poverty is the public housing program. The modern public housing program traces its roots to the mid-1930s, when the Public Works Administration purchased land and built publicly owned housing.(17) In 1935, however, a federal court struck down this program in United States v. Certain Lands in Louisville.(18) The court reasoned that providing housing to low-salaried workers and residents of slum districts was not a public purpose and therefore was beyond the scope of the government's eminent domain powers.(19)

      The Louisville case had enormously important implications for the structure of the public housing program that emerged in the Housing Act of 1937.(20) Instead of being owned by the federal government, public housing would be owned and operated by local public housing authorities (PHAs) created by states and localities.(21) Municipalities that wished to participate in the program would establish a PHA and enter into an Annual Contribution Contract (ACC) with the federal government.(22) Under the ACC, the federal government funded the majority of the capital costs of public housing by paying the debt service on long-term bonds.(23) The PHA, in turn, agreed to operate the housing over the life of the bonds, subject to federal statutes and regulations.

      The outbreak of World War II resulted in relatively low...