HOUSING AS SOCIAL INVESTMENT:
WHAT DO WE KNOW?
Sandra J. Newman
Johns Hopkins University
Institute for Policy Studies
Fifth Annual Berkeley Conference on Housing and Social Policy
Haas School of Business, UC Berkeley
March 25, 2004
1
DEFINITION
"SOCIAL INVESTMENT" or "SOCIAL BENEFITS" defined as
a positive effect on person’s well-being (e.g., health; education;
income; earnings; welfare dependency).
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HOUSING [ASSISTANCE] AS SOCIAL
INVESTMENT:
WHAT DO WE KNOW?
3
OVERVIEW
CONTEXT:
EVOLUTION OF HOUSING POLICY DEBATE
HYPOTHESES:
HOW COULD HOUSING AFFECT WELL-BEING?
WHAT WE KNOW:
FOCUS ON PUBLIC HOUSING
NEXT STEPS:
THE GOOD AND THE BAD
4
FORCES BROADENING THE DEBATE
WELFARE REFORM (1996 Bill and its precursors)
• >50% of housing assistance recipients receive welfare
• Shift in societal expectations of public benefit programs
SOCIETAL EXPOSURE AND SENSITIZATION
• The homeless; journalistic accounts (Auletta; Lemann)
W.J. Wilson's THE TRULY DISADVANTAGED
NEW FINDINGS ON PHYSIOLOGICAL EFFECTS OF SOCIAL CONTEXT
(“CONTEXTUALIZING SCIENCE”)
• Effects of social support on stress hormones (e.g., Berkman)
• Link between social cohesion, income inequality and health (Kawachi)
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A REDISCOVERY OF OLD IDEAS
•
James Ford, Slums and Housing (1936):
“There has been lacking in the housing programme the vision...in
which each home will be a positive element in the self-development of
its occupants and of the community....This may be taken as the
criterion by which housing programs is to be gauged..."
• Elizabeth Wood, The Beautiful Beginnings, The Failure to Learn: 50
Years of Public Housing in America (1982):
Public housing managers were expected to be the means by
which residents "advanced" socially and economically (paraphrase of
original).
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NEED FOR EVIDENCE-BASED
ARGUMENTS
• Jonathan Miller, Housing & Development Reporter (2002):
"...to make their case, housing advocates need to show how lack
of stable, affordable housing can have destructive effects."
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AFFORDABILITY FRAMEWORK
AFFORDABILITY MAY AFFECT:
HOUSING & HOME
• nutrition; medical care ("income effect")
• quality ("substitution effect")
• residential mobility
• parental stress
• parent work hours
OPERATING THRU PATHWAY:
PARENTING /
NURTURING
RESULTING IN OUTCOMES:
CHILD WELL-BEING
• physical, mental health
• cognitive development
• efficacy and motivation, etc.
NEIGHBORHOODS & SCHOOLS
• "neighborhood effects"
(e.g., (dis)advantaged peers and
adults; crime)
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EFFECTS OF HOUSING ASSISTANCE
DISINCENTIVE:
• 30% tax on income
• Concentration of disadvantaged residents in developments
• Neighborhood problems, particularly public housing
OR
INCENTIVE:
• Affordable, physically adequate, and stable housing necessary for
well-being, including economic self-sufficiency
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THE NEGATIVE ASSESSMENT OF 1980
• John Weicher, Housing: Federal Housing Policies and Programs
(1980):
"More than 40 years' experience with public housing and other
subsidized programs, and a large body of independent research
findings have provided little evidence that better housing does, indeed,
yield benefits to society over and above the improvement in housing
itself."
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EFFECTS OF PUBLIC HOUSING
CHILDREN:
Some beneficial effects
ADULTS:
Neutral (neither INcentive nor DISincentive)
CAVEAT:
Evidence is non-experimental
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FEATURES OF THE ANALYSIS
OUTCOME
AGE OBSERVED
___________________________________________________________
Welfare receipt
20-27
Earnings
25-27
___________________________________________________________
SAMPLE:
(1) Children who lived in public housing at some point between ages
10-16
(2) Children 10-16 who were income eligible for public housing but
never lived there
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KEY DATA REQUIREMENTS
(1)
Follows individuals from childhood through early adulthood
(2)
Relies on administrative records to identify public housing receipt
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THE CHANGING PROFILE
OF PUBLIC HOUSING
___________________________________________________________
1970
1980
1990
___________________________________________________________
% black
61.9
80.8
80.5
% married
50.4
24.4
30.3
% receiving welfare
46.5
67.1
72.3
Annual earnings
$10,087
$4,471
$5,921
____________________________________________________________
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EXAMPLES OF VARIABLES WE
CONTROLLED FOR
Age
Race
Sex
Family structure while growing up
Change in family structure
Educational attainment of head of household
Marital status of head
Earnings and employment of head
Number of children
Whether head disabled
Earnings of other household members
Moved
Census division
Population of locale (logged)
Number of years in public housing, 10-16
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KEY RESULTS: CHILDREN
(1) During the 1968-1982 period, public housing ENHANCED
children's long-term outcomes.
(2) The poor young adult outcomes of children who grew up in public
housing are entirely attributable to their more disadvantaged family
background characteristics, not public housing itself.
(3) Some examples:
Each additional year of public housing residence between 10-16
years old in 1968-1982:
• Increased the chances of working when 25-27 years old by 7
percentage points
• Raised annual earnings about about $1,860 when 25-27 years old
• Reduced welfare use between ages 20-27 by about .70 of a year
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SHORT-TERM EFFECTS ON
CHILDREN
• Children in public housing are 11 percentage points less likely to be
held back in school (Currie and Yellowitz 2000)
• WORTHY OF NOTE:
• Contemporaneous
• Additional outcome
• May mean that short-term effects may translate into long-term
gains
• BUT uses self-reports to identify public housing residents
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EFFECTS OF PUBLIC HOUSING ON
ADULTS
• Mark Shroder, Journal of Housing Economics (2002):
“(Based on a review of 18 studies) I find the following: Housing
assistance is not persuasively associated with any effect on employment.”
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EFFECTS OF PUBLIC HOUSING ON
ADULTS
OUTCOMES
(1)
(2)
(3)
(4)
Welfare receipt
Labor force participation
Work hours (weekly average)
Earnings (annual)
SAMPLE
(1) Heads of households with at least one child <18 years old who moved
into public housing during the period 1970-1995
(2) A comparison group with similar characteristics that never moved into
public housing
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VARIABLES
OUTCOMES (Measured after the move)
Labor Force Participation (1,0)
Average weekly work hours
Annual earnings
Any AFDC
$ AFDC/person
CONTROLLING FOR:
Outcomes (Measured before the move)
Age
Race
Sex
Educational attainment
Marital status
Head of household
Number of children
Whether child <5
Disabled
Earnings of other household members
Moved
Whether received housing assistance
Census division
Population of locale (logged)
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KEY RESULTS: ADULTS
(1) Without controls for greater disadvantage among public housing
residents, adults:
• work less
• earn less
• more likely to receive welfare
(2) After controls for greater disadvantage, negative effects disappear.
(3) Little effect of time period (“policy regime”) on outcomes.
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STAY TUNED...MORE TO COME
EXAMPLES OF STUDIES IN PROCESS
ASSISTED HOUSING
(Outcomes include work; earnings; welfare)
• Welfare to Work Voucher Experiment (Abt Associates)
• Harkness & Newman (private assisted)
• Harkness & Newman (long-term effects for children 0-10)
• Jacob & Ludwig (vouchers)
AFFORDABLE HOUSING
(Outcomes include child well-being: health; behavior; school performance)
• Belsky et al.
• Child Trends, Inc.
• Harkness & Newman
LOW-POVERTY NEIGHBORHOODS
(Outcomes include all of the above)
• Moving to Opportunity Experiment (multiple researchers)
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