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HOUSING AS SOCIAL INVESTMENT: WHAT DO WE KNOW?

This study examines the impact of housing assistance on well-being, including health, education, income, and welfare dependency. It discusses the evolution of housing policy, hypotheses on how housing affects well-being, and the findings on public housing. It also explores the need for evidence-based arguments and the effects of housing assistance on child well-being, parenting, neighborhoods, and schools. The analysis considers factors such as affordability, incentives, and drawbacks of public housing, while highlighting the changing profile of public housing and key data requirements. The study concludes with key results from the research.

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HOUSING AS SOCIAL INVESTMENT: WHAT DO WE KNOW?

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  1. 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

  2. DEFINITION "SOCIAL INVESTMENT" or "SOCIAL BENEFITS" defined as a positive effect on person’s well-being (e.g., health; education; income; earnings; welfare dependency).

  3. HOUSING [ASSISTANCE] AS SOCIAL INVESTMENT:WHAT DO WE KNOW?

  4. 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

  5. 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)

  6. 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).

  7. 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."

  8. AFFORDABILITY MAY AFFECT: OPERATING THRU PATHWAY: RESULTING IN OUTCOMES: HOUSING & HOME CHILD WELL-BEING PARENTING / NURTURING • nutrition; medical care ("income effect") • physical, mental health • quality ("substitution effect") • cognitive development • residential mobility • efficacy and motivation, etc. • parental stress • parent work hours NEIGHBORHOODS & SCHOOLS • "neighborhood effects" (e.g., (dis)advantaged peers and adults; crime) AFFORDABILITY FRAMEWORK

  9. 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

  10. 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."

  11. EFFECTS OF PUBLIC HOUSING CHILDREN: Some beneficial effects ADULTS: Neutral (neither INcentive nor DISincentive) CAVEAT: Evidence is non-experimental

  12. 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

  13. KEY DATA REQUIREMENTS • Follows individuals from childhood through early adulthood (2) Relies on administrative records to identify public housing receipt

  14. 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 ____________________________________________________________

  15. 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

  16. 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

  17. 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

  18. 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.”

  19. EFFECTS OF PUBLIC HOUSING ON ADULTS OUTCOMES (1) Welfare receipt (2) Labor force participation (3) 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

  20. 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) VARIABLES

  21. KEY RESULTS: ADULTS • Without controls for greater disadvantage among public housing residents, adults: • work less • earn less • more likely to receive welfare • After controls for greater disadvantage, negative effects disappear. (3) Little effect of time period (“policy regime”) on outcomes.

  22. STAY TUNED...MORE TO COMEEXAMPLES 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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