INSIGHTS

 

 

How do neighbourhoods shape economic opportunities for children? Listen to Jason Mitchell discuss with Professor Stefanie Deluca, Johns Hopkins University, about why neighbourhoods matter for creating social mobility; some of the outcomes and challenges in her recent paper, “Creating Moves to Opportunity”; and what it takes to create more high-opportunity zones, so families don’t have to continually uproot and move.

Recording date: 18 November 2024

Professor Stefanie DeLuca

Professor Stefanie DeLuca is the James Coleman Professor of Sociology and Social Policy at the Johns Hopkins University, director of the Poverty and Inequality Research Lab, and Research Principal at Opportunity Insights at Harvard University. She is one of the foremost qualitative mixed methods researchers on housing and higher education policy. Professor DeLuca co-authored Coming of Age in the Other America, which was named an Outstanding Academic Title from the American Library Association, and won the William F. Goode Award from the American Sociological Association. Stefanie has also been awarded a National Academy of Education/Spencer Foundation Fellowship and a William T. Grant Foundation Scholars Award. She serves on a Federal Research Advisory Commission at the Department of Housing and Urban Development, and was named Scholar of the Year by the National Alliance of Resident Services in Assisted and Affordable Housing.

 

Episode Transcript

Note: This transcription was generated using a combination of speech recognition software and human transcribers and may contain errors. As a part of this process, this transcript has also been edited for clarity.

 

Jason Mitchell:

Welcome to the podcast. Professor Stefanie DeLuca, it’s great to have you here and thank you for taking the time today.

Stefanie DeLuca:

Oh, thanks so much for having me. I’m looking forward to it.

Jason Mitchell:

Absolutely. So Stefanie, I want to start out with some scene setting. Why do neighbourhoods matter for creating opportunity? Talk about the effects that neighbourhoods have on social mobility opportunity and the life outcomes of children. I’ve read that economists have pointed out that low income neighbourhoods have lower upward social mobility, and at the same time that low income households rely heavily on neighbourhoods for economic connectedness.

Stefanie DeLuca:

Yeah, this is a great question and it’s a good time to ask it because we’ve never known more than we do now about how important neighbourhoods are. I think it’s a knee-jerk to think family matters or one’s own efforts and characteristics matter. But increasingly what we are seeing across disciplines, different data sources, different investigators, is that it isn’t just the family a child grows up in, but the neighbourhood that she’s raised in as well that has independent causal impacts on life outcomes. And we’re talking here about neighbourhood effects on children’s long-term income prospects, educational attainment, but also children’s health. We have work from folks here at Hawkins, Craig Pollock’s team, that I’m lucky to be part of. This is showing the importance of neighbourhoods, in improving neighbourhood conditions on reducing asthma exacerbations, effects that are stronger than even corticosteroid use. We’re talking about neighbourhood impacts on parents’ mental health, for example, on par with best practises and antidepressant medication therapies.

A parent’s mental health improves when neighbourhood characteristics improve, which we know from other work is really important for children’s long-term outcomes as well. And so I think what we’re seeing here is that neighbourhoods themselves are assets and reservoirs of potential for acting as education policy, as health policy. We’ve long thought in the US in thinking about reducing poverty, reducing inequality, promoting upward mobility, about increasing skills and access to jobs and education, which was really at the heart of the Great Society programmes in the sixties. But now we’re adding to this arsenal of anti-poverty policy, the idea that where one lives can also help us get to some of the same goals. And you’re right, I think people definitely consider neighbourhoods places for connectedness.

I think what’s also important to understand is some families would prefer to be in neighbourhoods other than those that they currently live in and maybe where some of their social networks are. Because they want to send their kids to better schools and they’d like to have more choice. And that’s something we don’t have as much of as I think we would need for better outcomes in terms of inequality. Because the geography of opportunity, as we call it, is quite structured and quite restrictive. And so, I think there’s certainly the importance in staying connected to maybe where you’re from, but also I think it’s vitally important to consider expanding choices for families of colour and low-income families who may not have always had them.

Jason Mitchell:

That’s super interesting and thanks for framing this. I guess before we go in deeper, I’m curious about one thing. Some of the topics of this podcast, namely climate change or increasingly politicised. And I guess I’m wondering what’s been your experience in your field? Correct me if I’m wrong, but in my mind, housing seems like kind of an obvious bipartisan issue, basically a no-brainer politically. It’s also interesting to me that during Trump’s first administration, secretary Ben Carson at HUD even asked for your counsel. And so would you say that housing, looking back, is generally non-controversial or are there areas that are more sensitive than others?

Stefanie DeLuca:

Yeah. I mean, I think people are asking themselves a lot of questions about this right now. We’ve just had an election that has implications for housing health and other policy. But I want to remain optimistic. Because you’re right when in the previous Trump administration, secretary Carson asked for some of my counsel on some programmes and policies that we’ll talk about in a bit. But I think that what was, what’s given me optimism that housing policy may remain bipartisan as a concern is the fact that it was bipartisan-supported legislation that really was at the heart of some of the expansion of the housing voucher programme that we saw in the last two administrations actually. That the call for an expansion of housing vouchers and services to help families relocate to higher opportunity neighbourhoods was at the centre of a bill that Todd Young, a Republican from Indiana and Chris Van Hollen, a Democrat from Maryland put forward in the last two sessions.

So I think in part the bipartisan draw around housing and neighbourhood policy, part of the draw is that we have increasing research evidence to point to the benefits for children that come when we have more affordable housing and when families with children have access to higher opportunity neighbourhoods. So I think that the benefits for children is a sell for folks on both sides of the aisle, in addition to some progress we’ve made in cost-effective ways of providing these kinds of services.

Jason Mitchell:

That’s really good to hear. You co-authored a pretty prominent paper recently titled Creating Moves to Opportunity, Experimental Evidence on Barriers to Neighbourhood Choice. Let’s call it Creating Moves for short. It’s pretty unique because it’s one of the first truly mixed methods studies ever published in the American Economic Review. Can you lift the text off the paper to summarise the thesis? What’s the main research question that the Creating Moves project addresses? What’s it trying to achieve?

Stefanie DeLuca:

Yeah, thanks for asking about this. We’re really excited about the paper for precisely the reason you hit on, which is that it is a mixed methods paper. It’s using both. What that means is it’s using both quantitative data and experimental data and also the qualitative data that we gathered from talking to families themselves who are part of a policy. Which, we don’t always have that combination, which really I think brings our science forward in some really important ways. I think that the thrust of the paper speaks to some of what we were just talking about, which is neighbourhoods matter. We now have a couple of decades of research coming to this consensus, but how do we deal with the fact that the geography of the US, the geography of desirable neighbourhoods is so unequal? And so part of what we were trying to understand here is how do we increase access for low income families to have a chance of being in some of these neighbourhoods?

And we have a policy on the books, the Housing Choice Voucher Programme, which is really the largest programme we have at the federal level or any level really to provide housing assistance for low-income families. And the Housing Choice Voucher Programme provides housing assistance for about 2.2 million families, yet most of these families end up using the voucher to move, to relocate, to other moderate to high-poverty neighbourhoods. And so that presents a puzzle, which is why does that happen? Why do we see families using a voucher that can pay for most of their rent? Why do we see families who have these vouchers moving to poor neighbourhoods over and over again? What gets in the way, in other words, between a really valuable, precious, all-too-rare policy and its biggest benefits?

And so I think what we were trying to do with this paper in this project is to test what gets in the way. Is it that families have preferences for low-income neighbourhoods? Is it perhaps barriers in the housing market that need to be overcome? And the paper provides compelling evidence that barriers are really the driving factor. Landlord practises, families needing assistance in navigating relationships with landlords and figuring out how to present themselves to landlords, in addition to the financial resources that come with the move and providing some of those. And I think this is important. Sociologists have long talked about barriers to neighbour attainment, and this was a chance to really empirically test some of that.

And so what we were able to see with this study, which was an experiment, a randomised controlled field trial, which is the gold standard for causal inference, we were able to see that if you remove some of these barriers with effective navigator assistance, which we can talk more about, alongside the housing choice voucher programme, you can really produce some remarkable gains in the kinds of neighbourhoods families move to with the housing choice voucher. For example, the treatment group that got the voucher plus the offer of navigator staff help, 53% of those families moved to opportunity areas, compared to 15% in the control group who just got the voucher. And in social science terms, that’s a pretty big impact.

Jason Mitchell:

Can you say a little bit more about the role of the navigator?

Stefanie DeLuca:

Yeah, so… One of the things that was really interesting to us was not just that the navigator provided information, which I think is really a strong contending theory about why it is people don’t do things that are good for them. The navigator didn’t just provide information. In fact, we found that that was a necessary but not sufficient resource that people needed. But then the navigators, through their communication and their customization of the resources the programme provided, were able to increase families’ beliefs about the success of their housing searches. That they could really use their vouchers to move to neighbourhoods with the kinds of schools that they really desired for their kids.

So it really tells us something important, which is social policy often brings with it benefits like financial, additional financial resources or something like we think with the voucher, like we have for sometimes school vouchers, that the housing voucher is a big financial resource. But really those sorts of resources can go a lot farther if we pair them with staff that help people feel better, that feel respected and feel like their needs are being attended to and who reduce the sometimes overwhelming administrative burdens and costs of redeeming policy benefits.

Jason Mitchell:

How has Creating Moves helped, I guess, to redefine our ability to intervene at the level of the neighbourhood through housing policy? In other words, if barriers and family preferences are actually driving segregation, to what degree can we, I guess, address them through changes in affordable housing policy?

Stefanie DeLuca:

Yeah. This is, I think, one of the key questions. I think what we can see from the Creating Moves to Opportunity experiment, in addition to Work in Baltimore, the Baltimore housing mobility programme which came before it and really helped inform some of the practise, is that we can give people choices, really support those choices in ways that are relatively low cost. I mean, nothing is free, but I think what it says is we can provide these services, which are about, I think can be less than 7% of the marginal cost of the voucher itself. Which is not as much as one might think. There are these seemingly small and seemingly cost-effective ways to provide enormous benefits for families to use a longstanding programme like the Housing Voucher Programme to relocate. I think that this still leaves some questions about what else we’d need to do in terms of helping neighbourhoods themselves thrive. But I think this has really opened up a policy tool for a programme that’s one of the biggest tools that we have in our policy toolkit to really help us use it in a way that’s more effective.

Jason Mitchell:

Really interesting. When the first Moving to Opportunity Paper was published, I think in 2015, it examined the short-term impact of the MTO programme in New York City. And I guess seemed to catalyse attention in policy circles that the US Department of Housing and Urban Development and regional agencies like Seattle or King County. What has now been the at least initial response from housing agencies to the latest Creating Moves work?

Stefanie DeLuca:

Yeah. I think this is another one of the terrific, I don’t want to say surprises, but it’s one of the really wonderful things that this work has helped us reveal. Which is that we have a lot of housing practitioners, people running housing agencies across the country who really want to provide better services for their clients, for their low-income families who use the voucher programme. And in fact, the Creating Moves to Opportunity study was born out of an interest from a number of these housing agencies. And ultimately the first extension was with Seattle and King County, but the Seattle and King County wanted researchers to help them see whether a new programme they would develop, that they could develop, whether it would work. And I was recently at the 50th anniversary celebration of the Housing Choice Voucher programme in DC a couple of weeks ago and met other leaders in the housing field across the country who are taking lessons from research, which is exciting in itself, but also thinking about ways to improve their practise through what they’re learning from Seattle and King County.

And so I think there’s been quite a bit of encouraging signal here around the extent to which agencies across the country are interested in using some of these insights. And also because of some of the federal, the legislative, funding that has come from this work that as I alluded to earlier, we can certainly talk to more the bipartisan legislation that’s come out of this work. There are eight other housing authorities right now who are in the process of creating their own, sort of creating Moves to Opportunity programmes. And we’re eager to see what that kind of scale up will teach us as the programme is operating in different sites.

Jason Mitchell:

Are there any early, I guess, expectations or perspectives on what the new administration in January will do? What does that mean in terms of recalibrating funding or policy stances?

Stefanie DeLuca:

I think that everybody wants to have a crystal ball here. I don’t know. We don’t have a good sense because we don’t really have a good sense of who might be leading the Department of Housing. I hope we still have a Department of Housing under the new administration. I know there have been under previous Republican administrations calls to get rid of the Department of Housing and Urban Development.

So on the one hand, I worry about whether we will still have a commitment to HUD and to some of these concerns about affordable housing, which has become part of a remarkable national conversation in a way it’s never been since I’ve been doing this work. But as I said earlier, there’s an optimism here because housing is so central to family life. It’s on the minds of voters across the country. We have evidence that it matters for children, who tend to get the policy sympathy of legislators on both sides of the aisle, that there may still be some appetite here for figuring out how we can use housing and how we can think about housing assistance targeted toward families, moves opportunity. I’m still optimistic that we may still have some support for this.

Jason Mitchell:

Got it. Can you talk a little bit more about the outcomes from Creating Moves? In other words, how do you measure satisfaction? What’s the evidence to say that these moves actually improve children’s rates of upward income mobility?

Stefanie DeLuca:

Yeah, it’s interesting. I mean, this is the kind of thing that we really get to see up close because of the field work, because of the interviews, because of being there on the ground with families. Not just crunching the data after the fact. It is just to see the, I think maybe at the most intuitive level, the relief and optimism families have when they get housing assistance. It’s like winning the Willy Wonka lottery, the Willy Wonka golden ticket inside the chocolate bar. It’s like winning the housing lottery. All of a sudden optimism and confidence for the future comes through these interviews. So I think on some basic level, and I’ve seen this in my work in Chicago, Baltimore, and other places, that having housing costs covered is such a relief for parents and opens up their ability to think about what else they want for themselves and their kids.

So I think just on some really basic levels, just having those significant costs, those concerns, reduced is remarkable. We won’t know, of course, what will happen for children for some time. Because one thing we learned from the earlier Moving to Opportunity work that inspired some of this is that it can take 20 years to see the results. But the simulation work that’s done in the paper that Raj Chetty and his team have done, both in their earlier work and in this work, suggest we could have quite remarkable impacts on children’s upward mobility to such an extent that the earnings gains to be recovered from children’s long time earnings as a result of moving to these neighbourhoods could more than cover the cost of the programme. So that’s another really important aspect of this policy. And so I think that’s key.

And in terms of satisfaction, we also saw up to three years later, most families who moved with CMTO remained in their initial unit, if not their initial neighbourhood. For the few that relocated, I think critics of programmes like this might think, “Well, families will move out as soon as they get a chance to, as soon as their lease is up.” But we’ve not in fact seen that at all to be the case. Quite the contrary, which is consistent with earlier work that I did in Chicago with the control programme with Jim Rosenbaum and my colleagues. And so I think one measure of satisfaction is the durability of the moves. And so far, we’re seeing persistence in that way.

Jason Mitchell:

If inefficiencies and complexities in the house search process are the main or one of the main drivers of low-income households remaining in low-opportunity areas. And I guess at the same time, the best policies deal with this on a case-by-case basis, by addressing barriers specific to each household, what does all that mean? Is policy inherently unscalable because of the issue of place and local context?

Stefanie DeLuca:

Yeah. This is one of the big, big, big questions that’s on all of our minds as researchers and certainly on practitioner and policymakers’ minds. I think one of the key takeaways from the Creating Moves to Opportunity Programme is that because the program’s success was driven in part by the customization of the assistance that families needed in terms of supporting their housing searches. I don’t think… Not each family needs the same amount of help. And so that way it’s a bit of an adaptive policy that doesn’t have to be super-high touch for everybody. And because of that, customization agencies and staff can sort of even out how much time they spend with families based on their needs. So on some level, I think that that’s really helpful to know.

But I think your other question is important. We don’t know whether this kind of a programme is going to work everywhere. We are looking forward to learning from the expansion sites that this is the HUD’s Community Choice Demonstration Programme the Abt Associates is evaluating that is now operating in eight other places. So Seattle and King County were maybe one set of one region. What happens in other regions? And we’re really eager to learn about whether these sorts of practises are scalable. I think our initial instincts are that these certain practises certainly can translate in more than one kind of setting. The extension to which they’re successful in each setting is something that remains to be seen. But I think the other interesting aspect of your question is whether these are the right kinds of programmes to do in different kinds of regions, is what might work in a rural setting, what might work in a small town, may be different than what might work in a large city that’s surrounded by suburban neighbourhoods. So I think these are still, there’s plenty of good work to do, in other words, Jason, to figure that out.

Jason Mitchell:

Great. You alluded a little to this earlier, but one of the unfortunate realities is that we can’t move all families out of low-opportunity zones given the cost of the housing voucher programme. What does your mixed methods work reveal about ideas to reduce income segregation? How do we create more high opportunity zones, I guess, so families don’t have to uproot and continually move? And maybe talk about that in the context of the work you’ve done and seen at Sandtown-Winchester, and Baltimore.

Stefanie DeLuca:

Yeah. I mean, the way I like to think about this is that it doesn’t have to be an either/or, right? We want to be able to have more than one approach. Because in fact, I think it’s a valuable thing to remember that people, in order to ensure choice, that means that we want to have a menu of options for families, a large menu of things from people to choose from, including staying in neighbourhoods that may be higher poverty or may be familiar. And how do we deal with that, right? Because some critics have said that moving people around is disruptive, and why don’t we create opportunity in place? And I think that’s right. I mean, another thing to keep in mind as we think about some of these critiques is that the most disruptive thing of all is poverty, not Moving to Opportunity programmes and not even gentrification necessarily.

And the other thing to keep in mind is that, at least at at this moment, Moving to Opportunity programmes are not so large and there aren’t so many of them that this is really going to be the thing that destabilises communities. I think poverty destabilises communities more than anything else. But we do have decades of efforts to try to do what people often call comprehensive community initiatives or community development projects. And the researcher in me says, “Well, what’s our evidence?” Not whether it’s the right thing to do to have all of these options and to preserve communities for legacy residents. I mean, which I think all makes sense. But what do we know that we can act on? And I think that’s how I sort of think about this. And as you raise, I did some work looking at the Sandtown-Winchester neighbourhood in Baltimore a few years back, because that was the site of one of the largest community development initiatives to date at the time when we were doing this work.

Sandtown-Winchester by the late seventies, early eighties, was one of the poorest neighbourhoods in the US. This is an eight-by-nine block neighbourhood in West Baltimore, famously known as the place where Freddie Grey was from. And at least by our estimation, Peter Rosenblatt, my co-author and I, at least $130 million was spent on this neighbourhood. What do we have to show for it? So we just looked at similarly situated neighbourhoods that were a little better off or a little bit worse off than Sandtown to see whether Sandtown looked a whole lot different from those neighbourhoods. And what we found was that the efforts to build new homes and to increase homeownership were of course quite successful in Sandtown compared to neighbourhoods that didn’t have this influx of resources and philanthropic support. But shortly after, we saw in the Great Recession, those homeowners were more likely to foreclose on their homes.

And so what I think that revealed is at least, while homeownership is something people talk about a lot is a valuable thing to expand, we have to think about the vulnerabilities that low-income homeowners face when we have these sort of more macroeconomic shocks. And so I think that the long story short is that we have a lot to learn still. I think it’s optimistic that we can muster the philanthropic appetite, enthusiasm, and support, and public support for community development. I think the empirical evidence to date is less compelling than what we know about for moving to opportunity, creating Moves to Opportunity-type programmes.

That said, some new work coming out of Opportunity Insights, more work led by Raj Chetty and other colleagues there, is pointing to some gains from a different place-based effort that happened in the 1990s called the Hope VI Programme. That was another HUD effort to target neighbourhoods, public housing neighbourhoods, that were the highest poverty neighbourhoods in American cities. And in some very early results from the work at Opportunity Insights, Raj Chetty, Matt Steger, Laura Tech, Larry Katz, and others are doing is showing that the revitalization of some of those neighbourhoods in fact had benefits for children in the long run. And so I think we’re starting to see more encouraging evidence about this, and so it’s more of a “stay tuned” on that work.

Jason Mitchell:

Wow. Super, super interesting. I definitely will stay tuned. I guess, switching lanes a little bit, I think it’s fair to say that research on the optimal level of communities with mixed socio-economic groups appears indeterminate. Let me know if you disagree. One side points to improved access to resources and opportunities, while the other one highlights the challenges like social tensions and displacement. How does your research think about the other side of the equation, the local incumbent community and their situation, social perception and expectations versus a group that has been historically disenfranchised? How do we measure that? Does a right balance in communities even exist? I guess I’m sort of thinking about some research exploring this question. There’s a [inaudible 00:29:37] bond and currents paper examining UK housing and a fair amount of research looking at mixed housing and well-being in New Zealand.

Stefanie DeLuca:

Yeah. I mean, some of this starts to get us into a philosophy, a political philosophy. What’s the right balance? And that maybe my next PhD in philosophy, maybe I’ll be able to explore that. But I think this is a great question because we move everyone. I mean, what happens if we try to do that? That’s not possible. I mean, there’s a lot about neighbourhoods we’d like to preserve in place. What we can say is that when neighbourhoods are segregated by race and income in the US, this often goes hand in hand. I know that there are some similarities in the UK, this differs by country in context to some extent. But when we see segregation by income and especially by race in the US, the neighbourhoods with those levels of segregation, the residents suffer because of it. That racial segregation at the residential level is a liability, especially for Black families and children, especially for Black boys.

So we know that if we care about inequality, we care about life chances, health and mortality, that we have to deal with the fact that many of our neighbourhoods are segregated by race and increasingly by income. So we know that much. Where we go from there, as we’ve been talking today, is in part an empirical question if we’re thinking about policy. But there are some bigger questions about what the right mix is. And I think as we’re learning, some of this has to be decided at the local level, what people would like to see. But what commonly happens is there are these debates around things like gentrification. Maybe it’s not so much a percent or a number, but should we be, what do we do when we start seeing new buildings built and bike lanes and more educated residents moving in? And people get really concerned about that.

And I think what we know to date, as I alluded to a little bit earlier, poverty destabilises more than gentrification does. So gentrification people often think displaces people, and we have less evidence for that then for the fact that when we see gentrification, housing prices go up, which reduces the opportunities for low-income folks to move into that community. Or reduces the number of communities in a metro area for low-income families to live in. So that’s certainly a consideration. But it may be that if a mixed-income neighbourhood comes out of gentrification, the families who do get a chance to move in, because we preserve some affordable housing, have children who benefit from that.

I think we know that diversity, socioeconomic and racial diversity, has benefits. We know this goes as far back as the school desegregation literature in the sixties, which had seen some more recent empirical treatment by Rucker Johnson looking at the benefits to desegregation for Black children. And we know that mixed income, and especially when we think about the potential benefits to also having racial diversity, and these are things we know we want to work toward. How we do it, what it looks like for any given neighbourhood and community, I think, is definitely sort of a local political question.

Jason Mitchell:

Yeah. I guess it brings up this kind of question. Are there countries and policies outside of the US that you think could work in creating positive mixed socioeconomic neighbourhoods? To what degree are these policies transferable to other geographies? I’m thinking, for instance, in the UK, there’s something called Section 106, which mandates a percentage for people who need housing assistance, with an average of 19%. That could range from zero to 40%, but that 19% is dedicated to affordable housing. Is it too hard to kind of wonder what the right number is or the appropriate number for things to work in the US? To what degree are your observations around creating moves confined to the US given in some ways its unique approach to the welfare state?

Stefanie DeLuca:

Yeah. I mean, you could even look at Vienna, which has an enormous proportion of its housing stock relative to us that’s set aside for affordable public housing. And it’s absolutely gorgeous sustainable housing. We could have all kinds of even more radical policies on the table. But to your point, how might they work in different political environments? Interestingly enough, we have a programme on the books. It’s not run through the Department of Housing, it’s run actually through Treasury. Which is the Low Income Housing Tax Credit Programme, which incentivizes developers through tax credits to develop affordable housing, but in particular to have some of the housing that they develop be set aside for families with lower incomes. And so this is the largest producer of affordable housing actually in the US.

The housing choice voucher programme provides subsidies for families to use in the private market, what we call LIHTC. The Low-Income Housing Tax Credit programme helps produce affordable housing. And I think that a challenge here is that while we see that developers will take up this offer, there’s still quite a few of these developments get developed in places that are already low-income and racially segregated. And so a question of where these developments go is a bit of a debate right now. Because many of them get developed in neighbourhoods where we’ll have maybe less political resistance to developing affordable housing.

Another challenge is sometimes what “affordable” is. How it’s defined can range quite a bit so as to rule out actually very low-income families. So there are some challenges, but that sort of a policy tool already exists here. And we can certainly… And some folks are thinking about how to leverage it to increase opportunities like those that the CMTO families had. Anne Owens at UCLA is looking at this in California, how developers respond to tax credits to try developing property in higher opportunity neighbourhoods. So I think it’s certainly something we can improve. We have a tool on the books, and so that’s at least a start. But the other part of this is of course, having the political will at the local level for such developments to move forward.

Jason Mitchell:

Got it. Given the history of public housing and the Housing Voucher Programme, it obviously feels like a big part of this is government policy-oriented. How do you think about incentivizing market-based solutions, for instance, community housing funds, impact funds and philanthropic investment? What are the challenges they face? Because I know you’ve talked about in the past, incredibly high cost of building even affordable housing.

Stefanie DeLuca:

I think with the uncertainty, with the new administration and just the existing problem with the high cost of developing housing, we have to think about all of the solutions, have to bring them all to the table. And I think there are definitely some innovative conversations around community land trusts and housing funds. As far as I know, we don’t have a lot of research on how they work. But I think the kinds of public, private, and philanthropic partnerships, we need to welcome more of these and we need to welcome partnerships with searchers. Because I think if we already know that, say, at the federal level, we don’t have the kind of funding. Even if HUD were to survive the current administration, we don’t have enough funding. Only one out of four families eligible for housing assistance actually gets it. So we have to come up with more creative solutions and bring entrepreneurial partners to the table.

I think we are seeing some people already trying to think about how to do this by reducing, for example, one, policy amenable costs, which is with the cost that come with regulation. I’m looking toward Houston, which has had some recent success with building affordable housing, or at least trying to start that conversation by reducing regulatory barriers to development. And so I think that’s another consideration to why it’s so expensive to build housing is regulation, which is another politically touchy question. Especially when some of that regulation is toward promoting green technologies when building housing. But we also, if we were reduce some of that, some of those barriers, we’d get more folks to the table, including VC and other kinds of players who don’t typically get the same kind of air time when we’re talking about housing policy. But probably we should start getting some more of that.

Jason Mitchell:

Interesting. Okay, last question. The Creating Moves paper indicates some really interesting future potential research. I’m reading, “Understanding the effects of scaling up policies such as Creating Moves and other efforts to increase socioeconomic integration on economic mobility will ultimately require specifying and estimating an equilibrium model of neighbourhood choice.” That is super, super provocative. I guess again, this is research for the future, but to the degree you can, can you frame what an equilibrium model of neighbourhood choice means? What it would look like?

Stefanie DeLuca:

Yeah, we thought about this a lot when working on the paper. And if my collaborators were here, they would definitely have a lot to say about this. I mean, I think that part of what we have to consider with any policy is what happens when you do more of it. And this speaks to so many of the questions that, the great questions you brought up today. What’s the right amount? What’s sort of the tipping point? Is something scalable? And I think that, and this speaks to some of the other things I’ve been raising where we have to think about local political will. Which is a hard thing for researchers to manipulate, but we have to consider it.

I mean, I think one way to think about it is that, say, we’re talking about housing policy and what would happen if we increased CMTO like programmes? Or what if we increased investment in community development? We’d have to not just think about housing. We’d have to think about schools. And so when thinking about these kinds of models, we need to think about other key institutions that we’d have to factor in. What is happening with school choice policy? What’s happening with local school control? And think about that.

So I am not sure we have that all figured out, but it’ll also be interesting to see as more localities try programmes like CMTO, what kinds of things look like in those communities moving forward. With the caveat that it’s really unlikely unless we wildly expand the voucher programme. That’s such CMTO-like efforts will throw off a balance of neighbourhood composition by race and income. But I think what we want to just keep in mind is we’re thinking these things through is, it’s both. There’s sort of the housing policy question, but then other key institutions like schools and even local labour markets are part of this conversation as well. And so I think any effort to think about these models has to consider those factors.

Jason Mitchell:

That’s a fantastic way to end. So look, it’s been great to talk about why neighbourhoods matter for creating social mobility, some of the outcomes and challenges in your paper. Creating Moves to Opportunity and what it takes to create more high opportunity zones so families don’t always have to uproot and move.

So I’d really like to thank you for your time and insights. I’m Jason Mitchell, head of Responsible Investment Research at Man Group. Here today with Professor Stefanie DeLuca, the James Coleman Professor of Sociology and Social Policy at Johns Hopkins University. Many thanks for joining us on A Sustainable Future, and I hope you’ll join us on our next podcast episode. Stefanie, thank you so much.

Stefanie DeLuca:

Thank you, Jason. This has been wonderful.

---

This information herein is being provided by GAMA Investimentos (“Distributor”), as the distributor of the website. The content of this document contains proprietary information about Man Investments AG (“Man”) . Neither part of this document nor the proprietary information of Man here may be (i) copied, photocopied or duplicated in any way by any means or (ii) distributed without Man’s prior written consent. Important disclosures are included throughout this documenand should be used for analysis. This document is not intended to be comprehensive or to contain all the information that the recipient may wish when analyzing Man and / or their respective managed or future managed products This material cannot be used as the basis for any investment decision. The recipient must rely exclusively on the constitutive documents of the any product and its own independent analysis. Although Gama and their affiliates believe that all information contained herein is accurate, neither makes any representations or guarantees as to the conclusion or needs of this information.

This information may contain forecasts statements that involve risks and uncertainties; actual results may differ materially from any expectations, projections or forecasts made or inferred in such forecasts statements. Therefore, recipients are cautioned not to place undue reliance on these forecasts statements. Projections and / or future values ​​of unrealized investments will depend, among other factors, on future operating results, the value of assets and market conditions at the time of disposal, legal and contractual restrictions on transfer that may limit liquidity, any transaction costs and timing and form of sale, which may differ from the assumptions and circumstances on which current perspectives are based, and many of which are difficult to predict. Past performance is not indicative of future results. (if not okay to remove, please just remove reference to Man Fund).