FOR IMMEDIATE RELEASE: August 4, 2019
CONTACT: Patricia Lamiell, lamiell@tc.columbia.edu, 212-678-3979
New York, NY – In Seattle and surrounding King County, Washington, a program co-designed by Teachers College economist Peter Bergman has produced unprecedented gains in moving low-income families to “higher opportunity” neighborhoods by significantly reducing common barriers in using housing choice vouchers.
The vouchers are provided through the federal Housing Choice Voucher program, commonly known as Section 8, which gives rental subsidies to private landlords who rent apartments and homes at market rates to qualified low-income tenants.
Previous research by several of the study’s authors has shown that every year spent in a higher opportunity neighborhood during childhood increases the likelihood of college attendance and total lifetime earnings by as much as $200,000. The younger a child is when he or she moves into a higher opportunity neighborhood, the higher his or her projected lifetime income.
The federal government spends $20 billion annually on housing choice vouchers. Although voucher recipients have some options to move to different neighborhoods, most of the 2.2 million families live in relatively high-poverty, low-opportunity neighborhoods.
Raj Chetty, the William A. Ackman Professor of Public Economics at Harvard University and director of Opportunity Insights, a Harvard-based nonprofit, teamed up with public housing authorities in Seattle and King County to create the study – Creating Moves to Opportunity (CMTO), a large-scale randomized evaluation of neighborhood choices by voucher recipients. The average income for the 274 families in the study was about $19,000 per year. Most of the families had two children, and 13 percent were homeless at the start of the study.
Families who became eligible for vouchers were randomly selected to be offered additional services, including information about the location of high-opportunity areas, personalized rental application coaching, housing search assistance, and financial assistance. Additionally, CMTO staff actively recruit new landlords to rent to families. (Importantly, families receiving CMTO services are not required to move to a designated high-opportunity neighborhood and maintain their housing choice voucher regardless of their neighborhood decision.)
Some 54 percent of families receiving additional services from CMTO chose to move to opportunity neighborhoods, compared to approximately 14 percent of families who received standard services from the public housing authorities. The CMTO program has so far increased the share of families who lease units in high-opportunity neighborhoods by 40 percentage points.
“The results of CMTO are incredibly encouraging,” says Chetty. “It shows that in Seattle and King County segregation is not a result of deep preferences that families have to live in specific neighborhoods or widespread discriminatory preferences among landlords.”
He calls the new finding “the largest effect I've ever seen in social science,” adding “we found that a small intervention can dramatically change a family’s ability to provide their children with the upward mobility promised in the American Dream.”
Bergman has played a key role in teasing out which variables in the study most affected families’ behavior. “The rationale for the study was, essentially, ‘Now that we know how much these neighborhoods matter, let’s figure out how to help families move there,’” he says. “And what we’ve learned is that it’s not just one barrier that prevents families from moving to higher opportunity neighborhoods.”
For example, Bergman says, providing information alone is cost-effective, but “the impact isn’t huge,” and the same is true of financial assistance. Rather, what is critically important, he says, is “the ability to tailor support to meet each family’s needs.”
Bergman was recruited to the research team because he was already running a related study of an intervention in which information about local school quality, which is readily accessible to middle- and high-income families through websites such as Zillow, was made available to families searching for housing through the website for the Section 8 program.
Bergman is also helping Chetty’s team develop a clearer understanding of what actually constitutes a higher opportunity neighborhood and why.
“It’s an ongoing research question what the determinants of a good neighborhood really are, and whether we can affect those determinants,” he says. “How much is due to school quality? How much is due to the nature of children’s peers? Obviously, in addition to providing access to better neighborhoods, we want to improve existing lower-opportunity neighborhoods. Because we can’t move everyone.” The cost of the intervention was $2,600 per family – but with the gains in lifetime income, “the intervention is close to paying for itself.”
“Given these huge effect sizes, the question is, could we redesign affordable housing policy to move a lot more families?” Bergman says. “We’re working now with housing authorities across the country to try to scale this up.”