NEW ISSUES, UNRESOLVED QUESTIONS, AND THE WIDENING DEBATE
Far from resolving itself over time, the tension related to the siting of subsidized housing is as high now as it has ever been. Several dynamics have contributed to the contemporary tug-of-war between community development and the spatial goals of fair housing. The most important is the ascendancy of dispersal as a policy idea. The idea of mobility and moving people out of pockets of concentrated poverty has dominated urban policy in the United States since the 1990s. The story of this policy idea and its recent rise need not be rehearsed again here.1 It is enough to note that since the 1990s and since the “discovery” of concentrated poverty by social scientists in the late 1980s, the idea of moving people out of disadvantaged neighborhoods has been dominant. Thus, contemporary fair housing goals related to integration are expressed in the language of poverty deconcentration rather than race. The movement has generated an entire vocabulary of terms and concepts that pepper the narrative about high-poverty neighborhoods and the twenty-first-century solution to urban poverty. Central in this discourse is the concept of “opportunity”—indeed, this concept is the lodestar of the dispersal movement. It is used most frequently not as a noun but as an adjective, describing the type of neighborhood that dispersal advocates regard as appropriate for affordable housing development.
Debate over the effectiveness of dispersal is greater within academia than it is within policy circles. Many studies have documented the pattern of modest and inconsistent gains from dispersal, as well as the costs to families of such a strategy. These findings have produced a nuanced understanding of the circumstances under which such efforts might be expected to generate positive and negative impacts for families. In policy circles, however, little of the nuance survives, and the dispersal strategy is rarely so thoroughly debated. Dispersal is the model of the moment and is very widely accepted as the best path forward for dealing with urban poverty. As I have argued elsewhere, this virtually universal enthusiasm for dispersal is in no small measure due to the ancillary benefits to local officials of opening up significant opportunities for renewed investment and gentrification in core parts of cities.2
Adding to the complexity of the current debate is the emergence of sustainability as an important objective for urban policy. Successive recent presidential administrations, but particularly Obama’s, have stressed the need for coordinating infrastructure investments in ways that reduce energy consumption and produce more sustainable outcomes. Among other things, this has meant an examination of whether housing and transportation investments should be co-located so as to enhance the value of each. Low-cost housing, it is thought, should be placed near to public transportation infrastructure so that the combined housing and transportation costs of low-income families can be minimized, and so that a ready clientele for public transit exists in proximity to the services created.3 This formulation, however, has been strongly opposed by fair housing advocates who see in it a spatial pattern of investment that will, in their minds, perpetuate segregation and minimize the development of affordable housing in opportunity areas. Within the Obama administration, the contradiction between the pursuit of urban sustainability and the pursuit of dispersal was never fully resolved.4
The Obama administration’s relative activism on matters of fair housing also elevated the debate on the spatial distribution of subsidized housing. The administration propagated new rules on disparate impact in 2013 and on affirmatively furthering fair housing in 2015 to guide fair housing work. The Supreme Court’s 2015 decision in Texas DHCA v. ICP has also focused attention on the issues considered here. These policy developments took place, however, at a time in which the landscape of race and income was changing dramatically in American urban areas, necessitating changes in the way in which spatial goals are articulated. Where once city and suburb stood for the enduring divisions of race and class in U.S. metro areas, now more sophisticated spatial analyses are necessary to describe what some call “the geography of opportunity” in American urban areas.
Changing Context of American Metropolitan Areas
Issues of regional equity and racial segregation and integration are complicated by an increasingly complex suburban demography in the early twenty-first century. The first significant acknowledgments of suburban diversity were analyses of inner-ring suburban decline in the 1980s and 1990s.5 The rapidly aging housing stock and weak tax base of inner-ring communities, as well as their relatively high levels of poverty, belied the stereotype of the homogeneous, white, upper-middle class suburb that dominated the popular view of American metropolitan areas. Whether or not this stereotype was ever fully accurate, these changes in suburban demographics have forced a new understanding of the American metropolis.6 As Karen Chapple argues, “Changes in metropolitan structure have overturned the city-suburb dichotomy as poverty has grown in suburbs and the affluent have flocked to cities.”7
Contemporary American urban areas are a complex landscape of central city revival and gentrification alongside sporadic economic decline and growing economic and racial diversity in the suburbs.8
Suburban Diversity
The economic and demographic profiles of American suburbs have changed dramatically since the 1960s. While suburbs were once thought of as places of extreme race and class homogeneity, they are no longer so. In fact, some argue that the race and class uniformity of suburban areas was always overstated; historian Andrew Wiese writes of his colleagues that “historians have done a better job excluding African Americas from the suburbs than even white suburbanites.”9 Regardless, the degree of racial, ethnic, and class diversity has soared over the past several decades. In fact, the degree of diversity within and across suburbs has moved a number of analysts to propose various typologies of suburbs in order to account for the full range of realities beyond the borders of the central city.10 Unique forms of suburban differentiation have inspired a number of journalistic and academic efforts to capture the variety of experiences beyond the city limits, producing analyses of places called “edge cities,” “boomburbs,” “exurbs,” “technoburbs,” and “ethnoburbs.”11 The differences between suburbs, some note, are often more dramatic than those between city and suburb.12
Suburban diversity is in part racial. Rates of suburbanization among African Americans have been significant since the late 1960s. At the same time, some cities have seen significant losses in the number of African American residents, Atlanta, Washington, DC, and Chicago notable among them.13 In major metropolitan areas of the country, more African Americans live in the suburbs than in central cities, and in at least some metropolitan areas, these residents appear to live in a wide range of suburban types.14 Still, there is a concern that not all suburban communities have become racially diverse and that in fact settlement patterns outside the central city simply repeat patterns of segregation that characterized neighborhoods within the city.15
The picture of suburban diversity includes a large and growing number of immigrants, too. The image of new immigrant groups crowding together in central city neighborhoods belongs to a different century. As urban planner Katrin Anacker points out, some immigrant groups are resettling directly to suburban communities, bypassing central cities altogether.16 By the end of the first decade of the twenty-first century, there were more immigrants living in American suburbs than in central cities.17
Finally, suburban diversity also means growing poverty rates extending not only beyond the central city, but also well beyond inner-ring suburbs. Elizabeth Kneebone and Alan Berube note that during the 1990s, the number of persons below the poverty level in American suburbs grew at twice the rate of city poverty, and accelerated even more so after 2000.18 Inner-ring suburbs as well as exurban areas have relatively higher poverty rates, but there is also growing poverty in the middle suburbs. Suburbs, in fact, are seeing rapidly increasing rates of “concentrated poverty”—a phenomenon historically associated with the most disadvantaged inner-city neighborhoods.19 The “near poor,” those just above the federal poverty level, are even more suburbanized than are persons below the poverty line.20
Some central cities are in effect expelling their poor and losing significant numbers of people of color as a result of gentrifying neighborhoods and rapidly changing land and housing markets that have generated extreme affordability problems for low-income households. Cities such as San Francisco, Seattle, Atlanta, Chicago, and Washington, DC, are seeing rapidly increasing rents that are pushing out lower-income households, who are increasingly moving to nearby suburban counties.21 At least a portion of this phenomenon has been produced by large-scale government gentrification efforts in the form of public housing redevelopment.22
The importance of these demographic changes for the enduring debate between fair housing and community development is not so much in the fact that suburbs are declining and cities reviving, but in the very fact of place-based change. Presumably, fair housing advocates will continue to identify concentrations of people of color and argue for their greater integration regardless of whether these concentrations are in central cities or in first-ring suburbs. As long as segregation persists, it will be the target of fair housing remedies, regardless of the particular pattern of segregation within a metropolitan area. What is important is the more basic fact that the “geography of opportunity” is changing at all, and that metropolitan areas are not static entities. Under such conditions, the integrationist is faced with a difficult task in terms of identifying appropriate “sending” and “receiving” communities for integration initiatives. If the central city revival continues at its current pace, will integrationists be looking to “open up” the same communities that they worked to desegregate a generation earlier? And will they be in the position of desegregating communities that had been the target of their integrating initiatives of a previous generation? The changing metropolitan area puts integrationists in the position of forecasting future demographic changes in order to identify the appropriate targets for their spatial strategies. The potential, in such a situation, for chasing one’s tail does not seem so remote.
Gentrification and Fair Housing
The rapidly increasing rents and housing values in many American urban areas threaten to force large numbers of low-income residents and people of color out of central cities in the near future. Though not a universal phenomenon, gentrification is increasingly common and has been accelerated since the recovery from the 2007–2010 recession.23 New York City and San Francisco are the most prominent cases, but the phenomenon has produced significant changes in Chicago, Seattle, Washington, DC, and reaches to so-called mid-level cities such as Minneapolis and Portland, Oregon.24
For areas seeing rising prices and displacement, subsidized housing is an important way to preserve affordability and keep people in neighborhoods they would otherwise be forced to leave. In Washington, DC, for example, where gentrification has led to significant displacement of people of color, subsidized housing efforts have been recognized by local officials as an important tool in keeping residents in place as neighborhoods change around them.25 City officials passed a budget for 2016 that directed $178 million to affordable housing in part to protect residents in gentrifying neighborhoods.26
But merely building subsidized housing in gentrifying neighborhoods does not guarantee that existing residents will be lucky enough to benefit from it, especially in cities with very long waiting lists for such housing. This has led some places, such as San Francisco, to provide long-term residents priority access to subsidized housing in gentrifying neighborhoods. In 2016 the city developed a plan to give residents of gentrifying neighborhoods preferential access to subsidized housing in order to help them remain in their communities. Similar efforts, referred to as “neighborhood preference” plans, have been used in the past by largely white communities to exclude newcomers, and thus have been targets of fair housing advocacy for many years. In this case, however, the City of San Francisco wanted to protect households of color from displacement and forced relocation from their neighborhoods that were seeing rapid increases in housing costs. Federal officials initially applied a narrow fair housing interpretation and rejected the San Francisco plan, arguing that it would perpetuate racial segregation despite the obvious demographic changes taking place in the city and in the city’s predominantly black neighborhoods. Leaders of the black community in San Francisco reacted, calling the HUD ruling “devastating” and “an egregious injustice against African-Americans in this city.”27 The application of fair housing logic in this case was harming people of color rather than protecting them. The city appealed HUD’s ruling, and the federal agency relented somewhat, allowing the preference but requiring the city to expand eligibility to residents from throughout the city and without regard to race.28
San Francisco is not the only place attempting to use neighborhood preferences to protect households at risk of displacement from gentrification. Anti-gentrification neighborhood preference has been contested in New York City by those who claim that predominantly white neighborhoods are using it to exclude people of color.29 The use of preferences by Portland, Oregon, in contrast, has not encountered opposition locally or by HUD.30
The issue of gentrification provides another opportunity for the fair housing / affordable housing tension to surface. Fair housers driven by the impulse to desegregate central city neighborhoods are wary of attempts to preserve affordability in what previously had been low-income communities. They may oppose both the construction of subsidized housing in these neighborhoods and the use of neighborhood preferences to target that housing toward existing residents. Affordable housing and community advocates, on the other hand, place a higher premium on protecting low-income households and households of color from involuntary displacement that accompanies gentrification.
Opportunity Is a Place
The concept of “geography of opportunity” emerged in policy circles during the 1990s as federal housing policy was shifting toward the mobility and dispersal paradigm. The term is meant to highlight the spatially differentiated pattern of life chances within metropolitan areas and to reflect the fact that opportunities are unevenly distributed across urban areas. In policy terms, the phrase “opportunity neighborhood” is used to denote locations that are desirable because of the range of private and public amenities they possess and for the advantages they confer upon residents. “Opportunity neighborhoods” are contrasted with disadvantaged neighborhoods, generally defined as neighborhoods with higher levels of poverty and a higher proportion of people of color.31 On the assumption that residence in opportunity neighborhoods improves the quality of life of targeted populations, federal housing policy shifted during the 1990s to programs that were designed to move federally subsidized households toward opportunity neighborhoods. Opportunity neighborhoods have since become the holy grail of U.S. housing policy, with a range of local efforts across the country, both public and private, adopting the framework.
The “opportunity neighborhood” discourse originated outside of a narrow fair housing framework. In fact, for more than a decade it was carefully associated with the objective of poverty deconcentration rather than racial desegregation. Early policy initiatives within the opportunity neighborhood framework were aimed at moving people around in order to establish a better mix. That is to say, early programs to enhance opportunity were predominantly displacement/relocation/redevelopment efforts. The original framing of the concept of opportunity neighborhoods was hostile to the idea of community development. Many of the proponents of the opportunity neighborhood approach saw the solution to urban problems in the reorientation of policy initiatives away from small-scale, place-based community development and toward facilitating greater access for lower-income populations to areas outside the core. Thus, David Rusk and others argued that even the largest community development efforts have failed at turning around the basic pattern of central city decline.32 The first wave of opportunity neighborhood initiatives that took place between 1980 and 2000 reflected these ideas and emphasized the geographic mobility of low-income people.
“Opportunity Neighborhood” Initiatives
In practice, early programs at the federal and local level have been aimed at enhancing the access of the poor and people of color to “opportunity neighborhoods” in two ways. First, and most commonly, programs such as the Gautreaux mobility program, the Moving to Opportunity demonstration program, and other deconcentration and desegregation efforts are designed to achieve the desired outcome by moving people to opportunity through relocation, either forced or voluntary. Modifications to the longer-standing programs such as the housing choice voucher program have also been considered for their potential to increase the movement to opportunity among assisted households.33 Second, and somewhat less frequently, programs are designed to bring opportunity to places through redevelopment. The HOPE VI program of public housing demolition and relocation worked, according to its proponents, in both directions, first displacing and forcing the relocation of social housing residents and then redeveloping social housing estates into mixed-income communities and triggering a real estate and investment revival in areas that previously had been largely ignored.34
The classic expression of the urban “geography of opportunity” has relied on a pair of simple dichotomies. The first of these was the Manichean division of neighborhoods into categories of “good” or “bad.”35 High-poverty and/or racially segregated neighborhoods were inevitably interpreted as possessing and producing problematic socioeconomic processes. They were seen as neighborhoods that people should strive to leave, and, in the case of public housing communities, areas requiring total clearance, demolition, and reinvention. Conversely, opportunity neighborhoods were seen, equally simplistically, as largely free of problematic aspects for low-income households. The second dichotomy driving the early ideas about opportunity neighborhoods is a geographic one that juxtaposes central city and suburb, largely situating opportunity in suburban areas and its opposite in older, core neighborhoods of metropolitan areas.36
Initially, opportunity neighborhoods were typically operationalized by racial mix, or by poverty rate (and less frequently, by both).37 However, if the concept of opportunity neighborhood is meant to illuminate the pattern of life chances and potentialities available across metropolitan areas, and how these correlate with poverty or race, then the concept itself should not be measured by the degree of poverty or race. Measuring the degree of opportunity in a neighborhood by measuring the percentage of people of color or the poverty rate defines communities of color as low-opportunity places. The utility of the concept of opportunity neighborhood, if there is utility, should be in allowing an analysis of the types and degrees of opportunity that are available in communities of color or in low-income communities as compared to other neighborhoods. Such analysis is precluded when opportunity is defined according to the race and poverty status of residents.
As time has passed, the inadequacies of such definitions have generally given way to more sophisticated measurements.38 Measures of opportunity increasingly focus on non-demographic indicators such as proximity to employment, transit, and well-performing schools.39 As the concept has advanced in use, furthermore, it has taken on complexity in other ways. Most significant was the emergence of a more multidimensional definition of opportunity. Instead of a simple dichotomy, opportunity is understood by some to have several dimensions, including proximity to employment centers, high-quality educational facilities, access to transit, and even environmental opportunity (defined as freedom from nearby environmental hazards). Such multidimensionality should also imply that in some cases the dimensions of opportunity could be cross-cutting and in fact contradictory. Consequently, a third important development in the notion of “opportunity neighborhood” might be the understanding that areas can be simultaneously high in some types of opportunity and low in others. Finally, there is a high likelihood that these more sophisticated geographies of opportunity will vary dramatically from one metropolitan area to the next on the basis of how jobs are distributed throughout the region, the nature and extent of public transit systems, and other characteristics of place and policies.40
This more nuanced understanding of opportunity is not universally held, however. One still finds “opportunity maps” that insist on a simplistic single index ranking neighborhoods from low to high opportunity.41 The 2012 report Equity, Opportunity, and Sustainability in the Central Puget Sound Region is an example of the tendency toward a simplistic single index of opportunity.42 Though the report measures and maps opportunity along five dimensions, it does not discuss the ways in which the five dimensions reflect different geographies and what the mix of opportunities is within different neighborhoods. Instead, the authors forfeit the richness of five different indicators by forcing them into a single composite index. The idea that opportunity can be reduced to a single index and that neighborhoods can be characterized as either having or not having opportunity must give way to the idea that areas differ in the types of opportunity that they provide or lack. Together, these developments in the concept of opportunity suggest a matrix of types of opportunity and places.
While the first wave of opportunity initiatives was focused primarily on housing policy and programs related to the location of assisted households (and assisted units), the second wave has increasingly involved a range of policy areas. Perhaps most notable is the role that transit investments have played in propelling the idea of access to opportunity, as well as in helping to define the elements that make up an opportunity matrix. Some current efforts at measuring and mapping opportunity emerged from regional efforts to plan transit investments.43 These efforts have been aimed at maximizing the impact of transit on improving accessibility for lower-income, transit-dependent populations. Other opportunity mapping efforts have emerged from advocacy efforts frequently supported by foundations, pursuing the goal of regional equity, itself a concept that is variously defined.44
Opportunity and Fair Housing
When opportunity is defined only by race, as in the Gautreaux program, there is truly no distinction between the mobility objectives of the program and the desegregation objectives of contemporary fair housing doctrine. But even when policy makers shifted language from racial desegregation to poverty deconcentration, the overlap between the objectives of the “opportunity neighborhood” agenda and fair housing were obvious and extensive. Fair housing advocates have, as a result, generally been quite supportive of the wave of opportunity initiatives and policy language, seeing in them a means of achieving integration goals. Concentrated poverty in the United States is heavily racialized—African Americans in poverty are many times more likely to live in concentrated poverty than their white counterparts, and the notion of the “opportunity neighborhood” has been embedded in various nonfederal racial desegregation initiatives, including programs that resulted from the desegregation lawsuits settled during the 1990s.45
The Siting Controversies of the LIHTC
As the debate between fair housing and community development has renewed and intensified since 2000, fair housing advocates have been aggressive in applying fair housing goals to the nation’s largest program of subsidized housing production, the Low Income Housing Tax Credit program. The decentralized nature of the allocation of tax credits under LIHTC and the fact that the federal authority for the program is the Department of the Treasury and not HUD make LIHTC unique among federal housing programs. Fair housing advocates have reasonably and successfully argued that the provisions of the Fair Housing Act are as relevant for LIHTC, a program not operated by HUD, as they are for any program run by the agency. This advocacy has led to a spate of studies about the spatial distribution of tax credit projects and whether they do in fact reinforce patterns of racial segregation. It has also led to legal action challenging the allocation of tax credits in some states. Fair housing advocates argue that the program is being operated in ways that perpetuate segregation by placing too many units in minority and high-poverty neighborhoods.
The Spatial Distribution of Tax Credit Housing
The program operates by providing tax credits to investors in subsidized housing. The program, enacted in 1986, authorized $1.25 per capita in tax credits and allocates these on a state-by-state basis. The amount of credits allowed is currently adjusted for inflation. Each state develops a Qualified Allocation Plan (QAP), which sets out the guidelines for allocating tax credits to developer applicants. These QAPs allow the states to build into the program ancillary policy objectives by incentivizing certain types of developments, such as those near transit facilities, or projects with energy-saving designs, for example. In fact, the federal legislation itself requires that QAPs incorporate additional selection criteria, including whether the project serves populations with special housing needs, provides for eventual tenant ownership, or is energy efficient.46 The inescapable conclusion from any reading of the statute is that Congress intended LIHTC to serve many policy objectives and that it wanted states to have some flexibility in the prioritizing of those objectives.
Congress went beyond merely suggesting additional objectives to be incorporated into the tax credit program by specifically mandating three such objectives. The legislation requires preferences be given to projects that serve the lowest-income tenants, that provide assisted housing for the longest period of time, and for projects located in distressed neighborhoods (so-called “qualified census tracts”—QCTs) that contribute to “a concerted community revitalization plan.”47 QCTs are defined in the law as tracts with either a poverty rate greater than 25 percent, or a tract in which more than 50 percent of households have incomes at or below 60 percent of the area median income. The QCT requirement is, in effect, a congressional directive to use LIHTC to support community development projects in disadvantaged neighborhoods. This provision of the program was added by amendments in 1989 and further defined in 2000. Thus, on those two occasions Congress indicated not only that projects in QCTs were acceptable, but that they were to be incentivized.
The QCT requirement is the provision of the law that is most widely opposed by fair housing advocates. Congressional intent is fairly clear in this case, and it is that intent that fair housing advocates oppose. Fair housers generally consider the QCT requirement a mistake, a misguided continuation of housing policies that have led to segregation. As fair housing attorney Elizabeth Julian argues, “When the LIHTC program was created, the legacy of segregation in prior housing programs for low-income people was ignored in both the statute and the regulatory process.”48 Revision of the QCT requirement is a standard recommendation in assessments of the LIHTC program.49 Frequently, LIHTC implementation is criticized for ignoring the second clause of the QCT requirement, that the housing built in disadvantaged neighborhoods be tied to a “concerted community revitalization plan.” That is, LIHTC projects in QCTs are criticized for being one-off projects that only have the effect of locating affordable, subsidized units in a high-poverty neighborhood rather than being part of a larger community development effort. In some cases, the community development objective of LIHTC is simply ignored or dismissed in fair housing analyses of LIHTC. For example, a national analysis of state QAPs, sponsored by the Poverty and Race Research Action Council, begins with this assertion: “LIHTC is most valuable when it does things that choice-based housing vouchers cannot do or do as well.”50 Having established its own standard for evaluating the program, the analysis goes on to say, “therefore, LIHTC developments should provide housing in situations where vouchers are difficult to use.”51 This proposition is then used as the principal, indeed the lone standard for the assessment of QAPs that ensues.
The spatial distribution of tax credit units has, in fact, attracted a great deal of research attention in the past fifteen years.52 Social scientists have examined the degree to which tax credit projects have penetrated the suburbs, and analyzed the distribution of units according to the demographic characteristics of locations, school quality, and crime rates. The clustering of LIHTC units has been assessed using spatial statistics, too. All this is done to assess the degree to which the program upholds fair housing expectations. The findings of these many studies are converging on a single story: while LIHTC is not integrating communities, it is also not contributing to greater segregation or concentrations of poverty. Researchers have found, for example, “no evidence that the LIHTC program contributes to greater segregation” and in fact find that at the metropolitan level, increases in LIHTC production are associated with declines in racial segregation.53 Similarly, a study of all projects developed between 2004 and 2009 reports that “concerns that the LIHTC-subsidized development is contributing to substantial poverty concentration... are largely misplaced.”54 In fact, LIHTC projects actually decrease poverty rates in high-poverty neighborhoods.55 The tax credit program does a better job than other subsidized housing programs in building in suburban areas, and LIHTC projects tend to be located in less distressed neighborhoods than other low-income housing production programs.56
On the other hand, a study of LIHTC in Dallas found that almost half of all units have been built in disadvantaged neighborhoods, while just more than half are located in neighborhoods that reflect the average social conditions within the region.57 In Ohio, researchers found that almost half of tax credit units were built in high-poverty neighborhoods, and less than a third built in neighborhoods of “low racial concentration.”58 Another study of ten metro areas found that in most of the regions studied, LIHTC is clustered in central-city neighborhoods with comparatively high rates of poverty and higher percentages of people of color.59
In the end, however, the real variety in these studies is not so much the empirical findings as it is the interpretation given to those findings. For example, while some conclude that LIHTC is not deepening segregation or poverty concentrations in the areas studied, others apply a different standard and conclude that LIHTC is not integrating lower-income households.60 Not addressed in any of these studies is what should actually be expected from a program that has an incentive to contribute to community revitalization built into it and that, from state to state, is enlisted to serve a range of additional policy objectives. Instead, virtually all recent studies of the program focus on one objective only, the spatial dispersal of tax-credit housing.
LIHTC Legal Actions
As posed by fair housing attorney Elizabeth Julian, the challenge for the LIHTC program is to not follow “in the footsteps of its predecessors by agreeing to trade off the civil rights of low-income people of color in order to get the housing.”61 Lawsuits in several states have challenged local practices in order to ensure that outcome. The legal actions have contested QAPs that, fair housing advocates feel, have resulted in too high a concentration of LIHTC units in disadvantaged minority areas.
NEW JERSEY
One of the first major suits of this type was filed in New Jersey in 2003 by the Fair Share Housing Center and the Camden Chapter of the NAACP.62 The suit challenged the New Jersey Housing and Mortgage Finance Agency’s Qualified Allocation Plans for 2002 and 2003. The Fair Share Housing Center “pushed for a ruling from the Court that would prevent any LIHTC allocations in high-poverty, predominantly minority census tracts.”63 The case pitted fair housing advocates against affordable housing providers and community developers. The plaintiffs strongly challenged the idea that building tax credit housing in central neighborhoods had any potential to revitalize the community. Journalist Robert Neuwirth quotes the associate director and staff attorney for the Fair Share Housing Center as claiming that “our case challenges the notion that more or new affordable housing in cities is fundamentally helpful for revitalization. In fact, building affordable housing in the cities has no net revitalizing effect at all.”64 This is part of the larger fair housing argument regarding the ineffectiveness of community development and the contention that affordable housing, in any case, does not contribute to such goals.65
Affordable housing developers responded by arguing that the position of the plaintiffs in the New Jersey case, one that would limit LIHTC housing in core neighborhoods, was the equivalent of “condemning poor people to awful living conditions while claiming to fight on their behalf.”66 In the end the court ruled in favor of the defendants, upholding the New Jersey QAP. Since then, however, the state has changed its allocation plan in the direction advocated by fair housing activists and now includes more incentives for development in “opportunity neighborhoods.”67
DALLAS
In Texas, the Inclusive Communities Project (ICP), a fair housing advocacy group based in Dallas, filed suit in March 2008 claiming that the Texas Department of Housing and Community Affairs (TDHCA), the state allocator of tax credits, was causing tax credit units “to be disproportionately located in the slum and blighted neighborhoods in the City of Dallas.”68 The ICP further argued that TDHCA actions were preventing the development of LIHTC units in white neighborhoods of the region. Statistics showed that 85 percent of LIHTC units in the region were in minority tracts, compared to only 51 percent of all rental housing units, and that Dallas-area LIHTC units were located in “neighborhoods with high crime and high poverty rates and that are blighted by industrial facilities such as illegal landfills.”69 The ICP complaint urged the court to establish balance in the distribution of LIHTC projects, asking for a requirement that the TDHCA “allocate Low Income Housing Tax Credits in the Dallas metropolitan area in a manner that creates as many Low Income Housing Tax Credit assisted units in non-minority census tracts as exist in minority census tracts.”70
The TDHCA spent over $1 million defending itself in this suit and argued that the spatial distribution of tax credit units in Dallas was due to the choices made by developers and to the QCT incentive. The ICP argued that the over-representation of LIHTC units in minority neighborhoods was caused by the agency denying projects in white areas. The U.S. District Court found in favor of the plaintiffs on the central question and ordered Texas to revise its selection criteria for tax credit projects to emphasize high-quality schools and avoid proximity to disamenities.71 The State of Texas appealed the case and in the end won when the district court ruled that the ICP had not proven that the Texas allocation system was causing the spatial and racial disparities in tax credit projects in the Dallas region.72
MINNEAPOLIS–SAINT PAUL
In 2014, fair housing advocates filed complaints in the Twin Cities of Minneapolis and Saint Paul against the State Housing Finance Agency, the regional planning agency (Metropolitan Council), and the two central cities, claiming that each has operated the LIHTC program in ways that perpetuate segregation.73 The complaints produced the same battle lines seen in the New Jersey case, with community development organizations lining up strongly in opposition to the filings, concerned that the legal actions were aimed at significantly limiting their efforts in core neighborhoods of the region. Fair housing advocates in the Twin Cities mounted an aggressive attack on community development, to the point of publicizing the salaries of CDC staff, accusing them in essence of enriching themselves at the expense of lower-income people of color in the neighborhoods in which they operate. The attacks were accompanied by analyses of community development projects purporting to show that they do not produce benefits for the community, and that they are overly costly.74 Joining CDCs in opposition were, of course, the four defendants (the state, the regional planning body, and both central cities), a group of Latino elected officials from the core neighborhoods of the central cities, and a coalition of community organizations and residents working in core neighborhoods.
The Twin Cities fair housing activists were joined in their efforts by the New York attorney who was counsel for the plaintiffs in the Westchester case.75 The actual complainants were a religious-based housing advocacy group, three inner-ring suburbs, and three Minneapolis neighborhood groups. These latter groups joined the complaint because they regarded their own areas as having done their fair share in providing affordable housing. The communities involved, both the inner-ring suburbs and the neighborhoods represented among the complainants, had a large amount of “naturally occurring affordable housing” and, they felt, more than their share of affordable housing.
There was significantly less evidence to support the LIHTC complaints in the Twin Cities compared to the Dallas case. The distribution of tax credit units was roughly proportional to need, and racially concentrated areas of poverty had received less than 10 percent of tax credit units over the five years preceding the filing of the complaint. Even the two inner-ring suburbs that joined the plaintiffs had demonstrably not received an outsized share of tax credit units.76 In May 2016 both cities settled the complaints with HUD, agreeing to participate in an extensive analysis of impediments to fair housing in the region that would include extensive engagement with community members.77
Sustainability and Housing/Transportation Affordability
The national debate over the siting of subsidized housing has been further complicated by recent government initiatives in the area of sustainability. The Obama administration was the first to promulgate and pursue a set of policy principles directly related to sustainable urban development and “livability.” The largest first-term initiative in this area was the Sustainable Communities Initiative (SCI), a partnership effort between HUD, the Department of Transportation, and the Environmental Protection Agency. Grants to local and regional governments were made in 2010 and 2011 to support regional planning and development efforts that would coordinate housing, urban development, and transportation investments to reduce energy consumption, environmental deterioration, and greenhouse gas emissions in major metropolitan areas. More than $230 million in grants were made to 143 recipients to coordinate local planning aimed at achieving six livability principles for metropolitan areas.78 The principles emphasize transit and housing equity, coordinated local investment strategies, and growth that supports existing infrastructure investments.
At the center of SCI was the goal of coordinating housing and transportation policy. HUD took several additional steps in that direction, including development of a Location Affordability Index (LAI) in 2014 as a new way of measuring housing affordability. The LAI measures the combined housing and transportation costs in a neighborhood, providing a more nearly complete understanding of the true cost of living in any given area than is provided by traditional housing affordability measures. Whether it is used to determine how housing programs impact the transportation costs of assisted families or where to place assisted housing in order to minimize transportation costs, the LAI highlights the advantages of locating affordable housing in core areas that are well served by transit.
The Obama administration also provided support to local governments for transit-oriented development as a way of maximizing both housing and transit investments. Transit-oriented development was seen by the administration as a more efficient form of land use in metropolitan areas, ensuring greater job accessibility for lower-income residents, and ensuring a greater ridership base for the transit systems the administration supported. Also providing a rationale for the co-location of transit and affordable housing is the fact that transit investments frequently drive up housing values nearby.79 Some observers refer to this as “transit-induced gentrification” and recommend subsidized housing as a way of mitigating displacement that might result from rising housing prices.80
The spatial location of most subsidized housing means that it generally ranks high on various sustainability measures. In Chicago, for example, subsidized housing projects are located, on average, in more sustainable neighborhoods than those inhabited by housing choice voucher households.81 Public housing high-rises for seniors and LIHTC units scored the highest in terms of neighborhood sustainability.
The challenge, of course, is to reconcile policy initiatives designed to enhance sustainability policy with the fair housing directive to disperse subsidized housing. The sustainability imperative for the Obama administration was transit connectivity—that is, the co-location of assisted housing and transit to reduce the transportation costs of assisted households, and the more intensive use of existing infrastructure. Such strategies imply greater investment in affordable housing in core areas of metropolitan regions that are well-served by transit and other infrastructure. The spatial strategy of fair housing, in contrast, is to disperse and deconcentrate assisted households to “opportunity neighborhoods,” many of which are ill-served or entirely unserved by transit.82 While location-efficiency goals prioritize development in the core, the spatial objectives of fair housing emphasize the decentralization of low-income households of color.
The tension between the two goals is clearly recognized by fair housing advocates. A leading national advocacy organization for fair housing, the Poverty & Race Research Action Council, for example, called the LAI an “inappropriate tool for siting new low-income housing,” and fair housing advocates have opposed transit-oriented development plans that call for affordable housing along transit lines because of fears that to locate assisted housing by transit would perpetuate segregation.83 In fact, fair housing activists worry that HUD and the Department of Transportation overemphasize the importance of housing cost and transit access, and urge policy makers instead to “recognize the additional variables greatly impacting household costs and quality of life.”84
Another response made to the sustainability challenge is to argue that the benefits of transit accessibility and even employment accessibility are not as important as the advantages of white, suburban neighborhoods. Pendall and Parilla, for example, write, “We suspect that the transportation and economic advantages, compared to lower poverty and lower crime areas... are probably modest.”85 Though some diminish the importance of the housing/transportation policy alignment, there is evidence that transportation is identified as a major impediment to employment for a significant number of very low-income families.86 Very low-income people disproportionately lack automobiles, a pattern that is even more pronounced for welfare recipients.87 Furthermore, even though jobs are suburbanizing, accessibility may be limited by poor transit coverage. In Chicago suburbs, for example, a ninety-minute commute provides poor residents access to only 14 percent of the region’s jobs.88 Ninety-five percent of households without a car and lacking transit service live in the suburbs.89
The availability of transit is one of the reasons why low-skilled workers have better job access in central cities compared to suburban residents.90 In Los Angeles, for example, “poor inner-city job seekers have greater job accessibility than do most of their suburban counterparts. Moreover, poor inner-city job seekers do not have lesser job accessibility than the regional average.”91
Fair Housing during the Obama Administration
Tensions between community development and the spatial goals of fair housing were intensified by several developments in fair housing policy during the Obama administration. One month after Obama’s election in 2008, the National Commission on Fair Housing and Equal Opportunity, an independent group organized by fair housing advocates, issued a report expressing disappointment in the federal government’s efforts to combat discrimination in housing.92 Specifically, the report stated that “fair housing enforcement at HUD is failing” and pointed to a number of deficiencies in the agency’s efforts in the years prior to 2008. The commission went so far as to recommend that fair housing enforcement be taken away from HUD and moved to a new and different agency. The federal government’s disregard for effective enforcement of fair housing, according to the commission, had extended as well to the Department of Justice (DOJ), which under the law has the authority to initiate lawsuits against public and private actors engaging in “a pattern and practice of discrimination” in housing. The commission documented the small and declining number of housing discrimination cases filed by the DOJ through the first eight years of the new century.
In contrast to the indifferent enforcement of fair housing under his predecessors, Obama made fair housing a central objective, and his administration initiated several actions that fair housing advocates applauded.93 The administration strengthened the administrative basis for fair housing enforcement and expanded the number and type of discrimination cases pursued. To the National Alliance for Fair Housing, these changes and others constituted a “sea change in the federal government’s approach to fair housing.”94
Westchester County
Early in Obama’s first term, the DOJ settled a high-profile suit against Westchester County, a suburb of New York City, in which the county agreed to develop hundreds of subsidized units in predominantly white sections of the county and to prevent housing discrimination. The legal strategy behind the case was to tie the county’s status as a recipient of HUD funds to the obligation to use HUD funds to further fair housing. The plaintiffs argued that the county should forfeit those federal funds because they were not being used to further fair housing objectives. The administration promised, furthermore, to hold hundreds of other cities and counties to the same standard.95 Though the settlement has been plagued by the county’s lack of progress in making good on its promises, the suit itself was an early and high-profile statement that the administration would take its fair housing responsibilities very seriously.
Disparate Impact
The distinction between discriminatory intent and discriminatory effect has been important in fair housing enforcement from the outset. Establishing disparate impact in housing discrimination cases is an easier standard to meet than showing discriminatory intent, and thus it widens the potential application of fair housing requirements. The decision to pursue cases using a disparate-impact claim has been an important point of variation in fair housing enforcement, with Republican and Democratic administrations choosing different standards. For years the courts have acknowledged the validity of fair housing claims based on the discriminatory effects of practices in question, as well as cases in which discriminatory intent can be shown. Aiming to standardize the interpretation of the disparate-impact rules, the Obama administration issued regulations in 2013 that define the conditions under which disparate-impact claims can be made.96 The regulations were long awaited by fair housing advocates who hoped to formalize the government’s recognition of a legal standard that would prohibit seemingly neutral policies and practices that have the effect of denying housing opportunities to members of protected classes.
Texas DHCA v. ICP
Despite overwhelming support for the notion of disparate impact by lower courts (the nine U.S. appellate courts that have considered the issue have confirmed disparate-impact claims), until 2015 the U.S. Supreme Court had never considered the issue in the context of housing discrimination. The Roberts court, however, seemed anxious to weigh in with a definitive statement. In 2013 the court agreed to review Gallagher v. Magner, a case in which the housing code enforcement of the city of Saint Paul, Minnesota, was argued to be driving up rents in low-income areas, producing a disparate and negative impact on people of color.97 Fair housing advocates were not confident, given the makeup of the Supreme Court, that disparate impact would survive a direct legal challenge. At the eleventh hour, the parties in Gallagher were persuaded to settle out of court, depriving the court of its chance to settle the issue. Not to be denied, the court sought another case that would give it this opportunity. The justices settled on Township of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc.98 In this case, residents of Mount Holly Gardens sued to stop the township from pursuing a redevelopment plan that would displace them. Because the community was largely people of color, the legal argument was that the redevelopment would have a negative and disparate impact on members of a protected class. The Supreme Court agreed to hear this case in July 2013. Five months later the Mount Holly case, too, settled out of court, and fair housing advocates once again avoided a direct Supreme Court ruling on disparate impact.
In 2014, the Supreme Court tried yet a third time to address the issue of disparate impact in housing discrimination and agreed to hear the Texas Low Income Housing Tax Credit case, Texas Department of Housing and Community Affairs et al. v. The Inclusive Communities Project, Inc., et al. In the spring of 2015 the court heard arguments, and in July it issued a surprise ruling: in a 5–4 decision the court held that disparate impact claims are allowable under the Fair Housing Act. This represented an unexpected but significant victory for fair housing.
The potential for disparate impact to essentially “resolve” the debate over dispersal versus community development decisively in favor of dispersal is clear enough. If the fair housing argument concerning the perpetuation of segregation were to be accepted by the court, community development activities could be interpreted as having a negative and disparate impact on members of protected classes living in core neighborhoods. This issue was, of course, the substantive question at stake in Texas DHCA v. ICP. Such an outcome would make community development and affordable housing efforts in core neighborhoods subject to disparate-impact claims, essentially leaving them valid only where fair housing advocates approved. This would emphatically place community development in a subordinate position compared to the spatial objectives of fair housing. Importantly, however, the Supreme Court ruled only on the procedural question of whether disparate impact is an actionable claim under the Fair Housing Act. The court’s ruling, however, did not reassess the substantive findings of the earlier ICP decision that the Texas Department of Housing and Community Affair’s allocation of tax credits violated the Fair Housing Act. As the majority opinion clarified in the opening paragraph, “the question presented for the Court’s determination is whether disparate-impact claims are cognizable under the Fair Housing Act.”99
As to the fair housing / community development debate, the court reaffirmed the validity of multiple policy objectives in the operation of housing policy. The court reasoned that “from the standpoint of determining advantage or disadvantage to racial minorities, it seems difficult to say as a general matter that a decision to build low-income housing in a blighted inner-city neighborhood instead of a suburb is discriminatory, or vice versa.”100 Furthermore, noted the court, “If the specter of disparate-impact litigation causes private developers to no longer construct or renovate housing units for low-income individuals, then the FHA would have undermined its own purpose.... And as to governmental entities, they must not be prevented from achieving legitimate objectives.”101 The decision clearly acknowledges community development and puts it on equal footing with dispersal. The majority opinion holds that “disparate-impact liability mandates the ‘removal of artificial, arbitrary, and unnecessary barriers,’ not the displacement of valid governmental policies.... The FHA is not an instrument to force housing authorities to reorder their priorities.”102 The court continues, “It would be paradoxical to construe the FHA to impose onerous costs on actors who encourage revitalizing dilapidated housing in our Nation’s cities merely because some other priority might seem preferable.”103 Thus, the Supreme Court decision in Texas DHCA v. ICP affirms the legitimacy of disparate impact claims but leaves intact the central debate between the competing policy objectives of integration and community development.
The decision relies on the 2013 HUD rule laying out the procedure for disparate-impact claims. According to the rule (and quoted by the court in its decision), disparate impact “does not mandate that affordable housing be located in neighborhoods with any particular characteristic.”104 The rule allows public agencies to demonstrate that the patterns producing disparate impact have been created in the pursuit of valid and alternative policy objectives. Disparate-impact claims prevail according to the court (relying on the 2013 rules) only if the plaintiffs can then demonstrate that the alternative policy objectives can be met without producing disparate impacts.
The interpretation of the ruling, however, by practitioners is what will actually determine its impact. One policy blog written shortly after the ruling maintains that “it is highly likely that developers and advocates of traditional community development will need to meet much higher standards for showing how current and future minority residents would benefit from revitalization.”105 The writers, both affiliated with the Urban Land Institute, go on to aver that “community developers may face more concerted legal opposition to their housing activities as well.”106 There is some evidence that governmental officials, too, see the court’s ruling as a directive to shift strategies away from investment in the core. Two months after the decision, for example, an official with the Georgia Department of Community Affairs said, “If the end result [of the agency’s practices] is that we are primarily building in high minority areas with no access to community resources, then we need to make changes in the Qualified Allocation Plan [of the tax credit program].”107 If this interpretation prevails, the early net effect of Texas DHCA v. ICP will be a victory for the spatial strategy of fair housing advocates at the expense of community development.
Affirmatively Furthering Fair Housing
Obama’s HUD also took action to codify the affirmatively furthering fair housing (AFFH) provision of the 1968 act. The AFFH provision thus requires that in addition to regulating the actions of the private sector in housing, the federal government ensure that its own programs and its own actions further fair housing goals. The AFFH clause has been interpreted to directly apply to federal actions implementing housing programs (for example, governing the siting of federally subsidized housing to ensure that the placement of subsidized units does not maintain or enhance patterns of segregation) and, more indirectly, to apply to the use of federal housing and community development funds by state and local governments.
AFFH establishes the obligation on the part of the federal government to ensure that local governments spend federal housing and community development funds in accordance with fair housing goals. Thus, local jurisdictions receiving federal Community Development Block Grant or HOME funds, for example, must certify that they are affirmatively furthering fair housing in their use of these federal funds. The suit against Westchester County described earlier was based on an assessment that the county had been spending federal grant funds in ways that reinforced patterns of racial segregation and furthermore had made false claims to the federal government about its programs.
Fair housing advocates have long complained that the AFFH goals have typically been subordinated within HUD, taking a backseat to concerns about program implementation and housing production goals. In addition, activists have criticized the weak nature of federal oversight of local governments’ compliance with AFFH obligations. As a result, the Obama administration issued a set of rules for AFFH in 2015. Specifically, the rules strengthen the requirements for local governments to assess local fair housing issues and to incorporate fair housing goals into a local plan of action by laying out steps for analysis of local housing conditions.
The new AFFH regulations have been hailed by fair housing advocates as an important step in extending the effectiveness of the Fair Housing Act. Whether they lead to a generalized shift in local policy away from meeting housing needs in central neighborhoods and toward greater emphasis on dispersal and integration is yet to be determined.
The Widening Debate
The dispute related to affordable housing and fair housing has widened and deepened in recent years. The controversy occurs not only in the context of housing policy, but now also with respect to sustainability and transportation policy. In the housing policy arena, the recent HUD rules related to disparate impact and AFFH, and the Supreme Court ruling in Texas DHCA v. ICP have accentuated the dispute but not resolved it. Thomas Edsall’s 2015 piece in the New York Times sums up the argument well. He cites HUD’s AFFH regulations, the re-analysis of MTO outcomes demonstrating positive effects for young children, and the Supreme Court decision in Texas DCHA v. ICP as each challenging the community development approach to affordable housing.108 The current policy environment, one that orbits so closely around the concept of opportunity and relies so heavily on ideas of dispersal and mobility, is likely to nurture the friction between integration and community development into the foreseeable future.