Unintended Consequences in the War against Poverty and Crime

One of the stubborn, but unfortunate, facts about American life is the persistence of poverty – and crime – amidst a land of plenty. After a “War” on poverty in the 60s and repeated efforts to reduce it, we have made limited progress at best.

In the 1990s, the Clinton Administration tried a bold new approach to the challenge, and it wasn’t welfare reform. The idea was to tear down some of the nation’s worst public housing projects and instead give rental vouchers to the residents to enable them to live where they wanted. The major hope: that middle class values and stability would somehow rub off on the former residents of the projects. And remember: this was one of the classic centrist ideas – using free-market (i.e. conservative) principles to achieve humanitarian (i.e. liberal) ends – over the skeptical resistance of both partisan extremes.

Well, guess what: it doesn’t seem to have turned out that way. As Hanna Rosin documents in a compelling, if depressing, piece in the July/August issue of The Atlantic, this “Section 8 rental voucher” program instead appears to have exported crime from city centers where public housing has been demolished and into the lower-middle class suburbs. Indeed, Section 8 may be the most important reason why crime – and murder in particular – seems to be rising at an alarming rate in many mid-size cities (like Memphis and Kansas City). A sample:

Nobody would claim vouchers, or any single factor, as the sole cause of rising crime. Crime did not rise in every city where housing projects came down. In cities where it did, many factors contributed: unemployment, gangs, rapid gentrification that dislocated tens of thousands of poor people not living in the projects. Still, researchers around the country are seeing the same basic pattern: projects coming down in inner cities and crime pushing outward, in many cases destabilizing cities or their surrounding areas. Dennis Rosenbaum, a criminologist at the University of Illinois at Chicago, told me that after the high-rises came down in Chicago, suburbs to the south and west—including formerly quiet ones—began to see spikes in crime; nearby Maywood’s murder rate has nearly doubled in the past two years.

In short, what seemed like a good idea at the time came with unintended consequences. The big question now is: what to do now? Were the centrists wrong? And if concentrating the poor in public housing is a bad idea, and dispersing them is a bad idea, what else possibly might work to reduce hard-core poverty and crime?

At Kauffman, we are working on some thoughts, but I ask you dear readers, for yours – hopefully after you read the article….

Comments

[Michael F. Martin]

You may be looking for improvement too soon. Vouchers and Section 8 have only been around for a decade or so. Probably less since it took time to actually tear down the tenant halls and move people.

Some of the social and economic patterns that lead to violence would evolve over at least as long as that period of time. For example, an increase over the short-term could reflect the gang members transplanted from one neighborhood to another without giving any insight into whether the new environment was effectively disrupting the cycle that leads to more gang members.

[Charles Johnson]

One of my friends, who now works at the New York Post, wrote an article about how essentially all of these programs fail in the U.K. He won the $10,000 Breindel Award for journalism. He interviewed Michael, a homeless person living in London. Here's just an extract from the 7 page article in which he describes a state-provided breakfast.You can access it here. http://media.www.claremontindependent.com/media/storage/paper1031/news/2006/09/01/Opinion/Finding.Burke.Among.The.Street.Sleepers-2270175-page2.shtml

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This is a "community" breakfast, Michael explains, which means both homeless and non-homeless are welcome. Most of the non-homeless here were once on the street but have since gotten placement in locally subsidized "Council flats."

This gets Michael talking about one of the "utopian ideologies" he often encounters, which holds that the way to solve homelessness is simply to give everyone homes. The plan is to get as many street homeless as possible into long-term hostels until a Council flat opens up. The accommodation generally costs about one-third of someone's unemployment benefits, deducted directly from the handout.

Many people are certainly grateful for a bed, but ultimately, he says, putting homeless in Council flats simply pushes the problem out of the way.

"You take someone from the street, put him in a flat, and just expect him to become a model citizen. Meanwhile you have isolated him from the only community he knows, and he starts to get lonely. He's back out on the street within months."

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Unfortunately, I believe you will find that the problem with the vouchers is that it is other people's money that they are risking and not their own. I fear the only hope is increased growth that reduces unemployment for those who want to work and charity for those who cannot or will not.

[Economics of Contempt]

The Hanna Rosin article would have been compelling if it was true, but it highly misleading (see e.g., GW economist Richard Green on the Rosin article here: http://real-estate-and-urban.blogspot.com/2008/06/brendan-o-flaherty-notes-problem-with.html).

If Section 8 was exporting crime to the suburbs, property values would decline, right? But they don't. Take this 2007 working paper from Harvard's Joint Center for Housing Studies, "Spillovers and Subsidized Housing: The Impact of Subsidized Rental Housing on Neighborhoods":

"In summary, the evidence clearly fails to support the notion that subsidized rental housing will in general depress neighborhood property values or otherwise undermine communities."

http://www.jchs.harvard.edu/publications/rental/revisiting_rental_symposium/papers/rr07-3_ellen.pdf

Or this 2007 study, "Does federally subsidized rental housing depress neighborhood property values?":

"We find that federally subsidized developments have not typically led to reductions in property values and have, in fact, led to increases in some cases."

http://www3.interscience.wiley.com/journal/114177532/abstract?CRETRY=1&SRETRY=0

Or most importantly, this comprehensive 2006 study on the effects of concentrated poverty, "The Social Costs of Concentrated Poverty: Externalities to Neighboring Households and Property Owners and the Dynamics of Decline":

"There is no substantial relationship between neighborhood poverty changes and property values or rents when poverty rates stay below 10 percent.
...
"If concentrated poverty is prevented or undone, the alternative destination neighborhoods for the poor should primarily be those of low-poverty, not moderate poverty."

http://www.jchs.harvard.edu/publications/rental/revisiting_rental_symposium/papers/rr07-4_galster.pdf

Section 8 isn't perfect by any means, and I'd be the first to support numerous changes. But to attribute the rise in crime in mid-size U.S. cities to Section 8 is misleading at best.

[rlitan]

The points about real estate values are interesting but also potentially beside the point. The issue Rosin addresses is crime, and if the correlations between the location of crime and Section 8 rental vouchers are true, as the research Rosin cites indicate, that alone is quite disturbing, and the point of my blog.

[DJH]

"If Section 8 was exporting crime to the suburbs, property values would decline, right?"

That is far from clear. You certainly cannot assert it as given.

[tom of the missouri]

Have any of the so far commenters to this blog ever owned or managed any section 8 or other type of subsidized or "free" housing? Have you ever personally known or been to the homes of any section 8 tenants?

I have been an inner city landlord for 25 years have done and seen it all. If I only had the time to tell ya the many sad and sordid stories.

There are rare individual exceptions of course,including many times the elderly, but a section 8 housing tenant is the definition of a dysfunctional human being. In order to qualify for a voucher or other type of section 8 housing you have to prove to the bureaucrats that you cannot function... meaning cannot feed yourself or your family or be able to set an example for your family(usually many children with many different fathers) as a person who earns a living, takes care of themselves and their family, stays for more than a week with one live in lover and contributes to society, i.e, pays taxes, etc. Many social pathologies including unsupervised young male children or free loading boyfriends (now days the freeloader is called, at least to the landlord, a fiancé, even though there is never a scheduled wedding date. Just for fun, I always say congratulations and ask about the date, but to date there has never been one scheduled) with the young males and boyfriends frequently being members of the criminal class. Sorry if the political incorrectness makes your (the harvard quoting study guy) ears hurt, but that is how it really works. Regardless of how many Harvard social work professors have studied this problem, When you move this system to the suburbs, the pathologies go with it.

There is of course a massive poverty industry that feeds off all of this including groups from "affordable housing" suppliers to the academics who teach our future "social workers" to the millions of poverty workers in govt. in HUD, HHS, etc. It also serves to make the limousine Liberals in their gated neighborhood and their private schools feel good about themselves and less guilty by supporting the expansion of all these programs. They also of course love the "diversity" of it all, but also of course, they don't actually know any of these people or want them living near them.

When I grew up, poor people congregated in poor neighborhoods (not the middle class neighborhoods) and lived in houses that were not as good as those of people who worked and provided for their families. While living there they had an incentive to work hard, better their lives and move up and out. Many did. Also in those neighborhoods most families were intact with a father and a mother living under the same roof with their children. Today, after many trillions of dollars spent by the poverty industry, of which section 8 is such a visible small part, poor people are just as numerous as before, millions of the families and broken and millions of their men are in prison. The only difference is that now you can have a brand new apartment with a frost free fridge, dish washer, central HVAC and many other amenities including three rent-to-own big screen TV's, all paid for on someone else's dime and the incentive to work harder is much lessened. And now it is in the suburbs, too and people here are, as Claude Raines would say, "shocked, shocked" that things have not gone so well.

What a wonderful success. I bet if we just got some really smart people, hopefully with Harvard degrees, to tweak these programs a little bit, spend a few billion more on them and wait another few "decades" it will all be wonderful.

At least that is what I have seen in my 25 years experience on the ground trying to avoid this sad mess.

52 year old inner city landlord,
St. Louis, MO

[Bob Knaus]

Recognizing that data is not the plural of anecdote, I will nonetheless tell a story.

A few years back I bought an abandoned crack house in Coconut Grove, a ritzy close-in 'burb of Miami with a small black enclave. I was the first white man on the block. Sad to say, when my neighbors learned what I had paid, I earned only their animosity because it burst their dreams of selling their own shacks for a quarter million (which was in fact typical property value just a block away).

Next to my place was a 2-story house on the National Register of Historic Places, built by Bahamians in 1897. It was uninhabited. One day, I saw a well-dressed young black man talking to a contractor on the front porch. When he was done, the young man walked over and introduced himself. "I'm the one the family trust has put in charge of this place" he said. "What do you think of the neighborhood?"

By then I had learned to watch my words. "It's... interesting." I replied.

He laughed. "We are partly culpable!"

Hiding my astonishment, I asked "What do you mean?"

He explained "This house is vacant because it can only be sold or rented to family members. None of us want to live here. The trust also owns more than 40 properties in this neighborhood."

"Two of the older family members who run the trust -- they are doctors, don't know anything about real estate -- decided they wanted to keep the neighborhood black. So they placed all the trust's rental properties in Section 8. You can't do that to so many properties in a small neighborhood without affecting property values. Some of us, younger family members, are concerned that the value of the trust is not increasing as much as it could. We hope to make some changes soon."

A most amazing conversation! Alas, I walked by last year. The house is still vacant, the neighborhood still run down. I am afraid the changes that young man wanted are not happening very fast.

[Bob Roth]

Dr. Coltaire Rapaille has done some fascinating research about what certain words in our culture actually mean. I spent several months doing some research with him and a related story comes to mind. He researched teen-age pregnancy in low-income neighborhoods and found that many of the reasons girls sought pregnancy was that they have such a short life expectancy. In order to perpetuate life as demanded by the reptilian/survival portion of the brain (in their words, hold a baby one more time), they sought out pregnancy. No conversation about abstinence or contraceptives made a difference. What did make a difference, however, is giving them a longer outlook on their life expectancy by getting them involved in constructing their own home.

Perhaps the problem is not the answers that we are evaluating, but the questions that we are asking.

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