Housing policies leave cities behind

By Benjamin Forman  |  November 29, 2009

FOR DECADES, building affordable housing has been the “fix’’ for declining neighborhoods in the state’s older industrial cities. But shoring up distressed blocks with affordable housing has done little to make these neighborhoods attractive again. If anything, it’s probably had the unintended effect of concentrating more poor families in areas where jobs have become increasingly scarce.

Because housing resources are severely limited, state housing policy has focused on ensuring people have a roof over their heads. The prioritization of affordable housing is correct. But it does not explain the reluctance to recognize the limitations of affordable housing development in communities with declining neighborhoods, and the need for another pool of resources to address the unique challenges cities with these conditions face. This hesitancy represents a bias toward the strong market affordability challenges of Greater Boston, as well as an overly pessimistic outlook for cities in other parts of the state. The state’s current housing strategy places a significant amount of investment in older industrial cities beyond Interstate 495; about a fifth of affordable housing resources have gone to these communities since 1993. Why make big investments in communities that already have a large supply of affordable housing? Because without housing programs designed to support comprehensive neighborhood revitalization, mayors are forced to turn to the state’s affordable housing resources to address blight and abandonment. While affordable housing development can resolve concerns on a given block, it may further destabilize distressed neighborhoods by drawing the families who take up residence in these new buildings from the existing housing stock.

Adding this supply without stimulating new demand can contribute to further market weakness and the concentration of low-income families in high poverty areas. School enrollment figures give some indication of the degree to which poverty has become increasingly concentrated in these older industrial cities. In the last 15 years, the percentage of students classified as low-income in urban schools outside of Greater Boston has grown from less than half to nearly two-thirds.

The role of state housing policy in these older cities needs to be revised. For one, it will be difficult to make gains on stalled efforts to close educational achievement gaps as long as we continue to concentrate poor students in urban districts. The foreclosure crisis, which is causing further erosion in urban neighborhoods, should also give us motivation to rethink housing policy.

But most important, the state’s long-term success hinges on its ability to build productive regional economies. As a 2007 report authored jointly by MassINC and the Brookings Institution revealed, the “Gateway Cities’’ that drive growth in regions outside of Greater Boston are struggling to connect to the new knowledge economy. To give these cities a chance to move forward - and to help the state emerge stronger from this deep recession -programs must recognize the critical connections between housing and economic development that current policies ignore.

While federal housing programs have also been slow to acknowledge the fundamental link between housing and economic growth, policymakers in Washington are starting to get serious with new proposals to help cities with weak housing markets. President Obama’s “Choice Neighborhoods’’ initiative, which would tie school reform to neighborhood revitalization, is one example. The state should follow the federal government’s lead. It should take a hard look at how to invest taxpayer money better to rebuild neighborhoods and stimulate growth and development in key regional cities beyond the strong housing markets of Greater Boston.

Benjamin Forman is a senior research associate at MassINC and author of “Going for Growth: Promoting Residential Reinvestment in Massachusetts Gateway Cities.’’