‘Good’ or ‘Bad’ Neighborhood? Not so fast.
By Dr. Keely Stater | Director of Research and Industry Intelligence | Public and Affordable Housing Research Corporation
The Public and Affordable Housing Research Corporation (PAHRC)’s latest research spotlight, “Strategies for Investing in Opportunity,” explores the locations of rental properties that receive federal subsidies or tax incentives to make homes affordable to low-income families. It measures ‘neighborhood quality’ with typical indicators that define neighborhood desirability like housing values and vacancy rates and finds that many neighborhoods that are below an area’s typical level of neighborhood quality still offer significant opportunities for economic advancement to residents. It argues that a neighborhood’s level of ‘opportunity capital,’ or the compilation of the many factors that could contribute to eventual improvements in households’ economic mobility, is a more important consideration in siting housing and boosting resident outcomes. Accessible transit, entry points into the labor market, quality schools, and a health-promoting environment are all drivers of household economic mobility and sustainability. Thus what we consider a ‘good’ or ‘bad’ neighborhood in terms of fostering potential positive outcomes for residents might not be as straightforward as the typical indicators of neighborhood quality.
The spotlight then overlays the federal portfolio of affordable properties on the level of opportunity capital in each neighborhood, ranked against the values in all neighborhoods in the surrounding area. It finds that half of all housing properties are located in neighborhoods with equal or greater opportunity than their city or surrounding area, which further debunks the incorrect generalization that locations of federally subsidized properties are often in ‘undesirable’ neighborhoods. It also finds that nearly one-quarter of neighborhoods that scored below the typical area neighborhood in neighborhood quality provide levels of opportunity capital equal to or above that of the typical city neighborhood. In this way, many neighborhoods that might be considered undesirable are providing opportunities for positive outcomes for residents.
At the same time, a number of neighborhoods containing affordable housing properties are trending better on neighborhood quality variables than their surrounding areas, suggesting that these sites may also experience upward shifts in opportunity capital. Based on these data, the report concludes that affordable housing property locations offer a significant amount of opportunity to their residents and can be leveraged to help their communities improve economic mobility for low-income households.
How can housers use these data to prioritize development and investments in resident opportunity? The report lays out five investment strategies based on the current level of opportunity capital and neighborhood quality and the neighborhood quality trend. Areas with greater opportunity are ideal places to develop or acquire additional housing properties and work with landlords to accept additional voucher holders. These strategies may require additional subsidies to keep properties affordable or the development of new buildings and greater landlord outreach to recruit more landlords into housing assistance programs. In areas with lower than typical opportunity capital, current housing properties can serve as neighborhood anchors and pull in partners to provide new avenues of opportunity to residents.
How does your portfolio measure up? Visit our maps and data resources to see how your portfolio scores on opportunity capital compared to its city or surrounding area and how your property sites compare on the contributing indicators to opportunity capital like transit, health, education, and labor market access. You can also identify which strategies might work best for your properties and your community by reading the report. If anything, the report will encourage readers to dig deeper before labeling neighborhoods ‘good’ or ‘bad.’