Click to visit City Journal California

By Howard Husock

America’s Trillion-Dollar Housing Mistake: The Failure of American Housing Policy.

City Journal

Howard Husock
Housing as Busing
With a Westchester decision, the feds decree that neighborhoods must seek minority residents.
Autumn 2009

The leafy towns and villages of central and northern Westchester County, New York, with their large-lot zoning, stone walls along winding lanes, and the wooden stables of horse country, are among the wealthiest in the United States. From Pound Ridge to Scarsdale, from Chappaqua to Bedford, they might seem remote and insulated from Washington policy disputes. But thanks to a legal settlement announced on August 11, they have become the testing ground for a federal social policy that seeks a dramatic change in the organizing principle of American residential life: that where a family lives is based chiefly on where it can afford to buy or rent a home.

The settlement, approved by the county’s legislature in late September, is the result of a lawsuit filed in 2007 by a New York City–based nonprofit called the Anti-Discrimination Center. The suit argued that when Westchester County applied for federal Community Development Block Grants (CDBGs) for, among other things, affordable housing, it inaccurately claimed to have identified racial as well as income-related barriers faced by poorer residents seeking better housing—and to have taken steps to counter those barriers. This February, a federal judge agreed. To resolve the suit, Westchester has pledged to use $50 million of its own, along with HUD money it receives, to build some 750 units of new subsidized housing—including 630 units in some of its wealthiest enclaves, where less than 3 percent of the population is black and less than 7 percent Hispanic—and to market them especially to those groups.

“This is historic,” said Deputy Secretary of Housing and Urban Development Ron Sims, who appeared personally at the announcement of the settlement, “because we are going to hold people’s feet to the fire.” Ever since 1974, localities have used CDBG money to upgrade their low-income neighborhoods. But now, places where “segregation” persists—as Sims claims it does in Westchester—may also have to use their CDBG funds to help relocate poor people to rich neighborhoods. Any of the 1,225-plus jurisdictions nationwide that receive federal community development funds should be prepared, if it has residents both rich and poor, to find ways to move them closer together.

“This is a tremendous departure,” asserts Stewart Gerson, an assistant attorney general in the George H. W. Bush administration and Westchester’s counsel in the case. “It establishes as policy that it is not enough for communities to be open to minorities but that they must include minorities.” Or as HUD assistant secretary for fair housing and equal opportunity Bryan Greene puts it: “We want to see some distribution [of affordable housing]. Certain communities have a disproportionate share, and sometimes it tracks racial patterns.” What’s more, Greene says that HUD will establish new rules to judge how well communities analyze racial housing patterns.

It is a policy of seductive narrative power, in the context of American history: the gates of supposedly exclusive white communities thrown open at long last to the people. Yet it is deeply wrongheaded—not just because the county it targets is not, in fact, segregated but also because it is a wholly ineffective way to advance the interests of the minority poor. In fact, it is a step not forward, as Sims believes, but backward, an approach whose uselessness was demonstrated by another HUD program 15 years ago.

Illustration by Arnold Roth

The lawsuit and the settlement might make some sense if Westchester’s neighborhoods were still segregated in the manner of the Jim Crow South. In that era, there was little doubt that, even had there been a black family with sufficient income, it wouldn’t have been permitted to move to the white side of the tracks. It was also clear that public resources—tax dollars—were directed overwhelmingly to the benefit of the wealthy whites. This appears to be the picture to which the Obama HUD and the courts involved in the Westchester case still cling—and from which they extrapolate a nationwide problem.

But Westchester County, in fact, boasts a significant black and Hispanic population. Westchester’s 131,000 blacks represent 14.2 percent of its total population, and its 144,000 Hispanics, 15.6 percent—both mirroring almost exactly the population of the nation as a whole. Westchester’s minority population is not evenly distributed throughout the county, however, but concentrated in the county’s cities to the south, including Yonkers, New Rochelle, and White Plains. As it once did for Italians and Jews, this area serves as a stopping point on the path of upward mobility for families leaving behind the Bronx, on the county’s southern border.

That northern Westchester has so few minority families compared with the county’s south is a sign of segregation, the accusers say. In key testimony in the court case, Queens College sociologist Andrew Beveridge claimed that “income level has very little impact on the degree of residential racial segregation experienced by African-Americans,” leading to what he called increased “racial isolation.” Put another way: minority-group members are not living in the places where their incomes would predict they should be living. They’re living in ghettos, even though they could afford better; thus, segregation exists in Westchester—and in any affluent place where minority households are few.

There are at least two problems with this line of reasoning. First, even in the super-wealthy parts of Westchester, blacks are only slightly underrepresented, based on what their incomes would predict. As of the 2000 census, Scarsdale was 1.5 percent black; Pound Ridge, 1.2 percent; Harrison, 1.4 percent. The numbers may sound low, but there simply aren’t many very affluent blacks in the entire county. Only 2 percent of black households in Westchester earned more than $200,000 in 2000—a total of 911 families—compared with 12.6 percent of white households. Small wonder that there aren’t many blacks in the county’s richest locales. Moreover, those who do live in the county may well be choosing to live together.

Probably more important, however, is that if the Beveridge claim were true, you’d expect Westchester to be full of higher-income blacks who, prevented from moving into the more affluent areas that their incomes would predict, were stuck living near lower-income whites. But census data show that this isn’t the case. Blacks in Westchester generally have lower incomes than their white neighbors do. According to the 2000 census, for instance, blacks in New Rochelle had a median family income of $55,000; whites, $72,000. In Tarrytown, the figures were $50,000 and $82,000; in Hartsdale, $79,000 and $100,000. In Westchester as a whole, black household income in 2000 stood at 51 percent that of whites, and Hispanic income at 44 percent. Though lower black household incomes aren’t anything to celebrate, in this case they do demonstrate that Beveridge-style segregation doesn’t exist in Westchester.

Further, contrary to what the lawsuit implies, Westchester is hardly a self-evidently bad place to be a member of a minority group, wherever one is located in the county. That’s because the taxes of the rich support a disproportionate share of the services provided by the county for all its residents, including low-income minority households. The 17,823 residents of Scarsdale, for instance, pay the county more in property taxes ($33 million) than the 68,381 residents of Mount Vernon do ($23 million). Residents of tony Pound Ridge pay an average of $1,575 per person in county taxes—compared with just $629 in New Rochelle and $746 in Yonkers. And these county taxes (not to be confused with the local property taxes that support schools, among other things) support a wide array of county social services, many of which, whatever their merits, are clearly not designed with rich white people foremost in mind: an extensive county bus system; offices of African-American and Hispanic affairs; a county Office of Equal Opportunity and Affirmative Action; and a Youth Bureau, which notes that it sent “more than 100 disadvantaged kids from Tarrytown and Sleepy Hollow to camp” this summer.

And Westchester already subsidizes “affordable” housing, some 600 units of which have been built for those of low and moderate income throughout the county—perhaps not in the wealthiest locales, where land costs are highest, but nonetheless in a number of quite affluent places. These subsidies are substantial. The county, for instance, invested $500,000 in one development in well-to-do Dobbs Ferry, whose 32 units cost an average of $132,000 each to build but sell for no more than $92,000 to those who fall within income guidelines. In short, Westchester should be known not for segregation but for redistribution.

All this is simply to show that the Westchester lawsuit and settlement make little sense, either for Westchester or as a model. A more important point is that mandating government-subsidized “affordable housing” in affluent neighborhoods is always misguided as a way to help the poor. The reasoning behind building affordable housing in a place like Westchester is that moving lower-income, often-minority families to higher-income, often-white neighborhoods will prove uplifting; it’s the real-estate equivalent of busing black students to white schools. As Sims put it, wealthier communities are obliged to offer “choice” to those of lower income, so that the poor, too, can “enjoy what I call the fruits and benefits of an established neighborhood.”

But we should be skeptical, as research funded by HUD itself shows. Beginning in 1994, an experimental five-city program called Moving to Opportunity started doing exactly what Sims endorses: shifting public-housing tenants to private apartments in better zip codes. The results effectively contradicted the program’s working assumption that such moves would lead to better lives. In a 2006 paper, Lisa Sanbonmatsu of the National Bureau of Economic Research (and three coauthors) wrote: “We did not find evidence of improvements in reading scores, math scores, behavior or social problems, or school engagement, overall or for any age group.” This finding followed an August 2004 paper about the same program, in which Jeffrey Kling and three coauthors—including Jeffrey Liebman, now a senior official in the Obama administration’s Office of Management and Budget—reported: “We find no significant overall effects on adult employment, earnings or public assistance receipt.” The paper also reported no improvements in the subjects’ physical health.

So much for the fruits of established neighborhoods. Sims has the process of upward mobility exactly backward. Improving one’s lot in life is not a function of rubbing shoulders with the better-off. Rather, it reflects myriad good decisions and successful struggles: staying in school, learning a skill, and getting and staying married, to name a few. (It is worth noting that of the 6,983 Westchester families living in poverty in which unmarried women are raising children, 86 percent are black or Hispanic.) Richer towns are not demonstrations of privilege and unfair advantage; they are hard-won achievements, reflecting the larger contributions of their residents.

No one understands this better than upwardly mobile minority families, who often express concern about government housing programs that can move the underclass poor into proximity with those who have, in Bill Clinton’s memorable phrase, worked hard and played by the rules. Consider this comment by a resident of affluent Larchmont, posted on the website of the New York Times in response to the Westchester affair: “As an African American who happily resides in one of the aforementioned towns targeted for this deplorable lower income housing, I am appalled at this decision to reward those individuals who . . . chose the easy way out instead of dedicating oneself to hard work. . . . My wife and I work/ed hard to be able to purchase a home and PAY TAXES in one of these towns, just like everyone else who resides in them.”

Another post made a similar point: “As an African American, I am tired of the practice of placing government housing in otherwise middle class and affluent neighborhoods. . . . All it does is reinforce a stereotype that all African Americans are laggards when it comes to educating ourselves, rising socially and advancing economically. It is not as though there aren’t African Americans already living in these neighborhoods in Westchester.” These are people yearning for a truly post-racial America, where blacks are no longer a special case for social policy and where their own accomplishments can serve as their own ticket.

If residential racial divides are to decline, it should be as the result of blacks and whites of similar incomes and education choosing to live together. That’s how America’s neighborhoods are actually organized. As the sociologist Herbert Gans pointed out in his classic 1961 book The Levittowners, “Experience with residential integration in many communities, including Levittown, indicates that it can be achieved without problems when the two races are similar in socio-economic level and in the visible cultural aspects of class.” The converse, of course, is also true: forcing social classes together is a recipe for tension.

There’s a better way for HUD to use its Community Development Block Grant program—itself a huge redistribution of tax dollars nationwide from rich to poor. Rather than scattering a few units of expensive housing for a small number of lower-income families in a wealthy county, HUD should help provide the “public goods,” as economists call them, that all strong neighborhoods need: parks, playgrounds, well-maintained streets, and schools. In that way, government can modestly complement residents’ efforts to ensure that poor neighborhoods are nonetheless good neighborhoods—places that can serve, as they have historically, as launching pads for upward mobility. And the Obama administration should avoid giving the impression that living in lower-income zip codes consigns one to a life of poverty and that it is the success of some that explains the problems of others.

Howard Husock, a contributing editor of City Journal, is the Manhattan Institute’s vice president for policy research and the director of its Social Entrepreneurship Initiative.

SHARE
respondrespondTEXT SIZE
If you enjoyed
this article,
why not subscribe
to City Journal? subscribe Get the Free App on iTunes Or sign up for free online updates: