• Matthew Desmond
  • Rebecca Diamond

Leaders: Matthew Desmond, Rebecca Diamond

The Housing RG is tasked with exploring the the inner workings of disadvantaged neighborhoods and the low-cost housing market, with a focus on (a) the relationship between housing, employment, and poverty, (b) the causes, dynamics, and consequences of eviction, and (c) the effectiveness of housing vouchers and other housing programs. A sampling of our ongoing projects follows.

Evictions and poverty: Are evictions an important cause of deep and extreme poverty? In collaboration with Raj Chetty, Matt Desmond is starting a project on the long-term consequences of eviction that will reveal the extent to which deep and extreme poverty can be reduced with a “housing first” policy that ramps up federal housing programs.

Housing voucher policy: The U.S. currently spends approximately $20 billion per year on subsidized housing vouchers, but 80 percent of these vouchers are used in moderate- or high-poverty neighborhoods, where opportunities for upward mobility are typically limited. Can voucher policies be recast to increase the number of families moving to “high opportunity” neighborhoods?

Housing - CPI Research

Title Author Media
Home, heart, and being Latina: Housing and intimate relationship power among low-income Mexican mothers Whitney Welsh, Linda Burton

Home, heart, and being Latina: Housing and intimate relationship power among low-income Mexican mothers

Author: Whitney Welsh, Linda Burton
Publisher: Sociology of Race and Ethnicity
Date: 07/2016

The authors examine an emergent association between low-income Mexican mothers’ control of housing and power relations in their romantic unions. Guided by valued resource theory, and mothers’ lived racial, ethnic, and gender experiences of navigating access to housing and sustaining intimate unions, the authors used secondary longitudinal ethnographic data on 29 low-income mothers of Mexican descent as exemplar cases to explore (1) mothers’ housing dependencies as they transitioned from their natal homes to coresidential housing with romantic partners, (2) the factors that differentially shaped mothers’ housing options, and (3) how mothers’ control of housing procurement influenced their intimate relationship power. The findings suggest that mothers followed one of five housing dependency pathways, with 25 percent securing housing independently. Most traversed complex and transient levels of dependence on their partners for housing with immigrants and native-born Mexican Americans evincing nuanced differences in their relationship power depending on their housing situations. In most cases, regardless of their national origin (Mexico or the U.S.), mothers’ control of housing procurement directly corresponded to increased relationship power. The importance of considering the impact of race/ethnicity on housing and women’s power in Latino families in future research is also discussed.

Evicted: Poverty and Profit in the American City Matthew Desmond

Evicted: Poverty and Profit in the American City

Author: Matthew Desmond
Publisher: New York: Crown Publishers
Date: 03/2016

Even in the most desolate areas of American cities, evictions used to be rare. But today, most poor renting families are spending more than half of their income on housing, and eviction has become ordinary, especially for single mothers. In vivid, intimate prose, Desmond provides a ground-level view of one of the most urgent issues facing America today. As we see families forced  into shelters, squalid apartments, or more dangerous neighborhoods, we bear witness to the human cost of America’s vast inequality—and to people’s determination and intelligence in the face of hardship.

Who Wants Affordable Housing in their Backyard? An Equilibrium Analysis of Low Income Property Development Rebecca Diamond, Timothy McQuade

Who Wants Affordable Housing in their Backyard? An Equilibrium Analysis of Low Income Property Development

Author: Rebecca Diamond, Timothy McQuade
Publisher: Journal of Political Economy (revision requested)
Date: 01/2016

We estimate the spillovers of properties financed by the Low Income Housing Tax Credit (LIHTC) onto surrounding neighborhood residents. We nonparametrically estimate the impact of LIHTC development on nearby house prices by developing a new difference-in-differences style estimator which exploits smoothness in housing prices across geographic distance and time. We find LIHTC development helps revitalize low income neighborhoods, driving up house prices 6.5%, lowering crime rates, and attracting a more racially and income diverse population. LIHTC development in higher income, low minority areas leads to local house price declines of 2.5% and attracts lower income households. We link these housing price effects to homeowner and renter preferences by developing a generalized hedonic model. Our estimates indicate that an affordable housing development in a low-income area improves welfare by $23,000 per local homeowner and $6500 per local renter, with aggregate welfare benefits to society of $115 million. When viewed as a place-based policy, affordable housing appears to be a desirable way to invest in and revitalize low-income communities.

Employment Insecurity among the Working Poor Carl Gershenson, Matthew Desmond

Employment Insecurity among the Working Poor

Author: Carl Gershenson, Matthew Desmond
Publisher: Social Problems
Date: 01/2016

While social scientists have documented severe consequences of job loss, scant research investigates why workers lose their jobs. We explore the role of housing insecurity in actuating employment insecurity, investigating if workers who involuntarily lose their homes subsequently involuntarily lose their jobs. Analyzing novel survey data of predominately low-income working renters, we find the likelihood of being laid off to be between 11 and 22 percentage points higher for workers who experienced a preceding forced move, compared to observationally identical workers who did not. Our findings suggest that initiatives promoting housing stability could promote employment stability.

Neighborhood Effect Heterogeneity by Family Income and Developmental Period Geoffrey T. Wodtke, Felix Elwert, David Harding

Neighborhood Effect Heterogeneity by Family Income and Developmental Period

Author: Geoffrey T. Wodtke, Felix Elwert, David Harding
Publisher: American Journal of Sociology
Date: 01/2016

Effects of disadvantaged neighborhoods on child educational outcomes likely depend on a family’s economic resources and the timing of neighborhood exposures during the course of child development. This study investigates how timing of exposure to disadvantaged neighborhoods during childhood versus adolescence affects high school graduation and whether these effects vary across families with different income levels. It follows 6,137 children in the PSID from childhood through adolescence and overcomes methodological problems associated with the joint endogeneity of neighborhood context and family income by adapting novel counterfactual methods—a structural nested mean model estimated via two-stage regression with residuals—for time-varying treatments and time-varying effect moderators. Results indicate that exposure to disadvantaged neighborhoods, particularly during adolescence, has a strong negative effect on high school graduation and that this negative effect is more severe for children from poor families.

Housing - CPI Affiliates

Matt Desmond Housing Research Group Leader; John L. Loeb Associate Professor of the Social Sciences Harvard University
Rebecca Diamond Housing Research Group Leader; Assistant Professor of Economics Stanford University
Heather L. Schwartz Associate Director, RAND Education; Policy Researcher RAND Corporation
Jens Ludwig McCormick Foundation Professor of Social Service Administration, Law, and Public Policy; Director, University of Chicago Crime Lab; Co-Director, University of Chicago Urban Education Lab University of Chicago
Lisa Gennetian Research Professor, Institute for Human Development and Social Change New York University


Housing - Other Research

Title Author Media
Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation's Window of Opportunity Initiative Heather L. Schwartz, Raphael W. Bostic, Richard K. Green, Vincent J. Reina, Lois M. Davis, Catherine H. Augustine

Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation's Window of Opportunity Initiative

Author: Heather L. Schwartz, Raphael W. Bostic, Richard K. Green, Vincent J. Reina, Lois M. Davis, Catherine H. Augustine
Publisher: RAND Corporation
Date: 06/2016

In 2000, the MacArthur Foundation began the Window of Opportunity initiative, a 20-year, $187 million project intended to help preserve privately owned affordable rental housing. The authors of this report assess whether the initiative achieved its goals and identify lessons learned about effective preservation practices. In doing so, they also provide a summary of the evolution of practices in preserving affordable rental housing, discuss challenges and opportunities for preservation going forward, and identify lessons learned that may help other philanthropies in their own philanthropic initiatives, even if they do not pertain to housing.

The authors find that the MacArthur Foundation met most of its goals for Window of Opportunity. As the initiative nears its end, large nonprofit preservation developers/owners have greater financial capacity and reputation, there are more resources and vehicles for preservation, and, to a lesser degree, the policy environment has changed to the benefit of preservation. However, Window of Opportunity has not achieved its most ambitious federal policy goals and is likely to fall short of its target for the number of privately owned affordable rental housing that will be preserved.

Do Rising Top Incomes Lead to Increased Borrowing in the Rest of the Distribution? Jeffrey P. Thompson

Do Rising Top Incomes Lead to Increased Borrowing in the Rest of the Distribution?

Author: Jeffrey P. Thompson
Publisher: Finance and Economics Discussion Series 2016-046
Date: 05/2016

One potential consequence of rising concentration of income at the top of the distribution is increased borrowing, as less affluent households attempt to maintain standards of living with less income. This paper explores the “keeping up with the Joneses” phenomenon using data from the Survey of Consumer Finances. Specifically, it examines the responsiveness of payment-to-income ratios for different debt types at different parts of the income distribution to changes in the income thresholds at the 95th and 99th percentiles. The analysis provides some evidence indicating that household debt payments are responsive to rising top incomes. Middle and upper-middle income households take on more housing-related debt and have higher housing debt payment to income ratios in places with higher top income levels. Among households at the bottom of the income distribution there is a decline in non-mortgage borrowing and debt payments in areas with rising top-income levels, consistent with restrictions in the supply of credit. The analysis also consistently shows that 95th percentile income has a greater influence on borrowing and debt payment across in the rest of the distribution than the more affluent 99th percentile level.

The Neighborhood Context of Latino Threat Matthew Hall, Maria Krysan

The Neighborhood Context of Latino Threat

Author: Matthew Hall, Maria Krysan
Publisher: Sociology of Race and Ethnicity
Date: 04/2016

In recent years, the size of the Latino immigrant population has swelled in communities throughout the United States. For decades, social scientists have studied how social context, particularly a minority group’s relative size, affects the sentiments of the dominant group. Using a random sample survey of five communities in suburban Chicago, the authors examine the impact of Latino population concentration on native-born white residents’ subjective perceptions of threat from Latino immigrants at two micro-level geographies: the immediate block and the surrounding blocks. After controlling for Latino population size in surrounding blocks, percentage Latino in the immediate block does not influence perceptions of threat from Latino immigrants. The effect of surrounding blocks’ population size is consistent with group threat theories for white residents: the larger the Latino population, the greater the perceived threat.

Structural versus Ethnic Dimensions of Housing Segregation Richard H. Sander , Yana Kucheva

Structural versus Ethnic Dimensions of Housing Segregation

Author: Richard H. Sander , Yana Kucheva
Publisher: US Census Bureau Center for Economic Studies (Working Paper No. CES-WP-16-22)
Date: 03/2016

Racial residential segregation is still very high in many American cities. Some portion of segregation is attributable to socioeconomic differences across racial lines; some portion is caused by purely racial factors, such as preferences about the racial composition of one’s neighborhood or discrimination in the housing market. Social scientists have had great difficulty disaggregating segregation into a portion that can be explained by interracial differences in socioeconomic characteristics (what we call structural factors) versus a portion attributable to racial and ethnic factors. What would such a measure look like? In this paper, we draw on a new source of data to develop an innovative structural segregation measure that shows the amount of segregation that would remain if we could assign households to housing units based only on non-racial socioeconomic characteristics. This inquiry provides vital building blocks for the broader enterprise of understanding and remedying housing segregation.

Effect of Neighborhood Stigma on Economic Transactions Max Besbris, Jacob William Faber, Peter Rich, Patrick Sharkey

Effect of Neighborhood Stigma on Economic Transactions

Author: Max Besbris, Jacob William Faber, Peter Rich, Patrick Sharkey
Publisher: Proceedings of the National Academy of Sciences of the United States of America
Date: 04/2015

The hypothesis of neighborhood stigma predicts that individuals who reside in areas known for high crime, poverty, disorder, and/or racial isolation embody the negative characteristics attributed to their communities and experience suspicion and mistrust in their interactions with strangers. This article provides an experimental test of whether neighborhood stigma affects individuals in one domain of social life: economic transactions. To evaluate the neighborhood stigma hypothesis, this study adopts an audit design in a locally organized, online classified market, using advertisements for used iPhones and randomly manipulating the neighborhood of the seller. The primary outcome under study is the number of responses generated by sellers from disadvantaged relative to advantaged neighborhoods. Advertisements from disadvantaged neighborhoods received significantly fewer responses than advertisements from advantaged neighborhoods. Results provide robust evidence that individuals from disadvantaged neighborhoods bear a stigma that influences their prospects in economic exchanges. The stigma is greater for advertisements originating from disadvantaged neighborhoods where the majority of residents are black. This evidence reveals that residence in a disadvantaged neighborhood not only affects individuals through mechanisms involving economic resources, institutional quality, and social networks but also affects residents through the perceptions of others.