Publications

Neighborhoods

Neighborhood is the bundle of spatially based attributes associated with a proximate cluster of occupied residences, sometimes in conjunction with other land uses.

Dwellings for the Severely Mentally Disabled and Neighborhood Property Values: The Details Matter

The research investigates the effects of dwellings occupied exclusively by severely mentally disabled (SMD) tenants on sales prices of nearby homes. Hedonic price models are estimated for an exhaustive sample of single-family home sales from 1989 to first quarter 1992 in Newark and Mt. Vernon, OH. Proximity within two blocks of rehabilitated dwellings occupied by SMD had no significant relationship with sales prices. Prices of homes proximate to two small, newly constructed apartment complexes were 40% lower after the complexes opened, although those near three other similar apartment complexes were not.

Testing for Discrimination in Home Insurance: Results from New York City and Phoenix

This paper examines the results of a paired testing study of neighbourhood-based discrimination in the provision of quotes for home insurance in New York City and Phoenix, Arizona. We examine whether agents treated insurance-seekers buying their first homes in moderate-income, predominantly black or Hispanic-occupied neighbourhoods differently from insurance-seekers in comparable predominantly white neighbourhoods. The study examines differences in whether a quote is provided, the type of insurance and policy options offered and the premium quoted. Overall, of 10 key measures (5 for each city), only 1 (optional replacement cost coverage on personal property in Phoenix) showed a statistically significant difference consistent with discrimination. Testers in Hispanic neighbourhoods of Phoenix were quoted premiums 12 per cent higher than those offered to testers in white neighbourhoods. This difference, however, is in line with the price schedules for the state-approved rating territories in which the white and Hispanic homes were located.

A Bid-Rent Analysis of Housing Market Discrimination

The elimination of racial discrimination has long been a dominant American social concern. Laudably, economists have contributed many studies which have attempted to identify and quantify such discrimination, particularly in the area of the housing market. The research reported here, while following in this tradition, employs a new approach in attempting to discover not only the magnitude of housing price discrimination, but how its burden is incident upon different types of nonwhite households. A model of urban housing markets will be developed from the bid-rent theory which allows one to isolate empirically the distinct contributions to interracial housing price differentials made by variations in households' preferences, incomes, and housing packages versus those made by discriminatory actions. Bid-rent functions will be econometrically estimated for individual household observations stratified into groups of comparable age, family size, education, socioeconomic class, and race. These functions will be used to estimate what the various nonwhite strata would be willing to bid for typical white-occupied units. The divergencies between such bids and prices actually paid by whites will provide a measure of the existence and magnitude of discrimination confronting nonwhite groups.

Implications of Rising Flood Risk for Residential Real Estate Prices and the Location of Employment

Flood risks are forecast to rise significantly across many parts of Europe, USA, and Asia. As the climate warms, sea levels will continue to rise and the water holding capacity of the atmosphere will increase exponentially. At the same time, the cost of building flood barriers will increase disproportionately with every additional centimetre of height. For many countries, these flood risks will be highly localised, however, and with strong spatial spillovers. This paper uses a unique dataset for 5 boroughs in London to develop a spatial econometric simulation model of the impacts of current and future flood risks on house prices and the location of employment. We consider the broader socio-economic implications of our results.

The Costs of Segregation and Discrimination. Policy Research Agenda on Fair Housing for HUD.

No abstract is provided for this article.

Threshold effects and the expected benefits of attracting middle‐income households to the central city

This article looks at the two primary expected benefits of efforts to bring back, or retain, middle‐income households in the central city: (1) improved fiscal conditions caused by increasing the tax base and (2) decreased socioeconomic isolation of central‐city low‐income households. We examine the causal linkages reputed to produce these two benefits in light of the relatively limited relevant theoretical and empirical research. Although stressing that this work is only tentative and intended to be provocative, we cautiously conclude that thresholds matter. That is, it is likely that the number of middle‐income households in a given area must exceed a certain threshold for significant benefits to accrue. The geographic scale of this area, the threshold that applies, and the time needed for benefits to appear depend on the particular causal linkage at issue. In the last section, we derive implications for research and policy evaluation.

The impact of parental homeownership on children's outcomes during early adulthood

Whether children benefit from being raised in a home owned by their parents has important policy implications and has been the topic of much scholarly debate. We match Panel Study of Income Dynamics data with census tract data to examine the impact of childhood experiences on adult outcomes for children followed over three decades. This allows us to document a wide range of characteristics. For children born between 1968 and 1974, we analyze data on their first 18 years and also various outcomes when they are between 25 and 31 in 1999. We control for a comprehensive set of observable parental characteristics and develop a method to control for unobservable child characteristics together with an instrumental variable for the remaining selection problems. Parental homeownership status and children's college education and home‐ownership status are closely related, although the former is generated partially by the greater residential stability associated with homeownership.

The Financial Viability of Housing for Mentally Ill Persons

Although persons with serious mental illness experience significant unmet housing needs, basic information on how housing is successfully financed, developed, and operated for them is lacking. It is possible that standard housing rules of thumb may not apply to this population. (For example, community opposition may raise development costs.) This lack of information may be a stumbling block to policy makers, planners, and developers. This article attempts to close the gap by examining the financial profile of 153 properties developed for persons with serious mental illness by five nonprofit housing corporations between 1988 and 1992. Our analysis suggests that although this housing may require more management attention, it is not fundamentally different from market‐rate housing for low‐income tenants. After more than 10 years, the nonprofit housing developers continue to thrive, and virtually all of the properties continue to serve persons with mental illness, demonstrating that such housing can be successfully developed and operated.

Measuring the impact of community development block grant spending on urban neighborhoods

Regression analysis of Community Development Block Grant (CDBG) spending in 17 large cities reveals strong statistical associations between spending from 1994 to 1996 and changes in three indicators of neighborhood conditions: the home purchase mortgage approval rate, the median amount of the home purchase loans originated, and the number of businesses. However, there is no consistent association between spending and indicators of subsequent neighborhood change unless CDBG spending is sufficiently spatially targeted that it exceeds a threshold of the sample mean expenditure and is measured relative to the number of poor residents. In addition, associations vary according to neighborhood trajectories before investment and changes in the local economy. Nevertheless, even in the least hospitable contexts—highly concentrated neighborhood poverty, preexisting declines in home values, weak city job growth—our estimates are consistent with the hypothesis that above‐threshold CDBG spending produces significant neighborhood improvements. We discuss the implications for such spatially targeted spending and connections between our work and the emerging literature on the dynamics of poor neighborhoods.

ONE / Introduction

This chapter provides overarching frameworks for understanding the determinants of individual household residential mobility, housing tenure choice, and residential property investment decisions, synthesizing the existing scholarship on these behaviors. These frameworks show how households and housing investors are behaviorally linked, how their actions get aggregated to produce neighborhood-level outcomes, and how these aggregate outcomes, in turn, reflect back on the individual decision makers and their families, shaping their perceptions, behaviors, qualities of life and future opportunities. These frameworks are distinguished by their consideration of different spatial scales—individual, neighborhood, local political jurisdiction and metropolitan area—and how the forces affecting neighborhoods are woven together in a complex web of mutually causal, self-reinforcing relationships. The chapter introduces eight core propositions related to how we make our neighborhoods and how they make us.

Who Is Affected by Neighbourhood Income Mix? Gender, Age, Family, Employment and Income Differences

This paper analyses the degree to which the mixture of low-, middle- and high-income males in the neighbourhood affects the subsequent earnings of individuals, and aims to test explicitly the degree to which these impacts vary across gender, age, presence of children, employment status or income at the start of the analysis period. An intertemporal differences specification of an econometric model is employed to eliminate the potential selection bias arising from unmeasured individual characteristics, utilising data on 1.67 million adults living in Swedish metropolitan areas 1991—99. It is found that there are important differences in the nature and magnitude of neighbourhood income mix effects in several dimensions, but many are statistically and economically significant. Neighbourhood mix effects are consistently stronger for parents and those who do not work full-time, independently of other individual dimensions, although a combination of personal attributes typically governs the vulnerability of the individual to the neighbourhood.

Neighborhoods

Be It Ever So Humble, There’s No Place Like Home: The Experiences Of Low-Income, Minority Homebuyers

Robert Mark Silverman, Kelly L. Patterson. p. cm. -- (Studies in critical social sciences ; v. 33) Includes bibliographical references and index. ISBN 978-90-04-20144-6 (hbk. : alk. paper) 1. Housing policy--United States. 2. Discrimination in housing--United States. 3. Housing--United States

The Dialectic of Neighborhood Social Mix: Editors' Introduction to the Special Issue

We review the longstanding dialectic that has characterized theorizing, evidence-gathering, and policy-making in the realm of neighborhood social mix, take stock of where the debate now stands, and offer suggestions of where next steps in scholarship might be most fruitful. The preponderance of plausibly causal evidence from Europe and North America indicates that disadvantaged individuals are (1) harmed by the presence of sizable disadvantaged groups concentrated in their neighborhood and (2) helped by the presence of more advantaged groups in their neighborhood, probably due to positive role modeling, stronger collective control over disorder, and violence and elimination of geographic stigma, not cross-class social ties. Thus, there is a sufficient evidentiary base to justify the goal of social mix on grounds of improving the absolute well-being of the disadvantaged. This goal should be achieved by voluntary, gradualist, housing option-enhancing strategies that over the longer term expand opportunities for lower income families to live in communities with households of greater economic means. We advocate for these approaches because they impose fewer hardships on the disadvantaged and, hopefully, are also more effective over time.

Obstacles to desegregating public housing: Lessons learned from implementing eight consent decrees

Between 1992 and 1996 the U.S. Department of Housing and Urban Development (HUD) settled a number of legal cases involving housing authorities and agreed to take remedial action as part of court‐enforced consent decrees entered into with plaintiffs. These housing authorities faced significant obstacles that impaired their ability to comply swiftly and fully with all of the elements in the desegregation consent decrees. The obstacles fell into two broad categories: contextual obstacles (racial composition of waiting lists and resident populations, lack of affordable rental housing, and inadequate public transportation), and capacity and coordination obstacles (conflict among implementing agencies and ineffective monitoring by HUD). Findings presented here highlight the sizable potential delay between the time a legal remedy is imposed and when plaintiffs in public housing segregation disputes realize any benefits. They also reinforce the argument that implementation problems will be legion when policies impose a significant scope of required changes on a large number of actors who must collaborate, yet are not uniformly capable or sympathetic to the goals being promoted. © 2003 by the Association for Public Policy Analysis and Management.

Neighbourhood Crime and Scattered-site Public Housing

In this paper, an assessment is made of the extent to which proximity to 38 dispersed public housing sites opening in Denver during 1992-95 affected post-development levels and trends in neighbourhood crime rates. A new econometric specification incorporating pre- and post-controls for selection bias as well as spatial autocorrelation was employed to test for statistical relationships between the development of dispersed public housing sites and subsequent increases in various types of crime. The findings suggest that proximity to dispersed public housing was not associated with any post-development increase in reported crime of any type.

On the Nature of Neighbourhood

The paper advances the conceptualisation of neighbourhood by specifying it as a bundle of spatially based attributes associated with clusters of residences, sometimes in conjunction with other land uses. There follows a discussion of how this 'composite commodity' definition relates to the planning challenge of spatially bounding neighbourhood. The paper then probes the myriad idiosyncrasies associated with the concept of neighbourhood: cross-attribute variation in durability and ability to be priced, relativistic evaluations of attributes and consumption impacts on attributes. It discusses how, within this new paradigmatic context, neighbourhoods are produced by the same actors that consume them: households, property owners, business people and local government. Finally, consideration is given to various aspects of the origins and nature of neighbourhood change and it is argued that neighbourhood dynamics are rife with social inefficiencies.

Alternative measures for the financial condition of the multifamily housing stock

Indicators of the financial condition of the multifamily housing stock can potentially inform several policy issues, such as the loss of affordable rental units, multifamily developers’ access to capital, and the emerging secondary mortgage market for multifamily properties. Several rules of thumb exist for assessing financial condition. This article uses the Residential Finance Survey to investigate whether it matters, from a practical standpoint, which one is employed. Specifically, we ascertain how five measures—loan‐to‐value, debt coverage, rent‐to‐value, net operating income—to‐value, and vacancy loss ratios—relate to each other and rank properties. We found that Pearsonian correlations among the measures varied dramatically. Factor analysis produced two factors, one corresponding to a rent‐flow measure and the other to a debt‐burden measure. Spearman rank‐order correlations revealed that with one exception, measures yielded noticeably dissimilar financial condition rankings. We conclude that single‐dimensional measures of financial condition should not be used in isolation.