The voices of Urban Institute's researchers and staff
September 11, 2012

Did somebody say neighborhoods don't matter?

September 11, 2012

In the mid-1990s, the Department of Housing and Urban Development (HUD) launched a demonstration to find out whether poor families would be better off if they could move away from distressed, high-poverty housing projects to live in low-poverty neighborhoods. The demonstration was called Moving to Opportunity (MTO) and the families that volunteered to participate have been surveyed and studied for more than a decade. The hope was that both parents and kids would benefit from the safety, good schools, positive peers, and job access in low-poverty neighborhoods.

Last year, HUD released findings from its MTO evaluation, answering the question: are families that received the demonstration’s experimental treatment (housing counseling and vouchers for rentals in low-poverty neighborhoods) better off than their counterparts in the comparison and control groups? It turns out that, as a group, the MTO experimental families do enjoy significantly better health and mental health than the control group but not higher employment, incomes, or educational attainment.

Some scholars and policymakers have taken these findings to mean that where we live—and where our kids grow up—doesn’t really matter. In fact, the evidence from MTO doesn’t support this pessimistic conclusion.

First, the health gains enjoyed by MTO’s experimental families are hugely important. High rates of obesity, anxiety, and depression severely degrade a person’s quality of life, employability, and parenting abilities. Nobody should understate the value of a policy intervention that helps tackle these chronic health risks.

Second, one possible reason that MTO gains were limited to health outcomes is that the special mobility assistance provided by the demonstration didn’t enable the experimental families to gain and sustain access to high-opportunity neighborhoods. Experimental families moved to better-quality housing and safer neighborhoods but few spent more than a year or two in low-poverty neighborhoods.

New analysis finds that the MTO families that lived for longer periods in neighborhoods with lower poverty did achieve better outcomes in work and school, as well as in health.

Here are the specifics. Adults living in lower-poverty neighborhoods are more likely to have jobs and earn more, other things being equal. Youth (both boys and girls) living in lower-poverty neighborhoods have higher English and math test scores. These benefits are not only statistically significant but also meaningful in size. For example, an adult who lived in neighborhoods with poverty rates averaging 16 percent over a decade has a predicted monthly income $233 higher at the end of the period than an adult who lived in neighborhoods with poverty rates averaging 41 percent. The corresponding differences in boys' predicted English and math test scores equate to nearly a year of instruction.

It’s possible that these results reflect a complex set of feedback loops between neighborhood environment and family success (rather than simple, one-way causality). For example, families may move to or stay in better neighborhoods because they got a good job or increased their income; or parents who see the value of education for their children’s future might relocate to a neighborhood with great schools and push their kids to succeed academically.

Despite these complexities, the latest evidence from MTO argues for ongoing investments in programs that help low-income families find and afford housing in high-opportunity neighborhoods, including housing vouchers, mobility assistance and incentives, and targeted housing acquisition and construction programs. Federal housing policies shouldn’t be subsidizing poor families to live in distressed neighborhoods that undermine their health, their employment prospects, and their kids’ school success.

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