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Economics

HUD confirms segregation created by housing crisis

A statement issued by HUD, seems to confirm the research finding foreclosures lead to the migration of families and in turn, segregation.

foreclosure obama

The U.S. Department of Housing and Urban Development (HUD) has released a statement addressing the research from Harvard University study we recently discussed. This statement from HUD seems to reinforce the concept that foreclosure has forced racial segregation in some of the most impoverished neighborhoods.

In 1994, HUD embarked on a 10-year demonstration and research project called Moving to Opportunity (MTO). This experimental program was designed to measure the long-term effects of moving families away from neighborhoods with deeply concentrated poverty to low-poverty environments and to gauge the impact these moves had on the overall well-being of these families.

Interesting outcomes of where people reside

The recently published research findings of Harvard University Professors, relies upon HUD and Internal Revenue Service (IRS) data to measure a number of the long-term outcomes of children in this demonstration who grew into adulthood. The authors found that, in fact, children who moved to low-poverty neighborhoods when they were young are doing better as adults, with significantly higher earnings and a greater likelihood of having attended college.

The body of research on HUD’s Moving to Opportunity demonstration shows that adult women who move to lower poverty neighborhoods have large reductions in depression, anxiety, obesity, and diabetes. Moving to lower poverty neighborhoods provided children positive mental health benefits for girls, but there were negative mental and behavioral health effects for boys, a finding supported by other studies. There were no significant improvement in school outcomes for children, a disappointing outcome.

Reinforcing why the government invests in economic mobility

Findings from this new study, along with HUD’s own research, support the Department’s current policy direction of fostering opportunities for economic mobility while also investing in place-based strategies that revitalize distressed neighborhoods.

In addition, HUD will shortly propose a new policy to increase the options HUD-assisted families have in selecting safe and decent rental housing in lower poverty neighborhoods of their choice.

HUD Secretary Julián Castro issued the following statement: “This research underscores the importance of HUD’s mission to build strong communities where folks can thrive. Every day, we invest in people, in the places they live, and in giving folks the choice of moving to neighborhoods that better fit their needs.” Castro goes on to state, “HUD has long believed that concentrated poverty helps to perpetuate patterns of segregation and a lifetime of lost opportunities for residents in high-poverty neighborhoods. We are using data and evidence to improve our policies and to expand opportunities that benefit residents, the broader community and economy.”

The housing crisis has had a ripple effect

As I stated before, this research, and the subsequent HUD statement, seems to confirm the notion that a rather large ripple has been created in the pond of massive foreclosures: migration has indeed contributed to racial segregation.

Hopefully, HUD’s plan to expand opportunities and give families a better choice of where to live will help close the gap created by the housing crisis; until then, it seems foreclosures have sent a good portion of the population into a backwards spiral, from which it is very difficult to get away.

Jennifer Walpole is a Senior Staff Writer at The American Genius and holds a Master's degree in English from the University of Oklahoma. She is a science fiction fanatic and enjoys writing way more than she should. She dreams of being a screenwriter and seeing her work on the big screen in Hollywood one day.

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