The Research

In the United States,

location is key for opportunities and for equality. Broadly, the “American Dream” (ie, the ability of a low-income kid to rise out of poverty) is tied to where someone grows up. For minorities, particular inequalities initially rose from discriminatory attitudes but were entrenched and exacerbated by segregation-enhancing housing policies dating back to 1933. (Excellent summary found here). Since 1986, the difference between what minority Americans earn and hold in wealth compared to white Americans has been broadening and has increased significantly since the Great Recession.


What matters? Location.

Groundbreaking recent research, led by Professor Raj Chetty at Harvard University’s Opportunity Insights, shows that breaking the cycle of poverty and closing the income gap for minority Americans greatly depends on where the low-income American happens to grow up. This finding comes down to the house-by-house and block-by-block level. In other words, a child from a low-income family raised in Frisco, Texas (high opportunity neighborhood) has a much greater chance of reaching the top than that same child raised in a disadvantaged Dallas area. The same concept applies to every city across the United States. To help guide policymakers, Harvard created the Opportunity Atlas, an interactive map depicting each High Opportunity Neighborhood across the US.

AREAS WHERE UPWARD MOBILITY WORKS ARE CALLED HIGH OPPORTUNITY NEIGHBORHOODS.

Through analyzing the Opportunity Atlas, certain areas have been identified as “High Opportunity Neighborhoods”. These are the places where a child born into a low-income family has a greater chance to close the wealth and income gap. This research by Opportunity Insights shows that the longer the child lives in the area, particularly at a very young age, the better they will do in the long run. Early interventions make a big difference in breaking the cycle of poverty.

These findings further revealed that the cycle of poverty had only been reinforced by historic national housing policies that paid rent subsidies based on average market rents across an entire metro area, thereby incentivizing landlords to solely house tenants in the lowest-cost neighborhoods. Those low-cost neighborhoods are typically those identified by the research as “Low Opportunity Neighborhoods”. They have higher rates of crime and poverty and lower educational attainment, which correlates to worse outcomes for children.

Dallas Housing Authority: A National Mobility Leader

In response to this groundbreaking research, HUD pivoted the Section 8 Housing Choice Voucher program to fund voucher recipients to move to High Opportunity Neighborhoods. Of the several geographic areas pursuing these programs around the country, the Dallas Housing Authority is currently the leader in terms of the number of vouchers provided as well as their level of commitment to making these moves possible for families.

Nationally, the challenge for these mobility programs is finding enough landlords in High Opportunity Neighborhoods willing to rent to these Section 8 Housing Choice Voucher holders. Many landlords hold pre-conceived biases about the quality of voucher holders as tenants. Matching housing supply with the demand will be the next big step in implementing these programs.

More Research Needed

While research shows that moving to HONs is better for kids than remaining in Low Opportunity areas, what is not as well known is how to make these moves easier and more successful, and thus more likely to drive greater long-term benefits for families and kids. For example, as reported by Opportunity Insights research, black boys don’t reach their full potential relative to their white boy peers to the same degree that black girls reach parity with white girls. These are important areas of inquiry with profound societal implications.