1. 2016 Massachusetts Smart Growth Conference - June 2, 2016
Mixed Income and Mixed Race Discussion
Karen E. Kelleher Deputy Director

2. MassHousing & Mixed Income
“Income mix is the major social goal of the Massachusetts Housing Finance Agency (MHFA)”
-- Citizens Housing & Planning Association Report, 1974
“When the Massachusetts Housing Finance Agency was created by the Massachusetts Legislature in 1966, we had for the first time in history a clear policy to promote economic integration . . .” Bill White, MHFA Executive Director in 1974
Source: All In Together, A Report on Income-Mixing in Multi-Family Housing, Citizens Housing & Planning Associatiion (based on a social audit of housing financed by the Massachusetts Housing Finance Agency), 1974.

3. MassHousing & Mixed Income
MassHousing formed in 1966
To finance privately-owned, mixed-income housing (vs. 100% affordable public housing)
Required 25% low income (80% AMI) units
Goal: Better design, construction and management to broader range of incomes
Federal and state interest and rent subsidies
Source: All In Together, A Report on Income-Mixing in Multi-Family Housing, Citizens Housing & Planning Associatiion (based on a social audit of housing financed by the Massachusetts Housing Finance Agency), 1974.

4. MassHousing & Mixed Income
121 developments, $396 million in loans, and 17,892 units.
Source: All In Together, A Report on Income-Mixing in Multi-Family Housing, Citizens Housing & Planning Associatiion (based on a social audit of housing financed by the Massachusetts Housing Finance Agency), 1974.

5. MassHousing & Mixed Income
1974 Independent “Social Audit” by CHAPA reviewed 16 deals (mostly garden-style, suburban) to test impact
Income mix did not affect tenant satisfaction
Tenants were more satisfied in quality, well-designed, -constructed and –managed developments
“Tenants in MHFA Mixed income developments showed a higher level of satisfaction at all three income levels – low, moderate and market – when compared with tenants of comparable incomes in developments with more homogeneous incomes.”
“There were no significant differences that could be identified along income lines in measuring the life-style preferences, values and attitudes of tenants.”
Source: All In Together, A Report on Income-Mixing in Multi-Family Housing, Citizens Housing & Planning Associatiion (based on a social audit of housing financed by the Massachusetts Housing Finance Agency), 1974.

6. MassHousing & Mixed Income
“The Agency has demonstrated that quality housing which is not in the image of public housing. . . can be produced in volume and offered to low and moderate-income households.”
however. . .
Result – work harder to meet needs of large families and minority people through more serious outreach to minority tenants and requirements that 25% of units have 3 or more bedrooms.
“The MHFA program had not made any significant changes in the pattern of racial segregation.”
Source: All In Together, A Report on Income-Mixing in Multi-Family Housing, Citizens Housing & Planning Associatiion (based on a social audit of housing financed by the Massachusetts Housing Finance Agency), 1974.

7. Growing Income Segregation
1970
2014
In 1970, just 8 percent of families in Boston and the surrounding cities and towns lived in the poorest neighborhoods. Now, the figure is more than twice as high — 20 percent. Over the same period, the proportion of families living in the wealthiest neighborhoods has nearly tripled, from 6 percent to 16 percent.
The surge in affluence in some areas and poverty in others has wiped out scores of mixed-income neighborhoods. In 1970, 7 in 10 families lived in these places. Now it’s just 4 in 10.
Poorest Neighborhoods: 8% Wealthiest Neighborhoods: 6%
Poorest Neighborhoods: 20% Wealthiest Neighborhoods: 16%
Source: Boston Globe: Boston’s struggle with income segregation, March 6, 2016 by David Sharfenberg 7

8. In Metro Boston, Middle-income working households shrank since 1990
Middle Income Squeeze
In Metro Boston, Middle-income working households shrank since 1990
Lower-income and high income working households grew dramatically over the past 25 years
Source: 8

9. Changing Income Mix
Report: Boston Ranks No. 1 For City Income Inequality
In 2013 Boston’s 95/20 ratio was 15.0, and it was then the third most unequal big U.S. city. From 2013 to 2014, Boston’s poor got poorer, and its rich got richer.
There has been a reduction in middle-income Bostonians while lower-income and upper-income residents have grown dramatically 9

10. Housing and the Economy
Middle-income housing needs represent almost a quarter of the new workforce housing need over the next 15 years 10

11. MassHousing Workforce Housing Program
$100 Million Funding Commitment
Targeted to households with incomes of 61% - 120% of area median (AMI)
Up to $100,000 per eligible unit
Priority for new construction, but may include some preservation
Mixed Income: At least 20% of the units must be available to households with incomes under 80% of AMI 11

12. Fair Housing Impact on Funding
Inclusive Communities Case, Disparate Impact
Duty to Affirmatively Further Fair Housing - LIHTC Allocating Agencies
HUD AFFH Mapping Tool
HUD Study: Changes in QAPs Result in Different Outcomes
21 State QAPs Analyzed
Opportunity area priorities led to more projects in low poverty areas, fewer in high poverty areas
MA QAP Scored Highest on “Aggregate Index of Opportunity” 12

13. Massachusetts Qualified Allocation Plan
Priority for Family Housing in Areas of Opportunity One of 4 priority funding categories – all applications must meet at least one. Development must be in neighborhood/community that provides access to opportunities, including, but not limited to, jobs, transportation, education, and public amenities. (There is also a priority for Investment in distressed and at-risk neighborhoods where the housing may promote a mixed income range or improve community revitalization via jobs, transportation, education.) Fair Housing Narrative Required
How will project location and type, tenant selection plan, etc. further fair housing and what is plan for affirmative fair marketing to households and individuals least likely to apply for the affordable units.
Location in an Area of Opportunity – Up to 14 Points
Low concentration of poverty (census tract or overall municipality <15% poverty), access to jobs (6 pts), health care (2 pts), high performing school systems (8 pts), higher education (2 pts), retail and commercial enterprise and public amenities.
Part of a Neighborhood Revitalization Effort – Up to 6 Points Overall effort must include enhancing access to jobs, education, and/or health care in distressed community.
Market Unit Incentive – Up to 6 Points for 50% Market Units
Competitive Scoring
182 points Total, 100 Related to “Fundamental Project Characteristics”
Of remaining 82 for “Special Project Characteristics, 13

14. Impact of QAP Criteria
Effect of QAP Incentives on the Location of LIHTC Properties Multi-Disciplinary Research Team Report U.S. Department of Housing and Urban Development Office of Policy Development and Research April 7, 2015 Submitted
Source:Effect of QAP Incentives on the Location of LIHTC Properties Multi-Disciplinary Research Team Report U.S. Department of Housing and Urban Development Office of Policy Development and Research April 7, 2015 14

15. HOPE VI Lessons Learned?
Mixed-income redevelopment of severely distressed public housing, 1990’s and 2000’s, approximately 450 grants
Housing quality improvements
Health improvements for residents
Community revitalization/redevelopment
But little data supporting economic benefit to low-income residents 15

16. Source: HUD Office of Fair Housing and Equal Opportunity16

17. New Research Suggests Zip Code DOES Matter
Children who moved to low-poverty areas when young (e.g., below age 13) do much better as adults:
–30% higher earnings = $100,000 gain over life in present value
–27% more likely to attend college
–30% less likely to become single parents
Every year of exposure to a better environment improves a child’s chances of success.
But moving had little effect on the outcomes of children who were already teenagers or on parents’ earnings
Reinforces conclusion that childhood exposure is a key determinant of upward mobility
Source: Equality of Opportunity Project, Chetty, Hendron & Katz, 2015 17

18. New Research Suggests Zip Code DOES Matter
BEST UPWARD MOBILITY
WORST UPWARD MOBILITY
DuPage, IL
Baltimore, MD
15.2% Earnings Gain
17.2% Earnings Loss
Boston “commuting zone” ranked 26th with an overall earnings gain of But upward mobility varies within the region. . .
This rep
Source: Equality of Opportunity Project, Chetty, Hendron & Katz, 2015 18

19. New Research Suggests Zip Code DOES Matter
Source: Chetty, Hendron & Katz, 2015 19

20. Incentivize housing construction in low poverty areas?
Policy Implications?
Incentivize housing construction in low poverty areas?
Increase opportunity in high poverty areas?
Subsidize middle class to retain diversity?
Prioritize mobility vouchers (at appropriate rent levels) to increase housing choice?
Zoning reform to drive housing production in low poverty areas? 20