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Privately Owned Subsidized Housing Lowers Chance of Living in Poor Neighborhoods

In an article published by Housing Policy Debate, Subsidized Housing and Residential Trajectories: An Application of Matched Sequence Analysis, Kwan Ok Lee, Richard Smith, and George Galster examine how residing in subsidized housing impacts a household’s access to quality neighborhoods in the future. The authors found that newly-formed households in privately owned assisted housing, including Low Income Housing Tax Credit and HUD-assisted properties, were less likely to live in high-poverty neighborhoods over the following 20-year period compared with newly formed households in public housing and market-rate housing. However, households formed in either privately owned assisted housing or public housing were more likely to live in racially segregated neighborhoods than similar households in unassisted housing.

The authors examined the 20 year moving patterns of households formed between 1988 and 1992 with incomes below 80% of the county median. The authors matched each household that began in public housing or privately owned subsidized housing with a similar household that began either in market rate housing. The authors ranked the neighborhoods to which these households subsequently moved, based on commonly used indicators of neighborhood quality, including the poverty rate and racial composition.

Households formed in privately owned assisted housing were less likely to spend longer periods of time in high-poverty neighborhoods than similar households formed in unsubsidized housing. Eighteen percent of households formed in privately owned assisted housing lived in high-poverty areas during most of the twenty-year period compared with 25% of similar households in market-rate housing and 45% of similar households in public housing. Households formed in privately owned assisted housing also spent more time in neighborhoods with higher educational attainment and lower unemployment than similar households in market-rate housing.

However, over the course of 20 years, households formed in both public housing and privately owned assisted housing remained in more highly segregated neighborhoods compared to similar households formed in market-rate housing. Newly formed households in public housing and those in privately owned subsidized housing were equally as likely to remain in exclusively minority-concentrated neighborhoods over the study period (58% vs 59%).

The authors conclude that privately owned assisted housing did better in promoting exposure to neighborhoods of higher socioeconomic status than either public housing, or private-market housing. Given the growing research documenting the importance of neighborhood effects, this finding suggests that privately owned assisted housing may be superior to traditional public housing in promoting positive long term outcomes for assisted households. However, both privately owned assisted housing and public housing underperform relative to private market housing in promoting exposure to more racially integrated neighborhoods.  

Subsidized Housing and Residential Trajectories: An Application of Matched Sequence Analysis is available at: