Thank you Vicki for that kind introduction, and thank you Ellen and Ricky for your presence and support. It is a great pleasure to join you here at the Furman Center for a deep conversation about housing.
I am especially grateful to our hosts: MacArthur is proud to support Furman’s rigorous, reliable, and policy-relevant research on New York’s housing market. You lead the way in revealing why and how housing matters.
I welcome our distinguished panel. We look forward to hearing your insights and sharing our ideas later this evening.
And I am heartened by this strong show of interest in housing. Thank you for coming. It is a real pleasure for me to reflect on a serious issue of public policy with an audience that is so caring, so well informed, and so deeply engaged. Your work, commitment, and wide experience have convinced you that housing is a critical issue for the health of our society, for America’s future.
The MacArthur Foundation shares your view. We want to help make housing policy and practice work better for more people and more places around this country.
I have had a deep personal interest in housing issues for a very long time: As a student in New Haven, I was a summer intern recruiting people with a mix of incomes to a 221d3 project on the edge of the Yale campus; when I was President of the New School, student and faculty housing was a pressing problem as both we and NYU went through a period of robust expansion; and as co-chair of the 14th Street Union Square Local Development Corporation, I worked hard to gain community acceptance for the 94-unit Genesis Apartments on 13th Street that provide quality housing for low-income and formerly homeless people.
“Home is where one starts from,” T. S. Eliot wrote. Few concepts are more primal, more universal, or more emotionally evocative. To discuss housing is to touch on the most deeply human places in our psyche and our society. The real issue in housing, after all, is not the buildings themselves, let alone their financing arrangements. At the end of the day, housing is really about people and their communities: who they are, the security they feel, the opportunities they enjoy, and how housing helps or hinders this nation’s individual and collective vitality.
Our intuition tells us that decent, affordable housing is central to education, health, employment, economic development. Yet there is not enough evidence to fully make the case. In a moment, I will describe some remarkable early studies. They are beginning to show the true importance of housing in reinforcing or eroding other social policies. Such studies provide us with firm empirical evidence and the intellectual tools to understand the role of housing.
More is needed. And this evening, I will announce a major new commitment by MacArthur to underwrite research at the intersection of housing and other policies.
But first, let me step back to examine the larger picture, to tell you a bit about MacArthur’s sustained involvement in the field of affordable housing, and to explain why I believe this to be an especially opportune moment for positive change in America.
It is fair to say, I think, that our citizens are on the whole better housed than at any time in our history. The dream of home ownership is already a reality for record numbers of Americans whose houses are larger and more fully equipped than ever.
But there is a parallel reality that is less encouraging. Consider the following:
• The Center for Housing Policy reports that, in 2003, 14 million American households (households, that is, not individuals) spent more than 50 per cent of their income on housing costs or lived in substandard conditions.
• The Center’s research shows growing problems among moderate income workers too: nurses, teachers, retail clerks, and police officers find it hard to buy homes in roughly 70 per cent of the country’s 200 metropolitan areas.
• The rental market, a vital part of a healthy housing sector, has eroded. In 2006, Harvard’s Joint Center for Housing Studies reported that the United States lost a net 1 million affordable rental homes over the previous decade. For every new low-cost unit built, two were razed, abandoned, or turned into condominiums and high-end rentals.
• Here in New York, two-fifths of the City’s households make less than $33,000 a year. The minimum salary for a new firefighter, for example, is below this level. The Furman Center’s newest “State of the City” report reveals that the number of rental homes affordable to these households dropped by more than 200,000 units between 2002 and 2005.
This data paints a sober picture. For many Americans, housing is a source of stress. For too many others, it is the cause of deep distress. People of color, the elderly, single parents, immigrants, and others with special needs are disproportionately affected. This situation is not acceptable for the richest society in the history of the world. Nor does it do justice to our country’s fundamental values: fairness, security, and opportunity.
The MacArthur Foundation is determined to elevate our country’s attention to housing. Our grants and program-related investments to leading nonprofit developers, financial intermediaries, housing researchers, and policy experts make us one of the largest funders in this field. We are increasing our grant budget for housing by 35 per cent this year, with more to come. By the end of the current decade, our total investment in housing will exceed $250 million. That places housing among the Foundation’s top areas of funding over its 30-year history. (I invite you to peruse the handout that shows all of the Foundation’s recent housing activity.)
I want to acknowledge the MacArthur staff members who are leading this effort: our domestic program Vice President, Julia Stasch, who served as Chicago’s Housing Commissioner; Debra Schwartz who directs program-related investments, and Erika Poethig, whose good judgment and keen insight assembled the portfolio of grants that inspired our decision to invest in new housing research. And although he could not join us tonight, we are delighted that Michael Stegman has come on board having previously served at HUD as Assistant Secretary for Policy Development and Research in the Clinton administration.
So we have first-rate staff, more money to spend, and a passion to move this country to a more rational and effective housing policy.
Our current program has three key elements:
• A special initiative to support the transformation of Chicago’s troubled public housing into new, mixed-income communities.
• The Window of Opportunity initiative, a promising 10-year effort dedicated to preserving and improving America’s stock of affordable rental homes. Our ambition is to preserve 100,000 homes directly. We also want to promote policy reforms that prevent the projected loss of another 1 million rental homes in the decade ahead.
• And the element I wish to stress particularly tonight: Significant support for research that builds our knowledge about how housing matters. For several years, we have been funding this research on an exploratory basis. We intend to do a great deal more.
I am pleased to take this occasion to announce a new initiative from the MacArthur Foundation. We will commit $25 million over five years to housing research. Details in a moment.
Even with all the good work that we are funding and that you are doing, the need continues to grow. It is clear that many of our current policies and programs are falling short. There is funding for new construction, but little for existing properties that need major repair. It is recognized that housing can be an effective setting in which to deliver social services. But funding for these programs is insufficient. Per capita formulas are used to ration Low Income Housing Tax Credits, bonds and other limited forms of subsidy; this leaves dollars unused in some parts of the country even as unmet housing needs in other places greatly outstrip the resources at hand.
But there are reasons for optimism too.
Hundreds of cities, counties and states have dedicated public revenue to housing trust funds. More than 40 states and localities have made preserving their existing affordable rental stock a new priority. Plans to end chronic homelessness are being adopted throughout the country, aided by a serious increase in federal attention and resources.
Mayor Bloomberg and Housing Commissioner Donovan are undertaking a $7.5 billion housing plan here in New York. MacArthur is pleased to be supporting this effort, which aims to build and preserve 73,000 affordable homes by 2013.
And the new Congress brings further hope. A full roster of proposed legislation promises to improve materially the environment for affordable housing. The first of these measures passed the House two weeks ago extending an important preservation policy, Mark-to-Market, for several more years.
It seems to me that a policy “window” is opening. It is easier now than at any time in recent memory to imagine that critical financial and regulatory barriers to preserving and improving affordable housing will be overcome. Creative local models, like the New York Housing Acquisition Fund, are likely to be replicated. There may even be reforms like exit tax relief to encourage the transfer of at-risk rental properties to responsible, long-term preservation owners.
MacArthur sees this moment as an opportunity. The Foundation is planning to step up its support for affordable housing preservation. The aim will be to accelerate and reinforce model policy reforms that are taking hold throughout the country. Effective philanthropy has a lot to do with timing, and we think this is a time when we have the potential to add great value.
Housing advocates, practitioners and policy experts can accomplish a great deal. But it is my concern that we equip them well to move forward with their task. We need a new theory about how housing matters, and why it is a critical path toward other individual and community improvements to which we aspire. And that new theory must be more than a field of dreams; it must be built on high quality research that yields evidence to persuade across the political spectrum.
With better evidence about housing’s impact, we will be able to point more confidently at short-comings in the current approach to housing policy. We will have a firmer sense of the major changes we need to make, not only in the near term, but also over the next 10 to 20 years. Better and more knowledge about housing as it relates to schools, jobs, health, and economic growth will significantly change attitudes among policymakers and the public at large.
Social science has produced data-filled volumes on the impact of welfare reform, early childhood learning, and other safety-net programs. Far less is known about the impact of decent and affordable housing. It is time to fix that omission.
How does housing affect an individual’s health, cognitive ability, or academic achievement? How does secure housing give children a sense of self worth, and improve their ability to learn? How does it support a young adult entering the work force and building a career? How essential is it to healthy family relations, responsible parenting, and engaged citizenship?
And how do housing patterns affect our communities? Does subsidized housing really “crowd out” private investment? Do housing markets constrain or facilitate labor mobility? How exactly does a diverse housing stock contribute to the economic success and prosperity of an entire region?
Some outstanding scholars have been asking just these kinds of questions. Their findings have been important, sometimes surprising. They have encouraged us to do more.
Some examples of this groundbreaking work:
• Ingrid Gould Ellen, Amy Schwartz, and their former Furman Center colleague, Michael Schill, studied the impact of subsidized rental housing on neighborhood property values in New York City. They found evidence that, contrary to conventional wisdom, subsidized rental properties can enhance neighborhood property values over the longer term.
• Stuart Rosenthal, at Syracuse University, studied cycles of urban decline and renewal over the past 50 years. His findings suggest that the condition of a city’s housing stock is a major factor in such cycles. Spurring owners to improve their aging properties not only maintains a good housing stock, it appears to keep neighborhoods stable and protects against serious city-wide decline. The policy implication is clear.
• Sandee Newman, from Johns Hopkins, studies the relationship of housing affordability to children’s well-being. The conventional wisdom has been that additional income spent on housing has a negative impact on a family’s children. Her evidence suggests, to the contrary, that children’s overall welfare improved when parents found more expensive housing in better neighborhoods.
• A study of HUD’s 10-year-old “Moving to Opportunity” demonstration has found improved mental and physical health among children and parents who moved from high- to low-poverty neighborhoods. The researchers speculate that these gains derive from reduced exposure to violence which, in turn, may be lowering stress, improving parenting behavior, and reducing asthma-related illnesses. These benefits may be still more pronounced for children who move to safer environments earlier in life.
• And finally, a study from ten years ago by University of Chicago professor David Kerbow indicated that students who move have more absences, lower test scores, and are more likely to be held back a grade. Sparked by that earlier work, new research is underway to examine the links between housing, student mobility and educational achievement. Do students living in precarious housing perform badly at school? Could a combined investment in both housing and education improve outcomes in ways that increased school funding alone does not?
Findings like these, and the further questions they provoke, remind us how much we have yet to learn about how housing matters. The evidence to date suggests that housing is a critical factor in opening opportunity to individuals and improving communities. But testing this hypothesis in a rigorous way calls for a more complete and coherent body of evidence.
The new five-year, $25-million commitment that I announce tonight is not to underwrite more studies of housing costs and affordability. Applied research of this kind will remain vitally important, of course, and we will continue to fund it. But we also hope to promote new, open-ended inquiry that will take a hard look at the impact of housing. Research that can push our vision beyond incremental policy reform.
I firmly believe we must look farther out on the horizon – to think beyond the constraints of the fragmented, inflexible, and overly bureaucratic housing policy that is our lot today.
The core of our plan will be to create an interdisciplinary research network. The Network will bring together experts on education, mental and physical health, labor markets, economic development, the social environment, urban planning, and more. Its scope will not be limited to a single program or policy. Instead, its charter will be to probe and understand the range of ways that housing intersects with the people’s lives and affects conditions within particular communities.
The Network’s research agenda will not be constrained by demands for immediate policy application. We hope to learn whether and how housing might be a “threshold investment.” Is it, for example, a prerequisite for effective public spending on education? Or for child care, health insurance, or income transfer programs like the Earned Income Tax Credit? Not just about housing – we believe that progress for cities and their residents rests on working on housing, education, jobs, economic development, and health all at once in an integrated fashion.
In addition to the Network, other elements of our multi-year housing research initiative will include support for important demonstration projects, evaluation research to test the value of policy innovations, rigorous cost-benefit studies, and analysis of factors controlling the supply of affordable housing.
Of course, there are skeptics. Some believe that housing is an expensive and inefficient way to address the basic problem of poverty. Others question programs that subsidize people who have modest incomes but are not poor, even if their housing options are limited.
Perhaps the skeptics will prove to be right. We must remain open to the possibility. But why not put the questions to the test through rigorous research?
MacArthur will be prepared to take heed of whatever the evidence might suggest. But it is my very strong instinct that, when the work is done, our hypothesis that housing matters will hold up. And that, in turn, will strengthen the case for investments that provide all Americans with decent housing at a price they can afford.
As you have heard, MacArthur believes that housing is a critical path to individual growth and community vitality. And while the research is underway to test that proposition, we look forward to making common cause with our partners all across the country -- in the public, private and not-for-profit sectors – who are working hard to strengthen and expand our nation’s supply of quality affordable housing.
Harry Truman put the challenge to Congress in September, 1945, when he said: “A decent standard of housing for all is one of the irreducible obligations of modern civilization. The people of the United States, so far ahead in wealth and productive capacity, deserve to be the best housed people in the world.” Four years later, the Housing Act of 1949 made this our nation’s policy when it declared that every American deserved a “decent home and a suitable living environment.”
I feel confident the historical moment is at hand to realize our collective aspirations. MacArthur hopes the research initiative we announce tonight will help change the conversation about housing and galvanize the political will to realize Harry Truman’s vision. How else can we expect our people and communities to fulfill their true promise over the century that lies ahead?
I look forward to our panelists’ comments, your questions, and a lively discussion.
I now turn to Dr. Ingrid Gould Ellen, the moderator of our panel.