Myron Orfield is concerned that an emphasis on building subsidized low-income housing along the Central Corridor light rail line connecting downtown St. Paul and downtown Minneapolis will concentrate poverty in those neighborhoods and he is right.
If I understand this housing correctly, the low-income housing units are offered to people who qualify based on income. The rent needed to finance the buildings is subsidized through building grants, reducing the amount needed to be financed by rents. Hence the ability to offer lower rents to people who qualify.
It sounds like a good idea, but Orfield is right. This sort of strategy concentrates the poor and the problems that follow poverty.
We have seen what happens when low-income and poverty is concentrated in neighborhoods by good intentions. Public housing complexes in St. Louis and Chicago come to mind.
The neighborhoods along the Central Corridor need stronger, more economically diverse neighborhoods. If I understand how the subsidized housing now built or being proposed subsidizes the property that then is made available to qualified renters at reduced rates, thus concentrating low incomes while excluding — and dissuading — others to invest in those neighborhoods.
Isn’t it a better idea to subsidize the individual rather than the property? We do this for education, for example. In a general sense — excluding privates, primarily — we don’t have subsidized schools for the poor and non-subsidized for the rest. We still give some grants to those who cannot afford tuition.
We also do this in another more familiar way…the much aligned “food stamp” program, otherwise known as the Supplemental Nutrition Assistance Program (SNAP). We don’t make people who need aid shop at stores subsidized and built just for them, we help them meet their needs along side everyone else.
These programs work. They help those who could use a boost, but they also put money into the existing economy without creating possible inefficient redundancy and bad externalities people associate with poverty. In the housing market, I imagine a landlord would welcome the extra guarantee of rents paid if it were backed up by a subsidy program.
So, again, if I understand these housing developments properly, I think Orfield has a point that should be taken up. If we want the Central Corridor neighborhoods to redevelop and someday thrive again, we need to focus on economic diversity and invest with that goal in mind. Quick solutions won’t serve that goal well.