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Housing programs concentrate poverty in a few metro locations, report finds

A University of Minnesota study says the programs are widening racial gaps, but the state’s housing commissioner refutes much of the critique.

Sienna Green Phase II brought 50 affordable, two and three-bedroom apartments for families to Roseville.
MinnPost photo

The infamous gaps that separate the Twin Cities’ relatively affluent white population from its persistently poor populations of color — gaps that are wider here than nearly any place in the nation — continue to embarrass and mystify this proudly progressive region. But they are no mystery to Myron Orfield.

In a combustible report released today, Orfield and his colleagues at the University of Minnesota Law School’s Institute on Metropolitan Opportunity purport to show how state and metro housing authorities have used — or perhaps misused — federal housing money to systematically concentrate impoverished racial minorities in just a few locations, most of them in the poorest areas of Minneapolis and St. Paul, rather than integrating them into the wider metro region.

Indeed, since the 1980s, the state and region have pursued policies in both housing and education that, according to the report, have corralled impoverished minorities into concentrated geographical settings, settings that, as sociologists have long understood, tend to turn poverty into a culture of its own and make cycles of generational poverty harder and harder to break.

By isolating “the problem,” we’ve widened our racial gaps, Orfield argues. By giving up on metro-wide integration, we are left with the sad consequences of the segregated world we’ve created.

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“Our policies and actions have been self-destructive,” he said in an interview on Thursday, arguing that housing has become “more of a segregation perpetuation program than an opportunity program.”

Orfield blames legislative mandates and perverse allocation formulas for funneling the bulk of housing money into already poor, racially segregated areas rather than into whiter suburban districts where subsidized housing could be built at two-thirds the cost and where opportunities for better schools and jobs are greater.

“It’s a paradox,” he said. “Even when white suburbia asks for more affordable housing projects they get turned down, in large part because the formulas are tipped against them.”

Minnesota Housing Commissioner Mary Tingerthal refutes much of Orfield’s critique, saying that he oversimplifies the housing picture. “I’m troubled by his conclusions,” she said Thursday, asserting that Orfield’s report overlooks progress that her agency and the Met Council have made in spreading the money around. “We’ve been focused on the problems that he has identified,” she said.

Orfield’s report, “Reforming Subsidized Housing Policy in the Twin Cities to Cut Costs and Reduce Segregation,” is the latest in a series of studies stretching back to the 1990s in which he, Tom Luce and other colleagues have mapped geographical, racial and economic divides, both here and in other U.S. cities.

Distribution of housing units in central cities and suburbs, 2012

Source: Institute on Metropolitan Opportunity
Subsidized housing units in the Twin Cities metro region are disproportionately located in the central cities.

As in previous reports, Orfield’s numbers and maps tell the tale. While only about 25 percent of the metro population and housing units are located in Minneapolis and St. Paul, about 59 percent of subsidized housing units are squeezed into the poorest areas of those cities, he asserts. Indeed, most of the region’s suburban subsidized housing is clustered near the borders of the central cities while far larger suburban expanses have little or no subsidized housing at all.

affordable housing
Courtesy of the Institute on Metropolitan Opportunity
Subsidized housing units are heavily concentrated in Minneapolis and St. Paul.

The policy impact is keenly felt in nearby public schools, Orfield claims. As recently as the early 1990s, there were almost no sharply segregated schools in the metro region. Now, by Orfield’s count, there are more than 130. For him, the link between subsidized housing location and low-performing schools is clear and direct – and a classic recipe for trapping people into lives of poverty and despair. Only one-sixth of subsidized housing units are located in predominately white areas, where opportunities are greater, the report says. The effect, it says, is to “shut off long-run opportunities to low-income children of color, contributing to the region’s enormous racial gaps in educational performance.”

Perhaps the report’s most explosive assertion is that the state and metro housing agencies have been unfaithful to the spirit — if not the letter — of federal housing laws, most specifically, the Fair Housing Act. “Simply put, federal funding must be used on projects that encourage integration,” the report says. “The region’s current strategies are clearly not meeting this requirement.”

Orfield cites a 2012 Texas case in which a federal court struck down a formula that disproportionately awarded low-income tax credits to minority neighborhoods. The court found a “perpetuation of segregation.”

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Minnesota’s policies come close to violating federal law, Orfield contends, and he wouldn’t be surprised to see a court challenge.

Tingerthal disagrees. “We’re confident that our plan does not include those characteristics,” she said, referring to the Texas statute.

For Orfield, the crux of the problem is that, based on their comparatively small populations, segregated areas of the Twin Cities get three times their share of housing dollars. To comply with the law, those dollars should be spread more evenly.

But for Tingerthal, it’s not that simple. Federal guidelines direct local agencies to follow a dual approach, she said. They must allocate money to non-poverty areas as a way of promoting integration, but must also reinvest to stabilize older, low-income areas where transit provides access to schools and jobs. “It’s our job to do both,” she said.

Orfield’s analysis fails to recognize the diversity of housing needs, she added. Most of the region’s suburban investments are in homes for families, she said, while the need in the urban core is for smaller-scale units.

One surprising target for the Orfield report was the affordable housing industry itself. With private banks and the federal government stepping away from general reinvestments in those poor areas, housing advocates have stepped in to fill the void with handsomely paid executives, large staffs and a mission to maximize units. But what masquerades as economic development does little for impoverished communities, the report contends, except to exacerbate the concentration of poverty.

In a case study, the report traces housing money flowing into Minneapolis’ near south side but concludes that, for all its efforts, the district falls far short of economic transformation. “There’s nothing to suggest that driving a larger share of housing money into poor neighborhoods actually improves the prospects of those neighborhoods,” Orfield said. The “scattered-site” approach — small investments scattered throughout the suburbs — shows better results, he said.

Andriana Abariotes, director of Twin Cities Local Initiative Support Corporation, a group that produces affordable housing, said she agreed with 85 percent of Orfield's critique, but said he's “myopic” on the subject of integration and lacks the broader context needed to fully understand the housing problem. Investments in Minneapolis' near south side actually paid off handsomely, she said. “Remember, that was crack alley and the heart of so-called Murderapolis, and now it's a stable community.”

Asked if he considers Minnesota’s strategy a deliberate effort to corral poor minority populations into a few concentrated locations, Orfield said, “It’s less a matter of racism than a comedy of errors.” But he noted that peer metro areas, notably Seattle and Portland, have used housing policies that avoided concentrations of racial poverty and have been better off for it.

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As for solutions, the report suggests that Minnesota return to previous policies that emphasize integration. Formulas should be changed in ways that distribute subsidized housing throughout the metro region, it says. Point systems should be reconfigured to give more weight to cost-effective solutions and access to good schools. And all levels of government should adjust their policies to avoid investments that exacerbate concentrations of poverty.