Should funds to build affordable rental housing be targeted to “high opportunity” suburban neighborhoods or to low income inner city neighborhoods?  This debate between advocates of mobility strategies versus in-place strategies has continued for several decades now.

The debate has recently resurfaced with respect to a discussion among groups from across the country as to how the US Treasury Department should fulfill its Fair Housing Act responsibilities in connection with the Low Income Housing Tax Credit program (LIHTC).  (Federal agencies which administer housing funds have an obligation under the Fair Housing Act to administer those funds so as to “affirmatively further fair housing”.)  The LIHTC program is the main federal housing program to fund new construction, as well as preservation, of affordable rental housing.  Also caught up in this debate are state housing finance agencies which are generally responsible for creating qualified allocation plans (QAPs), which determine which tax credit proposals get funded, and thereby, determine the general distribution of tax credit projects within each state and region.

A group of fair housing advocates have been urging Treasury to adopt rules which would compel state agencies administering tax credit funds to do so in a way that targets these funds principally to high opportunity racially integrated suburban locations.  They argue that the combination of the lack of guidance from Treasury and the way many QAPs are set up, has been to create a pattern in which too many tax credits are devoted to low income inner city neighborhoods, thus perpetuating patterns of racial segregation.  They point to a recent federal court decision holding that the QAP in the Dallas region violated the Fair Housing Act in its over-emphasis on placing tax credits in poor black neighborhoods of the city.

On the other side of the current debate are community development groups, including a number of affordable housing developers who rely on tax credits.  They argue that an allocation policy focused too much on “high opportunity areas” deprives many low income households of color affordable housing opportunities in inner city neighborhoods where they wish to stay.  Tax credit allocations are particularly necessary, they argue, to preserve existing affordable housing at risk of conversion to market rate housing or physical deterioration, as well as to build new affordable housing in low income areas that are subject to revitalization plans and likely gentrification. 

As of this writing (October 2012), the Ford Foundation and other groups have been convening a series of conversations between the two groups, with the goal of producing a statement of principles all can agree to.  HPP became involved in this debate because our staff has a long history of involvement in these questions.  Prior to their work with HPP, two of HPP’s senior staff spent nearly a decade litigating and then implementing the settlement of a region-wide class action public housing desegregation lawsuit in the Twin Cities, Hollman v. Cisneros.  The goal of the Hollman settlement was to expand affordable housing opportunities into suburban locations, but also to rebuild mixed income housing back on the site of the segregated inner city public housing projects.

HPP as an organization is dedicated to preserving existing affordable housing, including projects located in low income minority neighborhoods of the city.  It is HPP’s position that affordable housing resources necessarily need to be balanced between both expanding access to high opportunity areas, and investing in inner city neighborhoods where low income people wish to remain.  HPP staff have been contributing to this discussion not only on a policy level based upon three decades of working on these issues, but also with respect to the legal requirements of the Fair Housing Act, and the cases addressing these difficult questions involving competing policy goals.  Achieving a consensus on these questions among advocates would be very useful.  As of this writing, efforts are still underway.