Association for Public Policy Analysis & Management

For decades, HUD has invested in neighborhoods to change their trajectories. This project seeks to understand how one feature of neighborhoods—mixed income developments—catalyzes neighborhood change. Specifically, this project will evaluate how specific mixed-income properties in a sample of cities in the Chicago and Los Angeles metropolitan areas have affected neighborhood economic development through attracting private and other investment, reducing violent crime rates, and changing investor and resident perceptions of place.  Integral to this analysis will be an assessment of the impacts of mixed-income development on housing affordability in the neighborhood over time.  The project focuses on four types of mixed income housing: low income housing tax credit development; HOPE VI projects; regulation-mandated units (inclusionary zoning, rent control or stabilization); and unsubsidized, naturally occurring affordable housing. Each of these is a different model of mixed income development and could interact with broader economic forces in different ways.

The approach will be empirical and will use a combination of quantitative and qualitative analyses. For our sample areas, we will build a database of mixed-income properties and collect data about the communities where they are located. We also will try to identify other public, private, and philanthropic activities in these neighborhoods to provide a richer context for the development activity we will study. Finally, we will develop a set of neighborhood performance metrics that will be used to establish a baseline and assess the neighborhood’s trajectory after the development of the mixed-income housing based on several impact measures.

We will test the before and after impacts of development on real estate prices and crime rates through distance-weighted regression models that will measure differences in differences across neighborhoods and time, including the introduction of controls that account for variations in neighborhoods prior to the development of the mixed-income properties and for other changes that may impact the city and region. We will also measure overall real estate investment in those neighborhoods, as well as changes in household incomes and race/ethnic makeup. The goal is to isolate the contribution of the mixed income housing to a neighborhood’s future pathway—including existing residents’ ability and willingness to stay—and also understand how variations of income mixes may have differing impacts.

Based on the results of the quantitative analysis, we will select up to five mixed-income developments in each city for more detailed case studies.  We will select developments that are especially noteworthy in their ability to maintain a significant proportion of affordable housing, attract and retain households with a wide range of incomes, and contribute to significant local economic development. These may be developments that represent positive "outliers" in our statistical analysis, or they may simply be more representative developments that are scattered throughout their respective cities. Through interviews with key local actors knowledgeable about the development and the dynamics of the surrounding community—including real estate developers, property managers, lenders, local public officials, community leaders, and police officers—we will identify the factors that have driven this multi-pronged success.