Joseph Harkness

Homeownership for the Poor in Distressed Neighborhoods: Does This Make Sense?

Abstract Several recent studies have found that homeownership has positive effects on childrens development. This article extends these studies by testing whether these effects depend on neighborhood conditions. This extension is important because many low‐income families that become homeowners under current policies promoting homeownership for the poor are likely to purchase homes in troubled or distressed neighborhoods. Homeownership in almost any neighborhood is found to benefit children, while neighborhood effects are weak. This suggests that the children of most low‐income renters would be better served by programs that help their families become homeowners in their current neighborhoods instead of helping them move to better neighborhoods while remaining renters. However, the positive effects of homeownership on children are weakened in distressed neighborhoods, especially those that are residentially unstable and poor. Thus, helping low‐income families purchase homes in good neighborhoods is likely to have the best effects on children.

Facility location with increasing production costs

Abstract Facility location models determine the set of locations on a network that minimize the sum of the costs of investment, production, and distribution to meet a known set of demands. In this paper, we introduce a new type of facility location model, which combines aspects of the well-studied simple uncapacitated and capacitated facility location problems. Its distinctive feature is that unit production costs are modeled as increasing with scale of output. Such cost functions have practical value in handling cases in which capacity can be “stretched” by incurring some additional cost (e.g., by adding workers). Indeed, it is shown that average total costs are minimized at a point where average production costs are rising. Four different formulations for this problem are proposed. Using linear programming plus branch-and-bound as a solution method, the four formulations are tested and compared on a set of 216 problems with randomly generated data.

Housing Affordability and Children's Well-Being: Evidence from the National Survey of America's Families

Abstract Affordability is a major housing problem for many families. However, no research has documented the harmful effects of unaffordable housing on children. It could hurt poor children by restricting the consumption of other basic necessities or stressing parents’ emotional reserves. This article takes a first look at whether poor children living in areas with more affordable housing fare better than their counterparts in less affordable areas. Results suggest that they do. But some models also suggest that the best educational outcomes are found in the most and least affordable housing markets, the latter likely because of unmeasured variables. Affordable housing has a stronger impact on older children than on younger ones, indicating that the effects may be cumulative. Consistent with studies on the effects of income, affordability appears to affect poor childrens well‐being primarily through its impact on the material consumption of basic necessities when they are young.

GEOGRAPHIC DIFFERENCES IN HOUSING PRICES AND THE WELL‐BEING OF CHILDREN AND PARENTS

ABSTRACT: This article contributes to the ongoing discussion about whether the official poverty measure should be adjusted for geographic differences in the cost of living (COL). Part of the support for spatial COL adjustments is the concern that the reduced purchasing power of the poor in higher-priced areas could jeopardize the health and well-being of children and parents. The results of this analysis of the Panel Study of Income Dynamics and its Child Development Supplement do not support this view. We find that children growing up in higher-priced housing markets appear to fare no worse than those in lower-priced markets.

Recipients of housing assistance under welfare reform: Trends in employment and welfare participation

Abstract Between 1994 and 2001, the employment of low‐skilled single mothers increased dramatically and the welfare rolls shrank. Did these gains extend to single mothers who received federal housing assistance? This question is important because these women constitute a large, highly disadvantaged group and because housing assistance may work at cross‐purposes to welfare reform by fostering dependency on public support. The prospect of deep cuts in housing programs adds to the timeliness of this research. We find that employment increased as much for single mothers who received housing assistance as for those who did not. Although welfare participation appears to have declined somewhat less for single mothers getting housing assistance, this may be due to inadequate data. Demographic differences do not appear to matter. Gains from increased employment more than offset welfare losses, for an estimated annual net savings of approximately

The interactive effects of housing assistance and food stamps on food spending

265 million in government outlays for housing subsidies in 2001.

Bricks and Behavior: The Repair and Maintenance Costs of Housing for Persons with Mental Illness

This paper examines whether the effects of housing assistance on food expenditures are different for recent food stamp recipients versus non-recipients. Since housing absorbs a large share of low-income household budgets, it is plausible to expect that housing assistance could free up substantial income to be spent on other basic necessities, such as food. On the other hand, if the disincentive inherent in the two programs amplify each other, there could be strong adverse effects on income, which could result in flat, or even reduced, expenditures on food. Two types of housing assistance are examined: public housing, and federally-subsidized privately-owned housing. Although both types of housing assistance are found to increase participation in the food stamp program, they have distinct effects on food spending. Public housing reduces food spending among those who were receiving food stamps before they moved in. But among those not formerly receiving food stamps, public housing tends to raise food spending. Privatelyowned assisted housing has no statistically significant effects on food spending.

The Financial Viability of Housing for Mentally Ill Persons

Comprehensive data on 153 properties offering independent living for persons with mental illness are used to examine the effects on repair and maintenance (RM) costs of building quality, neighborhood quality, building size, proportion of tenants with mental illness, and management experience with mentally ill tenants. We find an inverted U-shaped relationship between the proportion of mentally ill tenants in a building and its RM costs, which suggests favorable behavioral effects on mentally ill tenants of living in the same building with others who are mentally ill. We also find amenity features are associated with higher RM costs in properties where more tenants are mentally ill. Copyright 2001 by the American Real Estate and Urban Economics Association.

Comment on Michael A. Stegman, Walter R. Davis, and Roberto Quercia's “The Earned Income Tax Credit as an instrument of housing policy”

Abstract Although persons with serious mental illness experience significant unmet housing needs, basic information on how housing is successfully financed, developed, and operated for them is lacking. It is possible that standard housing rules of thumb may not apply to this population. (For example, community opposition may raise development costs.) This lack of information may be a stumbling block to policy makers, planners, and developers. This article attempts to close the gap by examining the financial profile of 153 properties developed for persons with serious mental illness by five nonprofit housing corporations between 1988 and 1992. Our analysis suggests that although this housing may require more management attention, it is not fundamentally different from market‐rate housing for low‐income tenants. After more than 10 years, the nonprofit housing developers continue to thrive, and virtually all of the properties continue to serve persons with mental illness, demonstrating that such housing can be successfully developed and operated.

The long-term effects of public housing on self-sufficiency

Abstract Using the housing affordability issue to advocate for an expansion of the Earned Income Tax Credit as part of a broader working families agenda is politically shrewd. The American public strongly supports the idea that those who “work and play by the rules” (207) should be able to afford the basic essentials of life, and housing is obviously one of them. From a policy analysis standpoint, however, there are too many unanswered questions to recommend such an expansion as a means of reducing housing cost burdens, although it may have merit on other grounds. Remarkably little is known about the causes and consequences of unaffordable housing for lower‐income working families. It is puzzling, for example, why so many lower‐income renters are experiencing affordability problems when the rental vacancy rate is at an all‐time high. Without a solid understanding of the problem, premature efforts to fix it could have unintended consequences.