Strategies for Responding to Gentrification

by Joe Kriesberg
MACDC

As more and more communities across the country experience gentrification—and others fear its imminent arrival—community developers are struggling to find ways to respond. At a minimum, we seek to slow, or mitigate the process to diminish the disruption to the lives of current residents. Ideally, we would find ways to create inclusive neighborhoods that welcome newcomers while enabling long-time residents to stay and benefit from new jobs, services, amenities, and maybe even better schools. Indeed, our best hope for reducing racial segregation in our country is to achieve such a result.

Not surprisingly, these issues are frequent topics of conversations I've had with members of the Massachusetts Association of Community Development Corporations (MACDC), as well as with our allies and partners. I don't presume to have answers, but I do want to offer a few ideas that I've been thinking about as those conversations have unfolded:

• New affordable housing units (inclusionary or government-subsidized) may help retain the income mix of the neighborhood, but those units may or may not prevent displacement of existing residents because the people who move in could be from outside the neighborhood. To increase their efficacy as anti-displacement tools, we would need to offer a neighborhood preference for new tenants. Current fair housing rules, however, often prevent or severely limit such preferences.
• Given this reality, I believe that key actors in the affordable housing system need to overcome their reluctance to acquire existing apartments and preserve their affordability before it is too late. This is the only way to truly prevent displacement of current residents since they live in buildings that already exist—not ones yet to be built. Several CDCs in Boston and nearby Somerville have begun to do this effectively. We have many brilliant affordable housing professionals in Massachusetts and we should be able to develop scalable models for doing more of this. I'm confident it can be done for less money than we now spend on new affordable housing developments.
• The affordable housing system also needs to shift more of its resources to promoting homeownership as a stabilizing mechanism in gentrifying neighborhoods. Right now, the Commonwealth of Massachusetts spends 100 percent of its affordable housing development dollars on rental housing. Shifting 5 to 10 percent to homeownership could help stabilize our communities. Indeed, we need a full-scale effort to address the vast racial homeownership gap not only in our state, but in the rest of the country as well.
• While housing displacement gets most of the attention, I am increasingly concerned about cultural and economic displacement. When longstanding, locally-owned small businesses are forced to move (or worse, close), it impacts not only the business owner, but the entire community. Similarly, as the demographics of a place change, many residents feel the loss of their cultural community and home. Advocates are now fighting to help local businesses stay open. CDCs and others are increasingly using the arts and creative place-making (and place-keeping) to claim (and retain) their communities' historic and cultural narratives. The good news is that, compared to housing development, these interventions are relatively inexpensive. The bad news is that there is little public funding to support such programs. This needs to change.

The biggest point of controversy, both among our members and in the broader community, is whether new housing development helps or hurts. Some argue that we must build new housing in gentrifying neighborhoods to take pressure off the market and to accommodate rising demand. Many urban planners promote greater density and large-scale development as a solution to gentrification. At the same time, others blame these very developments for accelerating the process of gentrification. They believe high-end units attract upper-income people to the neighborhood, bring higher-end retail, and begin to change the character of the place, even if they include a significant percentage of affordable units, which often are occupied by lower-income newcomers—not longstanding residents.

I agree with both sides. New development might very well speed up the gentrification process, but stopping development will also speed up gentrification, as pressure will continue to build on the housing stock in changing neighborhoods. Unfortunately, the intensity of this debate can itself become an impediment to progress because it can undermine trust among otherwise allied partners.

On balance, I'm generally inclined to support new development, but only if it is done wisely. I think we need to mitigate the impact of new development with more than just inclusionary units. Fighting over 15, 20, or even 25 percent affordability levels does not confront the core issue of neighborhood change. Instead, we should use some of the resources generated by new development to attack displacement more directly through measures such as acquiring existing properties, providing financial assistance to current homeowners and tenants, supporting locally-owned businesses, and making cultural investments that preserve a community's history and culture. We should also push for more three-bedroom units in new buildings because those units would allow more families to move into changing neighborhoods. Those families, in turn, not only might enroll children in local school,s, but they also are likely to press for improved schools, which would benefit all of the neighborhood's families.

I make these suggestions knowing there are no easy answers and no complete answers. Neighborhoods are always changing and demographics continually evolve. Sadly, in a society with vast and growing income and wealth inequity, these dynamics are going to continue. Perhaps the only long-term and scalable solution to gentrification and displacement is to restructure our economy in ways that will make it more fair and equitable.

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This post is a response to the Panel 6 papers that were presented at our A Shared Future symposium in 2017. These papers are available on the JCHS website. 

Winner of 2018 Best Paper on Housing Prize Focuses on Philadelphia's Efforts to Address Climate Change and Affordable Housing

by David Luberoff,
Deputy Director

The Philadelphia Energy Campaign (PEC) is an unlikely success story of a municipal climate initiative prioritizing the needs of its marginalized residents by preserving affordable housing through energy policy, according to Caroline Lauer, a recent graduate of the Harvard Graduate School of Design, whose thesis on PEC received the 2018 Joint Center for Housing Studies Best Paper on Housing Prize.

In "A Pathway to Preservation? Planning Processes at The Intersection of Climate Change and Affordable Housing in Philadelphia, Pennsylvania", Lauer, who received a Master of Urban Planning, provides a detailed case study on PEC's history and goals, and links that history to literature on both planning and public policymaking.

Credit: Philadelphia Energy Authority/Jordan Baumgarten

PEC has an ambitious set of goals, writes Lauer. It aims to create jobs, strengthen communities, cut energy bills, and reduce Philadelphia's carbon footprint by leveraging $1 billion of public and private investment over ten years. This effort, she explains, is especially notable because, while cities across the United States have been actively planning for climate change for at least two decades, equity considerations, such as the impact of climate investments on disadvantaged communities, have often been overlooked or ignored when those plans have been prepared and implemented.

According to Lauer, the Philadelphia Energy Authority, which was created in 2010, became a notable exception largely because of the values and skills of Emily Schapira, who launched the PEC campaign not long after she became the authority's executive director in 2016. Lauer observes that, while the typical focal point of an energy initiative is the fastest or most efficient way to reduce energy consumption, the focus of the PEC has been the residents who will benefit the most from the energy reduction today. She adds that by "inextricably linking equity and energy, the PEC prioritizes the needs and interests of the many low-income and minority residents" in Philadelphia, which not only has the highest poverty rate of the ten largest American cities but has relatively old, poorly-maintained, energy-inefficient housing stock. Moreover, she notes that Philadelphia, a Democratic stronghold, has had to do much of this work without significant support from the state legislature, which was overwhelmingly Republican when the campaign got underway.

Succeeding in this complex milieu, she notes, has required skilled and committed leadership that not only is attuned to equity and energy issues but also is cognizant of, and responsive to, political considerations. Combining these approaches can be difficult, writes Lauer, who observes that "community development efforts to preserve affordable housing through energy efficiency are rare." However, she adds, "PEC demonstrates that merging both objectives into one program is a viable policy option."

Leveraging Resiliency to Promote Equity

by David Luberoff
Deputy Director

Faced with the increased threat of natural disasters, some community-based organizations are trying to link their efforts to better plan for catastrophic events with their existing efforts to address issues like affordable housing and economic development, according to "Bounce Forward, Not Back: Leveraging Resiliency to Promote Equity," a new working paper jointly published by the Joint Center for Housing Studies and NeighborWorks® America. Written by Caroline Lauer, a master in urban planning student at Harvard's Graduate School of Design who was a 2017 Edward M. Gramlich Fellow in Community and Economic Development, the paper draws lessons from the growing literature on resiliency and from two case studies of notable initiatives carried out by organizations in NeighborWorks' national network of independent, nonprofit organizations focused on affordable housing and community development.

A sample RAPIDO home.

The first case study describes work done by the Community Development Corporation Brownsville, which has worked with several other community groups to develop RAPIDO, a holistic approach to disaster recovery that, "aims to quickly and affordably rehouse individuals and families, building social capital within the community, and stimulating the local economy." The key to this effort, Lauer explains, is providing families with, "a simple 480-square-foot [structure] that contains essential facilities," and training a group of "Navigators" who can lead residents through the disaster recovery process. The units, which cost about as much as the temporary manufactured units typically provided to people who have lost their home to natural disaster, "can be built easily at local lumberyards, transported by basic trailers, and assembled on-site in three days by four people." Moreover, unlike the temporary housing, the units are permanent and can later be expanded.

The second case study focuses on NeighborWorks® Umpqua's Southwestern Oregon Food System Collaborative (SWOFSC) Seafood Project, a multi-faceted effort to address the struggles of the region's small-scale fisheries. This effort does so by investing in and fostering local processing facilities and other infrastructure to support local fishermen. At the same time, it also uses marketing and other strategies to increase the local and regional demand for less traditional types of seafood that, because of warming oceans, comprise increasingly large shares of what local fishermen are bringing into port. Moreover, the project leveraged these economic development initiatives to help the region prepare for both slow-moving disasters, such as the effect of climate change on the fish population, and for acute disasters, such as a storms, tsunami, or earthquakes that might reduce or even cut off the region's access to the mainland for an extended period of time.

Although the initiatives are quite different, and while it is too soon to fully gauge their effectiveness, Lauer contends that together they offer three important and timely lessons given the hurricanes that hit Texas and Puerto Rico and the wildfires that devastated parts of California and other western states last year (after she had carried out her research). First, their differing trajectories show that while efforts to link community and economic development initiatives with projects that are focused on resiliency and disaster response can have different starting points and program structures, they can still achieve similar goals. Second, both show that regardless of how they start and are structured, such efforts should focus on creating social and physical connections and structures that can be used to address a variety of pre- and post-disaster conditions, including structural inequality. Finally, she notes, such efforts strengthen a community's ability to respond not only to anticipated problems but to unforeseen challenges and potential disasters.

What Would it Take for Housing Subsidies to Overcome Affordability Barriers to Inclusion in All Neighborhoods?

by Katie Gourley, Graduate Research Assistant

The design of housing voucher programs, site selection for new subsidized units, and federal, state, and local housing programs can all encourage—or hamper—efforts to create more inclusive residential communities. Three new papers released today by the Joint Center for Housing Studies examine many of the issues and historic legacies that policymakers need to address as they strive to meet this goal. The papers, which were presented at A Shared Future: Fostering Communities of Inclusion in an Era of Inequality, a symposium hosted by Joint Center last year, are:

Margery Austin Turner,
Urban Institute

What Would it Take for Housing Subsidies to Overcome Affordability Barriers to Inclusion in All Neighborhoods? by Margery Austin Turner, the panel moderator, begins by noting that, while there are many benefits associated with moving to higher-opportunity neighborhoods, the voucher and tax credit programs that are currently the largest source of federal subsidies for affordable housing often fail to offer those opportunities to low-income families. Part of the problem, she argues, is that too often, policies aimed at expanding access to opportunity-rich neighborhoods (i.e. fair housing policies) are pursued separately from housing subsidy policies, rather than as part of a strategic portfolio of investments. Such a portfolio approach would use different investment and interventions to four different types of neighborhoods. In severely distressed neighborhoods, subsidized housing probably should not be further concentrated, while in stable, low-income neighborhoods, subsidized housing investments should focus on renovation and preservation of the affordable housing stock. In emergent neighborhoods, preservation and expansion of affordable housing options should be the top priority, while in opportunity-rich neighborhoods, housing subsidies should be deployed (along with other policy tools) to expand affordable housing options.

Stephen Norman &
Sarah Oppenheimer,
KCHA

Expanding the Toolbox: Promising Approaches for Increasing Geographic Choice by Stephen Norman and Sarah Oppenheimer reviews the King County Housing Authority's (KCHA) ambitious efforts to use federal housing subsidies to provide families with broader neighborhood choice. Informed by growing national evidence on the effects of neighborhood quality on life outcomes, they note, KCHA has used both tenant-based mobility approaches and site-based affordability approaches to expand low-income families' access to a wider set of neighborhoods in the county, which includes Seattle and many surrounding communities. KCHA's tenant-based mobility strategies have included offering to pay higher rents in higher-opportunities areas and providing extensive counseling to voucher holders. The site-based strategies have focused on acquiring and preserving housing and using federal vouchers to support new development in higher-opportunity areas. As a result, about 31 percent of KCHA's federally-subsidized households with children currently reside in low-poverty areas.

Christopher Herbert,
JCHS

Expanding Access to Homeownership as a Means of Fostering Residential Integration and Inclusion by Christopher Herbert, Managing Director of the Joint Center for Housing Studies, notes that efforts to foster more inclusive communities have to confront issues related to housing affordability not only in more expensive, higher-opportunity neighborhoods, but in gentrifying ones as well. While many discussions about these issues focus on subsidized rental housing, Herbert argues that efforts to make homeownership more affordable should also be part of the portfolio of approaches used to foster more racially-, ethnically-, and economically-integrated communities. Potential appealing policies, he contends, fall into four broad categories: changes in federal income tax policy related to the mortgage interest deduction and savings; increased support for housing counseling; maintaining or modifying "duty to serve" obligations that affect mortgage lending; and better targeting and potentially expanding funding for downpayment assistance. He notes that, while these are not the only areas where action is needed to expand residential choice, they are critical (and sometimes overlooked) elements that should be included in a broader effort to foster more inclusive communities.

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Additional papers from the A Shared Future symposium are available on the JCHS website. The papers will also be collected into an edited volume to be published later this year.

Furthering Fair Housing: It’s Not Too Late to Follow New Orleans’ Lead

by Cashauna Hill
Greater New Orleans Fair
Housing Action Center

Although the U.S. Department of Housing and Urban Development (HUD) has announced that state and local entities will have more time to detail their plans to affirmatively further fair housing, some localities are moving forward. These include the City of New Orleans, which in October 2016 became the country’s first jurisdiction to submit a legally required Assessment of Fair Housing plan (AFH).

New Orleans’ AFH, which was submitted jointly by the city government and the Housing Authority of New Orleans (HANO), not only represents a shift in the way that jurisdictions report on the state of housing access in their communities but also could serve as a model for other jurisdictions around the country. Most notably, in accordance with guidance provided by HUD in 2015, the New Orleans AFH was prepared with significant community input. 

Specifically, at the outset of the process, the city and HANO partnered with the Greater New Orleans Fair Housing Action Center (GNOFHAC), which I lead, to ensure that the AFH reflected the concerns of community leaders and community-based organizations. To make this happen, GNOHFAC designed and implemented a community engagement strategy that aimed to organize, educate, and engage with community stakeholders—particularly leaders of color and organizations that represented communities of color. In addition to facilitating a robust community engagement process, the city and HANO welcomed GNOFHAC’s assistance in analyzing relevant data that was included in the AFH plan. Finally, GNOFHAC helped provide both context and data on public and private acts of discrimination that affect housing choices in the New Orleans market.

Taken as a whole, these activities created a process that reflected an unprecedented level of community engagement in planning the city’s fair housing efforts. This engagement led to several notable recommendations in the AFH, such as a framework for improving the access that Housing Choice Voucher (HCV) participants have to low-poverty, high-opportunity neighborhoods, particularly areas connected job centers via dependable public transit services. Community leaders also helped develop other important recommendations, such as developing and implementing a “strategic plan to address environmental hazards, including lead in water and housing.” The AFH’s recommendation to address substandard housing in New Orleans by establishing a rental registry also was a direct result of engagement with community members who often accept substandard conditions when seeking affordable rental housing.

As noted above, in January 2018 HUD announced that it intends to delay required submission of AFH plans from jurisdictions that have yet to submit them. For persons in communities without a commitment from city leadership, or where the AFH will not be submitted in the near future as planned, this change could make it harder for people of color and lower-income households to access higher-quality housing, and programs designed to support existing homeowners.

However, despite that change in HUD’s policies, implementation of New Orleans’ AFH’s recommendations is expected to continue without interruption. We commend policymakers and leaders in New Orleans for continuing to support equal access to housing and the positive life outcomes that flow from access to better housing. Further, we hope that even with the delays, other jurisdictions follow New Orleans’ lead and work with affected communities to develop meaningful efforts to achieve the Fair Housing Act’s long-standing goal of “affirmatively furthering fair housing” throughout the United States.

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This post is a response to the Panel 4 papers that were presented at our A Shared Future symposium in 2017. These papers are available on the JCHS website. 

Collaborations by Design: CDFIs, Capital Absorption, and the Creation of Community Investment Systems

by Erin Shackelford
Initiative for
Responsible Investment
HKS

Rebuilding disinvested communities takes more than money. Rather, as research done by the Initiative for Responsible Investment (IRI) at the Harvard Kennedy School has shown, places that have been starved of resources for extended periods of time often lack the policies, practices, or relationships they need to effectively leverage existing or new resources.

IRI's capital absorption framework not only recognizes that there is a complex system that governs how resources flow into communities, it also provides a way to think beyond individual transactions to identify changes at a system level so that investment is used more effectively to achieve community goals. Potential system-level interventions can include bringing new partners to the table, identifying new resources that can be provided by existing partners, creating different ways of doing business, and changing the policies and relationships that determine the allocation of money and other resources.

Many of these approaches are central to strategies used in collaborative initiatives carried out by Community Development Financial Institutions (CDFIs) that have been funded by JPMorgan Chase & Co.'s PRO Neighborhoods program. The growing collaboration among CDFIs—which can be banks, credit unions, or other financial institutions that have a primary mission to provide access to financial services in low-income communities—have included the development of joint products and services, efforts to share risk and expertise, jointly developed new technologies, and the development of larger scale projects which could attract additional investors.

A new case study, which uses this "capital absorption" framework to examine many of the collaborative efforts funded by the PRO Neighborhoods initiative, finds that the funding spurred three types of collaborations that together increased the CDFIs' ability to respond more effectively to key needs and concerns. In particular, the grants helped:

1. Spur internal institutional change within CDFIs: Within institutions, flexible support to enter into new areas of lending, as provided by the PRO Neighborhoods grants, is tied to the ability to devote resources to strategic development and organizational learning. These are scarce resources for CDFIs, which, by necessity, tend to have a transactional focus. These resources can prove crucial for CDFIs seeking to expand their geographic and/or sectoral range, and those hoping to deepen engagement with the communities they serve.
   
2. Foster collaboration among CDFIs: PRO Neighborhoods awards enabled CDFIs to share best practices, support collaborators with challenges, and closely observe (and learn from) each other's practices. The structured collaborations and regular exchanges that came with project execution shed light on new practices and built relationships that are likely to endure well beyond the grant cycle. These connections are critically important because finding the time and space to learn from peer institutions is a crucial aspect of organizational development.
   
3. Expand CDFIs' connections with broader "Community Investment Systems": The benefits of collaboration came not just from the interchange among and between CDFIs, but also through the CDFIs' engagement with the larger "community investment systems" in the neighborhoods served by the various CDFIs. This occurred because the focus on innovation and collaboration led CDFI practitioners to engage with a variety of key actors in the broader ecosystem, including leaders of community advocacy groups, elected and appointed officials, representatives of local trade associations, and representatives of firms that provide collateral and financial services.

These conclusions suggest two key lessons for funders who want to effectively structure grant programs aimed at encouraging collaboration. These are:

1. Collaboration takes a big incentive. Creating the time and space to establish an ongoing collaboration is challenging for organizations where time, staffing, and funding are constrained. The significant funding provided by the PRO Neighborhoods program offered a critical incentive for CDFIs to establish ongoing collaborations.
   
2. Collaboration can take many forms, shaped by different systemic challenges. From a nationwide, spoke-and-wheel collaboration focused on addressing food deserts, to the collaboration of place-based actors to support the specific needs of their community, PRO Neighborhoods collaboratives are unique and varied in scope, shape, and sector. The funder's flexibility gave leaders of the CDFI collaboratives the time and space they needed to understand, identify, and address the different systemic challenges that existed in their unique sectors and places.

The capital absorption framework points to the importance of considering not just the transactions in question, but the broader system of community investment in which CDFIs operate. Funders and other actors in the community investment system can benefit from the observation and lessons that emerge as CDFIs collaboratively develop innovative practices to help revitalized disinvested communities.

Assessing Fair Housing: HUD's Delay and the Dilemma this Poses for Jurisdictions

by Katherine M. O'Regan,
NYU

How should the numerous jurisdictions poised to start their Assessments of Fair Housing (or those who are already mid-process) proceed in the wake of an announcement that the federal government planned to push back deadlines for using this specific form of assessment as part of their legally-required planning process?

That's the question facing thousands of entities after the US Department of Housing and Urban Development (HUD) announced in January that it was delaying a previously issued final rule requiring that jurisdictions receiving HUD funding conduct an Assessment of Fair Housing (AFH) to meet, in part, their obligation to comply with the federal Fair Housing Act's requirement that they "affirmatively further fair housing" (AFFH).

HUD's notice extended the AFH deadline for one cycle for jurisdictions that had not yet had an AFH accepted and whose AFH deadline date fell before October 31, 2020. These jurisdictions, the announcement emphasized, must still meet their AFFH obligations. During the delay, they must conduct an Analysis of Impediments (AI) to fair housing choice (as they had prior to HUD's final AFFH rule) and take appropriate actions to overcome impediments identified by the analysis. However, unlike an AFH, there is no standardized form or specific content required for an AI, it need not be submitted to HUD, and HUD will not review it. (While the notice specified that the delay would be applicable as of the day it was issued, public comments on the notice can be submitted through March 6, 2018.)

When the delay was announced, many jurisdictions were in the final stages of conducting their AFHs; hundreds more were about to start. This raises two related questions that this blog tries to briefly answer. First, what does this delay mean for these jurisdictions? Second, how should they proceed?

Returning to the Flawed Analysis of Impediments (AI) Process

The notice calls for jurisdictions to return to a process that both the GAO and HUD itself deemed to be highly flawed. A 2010 GAO study reported that only 64 percent of program participants appeared to have AIs that were current, and questioned the usefulness of many of the AIs that did exist. It concluded that "[a]bsent any changes in the AI process, they will likely continue to add limited value going forward in terms of eliminating potential impediments to fair housing that may exist across the country." HUD's own internal analysis in 2009 came to the same conclusion, finding that about half of the AIs it collected for the study were outdated. incomplete, or otherwise of unacceptable quality.

To address some of the concerns raised in the GAO's report, HUD requires that AFHs be conducted with a standardized assessment tool and that jurisdictions provide measurable goals with a timeline for achieving them. As part of its justification for AFH postponement, HUD noted that 35 percent of the first AFHs submitted to HUD were initially not accepted. The AFH process, however, requires that HUD give feedback on AFHs that are not accepted. HUD provided such feedback and worked with jurisdictions to resolve deficiencies in the submissions. Ultimately, almost all of the 49 first submissions were accepted. In contrast, with AIs, there is no review or feedback from HUD. Notably, HUD's 2009 internal report found no evidence that jurisdictions were improving their AIs over time.

The combination of tighter standards, a better assessment tool, and a feedback loop seems to have produced stronger plans, according to MIT's Justin Steil and Nicholas Kelly, who compared the first 29 AFHs (as modified in response to HUD's comments on initial submissions) to the AIs previously conducted by those same jurisdictions. They found that compared to the earlier AIs, the final AFHs included more quantifiable goals as well as more specific policies and programs meant to achieve those goals. Such results, they noted, suggest the rule is working. "[T]he non-acceptances provided participants with the opportunity to respond to HUD feedback and to strengthen their final AFHs so as to meet their fair housing obligations. In short, the non-acceptances should be seen as strengths of the new rule not a failure."

What is HUD's Advice for a Good AI? Conduct an AFH?

For jurisdictions that have already begun their AFH, HUD's notice states that jurisdictions may continue to do so, as "the AFFH rule may provide program participants with a useful framework for complying with their AFFH obligations." HUD encouraged all participants to use the data and mapping tools as well as the AFH Assessment Tool in conducting their AIs, and to collaborate with other submitters in their region. But this vague guidance puts jurisdictions in the precarious position of identifying which elements of the AFH tool and process are necessary to meet its AFFH obligations.

Will Legal Challenges Reinstate the AFH?

The Trump administration has been aggressive in its use of delays to forestall the implementation of rules, temporarily or indefinitely. Many of these delays have been successfully challenged in the courts under the Administrative Procedures Act, which governs most federal rulemaking. For example, in December 2017, the US District Court for the District of Columbia enjoined HUD's two-year delay of its Small Area Fair Market Rent (FMR) rule, which would have required 24 metropolitan areas to use ZIP-code-level FMRs in setting rent payment standards for voucher recipients. HUD has since dropped its plans for delay, and advised more than 200 affected public housing authorities they must implement the new process within three months.

While no lawsuit has yet been filed against HUD's AFH delay, it is likely to come. (In theory, HUD could also modify its announcement in response to public comments, which, as noted above, must be submitted by March 6.) This suggests that jurisdictions should carefully weigh the risk that the delay will be reversed, and their duty to Affirmatively Further Fair Housing, as they determine how to conduct their new AIs. HUD's AFFH framework and assessment tool seem the best place to start. Notably, officials in some jurisdictions, such as New York City, have made public statements that they will move forward with a process that is true to the principles of the AFH.

However, whether jurisdictions will stay true to key advantages of the AFH, including robust public engagement and an open and transparent drafting process, remains to be seen. As Michael Allen notes in his contribution to the Joint Center's panel "What would it take for the HUD AFFH rule to meaningfully increase inclusion?," that may depend on whether a broad set of constituents come together to mobilize a strong ground game. Meanwhile, until the uncertainty created by HUD's decision is resolved, the AFH process and assessment tool may provide the safest and clearest path forward for jurisdictions.

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Papers from the A Shared Future symposium are available on the JCHS website. 

What Would it Take for HUD to Meaningfully Increase Inclusion?

by Katie Gourley, Graduate Research Assistant

What would it take to meet the 1968 federal Fair Housing Act's requirement that federal entities use their power to "affirmatively further" fair housing? Four new papers published today look at this question by examining whether and how the US Department of Housing and Urban Development's (HUD) now-delayed Affirmatively Furthering Fair Housing (AFFH) rule might spur more inclusive communities.

Under the rule, which was finalized in 2015, local and state institutions receiving federal housing funds must use maps and other local data to conduct an Analysis of Fair Housing (AFH), and also describe their goals for affirmatively furthering fair housing. Many advocates believed the rule was a long overdue effort to finally achieve one of the Fair Housing Act's key, but unmet, goals. However, critics, including many Republican members of Congress as well as then-presidential candidate (and now HUD Secretary) Ben Carson, criticized it as inappropriate social engineering. In January 2018, HUD announced that states and localities do not have to submit their analyses until 2020. While HUD's announcement also noted that entities still have a legal obligation to further fair housing, the rule's supporters fear the delay effectively suspends enforcement of the rule and gives HUD time to dismantle or substantially weaken the new rule. A group of civil rights organizations is currently preparing litigation to enjoin the suspension of action.

The papers, which were originally presented at the symposium A Shared Future: Fostering Communities of Inclusion in an Era of Inequality in April 2017 (before HUD suspended enforcement actions) examine the rule's potential to produce meaningful change and, in doing so, provide critical context for understanding the implications of HUD's decision to delay the submission of required plans. The four papers are:

Katherine O'Regan,
NYU

Affirmatively Furthering Fair Housing: The Potential and the Challenge for Fulfilling the Promise of HUD's Final Rule by Katherine O'Regan, the panel's moderator, begins by noting that while the Fair Housing Act codified an ambitious goal, the nation has long lacked a clear, effective, and politically acceptable processes for achieving that goal. After explaining how the AFFH process was supposed to work and discussing how it was received by a variety of stakeholders, O'Regan discusses how the panel's authors posed key questions about what it would take for the 2015 AFFH rule to meaningfully increase inclusion int he near future.

Raphael Bostic, USC
& Arthur Alcolin,
U of Washington

The Potential for HUD's Affirmatively Furthering Fair Housing Rule to Meaningfully Increase Inclusion by Raphael Bostic and Arthur Acolin discusses how the AFFH Final Rule might produce meaningful change. After reviewing the history of residential segregation in the US, the paper explains how the new rule would have differed from and improved upon previous efforts to "affirmatively further" fair housing. However, they note, the full impact of the rule will depend on HUD's commitment to its philosophy and HUD's devotion of resources to the implementation of the law. Moreover, they add, the rule's impact will also depend critically upon decisions by local governments, community organizations, and individuals to use the resources they have to effectively remove barriers to fair housing in their communities.

Michael Allen,
Relman, Dane &
Colfax, PLLC

Speaking Truth to Power: Enhancing Community Engagement in the Assessment of Fair Housing Process by Michael Allen notes that the new rule "sets the table for robust conversations about hard topics—like discrimination and segregation—that most communities have tried hard to avoid for decades." However, he notes, "it leaves to local discretion to how to get the right stakeholders to the table for those conversations." Achieving the rule's promise, he adds, can only occur in places where community groups, academics, and foundations make concerted efforts to develop and carry out AFFH plans. These efforts, he continues, need to include strategies to ensure meaningful participation by people of color and their advocates; local data collection and analysis; mobilization of political constituencies; and a commitment to enforcement via litigation, administrative complaints, and grassroots advocacy. Allen concludes by detailing six successful community housing justice campaigns—in New Orleans, Milwaukee, New Jersey, Texas, Westchester County (NY), and the Minneapolis/St. Paul region—that could serve models for advocates in other locales.

Elizabeth Julian,
Inclusive Communities
Project

The Duty to Affirmatively Further Fair Housing: A Legal as Well as Policy Imperative by Elizabeth Julian predicts that jurisdictions would respond to the new rule in one of our four basic ways. Some would accept that the letter and the spirit of the law have the capacity to develop and carry out an effective plan, while others would accept the rule's letter and spirit but lack the capacity to do so. Third, while some would accept the need to comply with the rule's requirements (if only to secure desired federal funding), they might be unwilling to develop an effective plan. Finally, some communities would resist the rule's letter and spirit. While HUD can help localities in the first three categories achieve meaningful progress, jurisdictions in the fourth "will have to be dealt with by an external, relatively independent, and well-resourced enforcement structure," she asserts. Even though HUD's current leaders are not likely to support this approach, Julian asserts that a long history of court decisions shows that civil rights advocates do have the tools needed to effectively press for desired changes.

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Additional papers from the A Shared Future symposium are available on the JCHS website. The papers will also be collected into an edited volume to be published later this year.

What Would it Take to Overcome Exclusionary Barriers, and Promote More Affordable Options in All Neighborhoods?

by Katie Gourley, Graduate Research Assistant

What would it take to make new neighborhoods, and remake old ones, so that large, complex, metropolitan areas moved decisively toward racial and economic integration? What local and regional governance strategies could most effectively overcome barriers to these goals?

Today, we published four papers exploring these questions. The papers—an overview essay and case studies of Washington, DC, Houston, and Chicago—were presented at A Shared Future: Fostering Communities of Inclusion in an Era of Inequality, a symposium we hosted in April 2017. The four papers are:

Rolf Pendall,
Urban Institute

Pathways to Inclusion: Contexts for Neighborhood Integration in Chicago, Houston, and Washington, by Rolf Pendall, who moderated this panel at our symposium, offers an overview of the major demographic changes that are transforming US housing markets and describes two distinct patterns of political geography that will affect local and regional decisionmaking about neighborhood inclusion. He begins by reporting that the population of the United States – particularly its metropolitan areas – is both growing and becoming more diverse by age, race and ethnicity, household composition, and income. He then describes the two principal patterns of political geography that affect decisionmaking about neighborhood inclusion: fragmentation of local governments (particularly in the Northeast and Midwest where control of land use is in the hands of many local governments) and polycentricity (particularly in the South and the West, where larger county governments have much more control over land uses). Fostering inclusion in both types of places is challenging. In the former regions, he notes, it tends to require state-level action. In the latter, the efforts often focus on school districts as well as school assignment zones within particularly large school districts. He concludes by showing the interplay between the national demographic trends and political geographies of the three case study regions.

Willow Lung-Amam,
University of Maryland

An Equitable Future for the Washington, DC Region?: A "Regionalism Light" Approach to Building, by Willow Lung-Amam, begins by noting that while that DC region is racially and economically diverse, it also is highly segregated and has some of the nation's highest housing prices. Moreover, because it is politically fragmented, it has uneven patterns of development. Given this, Lung-Aman proposes a “regionalism-light” approach that focuses on the protection and production of affordable housing. In particular, she says four approaches should be the central part of any effort to break down barriers to housing inclusion in existing neighborhoods and build a strong platform for current and future residents to be a part of the region’s continued growth and prosperity: preserving existing affordable units through aggressive anti-displacement strategies; capturing land value to produce new affordable housing, especially near transit stations; increasing the density and diversity of suburban housing; and tackling the region’s stark east-west divide with fair-share policies.

William Fulton,
Rice University

Can a Market-Oriented City Also Be Inclusive?, by William Fulton, explains that while Houston has emerged in the last 30-plus years as one of the country's most ethnically diverse and affordable cities, these measures mask significant amounts of inequality and disparity that are at least as bad as, and perhaps worse than, those in other metro areas. At first glance, he notes, Houston seems unable to address these challenges, largely because it has a reputation for being one of the nation’s most market-oriented cities for real estate development. However, he contends, the city has a unique and important opportunity to address these issues because it also has abundant amounts of vacant land, limited zoning regulations that could block the development of affordable housing, regulatory tools that could encourage such development, and a potentially useful but currently uncoordinated set of financial incentives for economic development and real estate development. Accomplishing this task, he explains, would require both a comprehensive citywide approach and targeted efforts in underserved neighborhoods threatened by gentrification. In particular, the following strategies are especially promising: aligning both economic development incentives and regulations with inclusiveness goals; using government and institutional landholdings to strategically to pursue those goals; and creating a broad and comprehensive approach to inclusiveness that includes both underserved and high-opportunity areas. He notes that while Houston has taken some steps in this direction, it has fallen short in others, particularly in efforts to bring affordable housing to high-opportunity areas.

(Please note that Fulton's paper was completed before Hurricane Harvey caused extensive damage and displacement in Houston during August 2017.)

Marisa Novara &
Amy Khare,
Metropolitan Planning
Council

Two Extremes of Residential Segregation: Chicago's Separate Worlds & Policy Strategies for Integraion, by Marisa Novara and Amy Khare, argues that a movement is needed to rethink strategies for desgregation at the region's two poles: concentrated poverty and concentrated wealth. The Chicago region, they note, ranks in the top quarter of all metros with regard to economic segregation and is in danger of becoming even more segregated by race and class. In areas suffering from disinvestment, Novara and Khare argue that carefully revised lending criteria and improved appraisal processes, along with other complimentary policies, could lead to increased investment. This, in turn, might create more integrated communities. In contrast, they note that political realities make it unlikely that the state will step in to override local land-use restrictions that stymie the development of affordable housing (as Massachusetts has done via a law passed in 1969). Given this situation, they suggest that Illinois instead draw on a different Massachusetts law that offers incentives to more affluent communities that zone for dense, mixed-income residential developments, particularly in locations well-served by transit.

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Additional papers from the A Shared Future symposium are available on the JCHS website. The papers will also be collected into an edited volume to be published later this year.

A Shared Future: Fostering Communities of Inclusion in an Era of Inequality

by Jonathan Spader and
Shannon Rieger

Almost 50 years after the passage of the Fair Housing Act, what would it take to meaningfully reduce residential segregation and/or mitigate its negative consequences in the United States?

Over the next several months, the Joint Center for Housing Studies will publish working papers on various aspects of this question written by a diverse set of scholars, policymakers, and practitioners. The papers will be available on our website and will also be collected into an edited volume to be published next year. The papers were presented at a two-day symposium, A Shared Future: Fostering Communities of Inclusion in an Era of Inequality, that was convened by the Joint Center earlier this year.

At the symposium's seven thematically-focused panels, the authors took stock of the changing patterns of residential segregation by race/ethnicity and income, and examined concrete steps that could achieve meaningful improvements within the next 10-to-15 years. On a monthly basis from this fall until next summer, we will publish those papers on a panel-by-panel basis, along with a series of blogs, many of them by others who attended the symposium, that further engage with the event's central question.

This process begins today with the publication of our framing paper for the symposium, which summarizes existing evidence on three topics: the current patterns of residential segregation by race/ethnicity and income, the causes of residential segregation in the United States, and the consequences for individuals and society. The paper also examines the rationale for government action in these areas as well as the key levers that policymakers could use to change the current situation. Because each of these topics is the subject of a larger and longstanding research literature, our summary is not exhaustive. Rather, we seek to provide a concise overview of existing research, so that the papers which follow can focus on potential solutions.

Our discussion of these topics is a reminder of both what has been accomplished since the passage of the Fair Housing Act (technically Title VII of the Civil Rights Act of 1968) half a century ago and also how far the US remains from the aspirations put forth when it became law. In particular, we note that while the extent and nature of discrimination have changed int he last five decades, the legacies of historical segregation and exclusion by government, private institutions, and individuals have continued to produce stark and stubborn patterns of racial segregation in US metropolitan areas.

At the same time, we note that changes in demography, income distribution, and the geography of American communities are changing the patterns of residential segregation by income and race/ethnicity. The bursting of the housing bubble and the Great Recession exacerbated distress among poor communities—particularly poor communities of color. In many metropolitan regions, job growth in central cities, improved neighborhood amenities, and increased demand for urban living have also fostered rapid increases in housing costs in longstanding low-income and minority communities located in or near those regions' urban cores. While gentrification has been one of the most visible signs of these changes, the suburbanization of lower-income households and the growing self-segregation of high-income households into wealthy enclaves are equally consequential.

The framing paper also documents the severe costs of this separation for all members of society, as well as the disproportionate burdens imposed on residents of neighborhoods with concentrated disadvantage. Residents of such neighborhoods—who are most often members of minority racial and ethnic groups—face elevated risks to their health, safety, and economic mobility. Moreover, at a national scale, there is compelling evidence that these individual costs constrain the economy from reaching its full potential while also increasing levels of prejudice and mistrust within the populace and impairing the functioning of our democracy. These costs, along with the potential benefits of greater integration, highlight the need for continued attention and innovation to these challenges.

The symposium papers, which will be released over the next few months, will present multiple perspectives about how we might address these challenges. Our hope is that they will raise questions, spur discussions, and ultimately contribute to forward progress.

CDFI Collaboration Enables New Lending to Nonprofit Community Organizations in Minneapolis and Cincinnati

by Alexander von Hoffman
Senior Research Fellow

In the United States, nonprofit organizations provide a wide range of vital services to low-income people, but are often hampered by their inability to buy or upgrade the buildings where they operate. Because of the unconventional or irregular nature of many nonprofits' finances, banks are usually reluctant to give them traditional mortgage loans. Moreover, other pillars of support for non profits - public-sector funders, philanthropic foundations, and individual donors - generally prefer to underwrite programs, not facilities.

All of which makes the Midwest Nonprofit Lenders Alliance (MNLA), the subject of a Joint Center case study, noteworthy. This consortium of three community development financial institutions (CDFIs) came together specifically to provide facility loans to nonprofit organizations serving low-income residents of the Minneapolis-St. Paul, Cincinnati, and Dayton metropolitan areas. Catalyzed by a $3 million award from the JPMorgan Chase & Co. Partnerships for Raising Opportunities in Neighborhoods (PRO Neighborhoods) program, MNLA builds on the unique strengths of its three members: IFF (originally named the Illinois Facilities Fund), which acts as lender, real estate consultant, and developer throughout the Midwest; the Nonprofits Assistance Fund (NAF), which provides loans, financial training, and management advice to its nonprofit clients; and the Cincinnati Development Fund (CDF), which has specialized in loans to develop housing and rehabilitate commercial buildings in low-income neighborhoods in Cincinnati and nearby Kentucky. By sharing capital, underwriting expertise, and knowledge of local markets, the three entities have provided more than $13 million to 14 nonprofit entities looking to purchase or upgrade their facilities.

Community Matters, a Cincinnati nonprofit, opened the Wishing Well Laundromat in Cincinnati's Lower Price Hill Neighborhood using a loan from MNLA partner Cincinnati Development Fund.

Four important lessons emerge from this work:

1. Know your markets. This means not only identifying and reaching potential borrowers, but also learning about the competition for those borrowers. According to Kate Barr, chief executive officer of NAF, MNLA's leaders initially thought they could target nonprofits that fell just short of traditional banks' credit standards. But in the first year of the partnership, they discovered "that strata doesn't exist." Instead, the partners found clients who needed funding for unique (but financially viable) transactions that traditional banks would not finance, like converting an abandoned grocery store into a community space. Armed with this knowledge, MNLA aimed an intensive outreach campaign at community organizations and professional networks and created a viable market niche.
   
2. Some worthy nonprofits require non-standard loans. Underwriting these types of loans requires a deep knowledge of the prospective borrowers' finances, operations, and goals, which allows lenders to match the needs and financial resources of their customers. Making a loan to Cincinnati's Bi-Okoto Drum and Dance Theater, recalls CDF president and CEO Jeanne Golliher, "took a lot of sitting down, rolling up sleeves, and getting comfortable with the realities behind their financial statements." Although such personalized loans are time consuming, they provide needed credit to agencies that otherwise might now have been able to receive it.
   
3. CDFIs may find fruitful collaborations with unexpected partners. Different areas of expertise may offer the possibility of complementary business lines. Although CDF's small staff regularly approved loans for affordable housing projects built by nonprofit entities, the expertise and familiarity needed to make facility loans was, Golliher observes, "beyond our capacity." Within the MNLA umbrella, however, the lead organization, IFF, not only provided training in underwriting such loans, but also the capital to fund them.
   
4. Partner organizations should seek common understanding of key terms, concepts, and practices. Lending practices are complex, and lending practitioners use shorthand to refer to different aspects of their work. So it is that key officials in organizations, even in CDFIs with similar missions, often use different language, approaches, and practices when crafting loan packages. Therefore, groups working together need to make sure that they agree on the meaning of the many terms and actions involved in the lending process. Particularly in the early stages of a collaborative venture like MNLA, explains Joe Neri, CEO of IFF, "you really cannot overdo" the time and attention paid to defining terms and practices.

Successful Collaboration in Community Development: Easier Said Than Done

by Alexander Von Hoffman
Senior Research Fellow

What are the keys to successful collaborations of nonprofit housing organizations? A remarkable attempt to form a novel alliance by five such groups in western New York State reveals several keys to an effective collaboration. Each of the five organizations -- NeighborWorks® Rochester, West Side (Buffalo) Neighborhood Housing Services, Niagara Falls Neighborhood Housing Services, Arbor Housing and Development, and NeighborWorks® Home Resources -- were long-established in their geographic areas. Moreover, each belonged to the network of NeighborWorks® America, a congressionally chartered nonprofit corporation that provides grants, technical assistance, training, and organizational assessment to housing and community development organizations. Their experiences, which are documented in a recent Joint Center case study, shows both the problems and the possibilities of putting the idea of collaboration into action.

Buffalo, New York

Before going into details, it bears mention that it has become almost an axiom in the community development field that nonprofit organizations must "collaborate" if they are going to survive, much less transform low-income communities. And the idea of collaboration is appealing: two or more organizations agree to coordinate activities in a systematic way -- as opposed to carrying out a one-time joint venture. Such collaborations can range from a temporary partnership to outright mergers (or anything in between). But many practitioners and scholars believe such initiatives can address a host of serious problems. For most community development organizations, money is always short, and especially so in recent years as the federal government has reduced funding for the Community Development Block Grant (CDBG) program. In addition, many nonprofit groups appear to be financially weak, undersized, relatively unproductive, organizationally stagnant, or some combination of the above. By sharing business lines, programs, and administrative functions, smaller and financially weaker groups could become more efficient and possibly tap the resources and knowledge of stronger organizations. If so, they could stabilize their finances and begin to grow, which would allow them to devote more time and attention to serving their low- and moderate-income constituents effectively.

But as the new case study documents, putting these ideas into practice can be difficult. After extensive discussions, in 2012 the leaders of five western New York State groups devised the concept of a "collaborative merger." In this structure, each organization would become a subsidiary division of a new central organization. As subsidiaries, the five groups would maintain their separate identities, offices, and geographic service areas while increasing their capabilities and expanding the types and volume of business. The central organizations, which would be overseen by board members from each of the participating groups, would provide core administrative functions, and, in doing so, bring the efficiency and resources of a large organization to the work of what had been separate smaller groups.

Just as the groups were about to create the new entity, however, the alliance came to an abrupt halt. Many factors contributed to the breakdown of the process. The biggest obstacle was the difficulty of bringing five disparate groups together under a common structure. The organizations covered starkly different kinds of geographic territories. Three of the organizations (NeighborWorks® Rochester, West Side Neighborhood Housing Services (Buffalo), and Niagara Falls Neighborhood Housing Services) were rooted in cities. The other two (Arbor Housing and Development, and NeighborWorks® Home Resources) were rural entities with geographically extensive service areas.

Moreover, there were significant differences in the organizations' programmatic offerings. Arbor, the largest of the five groups not only provided residential services for people with special needs and victims of domestic violence, it also developed and managed low-income housing. The other four groups were traditional "neighborhood housing service" groups that emphasized homeownership counseling, lending, and community engagement. Over time, key staff and board members of the housing service organizations became increasingly concerned that if the alliance went forward, their organizations would lose their identities and be less able to perform their core functions. Ultimately, the concerns became so great that the groups' leaders decided not to proceed with the planned alliance.

That was not the end of the story, however. Following the original idea, albeit on a smaller scale, the three urban-oriented neighborhood housing service groups (NeighborWorks® Rochester, West Side Neighborhood Services, and Niagara Falls Neighborhood Housing Services) merged to form a new organization called NeighborWorks® Community Partners. Meanwhile, Arbor, which continued to be a NeighborWorks® member, has not only thrived, but has also expanded its service area as far as Pennsylvania and Albany, NY. The fifth organization, NeighborWorks® Home Resources, remained in business under the name Rural Revitalization Corporation, but has left the NeighborWorks® network.

The experiences of these five organizations not only underscores the importance of building trust among partners in any collaboration, it also offers several lessons for those interested in collaborating with other entities. First, prospective collaborators might do well to begin by collaborating on actual programs before they start building a grand organizational structure. Second, collaborators should take time to develop a common vision, which means wrestling honestly with with the differences that separate the participating groups. Third, and related to the above, communication - open and constant - is essential, as is the full and committed participation of all of the involved parties. The leaders of such efforts must go to great lengths to ensure that everyone - including staff and board members from all the organizations - understand and support the collaborative effort.

Finally, everyone must understand that bringing existing groups into a new organizational arrangement is not business as usual. It is an act of creation that will change the status quo. Such a collaboration requires extraordinary care to ensure that the participants recognize the process and the outcome as legitimate. And this in turn means it is essential to tackle difficult questions about management, sharing leadership, and the roles and responsibilities of staff and board members sooner rather than later.

Managing Rapid Urbanization: Lessons from Mongolia

by David Luberoff
Senior Associate
Director

The capital city of Mongolia, Ulaanbaatar, provides a useful lens for understanding tensions that arise from rapid urbanization, according to two recent journal articles reporting on research funded in part by the Joint Center's Student Research Support Program.

In the first piece, which appeared in International Planning and Development Review, Raven Anderson (formerly a research fellow in the Social Agency Lab at the Harvard Graduate School of Design) and Michael Hooper (an associate professor of urban planning at the GSD) explain that because of an economic boom, a series of harsh winters, and the decline of the rural economy, Ulaanbaatar grew dramatically over the last two decades. In response, a diverse array of domestic and international organizations converged on the city to help address the environmental, spatial, and social challenges created by the rapid growth.

Anderson and Hooper, interviewed representatives from 18 of these organizations and learned that while there is agreement about the city's main challenges there is a lack of consensus about how to tackle them. The result, they note, was a "proliferation of plans, in which local organizations' perspectives are often given relatively little attention."

In the second article, which appeared in the Journal of Urbanism, Anderson, Hooper, and Allie Aldarsaikhan Tuvshinbat (also a former researcher at the Social Agency Lab) use interviews with about 120 residents to explore some of the differing perspectives. They found that while there were relatively high levels of support for increases in unit-level density and for apartment living, the majority of interviewees also favored low land-use density.

The tension between the two findings, they note, is "a central theme in the results. The limited appeal of high-density land use likely reflects Mongolian cultural attitudes towards land and open space. These attitudes are generally not reflected in the global 'compact city' models that are promoted by international organizations and which appear to be driving the current city masterplan and other formal planning efforts in the city."

The divergence between residents' views and the organizations' desires, note Anderson and Hooper in the first article, "is likely to further reduce the city's ability to effectively cope with rapid urban growth."

Pay for Success: Opportunities and Challenges in Housing and Economic Development

by David Luberoff
Senior Associate
Director

Pay for Success (PFS) initiatives have received widespread attention in the United States over the past several years. These outcomes-based projects – which generally do not pay service providers and government entities until and unless they achieve certain agreed upon outcomes – hold great promise in a variety of fields, including housing and community development, notes Omar Carrillo Tinajero in a new working paper jointly published by NeighborWorks® America and the Joint Center for Housing Studies. In the paper, Carrillo, a 2016 Edward M. Gramlich Fellow, notes that PFS projects may offer important opportunities to break down funding silos, devise innovative new ways to address pressing problems, and compel providers to focus on the results of an intervention. However, he adds, “because their complexity makes them at present difficult to structure and finance, PFS projects are likely to be useful only in limited circumstances, which means the PFS model should therefore be used judiciously and carefully.” Moreover, he notes, “the interest in and discussion about PFS projects has highlighted approaches that could be carried out by the public sector without the structure of PFS arrangements.”

To better understand how this approach could be used to address housing and community development issues, Carrillo examines three projects: 

• The Denver Supportive Housing Social Impact Bond Initiative, which focused on providing supportive housing for individuals who are both frequently in jail and often go to emergency medical services in Denver.
• The Chronic Homelessness PFS Initiative, which aims to provide 500 units of permanent supportive housing for up to 800 of the 1,600 people currently experiencing homelessness in Massachusetts.
• Project Welcome Home, an initiative in Santa Clara County, California focused on providing housing and supportive services for 150-200 chronically homeless individuals in the Silicon Valley over six years.

In the paper, Carrillo reviews the goals of each initiative and describes the metrics that will be used to decide whether and how much providers will be paid.  He also offers detailed descriptions about how each initiative was organized, funded, and evaluated.

The initiatives, he writes, “are promising, especially as they promote an emphasis on outcomes and begin to streamline services from various government sources.” However, he also cautions that “it is not immediately obvious that their benefits outweigh their costs,” particularly the extensive time and resources needed to develop and oversee the initiatives. He adds that it may be possible for the public-sector to adopt many PFS approaches (particularly their focus on outcomes, and the need for better data systems to measure those outcomes) without developing the complex structures and systems needed to establish and oversee an effective PFS.

“Though PFS sounds promising,” he concludes, “putting a project together can entail logistical difficulties and substantial transaction costs. Because of these challenges, the PFS model should be used judiciously. In particular, it could be a promising strategy for situations in which addressing problems requires coordination of a variety of disparate sources of public funding which, for various reasons, are difficult to use in a coordinated fashion.”

However, he adds, “we should not lose sight of the overall problem that PFS programs address: the need to provide services to as many people as possible, in the most effective way possible. It seems difficult to conceive of increased funding for these much-needed resources from the federal government, and state and local governments will continue to find themselves pressed for solutions to deliver evidence-based services. The PFS movement has pushed public-sector entities to focus more heavily on outcomes and, in doing so, to consider more multi-pronged approaches for addressing key issues.”