Housing and Urban Development Policies in the War on Poverty Jens Ludwig University of Chicago and NBER Ed Olsen University of Virginia

Trends and Initial Conditions Housing conditions had improved greatly over past two decades In 1960, 8.5 million families lived in substandard housing Blacks were increasingly concentrated in central cities

Inherited Housing Programs Public housing Privately-owned subsidized projects Section 202 (elderly) Section 221(d)(3) BMIR

LBJ’s Housing Programs Public housing reforms Leased public housing Turnkey public housing Rent supplements Section 236 rental Section 235 homeowner

Direct Descendants (1974) Section 8 Existing Section 8 New Construction

Estimated Ratio of Total Cost to Market Rent ProgramPittsburghPhoenix Public Housing Section Section 23 Leased Existing Housing Allowances

Percentage of Families in Low-Income Housing Programs by Income Bracket Income Bracket (dollars) Public Housing (1970) Section 221(d)(3) BMIR (1968) Rent Supplements (1969) Section 235 (1971) Section 236 (1970) All Households (1970) Under 2, ,000-5, ,000 and over

Household Characteristics in Housing Programs (1977) Public Housing Rent Supplements Section 236 Section 8 New Section 8 Existing Mean Income$4,029$3,264$5,896$4,375$3,895 Mean Number of Persons Per-capita Income$1,424$1,316$2,294$2,124$1,623 Percent Elderly Percent Black Percent Other Minority

Household Characteristics in Housing Programs (2009) Public Housing Section 236 Section 8 New Section 8 Existing Mean Income$13,300$13,400$12,000$12,800 Mean Number of Persons Per-capita Income$6,200$7,200$8,000$5,100 Percent Elderly Percent Black Percent Other Minority Percent Minority

Evidence on Program Performance Reduced the cost of providing housing Increased the number of assisted families Programs differed greatly in their focus on poorest households Housing assistance has had a significant effect on poverty correctly measured Housing programs haven’t increased earnings Reduced economic and racial segregation

Policy Implications Offer housing vouchers to all public housing tenants in high poverty neighborhoods Shift budget from project-based to tenant-based assistance Transition to program that offers assistance to all of the poorest households