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African Americans Shun Affordable Housing

Affordable housing programs are often supported because proponents believe they will help minority and low income families. Of course, most minority households are not poor, but even middle-income households can be poor in many cities like San Francisco which rank among the most expensive housing markets in the nation.

USA Today recently had an interesting article on "black flight"--the tendency for African Americans to move away from the central city. San Francisco, it seems, is struggling to retain its ethnic and racial minority families as high housing costs, high crime rates and an inhospitable political environment drive them out.

Interestingly, near the end of the article, the reporter points out that many African American households avoid the city's "progressive" affordable housing programs because rent and mortgage restrictions limit their ability to build equity:

Many blacks here shun buying affordable housing because those homes have "equity restrictions" to keep them affordable, which means they can't be resold at market rates.

"They see homeownership as a chance to gain assets that will grow. So they'll go outside the city," says Ed Donaldson, counseling director for the San Francisco Housing Development Corp.

Hmm, so African Americans actually respond to incentives just like everyone else? As any economist would say: "duh". Fortunately, San Francisco's officlal policy is beginnig to recognize this:

[Mayor Gavin] Newsom says he's focusing on "asset creation" – strategies to help blacks, Latinos and others create wealth by owning homes and businesses. That will be a priority of the task force, he says.

Of course, Reason has published extensive research on the folly of affordable housing and inclusionary zoning. The summary of the general study can be found here. A study on Los Angeles and Orange County can be found here. Market oriented alternatives to government mandates can be found here.

Samuel Staley is Research Fellow


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