@L V1 ABSTRACT THE ECONOMIC IMPACT OF MULTIPLE UNIT PUBLIC HOUSING ON OCCUPANTS, PROXIMATE NEIGHBORS AND PUBLIC SERVICES BY Kenneth Walter Steen The procurement of multiple unit public housing stems from the intent of national housing policy to provide "a decent home and suitable living environment at rents the poor can afford." Past and present failures lead to the belief that increased knowledge of the costs and benefits will increase the probability of achieving the desired goals of multiple unit public housing. The decision maker, through his policy choices of size, location, design,main- tenance, and management alters the magnitude and incidence of costs and benefits. Presently however, the costs and benefits of multiple unit public housing are little under- stood with regard to who is affected and the direction of impact (i.e. whether those affected are receiving costs or benefits). This study is an empirical examination of the impact of three multiple unit public housing projects in Lansing, Michigan, on occupants, proximate neighbors, and public Kenneth Walter Steen services. The projects are located in primarily single family home communities. Through responses to questionnaires from these three groups, insight into various perceived costs and benefits is obtained. Suggestions regarding possible changes in the decision maker's above mentioned policy choices provide insight into how these implied costs and benefits may be expected to change; thus, improv- ing the decision maker's ability to make more informed choices among available policy alternatives. The specific goals of multiple unit public housing are left to the decision maker. However, if the goals involve occupants, proximate neighbors, or public services, the contents of the study are relevant. The study compares the occupants' present public housing residence with their previous residence in terms of a "decent home", a "suitable living environment", and relative rents. Proximate neighbors offer opinions with regard to the affect of the public housing complex on neighborhood property values and neighborhood "living environment." An empirical assessment of the affect on elementary public schools serves as an example of possible impacts on public services. There was wide agreement among occupants that the direct housing services of their public housing residence was preferable to their previous residence. Direct housing services include size and conditions of house, plumbing and Kenneth Walter Steen bathroom facilities, major household appliances, furniture, and health related items. The occupants were not in general agreement on whether or not indirect services were improved. Indirect services include schools, parks, neighbors, child care, transportation, congestion, noise, privacy, trash dis- posal, and personal safety. In terms of numbers of respon- dents, the public housing residence was preferable in school, transportation and trash disposal services. The previous residence was preferable in the areas of congestion, noise, and privacy. The respondents were approximately equally divided on the remaining indirect services. Forty-three percent of the proximate neighbor respon- dents felt the public housing complex had decreased the value of their property. The same percentage felt the complex had not affected their prOperty values with the remainder having no opinion. Those perceiving a fall in property values generally estimated a decline of about ten percent of the property value. Between forty and fifty per- cent of the proximate neighbor responses also implied a negative impact on privacy, congestion, aesthetic values and schools from the public housing complex. Four elementary schools contained children from the public housing complexes. Sixteen, eighteen, nineteen and twenty-seven percent of the total enrollment were children from the complexes. The addition of these children neces- sitated an increase in the number of teachers. Two of the Kenneth Walter Steen schools also received $619,000 worth of capital additions. Given the impact on the schools it is perhaps somewhat sur- prising that school officials were not asked to participate in the decision of size and location of the public housing. Through manipulation of size, location, design, mainten- ance, and management the decision maker can alter the impacts of multiple unit public housing. On the one hand, an attrac- tive alternative to the occupants must be provided in order for them to choose to live in public housing and receive the benefits deemed desirable. On the other hand, the greater community, which ultimately decides the fate of public housing, must be satisfied with the results achieved. The study discusses various trade—offs implied by different policy choices and hopefully provides the decision maker with a better understanding of how to achieve the desired ouptut from multiple unit public housing. THE ECONOMIC IMPACT OF MULTIPLE UNIT PUBLIC HOUSING ON OCCUPANTS, PROXIMATE NEIGHBORS AND PUBLIC SERVICES BY Kenneth Walter Steen A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Agricultural Economics 1975 ACKNOWLEDGEMENTS One's work is the product of a countless number of historical events involving both the human and nonhuman. One could, I suppose, simply acknowledge the "Law of Nature" for his or her established level of accomplishments or lack thereof at any point in time and be done with it. I could not possibly name all of the people who con- tributed to this study. However, there are some people who must be acknowledged--especially Dr. Allan Schmid and Dr. Larry Witt. Also I wish to thank Dr. Allen Shapley and Dr. Leanna Stiefel. My wife, Judy, and my children, Shelly and Kevin, are owed a very special debt of gratitude. Without them the study would never have been undertaken. ii Chapter I II TABLE OF CONTENTS INTRODUCTION, PROCEDURE AND BACKGROUND . . . IntrOduct ion . O O O O O O O C O O O O 0 Reasons for Study . . . . . . . . . . Importance of Study . . . . . . . . . Conceptualizing the Problem . . . . . The Scope of the Study and Major Findings . .-. . . . . . . . . . . . . Uses of the Study Findings . . . . . . Procedure . . . . . . . . . . . . . . . . Definition of the Problem . . . . . . The Problem Setting . . . . . . . . . Method of Data Collection . . . . . . Background . . . . . . . . . . . . . . . Housing Need and Public Assistance . . Historical Evolution of Public Housing . . . . . . . . . . . . . . HUD and Subsidized Housing . . . . . . Rules and Regulations Concerning Multi-Unit Public Housing in Lansing, Michigan . . . . . . . . . . Rent Determination . . . . . . . . . Public Housing Subsidies in Perspective . . . . . . . . . . . . . THE ECONOMIC IMPACT OF MULTIPLE UNIT PUBLIC HOUSING ON THE OCCUPANTS . . . . . . . . . . Introduction . . . . . . . . . . . . . . Part I: "A Decent Home": The Quality of Direct Housing Services as Perceived by the Occupants . . . . . . . . . . . . Introduction . . . . . . . . . . . A Comparison of the Level of Direct Housing Services Versus Previous Housing . . . . . . . . . . . . . . . iii Page 23 26 27 32 32 34 34 35 Chapter Policy Actions of the Decision Maker and the Quality of Direct Housing Services . . . . . . . . . . . Resource Allocation Among Direct Housing Services . . . . . . . . . . Location and Level of Direct Housing Services . . . . . . . . . Size and the Level of Housing Services . .'. . . . . . . . . . . . Design and the Level of Direct Housing Services . . . . . . . . . . Maintenance and Direct Housing Services . . . . . . . . . . . . . . Management and Direct Housing Services . . . . . . . . . . . . . . Part II: "A Suitable Living Environment" Indirect Housing Services and the Occupants of MUPH . . . . . . . . . . . . Introduction . . . . . . . . . . . . . The Level of Indirect Housing Services at the Occupants Previous Residence . Comparison of the Level of Indirect Housing Services Offered by MUPH and the Previous Residence . . . . . . The Allocation of Resources on Direct and Indirect Housing Services . . . . Policy Decisions and the Level of Indirect MUPH Services with Respect to Schools (Educational Services) . . . Neighbors . . . . . . . . . . . . . Child Care Services . . . . . . . . Car Pool and Bus Service . . . . . . Congestion, Noise and Privacy . . . Garbage Collection and Storage . . . Theft and Personal Safety . . . . . Family Life, Desire, Self Respect . smary Of Part II C O C O O O O O O 0 Part III: "Rents the Poor Can Afford:" A Comparison of the Present and Previous Rents of MUPH Occupants . . . . . . . . . Introduction . . . . . . . . . . . . How Much Rent Can the Poor Afford . . Comparison of Present and Previous Occupants' Rent . . . . . . . . . . . iv Page 38 38 39 40 41 42 43 45 45 46 48 53 55 55 58 59 62 63 65 66 68 69 69 70 71 Chapter III Summary of Part III . . . . . . . . . Summary and Conclusions . . . . . . . . smary O O O O O O O O O O O O O O 0 Conclusions . . . . . . . . . . . . . THE ECONOMIC IMPACT OF MUPH ON PROXIMATE NEIGHBORS AND CERTAIN POLICY CONSIDERATIONS Introduction . . . . . . . . . . . . . "Neighborhood Effects" and the Relation- ship Between MUPH and Proximate Neighbors . . . . . . . . . . . . Limitations of the General Applicability of the Results . . . . . . . . . . . . . The Impact of MUPH on PrOperty Values-- Some Empirical, Theoretical and Policy Considerations . . . . . . . . . . . . . Introduction . . . . . . . . . . . . Empirical Results from Proximate Neighbors Concerning the Impact on Property Values . . . . . . . . . Some Theoretical and Policy Consider- ations of the Impact of MUPH on Neighboring Property Values . . . . . The Impact of MUPH on Certain Indirect Housing Services as Perceived by Proximate Neighbors; and, Some Policy Considerations . . . . . . . . . . . . . Introduction . . . . . . . . . . . . Impact on Indirect Services of Proximate Neighbors . . . . . . . . . Privacy . . . . . . . . . . . . . . Congestion . . . . . . . . . . . . Noise . . . . . . . . . . . . . . . Aesthetic Values . . . . . . . . . Schools . . . . . . . . . . . . . . Summary and Conclusions . . . . . . . . Size 0 O O O O O O O O O O O O O O 0 Location . . . . . . . . . . . . . . Maintenance . . . . . . . . . . . . . Management . . . . . . . . . . . . . V Page 76 76 76 79 87 87 90 94 96 96 97 101 107 107 108 108 111 114 116 122 124 128 129 131 131 Chapter IV Introduction . . . . . . . . . . . How MUPH Affects the M gnitude and Incidence of Benefits and Costs of Publicly Provided Services . . . . Alternative Policy Decisions Regarding the Impact on Public Service Provi- sion When the Population is Changing and Finance Provisions are Considered Expected Population Growth Rate of the Community . . . . . . . . . Method of Financing . . . . . . An Empirical Examination of the Impact of MUPH on Elementary Schools in the Lansing School District . . . . . Introduction . . . . . . . . . Impact on the Elementary Schools Receiving Children from Public Housing . . . . . . . . . . . . Impact on the Remaining Elementary Schools and the Importance of Working with School Officials . Summary and Conclusions . . . . . Intent and Objectives . . . . . . Social Inquiry on Matters of Public Policy . . . . . . . . . . . . . . The Impact of Multiple Unit Public Housing on the Occupants . . . . . The Impact of Multiple Unit Public Housing on Proximate Neighbors . . Results from Questionnaire . . Some Input-Output Relationships of Policy Decisions and Proximate Neighbor Responses . . . . . . The Economic Impact of MUPH on Public Services . . . . . . . . . . . . . General Considerations of MUPH and Public Service Provision . vi THE ECONOMIC IMPACT OF MUPH ON PUBLICLY PROVIDED SERVICES . . . . . . . . . . SUMMARY, CONCLUSIONS AND RECOMMENDATIONS Page 138 138 139 144 144 146 149 149 150 155 160 166 166 171 172 175 175 179 185 185 Chapter BIBLIOGRAPHY APPENDICES The Impact of MUPH on Elementary Schools in the Lansing School District 0 O I O O O O O O O O O O O 0 Conclusions and Recommendations . . . . . Related General Areas of Recommended Research . . . . . . . . . . . . . . . Examination of Other Public Housing. Examination of Other Multiple Unit HOUSing I O O O O O O O O O O O C 0 Further Research and Recommendations Pertaining to the Occupants of Public Housing . . . . . . . . . . . . The Goals of Public Housing . . . . How Does Public Housing Affect the Social Decision Making Ability of Occupants? . . . . . . . . . . . The Relationship Between Direct and Indirect Housing Services . . . Some Question on the Level of Direct Housing Services . . . . . . . . . . Some Questions Concerning Indirect Housing Services . . . . . . . . . . Further Research and Recommendations Concerning Neighbors of MUPH . . . . . Externalities Associated with Different "Types" of Housing . . Neighborhood Property Values . . . . Further Research on the Impact Indirect Services Have on Proximate Neighbors . . . . . . . . . . . . . Further Research and Recommendations Concerning the Impact on Public serViCeS O O O O O O O O O O O O O O O I QUESTIONNAIRES USED IN STUDY . . . . . . . . II-l A DESCRIPTION OF THE THREE NEIGHBORHOODS DISCUSSED IN CHAPTER III . . . . II-Z RESPONSES OF PROXIMATE NEIGHBORS ACCORDING TO INCOME, EMPLOYMENT, LOCATION AND PARENTAL STATUS . . . . . . . . . . . . . . vii Page 187 191 191 191 192 192 192 193 194 195 197 199 199 200 201 203 207 210 210 226 230 Table 1.1 2.1 2.2 3.1 3.2 3.3 3.5 LIST OF TABLES Resident Income Requirements of Lansing Public Housing, 1972 . . . . . . . . . . . . Responses Obtained from Comparison of Direct Housing Services of Previous Residence and MUPH Residence . . . . . . . . . . . . . . . Responses Obtained from Comparison of Indirect Services of Previous Residence and MUPH ReSidence O O I O O O O I O O O C O O O A Comparison of Occupants' Present and Previous Monthly Rents by Percent of Income Received from Public Assistance . . . . . . Proximate Neighbor Response to the Question: "Do you Think the Value of Your Property was Affected in Any Way?" . . . . . . . . . Responses to the Question: "Do You Feel that Your Privacy Has Been Adversely Affected Due to the Public Housing Complex?" . . . . Responses of Proximate Neighbors Concerning the Question: "Do You Feel That There has Been a Change in Congestion Since the Public Housing Complex was Occupied?" . . . . . . . Responses of Proximate Neighbors Concerning the Question: "Do You Feel there has been a Change in the Amount of Noise Since the Public Housing Complex was Occupied?" . . . Responses of Proximate Neighbors to the Question: "Do You Feel there has been a Change in the Aesthetic Value of the Neighborhood?" . . . . . . . . . . . . . . . viii Page 25 37 49 74 97 109 112 114 118 Table Page 3.6 Responses of Proximate Neighbors to the Question: "If a Multiple Unit Housing Complex of the Same Size, Which was not Public Housing, had been Built in the Same Location, Do you Think the Affect on You, your Family, or your Property Would have been any Different?" . . . . . . . . . . 120 3.7 ReSponses of Proximate Neighbors to the Question: "Do You Feel that the Public Housing Affects the Schools Your Children Attend?" . . . . . . . . . . . . . . . . . . 122 3.8 The Number and Percent of Proximate Neighbor Responses Implying an Adverse Impact of MUPH on Indirect Services . . . . . . . . . . 128 4.1 Elementary School Receiving Children from MUPH: Number of Children in Attendance September 1973 (Total and From Public Housing) . . . . . . . . . . . . . . . . . . 151 4.2 Attendance in Schools Receiving Children from MUPH; and Attendance of School District from 1967 through 1973 . . . . . . . . . . . . . . 151 4.3 Number of Teachers at Elementary Schools Frequented by Children from MUPH, 1967-1973 . 153 4.4 Student/Teacher Ratio of the Lansing School District and of the Four Schools Containing Children from MUPH, 1967-1973 . . . . . . . . 156 4.5 Percent of Capacity of School District and the Four Schools Containing MUPH Children, 1967-1973 c o o o o o o o o o o o o o o o o o 157 5.1 The Number and Percent of Proximate Neighbor Responses Implying an Adverse Impact of MUPH on Indirect Services . . . . . . . . . . . . 179 5.2 Ordinal Ranking of Three Public Housing Com- plexes According to Catagories of Isolation . 184 5.3 Elementary Schools Receiving Children from MUPH: Number of Children in Attendance September 1973 (Total and From Public Housing) . . . . . . . . . . . . . . . . . . 188 ix Table A2.1.l A2.1.2 A2.2.1 A2.2.2 A2.2.3 A2.2.4 LIST OF TABLES IN APPENDIX Income of Proximate Neighbors by Neighborhood. Employment of Proximate Neighbors by Neighborhood . . . . . . . . . . . . . . . . . The Percent and Number of Proximate Neighbor Responses (By Employment Group) to the Question, "Does MUPH Adversely Affect:" . . . The Percent and Number of Proximate Neighbor ReSponses (By Income Group) to the Question: "Does MUPH Adversely Affect:" . . . . . . . . The Percent and Number of Proximate Neighbor Responses (By Parental Status) to the Question: "Does MUPH Adversely Affect:" . . The Percent and Number of Proximate Neighbor Responses (By Relative Location) to the Question: "Does MUPH Adversely Affect:" . . . Page 228 229 232 234 236 240 Figure 1.1 LIST OF FIGURES Page Possible input-output relationships between project size and proximate neighbor privacy . . 10 Inputs of direct and indirect housing services while maintaining a constant percent of occupants preferring MUPH services to previous services . . . . . . . . . . . . . . . . . . . 11 Percent of favorable proximate neighbor responses according to geographical location Of emplex O O O O I O O O O O O O O O O O O O 181 Percent of favorable proximate neighbor responses according to index of degree of i801ation O O O O O O O O O O O O O O O O O O O 183 xi CHAPTER I INTRODUCTION, PROCEDURE AND BACKGROUND Introduction Reasons for Study Since 1937 the federal government has allocated resources for the purpose of providing low cost housing to relatively low income groups.1 Various federal, state and local programs concomitant with public and private institutions have been developed for this purpose. Unlike the private market, which presumably allocates resources primarily according to "dollar votes" and the "profit motive", the "public sector" relies mainly on intuitive judgments without the aid of "dollar votes" as a common denominator in carrying out economic 2 Profit prospects are the criteria for making decisions. "economic decisions"in the private sector. If the judgment is wrong, profits are not forthcoming and capital is dissipated. Public decisions as to whether and how much to appropriate and allocate often involve more complex criteria than profit. Because there are often multiple criteria, and weights among them differ among individual decision makers, and because quantification is difficult; decision makers find that they must draw on intuitive judgments to supplement quantitative information. The extremely complex world of public economic decision making suggests that "intuition and judgment, generated by a lifetime of experience with simple systems that surround one's every action. . .,"4 are insufficient in developing policies which will achieve desired results in such complex systems. In the words of Professor Forrester: In a situation where coincidental symptoms appear to be causes a person or government agency acts to dispel the symptoms. But the underlying causes remain. The treatment is either ineffective or actually detrimental. With a high degree of con- fidence we can say that the intuitive solutions to the problems of complex social systems will be wrong most of the time. Here lies much of the explanation for the problems of faltering companies, disappointments in developing nations, disappoint- ments in low-income public housing, foreign exchange crises, and troubles of urban areas. The lack of knowledge concerning the social and economic impact of low income public housing as well as the large commitment of resources toward its provision has prompted this study. More specifically, more needs to be known about why multiple unit public housing often fails to obtain its objectives; and what human affairs management procedures offer hope of improvement. This study examines multi-unit public housing (hereafter also denoted MUPH), its institu- tional structure and the magnitude and incidence of the costs and benefits derived therefrom. The objectives of the study since its conception have been: 1) that the results will improve the ability of decision makers in the making and carrying out of economic decisions concerning multi-unit public housing (MUPH); and, 2) that sufficient insight into the problem area will be develOped so that more in-depth meaningful analyses may be conducted in the future. Con- sidering the scope of the study and the time and budget restrictions, some of the examination is necessarily peri- pheral; thus the greater part of the analysis is concentrated on identifying who is affected, to what extent they are affected, and alternative courses of action. Importance of Study Billions of dollars have been and are being committed to the development of multi—unit public housing. Moreover, millions of human lives are directly affected by MUPH pro- jects. With all of the adverse conditions (pollution, disease, disasters, poverty, ignorance, etc.) which affect the well being of mankind, it is important that we allocate our scarce resources efficiently and that we understand the returns to different groups from our social investments so we can choose what categories of inputs and outputs we wish to use for our efficiency calculations. The direct costs of MUPH (e.g., site cost, development cost” constructitnxcost, management and maintenance cost” etc.) can be readily determined. However, the indirect costs and benefits and the value of output--which are necessary in order to determine where to allocate our resources and how to allocate them efficiently--are elusive figures indeed. Dynamic computerized simulation systems promise to assist in the estimation of economic impacts due to changes in public policy. These systems unfortunately are only as good as the assumptions on which they are based. This study may be viewed as a very early prelude to a more sophisti- cated dynamic model. It attempts to identify and articulate some of the important characteristics and fundamental rela- tionships which, when better understood may later provide data upon which such a model could be built. The value of a better understanding of the social- economic impact of MUPH is clearly illustrated by the Pruitt-Igoe project in St. Louis. This project was con- sideredtx>betheofthe1rspmmbnu;fnantheIfildflnendtrmdgmxmhoxianeremaus, amiamermmuhworwxiinijuscnesUkm. The results of Table 3.1 show that one half of those responding "yes" or "no" felt as though property values were affected; and all of these agreed that property values had decreased. The difference in the number of "yes" and "no" responses between neighborhoods may be attributable to differences in the relationship of the neighbors to the complex 98 (e.g. different location with respect to public housing, etc.). After responding "yes" to the above question, the respondents were asked if they thought their proerpty value went "up" or "down" and by approximately how much. All respondents answering "yes" felt their property values had decreased. The responses as to "how much" were varied. In dollar amounts the figures ranged from $1500 to $15,000 with eight (approximately two-thirds) respondents located in the $2000-$4000 range. Some simply responded "a little bit" and others said "way down." While there was not a concensus on how far property values had fallen, these individuals felt they had, in fact, declined. The respondents were also asked, "Do you think there has been an increase in home sales in this area?" To this question there are forty-one "yes" responses, thirty-three "no" responses, and thirteen "don't know" responses. The Mt. Vernon neighbors accounted for seventeen of the "yes" responses, with thirteen and eleven respectively from the Hildebrant and La Roy neighborhoods. Those who responded "yes" were also asked if they knew what had caused this increase. Only seventeen responded that public housing was the cause. Taxes, schools and "less desirable people” were mentioned at least once. One respondent from the Mt. Vernon neighborhood said that two people sold because a house near theirs was broken into shortly after the public housing 99 complex was occupied. However, it seems that when the thieves were apprehended they were boys from the neighborhood and not from the complex at all. Several respondents men- tioned that there had been some "panic selling" shortly after the complexes were occupied, but that everbody had "cooled down." The respondents were also asked: "Do you or have you recently planned to sell your house?" Tvzenty-nine responded ”yes" and fifty-two replied "no"--the remainder being un- decided. According to neighborhoods there were ten, eight and eleven who responded "yes" from Hildebrant, La Roy and Mt. Vernon, respectively. Those responding "yes" were then asked, "What are, or were your reasons for want to sell?" Only four individuals referred to the public housing complex as being a reason for wanting to sell. A few others mentioned they "wished they could move." However, most respondents cited reasons other than public housing, and in fact said their reasons were "not related to public housing." The relatively small number of individuals wanting to move because of public housing, compared to the relatively large number who feel their property values are depressed, implies that these respondents are willing to accept the cost of any perceived decrease in indirect neighborhood services (discussed below) rather than sell now and assume moving expenses and the expected loss in property value. While property values may have declined in these 100 neighborhoods--relative to what they would have been had the public housing complexes not been built--there does not appear to be any widespread expectations of continuing falling values. If such expectations were widely held, it seems reasonable to expect that a greater number of proximate neighbors would be desirous of selling. In other words, if property values are expected to continue falling, many of the respondents would prefer to take the expected loss now rather than a greater loss at a later date.11 Another observation from the study indicates that owners of relatively high valued homes felt as though their property values were more adversely affected than owners of lower valued homes. Several mentioned being "over built" for the neighborhood. One respondent mentioned that when he had built his home he had assumed property values in the neighborhood would increase. However, he contended, public housing had prevented this and had "cost him about $10,000." Another said his home cost $60,000 and "he would be lucky to get $45,000." The above is primarily a brief data presentation which hopefully provides an insight into how the proximate neighbors perceived the impact of MUPH on property values. Below is a more general discussion of how public housing complexes may affect neighborhood property values. 101 Some Theoretical and Policy Considerations Of the Impact of MUPH on Neighboring Property Values Perhaps the first thing to consider, with respect to the impact on property values, is to determine their importance for policy. It has already been argued that an adverse impact on property values is not necessarily a wholly "bad" thing. In fact, it could be argued that a fall in property values would allow relatively lower-incOme families to purchase desired homes, while those who move also choose a preferable setting. But, those whose savings and assets are reduced are harmed. The harmful aspects of an adverse (or expected adverse) impact on neighborhood property values with respect to MUPH, seem to have three possible consequences.12 First, a con- tinued fall in property values may lead to dilapidation, abandonment, squalor, disease and other maladies which detract from societal welfare (i.e. incur a social cost which must be imputed into the cost of the public housing complex). Second, a perceived decline in property values by proximate neighbors may lead to animosity and dislike which diminish the value ("living environment") of the neighborhood. Third, an expected fall in property values will increase neighborhood resistance to any proposed public housing complex in their area, even if such expectations are groundless. Regarding the first consequence, certeris paribus, any sustained fall in property values due to a public housing 102 complex implies considerable deterioration of the direct or indirect housing services of the neighborhood in the eyes of a significant portion of the home buying public. Where "significant portion" is based on the number, tastes, and income of potential home buyers; as well as the costs of alternative housing services. Rapid deterioration of direct housing services can follow the "panic selling" which may occur when news of a public housing complex becomes known and construction starts. That is, as the supply of homes offered for sale in a given neighborhood increase, prices will fall and individuals with relativley lower incomes will now be able to enter this market. If prices fall sufficiently, homes may be purchased by individuals whose incomes do not allow for adequate maintenance. Thus, the home is allowed to deteriorate at a more rapid rate. The increased deterioration will "cause" a continued decline in price. In order to decrease the possibility of a large amount of "panic selling" and subsequent (artifically) depressed prices, the public decision maker can increase the "lag" between proximate neighbor knowledge and the actual construc- tion of the complex. The longer the "lag" the less likelihood of as many homes being on the market at any one time. The longer time limit may also allow some of the potential sellers to "cool down." An increased "lag” may also be useful with regard to 103 the second consequence (i.e. deterioration in the "living environment"). For example, if the entry of a MUPH complex increases home sales and forces prices down, some of those individuals desiring to sell may decide otherwise in view of the larger than expected capital loss. Wanting to leave and yet feeling "forced" to stameay increase neighborhood animosity toward the complex. Thus, leading to a less desirable neighborhood for many individuals--both outside and within the complex. A longer "lag" would allow some of these individuals to receive acceptable prices (i.e. prices high enough to prevent capital losses from being greater than the expected cost of remaining in the neighborhood). How long should this time "lag" between notification and construction be? This of course depends on the housing market conditions in the (greater) community, credit avail- ability, income and the "need" for low cost housing. With the exception of the latter, one year may be a reasonable policy alternative.13 A sustained fall in neighboring property values may also occur if the indirect services of the neighborhood are sufficiently negatively affected. Certain of these indirect services are considered in more detail in the next section. Nonetheless, the relationship between direct and indirect housing services is an important consideration regarding property values. That is, the demand for housing services is based on the combined demand of direct and indirect 104 housing services. This relates to the "necessity" and "luxury" aspects of housing. Quoting from Muth: On the subject of income elasticity, Morton asserts that, 'because of the absolute necessity of shelter, housing stands with food very high in the order of urgency. . . .Housing expenditures, accordingly, do not bear a constant but a decreasing ratio to income.‘ This is in direct contradiction to Marshall's classic comment that 'house room satifies the imperative need for shelter from the weather; but that need plays very little part in the affective demand for house room' and that 'where the condition of society is healthy. . .there seems always to be an elastic demand for house room, on account of the real con- veniences and the social distinction which it affords.14 The contradiction of the two authors may stem more from the definition of the good in question than from any disagreement regarding the "necessity" of housing or the income range considered. It is quite possible that the demand for direct housing services is income inelastic, over a range,whereas the demand for indirect housing ser- vices is income elastic. Regardless, a broad statement regarding the income elasticity of housing service demand is somewhat analogous to a similar statement with respect to the income elasticity of food demand. That is, there are many housing services with widely differing income elasticities, just as there are food items with extreme differences in income elasticities. However, in the area of housing, it would be very useful to determine the proportion of income allocated on direct and indirect housing services between different income groups.15 105 The relationship of direct and indirect housing services and the many unique aspects of any particular neighborhood and MUPH complex, suggest against a general statement con- cerning the impact on property values. However, since it is reasonable to expect that the location of, say, $15,000 homes in a $60,000 neighborhood (or vice versa), will increase the value of the former and decrease the value of the latter; it seems reasonable to construct MUPH of such value that it "fits in" with the neighborhood (assuming one is concerned with neighborhood property values).16 Unfortunately, in many cases, this would increase the cost per unit of public housing in higher income neighborhoods and reduce the total number of units built (given a fixed budget). Summarizing, the impact on property values concerns the decision maker primarily due to the possibility of rapid neighborhood deterioration and/or proximate neighbor anta- gonism. In order to decrease the likelihood of such an impact, a longer time "lag" between proximate neighbor knowledge of planned construction and actual construction is suggested as a possibility. Similarily, the construction of public housing units whose value per unit approximates that of the neighborhood would also work toward this end. It must be concluded, however, the study offered no defini- tive statement on the general impact of MUPH on property values. The inability to make such a statement rests with the multitude of housing and human characteristics involved. 106 Sales records are also spotty and to separate out causes of value changes other than MUPH would require a major study in itself. According to Bish and Nourse, two studies have compared the effect of public housing projects on neighboring property values. The two studies attempted to determine whether there were social benefits or costs to neighboring families. The arguments run: Changes in site value express the changes in the relative value of one neighborhood environment over others. Site value itself is difficult to measure, but changes in property value can be used as a measure of these changes as long as care is taken with respect to changes in improvements occuring on each side. The technique requires comparing the changes in property values in blocks surrounding a given project with changes in property values in other neighborhoods that were of comparable quality and accessibiiity prior to the introduction of public housing. 7 There are, of course, many unknowns in such an approach as well as an implicit assumption that changes in property values somehow accurately reflect "social" benefits and costs. Neither study found any substantial differences in rent changes between the two groups. However, these results would not necessarily have any implications for this study. The public housing projects in the above studies were located in low-income neighborhoods. The complexes examined in the present study are located in more middle-income neighborhoods. 107 The Ippact of MUPH on Certain Indirect Housing Services as Perceived by Proximate Neighbors; and, Some Policy Considerations Introduction The location of a public housing complex in a neighbor- hood will have certain effects on the indirect housing services. These services create costs and benefits to the occupants and neighbors of public housing. The recipients of the costs and benefits, however, have no market within which to reflect their satisfaction or dissatisfaction with 18 O I I Th1s section exam1nes regard to these benefits and costs. the impact of MUPH on certain indirect services (normally considered to be important in the desirability of a neighbor- hood) as perceived by proximate neighbors. The indirect services considered are privacy, congestion, noise, aesthetic value and schools. While this is not an exhaustive list of indirect services, it seems to represent a number of areas where a public housing complex may have an impact on the neighborhood. Especially since the broad and rather vague definitions of the above services (as shown later) allows the respondents considerable flexibility in their response. The primary difficulty in examining the above indirect services is the determination of "goodness" and "badness" or benefits and costs associated with each. For example, more "noise" or "congestion" may be considered "bad" by certain individuals and "good" by others. Thus, other than 108 at the extreme it is very difficult for the decision maker to assess costs and benefits. It is therefore necessary to attempt to determine not only the affect on the indirect services, but whether or not the result is a perceived benefit or cost. Even if one can assume an accurate measurement of the direction of impact on indirect services (as perceived by proximate neighbors), the magnitude of impact poses more difficult problems. For example, again using the noise level, assume that proximate neighbors generally perceive a cost to an increased noise level. This does not tell the decision maker how much if any additional resources should 19 Such a decision rests 20 be used to reduce the noise level. with the judgment of the decision maker. The following discussion of the impact on indirect services will hope- fully provide the decision maker with additional insight and ideas on which to make these decisions. Below the perceived impact on each of the indirect services is presented. Impact on Indirect Services of Proximate Neighbors Privacy Table 3.2 presents the responses of proximate neighbors, by neighborhood, regarding the question of privacy. Of those responding "yes" or "no" to the question, 41 percent felt as though the housing complex had affected their privacy. The two primary reasons given for this 109 Table 3.2. Responses to the Questicn, "Do you Feel that Your Privacy Inn;beaiAdmaseh{Affianedcheeustheikblszomfing(xanaém Nenfltnrthi Requses Yes No NO0phfion Per- Nmfixm'lkxb lumber Ier- Ihnber Per- Nader emu: cent meEeeltheneheskeenaaChaxxain‘dmaAmmnnzof NOise Since the PUblic Housing CompleX‘was Occupied?" ted4flxnhox1 fesgmees than:ALl Mmfli No($unhmi Same Per- Nudem'l%n~ lumber Pen- Nmfixn'IRmr- Nader cent cent cent cent Hildebrant. 65 20 3 1 6 2 26 8 La Roy 58 18 35 ll 0 0 6 2 Mt. vernon 82 23 0 0 0 0 18 5 Total 68 61 13 12 2 2 17 15 Again, the data show that the La Roy neighborhood per- ceived the greatest increase in noise followed by the Hilde- brant Park neighborhood. The major sources of the noise, according to the respon- dents, are automobiles ("hot-rods" some argued), yelling, sirens and children. A majority of the respondents referred to the "noise at night" (primarily automobiles) as being their primary concern. It is not unexpected that the Mt. Vernon neighborhood voiced the fewest complaints with respect to noise. This could simply be due to the geographical distance from that 115 complex to the neighbors. However, it is not easy to under- stand why the Hildebrant complex received fewer "much" responses, since it is surrounded rather closely by neigh- boring homes. One possibility may be the amount of vegeta- tion around that complex. Perhaps the trees and shrubs helped muffle the sounds. Also, much of the housing around the Hildebrant complex is either of equal or higher eleva- tion, whereas the La Roy project is of slightly higher ele- vation than the surrounding community. Being of slightly higher elevation and not having a vegetation "buffer", it is understandable that noise from the La Roy complex would carry farther with greater impact. Since noise, congestion and privacy are often times complimentary "bads", it is reasonable to expect that certain policy alternatives designed to improve one will also improve the other. For example, if fencing is desirable in order to prevent trespassing, a fence consisting of trees and shrubs would also tend to reduce noise levels. Also, the suggestion of locating a public housing complex such that entry and exit can take place without driving through the neighborhood would decrease the amount of automobile noise. Along with location and design, the size of a project can be decreased to reduce the noise level. However, the different impact on noise from three like sized complexes, suggests that alterations in size within a certain range may have a small affect. That is, it is not clear that, ceteris 116 paribus, a reduction in size from 100 to 50 units would reduce noise sufficiently to warrant any additional costs. Aesthetic Values "Aesthetic values" contain the singular problem of definition. The intent of attempting to obtain proximate neighbor opinions regarding "aesthetic values," was to gain insight into the perceived changes in the physical beauty of the neighborhood due to the public housing complex. While some respondents commented on physical changes, a majority referred to the people (or possible acts of the people) in the public housing complex. Comments often times referred “mothose items affecting congestion, noise and privacy pre- viously discussed. Roughly one-third offering negative comments referred to safety and security; and several others criticized the economic and racial characteristics of the occupants. The question of "aesthetic value" seemed to invite responses outlining the respondent's primary observa- tion concerning his relationship with the people in the public housing complex. In other words, when asked about "aesthetic values", the respondent's offering comments referred to the individuals living in the complex, and not to the complex itself. Numerically, comments on this question identified the affects of the occupants by a two-to-one margin over the affect of the structure itself. From a policy View point, the implication of significant external costs originating from relationships between 117 individuals; poses several problems with regard to policy choice. These problems arise primarily due to the limitation of the decision makers policy tools (i.e. size, location, design, maintenance and management). With the exception of physical separation there seems to be little a decision maker can do with regard to dislike or fear between individuals or groups of individuals. However, several of the respondents were careful to specify "some" or “a few" of the occupants (or friends of the occupants) are responsible for the detraction in neigh- borhood "aesthetic values." If, as seems likely, there are a few "bad apples", then certain management options are available. For example, managers of private multiple unit housing may remove tenants who continually create problems for the other occupants. In the case of private housing, it is assumed the individual evicted can find suitable alterna- tive shelter. Public housing, however, is housing of the last resort and eviction from such housing leaves perhaps no suitable alternative, and may be legally prohibitive. One possibility open to the decision maker is the creation of a "half-way" house to public housing. That is, individuals removed from public housing could be offered the option of living in a "suitable" house at the same rent. Such housing, whether single or multiple, could be relatively isolated from surrounding neighbors. This course, however, simply removes the housing of last resort to another project; and, may prove to be only a costly temporary solution. 118 Maintenance played a large role in the comments concerning the physical beauty of the neighborhood. A number of the proximate neighbors commented on the excellent upkeep of the housing projects. However, only four respondents felt the neighborhood had in fact been improved by the complex. One of the concerns of certain proximate neighbors in this regard, was the fully expected forthcoming deterioration of the neighborhood. The arguemnt runs: While the complex appears attractive, it is still relatively new--wait another five or ten years. Empirical observations over time would yield valuable insight into the rate of deterioration. The previous state of the site on which the public housing complex is built may also affect proximate neighbor repsonses. For example, as shown in Table 3.5 below, the proximate neighbor responses of Hildebrant Park differed considerably from the responses in the other two neighborhoods. Eflflee3.5. Remixees(fianmdneterkfigmxns'Uthecmeetflmn WXJYOu Feeltierelmr;beenaaCiemge:h1theIEethetkzvaLmacflfthe Nehhboflxed?’ Nehflboflmed Itepmees IknLatZUJ Sane Mmfll bk>Ophfien Per- Number Per- ‘Number Per- Number Per- Number cent cemt cent cent Hildebrant. 32 10 23 7 32 10 13 4 La Roy 58 18 29 9 10 3 3 1 Mt. Vernon 79 22 ll 3 ll 0 Total 56 50 21 19 18 16 6 5 119 Respondents from this neighborhood often referred to the "woods" and "park-like" condition of the site previous to the multiple unit housing project. The other projects (Mt. Vernon and La Roy) were constructed on vacant but cleared land, not particularly valuable for alternative uses (other than resi- dential). Thus, the clearing of the woods considerably de- tracted from the "aesthetic values" of the neighborhood in the opinion of many of the Hildebrant.:neiSIthrS-23 Thus, when selecting a site for the multiple unit housing project, the decision maker should consider the existing use of the site by individuals in the neighborhood. If such present use is highly valued by proximate neighbors: construction of a housing project increases the cost on the neighbors and may tend to create a general feeling of animosity toward the complex. Related to the area of "aesthetic values" and physical beauty is the question (along with responses) shown in Table 3.6. Forty-four percent of the respondents felt as though public housing had a different impact than similar private housing. Only one respondent felt the impact from public housing would be preferable to private housing. Lower property values and a "less respectable class of people" were the msot often mentioned causes of public housings' negative influence. As expected, then, responses in the affirmative to the above question are significantly related to responses which also tended to argue that: 120 Table 3.6. Responses of Proximate Neighbors to the Question: "If a Multiple Unit Housing Ccmplex of the Same Size, which was notPMbLk:Harfing,tedlx m afiJt hnthesemeIUxerhmn do )mM‘Hfink‘Urzaffixrwmiyou,yrmrlkmuly,crfiwmannxerty wouhirewelxxrnanytfiffenafif" Nekmbodxed Reqxxees Yes No Ik>0phfien Penxmt Narer Penemt Nader Penxmt Nader Hildebrant 42 13 32 10 26 8 La Roy 42 13 55 17 3 1 Mt. Vernon 32 9 64 18 4 1 Total 39 35 50 45 ll 10 l) the public housing complex had adversely affected property values; and 2) MUPH adversely affected the "aesthetic value" of the neighborhood. The attitude of "less respectable" people, as pre- viously mentioned, poses difficult problems for the decision maker. Manipulation of location, size, design, maintenance and management within a given area would have little affect on the perceived "respectability" of individuals. In a nega- tive sense, proximate neighborhood attitudes toward the "respectability" of public housing occupants can affect the decision makers' opinions regarding size. For example, proximate neighbor costs from "less respectable peOple" may be rather invariant over a range of project sizes. That is, four twenty-five unit structures located in four separate 121 neighborhoods may increase the total amount of proximate neighbor dissatisfaction relative to a single hundred unit complex. Thus, while smaller size complexes may tend to reduce certain other costs to occupants and neighbors; they may tend to increase costs in this respect. The implication being that no simple paretian welfare solution can be found with regard to complex size. Proceeding along the line of the desirability of public housing, the respondents were asked, "Do you think public housing in general is desirable?" Thirty of the respondents replied "not at all"; thirty-nine responded "somewhat" and three replied "very". One respon- dent perhaps typified many of those replying "somewhat", whenhe said, "I guess public housing is necessary, but I wish they would build it on the other side of town." An optimal solution regarding dislike and fear between occupants and neighbors may be the selection of a neighbor- hood which holds more positive values toward public housing and its occupants. As previously mentioned, the selection of a neighborhood containing a racial and economic mix which is at least partially similar to that of the complex, may help to achieve thie desired end. However, this is not guaranteed and such a location contains certain policy draw- backs (e.g. the assimilation of the poor into middle income society). Nevertheless, it is difficult to see how such assimilation can proceed under conditions of fear and dislike. Schools 122 Of thetotal of forty-seven responses concerning the impact on schools, two felt the schools were improved; twenty-seven felt the schools were harmed, while eighteen perceived no impact at all. Table 3.7. fidfleli7. These results are shown in Responses of Proxflnate Neighbors to the Question: HXJYou Feel that the Public Housing Complex affects the Schools your Children Attend?" Nekfibofixed lesgxees Yes Better Worse Penxmt Nader Penemt Nader Penxmt Nader Hildebrant 0 32 6 68 13 La Roy 11 67 12 22 4 Mt. Vernon 0 90 9 10 1 Total 4 57 27 38 18 A considerable majority of those contending a worsening of the schools, identified overcrowing as the primary cause. This was followed by expressions concerned with "friction among the student," and adverse feelings between whites and blacks. A lower level of educational services was expressed and indirectly implied by many of these respondents.24 The concerns Voiced by proximate neighbors do not differ in content from the concerns offered by the occupants 123 of public housing discussed in Chapter II. Similarly, the policy alternatives, as they pertain to MUPH, are identical. Briefly, the policy alternatives previously mentioned were designed to reduce the impact (fears of overcrowding) on any one school; and, to locate public housing projects in somewhat integrated neighborhoods. Contact and questioning of school officals in the neighborhoods did not substantiate the claim of overcrowding.25 In certain cases, additions to the school were constructed; and in the Hildebrant neighborhood, pre-seventh grade children of the complex are bused to a school which had excess capacity. Some officials mentioned that certain parents from the neighborhood are concerned, and that "public housing is not very popular" with these parents. Whether or not the schools are "overcrowded", does not detract from the concerns of parents with regard to a more crowded condition. The two individuals who felt that the impact on schools had been favorable, cited "more and different kids" and "integration" as reasons for the improvement. Unfortunately, some very difficult problems and external costs seem to arise from these perceived improvements. For example, one neighbor respondent said her children had never been "racists" until the housing project was occupied. This attitude was evidently developed due to the adverse relationships between some children in the complex and her children. The location of public housing in certain neighborhoods 124 may increase the social cost of this housing with respect to the children. This seems to be particularly true when one group is essentially poor, black, and lives in a housing complex; and the other is white, middle income and lives in single family homes. Again, this suggests locating public housing projects in areas which, at least, to a small extent, reflect the expected racial and economic mix of the project. Such a location may help to prevent the stereotypes of poor and black, rich and white, along with the hard feelings and social cost thereby generated. The increasing number of integrated neighborhoods increases the number of possible sites, and enhances the desirability of this suggestion. Summary and Conclusions To better understand the net social value of multiple unit public housing, it is necessary to understand its costs and benefits to individuals other than occupants.26 Proxi- mate neighbors may also incur benefits and costs through "neighborhood effects". These "neighborhood effects" arise because of an imperfect market within which proximate neighbors may express their desires and because of the existing power structure. For purpose of clarity, the costs and benefits incurred from public housing on proximate neighbors, is qualitatively divided between property values and indirect services. However, it is argued that the interrelationship between 125 changes in property values and changes in indirect housing services is fundamental in understanding the benefits and costs of multiple unit housing. Assuming "similar" alterna- tive available housing, changes in relative property values (along with moving expenses) establish the limit at which proximate neighbors would incur any perceived change in . indirect housing services. Changes in property values, per se, is not necessarily a "bad" thing from the decision makers' viewpoint. What is, for instance, a cost to one individual (e.g. the seller) . would be a benefit to another (the buyer). Changes in pro- perty values occur if: '1) they augment or diminish blighted conditions; 2) they affect the attitudes between proximate neighbors and occupants, and thus the desirability ("living environment") of the neighborhood. Thirty-eight of the eighty-eight respondents (forty- three percent) felt their prOperty values had declined. The range of decline was from a "little bit" to a "whole lot", with apprxoimately two-thirds of those answering in dollar amounts referring to between $2,000-$4,000. Forty-one of eighty-seven respondents felt that home sales in the neighbor- hood had increased; however, only seventeen felt that public housing was the cause. Similarily, of the twenty-nine respondents who planned to sell their homes, only four mentioned public housing as a reason for selling. Moreover, the results indicate that widespread expectations of decreasing 126 property values probably do not exist; since such expecta- tions would encourage home owners to sell now rather than later. Assuming that policy makers are concerned with the public housing impact on property values, two suggestions are presented. First, is the desirability of constructing public housing complexes which "fit-in" with the surrounding community. Since home buyers, ceteris pgribus, normally prefer similar valued homes in the neighborhood, the incur- sion of lower valued homes will tend to decrease property values of existing homes. However, at times this alternative will greatly increase the unit cost of public housing (i.e. when the public housing is to be constructed in relatively high income neighborhoods). Second, a longer time "lag" between the decision and notification of the intent to con- struct a public housing complex, and actual constructions, may be desirable. Such a "lag" would decrease the likelihood of "panic selling", and a subsequent fall in property values. However, both of the above suggestions are intended to prevent a short-term fall in property values. (Though as previously shown, a short-term fall may lead to a continuing downward trend through an increased rate of deterioration.) Assuming no effect on direct housing services, a continu- ing fall in property values must stem from adverse affects on indirect housing services. Thus, various indirect ser- vices are examined in order to determine the perceived 127 affect of the housing complexes on these services. Moreover, the implicit costs involved with changes in the indirect services and various policy alternatives are discussed. Privacy, congestion, noise, aesthetic values and schools are the indirect services examined. While not exhaus- tive, they seem to be sufficiently broad in nature to allow proximate neighbors considerable flexability in their responses. Whether or not these services are "good" or "bad," and the magnitude of the "goodness" and "badness" partially determine the public housing impact on proximate neighbors; and must be judged and weighed by the decision maker. Essentially all of the proximate neighbors of this study implied either a zero or negative cost associated with the impact on the above indirect services. The number and percent of respondents implying an adverse impact on the various indirect services, is shown in Table 3.8. With respect to privacy and schools, the number of negative responses are fairly evenly divided between the three neigh- borhoods. However, the La Roy neighborhood accounted for approximately fifty percent of the negative responses con- cerning noise and congestion; while the Hildebrant neighbor- hood accounted for approximately fifty percent of the negative responses concerning "aesthetic values." The decision maker has available the policy tools of size, location, design, maintenance and management with which to alter the impact of public housing on proximate I! I I i‘ll' li.l| | I III! 1' ‘l.,\‘ 128 Table 3.8. The Nader and Percent of Proximate Neighbor Responsee ImphdngamiAdwneeImnectcfifwmfilonShrfirefl:Sendres Indirect Service Number of Respondents Percent of Total Dqflyhrgalmretrwa Ranemiaus Ddflyimg Lnxmr Arkgathezndxrt Prhecy 35 41 defietnx1 40 48 Noise 27 31 ,Aenhetkzvahxe 35 41 samxns 35 44 1The percent is calculated frcm the total who answered "yes" or "no" or, who answered "not at all", "scme" or "a lot". Those having no ophfienzneaexdhmed. The firme"anri"a LN? wmmersaneeoadfined. neighbors. It is useful to conclude this chapter with a brief discussion of each policy tool and its desired impact on the indirect services considered. Size If the size of a public housing project could be reduced to any given size, the impact on the indirect services of privacy, congestion, noise and schools could likewise be reduced. However, the perceived different impact on indirect services from similar sized housing complexes, indicates that changes in size alone may be only partially effective. In other words, the additional unit cost from smaller complexes may not warrant the benefits derived therefrom. This opinion was reinforced by several proximate neighbors who were more concerned about the Section 235 housing in the neighborhood than the public housing I‘ll‘llll‘l i‘l‘llslll“llll"l[“||‘ 129 complex.27 Thus, a hundred single family subsidized units may have a greater impact on indirect services (so far as proximate neighbors are concerned) than a single hundred unit complex. Changes in size seems to be a useful policy tool regarding the impact on schools.‘ Both occupants and proxi- mate neighbors voicec opinions concerned with "over-crowding" of schools. In the Hildebrant neighborhood, children from the complex are bused to a school different from the one attended by the other neighboring children. Where this or some other alternative is not available or desirable, a reduction in the size of the multiple housing complex will reduce the impact on schools. Again, smaller complexes will often times increase the unit costs of construction, maintenance and management. Location The location of a multiple unit public housing complex seems to have an effect on each of the indirect services 28 To reduce the impact on proximate neighbor considered. privacy, it is argued that the complex should be located so as to reduce the desirability of trespassing (particularly with respect to school children). Locating either near establishments often frequented, and/or near direct public routes thereto would likely have this result. Location of a multiple housing complex with direct i1il.‘[l|\llll[I'llitlil'llllllll 130 entry and exit to a major street seems to reduce neighbor- hood congestion. Moreover, the inability to enter or exit the complex on any of several residential streets, will tend to reduce the perceived noise level increase. These conclusions are implied by the relatively large number of negative responses concerning noise and congestion in the La Roy neighborhood.29 Location is also important in the perceived impact on "aesthetic values". That is, if a public housing complex removes or detracts from an area considered desirable by proximate neighbors (e.g. woods, parks); the perceived negative impact on "aesthetic values" will likely be greater. The relatively large number of Hildebrant neighbors feeling a negative impact on "aesthetic values" is consistent with this conclusion. Moreover, since a sizable number of proxi- mate neighbors felt that a "lower class of people" from the complex detracted from the "aesthetic value," it may be advantageous to locate public housing in neighborhoods where the residents are less likely to hold this view.30 As shown in Chapter II, location may also be used to alter the impact on schools. Repeating, a public housing complex may be located near schools with excess capacity and/or located such that the children from the complex attend several different schools. However, the latter possibility may increase trespassing if convenient direct public routes to the schools are not available. if] I I i, |l||| I '1‘ iii Ill i 131 Sufficient lighting of the complex and surrounding neighborhood may help to reduce the fear of theft; which is a concern voiced by proximate neighbors and occupants. Maintenance The excellent maintenance of the complexes examined is perhaps the strongest "plus" as far as the proximate neighbors are concerned. However, a certain number feel that this is a temporary phenomena which will become worse as the projects age. Since sufficient maintenance is undoubtedly important in order to keep the projects from being an "eye sore", the decision maker may want to increase maintenance expen- ditures as they are warranted. Management There is little the public decision maker can do with management in order to alter the impact on proximate neigh- bors. One possibility may be the managements' ability to remove "troublemakers" (i.e. those who detract from the "living environment" of others). This possibility may require the construction of housing units specifically for these individuals. However, the creation of "hardcore" housing does not imply a "suitable living environment"; and, may have such harmful results on the individuals living there as to create additional social costs. Also, additional powers of management to police or discipline occupants of public housing may breed additional 132 dislike and antagonism among those already considered "dis- advantaged." Such a course contains many long term negative social implications. The above policy tools should not be viewed from an either-or context. Rather, they should be viewed as a mix of possible tools which may be used to improve the relation- ship between the occupants and neighbors of multiple unit public housing. Realizing that this relationship at times is secondary to other goals of public housing. 133 FOOTNOTES 1The terms "benefits" and "costs" are often used together for purpose of clarity. However, in some cases the term "benefits" is not explicitly mentioned; because, in an economic sense, "costs" can be either positive or nega- tive. Thus, the term "benefits" is a negative cost and its inclusion may be redundant. 2The three neighborhoods examined are identified by the names of the public housing complexes; namely Hildebrant (HN), La Roy (LRN), and Mt. Vernon (MVN). 3See Appendix 3.1 for a more complete description of the characteristics of the three neighborhoods. 4Milton Friedman, Capitalism and Freedom (Chicago: 1962), p. 30. 5This does not mean a money exchange market would not be a possible alternative in the case of MUPH. For example, if the pricing system worked smoothly (i.e. the operating of a market system without costs) the proximate neighbors and public housing authority could bid on whether or not the land would yield its highest value in public housing. More- over, the amount of public housing to be constructed would also be determined. From the point of View of the value of production (given the distribution of income) it doesn't matter if the proximate neighbors, the housing authority or a third party own the land. Quoting from Coase, "It is necessary to know whether the damaging bus- iness (e.g. public housing) is liable or not for damaged caused (e.g. to proximate neighbors) since without the establishment of this initial delimi- tation of rights there can be no market transaction to transfer and recombine them. But the ultimate result, which maximises the value of production is independent of the legal position if the pricing system is assumed to work without cost." The question to be determined is: Can the locating of public housing be handled desirably through a money exchange market, or would the market transaction mechanism be exceedingly costly? Again quoting Coase, "Once the costs of carrying out market transactions are taken into account it is clear that. . .a re- arrangement of rights will only be undertaken when the increase in the value of production consequent upon the rearrangement is greater than the costs which would be involved in bringing it about." When market transactions are not costless the initial delimi- tation of legal rights can have an effect on the efficiency 134 with which the economic system operates (and indeed, the definition of efficient). Whether or not the present administrative costs of certain public housing decisions exceed the costs of market transactions in this area is not clear. Market transac- tion determination of the location and amount of public housing has several desirable attributes. First, it would reflect the "irksomeness" of proximate neighbors and help prevent locating public housing (or an excess amount of public housing) in areas where substantial opposition exists. Second, the ability of proximate neighbors to voice dissatisfaction according to income could be corres- pondingly reduced by the housing authority agreeing to offer prOportionately higher bids in higher income neighbor- hoods. However, as Coase points out, . . .it is, of course, desirable that the choice between different social arrangements for the solu- tion of economic problems should be carried out in broader terms than this and that the total effect of these arrangements in all spheres of life should be taken into account. As Frank H. Knight has so often emphasized, problems of wel- fare economics must ultimately dissolve into a study of aesthetics and morals." A. Allan Schmid stated similarly, "One cannot talk of Pareto better trades unless property rights are first established to say who counts." For a more indepth discussion of this problem see A. Allan Schmid,"Economic Analysis of Water Resource Problems: Nonmarket Values and Efficiency of Public Investments in Water Resources," The American Economic Review; Vol. 53, No. 2,(May l967),pp. 158-168. And, Ronald Coase, "The Distinction Between Private and Social Benefits and Costs," Journal of Law and Economics (October 1960); Reprinted in Readings ifiiMiEroeconomics, edited by William Breit and Harold M. Hochman; (New York: 1968): PP. 423-456. . . .6Homes in Detroit, sold by HUD to low income qualifying 1nd1v1duals who normally could not afford to purchase these homes, have been abandoned and gutted by vandals, resulting in a deterioration instead of an improvement in the neighbor- hood. 7As defined by Scitovsky, "The price that reflects the marginal valuation of a commodity by each person who buys it is called its private marginal value. This may differ from its social marginal value, which is the hypothetical price that would express its marginal valuation if everybody whose welfare is affected by its consumption could express his preferences through the market mechanism." See Tibor Scitovsky, 9p. gii., pp. 182-183. 135 8The argument could be phrased in terms of an increase in indirect services and property values (i.e. if the "sale price"--"price of salvage"--exceeds the "price of acquisition" he would choose to sell if his marginal valuation is less than the "sale price" and remain if it is greater. 9Of course proximate neighbor expectations play an important role in deciding whether to sell. That is, if the expected cost of living near the project exceeded moving expenses and the relative price decline, he would choose to sell. .. 10Again, for a more specific and complete description of the characteristics of the neighborhoods, refer to Appendix II -10 11This, of course, depends on how much the present value has incorporated expected future changes. 12Since the construction of public housing requires scarce resources, it is likely that the cost of private new housing will be affected. However, it is assumed that the stock of private housing in the neighborhood is constant. 13This would not include the lag of approximately one year between beginning construction and substantial rent-up. 14Richard F. Muth, "The Demand for Non-Farm Housing," The Demand for Durable Goods, edited by Arnold C. Harberger (Chicago: 1960), p. 29. 15See Kelvin J. Lancaster, "A New Approach to Consumer Theory," The Journal of Political Economy; Vol. No. 2 (April 1966). 16Henry J. Aaron, Shelter and Subsidies: Who Benefits From Federal Housing Policy? (Washington: 1972). 17Robert L. Bish and Hugh 0. Nourse, Urban Economics and Policy Analysis (New York: 1975), pp. 231-232. See also Hugh 0. Nourse, "The Effect of Public Housing on Property Values in St. Louis," Land Economics, 39 (November 1963), and Salvatore V. Ferrera, "The Effects of Urban Renewal and Public Housing on Neighboring Property Values and Rents in Chicago," unpublished Ph.D. dissertation, Department of Economics, University of Chicago, 1969. 18This is assuming: 1) that because of no preferable (lower cost) alternative the recipients choose not to move. As previously shown, occupants and proximate neighbors may choose not to move even if the costs of indirect services are quite large; 2) that payments cannot be made to officials to Slte project elsewhere. 136 19As previously implied, if the decision maker is not concerned with changes in property values, the costs of resources to alter any impact on indirect services (related to proximate neighbors) is limited by the capital cost and moving expenses of proximate neighbors. Ceteris paribus, if the cost of altering the impact exceeded the capital and moving cost, it would presumably be of greater net social benefit to simply let the proximate neighbors move. 20 . . . . . The same issue ar1ses when a judge or 1eg1slation decides whether person A or B owns a private property right; a decision that preceeds trade in the commodity. 21Robert Frost's "Mending Wall" provides some poetic insight into the problem of fences. "Before I build a wall I'd ask to know/What I was walling in or walling out,/ And to whom I was like to give offence. . ." It is likely that fencing a public housing complex would increase the occupant's feeling of isolation from the surrounding community; and hinder the assimilation of these "poor" into the "mainstream" of societal life. In other words, the feeling and perhaps fact that they are being "walled-in". One is torn between "Something there is that doesn't love a wall, that wants it down;" and, "Good fences make good neighbors." While attractive barriers of water and shrubs can often be constructed, the alternative of a more suitable location, ceteris paribus, may be preferable. See Robert Frost, Complete Poems of Robert Frost reprinted in The New Pocket AnthoIBgy ofiAmerican Verse: From Colonial Days to the Presenp; Edited by Oscar Williams (New York: 1955), pp. 200-201. 22There was no direct evidence of any people in the complex committing the thefts. The argument was that before the complex was occupied the incidence of theft was practically nonexistant; and, since occupancy the amount of theft greatly increased. 23This objection may occur with any kind of development when people get used to open space. 24This chapter examines how proximate neighbors per- ceived the impact on schools. Chapter IV attempts to identify the impact on elementary schools due to changes in numbers of students and comments of school officials. 25Michigan law limits the number of students per teacher for different grades; though, as seen in Chapter IV the student-teacher ratio increased after the public housing complex entered. 137 26While the proximate neighbors of this study did not find many benefits from MUPH, it should be mentioned that this may change in different neighborhoods. For example, proximate neighbors of a MUPH project located in a run down neighborhood may perceive many benefits derived from this housing. 27Section 235 provides for subsidized single family home ownership to qualifying individuals. 28Like size, location may be taken to extremes. For example, locating a complex where the nearest neighbor is five miles removed would certainly tend to reduce the impact on indirect services. However, at present, such a considera- tion is assumed unrealistic and the present concern is location within an existing neighborhood. 29It will be remembered that the La Roy complex was the only one which provided for entry and exit on rather small residential streets. 30This is not to imply that segregation is desirable. However, integration in an environment of fear and dislike may be counterproductive. Perhaps people accommodate over time as not only their neighborhood but all neighborhoods become more mixed. The question seems to be one of: Where do we start? CHAPTER IV THE ECONOMIC IMPACT OF MUPH ON PUBLICLY PROVIDED SERVICES Introduction The public decision maker's alternative choices of location, size and design of multiple unit public housing have different effects on the magnitude and incidence of costs and benefits related to publicly provided services. The type of public services concerned with in this study are those primarily controlled by the local units of government (e.g. city, county); and, includes certain education, trans- portation, sewage, police and fire control services. The two previous chapters were concerned with the costs and benefits of MUPH on occupants and proximate neighbors, and how the decision maker can alter these costs and benefits. The present chapter examines the impact on public services, and attempts to identify significant considerations for the decision maker regarding this impact. The first part of the chapter deals with the impact of MUPH on publicly provided services in general. That is, the concern is with how MUPH may affect publicly provided services; and, moreover, attention is given to related considerations which should be taken into account in order to more closely estimate the MUPH impact. 138 139 The second part of the chapter is devoted to an empirical examination of the impact on elementary public schools. This section deals with the specific schools affected by MUPH, and also possible impacts on the greater Lansing school district. The measurement of the impact is limited in that the quality of education (presumably one of the goals of public education) cannot be accurately measured within this study. How MUPH Affects the Magnitude and Incidence of Benefits and Costs of Publiclprrovided Services In this discussion it is necessary to simplify the analysis in order to examine how MUPH can alter the magnitude and incidence of the costs and benefits of publicly provided services. Assume a community with a constant pOpulation in which public services are being provided at the minimum unit costs. Furthermore, assume the decision maker is institutionally bound to supply all members of the community with a minimum of public services (which they are presently receiving). Thus, any change in demand for public services will cause a change in the quantity of services supplied. Now, the question is, what is the impact on public services when a public housing complex is built in this community? With the subsidized rents it is not unreasonable to assume that the complex will become fully occupied. Some people, attracted by the low rents, will come from outside of the community (public service supplying area). Others, 140 for the same reason, will move from their present housing within the community into the complex. Both those moving from outside the community, and those moving from within, can alter the demand for and costs of providing public services. For the purpose of identifying the impact on public services, it is useful to examine these two groups separately. Those who move from outside the community (public service supplying area) directly increase the demand for public services. In order to supply these individuals with some desirable level of public services, the total cost of public service provision increases in the short run.1 Who pays the additional cost depends on the number of individuals coming from outside of the community, their uSe of public provided services, and the amount of revenue they contribute to the public services supplier. Regarding the latter, the relatively low incomes of those living in public housing plus the fact the public housing complex pays ten percent of receipts in lieu of property taxes, implies their contribution to local tax revenue may be low relatively to the rest of the community. However, Bish and Nourse argue that, "The evidence is clear that this pay- ment in lieu of taxes results in greater payments to local government then could have been generated in prOperty taxes from the same low-income family occupancy of private housing."2 Whether or not it pays local governments to procure public housing when a large proportion of the occupants come from 141 outside the public service supplying area is an unanswered question. The impact on public services from those who move within the community is more complicated. The complication stems from the fact that certain forces work to increase and others to decrease the costs of public services. When individuals within the community move into a multiple unit public housing complex, there will normally be a change in the composition of demand for public services. That is, as individuals move from various locations to a single project, there may be a perceived change in demand (and costs of supplying) public services. For example, if twenty second-grade children, each from a different school, move into a public housing complex, the demand for second grade teachers at their previous schools may not decrease. However, another second grade teacher may be required to accomodate the increased demand at the new location. Similarly, a one person reduction in demand for bus service at twenty different bus stops may not entail a reduction in bus service to any of these areas. But, additional bus service may be desirable at the new location. A perceived increase in the aggregate demand for public services may occur even if total individual demand does not actually change. This result is due to the imperceptable decrease in demad (increase in excess capacity) at any one location, coupled with a significant increase in demand at a single 142 location. Such a situation could lead to the purchase of additional physical capacity even if excess capacity in other areas of the community presently exists. Using a similar argument one could arrive at a lower cost of public service provision due to public housing. That is, if there is presently an inefficient use of resources (i.e. high unit cost of services rendered due to excess plant capacity); a movement of people to a public housing complex may lower the cost of public service provision to the community. Consider, for example, a school operating with excess capacity. The number of students attending the school is sufficiently large to preclude closing the school and having the students attend other nearby schools (which also have a certain amount of excess capacity). Now, if a public housing complex causes a sufficient number of children to leave the school (and assuming the homes they leave are either left vacant or families with fewer children move in), the school may be closed with the remaining children attending the nearby schools. This possibility suggests that multiple unit public housing, in some cases, may lower the cost of public service provision. In order to determine the impact on the cost of providing public services as people move within a community, the decision maker needs to know: 1) the change (if any) in the costs of providing services to those areas from which the individuals move; 2) the change (if any) in the costs 143 of providing services in the public housing area; and, 3) the cost of reallocating resources from one area of the community to another. Movement of people within the community in order to live in public housing may also have an impact on tax revenues. Given a constant population, the addition of multiple unit housing increases the supply of housing and tends to reduce the price of housing services. In a competi- tive housing market, existing homes may be removed from the private housing stock. However, it is unlikely that private housing will decrease the housing stock as much as public housing increased the housing stock. This is due to the fact that a certain number of public housing recipients may presently be residing with family or friends. Also, some housing may be converted to other uses; and, though they may be removed from the housing stock, they are not removed from the tax base. The impact on tax revenue is dependent on the number and value of the homes removed from the tax base; and, the amount the public housing complex pays in lieu of taxes. From the decision maker's point of view it is important to conclude that MUPH can affect both the magnitude and incidence of costs and benefits of public service provision. With various choices of size, location and design impact can be altered. Of course, choices of size, location and design with regard to the impact on public service provision is also dependent on other considerations. 144 Alternative Policy Decisions Regarding_the Impact on PuBIic Service Provision When the Pppulation is Changing_and Finance Provisions are Considered Expected Population Growth Rate of the Community The above discussion of how MUPH affects the costs and benefits of public services was conducted with the popu- lation growth rate held constant. Without being concerned with the absolute rate of change or the income level of those coming and going; the present discussion is restricted to a net increase or decrease in population. That is, does the impact on public services due to MUPH differ depending on whether the population is increasing or decreasing? When the population of the community is increasing, the costs of excess capacity in those areas where public housing occupants moved from would tend to be less. That is, as peOple moved into public housing, others would be moving into their previous housing, and these new individuals would use existing public services. There would be less tendency to reallocate resources between areas and a greater tendency to simply increase total capacity. Moreover, these new individuals would help prevent an erosion of the tax base by occupying houses which may be left vacant if the pOpulation were constant or decreasing. In communities with increasing pOpulations, the deci- sion maker may also want to examine the possibility of a "crowding-out" effect on private home building. That is, 145 if existing local home building resources (i.e. labor and entrepreneurship) are being fully utilized, then the decision to build public housing would tend to remove resources from the private housing market. The net effect may be to increase public housing at the expense of private housing. If such an outcome is not consistent with the goals of the decision maker, he may choose to provide public housing when excess capacity is available in the local residential construction industry. On the other hand, when the community population is decreasing, the decision maker may attempt to match excess capacity being created from out migration, with the location of public housing. The primary concern may be to reallocate existing public services, and not create additional services. A community with a decreasing population which builds public housing may incur certain costs related to public service provision. For example, as the population decreases, the existing housing stock should also decrease. Of course, building public housing increases the housing stock. The normal process of fitering would not occur at a sufficient rate, and a greater number of homes would become vacant.3 The tendency may be to create "slum conditions" and increase the cost of housing removal. In summary,decisionsas to size, location and design of public housing may differ depending on whether the community population is expected to increase or decrease. 146 If the population is expected to increase, the decision maker may be more concerned with constructing public housing in such a way as to minimize the cost of providing additional public services. If the population is expected to decrease, the concern may be to match the expected excess capacity of public services with additional demand created by the public housing. Method of Financing The decision maker's alternatives of size, location, design and maintenance may also be influenced by the method of financing; both with respect to financing the project itself, and the financing of certain public services. Considering the financing of a public housing project, the federal government, through HUD, agrees to retire the debt incurred in building a project.4 The borrowing results from the sale of tax free bonds. On the other hand, the local unit of government is required to pay a certain por- tion of yearly operating expenses (maintenance and management). Exactly how much the local unit of government is required to pay is based on historical costs and receipts; plus, HUD's decision as to how much costs and receipts are allowed to increase in any given year. This "formula" determines the proportion of operating expenses the federal government will pay for. The important point is that the local housing authority is required to pay a portion of operating expenses: but, it does not have to contributed toward debt retirement. 147 This method of financing encourages the local authority to substitute capital for current expenditures. The incen- tive arises because the local authority is held accountable for a certain portion of current expenditures, and not the original capital expenditures. Muth presents a similar argument and states that, "The chronic complaint that public housing projects are poorly maintained is also no surprise in view of the financial incentive to substitute capital for current expenditures."5 He continues: When I discussed this point with a colleague recently, he related a conversation with the local authorities in his community regarding the high capital costs of public housing. Vandalism and other sources of above average deterioration made it necessary, they said, to use concrete stairs and wall surfaces that needed little maintenance. However, even with the high rates of physical deterioration, wooden stairs could be repaired or replaced and walls repainted as needed. I suspect this alternative was not chosen primarily because it is more costly for an LHA (local housing authority) than for a private developer. Thus, how multiple unit public housing projects are financed influences the decision makers decisions as to size, location, design and maintenance. The relative costs of current expenditrues among possible alternatives deter- mines the significance of project financing considerations on the type of public housing to be constructed. Financing considerations with respect to public ser- vices may also be important to the housing decision maker. For_example, the federal government provides funds to the 148 state which in turn are provided to the local school districts. These funds are then given to individual schools on some acceptable basis (i.e. a basis that reflects "disadvantaged" students). The Lansing school district divides up the funds according to the percentage of students from ADC (Aid for Dependent Children) families. Since the funds are limited, .and since a minimum amount is required for each eligible student, only those schools with a relativley high percentage of ADC students qualify. A change in the number of qualifying students attending the various schools, may also entail a change in the amount of funds these schools receive. This change may or may not be desirable from the point of View of providing "better" educational services. That is, a movement of ADC families from one school may reduce the funds and the quality of educational services available. Whether or not the school receiving these families obtains any additional funds depends on its new percentage of qualifiable students. The point is, the location of the public housing complex may alter the financing of Schools. This change new in turn affect the costs and quality of educational services. Since various alternative locations and size of housing projects may have different effects on the costs and quality of educational services; the decision maker, in order to allocate community resources desirability, must take into account the financing of public schools (and 149 perhaps other public services). This implies that a working relationships between housing and school officials (and other public service decision makers) may be desirable. In summary, the financing of public housing and public services may have certain influences on the decision maker's choices of size, location and design of public housing complexes with regard to the costs and benefits of public service provision. An Empirical Examination of the Impact of MUPH on Elementary Schools in the Eansing School District Introduction The purpose of this section is two-fold. First, an attempt is made to determine the impact on the schools directly affected by the public housing complexes (i.e. those containing children from the complexes). Second, the impact on the school district is examined with various alter- natives discussed. Again the objective is to provide greater insight to the decision maker concerning size, location and design of MUPH. Since only four of the forty-seven elemen- tary schools in the Lansing school district contain children from the public housing complexes; and, since "other things" cannot be held constant, it is impossible to determine cause and effect from the standpoint of the school district as a whole. However , some interesting observations can be made. Similarly, it is not always possible to determine cause 150 and effect on the schools directly affected by the public housing. In the two previous chapters, schools were examined from the occupants and proximate neighbors point of view. The occupants were asked to compare their old schools with the schools their children presently attend. Proximate neighbors were asked if they felt MUPH had changed the services received from the schools. This chapter analyzes some of the physical changes that in fact occurred and some of the comments of school officials. A brief discussion is also presented on the importance of coordinating activities in the public housing sector with the education sector. Impact on the Elementary Schools Receiving Children from Public Housing Children from the three public housing complexes in Lansing attend four elementary schools. Children from the La Roy complex attend Pleasant View, those from Hildebrant attend Gier Park; and the children from Mt. Vernon attend both Cumberland and Northwestern. Table 4.1, below, shows the number of children attend- ing these schools along with the number of children from public housing. Table 4.2 shows the attendance figures for these schools from 1967 through 1973. 151 Table 4.1. Elementary Schools Receiving Children from MUPH: Number of children in Attendance September 1973 (Total and From Public Housing) School Total Number Percent of Attendance From MUPH Children From Public Housing Pleasant View 593 p 106 18 Gier Park 480 91 19 Cumberland 375 103 27 Northwestern 323 52 16 Thbka4.2. lumenmume:h18chxfls Raxfiying(ifildnalfnanumnfl;amd Attendance of School District from 1967 through 1973 dexfl Amhafibmxebylkar 1967 1968 1969 1970 1971 1972 1973 Pleasant View 442 660 673 657 653 586 593 Gier Park 362 348 454 556 546 492 480 Canberland 356 375 366 418 444 388 375 Nbrthwestern. 334 309 281 357 341 355 323 Qflmol District 18,055 18,604 18,785 18,901 18,717 18,075 17,316 152 The initial impact on Pleasant View occurred during 1968 and 1969. From 1967 to 1969, attendance increased by 231 students or 52.2 percent. During this same period, attendance in the school district increased by 730 students or four percent. While the La Roy public housing complex presumably accounted for slightly less than half the impact on Pleasant View during this period, it is still a large impact relative to the total school attendance, and to the total change in the number of students in the Lansing school district.7 Similarily, during 1969 and 1970, attendance at Gier Park increased by 208 students or 59.8 percent. Again, the Hildebrant complex accounted for only about half of this increase.8 Approximately 100 students began attending Gier Park due to the closing of another school. During this same period, attendance in the school district increased by 297 (about 1.6 percent). The increase in attendance at Cumberland and Northwestern during 1970 and 1971 was 78 (21.3 percent) and 60 (21.4 percent) respectively. Unlike La Roy and Hildebrant, the Mt. Vernon project seemingly accounted for the major share of these increases. During this same period attendance in the school district declined by 68 students. The above discussion simply shows the increase in the numbers of students during the two years following the renting up of the public housing complexes. The increase in 153 the number of students required the hiring of additional teachers. Table 4.3 presents the number of teachers in each of these schools from 1967 through 1973. Table 4.3. Number of Teachers at Elementary Schools Frequented by Children from MUPH, 1967-1973 — L School > Number of Teachers by Year 1967 1968 1969 1970 1971 1972 1973 Pleasant View 17 .24 24 22 23 22 21 Gier Park 13 15 l7 19 19 19 18 Cumberland 14 15 14 l6 17 14 13 Northwestern 13 ‘13 ll l4 l3 13 12 From 1967 to 1969, the number of teachers at Pleasant View increased by seven. From 1968 to 1970, the nubmer of teachers at Gier Park increased by four. From 1969 to 1971, the numbers of teachers at Cumberland and Northwestern increased by three and two, respectively. While some of these teachers may have been hired in any case, it is likely that the housing complexes caused a net increase in hiring (this is discussed in the next section). Moreover, Pleasant View and Gier Park received struc- tural additions in 1968 and 1969, respectively. The cost of the former being approximately $378,000 and the latter $241,000. Officials from the Lansing school district said the additions wmflfi probably have been built even if the public housing complexes had not. However, the principals at the two schools 154 are of the opinion that the additions were built at least in part due to public housing. Regardless, the declining number of students in the school district and thegrowing excess capacity, on hind sight, causes questions as to the appro- priateness of the decisions. The impact of MUPH on schools may also affect the quality of education and well-being of the students.‘ This negative affect seems to be due primarily to adverse expec- tations of parents in the community with respect to public housing. According to the principals questioned, some of the children in the community had probably heard their parents' unfavorable remarks concerning the project. Thus, friction between children of the complex and the other children in the neighborhood deve10ped. However, this adverse impact seemed to be rather short lived. Over time, the public housing complex seems to become accepted and the animosity becomes less according to the school officials. One other negative aspect seems to be the lack of privacy of the children living in the public housing complexes. That is, for example, a fight between parents or neighbors of the complex involving the policy is immediately common knowledge among the school children. This, of course, causes a certain amount of embarrassment to the child. Perhaps alternative designs of the complexes would help to alleviate this problem. 155 Impact of MUPH on the Remaining Elementary Schools and the Importance of Working with School Officials The impact on the elementary schools which do not contain children from the public housing complexes, arises from the fact that resources used for schools directly affected by public housing cannot be used for others. The opportunity cost of using resources in one school may be the resources foregone in another; which, can affect the net benefits attributable to the school district. This possi- bility is discussed with respect to number of teachers, additions to building capacity, and "quality" of education. The addition of the number of teachers at Pleasant View provides an example of the impact on the remaining school district. From 1967 to 1968, the number of students at Pleasant View increased by 218. During this same period the remaining schools had an increase in attendance of 331. The increase at Pleasant View was accompanied by an increase of seven teachers. However, the total number of teachers in the school district increased by only eight. Thus, while Pleasant View received seven teachers for an additional 218 students, the remaining school district received only one teacher for an additional 331 students. The impact on the student/teacher ratio is shown in Table 4.4. The relative small number of students in any one school limits the impact on the student/teacher ratio of the district. Moreover, the limit of the student/teacher ratio is thirty as determined by state law. This limit was 156 Table 4.4. Student/TEaCher Ratio of the Lansing School District and of the Four Schools Containing Children from MUPH 1967-1973 Iodfljon Shimntflkmcma:Ratk>by3&2r 1967 1968 1969 1970 1971 1972 1973 lensing Sdhool District 26.67 27.16 27.19 29.17 27.24 26.62 27.53 Onberland 25.43 25.00 26.14 26.13 26.12 27.71 28.85 NOrthwestern 25.69 23.77 25.55 25.50 26.23 27.31 26.92 Gier Park 27.84 23.20 26.70 29.26 28.74 25.89 26.67 Pleasant‘View 26.00 27.50 28.04 29.86 28.39 26.64 28.24 most closely approached in 1970 when a millage increase proposal failed to pass at the polls. Particularly at Gier Park and Pleasant View, the change in the student/teacher ratio is most noticable. ratio by both occupants and neighbors.1 However, The increase in the student/teacher lends credence to the "more crowded" argument voiced this does not answer the questionscfifwhether MUPH caused an increase in the student/teacher ratio of the remainder of the district; nor, if this change had any negative effect on the quality of education offered. Previously mentioned is the fact that approximately $619,000 worth of additions were added to Gier Park and - Pleasant View in 1969 and 1967, respectively. Without questioning the appropriateness of adding additional capacity in light of the subsequent decrease in the number of students, it seems reasaonable to question the additional capacity at 157 these particular schools. Percent of capacity for the school district and of the four schools containing children from MUPH, is presented in Table 4.5. Table 4.5. Percent of Capacity of School District and thelkmrskmodkscomafinflmJNMHHChihhtm 1967-1973 Location Percent of Capacity by Year 1967 1968 1969 1970 1971 1972 1973 Average School District 91 94 95 95 94 91 87 92 CUmberland 84 82 82 84 95 92 81 86 NOrthwestern 87 80 73 92 88 92 84 85 Gier Park 66 64 83 101 100 90 88 85 Pleasant View 67 100 102 100 99 89 90 92 Excluding Northwestern, each of the schools began with a percent of capacity less than the average of the school district, then increased to a greater percent and subsequently decreased at a faster rate. It is possible that MUPH had an influencecnlthis trend. That is, MUPH helped cause the utilized capacity to increase, and then as other families moved (perhaps because of MUPH) the utilization decreased more rapidly than within the district. This is an unanswered question but worthy of consideration. In terms of "equity" Gier Park and Pleasant View, which received additions, operated at an average capacity of 85 and 92 percent, respectively. During this same period (1967-1973), sixteen schools operated at a capacity rate of 158 less than eighty-five percent, while twenty-eight had a capacity utilization of greater than eighty-five percent. Correspondingly, twenty-eight operated at less than ninety- two percent capacity while sixteen operated at greater than ninety-two percent capacity. Again during the same period, six schools averaged greater than one hundred percent capacity. While the above does not mean to imply that Gier Park and Pleasant View should not have received additions; it does show that additions to other schools could also have been justified on the basis of capacity utilization. It is possible that MUPH focuses attention on certain schools at the exclusion of others. However, it is not clear to what extent greater and lesser capacity utilization affects the quality of education. In the case of Lansing, the school officials were not asked to help in the location decision of MUPH. However, it is clear that location decision can affect the benefits and costs of educational services to the community. In view of this consideration, it appears that school officials could add valuable contributions to the location decisions of MUPH. A similar argument could likely be made for officials of other public services. However, it is not clear the benefits received from joint decision making would exceed the transactions cost incurred in reaching a decision. In view of the special financing considerations of schools, consultation with school officials is even more 159 important. As previously mentioned, federal money is divided up between schools in the district on the basis of the number of chidren obtaining ADC payments. Since a minimum amount must be provided for each child (approximately $600 including administrative costs), only those fifteen schools with the greatest percentage of ADC students qualified in February 1974. Both Pleasant View and Gier Park qualified with thirty- seven and thirty-one percent, respectively. (The elementary average was twenty-four percent for the school district, and thirty-nine percent for those schools qualifying.) However, Northwestern and Cumberland with twenty-nine and twenty-six percent ADC children, respectively, did not qualify. Thus, with this type of financing, the location of MUPH and the schools theyattend, determine whether or not the school will be entitled to these federal funds. For example, if another ten ADC children attended Northwestern, the school would be able to obtain approximately $600 for each ADC child. With this money additional teachers can be hired to help "dis- advantaged" children. The decision maker can alter the impact of MUPH by considering various options. For example, the impact on Northwestern (in terms of the quality of education) may be greater even though a smaller number of MUPH children attended this school than Gier Park. This is because Gier Park qualifies for the federal money and can hire additional teachers and conduct special assistance. The local housing 160 authority can alter the impact on schools through these financing considerations. Again, the usefulness of working with other public service officials in determining the location, size and design of MUPH is illustrated. Summary and Conclusions The impact of publicly provided services due to MUPH is analyzed from the point of view of those moving within the public service supplying areas, and those moving from outside the public service supplying area. Those from outside the public service supplying area, ceteris paribus, cause a net increase in the demand for public services. Their contribution in the provision of these services is dependent, to a certain extent, on their income and property taxes. The number of families moving from outside the public service supplying area, their demand for public services, and their contribution toward tax revenues, is directly related to who pays for any additional costs of supplying public services. People moving from within the public service supplying area may also affect the costs of public service provision. In this case, it is not intuitively obvious whether the demand for public services will tend to increase or decrease. There will be a change in the composition of demand, but whether this change increases or decreases costs must be empirically determined. 161 A movement into public housing from individuals within the community may have a negative impact on the existing tax base. In order to maintain the existing level of public services with decreasing tax revenues, an increase in the tax rate to the citizens of the community would be necessary. Other things constant, it is not clear whether MUPH will have a positive or negative impact on the costs of public services provision. Other things, however, are subject to change and their change can also affect the impact of MUPH on public services. Other considerations examined in this regard include: 1) the expected population growth rate of the community; and, 2) the methodcflffinancing. These two considerations may affect the magnitude and relative importance of the impact on public services from MUPH and should be taken into account by the decision maker. The impact on elementary schools due to the public housing complexes is also examined. Four of the forty- seven schools in the Lansing school district contain children from the three public housing complexes. Sixteen, eighteen, nineteen and twenty-seven percent of the total student body were made up of children from public housing in September 1973. The increase in the number of students necessitated an increase in the number of teachers. Plea- sant View added an additional seven teachers, while four were added at Gier Park. These two schools also received 162 $619,000 worth of capital additions in 1967 and 1969. The impact on the other two schools was relatively small in terms of number of students from MUPH since they shared the children from one complex. The impact on the school district is examined from the point of view that additional resources, being employed by the four schools containing children from public housing, cannot be used by the remainder of the school district. Thus, when Pleasant View increased by 218 students an additional seven teachers were employed. During the same period an additional 331 students were attending the remainder of the school distict; however, only one additional teacher was employed. Nonetheless, the change in the student/teacher ratio was seemingly small, and little may be said regarding the quality of education received by the children. In terms of equity, there were sixteen schools which cperated at a greater capacity utilization from 1967-1973 than the two schools receiving additions to capacity. More- over, six schools average greater than one hundred percent capacity. It is not clear whether or not the additions were built (at least in part) to accommodate children from the public housing complexes. However, on the basis of "equity" considerations, additions could have been justified on several schools. Again, the effect on the quality of educa- tion is now known. In view of the impact on particular schools and the 163 school district in general, it is somewhat surprising that school officials were not asked for recommendations regarding the location, size and design of the public housing complexes. The importance of obtaining the viewpoint of school officials is compounded since the attendance of ADC recipient children affects internal financing of the school district. Perhaps the single most important thing the public housing decision maker can do to minimize the impact on public services, is to obtain the viewpoint of officials in charge of public services in the community. Their input would likely be useful in determining the size, location and design of MUPH such that the impact on public provided services could be minimized (given other goals). However, as mentioned, this possiblity may be precluded by the transactions costs of making a joint decision. 164 FOOTNOTES 1Long run cost considerations depend on the economies of scale in the particular public service area. For an interesting theoretical and empirical presentation on this topic see Werner Z. Hirsch, "Expenditure Implications of Metropolitan Growth and Consolidation," Review of Economics and Statistics; Vol. 4 (August 1959), pp. 232-241. 2Robert L. Bish and Hugh 0. Nourse, op. cit., pp. 229-230. Also, Hugh 0. Nourse, "Redistribution of Income from Public Housing," National Tax Journal, 19 (March, 1966), reprinted in Hugh 0. Nourse, The Effect of Public Housing Policy on Housing Markets, (Lexington, Mass.: 1973), pp. 29-42. 3For an excellent study of the filtering process see, John B. Lansing, Charles Wade Clifton, James N. Morgan, New Homes and Poor People: A Study of Chains of Moves, Institute for Social Research: (Ann Arbor, Michigan: The University of Michigan, 1969). 4The method of financing public housing has a broader influence on the decision maker's policy choices than simply the impact on public service provision. It also has an impact on occupants and neighbors and is included here primarily for convenience since finance provisions do have a direct bearing on public service provisions. 5Richard F. Muth, Public Housing: An Economic Evalua- tion (Washington: 1973), p. 18. 6 Ibid. 7The increase in attendance at Pleasant View was 231 students. Of this number, 106 were from the La Roy complex in September 1973. 8Again, the 208 increase is from 1968 to 1970 is compared to the 91 students attending the school from the Hildebrant‘ complex in September 1973. 9The cost of the addition at Gier Park of $241,000 is inclusive of furniture and architect fees. However, the cost of the Pleasant View addition was $315,000 exlusive of furni- ture and architect fees. The $378,000 figure is derived assuming the same proportionate costs of furniture and arch- itect fees at Pleasant View as at Gier Park. 165 10It should be pointed out that crowding is also a matter of square feet per student. This meaSure of crowding seemed to be more of a concern with proximate neighbors than occupants. Given that one group viewed an increase in the number of children attending "their" school; and, given that some of the others perhaps came from more "crowded" (square feet per student) schools, such a result is under- standable. CHAPTER V SUMMARY, CONCLUSIONS AND RECOMMENDATIONS Intent and Objectives This study empirically determine some input-output relationships of three multiple unit public housing projeCts as they pertain to occupants, proximate neighbors, and public services (mainly schools). Most traditional input-output studies are conducted with an accepted understanding of what outputs and inputs are most important. The production of corn serves as a useful example. The quantity of corn pro- duced may be an acceptable definition of output. Inputs would include such things as land, labor, seed, fertilizer and water. Various combinations of these inputs would yield various amounts of corn. The analysis of multiple unit public housing must start at a more fundamental level. The first question is: What are the outputs or catagories of outputs derived? There is no single easily identifiable output. The outputs of multi- ple unit public housing include not only the effect on occupants, but the effects on proximate neighbors and the larger community as well. Some outputs will be "positive" and others "negative" with various trade-offs existing within and between the different groups. Thus, one of the 166 167 objectives of the study is to determine the outputs of multi- ple unit public housing on occupants, proximate neighbors, and public services. Without an understanding of the out- puts involved, the decision maker cannot knowingly make meaningful changes toward the achievement of desirable goals. Outputs can always be viewed as some function of inputs and this leads to a second objective of the study. Namely, what are some of the more important inputs which seem to affect outputs? Output in this sense refers to more or less favorable impacts on occupants, proximate neighbors, and public services. The decision maker can change the input variables through changes in the policy tools of size, location, design, maintenance, and management of multiple unit public housing. A better understanding of which inputs affect which outputs will permit the decision maker to use policy tools to alter the inputs in order to achieve the desired outputs (or combination of outputs). A third objective of the study is to assist in the development of future research projects in the area of pub- lic housing (and multiple housing in general). Once outputs are identified and the relationship between outputs and inputs somewhat understood; the next step is to under- stand the rate of change in input variables which correspond to the rate of change in output. While this study provided some estimation of certain of these changes, its primary contribution toward further research is that it provides 168 insight into which inputs are most important in changing outputs. Finally, it is hOped the study will cause public housing decision makers to view the results of their actions in a broader framework. The cost of providing public housing may include more than the costs of bricks and mortar. A public program budgeting assessment should include the costs of all resources and not just the cost of construction. The well being of the individuals in a neighborhood is a resource. If public housing adds to or detracts from this resource it should be included in any budgeting decision. Presently, many public program budgeting decisions are made without knowing the output which will be forthcoming or the various inputs which can alter the output. Without such knowledge it is difficult to see how meaningful programs can be instituted or changed to yield the desired results (not to mention least cost alternatives). On the following page is a checklist summarizing the "inputs" which appeared to be the most important in affecting the impact of multiple unit public housing on the three groups. It is important to keep in mind that each of the "inputs" haseacost and contributes differently to output. Where output again refers to occupant and proximate neighbor satisfaction (or dissatisfaction) as measured by responses to the questionnaires. With additional information concerning the magnitude 169 Checklist of Most Important Inputs Affecting Occupants, Proximate Neighbors and Schools (With Illustrations Summarized from Three Lansing Projects) Impact on Occupants A. Direct Housing Services (The size and condition of house; plumbing and bathroom facilities; major household appliances; furniture; health related items-~food preparation, heating, ventilation) 1. Withtflmaexception of furniture (which was not provided) the occupants generally seemed satisfied with the direct housing services provided. 2. The garbage disposals were often broken and many occupants did not use them. 3. Certain occupants (especially those without automobiles) argued they would have benefitted from central laundry facilities located within the complex. 4. The management decisions which prevented certain alterations (such as painting the walls a different color) were disliked by certain occupants. 8. Indirect Housing Services (Schools, parks, neighbors, child care services, transportation services, congestion, noise, garbage collection, theft and personal safety, privacy) l. The provision of adequate garbage containers and nearby bus services perhaps helps to explain the occupants' seeming satisfaction with these services. 2. The design of the project was such that the units were close together and there was no private yard room. This plus the size of the projects seemed to account for the increased amount of noise and congestion from which many of the occupants had previously experienced. The perceived lack of privacy may also be explained by the size and design of the complexes. 3. Multiple unit public housing did not substantially improve the "living environment” (indirect housing services) of very many of the occupants. Impact on Indirect Services of Proximate Neighbors (Noise, Congestion, Privagy, Aesthetic Value) A. While the degree of geographical separation seemed to be important, it did not by itself seem to explain proximate neighbors responses regarding the impact on noise, congestion, and privacy. B. However,the degree of isolation which includes the degree of separation, the amount of fencing, the location of automobile entrances, the amount of vegetation, and the placement of the project with regard to often frequented locations; seemed to be important in explaining responses in the area of indirect services. This implies that both location and design are important variables in this regard. C. The three public housing complexes examined contained the same number of units. While size may be an important variable in determining the impact on proximate neighbors, there was insufficient variation to test size. Nevertheless, the difference in responses between the neighborhoods implies other significant input variables. D. Certain of the neighbors were angered by the different economic and racial characteristics of the occupants. This may be the direct result of the management decision to promote racial and economic integration. E. Proximate neighbors were generally satisfied with the maintenance and upkeep of the projects. However, some were concerned about longer term deterioration. Impact on Schools A. Both occupants and proximate neighbors were concerned about overcrowding of the schools. The impact on schools stems from the size, location and design of the complexes. 8. Friction among students (presumably because of economic and racial differ- ences) was also a concern of proximate neighbors, occupants and school officials. C. Occupants were also concerned about their children being behind the other children and the inability of the teacher to provide special attention. 1Size, of course, is important not only from the "output" side, but also from the cost side where economies of scale may be important. For an interesting dis- cussion on this topic see, James Russell Prescott, Economic Aspects of Public Housing (California: 1974), pp. 91-96. 170 and incidence of the costs and benefits of inputs and outputs, the decision maker will be in a better position to make meaningful changes toward the achievement of desirable goals. The researcher will be in a better position to identify and measure the magnitude and incidence of costs and benefits. The goals of multiple unit public housing and their relative importance is left to the individual decision maker. The only necessary condition for the study to be of use is that the desired goals are somehow related to the well—being of the occupants, proximate neighbors, or users (payers) of the same public services. For example, if the goal is to stimulate activity in the construction industry "at all costs," then this study would be of little practical use. Data on the perceived impact of occupants, proximate neighbors and public services were obtained primarily through responses to questionnaires. The responses in turn provide insight into possible areas of costs and benefits. From the various perceptions gained, it is sub- sequently possible to discuss how manipulation of size, location, design, maintenance and management may alter the costs and benefits. Before summarizing the impact on the three groups (occupants, proximate neighbors, public services) separately, it is perhaps desirable to summarize the role of the practising social scientist on matters of public policy. 171 Social Inquiry on Matters of Public Policy The basic premise on which the study is based is the belief that social inquiry on matters of public policies, which affect the quality of human life, is a valid area of endeavor. However, when examining the unique characteris- tics of public policy this validation is not intuitively obvious. Policy problems are problems of practical urgency; they are defined by the values of different groups in society; and, their solution is limited by the existing social institutional framework and existing resource base. Moreover, these characteristics are continually changing with the reasons for, and the direction and rate of change presently being little understood. The inquirer who chooses to be involved with policy issues must be willing to accept a greater amount of uncertainty than is usually present in other areas of social inquiry. Economics as a science is concerned with how scarce resources are allocated to achieve desired ends and whose desires count. The public decision maker allocates re- sources within multiple unit public housing. The problema- tic situation arises from the belief that a more desirable allocation of resources in the public housing area can improve the quality of life of those affected. Before any desirable alteration in the allocation of resources can be made; however, it is necessary to know how individuals are affected by multiple unit public housing. 172 The Impact of Multiple Unit Public Housing on the Occupants The national housing goal of a "decent home and suit- able living environment at rents the poor can afford" contains little actual content with which to assess multiple unit public housing's impact on occupants. The statement is not based on any well defined social norms and at best provides one with a subjective "feel" grounded in personal experience. Thus, in this sense it is not possible to estimate the effectiveness of MUPH in achieving the stated objectives. ‘However, it is possible to compare the occupants' MUPH residence with their previous residence in each of these areas. In other words, in the occupants' opinion, were they provided with "better housing", a more "suitable living environment", at lower rents? In the attempt to evaluate the "decent home" aspect, occupants were asked to compare the direct services of MUPH with their previous housing services. Direct housing services are those services obtainable from the housing structure itself along with any appurtenances and major appliances. Indirect housing services are those services offered from living at a particular location. They include all neighborhood services which are not direct housing services. Indirect housing services of MUPH and the previous residence are compared in the attempt to understand the perceived changes in "living environment." Finally, 173 present and previous rents are compared for the purpose of evaluating the "rents the poor can afford" aspect. According to the occupants, MUPH substantially improved their direct housing services. The thirty occu- pants were asked to compare the MUPH residence and the pre- vious residence with respect to: l) the size and condition of house; 2) plumbing and bathroom facilities; 3) major household appliances (i.e., refrigerator, stove, laundry facilities, garbage disposal, and food storage); 4) furni- ture; 5) health related items (i.e., food preparation, heating, ventilation). Only five percent of the total number of responses to these question (150) preferred the previous residence. Sixty percent of the responses pre- ferred the direct housing services of MUPH. There were thirty-five percent indifferent responses, with 21 of the 53 indifferent responses related to furniture. Since the MUPH complexes were not provided with furniture, this results is not unexpected. To better understand the perceived change in direct housing services, an "absolute" level of the direct housing services was provided on the occupants' applications. Of the eighty-nine applications examined, forty-six contained negative comments about the applicant's previous direct housing services. Overcrowding was mentioned twenty-eight times; lack of heating, nine times; structurally unsafe, five times; condemned, four times; lack of running water, 174 two times; and, lack of kitchen sink and stove was mentioned once. Given the relatively low level of previous direct housing services, it is understandable that MUPH provided a significant improvement. Turning to indirect housing services (the "living environment"), MUPH did not seem to provide a general improvement. The indirect services which occupants were asked to compare included; schools, parks, neighbors, child care facilities, tranSportation, congestion, noise, garbage collection, theft and personal safety, and privacy. Of the total 299 responses to these questions, 44 percent were indifferent between neighborhoods. The MUPH neighborhood seemed to be preferable (in terms of number of responses) in the area of schools, transportation, and garbage collec- tion. However, according to the number of responses, the previous neighborhood was preferable in the area of con- gestion, noise and privacy. Twenty-eight percent of the responses felt that MUPH had improved indirect services; while 27 percent of the responses favored the indirect services of the previous neighborhood. The results indicated that MUPH had little if any net positive impact on occupants regarding indirect services. The final comparison made between MUPH and the previous residence is in the area of rents. On the basis of 199 observations there was no significant difference (95 percent confidence interval) between the occupants' 175 previous and present rent. The mean monthly rent at MUPH was $106.83 compared to a mean monthly rent of $100.74 at the previous residence. However, the standard deviations from the two sets of monthly rents differed considerably. The standard deviation of MUPH rents was $21.19; while that of the previous residence was $46.68. The fact that occupants which derive more than 50 percent of their income from public assistance have standardized rents; and, the diverse backgrounds of the occupants, helps to explain the difference in the standard deviations. In terms of numbers, 42 percent (40) paid higher previous monthly rents, 16 percent (15) paid the same monthly rent, and 43 percent (41) paid lower previous monthly rents. Whether or not the rents in MUPH are "rents the poor can afford", there was not on the average, any reduction in rent from moving into MUPH. The Impact of Multiple Unit Public Housing_on Proximate Neighbors Results from Questionnaire A random sample of 89 proximate neighbors of the three housing projects were interviewed to determine the perceived impact on them from MUPH. Proximate neighbors incur benefits and costs primarily through the existance of "neighborhood effects." The costs and benefits of "neighborhood effects" do not operate within a voluntary money exchange market; thus, the "market" cannot charge or 176 recompense proximate neighbors for the services (both positive and negative) which they receive. However, the public housing decision maker may want to take into account the impact on proximate neighbors for at least three reasons. First, in order to assess the impact on those concerned, the costs and benefits on all parties must be better understood. Second, the impact on proximate neighbors can affect the "living environment" of the entire neighborhood including the MUPH occupants. Third, collective opposition by proximate neighbors (even if unwarranted) can prevent the locating of a public housing complex in their neighborhood.2 For simplicity, the impact on proximate neighbors is viewed from two points of view. On the one hand, perceived changes in prOperty values is examined. On the other, the level of indirect services ("living environment") is assessed. Unlike the occupants of multiple unit public housing, there is no reason to believe that proximate neighbors' direct housing services (the housing structure itself) will change-- at least not in the short run. A third impact on certain proximate neighbors--which was not specifically examined but became clear during the course of the study--was the negative personal feelings toward people with different economic and racial characteristics moving into the neighborhood. While examined somewhat separately, property values 177 and indirect services are definitely related. Presumably, any decline in indirect services is limited by the fall in property values plus moving expenses. That is, if a prox- imate neighbor feels the public housing complex has detracted from the indirect services of his neighborhood, and yet he chooses not to sell, he evidently would rather pay this cost than the cost of moving plus any capital losses. When asked if they thought their property values were affected in any way by MUPH; thirty-eight respondents said "yes", thirty-eight said "no", and twelve said they "didn't know." Of the thirty-eight responding "yes", only one felt that his property value "probably increased." In terms of dollars, property declines were estimated to have fallen from $1500 to $15,000. Two-thirds of those giving dollar amounts estimated the decline in the range of $2000 to $4000. These estimates amount to about ten percent of the market value of the housing ($20,000 to $40,000). Forty-seven percent of the respondents felt as though home sales had increased in the neighborhood. However, only twenty percent thought public housing was the cause. Taxes, schools and "less desirable people" were also mentioned as reasons for increased sales. MUPH perhaps influenced these aSpects, but this was not always clear. Fourteen percent (4 of 29) of the respondents, who wanted to sell, cited public housing as their reason for wanting to sell. It is important to note that a fall in property 178 values is not necessarily a "bad" thing for everybody. For example, a fall in property values would allow relatively lower income families to purchase desired homes. However, there may also be negative costs to people other than owners associated with falling property values. First, a continued fall in property values may lead to dilapidation, abandon- ment, squalor, disease and other maladies which detract from societal welfare. Second, a perceived decline in property values by proximate neighbors may lead to animosity and dislike which in turn may lead to a poorer "living environment." Third, an expected fall in property values may increase proximate neighbor resistance to multiple unit public housing, forcing the decision maker to choose "less desirable" sites. Turning to the impact on indirect services, proximate neighbors were asked if the public housing complex had a positive or negative affect on privacy, congestion, noise, aesthetic values and schools. The results are shown in Table 3.8, and for convenience are reproduced below. Essen- tially all of the proximate neighbor responses implied either a zero or negative cost associated with the per- ceived impact on indirect services. With the exception of schools and privacy, the nega- tive responses varied between the three neighborhoods. One neighborhood accounted for approximately fifty percent of the negative responses concerning noise and congestion; while 179 Table 5.1. The Nurber and Percent of Proximate Neighbor Responses ImphfingauiAdwaseIUmactcfifmmflionInfifinan:8endres Inrfirectfknwice Nudxm'ofltspomkxms Penxxmzofkaal inqflyingaiNemmfive Itspomfizfis nqflying .mect IkNemfljNe Exact Pnhnmy 35 41 Cmmxstflmi 40 . 48 bkfise 27 31 Aesdrfiiclkflues 35 41 Sdhxfls 35 44 another accounted for about fifty percent of the negative responses concerning "aesthetic values." Given some of the observable differences in the neighborhoods and the different percentages of negative responses it is possible to hypothe- size testable cause and effect relationships, and suggest various policy alternatives. Some Input-Output Relationships of Policy Decisions and Proximate Neighbor Responses Proximate neighbor responses of the impact on noise, congestion and privacy differed between the three neighbor— hoods examined. This section looks at some of the implied relationships between the location, size and design of the public housing complexes, and the percent of "favorable" proximate neighbor responses to the questions on noise, congestion and privacy. "Favorable" responses are defined as 100 percent of the total responses to the three questions minus the percent of responses which implies MUPH adversely affected noise, privacy and congestion. 180 Conceptually the relationship may be viewed as an input-output model; where the policy decisions of location, size and design are the inputs, and favorable proximate neighbor responses are the desired output. Favorable proximate neighbor responses to the questions on noise, congestion and privacy were summed for each of the three neighborhoods. The percent of favorable responses for each neighborhood are: Hildebrant 66 percent; La Roy 52 percent; and Mt. Vernon 70 percent. Figure 5.1 compares the relative degree of geographical separation of the three public housing complexes to the proximate neighbor respondents in their respective neighbor- hoods. The neighborhoods are ranked ordinally with Hildebrant being the closest (on the average) followed by La Roy and then Mr. Vernon. Ceteris paribus, the percent of favorable responses to the questions of noise, congestion and privacy would be expected to increase as the separation between the public housing complex and proximate neighbors increased. Size was held constant but some of the other project features differed. Of course, one of the objectives of this study is to find out what other features are important so that a ceteris paribus statement can be meaningful. Nevertheless, as shown in Figure 5.1, the favorable responses increased, decreased and then increased again as the seaparation increased. Since there is no a priori reason for such a relationship, the geographical .xwadsoo mo GOHDMUOH Havanmmumomm ou mcflouooom noncommmn Honzmwmc mumEaxond manmno>mm mo usmoumm Amamom map so unmwm ou puma Eonm mommmuocH cowumummmmv muonnmamz mumfiwxoum Scum mos: mo cowumumomm accenmmumomw m>wumamm no common Ame Amy 2; 181 connww.uz how on ucmwnmpaflm _ u + o L- ON isov hem ma 5. cm usannmpafim cocnm> .uz gflow %.ooa .H.m wusmflm muonnmfioz mussexoum mo noncommwm manmuo>mm mo vacuums 182 separation factor can only partially determine the percent of favorable responses. However, with limited sample size the observations could just be variations around the mean for the given degree of separation. The size of the public housing project would also be expected to influence the percent of favorable responses. However, the observed complexes each contained 100 units and thus there was no opportunity to test for the effect of size. Figure 5.2 comparesthe relative degree of isolation of the complex from the rest of the community, with the percent of favorable proximate neighbor responses. The relative degree of isolation is determined by the average ordinal ranking of the three complexes within four "cata- gories" of isolation of which the previously discussed geographical separation is a part. Table 5.2 shows that Mt. Vernon is the most isolated from the rest of the community based on the criteria used. Hildebrandt follows, and the La Roy complex is least isolated. As shown in Figure 5.2, the percent of favorable responses increase as the average degree of isolation increases. Mt. Vernon is more isolated in all respects than the La Roy project and received 18 percent more favorable responses from proximate neighbors in the area of noise, congestion and privacy. The question for the decision maker 183 .GOHuoHOmH mo ooumop mo xoocfl ou mcwouoooo momCOQmou nonsmfloc ouoEonum oanono>om mo ucoonom Auamflm ou umoq sown momoouosH cowuoOmH mo ooumoo osuv muflsssaoo Bonn coauoaomH mo oonoo o>HuoHom comm omhm mmwm o&.~ mmwm ooha i _ i _ A _ o ..o~ F ow wom ma ..oo ucounooaflm cocuo> .uz 1.0m i.ooa .~.m magmas noncommom uoaamamz ouoeflxonm oanono>om mo ucoouom 184 Table 5.2. Ordinal Ranking of Three Public Housing Complexes According to Catagories of Isolation Catagories of Isolation Housing Project Hildebrant La Roy Mt. Vernon ---------- Ordinal Rank------------ Geographical Separation (3 is most removedT’ l 2 3 Amount Fenced (3*is most fenced) 3 l 2 Street Entrance and Exit (3 is least used by proximate neighbors) 2 l 3 Vegetation (Screening) (3 is most vegetation) 3 l 2 Total 9 5 10 Average Ordinal Ranking 2.25 1.25 2.50 is: Is the additional favorable responses from proximate neighbors worth the cost of increased isolation? For example, if fencing the La Roy project would increase the number of favorable proximate neighbors responses from 52 percent to 65 percent, should the project be fenced? It is this type of decisiontflmadecision maker should be concerned with. Locating the housing project near a major street and providing entrances and exits only on that street may also increase the percent of favorable proximate neighbor responses. However, if the street must be crossed regularly by the occupants there will be an increase in the probability 185 of accidents. Again the decision maker must weigh the relative benefits and costs. Decisions of size, location, design, maintenance and management are the inputs of the decision maker. These decisions will produce an output which will likely improve the well-being of certain individuals at the expense of others. In the above example, fencing the project requires additional resources provided by tax dollars and may have undesirable effects on the occupants; however, a higher percent of proximate neighbors may be better off. An understanding of these "production functions" provides the decision maker with an idea of the rate output changesvfiijiregard to changes in inputs. It is the "mar- ginal" changes in the value of output which determine whether or not the changes are worth their cost. The Economic Impact of MUPH on Public Services General Considerations of MUPH and Public Service Provision Any housing project will have an impact on the costs and benefits of public provided services within a specific area. The impact will vary depending on the location, size, design, maintenance and management of the project. The decision maker can alter the magnitude and incidence of costs and benefits on public services by altering one or more of these variables. Of course, his ability to alter these varialbes is limited by scarce resources, institutional constraints, and other higher valued goals. 186 When a MUPH project is occupied, the demand for public services may change in two ways. First, individuals from outside of the public service supplying area may move into the complex, thus increasing aggregate demand for public services. Second, as individuals move within the public service supplying area, there will be a change in the com- position of demand. Either of these changes in demand may increase the per unit cost of supplying public services in the short-run (assuming a fixed plant operating at lowest unit costs). However, a change in the composition of demand may also work to lower unit cost if excess capacity can be eliminated. Both of the movements above can also affect the tax base of the public service supplying area. For example, the peOple who move into public housing normally have relatively low incomes; thus, those who move from outside would con- tribute less toward a local income tax. But, their use of public services may be no less than "average" use. Also, movement within the community can decrease the tax base from the private housing stock. However, total tax revenue may increase since the public housing complex pays ten percent of receipts in lieu of taxes, which may be greater than revenue generated by private low income housing.3 This assumes a constant or decreasing population in the area, since an increasing population implies that others would likely move into the homes left by public housing occupants. 187 The above discussion implies that MUPH can affect the costs and benefits of public service provision. It is also implies that other considerations will affect the magnitude and relative importance of MUPH's impact on public services. Included is the population growth rate which affects the utilization of plant capacity and the housing stock. If the pOpulation is expected to increase, the decision maker may be more concerned with constructing public housing so as to minimize the cost of providing additional public services. If the population is expected to decrease, the concern may be to match the expected excess capacity of public services with the additional demand created by public housing. Moreover, in order to obtain the most desirable method of financing, an otherwise desirable choice with respect to public services may be precluded. For example, the federal government subsidizes MUPH capital expenditures a greater amount than current expenditures; which may alter the decision maker's choices. Also, federal government expen- ditures to other public services (e.g. schools) may be directly affected by the decisions made with regard to public housing. The Impact of MUPH on Elementary Schools in the Lansing School District The impact on elementary schools is a subsection of the more general section on public services. An attempt is made to empirically examine the actual impact on the four elementary schools involved. 188 The table below shows the number and percent of child- ren from public housing attending the four schools. Table 5.3. Elementary Schools Receiving Children from MUPH: Number of Children in Attendance September 1973 (Total and From Public Housing) School Total Number Percent of Attendance From MUPH Children From Public Housing Pleasant View 593 106 18 Gier Park 480 91 19 Cumberland 375 103 27 Northwestern 323 52 16 Most of the impact on the schools from MUPH children occurred within a two year period. From 1967 to 1969, attendance at Pleasant View increased by 231 students or 52.2 percent. During this same period, attendance in the school district increased by 730 students or four percent. The public housing project (La Roy) accounted for about half the increase in attendance at Pleasant View with the other half coming from growth of the community. Also, during 1969 and 1970, attendance at Gier Park increased by 208 students or 59.8 percent. Again, public housing (the Hildebrant“ project) accounted for only about half of this increase, the other half coming from the closing of another school. During the same period, attendance in the school district increased by 297 (about 1.6 percent). 189 The increase in attendance at Cumberland and Northwestern during 1970 and 1971 was 78 (21.3 percent) and 60 (21.4 per- cent), respectively. The public housing complex (Mt. Vernon) seemingly accounted for the major share of these increases. Attendance in the school district declined by 68 students during the period. The increase in the number of students at these schools required the hiring of additional teachers due to the state law on maximum student-teacher ratios. During the same time periods discussed above, the number of teachers in- creased by; seven at Pleasant View; four at Gier Park; three at Cumberland; and two at Northwestern. The hiring of teachers was not uniform throughout the school district. For example, Pleasant View received seven teachers for an additional 278 students from 1967 to 1968. During this period, student attendance in the remaining school district increased by 331, but this increase was accompanied by only one additional teacher. In terms of capacity utilization, Cumberland, North- western, Gier Park and Pleasant View averaged 86 percent, 85 percent, 85 percent and 92 percent from 1967 to 1973, respectively. The school district as a whole operated at 92 percent capacity. Approximately $619,000 worth of capital additions were added to Gier Park and Pleasant View in 1969 and 1967, respectively. Since sixteen schools operated at greater than 92 percent capacity from 1967 to 1973; and since six of these operated at greater than 100 percent capaicty, 190 it seems reasonable to question the additions at these parti- cular schools. It is possible that MUPH drew attention to these particular schools at the exclusion of others. However, this is conjecture. The most important impact on schools would presumably be the cahnge (if any) on the quality of education afforded the children. Unfortunately, it was not possible to make such a determination in this study. Whatever the impact on the schools, it is clear from the study that school officials were not asked, and in fact did not participate in the'decision of where and how to locate public housing. In view of the fact that federal money is dispersed among Lansing schools on the basis of ADC, con- sultation with school officials becomes even more important. Movement of ADC children affects the internal financing of schools, and MUPH typically contains a large percentage of these children. For example, if an additional ten ADC children attended Northwestern, the school would qualify for approximately $600 per each ADC child.‘ Without consulting with school officials, the public housing decision maker is not able to accurately assess the affects of his actions on the schools. Presumably, working with other public service officials in determining the size, location and design of MUPH would assist in minimizing the impact on public services within the framework of desirable objectives. 191 Conclusions and Recommendations This study, like much applied research, supplies many more questions than it answers. Especially since answers to anything except facts can never be held with certainty. Thus, the purpose of this final section is to explore some of the more interesting questions implied by the study. The section is divided into four subsections. The first is a "general" consideration of certain related pro- blem areas in housing and neighbors. The next three subsec- tions examine researchable areas related to the occupants, proximate neighbors, and public services, respectively. Related General Areas of Recommended Research Examination of Other Public Housing An examination of public housing which varies in size, location, design, management or maintenance would help establish the importance of these policy tools in achieving desired goals. For example, decreasing the size of a project would reduce the impact on, say, schools; however, the impact on proximate neighbors may increase. Similarly, locating a complex several miles from the nearest neighbor would remove the impact on proximate neighbors; however, this may increase the costs of public services provision and forego desirable "living environment" improvements of occupants. Other studies of different public housing complexes in different neighborhoods will increase the decision maker's 192 ability to correctly assess the trade-off between alternative policy decisions. Examination of Other Multiple Unit Housing It would be interesting to compare the impact on single family proximate neighbors from private multiple unit housing as Opposed to multiple unit public housing. Thirty- nine percent of the proximate neighbors in this study felt as if private multiple unit housing would have had a different impact on the neighborhood. The implication being that public housing contained a "less respectable class of people." It may be however, that single family homeowners tend to have certain objections to multiple unit housing irrespective of whether it's public or private. The "public" aspect may simply be an identifiable target of these objections. Further Research and Recommendations Pertaining to the Occupants of Public Housing The Goals of Public Housing As argued in Chapter II, the objectives of a "decent home" and "suitable living environment" at "rents the poor can afford" contained little actual content. Before any decision maker can rationally choose among various alterna- tives, he must have a clear idea of what is wanted. More- over, the success of any program is based upon its objectives. What is the purpose of providing a "decent home" and "suitable living environment" at low rents? Is it to improve the 193 satisfaction or well being of the "poor"? Is it to assist them in becoming more productive citizens in society? Is it simply to improve the satisfaction of society through the feeling of being generous; or, the slum removal of eye sores? While these questions are not researchable, they are certainly important. If the public housing decision maker is going to "correctly" weigh the expected consequences of various decisions an idea of relative values must be established. For example, what is the trade-off between a "decent home" and a "suitable living environment"? How Does Public Housing Affect the Sociaerecision Making Ability of Occupants? When occupants were asked, "Would you rather have enough money per month and find other similar housing accommodations or have this housing at the present rent?" twelve said they would prefer the money, twelve said they preferred their present housing accommodations, and six were indifferent. It would be interesting to examine possible changes in the desire to make independent decisions among different income groups. That is, do people with Jelativelylow incomes tend to feel as though they are "failures" in society, and therefore prefer to have others make a larger number of their decisions? This question is not only important in itself but directly relates to public housing. For example, the answer 194 to this question would presumably provide an indication as to whether public housing is a temporary "halfway" house or a permanent way of life. This is particularly important with respect to children. In one public housing complex (not examined in the study) there was a married couple, both of whom had been raised in the same complex. It would be interesting to know if public housing perpetuated or dis- couraged continued dependence on the state. The Relationship Between Direct and Indirect Housing Services When purchasing a home, a person takes into account both the services offered by the house itself (direct housing services), and the services offered by the neighborhood (indirect housing services). Since the house itself provides shelter, a basic necessity, it is expected that the demand for direct housing services would be relatively income inelastic when compared to the demand for indirect housing services. It would be interesting to compare how the demand for direct and indirect housing services change as income increases. The results would perhaps yield some insight into the relative importance of a "decent home" and a "suitable living environment." The hypothesis might be: The price ratio of indirect to direct housing services tends to increase as incomes increase. The price of direct housing services would be the actual cost of construction (including basic furnishings such as stove, refrigerator, 195 etc.) plus the competitive rate of return to the entrepreneur. The costs of indirect services could perhaps be estimated through the difference between land prices and tax rates. The assumption being that land values and tax rates tend to reflect the relative value of indirect services. Substanti- ation of the hypothesis would be.a significant positive correlation between the price ratio and income. A basic problem in the empirical testing of this hypothesis is the expected rate of return from the investment portion of buying a home; which, may also be related to the price ratio and income.4 1 Some Onestions on the Level of Direct Housing Services Several interesting questions are raised with respect to direct housing services. First, what is the desired level of direct housing services of MUPH? For example, garbage disposals appeared to be broken much of the time and requiring considerable maintenance. Perhaps this is due to the fact that most of the occupants are not familiar with the proper use of garbage disposals. An understanding of the "average" occupant's level of sophistication regarding housing services would allow the decision maker to choose those services which optimize the relationship between initial costs, costs of maintenance, and occupant satisfaction. In this regard, however, it is important to keep in mind the long term nature of housing. Only including those 196 services which appear ideal today may decrease the useful life of a project. Assuming incomes increase, the demand for housing services will increase. Thus, an obsolete MUPH project may remain largely vacant even at very low rents. The lack of laundry services and not owning an auto- mobile may increase the costs of food and laundry services. Several of the occupants argued that it is very difficult to carry more than one or two bags on a bus. Thus, more trips to the laundry and food store would be required-- increasing the costs of clean clothes and food. An estimation of the actual cost of obtaining food and laundry services may influence the decisions of decision makers toward the provision of these services. Management decisions regarding MUPH contain many uncertainties. Part of the uncertainty stems from the lack of well defined objectives. However, some of the uncertainty stems from the lack of knowledge concerning the reactions of occupants toward various policies. For example, one occu- pant was dissatisfied because of managements' refusal to let her paint the walls of her house. The reasoning was that "these are the government's walls" and she could not change them to suit her taste. The implication being that she was the ward and the government the patron. To the extent that such management decisions cause some occupants to leave and force others to become dependent on the decisions of “superiors", MUPH may be partially defeating its purpose. 197 There appears to be considerable room for research in the area of management decisions. Some Questions Concerning Indirect Housing Services Indirect housing services to a certain extent deter- mine the quality of the "living environment." The question is, what is a "decent living environment"; or, more speci- fically, what do people look for in determining a "suitable living environment"? A better understanding of the "bads" to be avoided and the "goods" desired in the "living environ- ment” would assist the decision maker in assigning relative priorities. For example, is more congestion a "bad" and, if so, how much of a "bad" relative to, say, the noise level? The point is, there is little known about what indirect services make one neighborhood more or less desirable than another. The occupants of the study felt as though MUPH was less desirable than their previous neighborhood in the areas of noise, congestion, and privacy. This conclusion seemed to be based on more children and the close proximity of neighbors. However, it is not known how important noise, congestion, and privacy is to a "decent living environment." Therefore, it is impossible to say if MUPH improved or detracted from the "living environment" of the occupants. Occupants also expressed concern that their children were "behind" other children in the neighborhood in education. 198 This is an empirical question. While school officials thought children frombfludioften times had special problems, there had been no serious effort to determine the achievement of MUPH children relative to other children. An investiga- tion in this area would: 1) determine if in fact there is a difference in educational attainment; 2) provide insight into what seemed to cause this difference; and, 3) offer suggestionscnihow to remove the difference. A related area is that of preschool child care services. Existing research indicates that the years before five years of age are very important in determining a child's social behavior. Time series studies which determine how children from MUPH (or more generally, how children from the lowest income groups) adjust and perform in society, would be extremely useful in evaluating and altering programs for children. If children from MUPH tend to follow in the foot— steps of their parents, then such housing may not be accomplishing desirable long term goals. The area of theft and personal safety also offers some useful research possibilities. For example, is MUPH more or less safe than other neighborhoods? Number of thefts and police calls per capita would illustrate any difference between MUPH and other areas. Such a comparison would pro- vide an assessment of the "absolute" level of safety of MUPH. Of course, different MUPH projects would presumably also differ in theft and safety. A comparison of different 199 public housing projects may provide some insight into why these differences exist. Finally, more research in the area of family life, desire and self reSpect of occupants of MUPH may prove de- sirable. Some of the occupants said that living in MUPH made them feel "like a welfare case," or that it "crushed their pride." Such feelings may be lessened or removed if public housing were viewed more as a vehicle for improvement of the occupants' ability to lead more productive lives in society (i.e., help them increase their human capital), then perhaps hope and desire would tend to replace hope- lessness and failure. Further Research and Recommendations Concerning Neighbors of MUPH Externalities Asspciated with Different "Types" of Housing As incomes increase and barriers to entry into the market are removed, the economic and racial characteristics of neighbors will continue to change. Presently, there is little understanding about how neighborhoods change or the affects on the individuals involved. Mobility has and will likely continue to destroy the old sense of neighborhoods or community composed of a range of incomes and status, with values toward care and use of property imposed by community pressures. At one time this side and the other side of the tracks was a familiar concept; which, implies disparate 200 communities with differing values and approaches to housing behavior. Perhaps rules by a manager do not form an ade- quate substitute for social pressure. When interviewing proximate neighbors, there were several instances when comments were made about subsidized single family homes (Section 235 housing). Their concern, it seems, was not with the public housing project (which was not viewed as part of their neighborhood but as a separate community); but with the nearby subsidized single family homes. They argued that the subsidized homes were not "taken care of" as well as the other homes in the nei- ghborhood. It may be that single family subsidized homes have a proportionately greater impact on communities than MUPH. Studies of the impact on neighbors from different types of subsidized housing may offer some useful results with respect to neighborhood change. Some studies which cover a five or ten year period may be particularly fruitful. Neighborhood PropertygValues Estimation of the actual impact on neighborhood property values is very difficult because one is always confronted with what would have happened had public housing not located in the area. However, a sufficiently large sample size and "realistic" control groups would reduce the uncertainty. That is, comparing the sale prices of homes of a host of two ”similar" neighborhoods, one of which receives public housing, both before and after the locating of MUPH, would 201 perhaps provide some reliable data. Such a study would not only provide insight into the effect on the sale price of homes; but would yield information on the magnitude 5, < 10_____; >10 How many years were you at your previous location? <1______; 1-5_____; >s- < 10___; 3 10 Why did you decide to move here? Lower rent_____; better neighborhood_____; better housing ; other reasons, explain. Did you leave your old location because of: Government action (urban renewal, highways, etc.)? Availability of this complex?_____ Other reasons? If this same housing at the same price were available in your old neighborhood, would you prefer to live there rather than here? Would you rather have either (e.g. $100) per month and find other housing accommodations or have this apartment at the present rent? a) Money b) Apartment What was the approximate cost per month of your previous house or apartment? Where do you work? Your spouse? Approximately how far is your job from here? Spouse? year? 10) 11) 12) 13) 14) 15) 219 Do you still have close ties (friendly, business, relatives) in your old neighborhood? Do you do your shopping (washing) in your old neighbor- hood? If yes why? Do you associate socially with any people living outside of the complex but nearby? If yes: 12A) Approximately how many? 12B) How many are close friends? Would you say that people in the neighborhood-~outside this comp lex—are friendly? Do you find the people in the comples to be friendly? Yes No 14A) Do many of your friends live here? Yes No Would you compare this house and neighborhood with your previous house (or apartment) and neighborhood in terms of: a) Size and condition of house--age, number of rooms. Old New b) Plumbing and bathroom(s) (repairs, private) Old New c) Major household appliances--1) refrigerator, 2) stove, 3) laundry facilities, 4) garbage disposa1(s), 5) food storage Old 1) ES! 1) 2) 3; 3) 4 4) ) 5) 5) d) e) f) 9) h) i) j) k) l) m) 220 Furniture (quality, quantity) Old New Schools (quality, child's interest) Old New Parks (distance, size, facilities) Old New Neighbors Old New Day care and/or babysitting facilities Old New Why do you use the day care center? (work, social, child interest, other) Car pool, bus service Old New Why do you use the car pool? (work, shopping, other) Congestion (1) nearness and no. of neighbors, 2) roads Old 1. 2. New 1. 2. Noise Old New Garbage (collection, storage) Old New Theft and personal safety (actual, fear of) Old New 16) 17) 18) 19) 20) 21) 22) 23) 221 n) Privacy (1) neighbors, (2) family Old 1. 2. New 1. 2. 0) Health (1) food preparation, (2) heat, (3) ventilation Old 1. 2. 3 New 1. 2. 3. p) Any other comments Do you see a counselor? If yes, 16A) Did you before you came here? Do you attend the adult education program? If yes, 17A) Did you before you came here? How do you feel about the management of the complex? Do you feel that you have a voice in the decision making process of the complex? Do you feel that this house compared to your old house has had any affect on your: [careful to remove neighbor- hood] a) family life (harmonious) b) person (desire, self respect, etc.) How many children live here? boys girls ages: 1. 2. 3. 4. 5. Approximately how much is your monthly rent? Approximately what is your annual family income? l) 2) 3) 4) 5) 6) 7) 222 Questionnaire for School Officials How many students is the school designed to handle? How many students are presently attending this school? What has been the enrollment trend for the past ten years? How many students are from the public housing complex? Have district boundaries changed this period? What grades are being taught at this school? Did the entry of students from the public housing complex create any addition or modification to the school in the form of: a) The school building itself? If yes, 1) What was the addition or modification? 2) What was the cost of the addition or modification? b) The number of teachers? If yes, 1) How many? 2) What was the additiOnal cost? c) The number of grades being taught at the school? If yes, 1) What was the change? d) The average number of students per teacher? If yes, 1) What was the approximate change? e) The number of buses and/or bus drivers? If yes, 1) How many? f) The cost of bus service? If yes, 1) The number of stops? 2) The total mileage? 8) 9) 10) 11) 12) 13) 14) 223 Do children from the public housing complex have more or different problems than those of other students in this school? If yes, what are they? a) disciplinary b) relationship with children outside the complex c) performance Es Did the parents of children enrolled in the school before i the public housing complex was built believe that the j quality of schooling would be changed as a result of the entry of public housing students? a) In what way? 9 :3 b) Why? Were you or some other school official notified that a public housing complex was going to be built in this area? If yes, 1) By whom? 2) When? Were you asked if the entry of students from the public housing complex was going to impose any additional costs to the school? If yes, by whom? If the additional costs due to new students from a public housing complex were going to be substantial to the school, who would you notify that this was the case so that perhaps they could make different arrangements? What is current enrollment of total school system? a) Elementary b) Middle c) High School What is the capacity of the total school system? a) Elementary b) Middle c) High School l) 2) 3) 4) 5) 6) 7) 8) 224 Questionnaire for Proximate Neighbors Does the location of public housing affect you or your family in any way? Yes No a) not at all b) some c) a lot d) no opinion If yes, how? Do you think the value of your property was affected in any way? Yes No If yes, up or down and by approximately how much? Do you think there has been a change in home sales in this area? Yes No Can you tell me which homes have been 3015 Since (date when complex was started) Why sold? Do you or have you recently planned to sell your house? Yes No . What are or were your reasons for wanting to sell? Why did you not sell? Do you know anybody who lives in the public housing complex? Yes No If yes, how many? How many do you know well? Do you ever attend any meeting or social functions in the project center? Yes No Do you think public housing in general is desirable? a) not at all b) some c) very much d) no opinion Do you feel that there has been a change in: a) congestion of roads since the public housing complex was occupied? not at all some much no opinion b) Noise? not at all some much no opinion 225 Question 8 continued 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) c) The aesthetic value of the neighborhood? not at all some much no opinion Do you feel that your privacy has been affected due to the public housing? Yes No If yes, how? Do you feel that the public housing complex affects the schools your children attend? Yes No Has it made them better, or made them.worse? How? Has the neighborhood improved or deteriorated in the last years? In what way? If :1 multi-unit housing complex of the same size which was not public housing had been built in the same location do you think the affect on you, your family, or your property would have been any different? Yes No If yes, how? How long have you lived in this house? Years Are you married? Yes No How many children do you have and what are their ages? Where is husband employed? What type of work does husband do? a) blue collar b) white collar c) unemployed Is wife employed outside of the home? What type of work does she do? a) blue collar b) white collar c) unemployed What is your total annual family income? <5000 5,000-10,000 10,000-15,000 15,000-20,000 >20,000 APPENDIX II-l A DESCRIPTION OF THE THREE NEIGHBORHOODS DISCUSSED IN CHAPTER III APPENDIX II-l A DESCRIPTION OF THE THREE NEIGHBORHOODS DISCUSSED IN CHAPTER III The neighborhoods are identified by the name of the public housing complex located therein. The three neighbor— hoods are thus called Hildebrand (HN), La Roy (LRN) and Mt. Vernon (MVN). Respondents from each neighborhood were randomly selected, obtaining thirty-one respondents from HN and LRN; and twenty-eight from MVN. These respondents supplied the information cited in Chapter III. Contracts were let for the public housing complexes on: September 22, 1967 for La Roy; March 13, 1968 for Hildebrand;’ and April 9, 1969 for Mt. Vernon. The projects were completed and essentially full eighteen months following the above dates. The following characteristics illustrates some of the similarities and differences between the neighborhoods. Locational Setting Hildebrand This project contains 100 units and is completely and closely surrounded by single family homes. With the exception of the entrance the project is fenced; and, on three sides 226 227 is further enclosed by trees and vegetation. The remaining side faces Turner Street (a fairly well traveled street) from.which one enters and exits the project. La Roy Also containing 100 units, this project is faced by single family homes on three sides. The remaining side (totfluanorth) is a large open treeless park. Immediately north of the park is other multiple unit housing mixed with single family homes. The project is not fenced and grass is the only vegetation. The landscape of the project itself is primarily asphalt, sidewalks and buildings rather closely situated. While not being in as close proximity to as many neighbors as Hildebrant,- the only "buffer" is one or two blocks of cleared land. Mt. Vernon This project contains 100 units of family public housing and 40 units of elderly public housing. It faces Waverly Road to the North from which one enters and exits. Waverly is a four-laned well traveled street. North of Waverly is primarily vacant land. To the West is a rather large Section 236 (multiple unit) housing project (it should be noted that some respondents did not distinguish between this project and Mt. Vernon Park). West of the Section 236 project and continuing South in an arch are single family homes. Across a small area of vacant land, the project is 228 boardered by Grand River Avenue (a major highway) to the East. Income and Employment The neighborhoods differed somewhat in income and employment. The Mt. Vernon areas being a higher income, white collar neighborhood relative to the others. Tables A2.1.l and A2.1.2 provide the respondents answers to ques- tions concerning income and employment. Table A2.1.1. Income of Proximate Neighbors by Neighborhood Annual Income Neighborhood (Dollars) Hildebrantka Roy Mt. Vernon Total - ------------ Number--------------- Less than 5,000 4 5 l 10 5,000 less than 10,000 11 5 3 19 10,000 less than 15,000 8 15 8 31 15,000 less than 20,000 5 4 ll 20 20,000 or more 1 l 5 7 Total Responding 20 30 28 87 229 Table A2.1.2.Employment of Proximate Neighbors by Neighborhood Type of Employment. :Hildebranti La Roy Mt. Vernon Total b ---------------- Number -------------- Blue Collar 21 20 9 50 White Collar 4 3 14 21 Unemployed 3 5 2 10 Retired 2 3 3 8 Total Responding 30 31 28 89 Number of Children The respondents were also asked how many children they had. The Hildebrant respondents had the highest average of 1.53 children per respondent. La Roy was second with an average of 1.32, followed by 1.29 for Mt. Vernon. Minority Groups Visual observation indicated the the La Roy neighbor- hood contained the largest number of blacks. It was the only neighborhood that could be called "mixed." One Mt. Vernon respondent was black and two respondents from the Hildebrant neighborhood were Mexican-American. Since approximately half of the interviews were conducted by phone, it was impossible to obtain exact numbers. APPENDIX II-Z RESPONSES OF PROXIMATE NEIGHBORS ACCORDING TO INCOME, EMPLOYMENT, LOCATION AND PARENTAL STATUS APPENDIX II-Z RESPONSES OF PROXIMATE NEIGHBORS ACCORDING TO INCOME, EMPLOYMENT, LOCATION AND PARENTAL STATUS The decision maker may be interested in the question, "Within which neighborhood, or 'type' of neighborhood, will multiple unit public housing be most likely to 'fit-in'?" A valid question in that some neighborhoods will presumably be more receptive to multiple unit public housing than others. Implying, ceteris paribus, that less friction would be generated in the more receptive neighborhoods. Since the proximate neighbors of only three neighbor- hoods are examined in the study, no catagorical answers to the above question can be supplied. However, an attempt is made to determine if proximate neighbors of different employment, income and parental groups responded differently to questions concerning the public housing complex. Each of these "groups" and their responses are considered below. Employment Proximate neighbors were asked if the primary family wage earner was blue collar, white collar, retired or unemployed. Fifty indicated blue collar, twenty-one said white collar; while eight and ten replied retired and 230 231 unemployed, respectively. Table A2.2.1 shows the responses of those employment types with respect to the questions examined in Chapter III. As Table A2.2.1 shows, white collar respondents were generally least affected by the housing complex, followed by blue collar and retired, with the unemployed group being most affected. The relatively high proportion of unemployed disturbed by the complexes may have several explanations. First, being unemployed they may be more sensitive to possible decreases in prOperty values. Second, not going to work five days a week allows for more interaction and observation of the complex and its occupants. Third, they may feel a greater personal cost of their tax dollars (previous to being unemployed) going to the construction and operation of the complex. Several of the unemployed respondents indicated resentment over the.belief that occupants of MUPH with higher incomes than themselves were provided low cost housing. It is perhaps somewhat surprising that those who most felt public housing undesirable stood the greatest likeli- hood of future benefits from such housing. When asked if other multiple unit housing of the same size and location which was not public housing would have had a different impact; seventy-eight percent (7) of the unemployed respon— dents replied "yes". This compares to only twenty-four percent (5) oftfluawhite collar group and forty-five (19) 232 TablenA2.2.11The Percent and Number of Proximate Neighbor Responses (by Employment Group) to the Question, "Does MUPH Adversely Affect": Question Employment Type Blue Collar White Collar Retired Unemployed Percent Number Percent Number Percent Number Percent Number Property Value Yes 49 20 39 7 43 3 67 6 No 51 21 61 11 57 4 33 3 Privacy Yes 40 19 30 6 50 4 60 6 No 60 28 70 14 50 4 40 4 Neighbor- hood Congestion Yes 52 25 32 6 12 1 60 6 No 48 23 68 13 88 7 40 4 Neighbor- hood Noise Yes 33 16 10 2 50 4 70 7 No 67 33 90 19 50 4 30 3 Aesthetic Value Yes 41 19 14 3 62 5 60 6 No 59 27 86 18 38 3 40 4 Schools . Yes 62 21 50 3 50 l 40 2 No 38 13 50 3 50 l 60 3 Total Yes 45 120 26 27 44 18 61 33 No 55 145 74 78 56 23 39 21 1 or "a lot". TableA2.2.l,as well as TablesAZ.2.2andA2.2.3contain information derived from Chapter III. That is the questions were not asked exactly as listed in this appendix; and, the "not at all", "some", and "a lot" responses are condensed to "yes" - "no" responses; with "no" being equivalent to "not at all" and "yes" being either "some" 233 and fifty (4) percent, respectively, of the blue collar and retired groups. Begins The respondents were also divided into two income groups--those with less than $10,000 annual income and those whose annual income was equal to or greater than $10,000. Twenty-nine respondents reported they received less than $10,000, and fifty-eight received more. The responses of these two groups are shown in Table A2.2.2. The results of Table A2.2.25how that there is little difference between the two income groups. Forty-seven of the less than $10,000 income reSponses, and forty-two percent of the equal or greater than $10,000 responses, felt the public housing complex had adverse affects. While the two groups rather closely agreed with each other as to the adverse impact on the complex, they differed considerably on the opinion regarding the desirability of public housing. When asked, "Do you think public housing in general is desirable?"--fifty-seven percent of the less than $10,000 income group said "no"; and only thirty percent of the higher income group replied "no". (It should be remembered that many respondents, when asked if they thought MUPH was desirable, replied that it was a necessity and, therefore, somewhat desirable.) 234 Table A2.2.2. The Percent and Number of Proximate Neighbor Responses (by Income Group) to the Question, "Does MUPH Adversely Affect": Question Less Than $10,000 Annual Income Equal to Greater Th or an $10,000 Annual Income Percent Number Percent Number Property Value Yes 55 12 46 23 No 45 10 54 27 Privacy Yes 52 13 40 23 No 48 12 60 34 Neighborhood Congestion Yes 41 11 50 28 No 59 16 50 28 Neighborhood Noise Yes 39 ll 28 16 No 61 17 72 42 Aesthetic Value Yes 50 13 37 21 No 50 13 63 36 Schools Yes 50 7 65 20 No 50 7 35 11 Total Responses Yes 47 67 42 131 No 53 75 58 178 235 The divergence of opinion regarding the desirability of public housing may stem from the fact that the individuals in the relatively low income group do not perceive themselves to be financially much better off than the occupants of the complex. Yet, they pay taxes to help support these individuals- This combination could create a certain amount of animosity from relatively low income families toward public housing in general. It is interesting to note that a smaller percentage of the higher income group (when compared to the lower group) felt the housing complex had detracted from the "aesthetic value" of the neighborhood. However, a larger percentage of the higher income group felt the schools were adversely affected. The results indicate there is no major divergence of opinion between the two income groups regarding the impact of the public housing complex. Parental Status The impoartance of children in proximate neighbor responses provided the incentive to examine the possibility of differences in opinion of reSpondents with school age children living at home, and those without. The results of this dicotomy are shown in Table A2.2.3. The results in Table A2.2.3imply very little difference between the impact voiced by respondents with children and those without. While there are many reasons why individuals 236 Table A2.2.3 The Percent and Number of Proximate Neighbor ReSponses (by Parental Status) to the Question, "Does MUPH Adversely Affect": Question Responses by Parental Status With School Age Without School Children at Home Age Children At Home Percent Number Percent Number Property Values Yes 51 20 44 16 No 49 19 56 20 Privacy Yes 36 16 48 19 No 64 29 52 21 Neighborhood Congestion Yes 52 23 41 17 No 48 21 59 24 Neighborhood Noise Yes 34 16 27 11 No 66 31 73 30 Aesthetic Value Yes 41 18 41 17 No 59 26 59 24 Schools Yes 54 20 70 7 No 46 17 30 3 Total ReSponses Yes 44 113 42 87 No 56 143 58 122 237 with children may be affected differently by the location of a MUPH complex in their neighborhood, the results do not bear this out. Perhaps surprisingly, a smaller percentage or respondents with children perceived a negative impact on schools than respondents without children. Since there were children in the neighborhood prior to public housing, those without children were probably used to children. Thus, locating the complex in the neigh- borhood did not change the neighborhood from a "no children" community to a "children" community. Intuitively, it seems that locating a public housing complex (with many children) in a neighborhood previously without children would have a greater impact on proximate neighbors than locating the complex in a neighborhood with children (although this is not certain). It is not known how many children are necessary in order for the people in the community to be used to children (i.e. what is a "children" or "no children" community). Presumably the neighborhoods examined contained a sufficient number such that the impact on childless indiViduals did not differ substantially from the impact on those with children. 99322421. It is argued in Chapter III that the locational position of MUPH with respect to proximate neighbors may be a useful policy tool for the decision makers. Thus the responses of proximate neighbors are examined on the basis 238 of where the respondents are located relative to the housing complex. . The data are divided into those which are “relatively close" to the complex and those "relatively far". The terms 'relatively close". and "relatively far" are necessarily inexact. Those "relatively close", are either adjacent to the project or separated from the project by no more than two occupied lots. Geographical distance played a part in the determination of whether the respondent was "relatively close" or "relatively far." For example, if the nearest respondent to the north was four blocks removed, the respon- dent would be "relatively close." Those five blocks removed to the north would be "relatively far." Conversely, if the nearest respondent to the south is "just across the street," then both he and possibly the respondents two blocks south of him would be "relatively close." The asymetrical shape of the lots, vacant lots, major streets and geographical distance all played a part in the determination of whether a respondent was "relatively close" or "relatively far." Admittedly, such a criteria leaves considerable room for judgment. However, the intent of examining physical separation is not to develop a sound criteria of what is near and what is far; but merely to identify two groups, which on the average, differ in their separation from the complex. These groups are identified in Table A2.2.4 with a listing of their responses. Forty-nine of the respondents 239 are defined as being "relatively close" and forty-one as being "relatively far". As Table A2.2.4 shows, a greater prOportion of those considered "relatively close" felt in every case that MUPH had "more" adverse effects. Approximately fifty percent of the total responses from those proximate neighbors considered "relatively close" felt the complex had adverse effects. Only thirty-three percent of the total responses from those considered "relatively far" felt the complex had adverse effects. As expected, the farther away respondents are (on the average) from the complex, the less impact. However, unless the decision maker is considering physical separation of the complex, the phrase "on the average" must be considered. For example, a respondent six blocks removed may be more affected than one adjacent to the complex if the former's yard affords an excellent trail to school and the latter's does not. 240 TableuA2.2L4 The Percent and Number of Proximate Neighbor Responses (by Relative Location) to the Question, "Does MUPH Adversely Affect": Question "Relatively Close" "Relatively Far" Percent Number Percent Number Property Values Yes 57 24 36 12 No 43 18 64 21 Privacy Yes 45 21 37 14 No 55 26 63 24 Neighborhood Congestion Yes 59 27 33 13 No 41 19 67 26 Neighborhood Noise Yes 39 19 21 8 No 61 30 79 31 Aesthetic Values Yes 48 22 33 13 No 52 24 67 26 Schools Yes 60 18 50 8 No 30 12 50 8 Total Responses Yes 50 131 33 68 No 50 129 67 136 HIcHIan STATE UNIV. LIBRARIES )I))INWII)WNW)WWNIWWIUIHW)“HI 31293009955851