Hans Sievertsen: The opportunity not to move: Evidence from a grassroot urban renewal policy – Preliminary Results

Date and Location

Date: 7/11
Time: 11:00 - 12:00
Location: Frederiksholms Kanal 30, Fæstningens Materialgård 1220 København K

Abstract: Unintended consequences of social housing policies are long-term income segregation, and the deterioration of local amenities (e.g., school quality, crime and other living conditions). Some social housing units have transformed into what is known as ghettos or slums, i.e., poor neighborhoods which are often inhabited by minority groups who face social or economic restrictions. The force that sustains this parallel society is a viscous circle: successful residents try to leave those neighborhoods, only to be replaced by poorer families. Beyond the undesirable effects on its residents, these ghettos may also impact the dynamics of surrounding neighborhoods thus dragging down larger areas of a city.

Many developed economies, including Denmark, had massively invested in affordable housing developments between 1950 and 1980. Since then, policymakers have become increasingly concerned about the negative externalities associated to these place-based policies. Subsequently, mitigation policies have given residents the “opportunity to move” through the closure of housing units or relocation vouchers (see, e.g., the Moving to Opportunity program in the U.S., Kling, Liebman, and Katz 2007), or “the opportunity not to move” through the refurbishment of housing units and investment in local public goods.

This project evaluates a bottom-up nationwide policy, financing social housing development projects in Denmark between 1994 and 1998. About 8,000 housing communities were given the opportunity to apply for funding, and 502 such housing developments received approval for a variety of projects going from investment in equipment and social activities to refurbishment of existing housing units. The objective of the project is to quantify the long-term impact of these investments on social housing residents and their neighbors. The groups of interest are children and teenager cohorts in neighborhoods hosting a social housing development, and the project will evaluate social multipliers inside and outside their local school environment in the medium- and long-run using a wide range of outcomes, including schooling achievements, criminal records, labor market participation/performance and family-level outcomes like marriage or teenage pregnancy.