Housing and Opportunity: Impacts of Chicago’s Public Housing Demolition

Chicago’s history of low-income housing policy is complex. The Chicago Housing Authority used to manage 17 large housing projects for low-income residents, but during the 1990s, due to high crime, poverty, drug use, and corruption and mismanagement in the projects, plans were made to demolish them. By 2011, all of Chicago’s high-rise projects were torn down. This policy decision remains controversial as the demolitions disrupted communities and the replacement housing options for residents were insufficient. A recent study by Eric Chyn at the University of Virginia examined the long-term impact on children who were forced to move due to early building demolitions in Chicago. The study found that there were benefits to children who left the projects early in terms of labor market participation, earnings and crime.

Chyn’s analysis focused on residents of buildings that were demolished in the 1990s and received Section 8 housing choice vouchers to move elsewhere in Chicago. He compared these residents to those who lived in similar projects that were not yet demolished. Chyn takes advantage of the fact that although the city planned to phase out all public housing, funding limitations meant that initial demolitions took place in only a few buildings with major structural issues. For example, the pipes burst in several Robert Taylor buildings in 1999, and the resulting flooding forced residents to move. In order for the comparisons to be interpreted as causal, the demolition of the buildings must be unrelated to characteristics of the families who lived there. This is likely to be true, as public housing is assigned randomly: residents are pulled from a waitlist once a unit becomes available and do not have the opportunity to self-select into specific projects. Chyn confirmed this by showing that characteristics such as age, gender and criminal background are similar between the treatment and control groups. His sample included seven housing projects, with 20 treatment buildings and 33 control buildings. Data sources, collected through 2009, include administrative sources such as CHA records, social assistance case files, Illinois State Police arrest records, and records from the Illinois Departments of Employment Security and Human Services.

The analysis found positive outcomes for displaced youth. First, families with housing choice vouchers moved to neighborhoods with 21 percent lower poverty rates and 42 percent fewer violent crimes per 10,000 residents. Additionally, Chyn found that displacement improved labor outcomes. Children who moved were four percentage points more likely to be employed full time and earned, on average, $600 more per year. Much of this effect came from girls, who were 6.6 percentage points more likely to be employed and earned $806 more per year, on average. In terms of violent crime, youth who were displaced had 14 percent fewer arrests, with a larger impact on boys.

Chyn posited that the main mechanism for his results was families moving to lower-poverty neighborhoods, which may have led to different opportunities. Families may form networks with higher-income neighbors, who provide examples for children and can also share job information. Schools may also be of higher quality in these neighborhoods.

There are several limitations in the study that may bias Chyn’s results. First, these results may be relevant in the initial few building demolitions where all displaced residents received housing choice vouchers. However, as the CHA continued to demolish buildings, they did not always have perfect housing replacement, forcing some families into significant economic hardship. Thus, these results may lack validity in situations outside of this context. Another consideration is that there is generally lower police presence in lower-poverty neighborhoods; it is possible that youth in the treatment group are committing the same number of crimes but not getting caught. This might bias the impact of displacement on arrests upward.

The housing policy implications from this study are nuanced. Chicago no longer has large housing projects, and so there is not a direct application for the movement of families out of projects into higher-income neighborhoods. However, it does suggest that there are benefits of de-concentrating poverty, which may be achieved by giving families choice in where they live. It may be beneficial for cities and housing departments to focus on increasing provision of Section 8 vouchers, ensuring landlords accept them, and exploring other polices that allow mobility of families to neighborhoods of varying income levels.

Article source: Chyn, Eric. “Moved to Opportunity: The Long-Run Effects of Public Housing Demolition on Children.” American Economic Review 108, no. 10 (2018): 3028-056.

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