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Doing it the Right Way:
The Regional Approach!

by David Stanowski
24 September 2012


Yesterday, we exposed the "urban myth" that building mixed-income developments in high-poverty neighborhoods magically transforms them into acceptable low-poverty census tracts suitable for Public Housing. (The Mixed-Income Scam)

For over three years, the GOGP has maintained that the GHA must use a regional approach to Public Housing site selection, building only in high-opportunity census tracts. The GHA has consistently ignored this mandate until the new Vice-Chairman, Tony Brown, took on the task of developing a regional plan (Plan2).

Learn Purchase Real Estate for Cents on the Dollar!

Working in conjunction with Dr. Kirk McClure, they ranked all 66 census tracts in Galveston County. 21 census tracts were rated as high-opportunity neighborhoods, suitable for Public Housing, offering the regional plan ample sites. Only three of the high-opportunity census tracts are on the Island (7255, 7257, 7260).

The mission is to build 529 Public Housing units in these 21 census tracts. If they were allocated equally, only 25 Public Housing units would need to be built in each of the 21 high-opportunity census tracts, offering opportunity to Public Housing residents with minimal impact on the host neighborhoods.

As expected, building small numbers of Public Housing units (without any market-rate units) in low-poverty neighborhoods does raise the poverty levels slightly, but the impact is absorbed easily and the poverty remains low enough to allow the neighborhood to retain its high-opportunity status for all of its residents.

Compare this ideal performance (details and calculations shown below) to the myth that large mixed-income developments built in high-poverty neighborhoods can perform satisfactorily.



Building 25 Public Housing units in each of Galveston's high-opportunity census tracts:

Assumptions:

Each unit will house 2.5 residents on average.

The residents in the PH units will be below the poverty level.


Census Tract 7255:

Census Tract 7255 has a population of 1,118 and 1.67% of that population is below poverty.

1,118 X .0167 = 19 residents below poverty + 1,099 residents above poverty.

GHA will build 25 PH units.

Therefore, 25 PH units x 2.5 residents / unit = 63 new residents in the census tract below poverty.

New census tract demographics:

19 original residents in the census tract below poverty + 63 new residents in the census tract below poverty = 82 total residents in the census tract below poverty.

No change in residents in the census tract above poverty = 1,099 total residents in the census tract above poverty.

63 + 1,118 = 1,181 total residents now in the census tract.

82 / 1,181 = 7% total residents now in the census tract below poverty.

    

Census Tract 7257:

Census Tract 7257 has a population of 2,214 and 2.56% of that population is below poverty.

2,214 X .0256 = 57 residents below poverty + 2,157 residents above poverty.

GHA will build 25 PH units.

Therefore, 25 PH units x 2.5 residents / unit = 63 new residents in the census tract below poverty.

New census tract demographics:

57 original residents in the census tract below poverty + 63 new residents in the census tract below poverty = 120 total residents in the census tract below poverty.

No change in residents in the census tract above poverty = 2,157 total residents in the census tract above poverty.

63 + 2,214 = 2,277 total residents now in the census tract.

120 / 2,277 = 5% total residents now in the census tract below poverty.


Census Tract 7260:

Census Tract 7260 has a population of 1,566 and 6.18% of that population is below poverty.

1,566 X .0618 = 97 residents below poverty + 1,469 residents above poverty.

GHA will build 25 PH units.

Therefore, 25 PH units x 2.5 residents / unit = 63 new residents in the census tract below poverty.

New census tract demographics:

97 original residents in the census tract below poverty + 63 new residents in the census tract below poverty = 160 total residents in the census tract below poverty.

No change in residents in the census tract above poverty = 1,469 total residents in the census tract above poverty.

63 + 1,566 = 1,629 total residents now in the census tract.

160 / 1,629 = 10% total residents now in the census tract below poverty.

Conclusion:

The calculations clearly show that building 100% PH in high-opportunity census tracts, using a regional approach that spreads the units across a large number of census tracts, will definitely AFFH, while building mixed-income in high-poverty census tracts will NOT!

Merely repeating this process for the other 18 high-opportunity census tracts on the Mainland should create an ideal regional Public Housing plan.

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