SAVI Reports - Page 31

Overcoming intergenerational poverty, which has barriers well beyond housing affordability, is difficult anywhere in the United States, but recent research suggests that it may be even more challenging to overcome these barriers in Indianapolis relative to other large cities. Housing affordability is embedded within the broader economy. Harvard University’s Equality of Opportunity Project released a study that examined the likelihood of someone raised in the bottom 20 percent of an area’s income distribution moving to the top 20 percent within their lifetime. Indianapolis ranked 46th among the 50 largest cities in that measure, where only 4.9 percent of residents could expect to make that move (relative to 12.9 percent in San Jose, CA). 13 While this reality points to challenges well beyond housing, it is worth recognizing that housing affordability plays a role in an individual’s likelihood of experiencing upward mobility within their lifetime. Policy Options The federal government does not currently have a broad, goal-oriented policy for housing and neighborhood development. Federal programs that are meant to improve opportunities for individuals and families may work at cross purposes with those intended to support the physical revitalization of neighborhoods; in some cases, these conflicts arise within the same federal program. While the lack of federal focus on cities generally and housing and community development specifically can cause challenges, it provides relatively wide latitude for local communities to develop and pursue locally defined policy goals. 13 This is especially true in places that receive their own federal allocation of community development resources. Housing affordability is embedded within the broader economy. We often look at the cost side of the homeownership equation without paying as much attention to the resources side. If 30 percent of a household’s income is the threshold at which housing becomes affordable, housing can be made affordable by reducing the cost of housing or through raising people’s income, and the latter approach is too often ignored in the context of housing affordability. Summary and other research available at