The Keynesian View of Housing and Public School Markets: Is the Grass Always Greener for Ethel Lawrence Homes?

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I find Massey’s arguments about the important role played by the government in housing markets and the shift of mechanism that promotes housing segregation to be persuasive. Similar to Keynesian economics, housing markets are not truly “free markets”. Massey’s presentation slides summarized the positive effects of government intervention in the form of ELH residence found in chapters 7 and 9, which included promotion of racial integration. However, the fact that nearly 90% of residents in surrounding neighborhoods had never interacted personally with ELH residents challenges this claim. While Massey makes a bold claim that housing can help close our achievement gap, it is difficult to conclude a direct effect of ELH housing on children’s GPA due to the fact that he attributed variables that yielded negligible indirect effects on GPA. The ELH project might indirectly improve ELH children’s GPA, but it remains to be seen whether the presence of ELH children would change the study environment that non-residents had access to prior to ELH establishment.

I am interested to see if the presence of ELH homes would create negative externalities over time. Since they do not necessarily promote racial integration, their sole purpose is to improve social mobility of city residents without affecting non-residents. Even though Massey claims that ELH homes do not have any negative impact on taxes, crime or property value, I doubt this would remain true if the ELH model is replicated on a large scale across US suburbs.

Just like private housing markets, public school markets are not truly “free markets” as parents have received government aid through choice schools and school vouchers. The school choice system may not be fair to all parents, but if the public school system were framed as a perfect free market, more parents would be deprived from sending their children to good public schools. The government clearly cannot leave housing and public school markets to the guidance of the ‘invisible hand’ at the expense of low-income individuals.

Massey has convincingly presented the shift from overt racial discrimination in housing to density zoning through the passage of four laws in the civil rights era. I wish Malaysia had experienced a similar civil rights movement, because overt racial discrimination in the housing and public school markets is condoned by the government through affirmative action policies that sideline minorities.

Early in the 20th century, US municipalities established racial zones and perpetuated racial segregation until 1917 when US Supreme Court decided in Buchanan v. Warley that racial segregation ordinances were unconstitutional. The land-use policy decisions at the municipal level can be a problem due to the lack of protection from federal regulation that limits racial segregation in housing.

An example of a data visualization that I would add is a line graph showing the concentration of poverty for whites and blacks over time. An interesting observation is that the disparity, measured by the difference in concentration of poverty between two races, is the same at 10% in 1970 and 2007 despite changing over time.

Disparity Line Graph