Location, location, location. This ubiquitous phrase in real estate might be the overlooked resolution to income inequality: living in a high-opportunity neighborhood is crucial for upward mobility. Could location, location, location be the solution for Connecticut’s massive income inequality problem?
It is beyond question that the earnings of the richest and the poorest households in Connecticut have become far too unequal. The state has seen an upward trend in its Gini coefficient the past 11 years, meaning income inequality is expanding. In 2010, the Gini coefficient was 0.486, and in 2020 it hit a whopping 0.502, higher than the U.S. average of 0.481.
Connecticut’s discriminatory zoning laws cannot be ignored when assigning blame for income disparity. The Zoning Enabling Act passed in 1923 by the Connecticut General Assembly gave each municipality the right to enact restrictive regulations. Today, certain zoning laws prevent multifamily dwellings or apartments from being constructed, which essentially bans low-income people from moving into or occupying a neighborhood. The result is a sorting along racial and ethnic lines. Around half of Connecticut’s Black and Latino residents live in “low-opportunity” areas, while only 9% of white residents do.
Upward mobility is a far-off dream for residents stuck in poor neighborhoods. Where wealth is concentrated geographically, good resources are too. Low-opportunity areas have inadequate schools and minimal healthy food options.
In Connecticut neighborhoods where zoning laws are less strict, student-teacher ratios widen, decreasing education quality. Plus, it’s not just where you live, it’s who you know. Upward mobility depends on cross-class friendships. When children have relationships with people of higher economic status they are introduced to more opportunities, so the achievement gap, and subsequently the class divide, decreases.
So, what is to be done? Giving poor families access to better school districts, well-connected social networks, and good resources will grant children a better chance at success, reducing the achievement gap and ending the cycle of poverty. The Housing Choice Voucher program currently assists low-income families in choosing private rental housing where landlords agree to participate, rather than being limited to public housing. This gives families access to safe and sanitary private housing —a necessity in closing the achievement gap— while having their rent partially covered by the voucher if they are eligible.
But inequality still reigns. Landlords who participate in the program must agree to rent to voucher holders, those in areas with good schools are often reluctant if they are concerned about the stability of the voucher holders. As a result, housing Choice Voucher holders are concentrated in impoverished areas, and only a small share of these households that have children are located near schools ranked in the top 50%.
In Fairfield County, which has the highest median household income, almost half of the residents have a bachelor’s degree. In Windham County, where most residents live below the poverty line, only 24% of people have a bachelor’s degree. More than 75% of subsidized housing for families is located in poverty-concentrated areas. Right now, the Housing Choice Voucher program is not cutting it.
There is a solution. By incentivizing landlords (via tax credits) who own property in thriving Connecticut areas with good schools to participate in the Housing Choice Voucher program, income inequality will be minimized. Data shows that children relocated to high-opportunity areas see an increase in their household incomes by $214,000 and in their likelihood of attaining a college degree.
This solution requires some upfront costs, but Connecticut has the budget. Currently, the state budgets 1% of its $1.5 billion federal stimulus funding from American Rescue Plans Act (ARPA) to support housing-related projects, yet it is short 85,000 affordable rental units. The costs are worth it: promoting the participation of landlords in good school districts in the voucher program can strengthen educational outcomes, in turn producing a more skilled workforce which leads to economic growth.
Landlords have the key to more than just your apartment: with the right tools, they can reduce income inequality by helping to close the widening achievement gap. Creating affordable housing choices in high-opportunity areas will halt the seemingly endless income inequality cycle in Connecticut.
You know what they say! Location, location, location.
Natalie Posner attends the University of California, Berkeley.