The Promise-And Reality-Of Mixed-Income Housing
November 8, 2017 Ricardo Álvarez-Díaz
mixed-income housing

Public housing has a decades-long reputation for concentrating poverty, increasing crime, encouraging welfare dependency and causing urban decline.

One way the U.S. has addressed the public housing problem and sought urban revitalization is to replace low-income housing with mixed-income housing developments.

Has it worked? It depends on whom you ask. 

Definition of Mixed-Income Housing

The housing industry has yet to establish a universally accepted or legal definition of mixed-income housing. Some argue that mixed-income neighborhoods do not result from new housing construction but from organic changes in population, migration, and income.

Generally speaking though, mixed-income housing refers to diverse types of units developed as a deliberate effort to build multifamily neighborhoods that bring together a variety of income groups. The units are priced at market rates for higher-income residents and at below-market prices for lower-income residents.

The income mix is determined by calculating the area median income (AMI) and pricing the units at certain percentages of the AMI for low-, moderate- and higher-income residents.

Unlike tenant-based housing assistance, such as Section 8 vouchers, the subsidy in mixed-income housing development is tied to the housing unit, not the tenant.

Characteristics of mixed-income projects:

  • Development effort based on the distribution of household incomes
  • Income levels relative to those of residents in surrounding areas
  • Spatial strategy for mixing different income groups together
  • Some units designated for homeowners, others for renters

Mixed-income housing is built through federal, state and local efforts and through a combination of public and private nonprofit partnerships.

Purpose of Mixed-Income Housing

The goal of mixed-income housing development is to reduce poverty, facilitate racial and socioeconomic integration and revitalize urban neighborhoods by addressing the cultural reasons for poverty rather than the larger, fundamental causes.

Research shows that living in poor, inner-city neighborhoods hinders educational achievements, increases exposure to violence, leads to criminal behavior, rises eviction and unemployment rates and is detrimental to physical and mental health.


Affordable, adequate housing is considered a stabilizing force for people living in poverty.
Mixed-income housing seeks to alleviate poverty by providing quality housing and increasing residents’ access to opportunities that can aid their social advancement and improve their financial stability.

Poor neighborhoods usually suffer from a lack of investment in infrastructure and services. Mixed-income housing additionally is meant to drive private investments and real estate developments in otherwise neglected and often decaying urban areas.

mixed-income housing

Mixed-Income Housing: Promise versus Reality

After decades of public housing development policy that has led to concentrated poverty, racial and income segregation, higher crime rates and dropping property values, mixed-income housing is being promoted as a better alternative.

In theory, mixed-income housing should counteract negative neighborhood effects and deliver positive outcomes, but research does not always reach this conclusion. The particulars of each development and community seem to have a significant impact on the success or failure of mixed-income housing developments.

For example, a 2013 literature review on Cityscape (published by the Office of Policy Development and Research of the U.S. Department of Housing and Urban Development) titled “Mixed-Income Living: Anticipated and Realized Benefits for Low-Income Households” found evidence that mixed-income housing can improve neighborhoods but not in terms of social interaction and poverty alleviation.

Benefits of Mixed-Income Housing

Proponents of mixed-income development frequently point out the hypothesized positive outcomes associated with living in mixed-income communities. But as research remains inconclusive on the extent of these outcomes, whether they stem from reality or wishful thinking is yet to be determined.

However, many of these outcomes seem obvious.

Living in a safer neighborhood should be less stressful than living in a high-crime neighborhood. That’s just common sense.

Following are the most cited benefits of living in mixed-income communities.

Social Networks

Where we live influences our peer groups. By enabling interaction among residents of various incomes, mixed-income housing can provide lower-income residents with new social networks and enhanced social capital that links them to people outside of their immediate social circle and brings them word-of-mouth information about jobs and other opportunities. Social networks also provide emotional support.

Poverty Alleviation

Broadening of social networks and social capital that lead to new and better economic opportunities can translate into improved financial outcomes and reduced poverty.

Behavioral Modification

Higher-income residents can mentor lower-income residents in the areas of cultural conduct, work ethic, and home ownership.

Higher Quality of Life

Mixed-income housing ideally offers access to higher-quality housing, better schools, adequate healthcare and other social services; prompts greater academic performance and better economic results later in life for children; decreases crime rates and creates safer neighborhoods; and reduces the stress of living in poverty, leading to improved physical and mental health.

Improved Democracy

Because higher-income residents tend to speak up and get more involved in community governance, they can serve as role models for lower-income residents to increase their participation in civic organizations focused on advocacy and community improvement.

Increased Diversity

Bringing people of different social, economic, ethnic-racial backgrounds together should increase tolerance to diversity and help integrate these groups.

Political Economy of Place

The presence of higher-income residents should attract higher quality services, products, amenities, and jobs previously not available to lower-income residents because of market and political forces.


Higher-income residents tend to demand that the rules of the neighborhood be followed and that those who break them be held accountable, thus increasing order and safety.


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