Financial Health and the Economic Mobility of Public Housing Residents

KAREN DYNAN: Good morning or good afternoon or good evening, depending on where you're coming from. I'm Karen Dynan, professor of the practice of economic policy in the Harvard University Department of Economics and at the Harvard Kennedy School. And I want to begin by thanking you all for joining us today for this important event, financial health and the economic mobility of public housing residents. This is a topic that touches on an issue that has been central to me throughout my career as both a researcher and as an economic policymaker, which is the role of financial services in enabling economic opportunity and, ultimately, in enabling economic mobility.

So access to credit can be a powerful lever for helping people move up the economic ladder. It opens doors for families to buy homes, for entrepreneurs to start businesses, and for individuals to invest in education and skills that fuel future growth. Also, credit provides a crucial safety net in times of economic uncertainty, offering a cushion when unexpected challenges arise, such as job loss or medical emergencies.

But access to credit and the opportunities it brings-- it can vary dramatically, depending on where you live. So in particular, people who reside in public housing or low-income neighborhoods-- they often face significant obstacles when it comes to building credit and getting access to financial capital. And these barriers can lead to severe disparities in financial health, which, in turn, affects broader economic-- sorry, well-being and mobility.

These disparities don't just affect individuals and families. They create long-lasting ripple effects that influence entire communities, widening the gap between those who have opportunity and those who don't. But, and I want to underscore this, the importance of this issue goes even further. In recent years, we have seen how disparities in economic well-being and mobility have contributed to broader societal challenges.

So rising inequality and lack of upper mobility-- they've been linked to the loss of faith in institutions-- economic institutions, political institutions, and societal institutions. And that affects all of us, not just those who directly experience hardship.

So this is why today's [AUDIO OUT] is so important. It's an opportunity to understand more about how these financial disparities arise, particularly in public housing neighborhoods, and, in turn, what can be done to address them. Our program today will start with Daniel Hartley, a senior economist at the Chicago Federal Reserve, who will present his important research on the financial health of residents living in neighborhoods with public housing. His research explores how the economic well-being of these individuals is shaped not just by their immediate surroundings, but by a wider range of factors-- the neighborhoods they visit, the businesses they interact with, and their ability to access credit.

Following Daniel's presentation, we will turn to a panel discussion with experts who have diverse perspectives on banking, income disparities, and housing policy. The panel will build on Daniel's findings, examining the role of credit access and banking [AUDIO OUT] economic mobility for residents of public housing.

Our panelists will share their ideas for addressing some of the systemic barriers that these communities face, barriers that, in many cases, keep residents from achieving financial stability and from moving up the economic ladder. So I'm personally looking forward to this discussion. As the intersection of housing policy, financial access, and economic mobility-- I think-- I know it's a complicated area. But it's just a crucial area when it comes to policy.

I think the ideas and insights we will hear today will spark new conversations and, hopefully, lead to actionable strategies that will help create more inclusive economic systems. So again, we are pleased you have joined us this morning for this important event. We have a rich program ahead. And with that, I am going to turn things over to Daniel Hartley to begin his presentation.

DANIEL HARTLEY: Thanks, Karen. And good morning, everybody, from Chicago. I'm Dan Hartley. And this work is co-authored with a number of my Chicago Fed colleagues. It's important to note that these are our views and not necessarily those of the Chicago Fed or the Federal Reserve System.

So over a million households live in public housing in the United States. The existing research has found both positive and negative effects and correlations associated with living in and near public housing. We add to this literature by describing two new important aspects of living in or near public housing.

First, we explore the financial health of people that live in and near public housing as well as the ways in which they interact with credit markets. Second, we consider whether public housing neighborhoods are socially isolated from the rest of the city by describing the demographic and economic characteristics of the neighborhoods that they visit.

So the data for our study come from four different sources-- first, data from the Department of Housing and Urban Development on the location of all public housing buildings in the United States as of October 2021. Second, we use demographic and economic characteristics of census blocks and block groups from the 2010 decennial census-- third, data from the Federal Reserve Bank of New York's consumer credit panel, which is drawn from Equifax credit records.

These data contain history-- these data contain credit history observations for 5% of people with Social Security numbers in the United States. They contain measures of the Equifax Risk Score, a type of credit score, debt and delinquency for a number of types of credit accounts, and importantly, the census block of residence.

The fourth data set consists of geolocation data from Advan Research for 2018. These data are drawn from smartphone apps, measure the number of visitors to each census block group from each census block group of residents. Census block groups are geographic areas that are smaller than census tracts and usually contain somewhere from 600 to 3,000 residents. For example, the 2,500 census block groups in the city of Chicago contain about 1,200 residents and 500 housing units, on average.

As a way of describing residents in census block groups with public housing, we compare them to a set of census block groups that does not contain public housing and has similar economic characteristics. We form a comparison set of census block groups by selecting those where at least 30% of households have an income that is less than twice the federal poverty level.

The table on this slide and on the next compare mean characteristics in the public housing block groups and the set of comparison low-income block groups. The first two lines shown-- show that block groups with public housing units have an average of 50 public housing units-- and important to keep in mind for our study that the public housing units comprise an average of 9% of the total housing units in the block group.

The next two rows show that the share of the population over 25 with a college degree or higher and the median household income are very similar in both the public housing and the comparison block groups. The last two rows reveal that public housing block groups have a higher Black population share, while the low-income block groups have a higher white population share. Black people are over-represented in both sets of block groups compared to the US as a whole, where they make up roughly 12% of the population.

In this table, we see that the mean methods of commuting, as well as the mean commute times, are remarkably similar for people living in public housing census block groups and people living in other low-income census block groups.

This slide presents our descriptive results for the consumer credit panel outcomes. In the first bar, we see that residents of census block groups that contain public housing have subprime credit scores at an 18% higher rate than people that live in other low-income block groups.

Here, a subprime credit score is defined as having an Equifax Risk Score of less than 620, the typical subprime threshold for the Equifax Risk Score. This 18% estimate comes from dividing the 5.7 percentage point difference in mean subprime rates shown below by the sample mean, which shows that 32% of the combined sample of public housing and low-income census block groups has a subprime credit score. We prefer the percent differences shown on the bars, since they are comparable across outcomes with different scales.

The next two bars show that residents of block groups with public housing have worse credit outcomes and may be substantially worse. They are 11% more likely to have some type of credit account delinquency and 14% more likely to have debt that no longer shows as delinquent because it has been written down and has been transferred to a third-party debt collector.

The next two bars show that residents of public housing block groups are 12% less likely to have an auto loan and 18% less likely to have a mortgage. Of course, some of the lower mortgage rate is the mechanical effect of public housing residents being renter households.

This slide presents our descriptive results using the geolocation data from Advan. The outcomes pertain to the demographic and economic characteristics of the census block groups that people who live in public housing block groups visit as compared to people that live in other low-income block groups.

The first bar shows that people that live in public housing block groups tend to visit census block groups that have a 3% higher white population share. The second bar shows that they also visit block groups with a 9% lower Black population share. The last two bars show that residents of public housing block groups and other low-income block groups visit block groups with similar education levels and similar incomes.

To conclude, we find that public housing neighborhoods have worse financial health. We also find that public housing neighborhood residents tend to visit other neighborhoods with similar levels of educational attainment and income, but with more white people and fewer Black people, on average. Our analysis describes patterns that we find in these interesting data. But future work investigating what is driving these patterns will be important to more fully understand the effects of this particular housing policy.

KRISTEN E. BROADY: Well, thank you, Dan Hartley. I know that I certainly learned a lot. And I'm looking forward to our panel of expert. And so now I am pleased to welcome Dionissi Aliprantis, who is a researcher at the Center for Economic Research on Governance, Inequality and Conflict at the École Normale Supérieure in Lyon.

I'm also happy to welcome my former colleague, Jenny Schuetz, who is a senior fellow at the Brookings Institution in Washington, DC. Dr. Dorian Williams is the dean of the College of Business and [AUDIO OUT] at Dillard University in New Orleans. And now I have the pleasure of introducing Kristin Myers, who is senior vice president of content and editor in chief at etf.com. Kristin, it's all yours.

KRISTIN MYERS: Thank you so much, Kristen. And thank you so much to Dan, and also to Karen, for those opening remarks and for that presentation. So the purpose of this panel is to dive a little bit deeper into Dan's findings that we just heard about just a second ago. And so I'm really excited to be talking with Jenny, with Dionissi, and with Dr. Williams about this conversation.

So I first want to kick this conversation off really talking about, essentially, some of that financial health and the financial outcomes of some of those residents inside of public housing. Now, we heard that there's really persistent differences for those that are living in public housing when it comes to their financial health, and also their economic opportunity, especially when compared to those living in similar areas without public housing. So I really want to throw this first one out at the group really to talk about what the role of banking access might have in playing on those financial health and also those economic outcomes.

JENNY SCHUETZ: So I'm happy to take a first crack at that. As a real estate person, of course, one of the first things we do is try to think about the physical space and environment that people are living in. And in particular, we know that a lot of the traditional public housing that was built in the '40s, '50s, and '60s was built in this superblock format in areas that were reserved exclusively for public housing. And so there just wasn't a lot of commercial space in general that got added around them. Many of these were also very large properties. And so it was essentially the entire neighborhood-- was taken up by public housing.

Obviously, some of that has changed, as we've gone through rounds of redevelopment and bringing in more mixed use into many of these neighborhoods. But I think it's worth asking just, are the physical environments of the neighborhood conducive to neighborhood serving retail, including banks and other kinds of financial services?

DORIAN WILLIAMS: And I would even add to that, I know from being a previous bank manager, we know that the role of banks-- sometimes look at it from a retail standpoint. Many of our-- the residents that are in that area-- they're looking at opportunities when it comes to if they're able to get loans, if they're able to invest, things of that nature. In many of these communities, some of those things may not necessarily be at the forefront of their mind.

When it comes to trying to have access to funding, really, what they're wanting is to be able to have use for their money, to be able to stretch it to be able to get the needs that they have. So sometimes, when the-- those things may be in different other financial ways-- access to money quickly to be able to get those necessities, where from a banking standpoint, we're looking at how do they actually support being able to get loans. And the research even suggests that in those areas, those may be individuals that live in these areas that may have financial difficulties. So it's not necessarily having that access from the banking standpoint.

KRISTIN MYERS: Dionissi, I don't know if you have anything to add on that point.

DIONISSI ALIPRANTIS: That's all right. I'll pass on that one.

KRISTIN MYERS: No worries. So then, Jenny, let's talk a little bit further then about-- because you were mentioning a little bit about that real estate and, essentially, again, about banks perhaps being less likely to be located in those areas near those public housing developments. And what exactly is that impact, therefore, going to be on some of those residents that are living there?

JENNY SCHUETZ: I think we can put this in a larger context of poor neighborhoods often not having the same access to a wide range of commercial services and retail. So certainly, there's a long literature looking at the prevalence of food deserts, places that don't have large-scale grocery stores or shopping centers. And so for a variety of day-to-day needs and errands, it's important that households have that access.

When we think about the typical low-density suburb, we have residential neighborhoods where everybody drives to get to the nearby shopping center. But particularly for lower income neighborhoods and households who may not have a car, may not be able to pay for car ownership, it's really important to have those services either within walking distance or to have reliable public transportation that allows people to access someplace where they can carry out those needs.

KRISTIN MYERS: And Dorian, you touched on it a little bit. But let's dive into it a little bit deeper, essentially what that means with what Jenny's talking about-- essentially, the kinds of services that are going to be available in those areas with public housing because then you're going to see some-- perhaps some predatory banking services filling some of those gaps that exists from, essentially, the lack of those banks.

And so you have things like the payday lenders, for example, that are going to exist in some of those places. Can you talk just a little bit about that and that impact and, essentially, what those kinds of predatory businesses are essentially offering to those residents that are living in those areas with public housing?

DORIAN WILLIAMS: So one of the things that I think when we look at these areas-- as you mentioned, payday lending or those being able to have quick access-- you're going to have higher fees. You're going to have higher interest rates that's going to be associated with that, which basically takes away from that income or the limited income that some of these individuals may have. When that happens, then what you end up seeing is the need for that excess money being taken away because they're trying to get it quickly to be able to get those essentials.

And when we look at that, one of the things that's very impactful is when we start looking at transportation and things of that nature because now they're having to try to get to those places and they begin to look at prices. When you begin to look at prices within those communities, they're trying to seek out lower prices to be able to get the things that they need. But the money's being taken from these institutions.

And I'm not going to say necessarily-- well, they're impactful because now to be able to get the money fast is being able to take away from them. And they're not able to get the things that they need on a timely manner.

KRISTIN MYERS: So then sticking with you, Dorian, is it just, though, about the banking access and some of these other financial service providers-- the payday lenders, for example, title lenders-- is that the main cause, do you think, that's really causing this financial-- the difference in financial health or are there other factors that are coming into play here that could be contributing to some of those differences between those public housing residents and those low-income residents?

DORIAN WILLIAMS: That's a great question. So I think it really goes back to financial literacy as well. I think one of the things that's-- we pass down generations-- we pass down what we actually learned about our financial-- the way that we do financial growth and learning. We pass that down. So some of our behavior is what's impacting it as well.

We can see that if I'm a person that's used to trying to seek out the least price or being able to have quick access to money, what I'm actually portraying to my children is the same way. So therefore, how I look at money and how I handle money, my behavior, is indicative of what people actually see. If I'm not able to share that with my children, how to better manage their money, then that's also contributing to this issue.

So it's not always banking. And it's not necessarily-- if we're looking at these institutions really taking advantage of the individuals, but how we look at how-- if we see opportunities-- and I think that's the thing-- is we see opportunities. Then we'll be able to better manage our money. But in some of the communities, the opportunity is being taken away. And it becomes a necessity thing. And we're just trying to make it day to day and be able to get the needs that we have right now.

KRISTIN MYERS: Dionissi, I want to come to you just because, again, as Dorian is highlighting here, there's financial literacy issues that have come into play. But we also know that there's a lot of other things that come into play when it comes to specifically folks living in public housing. You have to consider benefits, the ability to stay in public housing or get into public housing. There's motivation.

And I know that all three of you have some comments on this. So I want to start with you, Dionissi, just to bring you into this conversation about some of those extra pieces that, again, are contributing to the difference that we see specifically between low-income residents and those that are living in public housing and some of these neighborhoods.

DIONISSI ALIPRANTIS: So I think, just piggybacking on what was previously said-- I think another issue that contributes is really this issue of the benefits cliff. So by that, I mean that by increasing your income or by gaining something on the labor market, you might, on net, actually be harming your income because it might make you ineligible for some benefits that otherwise are very important to you. And so that's also a really important factor when seeing differences, especially amongst people that are receiving some benefits that are quite large financially for their income. It really factors into the calculus of a lot of the choices they might be making.

KRISTIN MYERS: And Jenny, I know that you-- again, in terms of-- it's not just about the benefits, but then also-- and since you're the, as you already mentioned, the real estate one-- so then I, of course, naturally think that if the benefits get phased out and if you're starting to increase your salaries, then actually, even eligibility into public housing starts to go away, as well, correct?

JENNY SCHUETZ: Yeah. And this has been a problem for a long time with both public housing and with people who are receiving Section 8 vouchers-- that the amount of rent you pay is pegged to a percentage of your income. And so if your income goes up, then your rent also goes up. And at some point, when you're on the margin, you may also phase out of the eligibility to receive benefits at all.

This is a problem that we've known about in the policy design for a long time. You want people to be incentivized to work and maybe to take an extra shift and take a job that pays a little bit more so that they earn more. And the way that we construct the benefits disincentivizes that, and also encourages maybe some gameplaying a little bit around the rules.

So say that neighbors provide things like babysitting services for one another or some sort of other service that they're providing to their neighbors. There's an incentive to do this not via cash payments, but to do this via in-kind services because then you don't have this exchange of income going on.

So in general, as economists, we like people to have cash because cash is fungible. We want to encourage people to earn more to be able to save. And I think the Family Self-Sufficiency program that HUD runs is a really good example of we can create programs that incentivize people to work more, to earn, to save, to set aside money so they're also increasing their assets for a rainy day. We just need to build these into the policy design.

KRISTIN MYERS: Right. Now, Dorian, I want to come to you because, again, the benefits start to go away. And we're already hearing Jenny talk about just actually how we're starting to see actual differences in how we're actually starting to approach money, and also access to services. It's bartering, for example, instead of actually paying things with cash.

So how does this impact-- because for me, if I'm going to lose my housing if I make a little bit more money or if I'm going to lose access to social benefits if I make a little bit more money, then naturally, it would follow that people would say, well, then maybe I won't. I'm actually doing better off if I actually stay underneath a certain threshold, which, of course, isn't going to help you in the long run in terms of getting out of public housing, which is ultimately the goal.

So how does this-- does it actually play out that way, where the motivation is decreased and then we start seeing folks staying in public housing a little bit longer because of, essentially, the fact that once you start to do better, all of this assistance gets phased out a little bit too early, perhaps, we could call it?

DORIAN WILLIAMS: I think it does because one of the factors is that you try to stretch as much money as you can or be able to get as much as you can. And like I tell my students, really, what we want in society is we really want free stuff. We want it for as less as possible where we can actually receive more.

One of the issues is if I start to do better and be able to get some of these things, then maybe my daycare becomes affected. Maybe my housing becomes affected. Maybe all of the things that I benefit from become affected. So therefore, motivation incentive, as we've mentioned, is really taken away.

I really intuitively want to do better. However, I know how much that's going to cause me later on. So what I end up doing is I will end up maybe taking jobs in which I do get paid cash. So therefore, I don't necessarily have to report or do things of that nature, where I have the access to be able to get some of the things that I want, but I won't lose those benefits that are out there.

So yes, it's-- I think it is a motivational thing. I think it's sometimes-- if there's policies out there that would help to incentivize to be able to give individuals an opportunity to do better, and also want better, I think that's something that we need to look into and try to figure out how to dive into that situation. But I do think it takes away from some individuals. Now, that's not speaking of all individuals. But it's just saying some individuals-- that to do better sometimes is to be more painful to them or to their family or to those that they take care of.

KRISTIN MYERS: I'm actually really glad you mentioned the policies that we have to put into place. We will be talking about that because, obviously, we do want to discuss potential solutions, policy solutions, to address some of these issues. But first, want to dive-- continue a little bit further in some of these issues.

So as we were listening to some of Dan's research, I, of course, was struck even by some of these outcomes that change especially when it comes to the-- when it comes to potential gentrification issues and some of the populations that we see that exist outside of the public housing versus those communities that are living in low-income and how those population-- there's population differences and how that could potentially play in the financial health and outcomes.

So naturally, this is a very popular buzzword lately, which is gentrification. We see that happening a lot, particularly around those areas of public housing. So how does gentrification actually impact those residents of public housing? I'm going to come to you first, Jenny, just because I'm thinking to myself, well, gentrification is also bringing in-- we've called it the Whole Foods effect.

I'm sure a lot of people have heard that before. You always know a neighborhood is changing once you start to see the Trader Joe's and the Whole Foods popping up. It brings with it a lot of other businesses that are naturally not going to be catering to the needs of those in living in public housing, but perhaps the needs of those gentrifiers that have come in and have a little bit more money.

So Jenny, can you speak to us a little bit about that gentrification impact of those that are living in public housing, and particularly when it comes to the businesses that that gentrification brings with it?

JENNY SCHUETZ: Yeah. So the process of gentrification looks a little bit different in different cities and neighborhoods. But we know that there's these cycles and stages of it. And the commercial gentrification with businesses turning over is actually one of the later stages.

So what often happens in neighborhoods that start to have appreciating property values is actually very hard to observe from the outside. You'll get things like people moving in and buying an older house and doing some renovations and fixing it up. And so we have this period of time where the existing housing stock gets improved and goes up in value and in rent.

Once it's become clear that there's a critical mass and that the neighborhood is on a long-term trajectory, then you get new development coming in. So that's when your new apartments or your condos come in. That's the first stage that most people see. But that's actually not the first couple of years. That may be a decade, even, into property values going up.

And then the commercial gentrification is generally the last part because retail businesses are really looking to see that there are enough people who live in the neighborhood who can support neighborhood businesses, who can go to coffee shops and restaurants and specialty stores. In addition to the Whole Foods effect, we look for the pet grooming place. That's another key giveaway.

So again, these are coming in after you've got enough people with income. And I will say that thinking about whether it's good or bad to have new businesses coming in depends in part on what was there before.

So if a Whole Foods comes in, is it replacing a mom-and-pop grocery store that had relatively low prices or is it coming into a neighborhood that didn't have access to groceries before? That's a really different way to think about whether this is additive for the existing neighborhoods or whether this is pushing out some of the long-term businesses.

KRISTIN MYERS: And Dorian, do you have more to say, particularly on that pricing piece, because, again, we were talking a little bit earlier about how some-- hear some of these businesses or we see some of these businesses filling gaps, those predatory businesses. But what if the gaps don't exist? What if, as Jenny is mentioning, we now have the grocery store and we have all of these different services? But is there a pricing difference that is still, essentially, pushing out some of those residents because it's making this area now unaffordable to live in outside of just their housing needs?

DORIAN WILLIAMS: So I think one of the things when we look at price-- we have to look at the overall pricing for those individuals. So when those new businesses actually come in, we have to think about who-- what space did they now occupy that was once occupied by the other individuals.

So a lot of research tells you that these individuals have to live or they push further out, which means now you look at total price, being transportation costs, to be able to get to those locations as well as where these individuals were working. They were probably working in those communities. So when we look at the price, now transportation cost goes up or you start to see the access to be able to see where their money-- how far their money actually stretched. It will cause prices-- what you see is prices become more effective as overall.

And I think what happens is people try to seek out lower prices. So in these communities, although the more competition that you have-- you should see some form of suppression of prices in some form or fashion. But it's also indicative of what-- as Jenny said, what's actually coming in. Is it replacing some of those mom-and-pops that may have a lower price or did they shut those places down?

So do you have the access? Did they close some of these places where now this store comes in and they're the only Whole Foods store that'll give access to this community? Now you're going to see prices really affecting these individuals.

I think it's very important to really look at it as overall when it comes to the effect of individuals that are being affected in these areas when it comes to price. I like to look at it in terms of the total cost to these individuals because they're trying to stretch their money as far as they can because they necessarily don't have access or the ability to get access, like other communities. So Yes.

KRISTIN MYERS: Dionissi, I already can see you queuing up. You're ready. I want to bring you in here just to follow on some of those things that Dorian just said.

DIONISSI ALIPRANTIS: And I would say two things. So the first is just that just the cost of, for example, like vehicle ownership, like car ownership-- I think a lot of people don't appreciate how big of a share of people's income that can be. If you have a lower income, having a car is really expensive. And a lot of people can't afford it.

And so there's this chicken or the egg issue then of, can I get a car? Can I get a job? Well, which one comes first? And so that's really a difficult problem. And this is something that can contribute to that.

I also wanted to point out, going along with something that both people were saying, both panelists were saying-- is just this issue of abandonment and disinvestment is really a widespread problem. And so when we think about gentrification, I think we want the investments in neighborhoods. But I think we just want it to be done right so that we ensure that new investments that come in-- they benefit current residents. And I think that really is the issue here.

KRISTIN MYERS: So then to that point, following on that, how then do we make sure that it's done right? How do we make sure that we are bringing in businesses that are actually going to cater to those residents that are going to be lower income, that are those residents that do live in public housing? Jenny, I don't know if you have thoughts. Dionissi, I don't know if you have thoughts there on that point.

JENNY SCHUETZ: Sure. I will say that I don't think we have the answer to this. I think this is still an area where we could use some more research. A lot of local governments will go out and actively recruit certain kinds of businesses to come into a neighborhood because they bring in tax revenues. They bring in customers. And particularly things like a Whole Foods, a Trader Joe's, a big name national chain-- those are often seen as a win for the local government.

But when you're in the negotiating process to make sure that they understand the situation they're moving into-- and sometimes, it's little details. So one of the things we've noticed with a lot of the national chain businesses is that they really prefer to operate on an electronic economy. So they want to be cashless. They want to do credit cards and debit cards. That can work for people who have, say, food stamps on electronic benefit card.

But a lot of these businesses are going to be harder to do-- non-cash businesses are going to be tough for low-income households. So just being sensitive to what are the needs of the local community, we're seeing interesting experiments in some cases. Neighborhoods that don't have access to a grocery store with fresh fruits and vegetables-- it may be expensive to bring that in and to retrofit a building to do it. But something like a farmers market takes very little infrastructure. It's fairly quick and easy to do. You can connect with local farmers and local businesses.

Some of the companies also do a nice job with apprenticeship programs. They may do local hiring. But again, these are areas where it's worth trying a couple of different things, seeing how well they work. The regional Fed banks do a great job of working with communities to do evaluation and collect data and understand how well these kinds of investments are working.

KRISTIN MYERS: Dionissi, I can already see you ready to jump in.

DIONISSI ALIPRANTIS: So I was going to maybe make a comment about experimenting. And again, I think Jenny's right that-- I don't think there's any clear or obvious answers that totally solve this issue.

Something I wanted to point out was just the issue of inclusive zoning and just thinking about just the importance of, again, people being there so that businesses might want to-- if businesses know that those residents are going to be there, they're more likely to invest there or to locate there. And so I think just making sure that the residents are able to stay there-- I think inclusive zoning is an important policy that can help on that.

KRISTIN MYERS: So I know that-- again, we're going to be getting to solutions. I know you guys-- you mentioned there's no clear-cut answers with some of these things. Is it then, do you think, Jenny-- just really quickly, I had to follow up on what you were just saying. Is this something that you think is not a-- I don't know if I want to call it a one size fits all sort of thing. But it really needs to be dependent on the city or municipality or location for-- up to those local governments or areas to really experiment with what works.

JENNY SCHUETZ: I would say that this is probably something where we're going to see variation. We've talked a little bit before about the cost of transportation and car ownership. This is going to be one of the big differences across cities. So a city like Chicago or New York that has quite good public transportation-- people can meet their needs by hopping on the bus and going to-- relatively short distance. And often, the-- particularly the bus systems are priced to be relatively affordable or they may provide passes for low-income households to use.

But if you're talking about someplace like Atlanta or Dallas or Phoenix, there's really not going to be a public transportation system. And so thinking about the kinds of options that you have are going to be quite different. It also depends very much on the local ecosystem of both businesses and nonprofit organizations.

Some cities have a really rich ecosystem of community development organizations, including ones that work with local businesses. And so those are places where you might be able to tap into existing programs. Often, the hardest way to deal with this is in places that don't have a lot of public resources, that don't have a lot of nonprofit organizations. And so you don't have homegrown solutions and organizations to work with.

KRISTIN MYERS: So speaking about those local ecosystems and the transportation-- because one part of Dan's presentation was actually that public housing residents will leave their area. And then they'll actually go and interact with usually white communities and other white residents and less if they are Black-- less other communities of color-- curious to know what your guys' thoughts are on some of those interactions, and particularly those residents of public housing essentially having fewer interactions with, essentially, other Black communities and other Black people and more interactions with those that are white and what that impact could be, those interactions, that changing and that difference. Is there a change in terms of pricing because they have to go to places that are-- there's more competition or better pricing? Any thoughts there? Dionissi, I'll come to you.

DIONISSI ALIPRANTIS: Well, for me, I'm just thinking about the fact-- if people are moving away, I think the-- in my mind, there's two sides of that that I'm really focused on and really thinking about. And so the first one is, is that something that's going to potentially, on the upside-- going to maybe open up access to some opportunities that might not be available otherwise in terms of something like, say, schools, school performance, or perhaps even access to jobs? Maybe there's more jobs in a suburban location or some other location.

But then I can also think about the flip side of that that I'm concerned about-- is access to services and support networks. And then just if people are having to be in hostile environments, you want to make sure that people are supported in all sorts of ways. And so I think it creates opportunities. It creates risks. And I think, again, it's about finding that balance and trying to maximize the benefits there.

KRISTIN MYERS: And Dorian, I noticed that you had-- you looked like you were ready to jump in. So I'll come to you next for some of your thoughts on that impact of those interactions, whether to the upside or even to the downside, and what they could potentially be.

DORIAN WILLIAMS: I was trying to-- I was just trying to think of the reason why. And I think some of it will probably be in some places-- if I continue to go to the same individuals that we're interacting the same way, then it seems like maybe there's some information that I can obtain somewhere else. There's some insight.

We talked about financial literacy and, culturally, how we pass that down. Sometimes, I think we reach out to try to figure out, is there something different? Is there another way of looking at our financial situation? Even though we may be in areas that are similar, maybe there's a different way that you're making ends meet that I'm not necessarily thinking of. Is there opportunities out there that I haven't thought of that wasn't passed down to me? Is there financial knowledge of how I can improve my situation-- would not necessarily hurting my situation?

So that may be trying to obtain more knowledge from other groups, some insight on how to improve and the thinking that maybe someone else knows more that can actually help me. That's just what I was thinking. Why would that interaction actually take place when we're in similar situations? Maybe I think it's just a communication and a sharing situation that may be-- being affected.

KRISTIN MYERS: So now let's talk about solutions. We've tap danced around it and hinted around it a little bit throughout this conversation. I know that there's not necessarily one silver bullet solution to some of these questions and some of these issues that we discussed.

And Jenny, I'll come to you first since we just heard from Dionissi and from Dorian. But when we're thinking about this, what policies do you think could be put into place, particularly on the credit issue since that's where we started the conversation, access to credit and to financial services, for those public housing residents?

JENNY SCHUETZ: So I'm going to give a shout-out to better financial education programs, particularly in public schools. This hasn't traditionally been a part of the school curriculum. But it's just-- it's really important for kids from all kinds of family backgrounds to have a solid understanding of the basics of household finance decisions-- so understanding things like compound interest and you should start saving early and what that means, understanding things like the kinds of retirement programs or when you get a job that has health insurance and you're asked to decide, do you want to do a health savings account-- we're asked to make a lot of really complicated financial decisions as adults. And they get introduced often at a time when you don't really get to sit down and learn how these things work, what the alternatives are to think through them.

So I think our public schools could do a lot of this. It's a great thing to incorporate in math classes as part of the exercise. It's a very practical topic for kids to learn. And I think it's particularly important to keep incorporating information on new kinds of financial services and products.

One of the things that we've seen in the last several years with fintech is there are new kinds of companies offering different sorts of credit products. And it may pop up on your phone. It's an app. Some of these things can be really helpful.

So household budgeting as an app on your phone may seem really appealing. But you still want to know, why is somebody offering me a free app to manage my budget? Is this because they want to do good things for me or is this because they're monitoring my behavior and selling my information to some other companies? So this is a complicated environment we work in. And everybody would benefit from learning more about it.

KRISTIN MYERS: So you've highlighted almost two different branches. So we'll take them one at a time. So first, I'll start with that financial literacy pieces, just since that's what you started with first. And Dorian, you mentioned, actually, financial literacy a little bit earlier in the conversation.

So Jenny, obviously, talking about financial literacy being available inside of those public schools-- but as I think about financial literacy and talked about it so much, it's not just what-- about what's available in the education systems, but also what's available at home. And we'll see a lot of communities falling out of higher socioeconomic statuses, especially if there's not generational, essentially, provisions for keeping that going and that financial literacy going.

Can you talk a little bit and piggyback a little bit off of what Jenny was saying, at least in terms of that financial literacy piece, especially as it could perhaps pertain to some of these public housing residents and, essentially, trying to increase their financial health outcomes over the long run?

DORIAN WILLIAMS: So one of the things that I've been looking at, because financial literacy has been one of those buzzwords that's going around now, but has many different connotations of what it actually means-- I think-- I know here in Louisiana, one of the things, and I just want to piggyback real quickly-- they are implementing that into the school systems. One of the thing is that the children are learning about that. And then they're sharing that information when they get home, hopefully with their parents and bringing up the topics.

I think when it comes to the financial literacy part-- is understanding how you utilize your money and not necessarily how you can obtain more credit things, to make sure how important your credit score is that you'll be able to obtain-- better your score, the lower the interest rates on certain things. So if it is possibly getting a car, if it's probably trying to get a loan, how much that would actually save you--

And then, as you mentioned about budgeting and understanding that there's a lot of things that we want, but then within our budget, there are things that we need to make sure that we obtain, and understanding the value of whatever it is-- for many of our children, I think it's very important that we start young because I think some of our debt as we get older is being able to provide those things that we wanted when we were younger to be able to provide that to our children. So some of our debt is based on what we're perceiving to be-- what society is saying is the norm now, the products that we're actually buying.

So I think that financial literacy component is basically saying, how are you able to manage what you currently have and be able to utilize what you have to be able to one day be able to put yourself in a better situation rather than necessarily-- and I think banks-- to be honest with you, I think banks can do a better job of that and not necessarily saying, hey, because we see that your score is this way, we can get a higher interest rate.

We're going to offer you something. I think they can take a bigger role in saying the financial health of our environment, of our society, or our community in which we serve is making sure that our individuals that live here are better financially. And then they can rely on us. So I say all of that is understanding financial literacy-- is to make sure that individuals know some of the dos and don'ts when it comes to what they do with their money and how they see money as useful tools to be able to get the things that they want or necessities.

KRISTIN MYERS: So Dionissi, I want to come to you now on that since I think this is a nice segue, especially about what Jenny was knitting, both the financial literacy piece, but then also just the financial products piece and the credit piece and the availability on that. Again, some of these public housing residents are living in areas where they don't necessarily have access to those financial services. Credit is going to be a huge issue here.

We saw Dan-- from Dan's presentation already credit scores very much-- very big differences between some of those public housing residents. Can you talk a little bit about some of those-- that access issue to those financial products, those different types of financial products that Jenny was mentioning, and the-- perhaps the availability for some of these residents to even access some of those financial services or products?

DIONISSI ALIPRANTIS: So I can talk about access. But I was actually going to piggyback--

KRISTIN MYERS: No, go ahead. I would love to hear.

DIONISSI ALIPRANTIS: And I think what I have to say actually will get into this issue of access, as well, though, because I think what I was going to say is there's a lot of evidence that actually, math education really matters for financial literacy. And I think it's really a two-way street.

So I think we're thinking about these new approaches to financial literacy and ways that we can improve it. That can get kids excited about math. But on the other hand, the better that somebody's math background is, the stronger that it is, I think the better they'll be able to learn issues in financial literacy. But then I think that really extends also to some of these issues about access, and also new products.

So if something new comes out onto the market or if you're looking at some menu of products, the stronger that your math background is, the stronger your financial literacy is, the better your decisions will be about those. And so I think to me, this goes back to basics. I'm thinking about-- just thinking about math education in our schools and in our society and ways that that can strengthen financial literacy and financial literacy can strengthen that.

KRISTIN MYERS: Well, I want to thank the four of you honestly for today's conversation-- again, just one final thank you to Dr. Dorian Williams, Jenny Schuetz, and also Dionissi Aliprantis, coming all the way in from Europe. I honestly had so much-- I don't know if I say fun, but I absolutely loved this conversation. I want to turn it now back over to my name twin, Kristen, for some final remarks.

KRISTEN E. BROADY: Thank you so much, Kristin. Thank you to Karen Dynan. Thank you for Dan Hartley and his amazing research. I learned so much about public housing residents, people who live in neighborhoods with public housing, and about a lot of the factors that impact their access to credit and capital. And we heard from our panelists about some of the solutions that policymakers can consider.

So thank you to all of our participants today. And thank you to our audience members for joining us. We'll be sending a post-event survey. So please look for that. Your feedback helps us to plan future events.

A recording of this event and a summary will be available on chicagofed.org/mobility in the next few days. So we'll email that to you when it's ready. You can find Dan Hartley's research and a lot of other research from economists on the Chicago Fed website.

I'd also like to let you know that on November 14, we'll be having another event similar to this, where Ezra Carter will be presenting his research on life expectancy and income and how those things correlate. We're going to have an in-person conference on October 1 on the ongoing impact of the COVID-19 pandemic on children. So that's a hybrid event. You can join hybrid or you can actually come to the Chicago Fed. Information about that is available on the Chicago Fed website.

Again, thank you all for joining us. And have a great rest of your day.