SAN FRANCISCO—Wouldn't it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers' questions.

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Dear Ms. Real Estate,

What is Ms. Real Estate's opinion of the recently enacted HUD rule, "Affirmatively Furthering Fair Housing" (final rule published July, 2015)? One segment of this new regulation, which defines meaningful actions that must be taken by governmental agencies, requires the "elimination of historic patterns of segregation, achieve truly balanced and integrated living patterns, promote fair housing choice and foster inclusive communities that are free from discrimination."

—Affirmatively Confounded By New Fair Housing

Dear Affirmatively Confounded, 

First, an important caveat: Ms. Real Estate does not know how the new HUD regulation will be interpreted or enforced. But the wording of the new HUD regulations, and some of the statements made by HUD Secretary Julian Castro, suggest a federal policy under which housing construction subsidies will be dependent on the extent to which housing for the low income will be provided in middle income neighborhoods. Ms. Real Estate's reading of what we should have learned since the passage of the 1949 Housing Act is that forcing class integration is as difficult and ultimately unrewarding as forcing the segregation of classes.

Perhaps you tuned into the recent David Simon HBO series, "Show Me a Hero," which recounted the experience of the City of Yonkers in 1980 when a federal judge issued an edict that required Yonkers to provide approximately 200 new housing units within middle class white neighborhoods for primarily black individuals residing in low income housing projects. Decades later, statistics show that many middle income whites moved from the city. In 1980, Yonkers was 85 percent white. In 2010, the population of Yonkers was 56 percent white while the total population did not change. But, this is not a race issue, it's a class issue, and to assume that race and class are identical is a mistake that often has tragic consequences. Despite the almost pathological unwillingness of many governmental agencies and well-meaning housing activists to accept it, the greatest desire of low income people – irrespective of race – is not to be next to those whose values and economic circumstances differ from their own – not even to live next to you and me. What they desire is to live in safe neighborhoods with good schools among people like themselves.

When did I first find this out? In 1970, Gruen Gruen + Associates conducted a region-wide study in the Dayton, Ohio region, subsequently published by Praeger: "Low and Moderate Income Housing in the Suburbs: An Analysis for the Dayton, Ohio Region." The study not only surveyed two white and one black middle class neighborhood, our interview sample also included residents living in slum neighborhoods. We found out that low income residents, while desiring an improved neighborhood, did not want to live next to those they would be uncomfortable asking to borrow a cup of sugar or for babysitting in case of an emergency.

An economically troubling issue with forcing the integration by restricting the subsidization of affordable housing to "pristine high income neighborhoods" is the fact that building new housing in expensive locations will produce far fewer housing units than rehabbing older, existing housing stock in less expensive locations. It is a fact of life that housing prices escalate the most in those cities where historically supply has not kept up with demand. So the question to both the public and private sector is, do we want to offer acceptable affordable housing only to the few lucky lottery winners, or to as many low income households as possible?

A subsidiary question is, for those housing programs built specifically for and restricted to low income residents far into the future, who will take primary responsibility for the cost of maintaining these units? If this question is not adequately addressed, isn't there a likelihood that these government programs will themselves be creating future deteriorating neighborhoods?

Ms. Real Estate's bottom line is that future affordable housing programs need to take into consideration the amount of acceptable affordable units that can be built to house low income households, as well as the consideration of these households' own priorities, rather than those who speak and plan for them.