Children’s outcomes in adulthood are influenced by where they grow up (Opportunity Insights n.d.). Children raised in high-opportunity neighbourhoods are more likely to attend college and earn more as adults, but access to these places is unequally distributed. Income segregation in the US has increased over the past four decades (Stanford Center on Poverty and Inequality n.d.), restricting access to opportunity for many low-income families. Initiatives such as the federal Housing Choice Voucher program help some families move to better neighbourhoods (Chetty et al. 2024), but moving large numbers of families to high-opportunity areas is challenging.

An alternative approach is to focus on place-based investment, such as public housing redevelopment and neighbourhood revitalisation, to bring opportunity to disadvantaged areas. These policies aim to increase the supply of high-opportunity neighbourhoods. One of the largest such efforts is the HOPE VI programme, which invested $17 billion between 1993 and 2010 to replace 262 high-poverty public housing developments across the US with mixed-income communities (Opportunity Insights 2026).

Research findings

Our new research on the HOPE VI programme (Chetty et al. 2026) offers insight into how low-opportunity neighbourhoods can be transformed into high-opportunity ones via place-based revitalisation. By tracking more than one million residents through anonymised tax records and Census data from 1995 to 2019, we analyse how revitalisation impacted the adults and their children living in these communities.

We find that HOPE VI did not increase incomes for adults living in public housing, but it changed children’s life trajectories significantly (Figure 1). Children living in revitalised units earned 16% more at age 30, were 17% more likely to attend college, and, among boys, 20% less likely to be incarcerated. Each additional year of childhood in a revitalised neighbourhood increased adult earnings by 2.8%. Children who grew up in these communities from birth earned about 50% more as adults than comparable children in unrevitalised public housing.

Figure 1 Impacts of HOPE VI revitalisation on children’s earnings in adulthood

The programme cost the federal government $170,000 per unit but generated roughly $25,000 in annual lifetime earnings gains for children. Over 30 years, this translates to approximately $500,000 per unit – far exceeding upfront costs. Increased tax revenues and reduced transfer payments offset most of the initial taxpayer investment.

HOPE VI did not succeed simply by constructing new buildings; its impact worked by changing who children interacted with. These cross-class connections were key to HOPE VI’s success. Using data sources including decennial Census records, anonymised location data from cell phone pings, and friendship networks from Facebook, we found families in revitalised housing spent more time in surrounding neighbourhoods and formed more friendships with higher-income peers. These findings echo research showing that cross-class friendships are the strongest predictor of economic mobility (Chetty et al. 2022).

Revitalisation generated the largest gains where nearby neighbourhoods were thriving. In sites surrounded by high-income neighbourhoods, children’s earnings increased by nearly $5,000 per year (Figure 2). In sites surrounded by middle-income areas, the gain was about $1,700. But where surrounding communities were themselves deeply disadvantaged, HOPE VI had virtually no effect. The key was redesigning public housing to integrate neighbourhoods, connecting isolated low-income areas to high-opportunity communities nearby.

Figure 2 Effects of HOPE VI by peer income and on likelihood of forming social connections

This insight points to the harmful, isolating effects of concentrated poverty. HOPE VI’s results suggest that reducing that isolation has real, measurable consequences for children. But HOPE VI may not be a blueprint to replicate as is. The same redevelopment that improved outcomes for children who lived in the new housing also displaced many families. Developing place-based policies that lower barriers between high and low-income communities while minimising displacement costs would be valuable.

Policy implications and the path forward

Our findings suggest that ongoing revitalisation efforts – such as the Choice Neighborhoods Initiative and the Residential Assistance Demonstration in the US – could do more to improve economic mobility by prioritising integration with surrounding higher-income areas. Expanding housing supply is important (Albuquerque et al. 2020), but design also matters: affordable developments that encourage interaction across income groups can generate lasting benefits for the children who grow up there.

More broadly, many low-income neighbourhoods remain physically close to opportunity yet socially and economically isolated from it (Akbar 2025). Half of low-income neighbourhoods in America are as or more socially isolated from surrounding neighbourhoods as HOPE VI projects were prior to revitalisation. Children raised in these areas earn more as adults when their neighbourhoods are better connected to nearby affluent communities.

Importantly, these gains are not offset by losses for children from higher-income families. Children in higher-income neighbourhoods experience little change in outcomes when connections to lower-income areas increase, suggesting that integration raises opportunity for disadvantaged children without imposing economic costs on others.

We identify 1,300 neighbourhoods – which can be visualised using the Opportunity Atlas – that currently offer low levels of opportunity but are surrounded by higher opportunity areas (Figure 3), where ‘connection-based revitalisation’ may be especially valuable. Sunnydale, a neighbourhood in San Francisco, is an example of such a neighbourhood. In 2019, the City of San Francisco began a revitalisation project in the neighbourhood (San Francisco Planning Department, n.d.), with an approach inspired by HOPE VI. Our findings suggest that integrated developments of this kind have the potential to foster the cross-class connections our research identifies as engines of upward mobility.

Figure 3 Census tracts predicted to benefit from connection-based revitalisation

Notes: Candidate areas for connection-based revitalisation are highlighted in black dots.

Ultimately, our results show that improving opportunity does not require moving families away from their communities. High-opportunity neighbourhoods can also be created through cost-effective place-based interventions that strengthen connections across class lines. Future work should therefore focus not only on rebuilding physical spaces, but on fostering the social integration that shapes children’s long-term economic outcomes. Such an approach may provide a path to opportunity for many families in neighbourhoods across the US and beyond.

References

Akbar, P (2025), “Public transit access and income segregation”, VoxEU.org, 26 April.

Albuquerque, B, A K Anundsen, and K A Aastveit (2020), “The declining elasticity of US housing supply”, VoxEU.org, 25 February.

Chetty, R, R Diamond, T Foster, L Katz, S Porter, M Staiger, and Tach, L (2026), “Creating high-opportunity neighborhoods: Evidence from the HOPE VI programme”, NBER Working Paper 34720.

Chetty, R, N Hendren, P Bergman, S DeLuca, L Katz, and C Palmer (2024), “Creating moves to opportunity: Experimental evidence on barriers to neighborhood choice”, American Economic Review 111(5): 1281–337.

Chetty, R, M O Jackson, T Kuchler, J Stroebel, N Hendren, R B Fluegge, et al. (2022), “Social capital I: Measurement and associations with economic mobility”, Nature 608(7921): 108–21.

Stanford Center on Poverty and Inequality (n.d.), “Income segregation in the US’ largest metropolitan areas”.

Opportunity Insights (2026), “HOPE VI Revitalization grants: As originally awarded by HUD”.

Opportunity Insights (n.d.), “Neighborhoods matter”.

San Francisco Planning Department (n.d.), “Sunnydale HOPE SF”, San Francisco Planning.