The Secret to Breaking Poverty Cycles? Rich Friends

$17 billion spent. 200 housing projects demolished and rebuilt. 17 years of tracking outcomes. The results of America's HOPE VI program have finally arrived, and they reveal something unexpected: the key to lifting children out of poverty wasn't better buildings or more money—it was friendships across class lines.

From Roosevelt's Promise to Urban Decay

In 1935, President Franklin D. Roosevelt personally flipped the switch to electrify Atlanta's Techwood Homes, one of America's first federal housing projects. Built to replace slums where a quarter of residents were Black, the 604 new units were whites-only until civil rights laws forced integration in 1968.

By the 1990s, Techwood had become synonymous with urban decline. The complex had resegregated, becoming almost exclusively Black. Shattered windows, drug trafficking, and gang violence defined daily life. When Atlanta prepared to host the 1996 Olympics, Techwood was demolished as part of the federal HOPE VI program.

Today, visitors to the site between Georgia Tech and the Coca-Cola museum find Centennial Place—a mixed-income community designed to break the isolation of the urban poor. And according to new research, it's working.

The Power of Cross-Class Friendship

Harvard economist Raj Chetty and his team tracked outcomes for children at 200 HOPE VI sites over nearly two decades. Their findings, published as "Creating High-Opportunity Neighborhoods," are striking: children who lived in the revitalized developments earned 16% more as adults, were 17% more likely to attend college, and boys were 20% less likely to be incarcerated.

The secret ingredient? Social integration measured through Facebook friendship data. Children who formed friendships with peers from different income levels saw dramatic improvements. Those who moved to new housing but didn't develop cross-class friendships saw essentially no benefit.

"Just giving people cash, just giving people education, doesn't do as much as if you pair it with connections," Chetty explained. The research suggests social capital matters as much as financial or human capital—a finding that challenges conventional approaches to poverty reduction.

Rethinking Gentrification

The study also complicates popular narratives about gentrification. While critics often frame the arrival of affluent residents in poor neighborhoods as harmful displacement, the evidence suggests a more nuanced reality.

Research on Medicaid-receiving children in New York City from 2009 to 2015 found no elevated moving rates in gentrifying neighborhoods. If gentrification truly promotes social integration—as the HOPE VI results suggest it can—it might benefit rather than harm existing residents, particularly children.

The Integration Challenge

The findings reveal why concentrated poverty is so damaging. "Distressed public housing projects were essentially islands that had limited social interaction with nearby communities," the researchers write. HOPE VI "built a bridge to surrounding communities."

This happened through multiple mechanisms: demolishing tower blocks made the outside world physically accessible, reduced crime made connection psychologically easier, and community programs brought people together across social lines.

Policy Implications in an Era of Cuts

The research vindicates decades of sociological theory about concentrated disadvantage while providing concrete policy guidance. Yet implementation faces political headwinds. HOPE VI cost $170,000 per unit in today's dollars. The current political climate favors reduced public housing spending, not expanded social integration efforts.

This creates a paradox: we now have evidence that breaking up poverty concentration works, but less political will to fund such interventions. Meanwhile, naturally occurring gentrification might achieve similar integration benefits without government cost—if communities can manage it thoughtfully.