The Power of Cross-Class Childhood Friendships

50%. That's how much more money low-income children earned as adults when they grew up alongside affluent peers. Harvard economist Raj Chetty and his team tracked 109,000 children across America's most ambitious housing experiment, uncovering a truth that challenges how we think about poverty: sometimes the most powerful intervention isn't a program or a policy—it's a friendship.

The findings emerge from studying HOPE VI, a $17 billion federal program that demolished distressed public housing projects and replaced them with mixed-income communities. What researchers discovered wasn't just that these new neighborhoods worked, but why they worked—and the answer has profound implications for how we design cities and communities.

From Urban Disaster to Social Laboratory

America's public housing story is one of good intentions gone wrong, then slowly made right. From the 1930s to 1960s, cities across the US erected towering housing projects meant to replace overcrowded, substandard dwellings with modern amenities like indoor plumbing and heat. The vision was utopian: clean, efficient housing for the masses.

But by the 1990s, these projects had become synonymous with concentrated poverty, crime, and social isolation. The austere towers, set apart from surrounding neighborhoods like fortresses, had created what researchers now call "islands" with limited social interaction with nearby communities.

Congress responded in 1992 with HOPE VI, a program that would demolish many of these projects and replace them with mixed-income developments. Instead of isolated towers, the new communities featured low-rise townhomes and apartments integrated into existing street grids, blending public housing with subsidized and market-rate units.

The Friendship Factor

The results were striking. Children who grew up in HOPE VI developments were 17% more likely to attend college compared to peers in non-revitalized public housing. Boys were 20% less likely to be incarcerated later in life. For every additional year spent in the new housing, children's future earnings increased by 2.8% on average.

But here's what makes these findings remarkable: the benefits weren't explained by better schools, improved local services, or reduced crime. Children living nearby who attended the same schools but didn't live in the mixed-income developments didn't see the same gains.

The difference was friendship. Using data from Facebook, researchers measured cross-class social connections and found that low-income children's outcomes improved precisely because they formed relationships with higher-income peers. The researchers validated this through multiple empirical methods, confirming that social integration—not just physical proximity—was the key.

Crucially, these benefits only appeared for children, not adults. This reflects what developmental psychology has long suggested: the formative power of peer relationships during childhood, when expectations about what's possible in life take root.

The Anti-Urban Legacy

To understand why the original housing projects failed so spectacularly, consider the infamous Pruitt-Igoe complex in St. Louis, demolished in the 1970s after less than two decades of operation. The development consisted of massive towers surrounded by empty space, cut off from the surrounding city's street grid.

Urbanist Jane Jacobs had diagnosed the problem decades earlier: these projects weren't just anti-poor, they were anti-urban. Despite their density, they lacked the human-scale streets, convenient businesses, and woven-in destinations that facilitate what Jacobs called the "intricate sidewalk ballet" of healthy city life.

The crime that came to define public housing wasn't a product of residents' moral failings, Jacobs argued, but of design that created vast dead zones stripped of the natural safety mechanisms that ordinary neighborhoods possess. The projects segregated poor families not just economically but spatially, making that segregation worse through hostile, stigmatizing architecture.

HOPE VI represented a fundamental rejection of this philosophy, integrating public housing back into the urban fabric and enabling the cross-class interactions that the original projects had systematically prevented.

Lessons for Today's Cities

The $17 billion price tag might sound daunting, but researchers found that the economic gains to children far exceeded the government's costs per revitalized unit. A significant portion of taxpayer costs were ultimately offset by increased earnings and reduced incarceration rates—though the researchers stop short of claiming the benefits outweigh all costs, including those borne by displaced residents who couldn't return.

These lessons remain urgently relevant. The average low-income neighborhood in the US today is just as isolated as the decrepit projects that HOPE VI helped rebuild. Class segregation persists, often reinforced by zoning laws that prevent mixed-income development and by market forces that concentrate poverty.

The scarred legacy of failed housing projects has undermined public faith in government-provided housing. But Chetty's research suggests there's still a vital role for policy in ensuring that housing doesn't just shelter people but connects them to diverse social networks and opportunities.