Apparently, Barack Obama has advised his Department of Housing and Urban Development (HUD) to withhold low-income housing grants unless it can be demonstrated that they would be used to build islands of affordable housing for low-income families in upscale neighborhoods. Thus, low income families would be able to escape their typically beaten-down neighborhoods with poor schools, poor shopping, poor transportation, and crime.
From a purely economic standpoint, this makes no sense.
Upscale neighborhoods have upscale prices and little, if any, low-cost stores such as Wal-Mart that low-income families need to survive. Even with food stamps, grocery bills will be too high. Typically a store in an upscale neighborhood carries costlier cuts of meat and higher quality fruits and vegetables that demand higher prices. I also doubt that any local doctors and hospitals will be willing to accept low-income Medicaid patients. At the same time, working locations may be miles away from what are typically pure residential neighborhoods. Thus, this idea will fail for economic reasons because the low-income family will have to travel miles to see a doctor, buy food and clothing, and get to work. Also, there are far fewer municipal buses that operate in suburbs as opposed to the urban areas that these families left.
However, the biggest problem with Obama's plan will probably be the social and psychological impact of trying to mix the "have nots" with the "haves". Especially, when it comes to schooling. Low-income students may find it harder to compete for good grades because of the higher standards of the upper scale schools vs the inner city schools. There, will also be obvious class disparities on the basis of how people dress, talk, or in the possessions they have. For this reason, poorer students might be shunned by the greater population, creating all kinds of unhealthy feelings.
Like everything that President Obama sanctions, it's his way or else. Before pushing this concept onto society, it should be tested on a small scale to see if it is even viable. Otherwise, billions will be spent on another failed social experiment like the original housing projects that now have been mostly torn down or lay in ruin.
Reference: Obama making bid to diversify wealthy neighborhoods: http://thehill.com/regulation/244620-obamas-bid-to-diversify-wealthy-neighborhoods