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We've tried your idea. Have you ever seen a housing project?
Darling, for a part of my youth I grew up in a decent one. I grew up in the UK where they're called council estates. Some of them are scummy and some of them very decent places to live. If the governing local authority invests enough in them, and they're houses/apartments of a decent standard with green spaces, play areas, commerces, facilities, youth clubs etc. where people can live their lives with dignity, then guess what? People respect their environment as much as any owner-occupiers. I had a decent life in that public housing complex.
I now live in France - some local authorities don't invest in their public housing estates and they're $hit places to live - like the places where riots broke out a few years back. Others do invest - and those estates stayed riot free. It was essentially about poverty, not race or Islam as Fox News tried to portray. I live in a very progressive Parisian suburb where there is much decent public housing. The whole town has areas that are mixed public/private housing and quite frankly, it can be hard to tell which apartment complexes are public housing and which aren't. Low income families have decent apartments - what's so awful about that?
Of course, if you stick people in US style ghettos and limit their life chances, they're not going to be nice places to live.