You Can’t Follow The Money When It Keeps Running From You

Source: industryweek.com
I had an epiphany the other day.

I read quite a bit on urban trends.  I try to summarize and reconcile what I read, and discern broader points.  What I’m feeling about our nation’s metros today is not very positive.

Recently, Richard Florida weighed in on increasing economic segregation in our nation’s metros, finding increasing acceleration of economic segregation trends:

“Where cities and neighborhoods once mixed different kinds of people together, they are now becoming more homogeneous and segregated by income, education, and occupation. In separating metro-dwelling Americans across these three key dimensions of socio-economic class, this bigger sort threatens to undermine the essential role that cities have played as incubators of innovation, creativity, and economic progress.

It is not just that the economic divide in America has grown wider; it’s that the rich and poor effectively occupy different worlds, even when they live in the same cities and metros.”

I think most urban observers would acknowledge this; I know I would.  This trend is consistent with what I’ve witnessed nationwide.

Of course, one big part of the reason for growing economic segregation is this, also from CityLab:

“Talented young people are moving to urban centers, raising the skill level of the labor force and attracting the attention of businesses. As a result, some of the job sprawl that took place in the early 2000s has started to swing back to cities, concludes a new analysis by the City Observatory think tank of Census data on local employment and housing.

From 2002 to 2007, as population grew in the suburbs, jobs followed. But since 2007, data from the 41 largest U.S. metro areas show that city centers (defined here as the area within 3 miles of each region’s central business district) have seen a 0.5 percent annual increase in jobs, while the peripheries have seen a 0.1 percent annual decline.”

I think most urban observers would acknowledge this point as well.  The last decade has been particularly fruitful for our nation’s largest urban cores.  Highly skilled younger people are expressing their preference for urban living.  They’re doing so well at it that jobs are starting to follow them back to city centers.  Witness the power of the Millennials.

But you know what?  Sprawl still moves forward in America.  There’s this from the Atlantic:

“A decade ago, home builders put up thousands of new spacious stucco homes in the desert here, with marble countertops, ample square footage, and walk-in kitchen cupboards.

Then the recession hit, the values of these homes plummeted, and economists talked of the overbuilding of Las Vegas.

Now, though, developers are building once again, on projects derailed during the recession, including master-planned communities such as the 1,700-acre Skye Canyon, the 2,700-acre Park Highlands, the 1,900-acre Inspirada, and 555 acres of luxury living in an area called Summerlin.”

So, city cores are doing better.  The suburban periphery is bouncing back.  Yet, there’s also growing awareness that the great leveling between core and periphery in our nation’s metros is certainly not benefiting everyone:

“While media attention often focuses on those few places that are witnessing a transformation, there are two more potent and less mentioned storylines. The first is the persistence of chronic poverty. Three-quarters of 1970 high-poverty urban neighborhoods in the U.S. are still poor today. The second is the spread of concentrated poverty: three times as many urban neighborhoods have poverty rates exceeding 30 percent as was true in 1970 and the number of poor people living in these neighborhoods has doubled.

The result of these trends is that the poor in the nation’s metropolitan areas are increasingly segregated into neighborhoods of concentrated poverty. In 1970, 28 percent of the urban poor lived in a neighborhood with a poverty rate of 30 percent or more; by 2010, 39 percent of the urban poor lived in such high-poverty neighborhoods.”

This analysis has more traction among the urbanists who evaluate social conditions — meaning, a minority of urbanists.  For the rest, it represents a conundrum: how is concentrated poverty spreading in cities at the same time that cities are witnessing perhaps their strongest rebound in 75 years?

Here’s the epiphany — poverty is not spreading.  It is wealth that is being extracted and being concentrated, leaving behind more impoverished communities.

The remaining wealth in older middle class communities, whether in urban neighborhoods or inner-ring suburbs, is being wrung out as those who have the financial ability to choose decamp for parts closer to the core or even further out.   Wealth is leaving, giving the impression of spreading poverty, but it’s in fact concentrating wealth.

I think it’s important to understand the distinction here.  If we acknowledge (and most people do) that those with more means have more options, then low-income residents are not transforming communities by staying in place, or even slowly moving into new areas.  However, middle and upper income residents are transforming communities by making placed-based decisions.  The decision is being made for the poor.

I’ve argued that, despite its negative connotations, gentrification is good because it brings back an economic base for cities.  I recognize that uncontrolled gentrification could have negative impacts, and even proposed some broad elements of a gentrification management program that could mitigate gentrification impact.  Following that, Daniel Kay Hertz made some strong points in dissent, suggesting that unless gentrifying neighborhoods have the political power, financial power and institutional framework to set terms for newcomers, gentrification management is unlikely to happen.

But this is important because of one crucial point.  I argued that gentrification offered an opportunity for engagement, and engagement offered an opportunity for improved economic prospects for low-income residents.  I fear now that engagement isn’t happening and may never happen.  A couple days ago, Jim Russell recounted a story of diverging success in Britain among Bangledeshis and Pakistanis that seems to make this point clear:

“Bangladeshis outperform Pakistanis. The data on “marrying out” comes off as an effect, not a cause. The suggested leg-up for the Bangladeshis is two-fold. First, Bangladeshis came later and avoided occupations in the dying textile industry. Second, Pakistanis concentrated in the part of Britain known for textile employment. Thus, Bangladeshis concentrate in London; Pakistanis do not. Geography is destiny…

Pakistanis as relative under-performers remind me of the Portuguese community in Toronto, Canada. Many migrants crossed an ocean and stubbornly refused to interact with other ethnic groups. The Toronto neighborhood might as well be in Portugal. The refusal to socialize outside one’s immigrant group, I argue, causes the negative economic outcome.”

I understand how the inward focus of an ethnic group can inhibit economic progress.  But what if those with the means continue to refuse to interact with you?

One thought on “You Can’t Follow The Money When It Keeps Running From You

  1. Thought of you when I read this article and thought you could shed some light and perspective on this topic of environmental gentrification (though a bit different than housing gentrification, aids to the same issues you're getting at). http://www.governing.com/topics/transportation-infrastructure/gov-green-gentrification-series.html
    FYI I sent it to http://danielkayhertz.com/ because I love seeing the perspectives you both offer on Chicago, and yours on Detroit! Hope you're well! Also, not sure if you have seen this yet http://www.governing.com/topics/urban/gov-gentrification-series.html

    Like

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