The voices of Urban Institute's researchers and staff
August 5, 2015

To reduce inequality among neighborhoods, make inclusion the central goal

August 5, 2015

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Over the last month, the Urban Institute has highlighted the divides between conditions in the top and bottom neighborhoods of the nation’s largest metropolitan areas. The gap between incomes, education levels, homeownership, and home values in the most privileged and the most disadvantaged neighborhoods is high—and it has grown substantially higher in most cities.

This isn’t a new problem, but it remains critical to the future of the United States. As neighborhoods become more divided from one another, it’s harder for people to move over their lifetimes. Divisions among neighborhoods can also reinforce differences among people. And since top and bottom neighborhoods often lie in different jurisdictions, a gulf among neighborhoods can translate into a gulf among the level of local resources available for investment, especially for families with kids.

Inequality across neighborhoods isn’t just a symptom of an economy that is not producing enough opportunities—it’s also a cause of greater inequality. An important characteristic of more inclusive economies is that people have equal access to services and markets, especially labor markets. Poorer neighborhoods too often lack this access, leading to fewer opportunities and a lesser capacity to take advantage of opportunities that exist.

Should we aim to increase the equality among neighborhoods, then? If this comes about through greater diversity of incomes within neighborhoods, then probably so. A diversity of income within neighborhoods may bolster support for the funding of much-needed public services. If high-income neighborhoods decide to “go it alone” by providing public goods only to themselves locally, it could erode funding support at the state or even federal level, to the detriment of lower-income neighborhoods that do not have access to the same resources.

On the other hand, equality among neighborhoods could also come about without much increase of income mixing within neighborhoods. If incomes, education levels, homeownership, and housing values increase for low-income people generally, disadvantaged neighborhoods would improve statistically even without mixing. But such improvements usually don’t occur without mixing. Inequality between neighborhoods might even decline because of declining upper-income neighborhoods. In fact, this is often the case: inequality between top and bottom neighborhoods fell throughout the Rust Belt from 1990 to 2010 because upper-income households moved away or retired as their regions stagnated economically. 

So how should we think about closing the gap and measuring progress? We need approaches that build more inclusion into all kinds of neighborhoods. Investments in infrastructure can attract middle-income families to disadvantaged neighborhoods. Often we invest in and for advantaged neighborhoods, providing high-quality transportation, schools, parks, cultural spaces, and other facilities. Here, investments need to be used as leverage for inclusion of lower-income households. Regulations also need to accommodate and encourage greater mixing by tenure and income.

Philanthropy can also play a role, and it has, traditionally, to augment public goods in poorer neighborhoods—looking beyond traditional, well-established cultural and economic support institutions to reach further down into excluded communities. But it can also assist in the development of more inclusive cities and neighborhoods by helping to empower the residents themselves in the design and planning choices. In the words of Jane Jacobs, “Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.”

John Irons is managing director, global markets at the Rockefeller Foundation. The Neighborhood Change Database, on which much of this research was based, was built with support from Rockefeller.

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