April 22, 2011

Bad Ways to Deconcentrate Poverty

April 22, 2011

Last month I showed that when poverty grows, concentrated poverty—the share of people living in neighborhoods where upwards of 30 percent are poor—grows even faster. For every percentage-point increase in metro poverty between 2000 and 2005-09, the share of people living in high-poverty neighborhoods grew on average by 1.8 percentage points.

Two metros—New Orleans and Stockton—present extreme examples of poverty deconcentration and falling poverty. In New Orleans, poverty and concentrated poverty both fell after Hurricane Katrina devastated poor and high-poverty neighborhoods. The city, the 2010 Census reveals, lost over 11 percent of its residents between 2000 and 2010. Its estimated poverty rate also fell from 18.4% in 1999 to 14.6% in 2006, 2007, and 2008 because the storm destroyed so many low-cost housing units. Indeed, the share of New Orleanians living in high-poverty neighborhoods dropped by 9.4 percentage points. Since 2009, however, poverty is rising again in metro New Orleans.

The Stockton metro (San Joaquin County), another story altogether, saw explosive growth in the 2000s, its housing market pumped up by a perfect storm of international financial forces and regulations far looser than those in neighboring San Francisco-Oakland and Sacramento metro areas. Its population soared from about 564,000 to over 685,000 in the 2000s; as housing prices climbed and peaked, middle-class residents moved in, reducing poverty rates from 17.7% to an estimated 14.1% between 1999 and 2007. Meanwhile, the share of residents in high-poverty neighborhoods fell by 10 percentage points. Since 2007, however, a huge wave of foreclosures has engulfed the county. With land and housing development abruptly halted, Stockton’s 2010 fourth-quarter unemployment rate—18%—topped that of all other U.S. metros, and poverty rates are rising again.

These two extremes show how poverty and concentrated poverty connect. Metropolitan areas rise and fall on global and national tides, and low-income neighborhoods and their residents are the most vulnerable when tides turn rapidly. What happened in New Orleans and Stockton also bids us to look twice at falling concentrated poverty rates since they can mean (as in New Orleans) massive residential displacement or (as in Stockton) housing bubbles about to burst. In the first case, poverty is simply moving and, in the second, it’s bound to return—a bad business either way.

Other metro areas—Los Angeles, New York, and Baltimore among them—had gradual drops in poverty during the decade just past. Let’s hope these metros show us better ways to deconcentrate poverty.  


As an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research.


You can probably add the HOPE VI demolition of housing projects as one of the bad ways to deconcentrate poverty. This is mainly because in most cases there is not one-for-one replacement of low-income homes in the mixed-income neighborhoods that replace housing projects. Public housing residents displaced by HOPE VI who are lucky enough to get vouchers simply move out of housing projects into poor neighborhoods.
Actually, our research shows that even though relatively few have returned to the new, mixed-income communities, most HOPE VI relocatees are living in much less poor communities that are dramatically safer than the distressed housing projects they left behind (http://www.urban.org/projects/hopevi/index.cfm).
I always wondered if the dislocation of the poor from New Orleans could be a blessing in disguise for the poor families who were forced to relocate, potentially in areas with less concentrated poverty and thus more social services, better schools and other resources that could help them escape poverty. Has there been any research on whether the poor left and found new hyper-ghettoized places, or whether when they left they indeed found more mixed areas that could offer them more help?