Throughout June, Urban Institute scholars will offer evidence-based ideas for reducing poverty and increasing opportunity.
Earlier this month, House Republicans released a new plan to fight poverty and help Americans move up the economic ladder. The plan begins and ends with the premise that “The American Dream is the idea that, no matter who you are or where you come from, if you work hard and give it your all, you will succeed.” In between, however, there is scant mention of the role that place (i.e., where you come from) plays in perpetuating poverty or shaping economic opportunity.
This is a glaring omission, especially in light of the plan’s insistence on grounding poverty-reduction policies in the best available evidence. The evidence shows that geography plays a powerful role in determining life outcomes in the United States. Better understanding the mechanisms by which zip codes determine destiny and identifying effective strategies to sever the connection between poverty and place should be central to any federal antipoverty plan.
The poor are increasingly concentrated in poor neighborhoods
Since 2000, poor people have become increasingly concentrated in poor neighborhoods, a trend that has accelerated since the Great Recession. According to a recent Brookings Institution study, both the number of extremely poor neighborhoods (those with at least 40 percent of residents living below the poverty line) and the share of poor people who live in them have spiked in recent years. Nationally, the number of extreme-poverty census tracts more than doubled between 2000 and 2010-2014. And concentrated poverty increased in 67 of the nation’s 100 largest metropolitan areas since the Great Recession.
This trend coincides with a widening gap between rich and poor neighborhoods. As my colleagues Rolf Pendall and Carl Hedman recently demonstrated, the disparities between America’s most- and least-affluent neighborhoods have grown rapidly over the past two decades. They find that the rich and the poor are living farther apart geographically and in terms of neighborhood quality. These patterns concentrate poverty and privilege at the same time.
The effects of concentrated poverty are strong and lasting
Recent research also sheds light on the effects of growing up in poor neighborhoods across a broad range of life outcomes. Raj Chetty and colleagues find that children who move from a high-poverty neighborhood to a low-poverty one are far more likely to attend college and earn significantly more as adults than those who don’t move or move to another high-poverty area. The Robert Wood Johnson Foundation finds that life expectancies can differ by as much as 20 years between rich and poor neighborhoods within the same city. And Patrick Sharkey’s research demonstrates how neighborhood disadvantage is passed on from generation to generation.
This recent research reinforces earlier studies on neighborhood effects that suggest that growing up in a poor neighborhood amplifies the effects of growing up poor. As a recent Vox article evocatively framed it, research shows that living in a poor neighborhood is “like breathing in bad air; the more you’re exposed to it, the more it hurts you.”
Simply put, the evidence tells us that when tackling poverty, place matters.
How federal antipoverty policies could take on place
Recognizing the tight and powerful connection between place and poverty, a federal antipoverty plan that takes on place should at least include the following three components.
- Remove barriers to affordable housing development in opportunity-rich neighborhoods. Local experiments—such as those in Mount Laurel, NJ, and Montgomery County, MD—have demonstrated that siting affordable housing in wealthier communities can help lift families out of poverty by giving them access to better schools and neighborhood amenities.
- Improve housing mobility, allowing recipients of housing assistance greater choice in where they live. The US Department of Housing and Urban Development recently proposed changing how it sets values for federal housing vouchers, a change that research suggests could help people move to neighborhoods with lower poverty rates. However, landlord discrimination against voucher holders is prevalent in many places. Federal protections against source-of-income discrimination might be necessary to realize the full potential of the voucher program to lift families out of poverty.
- Invest in comprehensive revitalization strategies in poor neighborhoods. The Urban Institute has documented lessons learned from decades of place-based investments by the federal government. We found that the most effective strategies work both horizontally (integrating efforts across policy domains within a neighborhood) and vertically (activating city, state, and federal policy levers and resources).
But perhaps most fundamentally, policymakers and advocates can use place as an additional lens through which to evaluate federal antipoverty policies. Are policies designed not only to lift individuals out of poverty, but also to improve the places in which poor people live? How much do new policies reverse decades of federal policies that divided the country along lines of race and class and trapped the poor in neighborhoods deprived of decent schools, healthy foods, safe streets, and quality housing?
To realize the American Dream of equal opportunity and upward mobility, this may be just the place to begin.