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America's Middle Neighborhoods: Setting the Stage for Revival

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America's Middle Neighborhoods: Setting the Stage for Revival Predicting Municipal Fiscal Distress: America’s Middle Neighborhoods: Setting the Stage for Revival Working Paper WP18AM2 Alan Mallach Center for Community Progress November 2018 The findings and conclusions of this Working Paper reflect the views of the author(s) and have not been subject to a detailed review by the staff of the Lincoln Institute of Land Policy. Contact the Lincoln Institute with questions or requests for permission to reprint this paper. [email protected] © 2018 Lincoln Institute of Land Policy Abstract In this paper, I attempt to provide a comprehensive framework to encourage thinking about the growing challenges faced by the middle neighborhoods of the nation’s legacy cities and their inner-ring suburbs. Beginning with a discussion of alternative ways of defining and measuring middle neighborhoods, I propose a typological framework that links a neighborhood’s trajectory to five factors: market trends, racial and ethnic characteristics and transitions, physical form, and location. That is followed by an exploration of the challenges these neighborhoods face today and those they may face in the future, with particular emphasis on the distinct challenges facing predominately African-American middle neighborhoods. A closing section offers a number of key strategies for revival of middle neighborhoods, while an appendix outlines a future middle neighborhoods research agenda. About the Author Alan Mallach is a senior fellow at the Center for Community Progress and a visiting professor in the Graduate Center for Planning and the Environment at Pratt Institute. His latest book, The Divided City: Poverty and Prosperity in Urban America will appear in May 2018. PO Box 623 Roosevelt NJ 08555 609.448.5614 [email protected] Table of Contents Introduction ....................................................................................................................................1 What is a Middle Neighborhood? .................................................................................................2 The Origins of the Middle Neighborhood ...........................................................................2 How Should We Define Middle Neighborhoods? ...............................................................4 How Extensive Are Middle Neighborhoods? ......................................................................6 Why Do Middle Neighborhoods Matter? ....................................................................................9 Middle Neighborhoods Are Spaces of Economic, Racial, and Ethnic Diversity ................9 Middle Neighborhoods Are Spaces of Opportunity ..........................................................11 Middle Neighborhoods Are Valuable Urban Assets .........................................................12 Toward a Typology of Middle Neighborhoods .........................................................................13 The Forces of Change Affecting Middle Neighborhoods .........................................................21 The Big Picture: Demographic and Socioeconomic Change .............................................21 Household Change .................................................................................................21 Inequality ...............................................................................................................22 Economic Sorting...................................................................................................22 Erosion of Jobs and Workforce ..............................................................................23 Spatial and Physical Challenges and the Housing Market.................................................25 The Character and Quality of the Housing Stock ..................................................25 Erosion of Homeownership ...................................................................................27 Location, Location, Location .................................................................................29 Public Policy ......................................................................................................................29 Declining Demand and the Disproportionate Burden of the African-American Neighborhood ....................................................................................................................31 Future Changes and Their Potential Impact on Middle Neighborhoods ...............................36 Demographic and Migration Trends ..................................................................................36 Changes in Workforce and Transportation ........................................................................39 Environmental Change.......................................................................................................40 Key Strategies for the Revival of Middle Neighborhoods ........................................................41 Make Middle Neighborhoods Central to Local Planning and Revitalization Strategies ...41 Prioritize Increasing Capital Access ..................................................................................41 Design Context- and Market-Sensitive Strategies .............................................................41 Support Bottom-Up Community Efforts ...........................................................................42 Build Greater Understanding Through Targeted Research ...............................................42 Appendix: Elements in a Comprehensive Middle Neighborhoods Research Strategy .........43 References .....................................................................................................................................47 America’s Middle Neighborhoods: Setting the Stage for Revival Introduction Throughout most of the history of America’s older cities, middle neighborhoods – where the city’s working class and middle-class families lived and where incomes and house prices were typically close to citywide medians – have been the backbone of those cities. In recent decades, however, these cities have seen a dramatic divergence in the fate of those neighborhoods. As their number has declined, individual neighborhoods have moved along sharply different trajectories. In rapidly-growing ‘magnet’ cities like Seattle or Washington DC, many if not most have seen revival or gentrification. In those cities, even in neighborhoods where there has been little social or demographic change to date, intense citywide demand pressures have pushed house prices upward out of the reach of most existing residents. In the greater number of still- struggling older cities or legacy cities, however, fewer neighborhoods have seen revival. Some have remained stable, seeing reinvestment without significant demographic change. Others, however, and in some cities most, have declined, often precipitously. These declines are visible in sharp drops in incomes, house prices, and homeownership rates; higher poverty and unemployment rates, and more vacant homes. While the gentrification of middle neighborhoods in cities like San Francisco or Boston raises serious issues of equity and affordability, the decline of middle neighborhoods in legacy cities has powerful but very different implications not only for the neighborhoods but for the health of legacy cities and for public policy. Because of these implications, as well as the far greater amount of work that has been done on gentrification-related questions, those cities and their struggling neighborhoods are the principal focus of this paper. Middle neighborhoods typically contain 25% to 40% of these cities’ population. Their ability to retain their vitality affects the social fabric of their cities, while their ability to sustain stable property values affects their cities’ economic and fiscal health. Deterioration, middle-class flight, and declining house values in many of these areas over recent decades have undermined the vitality of dozens of cities and undone much of the economic benefit of the in-migration and revitalization taking place elsewhere in the same cities. This is particularly true of African- American middle neighborhoods, many of which have shown particularly severe decline in recent years linked to the long-term effects of subprime lending and foreclosures. Over the past few years, policymakers, planners and public officials have become increasingly aware of the critical role middle neighborhoods play in the health of their cities, the importance of addressing their problems before decline takes hold and becomes irreversible, and the need for new, creative strategies to that end. At the same time, those involved with middle neighborhoods also realize that we need more good research and data, to better understand the forces and pressures affecting these neighborhoods, so that more effective strategies can be designed and deployed. That research must not only address fundamental questions about the characteristics and trajectories of these neighborhoods, but must focus on the need to help practitioners better put in place effective strategies to stabilize them or reverse their decline. Page 1 The Center for Community Progress, the Lincoln Institute of Land Policy and the American Assembly share a commitment to the future of America’s middle neighborhoods by fostering creative efforts in both research and practice. This framing paper has been written to further those efforts. In the following pages, we describe the different types of middle neighborhood and
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