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Resiliency and Rebuilding: Places - Transcript

Plenary Session Highlights with:
Joseph B. McNeely, Central Baltimore Partnership
Rolf Pendall, Urban Institute
Brett Theodos, Urban Institute
Jenny Schuetz, University of Southern California

Rolf Pendall: By the late 2000s, and this is an average that includes some pretty good years as well as the years after the crash, over nine million Americans lived in neighborhoods with poverty rates exceeding 40 percent, and another 12 million Americans lived in neighborhoods with poverty rates between 30 and 40 percent. As most people know, living in these kinds of neighborhoods is living in toxic neighborhoods. For the most part, these are areas in which investment is not strong, in which public services are generally weak, in which the environmental quality is generally poor, the quality of schools is generally poor, and so on. So there are a lot of reasons to have concern, not only about the rising rates, but the rising exposure of large numbers of American citizens to these conditions in high poverty.

So what's driving this? I think there may not have been quite enough attention to the close lock-in between changes in the national poverty rate overall and the share of Americans who live in concentrated poverty neighborhoods. So there's kind of this echo between rising poverty rates overall between 1970 and '80, '80 and '90 in concentrated poverty, but then a prolonged decrease in the poverty rate between the early '90s and the year 2000 to less than 12 percent in 2000, and that's the time when we see this decrease in concentrated poverty nationwide. But then since then the poverty rate has climbed again to levels that are on par with the highest that we have seen in the last 40 years.

When we scale down to the metropolitan level for the 366 metro areas that are listed here, the increase in a metro area's poverty rate between 2000 and the late 2000s is an excellent predictor of the percent of its residents, that the growth in the percent of its residents who live in a high poverty neighborhood.

Seeing data suggests to us that efforts to reduce concentrated poverty have limitations that may be imposed by metropolitan structure. That is, that the built environment and population of neighborhoods constitute a structure that is something like geological topography—the housing gets built first, that attracts certain people, and those people and that housing both play forward through time, sometimes changing, but usually slowly, and usually as a function of interactions between people and the built environment.

Ultimately, though, we need to make metropolitan areas more resistant to the impacts of rising poverty at the national level. This starts by building economies that deliver high-wage jobs and continues by building and rebuilding neighborhoods so that they have a better mix of owner- and renter-occupied housing, in a mix of housing structure types, yielding a mix of incomes. It would also help if this development process could occur over a longer period of time to provide a mix of housing ages.

Brett Theodos: We know that some amount of residential mobility is normal, even healthy in places. People move to better opportunity neighborhoods, better school districts, safer communities; they move for life cycle reasons—if they need a bigger home or smaller home; they move to buy a home—so there is links to asset building as well that we heard about in the previous panel. But when we're looking at poor neighborhoods, we start to think about residential stability, not just mobility, and we start to wonder about whether poor individuals are in fact not moving out of good and opportunity reasons, but making what we have termed "turning moves"—moves that our previous research has characterized to be moves that are a result of instability, of financial distress where residents are moving from one equally disadvantaged neighborhood to another equally disadvantaged neighborhood that is nearby.

Over four in 10 turned over in under three years. This is a much higher rate of turnover than most people anticipate, and it really belies the perception of neighborhoods as stable and static places, which is a challenge for place-based efforts and how to accommodate for, and adjust for, and allow for in terms of intervention, and also in terms of evaluation, this level of mobility. Poor neighborhoods are experiencing, in some cases, shockingly high rates of residential instability. Age and homeownership are the strongest predictive factors, but economic factors, collective efficacy, and the built environment matter as well.

Our implications for resilience are that subsidized housing may indeed be a platform to reduced instability, and no one understands that the right mix of tenure, income, and age dynamics can lower neighborhood turnover. But important questions remain about whether poor and young renter families will continue to turn in that environment and what supports they need. And the answer is probably a mix of long-term supports like some of the housing subsidies that are available as well as some of the short-term and shallow subsidies that are available.

Jenny Schuetz: So the two strongest predictors of where new big-box stores choose to open are the concentration of retail employees before they go into the neighborhood and the concentration of nonretail employment. So retail employees—they're moving, essentially, into places that are already retail centers or retail corridors. They're not moving into areas that are, essentially, devoid of commercial activity and they're going into areas that employment centers. Right? If you think about this,  people who work in a neighborhood are the daytime consumer base and so places that have lots of daytime employees are people who can go out and buy this, and these also tend to be commercial friendly areas, which may come back to limitations on zoning.

I think the large question is, "What do policymakers do to address retail deserts?" And I think going through, sort of, step by step why it's so hard for big-box retailers to go into these neighborhoods opens some broader questions about how hard it is to do business in some central city locations. Not just the individual pieces of zoning are hard, building codes are hard, there are taxes, there's a long process, but the coordination across different agencies.

And then the last question is to think about economic development policy a little more broadly. Traditionally, the focus has been on helping locally owned, mom-and-pop businesses as a means of wealth building for the business owners. Noble goal; something that all of us have thought about. But think about the flip side: if you're helping the small businesses, what are the implications for consumers, for people who would potentially work at these stores, and just remember that the ideal policy for one group may not be ideal for all of them.

Joseph B. McNeely: I think there's a nice connection between the first paper and the second one in recognizing that turnover has a big impact on how we undertake our neighborhood strategies. Having worked at place-based strategies for a long time, we can be working in a neighborhood that helps hundreds, even thousands of families succeed and move on, and they are replaced again by people that are maybe even more vulnerable than they were when they started because that's the place that that neighborhood is in the regional real estate market. And so we are inevitably criticizing the place-based strategy because, "Jeez, the place hasn't changed."

Pendall: That's why I think having the conversation both at the national and at the regional and local level is important so that we inform policymakers here in Washington about the perils of "one size fits all" policies, whether it's extending homeownership options to low-income households or doing neighborhood development, it really depends a lot on the market.