Daniel Kay Hertz of City Observatory deserves praise for his willingness to delve deeply into the matter of economic inequality in America, especially as it shapes our cities and metro areas. But in a recent piece in which he tried to articulate the complexity of a touchy subject, I came away unclear of his point or his possible policy prescription.
It left me wondering if people who are insulated might always choose insulation, and those who are isolated will forever be chasing an elusive dream.
Hertz brings up recent studies, like Raj Chetty’s paper on intergenerational mobility, and notes that research suggests that more unequal metro areas inhibit economic mobility. In fact, the more economically segregated a metro area is, the more difficult it is for low-income children to escape poverty in that same metro area as adults. Here he explains why:
“Well, high levels of segregation are created by economically homogenous neighborhoods: rich people live near other rich people, poor people live in neighborhoods of high poverty. In other words, more segregation equals more neighborhood-level equality. A wealthy suburb where everyone earns six figures is going to have very low levels of income inequality; ditto a neighborhood where almost everyone is economically struggling. In that sense, given high levels of regional inequality, sub-regional equality—in a neighborhood or municipality—isn’t really a good thing.”
This makes perfect sense to me. Hertz then goes on to talk about what he sees as a paradox that might stifle actual work on economic inequality:
“At a national and regional level, high levels of inequality are very bad. But local policy is mostly made by municipalities at a sub-regional level. And the only way for municipalities to pursue more equality is, in effect, by pursuing economic segregation.”
But it’s right after that point that Hertz begins to lose me. He offers a couple of possibilities in which higher income communities could take potentially problematic steps that would decrease their income inequality:
“It means something very different for a city or neighborhood to have a high 95/20 ratio than for the country as a whole. It would be a great thing for national inequality levels to fall; but does anyone think Chelsea in New York City would be a more “equal” place if its public housing residents were all removed, leaving only the wealthy and reducing its 95/20 ratio? Would it be unprogressive to create affordable housing in a place like Winnetka, Illinois, increasing local inequality thereby making it a place where both rich and poor could live?”
I guess what he’s saying is that city neighborhoods and suburban municipalities have been pursuing a policy of equality through economic segregation. They utilize land use policies that can set prices and rents at desired price points. I guess I’d flip that somewhat and say city neighborhoods and suburban municipalities have been pursuing economic homogeneity wherever they can, at the highest level they can attain.
Maybe this is a glass-half-full/glass-half-empty thing, but here’s how I see it.
For a century now, and at an accelerated pace since World War II, there have been very strong incentives for city neighborhoods and suburban municipalities to appeal to wealthy residents, and that has given wealthy households ample opportunities to cluster. Like I said, this happened at the highest level that any neighborhood/suburb could attain; the Winnetkas of the world could shoot for the stars, but the Schaumburgs could comfortably pursue the middle-market. As long as there were middle class to pursue. This fueled suburban growth, and led to even greater segmentation that the housing market slotted communities into — professional upper-middle class, manufacturing middle or working class — along the economic spectrum.
The sorting continued, and we all know why. Choosing the right community ultimately chooses the opportunities and future for you and your family. It means better schools, better access, better and closer jobs, and greater physical and psychological distance from ills like crime. Increasingly, where you live even determines how healthy and fit you may be (and I’d add that you’d find greater variations within metros than you would between them).
That was America circa 1945-1990. Over the last 25 years or so, a growing number of affluent metro residents have shed their suburban preferences for more walkable urban places. And those places have benefitted fantastically from the shift. However, our affinity for economic segregation, engrained through three generations of the suburban experience, has not waned. In fact, there are many who now believe that such segregation is immutable.
This is what fuels inequality locally, regionally, nationally. Affluence seeks to cluster. When it does, it facilitates the spread of poverty into less desirable areas. And while stagnant incomes, a slow job recovery, rising education and health care costs, a shrinking middle class and unaffordable homes can explain a lot, much of the new attention to inequality is owed to the affluent’s newfound proximity to poverty. And while we continue to try to explain inequality in purely economic terms, it has a social and cultural context that we ignore at our peril.
The answer lies in creating heterogeneous communities. The kinds of communities that can accommodate people at multiple life stages, at multiple places on the economic spectrum.
What does that mean? It means ridding ourselves of the heavily-segmented development model that’s sorted our metro areas. It means homes and apartments at a wide variety of price points and rents within one neighborhood or community. Places where Nieman-Marcus and Dollar Tree can comfortably co-exist, if only in our dreams.
But is America really ready for that? Is that even in the realm of the possible?
There was once a time when walkable urbanism was the standard for American cities. We moved away from it for a time, and now we’re slowly coming back toward it again. There was also a time when the junk dealer and the lawyer used to live near and interact with each other in American cities. We moved away from that, too. We’re quite removed from changing that.