Thomas writes*
Poverty, when concentrated in a small neighborhood, can often lead such neighborhoods to become economic “dead zones” — cut off from investment due to the perceived risks and lack of profit potential to investors. In the long-term, this entrenches the disadvantaged position of residents as property values fall and poverty and crime rates rise in a positive feedback loop (Sánchez-Jankowski 1999).
But despite noticeable drops in both population and investment in such affected areas, the size of many “dead zones” seems to expand over time. This is because businesses and residences lying in the periphery of disadvantaged areas face exposure to many of the economic and interrelated social problems, such as higher crime rates, which increase insurance premiums among other costs, facing the center of the dead zone, and can therefore fall in with that center.
A core neighborhood where poverty has concentrated can therefore damage the potential for growth in a far wider area over time as an increasingly large area is divested from. But beyond pulling peripheral areas in, such expanding poverty-stricken areas also make it increasingly difficult, or at least less appealing, for residents to move elsewhere — for more than just financial reasons.
Pre-existing conceptions of identity and entrenched local social support networks within these neighborhoods play an important role incentivizing one to remain where they are in order to preserve proximity to those valued social networks (Krysan & Farley 2002). The expansion of “dead zones” also facilitates searches for cheap housing, as more buildings integrate with the ghetto, or encourage previous residents to return after having suffering economic setbacks, both because of cheaper cost of living and proximity to family networks (Sánchez-Jankowski 1999).
In some cases, cheap housing can attract wealthier outsiders looking for cheap accommodation — in turn driving up housing costs and leading to gentrification. In the United States, at least, such influxes are far less likely to happen in predominantly African-American neighborhoods since Whites, who make up the vast majority of the gentrifying, yuppy class, are far less likely to move into or remain neighborhoods with a significant number of African-American households. They do not, however, seem to have a general bias for or against predominantly Asian-American or non-Black Hispanic neighborhoods.
Bottom Line: Concentrated, underprivileged neighborhoods manage to preserve their identity and expand their presence over time. They can manage to consume neighboring areas, retain residents in the long-term, and discourage investment which might change the neighborhood. This is evidence of a kind of self-preservation on a neighborhood block scale.
* Please help my Economic Growth & Development students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).
I think this is a very interesting blogpost that touches upon some of the difficulties in ensuring city-wide development, as opposed to some neighbourhoods economically ‘outgrowing’ others and becoming more attractive locations for investments.
However, two questions arise when reading this article. First, it is not clear to me what the effect of these dead zones are on resettlement. On the one had you describe that these ‘dead zones’ lead to both drops in population and investments, and on the other hand you discuss how these ‘dead zones’ incentivise one to remain in their neighbourhoods because of a shared identify and local support networks that keep them there. Could you elaborate on this?
Second, if gentrification by the White majority is unlikely to happen in predominantly African-American neighbourhoods due to general biases, what explains development that happens within these neighbourhoods? Investments from the local community?
Thanks for your thoughtful comments Laura,
On your first point — sorry it wasn’t clear: the idea is that as a community becomes poorer, the working class moves out which perpetuates the vicious cycle of less money in the community, and more people moving out as the neighborhood gets progressively worse. It’s also true that social and cultural connection has a lot to keeping communities centered on themselves — which is why on the periphery of the African-American poor neighborhood there is a working class African-American neighborhood. I also think in the longer term, those pulls of “shared identify and local support networks that keep them there” that you mentioned do indeed perpetuate population retention within the “dead zone” but that happens after the initial solidification of the neighborhood as decidedly “poor,” and before that status solidifies, that’s when population goes down as the working class leaves (if they can).
To add to that point, the Black working class here can also get screwed, for reasons that relate to the “proximity to poverty” — so I guess as I’m thinking about it I can think of more reasons why the population would increase in the ghetto than it would decrease. It’s an interesting question and the answer lies really in: As a “dead zone” expands, whats the proportion between the number of derelict properties around a poor area and population of the poor area? Since really if the population was big enough, there would be no dereliction — so depopulation must factor, just the growth of the total area (and therefore the derelict space) must grow faster than the population. Also reminds me of tales of NYC in the 1970s, when the city went bankrupt, many neighborhoods were depopulated and many buildings abandoned. At that time, property owners were setting their buildings on fire in the Bronx for the fire insurance because there was no other profitable use for them.
On your second point, gentrification is very important. It’s actually more important than I knew when I wrote this blog post. So the answer to “what else?” is “gentrification.” Shifting perceptions among Whites could be the driving force behind willingness to move to African-American neighborhoods. For example: Bedford-Stuyvesant in Brooklyn is a historically Black neighborhood which is currently being gentrified. Why? In part, Millenials enjoy Brooklyn and are less uncomfortable with moving into such a neighborhood than their parents were — in part also promoted by dramatic decrease in crime rates in these neighborhoods, yes, but also by shifting perception and yuppie willingness to integrate. Contrast this with Harlem: also a Black neighborhood — but (this is just my theory and inference from reading) unlike Brooklyn, not a yuppie lightning rod because it is in “less cool” upper Manhattan. This increase investment in Bed-Stuy (and not in Harlem) can be seen in real estate appreciation rates in the two neighborhoods. You can look at these appreciation rates here:(https://www.neighborhoodscout.com/ny/brooklyn) Gentrification is indeed driving investment and possibly undermining the Black character of Bed-Stuy (a potential negative effect of investment which I mentioned in my blog) If upper Manhattan were cool, I think they’d move there — the point is the racial composition is possibly just now not becoming the major deterring factor keeping people away (thought it is probably still a factor, as indicated by how home appreciation rates in Manhattan are still somewhat lower in the African-American parts of Harlem than citywide rates) Anyway, the attitudes of the wealthy majority (in this case Whites) do in fact have a strong effect on whether investments are brought and changing those perception can lead to changing neighborhood character — since if they don’t feel “alien” in a neighborhood then obviously that’s one less deterrent from moving in. Detail on changing White perceptions and relation to Bed-Stuy: https://doi.org/10.1177/0002716215578425.
This was a super interesting blogpost and I also really enjoyed reading the comments left by both you and Laura. Here are some thoughts I’m left with (that could be interesting to explore in your essay): are there factors, other than the racial composition of residents, that lead to certain neighbourhoods being more likely to become economic “dead zones”? You discuss the consequences of these “dead zones” and what causes them to grow, etc. but understanding the underlying factors that lead to the formation of such “dead zones” might be interesting to look at and consider when thinking of ways to decrease the prevalence/expansion of such areas. With regards to “solving” this issue, I was a bit internally conflicted. On the one hand, we don’t want such “dead zones” because those in them can easily get stuck in the vicious cycle of poverty but on the other, for those who are poor, such “dead zones” offer important benefits (cheap housing, social networks, etc.). However, they don’t offer a way out… But in my mind (and this may be pessimistic thinking), this is just as hard anywhere else. Investing in such neighbourhoods, which seems like a logical solution (?), could then actually drive up housing prices and not actually help those who don’t have a job and thus cannot afford this. This is the problem with gentrification. As someone who is not very familiar with such processes, I would be interested in knowing how the potential negative consequences of gentrification may be mitigated, or how the conditions of “dead zones” can be improved without driving those who live there out? All in all, a very interesting topic and blogpost!
This is a very interesting blog post! I also want to add to Noa’s comment about the dilemma of gentrification, and how measures can be taken without driving the local community away. I was wondering if this could be done through a more bottom-up approach which involved banks investing in local businesses and giving mortgages to local people. Would an increase in homeownership reduce the displacement of local people? Governments can also intervene to ensure that economic growth would not lead to the displacement of long term residents by reducing property taxes. How feasible would these measures be, and how likely are they to occur?