By JODI SUMMERS
Just as you might suspect, middle-income neighborhoods are becoming rare in the nation’s metropolitan areas. And, just as the prices in Palmdale keep rising, a recent report by The Brookings Institution’s Metropolitan Policy Program finds that middle-income quarters also are declining in suburban areas.
The report, “Where did they go? The decline of middle-income neighborhoods in metropolitan America,” is based on a study of U.S. Census data from 1970 to 2000 for families and neighborhoods in the 100 largest metropolitan areas, and in the cities and suburbs of 12 selected metropolitan areas. The 12 selected areas are: Atlanta; Baltimore; Chicago; Denver; Indianapolis; Los Angeles-Long Beach; Louisville, Ky.; Oakland, Calif.; Philadelphia; San Antonio, Tex.; San Francisco; and Washington, D.C. The study draws some very interesting conclusions: ■ Middle-income neighborhoods — as a proportion of all metropolitan neighborhoods — declined from 58 percent in 1970 to 41 percent in 2000. This dramatic decline far outpaced the corresponding drop in the proportion of metropolitan families earning middle incomes, which went from 28 percent in 1970 to 22 percent in 2000.
In Los Angeles, we saw a dramatic 24 percentage-point decline in the share of neighborhoods with middle incomes over the study period, accompanied by a 14 percentage-point rise in higher income neighborhoods. As you might expect, our skyrocketing real estate values have redefined middle-class neighborhoods.
Conversely, a middle-income neighborhood drop-off in Baltimore yielded a 17 percentage-point rise in the share of neighborhoods with lower incomes. Oakland and Atlanta areas shifted toward upper-income neighborhoods, while the San Antonio and Indianapolis areas acquired lower-income neighborhoods. ■ Between 1970 and 2000, lower-income families became more likely to live in lower-income neighborhoods, and higher-income families in higher-income neighborhoods. Only 37 percent of lower-income families lived in middle-income neighborhoods in 2000, down from 55 percent in 1970. Would the LA definition of a low-income neighborhood be somewhere where the price of a house is below $400,000? With our real estate prices, what category would our low-income home prices fall into in another metro area?
The report states that the LA metro area saw an 18 percent rise in the share of very high-income neighborhoods from 1970 to 2000 — highest among the selected 12 areas. LA’s share of moderate-income neighborhoods and high-moderate income families each dropped 13.8 percent during that period.
Conversely, the Atlanta metro area experienced a 21.3 percent decline in the share of high-moderate income neighborhoods from 1970 to 2000 while its share of low-income neighborhoods gained 17.4 percent. ■ The proportion of neighborhoods that were middle-income shrank faster than the proportion of families that were middle-income in each of 12 large metropolitan areas examined.
The degree to which middle-income families and neighborhoods “disappeared”in those 12 metros reflects differing rates of family income polarization and changes in income segregation across their neighborhoods.
As of 2000, in the LA area today, 28 percent of neighborhoods are either moderate-or high-moderate income compared to 41 percent across the 100 largest metro areas. The LA-Long Beach metro area had the low-est share of middle-income neighborhoods, at 28.3 percent, followed by New York, N.Y., at 29.6 percent; Memphis, Tenn., at 29.7 percent; Houston, Texas, at 30 percent; and Newark, N.J., at 30.4 percent.
San Antonio was the lone metro area among the 12 selected areas to see both a decline in its share of low-income neighborhoods and a decline in its share of very-low-income families from 1970 to 2000.
Changes in the income profile of families and neighborhoods in a particular metropolitan area do not necessarily indicate that the area itself has grown richer or poorer compared to others. It is relative to each area’s median family income. As poverty in the Los Angeles area increased over the past three decades, the median income that measured families and neighborhoods grew more slowly than in other parts of the nation. ■ Only 23 percent of central-city neighborhoods in the 12 large metropolitan areas had a middle-income profile in 2000, down from 45 percent in 1970. A majority of families — 52 percent — and neighborhoods — 60 percent — in these cities had low or very low incomes relative to their metropolitan area median in 2000.
Blame our lack of integration on the Watts riots. In addition, once a community gets gentrified, the economic group that lived in that area tends to cash out and move away. Notice that nobody in Venice has the cars they are working on sitting on blocks in the driveway, street or yard anymore. ■ A much larger proportion — 44 percent — of suburban neighborhoods in the 12 metropolitan areas had a middle-income profile in 2000. This proportion fell over the 30-year period, from 64 percent in 1970, accompanying a smaller decline in suburban middle-income families. Suburban middle-income neighborhoods were replaced in roughly equal measure by low-income and high-income neighborhoods.
The largest suburban increases in lower-income families occurred in the Atlanta and San Francisco metro areas, while the largest suburban increases in higher income families took place in the Indianapolis and LA metro areas.
Although middle-income families have declined considerably as a share of the overall family income distribution, the report finds it particularly noteworthy that middle-class neighborhoods have disappeared even faster in metropolitan areas. Lower-income families are moving into formerly middle-income neighborhoods, suggesting increased segregation of high-and low-income families into neighborhoods that reflect their own economic profiles. It also notes that there are fewer new developments designed for middle-income families.
Gentrification that is converting formerly middle-income areas to higher-income areas, and the flight of high-income families from formerly middle-income neighborhoods are considered to be possible contributors to the shrinking middle-class. The resulting disparities among neighborhoods create new challenges for policies to enhance household mobility, improve the delivery of key public services and promote private-sector investment in struggling locales.
For information on Southern California investment properties, there is a great blog at www.socalindustrialrealestateblog.com. (Jodi Summers is director of the investment division at Boardwalk Realty. For your real estate needs, , call (310) 309-4219, or visit her Web site at www.santamonicalandmarks.com.)
Originally published in the Santa Monica Daily Press print edition on August 23, 2006. Read the original PDF.