More of Us Live in Income Segregated Neighborhoods

Posted by kevin on October 19, 2013 under Foreclosure Blog | Comments are off for this article

Usually, we talk about foreclosure and events surrounding the fallout caused by the mortgage crisis.

In the last few weeks, however, we have lived through the drama of the government shutdown. Now, you could say that the culprits were the Tea Party activists for pushing the envelop, or Harry Reid and the President for refusing to negotiate any significant changes to Obamacare. I say that there is enough blame to go around with some finger pointing to be directed to the media as well.

One thing is sure. The country is divided- by political party for sure; but also, more or less, by economic group, by age, by race and, it appears, by neighborhoods.

A Pew Research Center report called “The Rise of Residential Segregation by Income” concluded that the share of lower-income and upper-income households who live mainly among other households of their income class increased significantly from the 1980 census to the 2010 one. The percentage of upper-income households who live in majority upper-income census tracks doubled, from 9% to 18%, while the percentage of lower-income households who live in majority lower-income household increased significantly, from 23% to 28%.

The more important backstory here is the by now much-discussed contraction of the middle class. This is not just the result of the last few years’ Great Recession, but has been happening for decades. In 1980, middle-income households (those with income from 67% to 200% of the national median) included 54% of U.S. households, but by 2010 they were down to 48%.

With less households at middle income, there are more census tracts (local areas with about 4,200 people) that are either majority lower income (less than 67% of median) or majority upper-income (more than 200% of median income). From 1980 to 2010, the portion of census tracts that did not have majority middle income climbed from 15% to 24% (up from 15% to 18% for lower income and from 3% to 6% for upper income).

At the threshold points of 67%/200% of median income, in 2010 lower income was defined as less than $34,000 of household income, and upper income as $104,000 and above. Although these dollar amount may or may not fit your personal definition of these economic classes, the Pew Center conducted multiple analyses using different thresholds to define lower- and upper-income households, and the basic finding reported here of increased residential segregation by income was consistent regardless of which threshold were used.

At this point you may be saying, well of course, people live in neighborhoods they can afford, so well-off people will live in expensive neighborhoods and the less well-off will live in more modest ones. True, but what is meaningful is the trend towards greater residential segregation, and particularly the sharpness of the trend. We’ve seen a widening income gap between the rich and the poor, and now understand that this has come with fewer of us living in mixed-income neighborhoods, and more of us living among people like us economically. This fast-increasing isolation of the economic classes from each other can have profound consequences for the nation’s social and political cohesiveness. Our national motto—“E Pluribus Unum,” “out of many, one”—is being sorely tried by our deep and seemingly increasing political divides. Adding a deepening economic divide only increases the challenge of working together constructively.