Reflections on Place Matters

Do We Know Enough to Make Reducing Economic Segregation a Priority in Public Policy?

When the first edition of PM was published in 2001, many scholars argued that the evidence for the negative effects of economic segregation and concentrated poverty was too weak to guide public policy. ³ The evidence is now in, and the debate should be over. We summarize that evidence in chapter 3 of the new edition, backed up by 246 endnotes.

Many scholars based their prior skepticism on the weak evidence of place effects found in the Moving to Opportunity (MTO) experiment. Contrary to what many people believe, MTO did not satisfy the “gold standard” of scientific research based on random assignment of individuals to low- and high-poverty neighborhoods. ⁴ As Robert Sampson (2012) has shown, the actual difference in the poverty levels between the experimental and control groups was not great. Also, MTO did not control for the time of exposure. Patrick Sharkey has demonstrated that 48% of African American families have lived in the poorest quarter of neighborhoods over multiple generations (Sharkey 2013); it is unreasonable to expect that moving to a marginally better neighborhood for a few years under MTO will have a significant impact on life outcomes. Indeed, reanalysis of MTO data shows that exposure to more advantageous neighborhoods over a longer period of time is associated with greater economic success (Chetty, Hendren, and Katz 2015; Clampet-Lundquist and Massey 2008).

Having said that the negative contextual effects of concentrated poverty are well supported, I should quickly add that the exact causal mechanisms by which concentrated poverty impacts the life chances of individuals have not been completely sorted out. “Concentrated poverty” is a summary measure, not a theoretical concept. Areas of concentrated poverty differ from affluent and mixed-income areas along a wide array of dimensions, including economic, social, cultural, physical, and political. ⁵ PM focuses on certain causal mechanisms (economic and political) over others (cultural).

PM has been attacked both from the right and the left. From the right, PM has been attacked for replacing free choice in the market with coercive regional policies (Kurtz 2012). Conservative scholars stress the role of culture in explaining the negative effects of concentrated poverty. I am skeptical of isolating cultural variables to explain neighborhood effects. According to the culture of poverty argument, disadvantaged neighborhoods nurture autonomous cultural practices, such as having children outside of marriage, dropping out of school, and distinctive clothing and speech patterns that prevent individuals from successfully pursuing opportunities even when offered them (Banfield 1974; Murray 1984). The implication of the culture of poverty arguments is that success of the mixed-income strategy requires poor people to rub elbows with middle and affluent individuals to learn the kinds of habits and values that lead to success in the marketplace. I believe that almost all the benefits of economic integration can be achieved without close personal association between classes. ⁶

In contrast to the culture of poverty theorists, we associate ourselves with the position identified with the work of William Julius Wilson (1987, 1996) that cultural norms of the ghetto poor are more the result of blocked opportunity than the cause of economic failure. One need not venture too far onto the shaky ground of culture to prove that place matters. It is almost impossible to argue against the fact that a person living in a poor suburb pays a higher tax rate and receives inferior public services compared with those living in prosperous suburbs. Similarly, the fact that residents of disadvantaged neighborhoods often live far from regional job centers and pay more for groceries, car and home insurance, mortgages, and consumer loans is hardly debatable. In PM, we are careful to argue that individual neighborhoods cannot succeed by simply mixing incomes. Local communities need to be connected to regional opportunity structures, develop strong and well-funded institutions, and be incorporated into city and regional governing coalitions.

The other criticism from the right side of the political spectrum is that neighborhood effects are the result of free choice in the market. Contextual effects can be dismissed as a public concern because the costs of living in poor neighborhoods and governments are fully capitalized in land values. Housing is cheaper in poor neighborhoods. You get what you pay for. This argument is difficult to test but common sense suggests it is false. Does anybody really believe that the marginal utility of the last dollar spent on ghetto housing is equal to the marginal utility of the last dollar spent on food or a college education? The market argument leads to the implausible conclusion that poor and minority families freely choose to live in unsafe neighborhoods that consign their children to failing schools.

Moreover, the argument of public choice and free market theorists that income determines where you live overlooks the fact that where you live significantly determines your income, especially the future incomes of children. Low-income and minority families do not choose to live in disadvantaged neighborhoods. As Robert Sampson (2012, p. 327) put it, “neighborhoods choose them.” The sorting process is historical and deeply political; in the Jim Crow era, public policies forced Blacks to live in inferior neighborhoods, and those living patterns still have a powerful effect on life chances. ⁷ The lack of choice should concern us as much as the outcomes for individuals. ⁸ Moreover, neighborhoods matter; we should care about the proliferation of distressed communities that cripple social relations and democratic processes as much as we care about the impacts of these neighborhoods on individuals.

Do Attempts to Decrease Concentrated Poverty Actually Harm the Poor?

PM has also been attacked from the left. Some scholars argue that the whole critical discourse on economic segregation that supports mixed-income housing policies operates, in effect, as an ideology justifying neoliberal policies to gentrify neighborhoods by pushing low-income people off of valuable real estate. For the most part, this has been directed at one aspect of PM’s policy recommendations, namely, our proposals to open up opportunities for low-income and minority families to move to areas of high opportunity, overlooking our recommendations for regional reforms designed to bring economic opportunities to disadvantaged communities. ⁹ Focusing on the mobility approach to reducing economic segregation, Ed Goetz argues that it has had the unintended effect of limiting the production of needed affordable housing in Minneapolis (Goetz 2003). In a later book, Goetz shows how calls to deconcentrate poverty have been used to justify reducing the number of public housing units, often under the HOPE VI program, leaving many former public housing residents in worse shape (Goetz 2013).

Goetz’s work provides a valuable warning for policy makers that even the best of intentions can be subverted by unintended effects and selfish interests. I and my coauthors certainly condemn any public programs that force low-income families out of their homes. However, we applaud policies that give families the choice to move to more prosperous communities. The fact that findings about the negative effects of concentrated poverty have sometimes been misused should not surprise anybody. Social scientists do not control their research once it has been published. I would add, however, that dismissing the findings because they have been misused would be the equivalent of throwing out the germ theory of disease because antibiotics have been overused. The fact remains: Economic segregation and concentrated poverty are bad for society.

In the past 15 years, a rich research literature has accumulated documenting the potential and limits of mixed-income housing programs. ¹⁰ In particular, the research shows that social networks are important for low-income families and the mobility strategy can disrupt those networks. This critical research on mixed-income policies, both people-based and place-based, is an important corrective. PM never recommended simply mixing incomes within isolated communities. Neighborhood effects need to be treated in a larger regional context. Local communities need the support of strong regional policies, including expanded public transit, limits to destructive bidding wars by local governments, and more equal funding for schools and local public services. In addition, we need stronger nonplace-based entitlement programs to level the playing field of metropolitan development.

The Importance of Nonplace-Based Social and Economic Policies

Part of the critique of PM from the left revolves around the idea that simply moving people around within the present stratified class system will make little difference. PM does not argue, however, that spatial inequalities are the only, or even the most important, force behind rising inequality. Globalization, the decline of unions, and regressive taxing and spending policies are all important causes of rising inequality. PM does argue that metropolitan development patterns are one important mechanism, often overlooked, behind rising economic inequality. ¹¹

In PM, we recommend a range of nonplace-based policies, including expanding the social safety net, the earned income tax credit, national health insurance, subsidized daycare, as well as raising the minimum wage and reforming labor laws. The reader may legitimately ask, why discuss these nonplace-based policies in a book called Place Matters? The short answer is that if the United States had more social entitlements along the lines of Western European social democracies, addressing metropolitan spatial inequalities would be easier.

Remarkably, poor and even moderate-income working families have become pariahs in the modern American metropolis. New suburban developments often zone out not just apartments but even modest single-family homes. “Homes in the $300s,” new developments will advertise, as if to assure buyers that all their neighbors will be middle class or above. The structure of American local government is part of the reason for these extreme exclusionary sentiments. The tax rate citizens pay and the quality of their local schools and public services are significantly determined by the economic wherewithal of their neighbors. When schools and local services are funded largely out of national revenues, as they generally are in Western Europe, the motive to exclude lower-income households is greatly reduced.

European social democracies also have robust systems of social supports that do not depend on where you live. In the United States, with the demise of the defined-benefit pensions, the rising cost of higher education, and the erosion of the social safety net through welfare reform, risk has been increasingly shifted from society down to the individual (Gosselin 2008; Hacker 2006). ¹² Lacking these supports, the problems of poor and moderate-income families often become a burden to those who live around them. Imagine what a difference it would make if universal, high-quality daycare was guaranteed to every American. Youth crime would fall and children of low-income families would be more successful in school.

In a just society, place would not matter the way it does in American society today. Your ability to move up the economic ladder and achieve the American dream would not be determined by which neighborhood or school district you grew up in. Success would still depend on your work ethic, values, choices, and luck. Place would still matter in all sorts of ways consistent with a just and fair society. Communities, for example, would vary in their cultural values, aesthetic visions, and social organization. But places would not radically expand or constrict choices the way they do now.

But What about Race?

The focus of PM on economic segregation seems to belie the continued relevance of race, which has been so much in the headlines following police brutality toward Blacks in Ferguson, Baltimore, Cleveland, New York, and other cities. Clearly, racism plays a significant role in the metropolitan dynamics we examine in PM. Blacks, for example, are six times more likely than non-Hispanic Whites to live in extreme poverty census tracts (Pendall et al. 2011). Even middle-class Black families end up in communities that are considerably poorer than middle-class White families (Reardon, Fox, and Townsend 2015).

Clearly, race cannot be ignored. As we wrote in PM: “The central issue . . . is not how to separate economic factors from racial dynamics, but how race and class interact to produce enduring patterns of spatial inequality” (p. 52). Media coverage of recent incidents of police brutality against Blacks often gives the impression that the nation has made no progress since the victories of the civil rights movement. It’s as if old-fashioned racism is as bad as ever. The roots of the turmoil in one community, Ferguson, Missouri, however, illustrate the need to integrate race and space, economics and the continuing significance of race. ¹³

Prominent facts about Ferguson point to a system that is thoroughly racist. Even though Ferguson was about two-thirds African American, at the time of the shooting five out of six council members were White, along with both the mayor and the city manager. Blacks were twice as likely as Whites to be searched during vehicle stops even though contraband was 26% less likely to be found on them than on Whites (U.S. Department of Justice 2015). Violent and exploitative tactics by police, including generating municipal revenues through excessive fines and court fees, fell disproportionately on Black citizens.

Driving these racial disparities, however, were powerful economic and spatial inequalities. In 2010, Ferguson had double St. Louis County’s unemployment rate, it suffered a 30% decline in median household income between 2000 and 2010 (controlling for inflation), and it had a poverty rate of 25% (American Community Survey 2009–2013; as reported in U.S. Department of Justice 2015). Housing values in the area are stagnating as vacancy rates rise. With a per capita property tax base only about one-third of the county average (author’s calculation), Ferguson faced a fiscal dilemma: If it increased tax rates (to raise revenues to meet service needs), it would drive home values down further, but if it did not increase tax rates, it would slowly starve municipal services and local schools.

Ferguson did what many fiscally strapped older suburbs in North St. Louis County did—it turned to traffic fines and court fees as a way to enhance revenues without raising taxes. Between 2010 and 2014, the City of Ferguson issued approximately 90,000 citations for municipal violations (U.S. Department of Justice 2015). More than one-quarter of Ferguson’s municipal budget came from traffic fines and court fees. In 2013, Ferguson’s municipal court—serving a city of 21,135 people (2010)—disposed of 24,532 arrest warrants (Arch City Defenders 2014). Trapped in an oppressive legal system without a lawyer, low-income citizens often lost their right to drive, their jobs, and their freedom. With good reason, critics compared it to debtors’ prisons. Fiscally strong local governments in the St. Louis region did not engage in the game of using the police to fund city services. Further evidence that abusive police practices were not entirely driven by race is provided by the fact that fiscally strapped suburbs such as Berkeley, with a Black mayor, Black city council, Black city manager, and a majority Black police force, also abused police powers, issuing 10,452 traffic citations in 2013, or about $111 for every resident, with the burden falling disproportionally on low-income African Americans (Balko 2014).

The U.S. Department of Justice (2015, p. 5) concluded that the discriminatory effects of Ferguson’s police practices were “driven at least in part by discriminatory intent in violation of the Fourteenth Amendment.” Racial bias is evident in the fact that 50 of 53 police officers in Ferguson were White. The Department of Justice report shows that many were racist and that they acted on their prejudices. But the report also shows that the city manager, under fiscal pressure, goaded the police to generate more revenues. The fiscal pressure to generate revenue, along with a poorly paid and poorly trained overwhelmingly White police force, was a toxic combination. Finally, the lack of political power by Blacks in municipalities such as Ferguson made it possible for police to oppress them with impunity. ¹⁴

In short, economic and racial forces are intertwined in complex ways that perpetuate spatial inequalities and injustices. Before the civil rights laws were enacted, Jim Crow laws and private practices relegated Blacks in St. Louis to the more disadvantaged parts of the region (Gordon 2008; Rothstein 2014). Unable to acquire significant household savings, Black families are now excluded from more advantaged communities in the St. Louis region largely on economic grounds. ¹⁵ Municipalities that discriminate in land-use regulations on economic grounds, excluding apartments or requiring large-lot sizes for single-family homes, in effect, discriminate against African Americans. Economic discrimination upholds racial segregation. ¹⁶

Are the Policy Recommendations of PM Politically Realistic?

A common response to PM is that its analysis of the problem is persuasive and its policy recommendations make sense, but (and this is a big but) its policy recommendations, especially those involving new regional institutions and policies, will never acquire the necessary political support. Local governments are too attached to their control over land use. The rational self-interest of those in the middle classes and above is aligned with local control and segregation—and against regionalism and mixing incomes. The suburban middle class will never welcome low-income families, especially minorities, into their communities.

It is easy to get discouraged. Looking back on the 14 years since the first edition of PM was published, my coauthors and I were disappointed. With the exception of the now amply documented examples of Portland and Minneapolis-St. Paul, few truly regional institutions have been created. One important example of regionalism that scholars routinely overlook is New York City. Joining together five boroughs into one regional government in 1898, New York City is the largest local government in the nation and, arguably, the most successful. The election of a progressive mayor, Bill de Blasio, will provide a test of how far a quasi-regional government can go to redistribute resources and opportunities. Although the New York regional economy now extends well beyond the borders of the city, the sheer size of New York City and its market strength mean that there is ample room for experimentation without fear of capital flight.

Other examples of proto-regional planning and policies have emerged around the nation. While government mergers are still very difficult, the mergers of Louisville and Jefferson County and the Memphis and Shelby County school systems are worth watching. Experiments to promote economic integration of schools are also promising (Kahlenberg 2014). While the federal government has largely dropped the ball in promoting new public transit with the shrinking of its New Starts program, local governments around the nation have stepped up and passed initiatives to support public transit and the building of new light rail systems. From 2012–2014, 138 transit initiatives were put before the voters; 102 passed, a 74% pass rate. ¹⁷ The movement to build workforce housing in transit-oriented developments (TODs) presents an opportunity to link low-income households to regional opportunities.

We discuss many other hopeful examples of policies that promote equitable regional development and economic integration in chapter 9 of the recent edition of PM. Clearly, however, the underlying political dynamics will have to change for progressive regional policies to break through. In particular, federal and state governments will need to pass policies to provide incentives and structures for progressive regional policies. PM outlines the dynamics behind new political coalitions that cross the city-suburban divide in chapter 10. But here are a few trends that I believe will create opportunities in the years ahead for new coalitions around metropolitan development and equity.

Of course, all these underlying trends only create the possibility for more progressive regional policies. Whether this promise is realized will depend on the emergence of creative leaders and the hard work of political organizing.